FH — AGM Information 2021

Aug 2, 2021

Stock Code: 2015

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General Shareholders’ Meeting 2021

Handbook

June 11, 2021

Table of Contents

Agenda..........................................................................................................1 Reports..........................................................................................................2 1. Report on Business Overview 2020...........................................................3 2. Report on Financial Statements 2020 Reviewed by Audit Committee ....................................................................................................7 3. Report on Allocation of Employee Compensation and Remuneration to Directors 2020...............................................................................................8 Proposed Resolutions....................................................................................9 1. Proposed Resolution for Business Report and Financial Statements 2020...............................................................................................................9 2. Proposed Resolution for Allocation of Earnings 2020.............................31 Discussed Motions.......................................................................................................32 1. Motion for the amendments to the Company’s “Articles of Incorporation”.............................................................................................32 2. Motion for the amendments to the “Parliamentary Rules for Shareholders’ Meetings”.............................................................................34 Elections......................................................................................................36 Election of 13 Directors (Including 3 Independent Directors) of 22nd Term Of the Company..........................................................................................36 Other Motions.............................................................................................39 Release of the Company’s New Directors from Non-Competition Restrictions..................................................................................................39 Extemporary Motions .................................................................................40

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Attachments................................................................................................41 1. The Company’s Parliamentary Rules for Shareholders’ Meetings......................................................................................................41 2. The Company’s Articles of Incorporation................................................48 3. Statement of Current Shareholdings of the Company’s Directors......................................................................................................54 4. Effect of Bonus Stock Distribution on the Company’s Operation Performance, EPS and ROE.........................................................................55

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Agenda of General Shareholders’ Meeting 2021

Date & Time: 9:00AM, June 11, 2021 (Friday)

Venue: No. 259, Sec. 3, Houke Rd., Houli Dist., Taichung City (Briefing Room on 2F in Administration Building)

• I. Announcement of Meeting

• II. Address by Chairperson

• III. Address by Guests

• IV. Reports

• Report on Business Overview 2020

• Report on Financial Statements 2020 Reviewed by Audit Committee

• Report on Allocation of Employee Compensation and Remuneration to Directors 2020

• V. Proposed Resolutions

• Proposed Resolution for Business Report and Financial Statements 2020

• Proposed Resolution for Allocation of Earnings 2020

VI. Discussed Motions

1. Motion for the amendments to the Company’s “Articles of Incorporation.”

2. Motion for the amendments to the “Parliamentary Rules for Shareholders’ Meetings.”

VII. Elections

Election of 13 Directors (Including 3 Independent Directors) of 22nd Term of the Company

• VIII. Other Motions

• Release of the Company’s New Directors from Non-Competition Restrictions

• IX. Extemporary Motions

• X. Adjournment

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Reports

• I. To report the business overview 2020 for your review and approval.

• The business report is attached hereto (please refer to Pages 3~6 of the Handbook).

• II. To report the financial statements 2020 reviewed by Audit Committee for your review and approval.

The Audit Committee’s inspection report is attached hereto (please refer to Page 7 of the Handbook).

• III. To report on allocation of employee compensation and remuneration to directors 2020 for your review and approval (please refer to Page 8 of the Handbook).

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2020 Business Report

Dear Ladies & Gentlemen:

In 2020, among the Company’s primary products, the round bars got rid of the impact posed by the Sino-US Trade War and COVID-19 in the second half of 2020. The effect posed by rush orders boosted the mild growth of annual sales of round bars. The rebar market kept benefiting from the

government’s public work boosting policy and Taiwanese businessman’s return to and plant construction projects in Taiwan. The increase in the entire domestic demand for rebar, plus the positive results achieved by the new rebar factories operated by the Company since 2018, drove the growth of the Company’s sale volume for rebar by about 20% in 2020. The Company’s sale volume for primary products in 2020 included the semi-finished goods, 1.636 million tons, an increase from that in 2019 by 9.23%. The operating revenue amounted to NT$27.3 billion, decreasing by 1.58% from that in 2019. The operating profit amounted to NT$3.1 billion, increasing by 47.96% from 2019.

I. Operating results

1. The implementing results for the Company’s primary product sale volume 2020:

Unit: Tons

				Unit: Tons
	Primary Products	Sale volume 2020	Sale volume 2019	Growth rate %
Semi-finished goods	billet	-	25	-100%
Finished goods	merchant bar	339,599	366,233	-7.27%
	round bar	342,809	332,655	3.05%
	rebar	953,339	798,597	19.38%
	Subtotal	1,635,747	1,497,485	9.23%
	Total	1,635,747	1,497,510	9.23%

2. The Company’s earnings are compared as following:

(1) Consolidated financial statements

Unit: NT$ thousand

			Unit: NT$
Item	2020	2019	Growth rate %
Operatingrevenue	27,298,051	27,735,611	-1.58%
Operatingcost	23,448,762	24,870,034	-5.71%
Grossprofit	3,849,289	2,865,577	34.33%
Operatingexpenses	758,427	776,575	-2.34%
Operating profit	3,090,862	2,089,002	47.96%

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(2) Standalone Financial Statements

Unit: NT$ thousand

			Unit: NT$
Item	2020	2019	Growth rate %
Operatingrevenue	27,298,051	27,735,611	-1.58%
Operatingcost	23,448,762	24,870,034	-5.71%
Grossprofit	3,849,289	2,865,577	34.33%
Operating expenses	758,405	776,553	-2.34%
Operating profit	3,090,884	2,089,024	47.96%

3. Analysis on financial structure and profitability (the figures of the consolidated financial statements consist with those of the parent company only financial statements)

