CSC - AGM Information 2016 | FinancialReports.eu

China Steel Corporation Annual General Meeting June 23, 2016

Reports and Discussion

(1) Discussion proposal: amendments to Articles of Incorporation.
(2) Report proposal: adoption of the 2015 Business Report and Financial Statements.
(3) Report proposal: adoption of the Proposal for Distribution of 2015 Profits.
(4) Discussion proposal: amendments to Rules Governing Procedures for Shareholders’ Meeting.
(5) Discussion proposal: amendments to Regulations Governing the Election of Directors.
(6) Discussion proposal: amendments to Procedures for Acquisition or Disposal of Assets.
(7) Discussion proposal: amendments to Procedures for Loaning of Funds to Other Parties.
(8) Discussion proposal: amendments to Procedures for Endorsements and Guarantees.
(9) Proposal to elect 11 Directors (including 3 Independent Directors) for the 16[th] term of the Board of Directors.
(10) Proposal to release the prohibition on Director, Mr. Jyh-Yuh, Sung, from holding the position of Director of Chung-Hung Steel Corporation and China Ecotek Corporation.
(11) Proposal to release the prohibition on Director, Mr. Feng-Sheng, Wu, from holding the position of Director of Taiwan Shipbuilding Corporation.

(12) Proposal to release the prohibition on Director, Mr. Shyi-Chin, Wang, from holding the position of Director of Formosa Ha Tinh Steel Corporation and Formosa Ha Tinh (Cayman) Limited.
(13) Proposal to release the prohibition on Director, Mr. Jih-Gang, Liu, from holding the position of Director of Chung-Hung Steel Corporation, CSC Steel Holdings Bhd., CSC Steel Sdn. Bhd., East Asia United Steel Corporation, and Taiwan Shipbuilding Corporation.

Agenda 1-proposed by the board of directors

Explanatory Note:

In compliance with amendments to Company Act including Article 235, 235-1 and Article 240, Paragraph 1 of Article6 of the Articles of Incorporation of the Company is hereby proposed to be added, which replaces the term of “employee bonus” by “employee remuneration” and changes the calculation basis for remuneration from post-tax earnings to pre-tax.
As the audit committee will be set up, Articles of Incorporation of the Company is proposed to be revised and the related provisions of supervisors are proposed to be deleted.
A comparison table of drafted clause and the clause in force is attached.

Resolution:

Attachment 1

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

	Revised clause		Clausein force	Explanation
	Article 6. If there is profit in any given fiscal year, the Company shall set aside no less than 0.1% as the remuneration in stock or cash for employees, and no more than 0.15% as the remuneration for Directors and Supervisors under the resolution of the Meeting of the Board of Directors and shall be reported in the shareholders’meeting. Nevertheless, accumulated losses shall be offset in advance. In case of any earnings earned in any given fiscal year being reported from the Company’s final annual accounting, the Company shall appropriate or reverse a special reserve firstly after taxes, losses and legal reserves have been paid, made up and set aside respectively. Secondly, a preferred share dividend shall be distributed at 14% of the par value,and a common share bonus shall be distributed at no more than 14% of the par value. 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.		Article 6. (New Clause) In case of any earnings earned in any given fiscal year being reported from the Company’s final annual accounting, the company shall appropriate or reverse a special reserve firstly after taxes, losses and legal reserves have been paid, made up and set aside respectively. Secondly, a preferred share dividend shall be distributed at 14% of the par value.The remaining earnings if have, shall be set aside 0.15% as remuneration for Directors and Supervisors, 8% as bonuses for employees, and no more than 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.	According to revised “Company Act” and other related explanations released by the authority, term of “employee bonus” is replaced by “employee remuneration” and remuneration is changed from post-tax earnings calculation basis to pre-tax earnings calculation basis. In order to mitigate the impact and reach the most common benefits of Directors, Supervisors, employees, and shareholders, the Company refers to the actual amount of the remunerations based on the previous post-tax calculation basis and adjusts the percentage to pre-tax basis accordingly. As a result, one paragraph is added into paragraph 1 of Article 6 and the original paragraph 1 is revised and moved to paragraph 2. Original paragraphs 2~8 were moved to paragraph 3~9. As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Article 6.

(Omitted) Shareholders of preferred shares shall have no right to vote for members of the Boards of Directors, and their other rights and obligations shall be the same as those of shareholders of common shares. (Omitted)	(Omitted) Shareholders of preferred shares shall have no right to vote for members of the Boards of Directors, and their other rights and obligations shall be the same as those of shareholders of common shares. (Omitted)	(Omitted) Shareholders of preferred shares shall have no right to vote for members of the Boards of Directors and Supervisors ,and their other rights and obligations shall be the same as those of shareholders of common shares. (Omitted)	(Omitted) Shareholders of preferred shares shall have no right to vote for members of the Boards of Directors and Supervisors ,and their other rights and obligations shall be the same as those of shareholders of common shares. (Omitted)
	CHARTER FOUR DIRECTORS ANDAUDIT COMMITTEE		CHARTER FOUR DIRECTORS AND SUPERVISORS	The power of Supervisors will be replaced by the audit committee.
Article 25. (Omitted) When convening a Board meeting, members of the Board of Directors shall be notified of the date, location, agenda of the meeting and sufficient meeting materials seven days in advance. In the event of an emergency, such a meeting may be convened at any time. (Omitted) Any member of the Board of Directors may declare a waiver of the notice in the preceding 2 paragraphs in writing prior or subsequent to a meeting.			Article 25. (Omitted) When convening a Board meeting, members of the Board of Directors and Supervisors shall be notified of the date, location, agenda of the meeting and sufficient meeting materials seven days in advance. In the event of an emergency, such a meeting may be convened at any time. (Omitted) Any member of the Board of Directors and Supervisors may declare a waiver of the notice in the preceding 2 paragraphs in writing prior or subsequent to a meeting.	As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s) in Article 25.
Article 30-1. (Deleted) (Deleted)		Article 30-1. The Company shall have three to five Supervisors. A candidate nomination system is adopted by the Company, and Supervisors shall be elected from a list of candidate by shareholders.		As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s) in Article 30-1.

Starting from the 16th term of board of directors, the company shall establish an audit committee in accordance with Article 14-4 of the Securities and Exchange Act. The audit committee shall be composed of the entire number of independent directors. It shall not be fewer than three persons in number, one of whom shall be convener, and at least one of whom shall have accounting or financial expertise. Other matters not mentioned in Article shall be handled in accordance with Company Act, Securities Exchange Act, other relevant laws or regulations, and procedures of the Company.

After the company established an audit committee, the provisions regarding the power of supervisors in the Securities and Exchange Act, the Company Act, other laws and regulations, and this Articles of Incorporation shall apply to the audit committee, except the provisions listed in Paragraph 4 of Article 14-4 of the Securities and Exchange Act. A resolution of the audit committee shall have the concurrence of one-half or more of all members; the convener of audit committee shall externally on behalf of the committee.

(Deleted)

The provisions of Paragraph 2 of Article 22 shall apply mutatis mutandis to the election of Supervisors. Starting from the 16th term of board of directors, the company shall establish an audit committee in accordance with Article 14-4 of the Securities and Exchange Act. The audit committee shall be composed of the entire number of independent directors. It shall not be fewer than three persons in number, one of whom shall be convener, and at least one of whom shall have accounting or financial expertise. After the company established an audit committee, the provisions regarding the power of supervisors in the Securities and Exchange Act, the Company Act, other laws and regulations, and this Articles of Incorporation shall apply to the audit committee, except the provisions listed in Paragraph 4 of Article 14-4 of the Securities and Exchange Act. A resolution of the audit committee shall have the concurrence of one-half or more of all members; the convener of audit committee shall externally on behalf of the committee. Starting from the effective

	date of provisions in the previous two paragraphs, the provisions regarding nomination and election of Supervisors in Paragraph 1 and 2 shall expire.	date of provisions in the previous two paragraphs, the provisions regarding nomination and election of Supervisors in Paragraph 1 and 2 shall expire.
Article 30-2. (Deleted)		Article 30-2. Supervisors shall be elected for a term of three years and may be reappointed upon reelection.	As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s) in Article 30-2.
Article 31. (Deleted)		Article 31. The powers of Supervisors are as follows: (1) To supervise the execution of business operations of the Company; (2) To investigate the business and financial condition of the Company; (3) To review and approve the Company’s accounts and documents; and (4) Any other powers are empowered by laws and regulations.	As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s) in Article 31.
Article 32. (Deleted)		Article 32. The Supervisors, in addition to executing their own duties according to law, may attend the meeting of the Board of Directors and state opinions, but shall not be entitled to participate in voting.	As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s) in Article 32.
Article 32-1. The traveling allowance of Directors, the remuneration of Independent Directors and the salary of Chairman of Board are discussed and approved by the Board of the Directors referring	Article 32-1. The traveling allowance of Directorsand Supervisors , the remuneration of Independent Directors and the salary of Chairman of Board are discussed and		As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s) in Article 32-1.

to the standard payments of related crafts and listing companies. Other payments shall also be given to Chairman of Board pursuant to related by-laws in respect of employee’s compensation. (Omitted)	approved by the Board of the Directors referring to the standard payments of related crafts and listing companies. Other payments shall also be given to Chairman of Board pursuant to related by-laws in respect of employee’s compensation. (Omitted)
Article 32-2. (Omitted) (Deleted)	Article 32-2. (Omitted) In the event that any Supervisor is engaged in any act in competition with the Company, such an act shall be governed by the provisions in the preceding paragraph, and the method adopted for the special resolution provided in paragraph 2 and paragraph 3 of Article 209 of the Company Law shall apply mutatis mutandis.	As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s) in Article 32-2.
Article 32-3. The company may take out liability insurance for directors with respect to liabilities resulting from exercising their duties during their terms of occupancy so as to reduce and spread the risk of material harm to the company and shareholders arising from the wrongdoings or negligence of a director.	Article 32-3. The company may take out liability insurance for directors and supervisors with respect to liabilities resulting from exercising their duties during their terms of occupancy so as to reduce and spread the risk of material harm to the company and shareholders arising from the wrongdoings or negligence of a directoror supervisor .	As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s) in Article 32-3.
Article 37. The fiscal year for the Company shall be from January 1 to December 31 of every calendar	Article 37. The fiscal year for the Company shall be from January 1 to December 31 of	As the audit committee will be set up, the Company proposed to delete the wording of Supervisor(s)in Article37.

	year. The name of the operation year shall be the calendar year of Republic of China. After the close of every operation year, the following reports shall be prepared by the Board of Directors, and shall be submitted by the Board of Directors to the regular shareholders' meeting for acceptance: (1) The business report; (2) The financial statements; and (3) The surplus earning distribution or loss off-setting proposals.		every calendar year. The name of the operation year shall be the calendar year of Republic of China. After the close of every operation year, the following reports shall be prepared by the Board of Directors, and shall,after being audited by the Supervisors of the Company , be submitted by the Board of Directors to the regular shareholders' meeting for acceptance: (1) The business report; (2) The financial statements; and (3) The surplus earning distribution or loss off-setting proposals.
	Article 42. This Articles of Incorporation are agreed and signed on Nov. 2, 1971, … (Omitted)…, forty-thirdly amended on June 23rd, 2015,and forty-fourthly amended on June 23rd, 2016.		Article 42. This Articles of Incorporation are agreed and signed on Nov. 2, 1971, …(Omitted)…, and forty-thirdly amended on June 23rd, 2015.	To revise the date of amendment and cardinal number.

Agenda 2-proposed by the board of directors

Explanatory Note:

To adopt the report proposal of 2015 Business Report and Financial Statements.

Please refer to Attachment 2 for the financial statements for the year ended December 31[st] , 2015.