Analysis Item	Year	2020	2019
Financial structure (%)	Liability to asset ratio	15.41	14.81
	Ratio of long-term capital to property, plants and equipment	206.32	185.72
Profitability	Return on assets (ROA) (%)	11.80	8.91
	Return on equity (ROE) (%)	13.88	10.62
	Income before tax to paid-in capital ratio (%)	55.66	41.10
	Net profit margin (%)	9.60	7.07
	EPS (NT$)	4.50	3.37

4. Technology and R&D

The Company’s new product development primarily covered improvement on process of semi-finished goods, development of new products and upgrading of product quality. Among the other things, the new products under development primarily included the new steel types and products for new purposes, e.g. Low-carbon and medium-carbon cold forging materials, carbon steel and low-alloy steel for mechanical structure, medium-carbon vulcanized steel, and spring steel for vehicles, etc.. Meanwhile, the Company also engaged in the R&D of products in new shapes and sizes. The Company’s primary R&D results in 2020 are stated as follows: To develop blades of cultivator/car blade dampers and coil springs SUP9, medium-carbon vulcanized steel 1144 for cold drawn bright bars, hexagon socket bolts SCM435H, HEX flange bolts 10B33, bridge bolts 25CUNICRV, steering tie rods 30mnvs6, linear sliders SCM420H & deformed steel for sliders S55C and high-tensile steel SD690, upon customers’ request.

Given the general economic distress, Feng Hsin Steel’s technology and R&D focused on electric furnace steelmaking, few and diversified as its characteristics, in order to mitigate the impact posed by the environment to the Company’s orders. The Company has passed the certification by IATF 16949:2016 Quality Management System of SGS Taiwan Limited in March 2020.

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II. Business Plan 2021

1. External competition, legal environment, and business policy:

Given the critical challenge caused by the Sino-U.S. Trade War and increasing trade protectionism adopted in various countries with respect to the steel trading in the previous year (2019), in addition to the severe impact posed by the COVID-19 pandemic in 2020, various countries have successively adopted the lockdown policy in response to the situation. As a result, the demand for steel materials declined drastically in the world in the first half of the year. The normal economic activities recovered gradually only after the lockdown was lifted step by step as the epidemic slowed down gradually in the second of the year. The Company’s business policy 2021 will continue to adopt the goal in 2020, namely “continue to remodel equipment and improve technology to upgrade the production efficiency and product quality, conserve energy in production, practice the circular economy of green environment, and fulfill the corporate social responsibility,” in order to create the maximum interest for the Company and shareholders at the same time.

2. Sales volume forecast and supporting basis

Despite the COVID-19 epidemic and Protectionism, competition in the global steel industry remains fierce in 2021. All people expect that the lockdown policy would be lifted step by step in various countries so that the world may be back to the normal situation and the demand could recover. According to the forecast announced by the World Steel Association in October 2020, the demand for steel materials would grow by 4.1% in the world in 2021 from 2020. Upon completion of the remodeling of steel bar & wire mills, the Company continued to develop toward the market for high-rank steel types and purposes. Further, upon the official mass production of steel rebars mills, due to the government’s prospective infrastructure construction and public work boosting policies, Taiwanese businessman’s return to and plant construction projects in Taiwan and leading electronics manufacturers’ increasing demand for factory expansion, it is expected that the overall demand may grow stably in 2021. The sales of steel products will grow mildly in 2021 from 2020.

3. Key production and sales policies

(1) Production

• A. Continue to develop new products per customers’ needs, expand the product portfolio and apply flexible scheduling in response to the production plan in order to satisfy customers’ needs.

• B. Uphold the philosophy “Full Engagement, Quality First, and Customers as the First Priority” as the Company’s quality policy.

• C. Start mass production of new steel mills, improve the quality of finished goods, conserve energy consumption by means of direct steel rolling, cut the production cost, and improve the Company’s competitiveness.

(2) Sale

• A. Actively participate in the tender solicitations for public works and important factory construction, and use the best effort to strive for orders to increase the market share in the steel rebars market by enhancing the cooperation with processors and developing new customers.

• B. Continue to develop the export markets for finished goods to seek maximum profit.

• C. Maintain a long-term supply relationship with raw materials suppliers to stabilize the source of goods and product quality.

• D. Improve the service quality and establish a long-term fair partnership with distributors and

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customers to strive together and thrive together.

• E. Keep remodeling, updating, and improving technologies of, steel-making and rolling equipment to improve production efficiency and improve various products’ quality; also keep researching and developing round bar products to help launch into higher rank and wider ranges.

III. Business Environment

Since the previous peak of booming in the global steel industry, the steel manufacturers in various countries have started to expand their production capacity successively. As a result, the overcapacity issue derived again. Besides, the Protectionism advocated by Trump caused the steel price to drop in the world since 2019 and even till 2020. Meanwhile, given the COVID-19 epidemic, the steel price didn’t stop dropping until Q4 of 2020 and fluctuated sharply at the end of 2020 and the beginning of 2021. International research organizations started to adjust the global economic forecast upward successively and thereby might benefit the steel industry’s contingency plan. Therefore, the future can be expected optimistically. Notwithstanding, the COVID-19 still remains a major variable for the global economy. The significant fluctuation in steel price would also test various steel manufacturers’ adaptability to changes, thereby increasing challenges in their business management.

IV. Future Development Strategies

In order to pursue sustainable development, the Company sets forth the following short-term and long-term development strategies, which all employees shall follow:

1. Short-term development strategies

(1) Build a friendly working environment.

(2) Develop new steel types and products.