Resolution:

Attachment 2

China Steel Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2015 and 2014 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders China Steel Corporation

We have audited the accompanying consolidated balance sheets of China Steel Corporation (the “Corporation”) and its subsidiaries as of December 31, 2015 and 2014, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2015 and 2014. These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to in the first paragraph present fairly, in all material respects, the consolidated financial position of the Corporation and its subsidiaries as of December 31, 2015 and 2014, and their consolidated financial performance and their consolidated cash flows for the years ended December 31, 2015 and 2014, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS and Interpretations of IAS endorsed by the Financial Supervisory Commission (“FSC”) of the Republic of China.

As discussed in Note 3 to the accompanying consolidated financial statements, starting from January 1, 2015, the Corporation and its subsidiaries applied the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the IFRS, IAS, Interpretations of IFRS, and Interpretations of IAS endorsed by the FSC. Therefore, some items in the consolidated financial statements of prior reporting periods were adjusted to reflect the effects of retrospective application of the above regulations, standards and interpretations.

We have also audited the standalone financial statements of China Steel Corporation as of and for the years ended December 31, 2015 and 2014 on which we have issued a modified unqualified report.

March 25, 2016

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail. As stated in Note 4 to consolidated financial statements, the additional footnote disclosures that are not required under generally accepted accounting principles were not translated into English.

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Available-for-sale financial assets - current (Notes 4, 5 and 8) Derivative financial assets for hedging - current (Notes 4 and 10) Notes receivable (Notes 4 and 11) Notes receivable - related parties (Notes 4, 11 and 33) Accounts receivable, net (Notes 4, 5 and 11) Accounts receivable - related parties (Notes 4, 5, 11 and 33) Amounts due from customers for construction contracts (Notes 4, 5 and 12) Other receivables (Note 4) Current tax assets (Note 28) Inventories (Notes 4, 5 and 13) Other financial assets - current (Notes 4, 16 and 34) Other current assets Total current assets NONCURRENT ASSETS Financial assets at fair value through profit or loss - noncurrent (Notes 4 and 7) Available-for-sale financial assets - noncurrent (Notes 4, 5 and 8) Held-to-maturity financial assets - noncurrent (Notes 4, 5 and 9) Derivative financial assets for hedging - noncurrent (Notes 4 and 10) Debt investments with no active market - noncurrent (Notes 4, 14 and 19) Investments accounted for using equity method (Notes 4, 15 and 30) Property, plant and equipment (Notes 4, 5, 17 and 34) Investment properties (Notes 4, 5, 18 and 34) Intangible assets (Notes 4 and 30) Deferred tax assets (Notes 4, 5 and 28) Refundable deposits (Note 4) Other financial assets - noncurrent (Notes 4 and 16) Other noncurrent assets (Notes 24 and 33) Total noncurrent assets		December 31, 2015 Amount % $ 20,334,823 3 3,441,885 - 3,839,902 1 123,828 - 1,206,786 - 258,005 - 10,578,187 2 448,197 - 8,767,343 1 1,453,760 - 95,004 - 68,906,548 10 12,191,202 2 3,496,706 1 135,142,176 20 - - 50,284,593 8 285,963 - 41,713 - 2,014,061 - 15,207,682 2 448,688,581 66 10,108,189 2 2,404,617 - 5,558,156 1 479,287 - 2,663,786 - 5,260,212 1 542,996,840 80	December 31, 2014(Restated) Amount % $ 13,632,013 2 5,418,751 1 6,651,624 1 62,992 - 1,243,767 - 162,202 - 10,818,647 2 734,991 - 7,313,482 1 1,484,045 - 169,509 - 81,203,168 12 13,714,418 2 5,757,202 1 148,366,811 22 31,842 - 31,102,392 5 222,989 - 87,969 - 2,806,597 1 13,419,402 2 459,313,969 67 8,436,098 1 2,493,804 - 6,065,105 1 436,833 - 2,376,787 - 7,579,422 1 534,373,209 78

TOTAL $ 678,139,016 100 $ 682,740,020 100

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings and bank overdraft (Notes 19 and 34) Short-term bills payable (Note 19) Financial liabilities at fair value through profit or loss - current (Notes 4 and 7) Derivative financial liabilities for hedging - current (Notes 4 and 10) Notes payable Notes payable - related parties (Note 33) Accounts payable (Note 21) Accounts payable - related parties (Notes 21 and 33) Amounts due to customers for construction contracts (Notes 4, 5 and 12) Other payables (Note 22) Current tax liabilities (Note 28) Provisions - current (Notes 4, 5 and 23) Current portion of bonds payable (Note 20) Current portion of long-term bank borrowings (Notes 19 and 34) Other current liabilities Total current liabilities NONCURRENT LIABILITIES Derivative financial liabilities for hedging - noncurrent (Notes 4 and 10) Bonds payable (Notes 4 and 20) Long-term bank borrowings (Notes 19 and 34) Long-term bills payable (Note 19) Provisions - noncurrent (Notes 4, 5 and 23) Deferred tax liabilities (Notes 4 and 28) Net defined benefit liabilities (Notes 4, 5 and 24) Other noncurrent liabilities Total noncurrent liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Notes 4 and 25) Share capital Ordinary shares Preference shares Total share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury shares Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS Total equity TOTAL		December 31, 2015 Amount % $ 34,386,947 5 31,641,286 5 1,525 - 29,428 - 555,486 - - - 7,898,460 1 256,131 - 4,115,170 1 19,351,699 3 1,621,208 - 3,158,369 - 4,696,735 1 23,561,520 4 3,092,890 - 134,366,854 20 57,412 - 94,842,610 14 83,128,236 12 24,459,879 4 828,923 - 12,417,475 2 5,967,987 1 1,344,807 - 223,047,329 33 357,414,183 53 157,348,610 23 382,680 - 157,731,290 23 37,612,027 5 59,173,907 9 27,132,983 4 13,323,848 2 99,630,738 15 7,924,408 1 (8,577,644 ) (1 ) 294,320,819 43 26,404,014 4 320,724,833 47 $ 678,139,016 100	December 31, 2014(Restated)	December 31, 2014(Restated)
				Amount % $ 30,801,717 5 20,112,096 3 7,149 - 46,327 - 1,384,782 - 88 - 8,903,520 1 689,623 - 5,403,038 1 23,131,466 3 4,868,683 1 3,795,700 1 8,148,376 1 20,939,065 3 3,273,887 - 131,505,517 19 10,060 - 89,695,089 13 86,579,129 13 20,019,412 3 1,031,812 - 12,678,234 2 5,503,901 1 1,072,632 - 216,590,269 32 348,095,786 51 157,348,610 23 382,680 - 157,731,290 23 37,217,876 5 56,957,880 8 27,086,283 4 24,106,715 4 108,150,878 16 10,162,015 2 (8,587,461 ) (1 ) 304,674,598 45 29,969,636 4 334,644,234 49 $ 682,740,020 100

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

(With Deloitte & Touche audit report date March 25, 2016)

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUES (Notes 4, 26, 33 and 38) OPERATING COSTS (Notes 13 and 33) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income (Notes 27 and 33) Other gains and losses (Notes 27 and 33) Finance costs (Note 27) Share of the profit of associates Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX (Notes 4, 5 and 28) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (Notes 4, 25 and 28) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans Income tax benefit (expense) relating to items that will not be reclassified subsequently to profit or loss		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2015 Amount % $ 285,053,876 100 263,652,456 92 21,401,420 8 89 - 21,401,331 8 4,649,447 2 6,676,319 2 1,960,034 1 13,285,800 5 8,115,531 3 1,759,579 - 3,179,750 1 (3,752,097) (1) 202,847 - 1,390,079 - 9,505,610 3 1,886,191 - 7,619,419 3 (490,525) - 76,869 -		2014(Restated)
				Amount % $ 366,510,697 100 322,615,562 88 43,895,135 12 - - 43,895,135 12 4,898,797 1 7,218,369 2 2,015,820 1 14,132,986 4 29,762,149 8 2,420,780 1 (454,241) - (3,787,776) (1) 605,936 - (1,215,301 ) - 28,546,848 8 4,372,566 1 24,174,282 7 1,596,066 - (275,190) - (Continued)

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Unrealized gains and losses on available-for-sale financial assets The effective portion of gains and losses on hedging instruments in a cash flow hedge Share of the other comprehensive income (loss) of associates Income tax expense relating to items that may be reclassified subsequently to profit or loss Other comprehensive income for the period, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (Note 29) Basic Diluted		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2015 Amount % $ (927,721) - (2,679,096) (1) (19,026) - 997,447 - (32,953 ) - (3,075,005 ) (1 ) $ 4,544,414 2 $ 7,604,721 3 14,698 - $ 7,619,419 3 $ 5,073,036 2 (528,622 ) - $ 4,544,414 2 $ 0.49 $ 0.49		2014(Restated)
				Amount % $ 2,212,405 1 580,738 - 178,384 - (26,796) - (68,982 ) - 4,196,625 1 $ 28,370,907 8 $ 22,132,134 6 2,042,148 1 $ 24,174,282 7 $ 25,693,955 7 2,676,952 1 $ 28,370,907 8 $ 1.43 $ 1.42

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

(With Deloitte & Touche audit report date March 25, 2016)

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share)

	Equity Attributable to Owners of the Corporation	Equity Attributable to Owners of the Corporation
Share Capital Preference Ordinary Shares Shares Capital Surplus $ 154,255,840 $ 382,680 $ 36,960,818 - - - 154,255,840 382,680 36,960,818 - - - - - - - - - - - - 3,085,117 - - 7,653 - - - - - - - - - - - - - - - - - - - 218,053 - - - - - 39,005 157,348,610 382,680 37,217,876 - - - - - - - - - - - - - - - - - - - - - - - - - - (707 ) - - 318,021 - - - - - 76,837 $ 157,348,610 $ 382,680 $ 37,612,027	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 55,359,726 $ 26,920,871 $ 16,348,240 - - (27,533 ) 55,359,726 26,920,871 16,320,707 1,598,154 - (1,598,154 ) - 166,266 (166,266 ) - - (10,797,909 ) - - (45,922 ) - - (3,085,117 ) - - (7,653 ) - (854 ) 854 - - 22,132,134 - - 1,355,659 - - 23,487,793 - - - - - - - - - - - (1,618 ) 56,957,880 27,086,283 24,106,715 2,216,027 - (2,216,027 ) - 47,049 (47,049 ) - - (15,734,861 ) - - (53,575 ) - (349 ) 349 - - 7,604,721 - - (294,078 ) - - 7,310,643 - - - - - - - - - - - (42,347 ) $ 59,173,907 $ 27,132,983 $ 13,323,848	Other Equity	Total Other Equity Treasury Shares $ 7,955,853 $ (8,496,974 ) - - 7,955,853 (8,496,974 ) - - - - - - - - - - - - - - - - 2,206,162 - 2,206,162 - - (90,487 ) - - - - - - 10,162,015 (8,587,461 ) - - - - - - - - - - - - (2,237,607 ) - (2,237,607 ) - - 9,263 - - - - - 554 $ 7,924,408 $ (8,577,644 )
		The Effective Portion of Gains Exchange Unrealized and Losses on Differences on Gains and Losses Hedging Translating on Available-for- Instruments in Foreign sale Financial a Cash Flow Operations Assets Hedge $ (659,689 ) $ 8,603,167 $ 12,375 - - - (659,689 ) 8,603,167 12,375 - - - - - - - - - - - - - - - - - - - - - - - - 1,392,158 680,187 133,817 1,392,158 680,187 133,817 - - - - - - - - - - - - 732,469 9,283,354 146,192 - - - - - - - - - - - - - - - - - - 466,327 (2,710,006 ) 6,072 466,327 (2,710,006 ) 6,072 - - - - - - - - - - - - $ 1,198,796 $ 6,573,348 $ 152,264
Ordinary Shares $ 154,255,840 - 154,255,840 - - - - 3,085,117 7,653 - - - - - - - - 157,348,610 - - - - - - - - - - - - $ 157,348,610

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

(With Deloitte & Touche audit report date March 25, 2016)

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expense Amortization expense Net loss (gain) on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of the profit of associates Loss on disposal of property, plant and equipment Gain on disposal of intangible assets Gain on disposal of investments Impairment loss recognized on financial assets Increase in provision for loss on inventories Impairment loss recognized on non-financial assets Reversal of impairment loss on non-financial assets Recognition of provisions Others Changes in operating assets and liabilities Financial instruments held for trading Notes receivable Notes receivable - related parties Accounts receivable Accounts receivable - related parties Amounts due from customers for construction contracts Other receivables Inventories Other current assets Notes payable Notes payable - related parties Accounts payable Accounts payable - related parties Amounts due to customers for construction contracts Other payables Provisions Other current liabilities Net defined benefit liabilities Cash generated from operations Income taxes paid Net cash generated from operating activities		For the Year Ended December 31 2015 2014 (Restated) $ 9,505,610 $ 28,546,848 35,116,060 35,354,714 339,665 368,943 98,790 (127,501) 3,752,097 3,787,776 (426,374) (511,164) (403,048) (379,552) (281,595) (617,995) 72,143 214,424 (2,318) (73,327) (2,317,857) (740,942) 405,022 930,366 4,545,424 1,246,293 - 856,030 (1,652,414) - 4,377,661 6,524,255 14,578 180,612 881,219 (107,934) 36,981 (45,546) (95,803) 444,860 330,976 (701,378) 286,794 (214,259) (1,453,861) (4,012) 46,880 748,434 7,927,512 603,865 2,265,716 (83,485) (829,296) 369,365 (88) (668) (1,005,060) (2,639,859) (433,492) 532,251 (1,287,868) (415,411) (413,757) 559,896 (5,224,959) (5,689,752) (187,549) (43,294) 464,086 (194,217 ) 54,451,875 68,678,636 (4,776,794 )(4,225,392 ) 49,675,081 64,453,244 (Continued)
		2015 $ 9,505,610 35,116,060 339,665 98,790 3,752,097 (426,374) (403,048) (281,595) 72,143 (2,318) (2,317,857) 405,022 4,545,424 - (1,652,414) 4,377,661 14,578 881,219 36,981 (95,803) 330,976 286,794 (1,453,861) 46,880 7,927,512 2,265,716 (829,296) (88) (1,005,060) (433,492) (1,287,868) (413,757) (5,224,959) (187,549) 464,086 54,451,875 (4,776,794 ) 49,675,081

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets designated as at fair value through profit or loss Proceeds from disposal of financial assets designated as at fair value through profit or loss Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Proceeds from the capital reduction on available-for-sale financial assets Purchases of debt investments with no active market Proceeds from disposal of debt investments with no active market Acquisition of held-to-maturity financial assets Net cash outflow on acquisition of subsidiaries Acquisition of investments accounted for using equity method Proceeds from the capital reduction on investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Acquisition of intangible assets Acquisition of investment properties Proceeds from disposal of investment properties Decrease (increase) in other financial assets Decrease in other noncurrent assets Interest received Dividends received from associates Dividends received from others Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Increase (decrease) in short-term bills payable Issuance of bonds payable Repayments of bonds payable Proceeds from long-term bank borrowings Repayments of long-term bank borrowings Increase (decrease) in long-term bills payable Increase in other noncurrent liabilities Dividends paid to owners of the Corporation Purchase of the Corporation's shares by subsidiaries Disposal of the Corporation's shares by subsidiaries		For the Year Ended December 31 2015 2014 (Restated) $ (5,727,876) $ (6,714,162) 6,578,485 6,448,991 (23,053,113) (7,237,912) 5,321,509 2,995,987 567,347 53,438 (45,441) (39,155) 949,226 24,861 (55,753) - (105,382) (771,678) (1,242,940) (942,591) - 11,550 (25,119,118) (30,970,004) 109,749 99,390 (42,454) 76,382 (122,687) (71,234) (390,207) - - 89 1,220,484 (292,737) 176,918 211,931 431,312 508,355 353,829 576,427 403,048 379,904 (39,793,064 )(35,652,168 ) 235,755,883 205,793,710 (232,763,733) (203,954,160) 11,529,190 (10,674,204) 9,996,610 34,900,000 (8,313,002) (3,500,000) 47,721,329 41,533,502 (49,248,241) (61,918,263) 4,440,467 (14,862,621) 278,482 223,170 (15,590,415) (10,709,909) - (198,602) 13,325 - (Continued)
		2015 $ (5,727,876) 6,578,485 (23,053,113) 5,321,509 567,347 (45,441) 949,226 (55,753) (105,382) (1,242,940) - (25,119,118) 109,749 (42,454) (122,687) (390,207) - 1,220,484 176,918 431,312 353,829 403,048 (39,793,064 ) 235,755,883 (232,763,733) 11,529,190 9,996,610 (8,313,002) 47,721,329 (49,248,241) 4,440,467 278,482 (15,590,415) - 13,325

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

For the Year Ended December 31 2015 2014 (Restated) Interest paid $ (4,021,824) $ (3,808,487) Decrease in non-controlling interests (3,235,448 )(2,388,290 ) Net cash used in financing activities (3,437,377 )(29,564,154 ) EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES (49,357 ) 881,293 NET INCREASE IN CASH AND CASH EQUIVALENTS 6,395,283 118,215 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 10,659,657 10,541,442 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 17,054,940 $ 10,659,657 Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets as of December 31, 2015 and 2014: Cash and cash equivalents in the consolidated balance sheets $ 20,334,823 $ 13,632,013 Bank overdraft (3,279,883 )(2,972,356 ) Cash and cash equivalents in the consolidated statements of cash flows $ 17,054,940 $ 10,659,657 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)		For the Year Ended December 31	For the Year Ended December 31
			2014 (Restated) $ (3,808,487) (2,388,290 ) (29,564,154 ) 881,293 118,215 10,541,442 $ 10,659,657 $ 13,632,013 (2,972,356 ) $ 10,659,657 (Concluded)

(With Deloitte & Touche audit report date March 25, 2016)

China Steel Corporation

Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders China Steel Corporation

We have audited the accompanying standalone balance sheets of China Steel Corporation (the “Corporation”) as of December 31, 2015 and 2014, and the related standalone statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2015 and 2014. These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the standalone financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall standalone financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the standalone financial statements referred to in the first paragraph present fairly, in all material respects, the standalone financial position of the Corporation as of December 31, 2015 and 2014, and its standalone financial performance and its standalone cash flows for the years then ended December 31, 2015 and 2014, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers in the Republic of China.

As discussed in Note 3 to the accompanying standalone financial statements, starting from January 1, 2015, the Corporation applied the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS, and Interpretations of IAS endorsed by the Financial Supervisory Commission (“FSC”). Therefore, some items in the standalone financial statements of prior reporting periods were adjusted to reflect the effects of retrospective application of the above regulations, standards and interpretations.

March 25, 2016

Notice to Readers

The accompanying standalone financial statements are intended only to present the standalone financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such standalone financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying standalone financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and standalone financial statements shall prevail. As stated in Note 4 to standalone financial statements, the additional footnote disclosures that are not required under generally accepted accounting principles were not translated into English.

CHINA STEEL CORPORATION

STANDALONE BALANCE SHEETS

(In Thousands of New Taiwan Dollars)


ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Available-for-sale financial assets - current (Notes 4 and 7) Derivative financial assets for hedging - current (Notes 4 and 8) Notes receivable (Notes 4 and 9) Notes receivable - related parties (Notes 4, 9 and 28) Accounts receivable, net (Notes 4 and 9) Accounts receivable - related parties (Notes 4, 9 and 28) Other receivables (Notes 11 and 28) Other receivables - loans to related parties (Note 28) Inventories (Notes 4, 5 and 10) Other financial assets - current (Notes 4, 13 and 29) Other current assets Total current assets NONCURRENT ASSETS Available-for-sale financial assets - noncurrent (Notes 4, 5 and 7) Derivative financial assets for hedging - noncurrent (Notes 4 and 8) Debt investments with no active market - noncurrent (Notes 4 and 11) Investments accounted for using equity method (Notes 3, 4, 12 and 28) Property, plant and equipment (Notes 4, 14, 28 and 29) Investment properties (Notes 4, 15 and 28) Intangible assets Deferred tax assets ( Notes 4, 5 and 24) Refundable deposits (Note 4) Other financial assets - noncurrent (Notes 4 and 13) Total noncurrent assets	December 31, 2015 Amount % $ 7,518,687 2 1,341,235 - 79,125 - 443,376 - 198,399 - 903,126 - 686,746 - 1,496,979 1 5,890,000 1 37,640,539 8 6,604,939 2 988,788 - 63,791,939 14 12,389,861 3 36,205 - 1,818,091 - 200,381,399 43 175,420,761 38 7,163,037 1 65,736 - 3,140,979 1 44,083 - 148,307 - 400,608,459 86	December 31, 2014 (Restated) Amount % $ 2,603,621 1 3,920,578 1 46,345 - 586,347 - 159,409 - 1,823,421 - 962,523 - 2,028,881 1 5,230,000 1 41,179,810 9 6,362,957 1 1,073,255 - 65,977,147 14 18,094,873 4 61,858 - 2,646,000 1 181,520,724 39 185,285,861 40 6,502,328 1 76,971 - 3,984,551 1 33,699 - 65,580 - 398,272,445 86