(3) Cut costs, improve product quality, and expand market share.

(4) Conserve energy and reduce carbon, reduce pollution emissions, improve recycling of water resources, and aim at zero waste discharge.

• (5) Be a good neighbor and landscape the environment to improve the Company’s identity.

2. Long-term development strategies

Implement the smart production into the production process step by step, and adopt the diversification strategy to expand the Company’s core strengths and help the Company launch into the global market.

Thank you for your support and care over the years. We wish you good health and all the best!

Chairman of Board	Lin Ming-Ju
President	Lin Ta-Chun
Accounting Manager	Huang Kuei-Yu

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Audit Committee’s Inspection Report

The Board of Directors has prepared the Company's business report, financial statements (including consolidated and standalone financial statements) and the motion for allocation of earnings 2020, in which the financial statements have been audited by Chen Ming-Hung, CPA and Yen Wen-Pi, CPA of EY Taiwan, who also gave their audit report. After inspecting business report, financial statements and motion for allocation of earnings, the Audit Committee believes that they are free of material misstatement and thus produces this report according to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Please review and approve it accordingly.

Feng Hsin Steel Co., Ltd.

Convener of Audit Committee: Yue Chao-Tang

February 25, 2021

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Report on Allocation of Employee Compensation and Remuneration to Directors 2020

Notes:

1. According to Article 235-1 of the Company Act, a fixed amount or ratio of profit of the current year distributable as employees’ compensation shall be definitely specified in the Articles of Incorporation.

2. According to the Articles of Incorporation, where the Company has annual profits at the end of a financial year, the Company may distribute not less than 2% of the profits for such year to employees as the employees’ compensation. It may distribute not more than 2% thereof to directors as the remuneration.

3. Subject to the profit sought in 2020, upon approval of the Remuneration Committee and resolution of the Board of Directors, the employee compensation, NT$305,698 thousand, and the remuneration to directors, NT$45,000 thousand, were distributed in cash accordingly.

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Proposed Resolution No. 1

• Cause: To propose the resolution for Business Report and Financial Statements 2020. (Proposed by the Board of Directors)

• Note: The Company's business report and financial statements (including consolidated and standalone financial statements) have been inspected by the Audit Committee. Among the other things, financial statements were also audited by Chen Ming-Hung, CPA and Yen Wen-Pi, CPA of EY Taiwan. The business report and financial statements are proposed for resolution.

Resolution:

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Feng Hsin Steel Co., Ltd.

Declaration of Statement

The companies to be included by the Company in the consolidated financial statements of affiliated enterprises in 2020 (Jan. 1, 2020~Dec. 31, 2020) pursuant to the Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those to be included into the consolidated financial statements of the parent company and subsidiaries pursuant to the Statements of International Financial Reporting Standards (IFRS) No. 10. Further, the related information to be disclosed in the consolidated financial statements of affiliated enterprises has been disclosed in consolidated financial statements of the parent company and subsidiaries. Accordingly, it is not necessary for the Company to prepare the consolidated financial statements of affiliated enterprises separately.

We hereby declare as above.

Feng Hsin Steel Co., Ltd.

Responsible Person: Lin Ming-Ju

February 25, 2021

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Independent Auditors’ Report

To FENG HSIN STEEL Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of FENG HSIN STEEL Co., Ltd. and its subsidiaries (the “Group”) as of 31 December 2020 and 2019, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2020 and 2019, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter – Making Reference to the Audits of Component Auditors section of our report), the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of 31 December 2020 and 2019, and their consolidated financial performance and cash flows for the years ended 31 December 2020 and 2019, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditor(s), we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2020 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation for inventories

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As of 31 December 2020, the Group’s net inventories amounted to NT$3,301,468 thousand which represented 14% of the total consolidated assets. The amount of inventories was significant to the Group’s financial statements. The Group manufacture and sell various types of steel products. The main ingredient is iron scrap. The material and finished goods are affected by the fluctuation of international prices that may cause significant changes in inventory prices. As a result, the calculation of net realizable value was complicated, we therefore determined this a key audit mater. Our audit procedures included, but not limited to, understanding and testing the effectiveness of internal control; evaluating the adequacy of accounting policies around obsolete inventories; evaluating stocktaking plan and selecting important storage locations to observe inventory counts to ensure inventory quantities and status; obtaining inventory aging schedule to test whether inbound and outbound records are accurate; re-calculating the unit cost of inventories; evaluating and testing net realizable value adopted by management; testing selling prices; and implementing analytical procedures with respect to the gross profit ratios by products. We also assessed the adequacy of disclosures of inventories. Please refer to Note 6 to the Group’s consolidated financial statements.

Other Matter – Making Reference to the Audits of Component Auditors

Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the audit reports of the other auditors. We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method whose statements are based solely on the reports of other auditors. Investment in these associates and joint ventures under equity method amounted to NT$744,203 thousand and NT$696,101 thousand, both representing 3% of the consolidated total assets as of 31 December 2020 and 2019, respectively. The related shares of profits from the associates and joint ventures under the equity method amounted to NT$83,504 thousand and NT$79,764 thousand, both representing 3% of the consolidated net income before tax for the years ended 31 December 2020 and 2019, respectively; and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$159 thousand and NT$173 thousand, both representing 0% of the consolidated other comprehensive income for the years ended 31 December 2020 and 2019, respectively.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the ability to continue as a going concern of the Group disclosing, as applicable, matters related to going

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concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Group.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Group. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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1. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

2. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2020 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other

We have audited and expressed an unqualified opinion on the parent company only financial statements of FENG HSIN STEEL CO., Ltd. as of and for the years ended 31 December 2020 and 2019.

/s/Chen, Ming Hung

/s/Yen, Wen Pi

Ernst & Young, Taiwan

25 February 2021

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, results of operations 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 consolidated financial statements are those generally accepted and applied in the Republic of China.

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English Translation of Consolidated Financial Statements Originally Issued in Chinese

FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes	2020.12.31 $2,175,269 $1,566,952 397,242 239,141 11,006 25,287 1,478,967 1,532,271 8,579 20,516 3,301,468 4,307,181 668,739 671,224 7,352 2,620 9,748,933 8,365,192 1,426,954 1,367,312 9,436,032 9,846,122 178,936 212,184 698,381 380,417 109,222 111,510 343,142 101,641 13,264,929 13,101,584 2019.12.31 1,072,262 1,082,398 - 1,700,311
Current Assets Cash and cash equivalents Financial assets at fair value through other comprehensive income-current Contract assets, current Notes receivable, net Accounts receivable, net Other receivables Inventories, net Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income-noncurrent Investments accounted for under the equity method Property, plant and equipment Right-of-use asset Investment property,net Deferred tax assets Other non-current assets Total non-current assets	4, 6.(1) 4, 6.(14),(15) 4, 6.(15) 4, 6.(3),(15) 4, 6.(4) 6.(5) 4, 6.(6) 4, 6.(7) 4, 6.(16) 4, 6.(8) 4, 6.(20) 6.(9) 4, 6.(2) 4, 6.(2)

$23,013,862 $21,466,776

(Continued)

Total assets

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English Translation of Consolidated Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)

31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

	Notes 4, 6.(10) 4, 6.(14) 7 6.(11) 4 4, 6.(16) 4, 6.(16) 4, 6.(12) 6.(13) 6.(13) 6.(13) 4	2020.12.31 2019.12.31 $329,941 $381,151 134,198 131,372 - 241 1,302,794 1,176,403 1,026,124 998,743 414,836 120,585 5,109 6,238 2,159 1,376 3,215,161 2,816,109 174,803 204,165 155,688 159,488 330,491 363,653 3,545,652 3,179,762 5,815,994 5,815,994 560,097 588,123 4,354,532 4,158,088 278,241 316,503 8,543,337 7,686,547 13,176,110 12,161,138 (83,991) (278,241) (83,991) (278,241) 19,468,210 18,287,014 $23,013,862 $21,466,776
Current liabilities Short-term loans Contract liabilities, current Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities, current Other current liabilities Total current liabilities Non-current liabilities Lease liabilities, noncurrent Net defined benefit obligation, noncurrent Total non-current liabilities Total liabilities Equity attributable to the parent company Capital Common stock Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated earnings Total Retained earnings Other components of equity Unrealized gains (losses) measured at fair value through other comprehensive income financial asset Total Other components of equity Total equity Total liabilities and equity

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

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English Translation of Consolidated Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended 31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Operating revenues Operating costs Gross Profit-net Operating expenses Sales and marketing expenses General and administrative expenses Research and development expenses Subtotal Operating Income Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit or loss of associates and joint ventures Subtotal Income from continuing operations before income tax Income tax expense Net income Other comprehensive income Items that will not to be reclassified subsequently to profit or loss Remeasurements of defined benefit pension plans Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income Share of other comprehensive of associates and joint ventures Income tax related to items that will not to be reclassified subsequently to profit or loss Total other comprehensive loss, net of tax Total comprehensive income Net income attributable to: Stockholders of the parent Non-controlling interests Comprehensive income attributable to: Stockholder of the parent Non-controlling interests Earnings per share (NTD) Earnings per share-basic Earnings per share-diluted	Notes	2020 2019
	4,6.(14) 6.(17),7 6.(17) 4,6.(18) 6.(18) 6.(18) 6.(6) 4,6.(20) 6.(19) 4,6.(21)	$27,298,051 $27,735,611 (23,448,762) (24,870,034) 3,849,289 2,865,577 (410,547) (441,118) (304,047) (290,567) (43,833) (44,890) (758,427) (776,575) 3,090,862 2,089,002 3,480 2,535 65,015 56,321 (11,542) 47,185 (5,917) (13,533) 95,044 209,220 146,080 301,728 3,236,942 2,390,730 (617,516) (428,375) 2,619,426 1,962,355 (7,784) 2,437 159 173 334,594 40,350 $2,954,020 $2,002,705 $2,619,426 $1,962,355 - - $2,619,426 $1,962,355 $2,954,020 $2,002,705 - - $2,954,020 $2,002,705 $4.50 $3.37 $4.50 $3.37 1,525 (522) 340,694 38,262