TOTAL	$464,400,398 100


			December 31, 2014					December 31, 2014
	December 31, 2015		(Restated)			December 31, 2015		(Restated)
ASSETS	Amount	%	Amount	%	LIABILITIES AND EQUITY	Amount	%	Amount	%
CURRENT ASSETS					CURRENT LIABILITIES
Cash and cash equivalents (Notes 4 and 6)	$ 7,518,687	2	$ 2,603,621	1	Short-term borrowings and bank overdraft (Notes 16, 28 and 29)	$ 11,466,879	3	$ 7,293,715	1
Available-for-sale financial assets - current (Notes 4 and 7)	1,341,235	-	3,920,578	1	Short-term bills payable (Note 16)	12,847,014	3	1,899,630	-
Derivative financial assets for hedging - current (Notes 4 and 8)	79,125	-	46,345	-	Derivative financial liabilities for hedging - current (Notes 4
Notes receivable (Notes 4 and 9)	443,376	-	586,347	-	and 8)	26,497	-	11,497	-
Notes receivable - related parties (Notes 4, 9 and 28)	198,399	-	159,409	-	Accounts payable	2,057,194	-	3,469,515	1
Accounts receivable, net (Notes 4 and 9)	903,126	-	1,823,421	-	Accounts payable - related parties (Note 28)	357,453	-	890,942	-
Accounts receivable - related parties (Notes 4, 9 and 28)	686,746	-	962,523	-	Other payables (Notes 18 and 28)	11,956,612	3	15,076,462	3
Other receivables (Notes 11 and 28)	1,496,979	1	2,028,881	1	Current tax liabilities (Note 24)	822,723	-	2,886,183	1
Other receivables - loans to related parties (Note 28)	5,890,000	1	5,230,000	1	Provisions - current (Notes 4, 5 and 19)	1,699,678	-	1,459,275	-
Inventories (Notes 4, 5 and 10)	37,640,539	8	41,179,810	9	Current portion of bonds payable (Note 17)	4,649,075	1	8,148,376	2
Other financial assets - current (Notes 4, 13 and 29)	6,604,939	2	6,362,957	1	Current portion of long-term bank borrowings (Notes 16 and 29)	9,087,829	2	7,827,211	2
Other current assets	988,788	-	1,073,255	-	Other current liabilities	2,943,340	1	3,035,637	1
Total current assets	63,791,939	14	65,977,147	14	Total current liabilities	57,914,294	13	51,998,443	11
NONCURRENT ASSETS					NONCURRENT LIABILITIES
Available-for-sale financial assets - noncurrent (Notes 4, 5 and					Derivative financial liabilities for hedging - noncurrent (Notes
7)	12,389,861	3	18,094,873	4	4 and 8)	17	-	748	-
Derivative financial assets for hedging - noncurrent (Notes 4 and					Bonds payable (Note 17)	72,847,061	16	77,485,410	17
8)	36,205	-	61,858	-	Long-term bank borrowings (Notes 16 and 29)	24,276,027	5	15,113,123	3
Debt investments with no active market - noncurrent (Notes 4 and					Deferred tax liabilities (Notes 4 and 24)	10,925,638	2	11,185,715	2
11)	1,818,091	-	2,646,000	1	Net defined benefit liabilities (Notes 4, 5 and 20)	4,057,302	1	3,791,555	1
Investments accounted for using equity method (Notes 3, 4, 12 and					Other noncurrent liabilities	59,240	-	-	-
28)	200,381,399	43	181,520,724	39
Property, plant and equipment (Notes 4, 14, 28 and 29)	175,420,761	38	185,285,861	40	Total noncurrent liabilities	112,165,285	24	107,576,551	23
Investment properties (Notes 4, 15 and 28)	7,163,037	1	6,502,328	1
Intangible assets	65,736	-	76,971	-	Total liabilities	170,079,579	37	159,574,994	34
Deferred tax assets ( Notes 4, 5 and 24)	3,140,979	1	3,984,551	1
Refundable deposits (Note 4)	44,083	-	33,699	-	EQUITY (Notes 4 and 21)
Other financial assets - noncurrent (Notes 4 and 13)	148,307	-	65,580	-	Share capital
					Ordinary shares	157,348,610	34	157,348,610	34
Total noncurrent assets	400,608,459	86	398,272,445	86	Preference shares	382,680	-	382,680	-
					Total share capital	157,731,290	34	157,731,290	34
					Capital surplus	37,612,027	8	37,217,876	8
					Retained earnings
					Legal reserve	59,173,907	12	56,957,880	13
					Special reserve	27,132,983	6	27,086,283	6
					Unappropriated earnings	13,323,848	3	24,106,715	5
					Total retained earnings	99,630,738	21	108,150,878	24
					Other equity	7,924,408	2	10,162,015	2
					Treasury shares	(8,577,644 )	(2 )	(8,587,461 )	(2 )
					Total equity	294,320,819	63	304,674,598	66
TOTAL	$464,400,398	100	$464,249,592	100	TOTAL	$464,400,398	100	$464,249,592	100

The accompanying notes are an integral part of the standalone financial statements.

(With Deloitte & Touche audit report dated March 25, 2016)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUES (Notes 4, 22 and 28) OPERATING COSTS (Notes 10 and 28) GROSS PROFIT REALIZED (UNREALIZED) GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income (Notes 23 and 28) Other gains and losses (Notes 23 and 28) Finance costs (Notes 23 and 28) Share of the profit of subsidiaries and associates Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4, 5 and 24) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 21 and 24) Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2015 Amount % $160,909,464 100 148,511,291 92 12,398,173 8 225,679 - 12,623,852 8 2,633,416 2 3,217,154 2 1,618,945 1 7,469,515 5 5,154,337 3 1,068,481 1 1,643,968 1 (1,886,133) (1) 2,335,661 1 3,161,977 2 8,316,314 5 711,593 - 7,604,721 5 (163,686) -		2014(Restated)
				Amount % $205,159,602 100 183,377,897 89 21,781,705 11 (293,861 ) - 21,487,844 11 2,956,375 1 3,599,912 2 1,706,970 1 8,263,257 4 13,224,587 7 1,215,965 - (564,785) - (1,984,712) (1) 11,765,028 6 10,431,496 5 23,656,083 12 1,523,949 1 22,132,134 11 1,661,090 1 (Continued)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of the other comprehensive income of subsidiaries and associates Income tax benefit (expense) relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Unrealized gain and losses on available-for-sale financial assets The effective portion of gains and losses on hedging instruments in a cash flow hedge Share of the other comprehensive income of subsidiaries and associates Income tax benefit (expense) relating to items that may be reclassified subsequently to profit or loss Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 25) Basic Diluted		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2015 Amount % $ (158,219) - 27,827 - 393,288 - (2,344,410) (2) (1,360) - (285,356) - 231 - (2,531,685 ) (2 ) $ 5,073,036 3 $ 0.49 $ 0.49		2014(Restated)
				Amount % $ (23,046) - (282,385) - 1,018,234 1 100,022 - 135,763 - 975,223 - (23,080 ) - 3,561,821 2 $ 25,693,955 13 $ 1.43 $ 1.42

The accompanying notes are an integral part of the standalone financial statements.

(With Deloitte & Touche audit report dated March 25, 2016) (Concluded)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share)

BALANCE AT JANUARY 1, 2014 Effect of retrospective application and retrospective restatement (Note 3) BALANCE AT JANUARY 1, 2014 AS RESTATED Appropriation of 2013 earnings (Note 21) Legal reserve Special reserve Cash dividends to ordinary shareholders - NT$0.7 per share Cash dividends to preference shareholders - NT$1.2 per share Share dividends to ordinary shareholders - NT$0.2 per share Share dividends to preference shareholders - NT$0.2 per share Reversal of special reserve Net profit for the year ended December 31, 2014 Other comprehensive income for the year ended December 31, 2014, net of income tax Total comprehensive income for the year ended December 31, 2014 Purchase of the Corporation's shares by subsidiaries Adjustment to capital surplus arising from dividends paid to subsidiaries Adjustment from changes in equity of subsidiaries and associates BALANCE AT DECEMBER 31, 2014 AS RESTATED Appropriation of 2014 earnings (Note 21) Legal reserve Special reserve Cash dividends to ordinary shareholders - NT$1.0 per share Cash dividends to preference shareholders - NT$1.4 per share Reversal of special reserve Net profit for the year ended December 31, 2015 Other comprehensive income (loss) for the year ended December 31, 2015, net of income tax Total comprehensive income (loss) for the year ended December 31, 2015 Disposal of the Corporation's shares held by subsidiaries Adjustment to capital surplus arising from dividends paid to subsidiaries Adjustment from changes in equity of subsidiaries and associates BALANCE AT DECEMBER 31, 2015	Share Capital Preference Ordinary Shares Shares Capital Surplus $ 154,255,840 $ 382,680 $ 36,960,818 - - - 154,255,840 382,680 36,960,818 - - - - - - - - - - - - 3,085,117 - - 7,653 - - - - - - - - - - - - - - - - - - - 218,053 - - 39,005 157,348,610 382,680 37,217,876 - - - - - - - - - - - - - - - - - - - - - - - - - - (707 ) - - 318,021 - - 76,837 $ 157,348,610 $ 382,680 $ 37,612,027		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 55,359,726 $ 26,920,871 $ 16,348,240 - - (27,533 ) 55,359,726 26,920,871 16,320,707 1,598,154 - (1,598,154 ) - 166,266 (166,266 ) - - (10,797,909 ) - - (45,922 ) - - (3,085,117 ) - - (7,653 ) - (854 ) 854 - - 22,132,134 - - 1,355,659 - - 23,487,793 - - - - - - - - (1,618 ) 56,957,880 27,086,283 24,106,715 2,216,027 - (2,216,027 ) - 47,049 (47,049 ) - - (15,734,861 ) - - (53,575 ) - (349 ) 349 - - 7,604,721 - - (294,078 ) - - 7,310,643 - - - - - - - - (42,347 ) $ 59,173,907 $ 27,132,983 $ 13,323,848		Other Equity	Total Other Equity Treasury Shares $ 7,955,853 $ (8,496,974 ) - - 7,955,853 (8,496,974 ) - - - - - - - - - - - - - - - - 2,206,162 - 2,206,162 - - (90,487 ) - - - - 10,162,015 (8,587,461 ) - - - - - - - - - - - - (2,237,607 ) - (2,237,607 ) - - 9,263 - - - 554 $ 7,924,408 $ (8,577,644 )	Total Equity $ 289,687,054 (27,533 ) 289,659,521 - - (10,797,909 ) (45,922 ) - - - 22,132,134 3,561,821 25,693,955 (90,487 ) 218,053 37,387 304,674,598 - - (15,734,861 ) (53,575 ) - 7,604,721 (2,531,685 ) 5,073,036 8,556 318,021 35,044 $ 294,320,819
					Exchange Unrealized The Effective Portion of Gains and Losses Differences on Gains and Losses on Hedging Translating on Available- Instruments in a Foreign for-sale Cash Flow Operations Financial Assets Hedges $ (659,689 ) $ 8,603,167 $ 12,375 - - - (659,689 ) 8,603,167 12,375 - - - - - - - - - - - - - - - - - - - - - - - - 1,392,158 680,187 133,817 1,392,158 680,187 133,817 - - - - - - - - - 732,469 9,283,354 146,192 - - - - - - - - - - - - - - - - - - 466,327 (2,710,006 ) 6,072 466,327 (2,710,006 ) 6,072 - - - - - - - - - $ 1,198,796 $ 6,573,348 $ 152,264
	Ordinary Shares $ 154,255,840 - 154,255,840 - - - - 3,085,117 7,653 - - - - - - - 157,348,610 - - - - - - - - - - - $ 157,348,610

The accompanying notes are an integral part of the standalone financial statements.

(With Deloitte & Touche audit report dated March 25, 2016)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expense Amortization expense Finance costs Interest income Dividend income Share of the profit of subsidiaries and associates Loss on disposal of property, plant and equipment Gain on disposal of investments Impairment loss recognized on financial assets Increase in provision for loss on inventories Unrealized (realized) gain on the transactions with subsidiaries and associates Recognition of provisions Others Changes in operating assets and liabilities Notes receivable Notes receivable - related parties Accounts receivable Accounts receivable - related parties Other receivables Inventories Other current assets Accounts payable Accounts payable - related parties Other payables Provisions Other current liabilities Net defined benefit liabilities Other noncurrent liabilities Cash generated from operations Income taxes paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Proceeds from the capital reduction on available-for-sale financial assets Proceeds from the capital return on investment accounted for using equity method (Continued)	For the Year Ended December 31	For the Year Ended December 31
		2015 2014 (Restated) $ 8,316,314 $ 23,656,083 18,598,624 19,443,879 11,071 22,750 1,886,133 1,984,712 (166,372) (183,073) (222,530) (206,682) (2,335,661) (11,765,028) 22,915 119,214 (1,857,244) (116,661) 416,000 641,600 2,883,645 1,303,012 (225,679) 293,861 3,949,768 3,474,684 249,953 (129,755) 142,971 (177,903) (38,990) 441,454 920,295 292,453 275,777 356,136 1,156,871 (687,209) 674,674 4,173,265 84,467 1,921,108 (1,412,321) (1,386,758) (533,489) (700,737) (1,314,346) (1,860,467) (3,709,365) (3,481,674) (92,297) 910,187 102,061 63,390 59,240 - 27,842,485 38,401,841 (2,163,500 ) (1,216,978 ) 25,678,985 37,184,863 (462,930) (1,028,330) 1,941,520 117,662 541,925 - 13,748 -

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

	For the Year Ended	For the Year Ended	For the Year Ended	December 31
		2015	2014 (Restated)
Proceeds from disposal of debt investments with no active market	$	848,915	$	-
Acquisition of investment properties		(594,606)		-
Acquisition of investments accounted for using equity method		(22,533,483)		(7,681,324)
Acquisition of property, plant and equipment		(10,661,694)		(12,866,036)
Proceeds from disposal of property, plant and equipment		125,537		-
Decrease (increase) in refundable deposits		(10,384)		18,827
Increase in other receivables - loans to related parties		(660,000)		(2,910,000)
Decrease (increase) in other financial assets		(318,927)		282,203
Interest received		165,095		187,797
Dividends received from subsidiaries and associates		11,071,395		5,291,713
Other dividends received		222,530		206,682
Net cash used in investing activities		(20,311,359 )		(18,380,806 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings		17,530,000		12,429,522
Repayments of short-term borrowings		(13,962,453)		(12,388,733)
Increase (decrease) in short-term bills payable		10,947,384		(7,069,214)
Issuance of bonds payable		-		22,900,000
Repayments of bonds payable		(8,150,000)		(3,500,000)
Proceeds from long-term borrowings		16,683,267		6,209,166
Repayments of long-term borrowings		(6,339,917)		(14,208,929)
Decrease in long-term bills payable		-		(9,000,000)
Dividends paid		(15,784,094)		(10,842,383)
Interest paid		(1,982,364 )		(1,827,768 )
Net cash used in financing activities		(1,058,177 )		(17,298,339 )
NET INCREASE IN CASH AND CASH EQUIVALENTS		4,309,449		1,505,718
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR		213,938		(1,291,780 )
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$	4,523,387	$	213,938
Reconciliation of the amounts in the standalone statements of cash flows
with the equivalent items reported in the standalone balance sheets as
of December 31, 2015 and 2014:
Cash and cash equivalents in the standalone balance sheets	$	7,518,687	$	2,603,621
Bank overdraft		(2,995,300 )		(2,389,683 )
Cash and cash equivalents in the standalone statements of cash flows	$	4,523,387	$	213,938
The accompanying notes are an integral part of the standalone financial statements.