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

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(Expressed in Thousands of New Taiwan Dollars) FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES English Translation of Consolidated Financial Statements Originally Issued in Chinese CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended 31 December 2020 and 2019		Total Equity	Total Equity	$18,638,167 - - (2,326,398) (28,385) 925 1,962,355 40,350	2,002,705	$18,287,014	$18,287,014 - (1,744,798) - (28,867) 841 2,619,426 334,594	2,954,020	-	$19,468,210		(The accompanying notes are an integral part of the financial statements)
	Equity Attributable to the parent company	Other components of equity	Unrealized Gains (losses) measured at fair value through other comprehensive income	$(316,503) 38,262	38,262	$(278,241)	$(278,241) 340,694	340,694	(146,444)	$(83,991)
		Retained earnings	Unappropriated Earnings	$8,612,358 (294,241) (269,615) (2,326,398) 1,962,355 2,088	1,964,443	$7,686,547	$7,686,547 (196,444) (1,744,798) 38,262 2,619,426 (6,100)	2,613,326	146,444	$8,543,337
			Special reserve	$46,888 269,615	-	$316,503	$316,503 (38,262)	-		$278,241
			Legal Reserve	$3,863,847 294,241	-	$4,158,088	$4,158,088 196,444	-		$4,354,532
			Additional Paid-in Capital	$615,583 (28,385) 925	-	$588,123	$588,123 (28,867) 841	-		$560,097
			Common Stock	$5,815,994	-	$5,815,994	$5,815,994	-		$5,815,994
				Balance as of 1 January 2019 Appropriation and distribution of 2018 retained earnings Legal reserve Special reserve Cash dividends Change in other paid-in capital Change in other paid-in capital of associates and joint ventures accounted for using the equity method Change in other paid-in capital Net income for the year ended 31 December 2019 Other comprehensive income (loss), net of tax for the year ended 31 December 2019 Total comprehensive income (loss) Balance as of 31 December 2019 Balance as of 1 January 2020 Appropriation and distribution of 2019 retained earnings Legal reserve Cash dividends Reversal of special reserve Change in other paid-in capital Change in other paid-in capital of associates and joint ventures accounted for using the equity method Change in other paid-in capital Net income for the year ended 31 December 2020 Other comprehensive income (loss), net of tax for the year ended 31 December 2020 Total comprehensive income (loss) Disposal of financial assets at fair value through other comprehensive income Balance as of 31 December 2020

18

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended 31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Net income before tax Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expense adjustments: Depreciation Amortization Net gain of financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates and joint ventures Gain on disposal of property, plant and equipment Loss on disposal of other assets Other items Changes in operating assets and liabilities: (Increase) Decrease in current contract assets Decrease (Increase) in notes receivable Decrease (Increase) in accounts receivable Decrease in other receivables Decrease in inventories, net Increase in prepayments Increase in other current assets Increase (Decrease) in current contract liabilities Decrease in notes payable Increase (Decrease) in accounts payable Increase in other payables Increase in other current liabilities Decrease in net defined benefit obligation Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash provided by operating activities

For theyears ended 31 December

2020 2019 $3,236,942 $2,390,730 1,184,374 1,114,364 3,000 3,000 (520) - 5,917 13,533 (3,480) (2,535) (48,056) (30,583) (95,044) (209,220) (497) (34,329) 98 - (544) - (158,101) 11,783 15,122 (21,566) 53,304 (76,572) 8,700 11,656 1,007,086 2,435,929 (40,114) (174,274) (1,892) (504) 2,826 (39,528) (241) (2,231) 129,036 (379,728) 39,594 86,131 783 156 (23,612) (13,698) 5,314,681 5,082,514 3,480 2,478 51,293 26,783 (3,186) (10,917) (319,452) (605,721) 5,046,816 4,495,137

(Continued)

19

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended 31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through other comprehensive income Return of paid-in capital for capital reduction in financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for under the equity method Decrease in investments accounted for under the equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of investment properties Increase in non-current-assets Dividends received Net cash used in investing activities Cash flows from financing activities: Decrease in short-term loans Cash payments for the principal of lease liability Cash dividends Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

For theyears ended 31 December

2020 2019 (2,666,305) - 1,303,417 - 13,407 3,528 (10,000) - 10,520 - (52,122) (188,129) - 4,268 (726,663) (874,744) 150 14,553 (321,843) - (244,501) (59,851) 58,816 496,393 (2,635,124) (603,982) (51,210) (637,382) (7,367) (10,756) (1,744,798) (2,326,398) (1,803,375) (2,974,536) 608,317 916,619 1,566,952 650,333 $2,175,269 $1,566,952

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

20

Independent Auditors’ Report

To FENG HSIN STEEL Co., Ltd.

Opinion

We have audited the accompanying standalone balance sheets of FENG HSIN STEEL Co., Ltd. (the “Company”) as of 31 December 2020 and 2019, and the related standalone statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2020 and 2019, and notes to the standalone financial statements, including the summary of significant accounting policies (together “the standalone financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter – Making Reference to the Audits of Component Auditors section of our report), the standalone financial statements referred to above present fairly, in all material respects, the standalone financial position of the Company as of 31 December 2020 and 2019, and their standalone financial performance and cash flows for the years ended 31 December 2020 and 2019, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditor(s), we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2020 standalone financial statements. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation for inventories

As of 31 December 2020, the Company’s net inventories amounted to NT$3,301,468 thousand which represented 14% of the total standalone assets. The amount of inventories was significant to the Company’s financial statements. The Company manufacture and sell various types of steel products. The main ingredient is iron scrap. The material and finished goods are affected by the fluctuation of

21

international prices that may cause significant changes in inventory prices. As a result, the calculation of net realizable value was complicated, we therefore determined this a key audit mater. Our audit procedures included, but not limited to, understanding and testing the effectiveness of internal control; evaluating the adequacy of accounting policies around obsolete inventories; evaluating stocktaking plan and selecting important storage locations to observe inventory counts to ensure inventory quantities and status; obtaining inventory aging schedule to test whether inbound and outbound records are accurate; re-calculating the unit cost of inventories; evaluating and testing net realizable value adopted by management; testing selling prices; and implementing analytical procedures with respect to the gross profit ratios by products. We also assessed the adequacy of disclosures of inventories. Please refer to Note 6 to the Company’s standalone financial statements.