(With Deloitte & Touche audit report dated March 25, 2016) (Concluded)

Agenda 3-proposed by the board of directors

Explanatory Note:

To adopt the report proposal for Distribution of 2015 Profits

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

	Undistributed earnings from previous years Adjustment for initial application of the 2013 version of International Financial Reporting Standards(IFRS) Reverse of special reserve: disposal of fixed assets Actuarial gains(losses) from defined benefit pension plans (included in retained earnings) Effects resulting from changes in long-term equity investment Add: After-tax earnings of 2015 (A) Deduct: Legal reserve = (A) *10% Deduct: Provision of special reserve Subtotal of distributable earnings Distribution Items: Dividends for preferred shares (53,575,199.00) Dividends for common shares (7,867,430,499.00) Subtotal of distribution items Undistributed earnings	NT$ 6,074,002,873.28 (18,799,536.00) 349,534.00 (135,858,907.00) (200,566,051.00) 7,604,721,427.46 (760,472,143.00) (2,654,115,975.00)
		9,909,261,222.74
		(7,921,005,698.00)
		NT$1,988,255,524.74

The proposed dividend appropriation for preferred shares totaled NT$1.4 per share in cash. The proposed dividend appropriation for common shares totaled NT$0.5 per share in cash.
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:

Agenda 4-proposed by the board of directors

Explanatory Note:

Amendments to the Rules Governing Procedures for Shareholders’ Meeting are proposed.

Amendments are made in compliance with the establishment of the audit committee and the abolishment of supervisory mechanism, which is provided in the amendments to Articles of Incorporation of the Company.
A comparison table of drafted clause and the clause in force is attached.

Resolution:

Attachment 3

Comparison Table of Drafted Amendments to Rules Governing Procedures for Shareholders’ Meeting of China Steel Corporation

Shareholders’ Meetingof China	Steel Corporation
Revised clause	Clause in force	Explanation
Article 2. (Omitted) Thirty days before the Company convenes a regular shareholders’ meeting or fifteen days before a special shareholders’ meeting, the Company shall prepare electronic files of the meeting announcement, proxy form, explanatory materials relating to proposals for ratification, matters for deliberation, election or dismissal of directors, and other matters on the shareholders’ meeting agenda, and upload them to the Market Observation Post System. Where there are proposals relating to election or discharge of directors, amendments to the Articles, dissolution, merger or spin-off of the Company, or relating to Paragraph 1, Article 185 of the Company Act, Article 26-1 and Article 43-6 of the Securities Exchange Act, Article 56-1 and Article 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, proposals for the meeting shall be enumerated and extraordinary motions for such proposals shall be prohibited.	Article 2. (Omitted) Thirty days before the Company convenes a regular shareholders’ meeting or fifteen days before a special shareholders’ meeting, the Company shall prepare electronic files of the meeting announcement, proxy form, explanatory materials relating to proposals for ratification, matters for deliberation, election or dismissal of directorsor supervisors ,and other matters on the shareholders’ meeting agenda, and upload them to the Market Observation Post System. Where there are proposals relating to election or discharge of directors/supervisors , amendments to the Articles, dissolution, merger or spin-off of the Company, or relating to Paragraph 1, Article 185 of the Company Act, Article 26-1 and Article 43-6 of the Securities Exchange Act, Article 56-1 and Article 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, proposals for the meeting shall be enumerated and extraordinary motions for such proposals shall be prohibited.	As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Paragraph 3 and 4 of Article 2.

(Omitted)	(Omitted)
Article 5 (Omitted) The Company shall deliver the agenda booklet, the annual report, the attendance badge, the attendance sign-in card, the comments form, the ballot and other meeting materials to shareholders who attend the meeting; if directors are being elected, election ballots should also be enclosed. (Omitted)	Article 5 (Omitted) The Company shall deliver the agenda booklet, the annual report, the attendance badge, the attendance sign-in card, the comments form, the ballot and other meeting materials to shareholders who attend the meeting; if directorsand supervisors are being elected, election ballots should also be enclosed. (Omitted)	As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Paragraph 4 of Article 5.
Article 7 Meetings of shareholders convened by the board of directors shall be hosted by the Chairman of the board and attended in person by a majority of the directors on the board and at least one representative from each board committees. The attendance shall be recorded in minutes of Shareholders’ Meeting. (Omitted)	Article 7 Meetings of shareholders convened by the board of directors shall be hosted by the Chairman of the board and attended in person by a majority of the directors on the board, at least one supervisor ,and at least one representative from each board committees. The attendance shall be recorded in minutes of Shareholders’ Meeting. (Omitted)	As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Paragraph 1 of Article 7.
Article 15 (Omitted) Except when exercising their right to elect directors, when shareholders have personal interests in meeting matters, such that there is concern that they may damage the Company's interest, they must not participate in voting, and must not exercise votingrights on	Article 15 (Omitted) Except when exercising their right to elect directorsand supervisors , when shareholders have personal interests in meeting matters, such that there is concern that they may damage the Company's interest, they must not participateinvoting, and	As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Paragraph 3 of Article 15.

behalf of other shareholders. Therefore, the number of such shares not permitted to exercise voting rights is not counted in the number of voting rights of shareholders in attendance. (Omitted)		must not exercise voting rights on behalf of other shareholders. Therefore, the number of such shares not permitted to exercise voting rights is not counted in the number of voting rights of shareholders in attendance. (Omitted)
Article 19. When election of directors occurs at a meeting of shareholders, elections shall be handled in accordance with director election rules formulated separately by the Company.		Article 19. When election of directors and supervisors occurs at a meeting of shareholders, elections shall be handled in accordance with directorand supervisor election rules formulated separately by the Company.	As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Article 19.
Article 20. (Omitted) The method of adopting resolutions in the preceding paragraph where the shareholders’ opinions are solicited and the proposal are unanimously agreed, the meeting minute shall state ” the resolution is unanimously adopted by all shareholders attending the shareholders' meeting after the chairman inquires all attending shareholders' opinion”. However, as to any proposal that has received any dissent and been adopted in the shareholders' meeting, the meeting minutes shall record the method and result of the voting. With respect to the election of Directors, the meeting minutes shall record the method of voting adopted therefore and the total number of votes for the Directors who were elected.		Article 20. (Omitted) The method of adopting resolutions in the preceding paragraph where the shareholders’ opinions are solicited and the proposal are unanimously agreed, the meeting minute shall state ” the resolution is unanimously adopted by all shareholders attending the shareholders' meeting after the chairman inquires all attending shareholders' opinion”. However, as to any proposal that has received any dissent and been adopted in the shareholders' meeting, the meeting minutes shall record the method and result of the voting. With respect to the election of Directorsand Supervisors , the meeting minutes shall record the method of voting adopted therefore and the total number ofvotes for the	As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Paragraph 4 of Article 20.

Directors or Supervisors who were elected.

Agenda 5 -proposed by the board of directors

Explanatory note:

Amendments to the Regulations Governing the Election of Directors are proposed.

In compliance with the establishment of the audit committee, amendments are made to the related provisions on supervisors in the Regulations Governing the Election of Directors.
A comparison table of drafted clause and the clause in force is attached.

Resolution:

Attachment 4

Comparison Table of Drafted Amendments to Regulations Governing the Election of Directors of China Steel Corporation

Revised clause		Clause in force	Explanation
Article 1 Except where prescribed laws and regulations or the Articles of Incorporation of China Steel Corporation (herein referred to as “CSC”), the election of directors shall in all cases be pursuant to the rules stipulated herein.		Article 1 Except where prescribed laws and regulations or the Articles of Incorporation of China Steel Corporation (herein referred to as “CSC”), the election of directorsand supervisors shall in all cases be pursuant to the rules stipulated herein.	As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Article 1.
Article 13 The ballot examiners shall separate the valid and invalid ballots to seal in respective packages, jointly sign their names on the seals, as well as remark the written words of “invalid ballots” on the seal-side cover of the package. All packages shall be handed over to CSC for safekeeping. All ballots shall be kept for at least one (1) year. However, if a lawsuit regarding election of directors has been filed by any shareholder in accordance with Article 189 of the Company Law, the ballots shall be kept until the legal proceedings of the foregoing lawsuit have been concluded.		Article 13 The ballot examiners shall separate the valid and invalid ballots to seal in respective packages, jointly sign their names on the seals, as well as remark the written words of “invalid ballots” on the seal-side cover of the package. All packages shall be handed over to CSC for safekeeping. All ballots shall be kept for at least one (1) year. However, if a lawsuit regarding election of directors or supervisors has been filed by any shareholder in accordance with Article 189 of the Company Law, the ballots shall be kept until the legal proceedings of the foregoing lawsuit have been concluded.	As the audit committee will be set up and Supervisory mechanism will be abolished, the Company proposed to delete the wording of Supervisor(s) in Article 13.

Agenda 6 -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 the establishment and the charter of the audit committee, concurring the abolishment of supervisory mechanism, and other related regulations.
A comparison table of drafted clause and the clause in force is attached.

Resolution:

Attachment 5

Comparison Table of Drafted Amendments to Procedures for Acquisition or Disposal of Assets of China Steel Corporation

Revised clause	Clause in force	Explanation
Article 3 Terms used in the Procedures are defined as follows: 1. "Derivatives": Forward contracts, options contracts, futures contracts, leverage contracts, swap contracts and compound contracts combining the above products, whose value is derived from the products of assets, interest rates, foreign exchange rates, indexes or other interests. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) agreements. 2. "Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with acts of law": Refers to assets acquired or 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, paragraph 6 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 definedin	Article 3 Terms used in the Procedures are defined as follows: 1. "Derivatives": Forward contracts, options contracts, futures contracts, leverage contracts, swap contracts and compound contracts combining the above products, whose value is derived from the products of assets, interest rates, foreign exchange rates, indexes or other interests. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) agreements. 2. "Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with acts of law": Refers to assets acquired or 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, paragraph 6 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 definedin	1. Wording related to Supervisors in Subparagraph 9 is deleted to comply with the establishment of Audit Committee, which substitutes the role of Supervisors. As provided in the amendments to Article 4-1, all the proposals shall be approved by the Audit Committee before the submission to the meeting of the Board of Directors. The term “the Audit Committee” is consequently not to be included in Subparagraph 9 to avoid redundancy. 2. In accordance with the Article 14-5 of Securities and Exchange Act, the Company proposed to add new Subparagraphs 10 and 11 in this Article in order to define the calculation for all Audit Committee members and all Directors.