Other Matter – Making Reference to the Audits of Component Auditors

Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the audit reports of the other auditors. We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method whose statements are based solely on the reports of other auditors. Investment in these associates and joint ventures under equity method amounted to NT$744,203 thousand and NT$696,101 thousand, both representing 3% of the standalone total assets as of 31 December 2020 and 2019, respectively. The related shares of profits from the associates and joint ventures under the equity method amounted to NT$83,504 thousand and NT$79,764 thousand, both representing 3% of the standalone net income before tax for the years ended 31 December 2020 and 2019, respectively; and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$159 thousand and NT$173 thousand, both representing 0% of the standalone other comprehensive income for the years ended 31 December 2020 and 2019, respectively.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

Management is responsible for the preparation and fair presentation of the standalone financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China and for such internal control as management determines is necessary to enable the preparation of standalone financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the ability to continue as a going concern of the Company disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of the Company.

22

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Company. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the standalone financial statements, including the accompanying notes, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the standalone financial

23

statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2020 standalone financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

/s/Chen, Ming Hung

/s/Yen, Wen Pi

Ernst & Young, Taiwan

25 February 2021

Notice to Readers

The accompanying standalone financial statements are intended only to present the standalone financial position, results of operations 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 accepted and applied in the Republic of China.

24

English Translation of Standalone Financial Statements Originally Issued in Chinese

FENG HSIN STEEL CO., LTD.

Standalone BALANCE SHEETS

31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes	2020.12.31 $2,174,223 $1,565,811 397,242 239,141 11,006 25,287 1,478,967 1,532,271 8,579 20,516 3,301,468 4,307,181 668,739 671,224 7,352 2,620 9,747,887 8,364,051 1,943,411 1,883,864 9,436,032 9,846,122 178,936 212,184 698,381 380,417 109,222 111,510 343,142 101,641 13,265,975 13,102,725 556,851 566,987 - 1,700,311 2019.12.31
Current Assets Cash and cash equivalents Financial assets at fair value through other comprehensive income-current Contract assets, current Notes receivable, net Accounts receivable, net Other receivables Inventories, net Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income-noncurrent Investments accounted for under the equity method Property, plant and equipment Right-of-use asset Investment property,net Deferred tax assets Other non-current assets Total non-current assets	4, 6.(1) 4, 6.(14),(15) 4, 6.(15) 4, 6.(3),(15) 4, 6.(4) 6.(5) 4, 6.(6) 4, 6.(7) 4, 6.(16) 4, 6.(8) 4, 6.(20) 6.(9) 4, 6.(2) 4, 6.(2)

Total assets

$23,013,862 $21,466,776

(Continued)

25

English Translation of Standalone Financial Statements Originally Issued in Chinese

FENG HSIN STEEL CO., LTD.

Standalone BALANCE SHEETS (Continued)

31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

	Notes 4, 6.(10) 4, 6.(14) 7 6.(11) 4 4, 6.(16) 4, 6.(16) 4, 6.(12) 6.(13) 6.(13) 6.(13) 4	2020.12.31 2019.12.31 $329,941 $381,151 134,198 131,372 - 241 1,302,794 1,176,403 1,026,124 998,743 414,836 120,585 5,109 6,238 2,159 1,376 3,215,161 2,816,109 174,803 204,165 155,688 159,488 330,491 363,653 3,545,652 3,179,762 5,815,994 5,815,994 560,097 588,123 4,354,532 4,158,088 278,241 316,503 8,543,337 7,686,547 13,176,110 12,161,138 (83,991) (278,241) (83,991) (278,241) 19,468,210 18,287,014 $23,013,862 $21,466,776
Current liabilities Short-term loans Contract liabilities, current Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities, current Other current liabilities Total current liabilities Non-current liabilities Lease liabilities, noncurrent Net defined benefit obligation, noncurrent Total non-current liabilities Total liabilities Equity attributable to the parent company Capital Common stock Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated earnings Total Retained earnings Other components of equity Unrealized gains (losses) measured at fair value through other comprehensive income financial asset Total Other components of equity Total equity Total liabilities and equity

Total liabilities and equity

(The accompanying notes are an integral part of the Standalone financial statements)

26

English Translation of Standalone Financial Statements Originally Issued in Chinese

FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF COMPREHENSIVE INCOME

For the years ended 31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Operating revenues Operating costs Gross Profit-net Operating expenses Sales and marketing expenses General and administrative expenses Research and development expenses Subtotal Operating Income Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit or loss of associates and joint ventures Subtotal Income from continuing operations before income tax Income tax expense Net income Other comprehensive income Items that will not to be reclassified subsequently to profit or loss Remeasurements of defined benefit pension plans Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income Share of other comprehensive of associates and joint ventures Income tax related to items that will not to be reclassified subsequently to profit or loss Total other comprehensive loss, net of tax Total comprehensive income Earnings per share (NTD) Earnings per share-basic Earnings per share-diluted	Notes	2020 2019
	4,6.(14) 6.(17),7 6.(17) 4,6.(18) 6.(18) 6.(18) 6.(6) 4,6.(20) 6.(19) 4,6.(21)	$27,298,051 $27,735,611 (23,448,762) (24,870,034) 3,849,289 2,865,577 (410,547) (441,118) (304,025) (290,545) (43,833) (44,890) (758,405) (776,553) 3,090,884 2,089,024 3,479 2,529 65,015 56,321 (11,468) 47,209 (5,917) (13,533) 94,949 209,180 146,058 301,706 3,236,942 2,390,730 (617,516) (428,375) 2,619,426 1,962,355 (7,784) 2,437 159 173 334,594 40,350 $2,954,020 $2,002,705 $4.50 $3.37 $4.50 $3.37 340,694 38,262 1,525 (522)

(The accompanying notes are an integral part of the Standalone financial statements)

27

FENG HSIN STEEL CO., LTD. English Translation of Standalone Financial Statements Originally Issued in Chinese Standalone STATEMENTS OF CHANGES IN EQUITY For the years ended 31 December 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)		Total Equity	Total Equity	$18,638,167 - - (2,326,398) (28,385) 925 1,962,355 40,350	2,002,705	$18,287,014	$18,287,014 - (1,744,798) - (28,867) 841 2,619,426 334,594	2,954,020	-	$19,468,210
	Equity Attributable to the parent company	Other components of equity	Unrealized Gains (losses) measured at fair value through other comprehensive income	$(316,503) 38,262	38,262	$(278,241)	$(278,241) 340,694	340,694	(146,444)	$(83,991)
		Retained earnings	Unappropriated Earnings	$8,612,358 (294,241) (269,615) (2,326,398) 1,962,355 2,088	1,964,443	$7,686,547	$7,686,547 (196,444) (1,744,798) 38,262 2,619,426 (6,100)	2,613,326	146,444	$8,543,337
			Special reserve	$46,888 269,615	-	$316,503	$316,503 (38,262)	-		$278,241
			Legal Reserve	$3,863,847 294,241	-	$4,158,088	$4,158,088 196,444	-		$4,354,532
			Additional Paid-in Capital	$615,583 (28,385) 925	-	$588,123	$588,123 (28,867) 841	-		$560,097
			Common Stock	$5,815,994	-	$5,815,994	$5,815,994	-		$5,815,994
				Balance as of 1 January 2019 Appropriation and distribution of 2018 retained earnings Legal reserve Special reserve Cash dividends Change in other paid-in capital Change in other paid-in capital of associates and joint ventures accounted for using the equity method Change in other paid-in capital Net income for the year ended 31 December 2019 Other comprehensive income (loss), net of tax for the year ended 31 December 2019 Total comprehensive income (loss) Balance as of 31 December 2019 Balance as of 1 January 2020 Appropriation and distribution of 2019 retained earnings Legal reserve Cash dividends Reversal of special reserve Change in other paid-in capital Change in other paid-in capital of associates and joint ventures accounted for using the equity method Change in other paid-in capital Net income for the year ended 31 December 2020 Other comprehensive income (loss), net of tax for the year ended 31 December 2020 Total comprehensive income (loss) Disposal of financial assets at fair value through other comprehensive income Balance as of 31 December 2020

28

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF CASH FLOWS

For the years ended 31 December 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Net income before tax Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expense adjustments: Depreciation Amortization Net gain of financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates and joint ventures Gain on disposal of property, plant and equipment Loss on disposal of other assets Other items Changes in operating assets and liabilities: (Increase) Decrease in current contract assets Decrease (Increase) in notes receivable Decrease (Increase) in accounts receivable Decrease in other receivables Decrease in inventories, net Increase in prepayments Increase in other current assets Increase (Decrease) in current contract liabilities Decrease in notes payable Increase (Decrease) in accounts payable Increase in other payables Increase in other current liabilities Decrease in net defined benefit obligation Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash provided by operating activities

For theyears ended 31 December

2020 2019 $3,236,942 $2,390,730 1,184,374 1,114,364 3,000 3,000 (520) - 5,917 13,533 (3,479) (2,529) (48,056) (30,583) (94,949) (209,180) (497) (34,329) 98 - (544) - (158,101) 11,783 15,122 (21,566) 53,304 (76,572) 8,700 11,656 1,007,086 2,435,929 (40,114) (174,274) (1,892) (504) 2,826 (39,528) (241) (2,231) 129,036 (379,728) 39,594 86,131 783 156 (23,612) (13,698) 5,314,777 5,082,560 3,479 2,472 51,293 26,783 (3,186) (10,917) (319,452) (605,721) 5,046,911 4,495,177

(Continued)

29

English Translation of Standalone Financial Statements Originally Issued in Chinese

FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF CASH FLOWS

For the years ended 31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through other comprehensive income Return of paid-in capital for capital reduction in financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for under the equity method Decrease in investments accounted for under the equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of investment properties Increase in non-current-assets Dividends received Net cash used in investing activities Cash flows from financing activities: Decrease in short-term loans Cash payments for the principal of lease liability Cash dividends Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

For theyears ended 31 December

2020 2019 (2,666,305) - 1,303,417 - 13,407 3,528 (10,000) - 10,520 - (52,122) (188,129) - 4,268 (726,663) (874,744) 150 14,553 (321,843) - (244,501) (59,851) 58,816 496,393 (2,635,124) (603,982) (51,210) (637,382) (7,367) (10,756) (1,744,798) (2,326,398) (1,803,375) (2,974,536) 608,412 916,659 1,565,811 649,152 $2,174,223 $1,565,811

(The accompanying notes are an integral part of the Standalone financial statements)

30

Proposed Resolution No. 2

Cause: To proposed the resolution for allocation of earnings 2020 (Proposed by the Board of Directors)

Note: The allocation of earnings 2020 is planned as following:

Feng Hsin Steel Co., Ltd.

Statement of Earnings Allocation 2020

Statement of Earnings Allocation 2020	Statement of Earnings Allocation 2020
Unit: NT$thousand
Item	Amount
Unallocated earnings - beginning	5,783,566,230
Add(less):
Other comprehensive income (Defined benefit plan re-measurement amount - 2020)	(6,100,242)
Current net income 2020	2,619,426,254
Disposal of equity instrument at fair value through other comprehensive income	146,444,744
Allocable earnings	8,543,336,986
Less:
Provisions
Appropriation of legal reserve(10%)	(275,977,076)
Reversal of special reserve set asidepursuant to laws	194,249,615
Allocations
Shareholder bonus - cash(NT$3.50 distributedper share)	(2,035,597,984)
Unallocated earnings - ending	6,426,011,541

Note 1: The cash dividends will be calculated and truncated to the nearest NTD. Fractions shall be summed and recognized by the Company as other income.