Statements of Financial Accounting Standards Nos. 5 and 7 published by the ARDF.

"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 other fixed assets.
"Date of occurrence": Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of resolutions of the meeting of the Boards of Directors, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the Competent Authority is required, the earlier of the above date or the date of receipt of approval by the Competent Authority shall apply.
"Mainland area investment": Refers to investments in China approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area. 8. “Within one year”: Refers to one year preceding the actual date of acquisition or disposal of the assets or occurrence of the transaction.
“Transaction amount”: Refers to the transaction amount calculated using one of the following methods. However, in calculation of threshold of the transaction amount to determine whether the Company shall obtain appraisal reports or certified public accountant’s opinions, or whether items need to be

Statements of Financial Accounting Standards Nos. 5 and 7 published by the ARDF.

"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 other fixed assets.
"Date of occurrence": Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of resolutions of the meeting of the Boards of Directors, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the Competent Authority is required, the earlier of the above date or the date of receipt of approval by the Competent Authority shall apply. 7. "Mainland area investment": Refers to investments in China approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area. 8. “Within one year”: Refers to one year preceding the actual date of acquisition or disposal of the assets or occurrence of the transaction. 9. “Transaction amount”: Refers to the transaction amount calculated using one of the following methods. However, in calculation of threshold of the transaction amount to determine whether the Company shall obtain appraisal reports or certified public accountant’s opinions, or whether items need to be

approved by the Board of approved by the Board of Directors, items duly conducted in Directors and recognized by the accordance with the Procedures Supervisors, items duly conducted need not be counted toward the in accordance with the Procedures transaction amount. In calculation need not be counted toward the of the threshold to determine transaction amount. In calculation whether the Company shall of the threshold to determine publicly announce and report the whether the Company shall relevant information of the publicly announce and report the transaction, items duly announced relevant information of the in accordance with the Procedures transaction, items duly announced need not be counted toward the in accordance with the Procedures transaction amount. need not be counted toward the (1)The amount of any individual transaction amount. transaction. (1)The amount of any individual (2)The cumulative transaction transaction. amount of acquisitions and (2)The cumulative transaction disposals of the same type of amount of acquisitions and underlying asset with the same disposals of the same type of trading counterparty within one underlying asset with the same year. trading counterparty within one (3)The cumulative transaction year. amount of real property (3)The cumulative transaction acquisitions and disposals amount of real property (cumulative acquisitions and acquisitions and disposals disposals, respectively) within the (cumulative acquisitions and same development project within disposals, respectively) within the one year. same development project within (4)The cumulative transaction one year. amount of acquisitions and (4)The cumulative transaction disposals (cumulative acquisitions amount of acquisitions and and disposals, respectively) of the disposals (cumulative acquisitions same securities within one year. and disposals, respectively) of the same securities within one year.

"All Audit Committee members": Refers to the actual number of persons currently holding the positions.
"All Directors": Refers to the actual number of persons currently holding the positions.

Article 4-1

Where the amendment to the Procedures or the acquisition and disposal of individual assets is subject to the approval of the meeting of the Board of Directors under the Procedures or other acts

Article 4-1

Where the amendment to the Procedures or the acquisition and disposal of individual assets is subject to the approval of the meeting of the Board of Directors under the Procedures or other acts

To comply with the establishment of Audit Committee, Paragraph 1 is amended by adding the process of approval of Audit Committee and

	or regulations,such acquisition or disposal of assets shall first be approved by one-half or more of all Audit Committee members. Wherea member of the Board of Directors expresses dissent (including in a written statement), it shall be recorded in the minutes of the meeting of the Board of Directors, and then the minutes shall be submitted tothe Audit Committee. If approval of one-half or more of all Audit Committee members as required in the preceding paragraph is not obtained, the acquisition or disposal of assets may be implemented if approved by two-thirds or more of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the meeting of the Board of Directors.		or regulations,each Independent Director's opinion shall be fully considered. Where anIndependent Director or Directorobjects or expressesreservations about any matter (including in a written statement), it shall be recorded in the minutes of the meeting of the Board of Directors, and then the minutes shall be submitted toeach Supervisor .	Paragraphs 2 is added.
	Article 13 When the Company 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 Company 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: 1.The purpose, necessity and anticipated benefit of the acquisition or disposal of the asset 2. The reason for choosing the related party as a trading counterparty. 3. With respect to the acquisition of realpropertyfromarelated		Article 13 When the Company 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 Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directorsand recognized by the Supervisors : 1.The purpose, necessity and anticipated benefit of the acquisition or disposal of the asset 2. The reason for choosing the related party as a trading counterparty. 3. With respect to the acquisition	Wording related to Supervisors in Article 13 is deleted to comply with the establishment of Audit Committee, which substitutes the role of Supervisors. As provided in the amendments to Article 4-1, all the proposals shall be approved by the Audit Committee before the submission to the meeting of the Board of Directors. The term “the Audit Committee” is consequently not to be included in this Article to avoid

party, information regarding of real property from a related redundancy. appraisal of the reasonableness of party, information regarding the preliminary appraisal of the reasonableness of the preliminary

The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the Company and the related party.
The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the Company and the related party.
Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.
Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.
An appraisal report from a professional appraiser or a certified public accountant's opinion obtained in compliance with the preceding article.
An appraisal report from a professional appraiser or a certified public accountant's opinion obtained in compliance with the preceding article. 7. Restrictive covenants and other important stipulations associated with the transaction. When the Company acquires or disposes of machinery 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 meeting of the Board of Directors.
Restrictive covenants and other important stipulations associated with the transaction. When the Company acquires or disposes of machinery 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 meeting of the Board of Directors.

The		term
“Supervisors”		in
Subparagraph	2 of
Paragraph revised “Independent Directors”	1	is into in
accordance with the
establishment		of

Article 16

Where the Company acquires real property from a related party and the results of appraisals conducted in accordance with the provisions of Articles 14 and15 are uniformly lower than the transaction price, the following steps shall be taken:

Audit Committee and 1. A special reserve shall be set 1. A special reserve shall be set Article 33-1 of aside in accordance with the aside in accordance with the provisions of Article 41, provisions of Article 41, “Regulations paragraph 1 of the Securities and paragraph 1 of the Securities and Governing the Exchange Act against the Exchange Act against the Acquisition and difference between the real difference between the real Disposal of Assets by property transaction price and the property transaction price and the Public Companies.” appraised cost, and may not be appraised cost, and may not be distributed or used for capital distributed or used for capital increase or issuance of bonus increase or issuance of bonus shares. shares.

Independent Directors shall comply with the provisions of Article 218 of the Company Act.
Actions taken pursuant to subparagraphs 1 and 2 shall be reported to a shareholders’ meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

When the Company has set aside a special reserve under the preceding paragraph, it may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or the assets have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.

When the Company obtains real property from a related party, it shall also comply with the provisions of the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arms length transaction.

Supervisors shall comply with the provisions of Article 218 of the Company Act.
Actions taken pursuant to subparagraphs 1 and 2 shall be reported to a shareholders’ meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

Article 17

The Company shall take the following principles and strategies for risk management and auditing matters when engaging in derivatives trading:

Trading principles and strategies:

(1) Operating or hedging strategies:

Trade in derivative instruments engaged in by the Company is limited to non-trade purposes, and under the principle of hedging against risk. All related organizations must confirm their operations in accordance with the authorized regulations, and attention must be paid to risk management and to making periodic assessments.

(2) Types of derivatives that may be traded: At present the Company’s trade in derivative instruments is limited to hedge trades which fit in with the needs of our business, such as foreign exchange futures, currency swaps and interest rate swaps.

(3) Segregation of duties:

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

Article 17

The Company 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:

(3) Segregation of duties:

The term “all
Supervisors” in
Subparagraph 3 is
revised into “the
Audit Committee” in
accordance with the establishment of
Audit Committee and
Article 33-1 of
“Regulations
Governing the
Acquisition and
Disposal of Assets by Public Companies.”

trading certificates and related 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 Company 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 for the Company.

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.

Risk management measures:

(1)The following risks should be considered within the scope of

trading certificates and related 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.

(5) Total value of contracts and upper limit for losses:

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.

Risk management measures:

(1)The following risks should be considered within the scope of

risk management, and should be avoided: Credit risks: The risk of losses incurred when the counterpart of the trade does not execute the terms of contracts.

Market risks: The risk of potential losses incurred by market price fluctuations in derivate instruments in the future.

Liquidity risks: The risks associated with the depth of trades on the commodities market and realization at appropriate market prices, and the risks associated with the delivery of fund allocations in the future.

Operational risks: Operational risks caused by negligence, insufficient supervision, fraud and improper controls and management.

Legal risks: Risks associated with losses caused by insufficiently detailed contracts, incorrect authorizations, and varying interpretations of legal stipulations.

(2)Trading personnel and those involved in confirmation and delivery are appointed by the Finance Department, but can not simultaneously hold positions in both areas. Trading personnel must submit trade certificates or contracts (orders) to confirmation personnel, who verify them with the banks and then notify delivery personnel. Trade certificates or contracts (orders) are also submitted to the Accounting Department, who must periodically verify or confirm them with the bank.

(3)Authorized monetary limits and levels: Authorized monetary limits are given as follows based

risk management, and should be avoided: Credit risks: The risk of losses incurred when the counterpart of the trade does not execute the terms of contracts.

Market risks: The risk of potential losses incurred by market price fluctuations in derivate instruments in the future.

Operational risks: Operational risks caused by negligence, insufficient supervision, fraud and improper controls and management.

Legal risks: Risks associated with losses caused by insufficiently detailed contracts, incorrect authorizations, and varying interpretations of legal stipulations.

(3)Authorized monetary limits and levels: Authorized monetary limits are given as follows based

on the status of the Company’s on the status of the Company’s operations and risk position : operations and risk position :


Authorized Level	Single trade amount	Daily Total Amount	Authorized Level	Single trade amount	Daily Total Amount
President or Executive Vice President	US$20 million or equivalent	US$50 million or equivalent	President or Executive Vice President	US$20 million or equivalent	US$50 million or equivalent
Vice President of Finance Division	US$10 million or equivalent	US$25 million or equivalent	Vice President of Finance Division	US$10 million or equivalent	US$25 million or equivalent
General Manager of Finance Department	US$5 million or equivalent	US$12.5 million or equivalent	General Manager of Finance Department	US$5 million or equivalent	US$12.5 million or equivalent

Situations processed according to authorizations should be recorded in the most recent business reports of the Finance Division for the Board of Directors.

(4)Periodic evaluations and abnormal situation management:

Hedge trades engaged for business purposes must be evaluated at least twice per month. Evaluation reports must be submitted to the Vice President of the Finance Division.

(4)Periodic evaluations and abnormal situation management: Hedge trades engaged for business purposes must be evaluated at least twice per month. Evaluation reports must be submitted to the Vice President of the Finance Division.

The Vice President of the Finance Division must perform periodic evaluations of the performance of derivative instruments in order to ascertain whether they fit in with operational strategies, whether the risks are within the permitted range, whether current risk management procedures are appropriate, and whether they are being performed according to

	regulations. The results of the periodic evaluations must be recorded in the most recent business reports of the Finance Division for the Board of Directors. The Vice President of the Finance Division must monitor and supervise the status of trading and losses. Corresponding measures must be taken in the event of an abnormal situation where market price evaluation reports exceed the upper limit for losses, and a report must be made immediately for the Board of Directors. An Independent Director must attend the meeting of the Board of Directors and provide his/her opinion. 3. Internal audit system; Internal auditors must periodically remain aware of the appropriateness of internal controls, examine the adherence by the trading department to the regulations for derivatives trading every month and make an audit report. Any major violation of the regulations shall be reported in writing tothe Audit Committee.		regulations. The results of the periodic evaluations must be recorded in the most recent business reports of the Finance Division for the Board of Directors. The Vice President of the Finance Division must monitor and supervise the status of trading and losses. Corresponding measures must be taken in the event of an abnormal situation where market price evaluation reports exceed the upper limit for losses, and a report must be made immediately for the Board of Directors. An Independent Director must attend the meeting of the Board of Directors and provide his/her opinion. 3. Internal audit system; Internal auditors must periodically remain aware of the appropriateness of internal controls, examine the adherence by the trading department to the regulations for derivatives trading every month and make an audit report. Any major violation of the regulations shall be reported in writing toall Supervisors.
	Article 29 The Procedures shall be enforced after the approval by the Board of Directors and the shareholders' meeting. The same shall apply to any amendment to the Procedures.		Article 29 After passage by the Board of Directors, the Procedures shall be enforced afterthe submission to each Supervisor andthe approval by the shareholders' meeting. The same shall apply to any amendment to the Procedures.	Wording related to Supervisors in Article 29 is deleted to comply with the establishment of Audit Committee, which substitutes the role of Supervisors. As provided in the amendments to Article 4-1, all the proposals shall be approved by the Audit Committee before the submission

to the meeting of the
Board of Directors.
The term “the Audit
Committee” is
consequently not to
be included in this
Article to avoid
redundancy.

Agenda 7 -proposed by the board of directors

Explanatory note:

Amendments to the Procedures for Loaning of Funds to Other Parties are proposed.

Amendments are made in compliance with the establishment and the charter of the audit committee, concurring the abolishment of supervisory mechanism, and other related regulations.
A comparison table of drafted clause and the clause in force is attached.

Resolution:

Attachment 6

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

	Revised clause	Clause in force	Explanation
	Article 2 Terms in the Procedures are defined as follows: 1. The term "announce and report" refers to the process of entering data to the information reporting website designated by the FSC. 2. The term “date of occurrence” refers to the date of contract signing, date of payment, dates of Boards of Directors resolutions, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier. 3. The term “subsidiary" shall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. The term "net worth of the Company" refers to the latest balance sheet equity attributable to the Company under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 5. The term "all Audit Committee members"refers to the actual number of persons currently holding the positions. 6. The term"all Directors"refers to the actual number of persons currently holding the positions.	Article 2 Terms in the Procedures are defined as follows: 1. The term "announce and report" refers to the process of entering data to the information reporting website designated by the FSC. 2. The term “date of occurrence” refers to the date of contract signing, date of payment, dates of Boards of Directors resolutions, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier. 3. The term “subsidiary" shall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. The term "net worth of the Company" refers to the latest balance sheet equity attributable to the Company under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.	In accordance with the Article 14-5 of Securities and Exchange Act, the Company proposed to add new Subparagraphs 5 and 6 in this Article in order to define the calculation for all Audit Committee members and all Directors.

	Article 7 Before making a loan of funds to others, the Company shall carefully evaluate whether the loan is in compliance with the relevant provisions in the Company Act, the Procedures, and the provisions regulated by the FSC, and thenfirst submit, together with the result of the evaluation made as described in subparagraph 2 of the preceding article and conditions of loans, tothe Audit Committee for approval and next to the Board of Directors for a resolution and approval. The Board of Directors may authorize the chairman, for a specific borrowing counterparty, within a certain monetary limit resolved by the Board of Directors, and within a period not to exceed one year, to give loans in installments or to make a revolving credit line available for the counterparty to draw down. If approval, as described in the preceding paragraph, of one-half or more of all Audit Committee members is not obtained, the loaning of funds to others may be implemented if approved by two-thirds or more of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the meeting of the Board of Directors.		Article 7 Before making a loan of funds to others, the Company shall carefully evaluate whether the loan is in compliance with the relevant provisions in the Company Act, the Procedures, and the provisions regulated by the FSC, and then submit, together with the result of the evaluation made as described in subparagraph 2 of the preceding article and conditions of loans, to the Board of Directors for a resolution and approval. The Board of Directors may authorize the Chairman, for a specific borrowing counterparty, within a certain monetary limit resolved by the Board of Directors, and within a period not to exceed one year, to give loans in installments or to make a revolving credit line available for the counterparty to draw down. When extending loans to others in compliance with the preceding paragraph, the Board of Directors shall take into full consideration each Independent Director’s opinions; Independent Directors’ opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the meeting of the Board of Directors.	By adding the approval of Audit Committee into the proposal submission procedures, the amendments to Paragraphs 1 and 2 are made in accordance with the Article 14-5 of Securities and Exchange Act.
	Article 9 The Finance Department shall prepare a memorandum book for its fund-loaning activities and		Article 9 The Finance Department shall prepare a memorandum book for its fund-loaning activities	The term “all the Supervisors” in Paragraph 2 is revised into “the Audit Committee” to comply with the establishment of Audit

	truthfully record the following information: borrower, amount, date of approval by the Board of Directors, dates of approvals by the chairman to loans given in installments to a specific borrowing counterparty, lending/borrowing date, and matters to be carefully evaluated under paragraph 1 of Article 7. The Company’s internal auditors shall audit the Procedures for Loaning Funds to Other Parties and the implementation thereof no less frequently than monthly and prepare written records accordingly. The internal auditors shall promptly notify the Audit Committee in writing of any material violation found.		and truthfully record the following information: borrower, amount, date of approval by the Board of Directors, dates of approvals by the chairman to loans given in installments to a specific borrowing counterparty, lending/borrowing date, and matters to be carefully evaluated under paragraph 1 of Article 7. The Company’s internal auditors shall audit the Procedures for Loaning Funds to Other Parties and the implementation thereof no less frequently than monthly and prepare written records accordingly. The internal auditors shall promptly notify all the Supervisors in writing of any material violation found.	Committee, which substitutes the role of Supervisors.
	Article 2 Terms in the Procedures are defined as follows: 1. The term "announce and report" refers to the process of entering data to the information reporting website designated by the FSC. 2. The term “date of occurrence” refers to the date of contract signing, date of payment, dates of Boards of Directors resolutions, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier. 3. The term “subsidiary" shall be as determined under the Regulations Governing the Preparationof Financial Reports		Article 2 Terms in the Procedures are defined as follows: 1. The term "announce and report" refers to the process of entering data to the information reporting website designated by the FSC. 2. The term “date of occurrence” refers to the date of contract signing, date of payment, dates of Boards of Directors resolutions, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier. 3. The term “subsidiary" shall be as determined under the Regulations Governing the Preparation of Financial	In accordance with the Article 14-5 of Securities and Exchange Act, the Company proposed to add new Subparagraphs 5 and 6 in this Article in order to define the calculation for all Audit Committee members and all Directors.

by Securities Issuers.

Reports by Securities Issuers.

The term "net worth of the 4. The term "net worth of the Company" refers to the latest Company" refers to the latest balance sheet equity attributable balance sheet equity to the Company under the attributable to the Company Regulations Governing the under the Regulations Preparation of Financial Reports Governing the Preparation of by Securities Issuers. Financial Reports by Securities Issuers. 5. The term "all Audit Committee members" refers to the actual number of persons currently holding the positions. 6. The term "all Directors" refers to the actual number of persons currently holding the positions. Article 7 Article 7

Before making a loan of funds to Before making a loan of others, the Company shall funds to others, the Company carefully evaluate whether the shall carefully evaluate loan is in compliance with the whether the loan is in relevant provisions in the compliance with the relevant Company Act, the Procedures, provisions in the Company and the provisions regulated by Act, the Procedures, and the the FSC, and then first submit, provisions regulated by the together with the result of the FSC, and then submit, evaluation made as described in together with the result of the subparagraph 2 of the preceding evaluation made as described article and conditions of loans, in subparagraph 2 of the to the Audit Committee for preceding article and approval and next to the Board conditions of loans, to the of Directors for a resolution and Board of Directors for a approval. The Board of resolution and approval. The Directors may authorize the Board of Directors may chairman, for a specific authorize the Chairman, for a borrowing counterparty, within a specific borrowing certain monetary limit resolved counterparty, within a certain by the Board of Directors, and monetary limit resolved by within a period not to exceed the Board of Directors, and one year, to give loans in within a period not to exceed installments or to make a one year, to give loans in revolving credit line available installments or to make a for the counterparty to draw revolving credit line available down. for the counterparty to draw down. If approval, as described in the preceding paragraph, of one-half When extending loans to or more of all Audit Committee others in compliance with the

By adding the approval of Audit Committee into the proposal submission procedures, the amendments to Paragraphs 1 and 2 are made in accordance with the Article 14-5 of Securities and Exchange Act.

	members is not obtained, the loaning of funds to others may be implemented if approved by two-thirds or more of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the meeting of the Board of Directors.		preceding paragraph, the Board of Directors shall take into full consideration each Independent Director’s opinions; Independent Directors’ opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the meeting of the Board of Directors.

Agenda 8 -proposed by the board of directors

Explanatory note:

Amendments to the Procedures for Loaning of Funds to Other Parties are proposed.

Amendments are made in compliance with the establishment and the charter of the audit committee, concurring the abolishment of supervisory mechanism, and other related regulations.
A comparison table of drafted clause and the clause in force is attached.

Resolution:

Attachment 7

Comparison Table of Drafted Amendments to Procedures for Endorsements and Guarantees of China Steel Corporation

	Revised clause	Clause in force	Explanation
	Article 2-1 Terms in the Procedures are defined as follows: 1. The term "announce and report" refers to the process of entering data to the information reporting website designated by the FSC. 2. The term “date of occurrence” refers to the date of contract signing, date of payment, dates of Boards of Directors resolutions, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier. 3. The term “subsidiary" shall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. The term "net worth of the Company" refers to the latest balance sheet equity attributable to the Company under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 5. The term "all Audit Committee members"refers to the actual number of persons currently holding the positions. 6. The term"all Directors"refers to the actual number of persons currently holding the positions.	Article 2-1 Terms in the Procedures are defined as follows: 1. The term "announce and report" refers to the process of entering data to the information reporting website designated by the FSC. 2. The term “date of occurrence” refers to the date of contract signing, date of payment, dates of Boards of Directors resolutions, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier. 3. The term “subsidiary" shall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. The term "net worth of the Company" refers to the latest balance sheet equity attributable to the Company under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.	In accordance with the Article 14-5 of Securities and Exchange Act, the Company proposed to add new Subparagraphs 5 and 6 in this Article in order to define the calculation for all Audit Committee members and all Directors.

	Article 7 Before making an endorsement/guarantee for others, the Company and its subsidiaries as defined in Article 3-1 shall carefully evaluate whether the endorsement/guarantee is in compliance with the Procedures and other regulations promulgated by the FSC. The Company may make an endorsement/guarantee only after the evaluation results pursuant to Article 6 havefirst beenapproved by the Audit Committee and then been submitted to and adopted by the meeting of the Board of Directors, or approved by Chairman of the Board who is authorized by the Board of Directors to grant endorsements/guarantees within a specific limit, and then subsequently submitted tothe Audit Committee for approval and to the next meeting of the Board of Directors for verification. If approval, as described in the preceding paragraph, of one-half or more of all Audit Committee members is not obtained, the endorsement/guarantee may be implemented if approved by two-thirds or more of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the meeting of the Board of Directors.		Article 7 Before making an endorsement/guarantee for others, the Company and its subsidiaries as defined in Article 3-1 shall carefully evaluate whether the endorsement/guarantee is in compliance with the Procedures and other regulations promulgated by the FSC. The Company may make an endorsement/guarantee only after the evaluation results pursuant to Article 6 have been submitted to and adopted by the meeting of the Board of Directors, or approved by Chairman of the Board who is authorized by the Board of Directors to grant endorsements/guarantees within a specific limit, and then subsequently submitted to the next meeting of the Board of Directors for verification. When the meeting of the Board of Directors resolves or verifies endorsements/guarantees for others in accordance with the preceding paragraph, it shall take each Independent Director’s opinion into full consideration; his/her specific opinion of assent or dissent and reason for dissent shall be included in the minutes of the meeting of the Board of Directors.	By adding the approval of Audit Committee into the proposal submission procedures, the amendments to Paragraphs 1 and 2 are made in accordance with the Article 14-5 of Securities and Exchange Act.
	Article 10 The Company’s internal auditors shall audit the Procedures and		Article 10 The Company’s internal auditors shall audit the	The term “each Supervisor” is revised into “the Audit Committee” to comply with the establishment of Audit

	the implementation thereof at least on a quarterly basis and prepare written records accordingly. If any material violation is found, the internal auditors shall write reports to notifythe Audit Committee immediately.	Procedures and the implementation thereof at least on a quarterly basis and prepare written records accordingly. If any material violation is found, the internal auditors shall write reports to notify each Supervisor immediately.	Committee, which substitutes the role of Supervisors.
	Article 11 Where, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of the Procedures or the amount for the endorsement/guarantee exceeds the limit, the Company shall propose rectification plans, submit it to the Audit Committee ,and carry out the plan according to the timeframe set out in it.	Article 11 Where, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of the Procedures or the amount for the endorsement/guarantee exceeds the limit, the Company shall propose rectification plans, submit it toeach Supervisor ,and carry out the plan according to the timeframe set out in it.	The term “each Supervisor” is revised into “the Audit Committee” to comply with the establishment of Audit Committee, which substitutes the role of Supervisors.
	Article 18 The Procedures, after passage by the meeting of the Board of Directors, shall be submitted to the shareholders' meeting for approval. Provided that any Director expresses dissent which is contained in the minutes or a written statement, the dissenting opinion shall be submitted tothe Audit Committee and to the shareholders' meeting for discussion. The same as above said in this Article shall apply to any amendment to the Procedures. Starting from the 16thterm of the Board of Directors of the Company, the amendments to the procedures for Endorsements and Guarantees shall first be approved by one-half or more of	Article 18 The Procedures, after passage by the meeting of the Board of Directors, shall be submittedto each Supervisor and to the shareholders' meeting for approval. Provided that any Director expresses dissent which is contained in the minutes or a written statement, the dissenting opinion shall be submitted toeach Supervisor and to the shareholders' meeting for discussion. The same as above said in this Article shall apply to any amendment to the Procedures.	Paragraph 1 is amended and Paragraph 2 is added to comply with the establishment of Audit Committee, which substitutes the role of Supervisors.

all Audit Committee members
before submission to the Board
of Directors for a resolution. If
approval of one-half or more of
all Audit Committee members is
not obtained, the aforementioned
amendments may be
implemented if approved by
two-thirds or more of all
Directors, and the resolution of
the Audit Committee shall be
recorded in the minutes of the
meeting of the Board of
Directors.

Agenda 9-proposed by the board of directors

Explanatory note:

To elect 11 directors (including 3 independent directors) for the 16[th] term of the board of directors.

The term of the 11 directors and 3 supervisors of the15[th] board expired on June 18, 2016. It is planned to elect all of the 11 directors (including 3 independent directors) of the 16[th] term of the board of directors, serving a term of three years from June 23, 2016 to June 22, 2019. Following the establishment of the audit committee, the supervisory mechanism will be abolished starting from the 16[th] term of the board of directors. The Company will not hold any election of supervisors from now on.
The candidate nomination system is adopted in election of the 16[th] term of the board of directors. Shareholders shall elect the directors from the list of the nominated candidates as follows.

Candidates for Directors of the 16[th] term of the Board of Directors.

Name	Current Position	Major Education	Remark
Jyh-Yuh, Sung	Chairman, China Steel Corporation	M.S. in Mechanical Engineering, National Taiwan University	Representing Ministry of Economic Affairs, R.O.C. (holding 3,154,709,357 shares)
Jong-Chin, Shen	Vice Minister of the Ministry of Economic Affairs, R.O.C.	M.S. in Commerce Automation and Management, National Taipei University of Technology	Representing Ministry of Economic Affairs, R.O.C. (holding 3,154,709,357 shares)
Feng-Sheng, Wu	Vice Chairperson and Executive Director of State-Owned Enterprise Commission, Ministry of Economic Affairs, R.O.C.	M.A. in Sociology, National Taiwan University	Representing Ministry of Economic Affairs, R.O.C. (holding 3,154,709,357 shares)
Horng-Nan, Lin	President , China Steel Corporation	MBA in International Management, Thunderbird School of Global Management	Representing Gau Ruei Investment Corporation (holding 1,335,318 shares)

Shyi-Chin, Wang	Executive Vice President, China Steel Corporation	Ph.D. in Materials Science, National Sun Yat-sen University	Representing Ever Wealthy International Corporation (holding 2,226,265 shares)
Jih-Gang, Liu	Vice President, Commercial Division, China Steel Corporation	B.A. in Mechanical Engineering, National Taiwan University	Representing Chiun Yu Investment Corporation (holding 1,548,289 shares)
Cheng-I, Weng	Emeritus Professor, Department of Mechanical Engineering, National Cheng Kung University	Ph D. in Mechanical Engineering, University of Rochester, U.S.A.	Representing Hung Kao Investment Corporation (holding 1,003,980 shares)
Chao-Chin, Wei	President, Labor Union of China Steel Corporation in Kaohsiung	M.S. in Electrical Engineering, National Cheng Kung University	Representing Labor Union of China Steel Corporation in Kaohsiung (holding 7,221,487 shares)
Min-Hsiung, Hon	Honorary Chair Professor, National Cheng Kung University	Ph.D. in Materials Engineering, North Carolina State University, Raleigh, U.S.A.	Independent Director (holding 0 shares)
Shyue-bin, Chang	Chair Professor and Dean, College of Mechatronic Engineering, Kao Yuan University	Ph.D. in Aerospace Engineering, Cornell University, U.S.A.	Independent Director (holding 0 shares)
Lan-Feng, Kao	Professor, Department of Finance, National University of Kaohsiung	Ph.D. in Accounting, National Cheng Kung University	Independent Director (holding 2,216 shares)

Resolution:

Agenda 10 -proposed by the board of directors

Explanatory note:

It is proposed to release the prohibition on Mr. Jyh-Yuh, Sung from holding the position of director of Chung-Hung Steel Corporation and China Ecotek Corporation if Mr. Jyh-Yuh, Sung is elected as the director for the 16[th] term of the board of directors.

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.
Mr. Jyh-Yuh, Sung is holding the following positions:

Invested Company	Direct/Indirect Shareholding by CSC	Concurrent Post	Business Relationship with CSC
Chung-Hung Steel Corporation	40.68%	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
China Ecotek Corporation	45.23%	Director	Engineering of environmental protection and steel construction

Although the Company is related to Chung-Hung Steel Corporation and China Ecotek Corporation in part of its business, products and services provided by these 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 these two companies by participating in important operating decisions and monitor the execution of business strategies.

Resolution:

Agenda 11 -proposed by the board of directors

Explanatory note:

It is proposed to release the prohibition on Mr. Feng-Sheng, Wu from holding the position of director of Taiwan Shipbuilding Corporation if Mr. Feng-Sheng, Wu is elected as the director for the 16[th] term of the board of directors.

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.
Mr. Feng-Sheng, Wu is holding the following position:

Invested Company	Direct/Indirect Shareholding by CSC	Concurrent Post	Business Relationship with CSC
Taiwan Shipbuilding Corporation	2.48%	Director	Machinery and equipment manufacturing; Steel casting

Although the Company is related to Taiwan Shipbuilding Corporation in part of its business, products and services provided by the two companies belong to different market segments. The Company may thereby protect its investment rights and benefit from Mr. Feng-Sheng, Wu’s serving in the board of Taiwan Shipbuilding Corporation by participating in important operating decisions and monitor the execution of business strategies.

Resolution:

Agenda 12 -proposed by the board of directors

Explanatory note:

It is proposed to release the prohibition on Mr. Shyi-Chin, Wang from holding the position of director of Formosa Ha Tinh Steel Corporation and Formosa Ha Tinh (Cayman) Limited if Mr. Shyi-Chin, Wang is elected as the director for the 16[th] term of the board of directors.

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.
Mr. Shyi-Chin, Wang is holding the following positions:

Invested Company	Direct/Indirect Shareholding by CSC	Concurrent Post	Business Relationship with CSC
Formosa Ha Tinh Steel Corporation	25%	Director	Integrated steel mill
Formosa Ha Tinh (Cayman) Limited	25%	Director	The holding company of Formosa Ha Tinh Steel Corporation.

Although the Company is related to Formosa Ha Tinh Steel Corporation and Formosa Ha Tinh (Cayman) Limited in part of its business, products and services provided by these companies belong to different market segments. The Company may thereby protect its investment rights and benefit from Mr. Shyi-Chin, Wang’s serving in the board of these two companies by participating in important operating decisions and monitor the execution of business strategies.

Resolution:

Agenda 13 -proposed by the board of directors

Explanatory note:

It is proposed to release the prohibition on Mr. Jih-Gang, Liu from holding the position of director of Chung-Hung Steel Corporation, CSC Steel Holdings Bhd., CSC Steel Sdn. Bhd., East Asia United Steel Corporation, and Taiwan Shipbuilding Corporation if Mr. Jih-Gang, Liu is elected as the director for the 16[th] term of the board of directors.

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.
Mr. Jih-Gang, Liu is holding the following positions:

Invested Company	Direct/Indirect Shareholding by CSC	Concurrent Post	Business Relationship with CSC
Chung-Hung Steel Corporation	40.68%	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 Holdings Bhd.	46.37%	Director	The holding company of CSC SteelSdn. Bhd.
CSC Steel Sdn. Bhd.	46.37%	Director	Production and trading of Cold-rolled product
East Asia United Steel Corporation	19.36%	Director	The holding company of Nippon Steel and Sumitomo Metals (Wakayama) – the slab supplier of the CSC Group.
Taiwan Shipbuilding Corporation	2.48%	Director	Machinery and equipment manufacturing; Steel

casting

Although the Company is related to the above-mentioned five companies in part of its business, 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 the five companies by participating in important operating decisions and monitor the execution of business strategies.

Resolution:

AI assistant

CSC — AGM Information 2016

51937_rns_2016-12-13_97f858b5-2a24-4035-ac02-f95b8a555a97.pdf

China Steel Corporation Annual General Meeting June 23, 2016

Reports and Discussion

Agenda 1-proposed by the board of directors

Attachment 1

Agenda 2-proposed by the board of directors

China Steel Corporation and Subsidiaries

INDEPENDENT AUDITORS’ REPORT

March 25, 2016

Notice to Readers

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA STEEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share)

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

China Steel Corporation

INDEPENDENT AUDITORS’ REPORT

March 25, 2016

Notice to Readers

CHINA STEEL CORPORATION

STANDALONE BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CHINA STEEL CORPORATION

STANDALONE STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Agenda 3-proposed by the board of directors

Explanatory Note:

Explanatory Note:

Attachment 3

Explanatory note:

Attachment 4

Attachment 5

Article 4-1

Article 4-1

Article 16

Article 16

Article 17

(3) Segregation of duties:

Article 17

(3) Segregation of duties:

Attachment 6

Attachment 7

Explanatory note:

Candidates for Directors of the 16[th] term of the Board of Directors.

Explanatory note:

Explanatory note:

More from CSC

CSC AGM Information 2016