Note 2: The earnings 2020 shall be allocated as the first priority this year. Note 3: Once resolved at the Annual General Meeting, the Board of Directors will be authorized to set the ex-dividend date and date of allocation with respect to the cash dividends referred to herein.

Chairman of Board: Lin Ming-Ju President: Lin Ta-Chun Accounting Manager: Huang Kuei-Yu

Resolution:

31

Discussed Motions

Discussion Motion No. 1

Cause: To propose the amendments to the Company’s “Articles of Incorporation” for discussion. (Proposed by the Board of Directors)

Note: The comparative list for the Company’s “Articles of Incorporation” before and after the amendments.

Basis: The related provisions were amended according to the “Taiwan Stock Exchange Corporation Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers” and relevant practices.

	After Amendments		Before Amendments	Before Amendments	Notes:
	Article 16. …………………………………… The Companyshalltake out for directors the liability insurance during their term of office.		Article 16. ……………………… The Company insurance for term of office.	…………… maytake out liability directors during their	The related provisions were amended according to the “Taiwan Stock Exchange Corporation Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers.”
	Article 25. The Company appoints one President and several managers. The appointment, dismission and remuneration thereof are governed by Article 29 of the Company Act. Remuneration to the Company’s managers is resolved by the Chairman of Board based on their engagement in the Company’s operation and value of their contribution, and then proposed to the Remuneration Committee for review and to the Board of Directors for resolution.		Article 25. The Company appoints one President and several managers. The appointment, dismission and remuneration thereof are governed by Article 29 of the Company Act. (Added)		Add the literal description about remuneration to managers.
	Article 27-1 …………………………………… The Board of Directors proposes the motion for distribution of shareholder bonuspursuant to Paragraph 1. The		Article 27-1 …………………………………… The Board of Directors proposes the motion for distribution of shareholder bonuspursuant to Paragraph 1. The		Add the contents providing that the Board of Directors is authorized to resolve the cash dividend

32

	After Amendments		Before Amendments	Notes:
	shareholder bonus refers to more than 50% (inclusive) of the balance after the current net income less the legal reserve and special reserve to be provided in the current period, as well as the non-recurring non-operating gains. Notwithstanding, when the allocable earnings are less than 10% of the paid-in capital or the current net income is less than 2% of the paid-in capital, a motion for suspended allocation of the shareholder bonus may be proposed. For distribution of the shareholder bonus referred to in the preceding paragraph, based on the resolution of a majority of directors at a meeting attended by two-thirds of the whole directors, the Company shall distribute the dividend and bonus, in whole or in part, in cash and report to the shareholders’meeting.		shareholder bonus refers to more than 50% (inclusive) of the balance after the current net income less the legal reserve and special reserve to be provided in the current period, as well as the non-recurring non-operating gains. Notwithstanding, when the allocable earnings are less than 10% of the paid-in capital or the current net income is less than 2% of the paid-in capital, a motion for suspended allocation of the shareholder bonus may be proposed. (Added)	distribution to shareholders.
	Article 31: …………………………………… 37th amendments hereto were made on June 8, 2016. 38th amendments hereto were made on June 11, 2021.		Article 31: …………………………………… 37th amendments hereto were made on June 8, 2016.	Add the dates when the amendments were made.

Resolution:

33

Discussion Motion No. 2

Cause: To propose the amendments to the “Parliamentary Rules for Shareholders’ Meetings” for discussion.

(Proposed by the Board of Directors)

Note: The comparative list for the Company’s “Parliamentary Rules for Shareholders’ Meetings” before and after the amendments.

Basis: The Company’s parliamentary rules for shareholders’ meetings were amended in response to the letter under Tai-Cheng-Ji-Li-Zi No. 1100001446 and in order to improve the corporate governance and maintain shareholders’ interests and rights.

	After Amendments		Before Amendments	Notes:
	Article 2. (Convention of Shareholders’ Meetings and Meeting Notice) …………………………………… Motions for election or discharge of directors, alteration of the Articles of Incorporation, capital decrease, suspension of public offerings, directors’ competition permission, capital increase from earnings, capital increase from capital surplus, dissolution/merger/demerger of the Company, or anything as stated in Paragraph 1 of Article 185-1 of the Company Act,Article 26-1 and Article 43-6 of the Securities and Exchange Act, and Article 56-1 and Article 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuersshall be explicitly stated in the cause of convening the meeting, but shall not be proposed as extemporary motions. …………………………………… Any shareholder holding 1% or more of the total outstanding shares of the Company may propose no more than one motion at the Company’s General Shareholders’ Meeting. Any additional proposal will not be included as a motion. Any shareholder may proposeanysuggestive motionto urge the Company to enhance public interests or fulfill its corporate social responsibility. Procedurally, the shareholder is allowed to propose no more than one motion pursuant to Article 172-1 of the Company Act. Any additional proposal will not be included as a		Article 2. (Convention of Shareholders’ Meetings and Meeting Notice) …………………………………… Motions for election or discharge of directors, alteration of the Articles of Incorporation, capital decrease, suspension of public offering, directors’ competition permission, capital increase from earnings, capital increase from capital surplus, dissolution/merger/demerger of the Company, or anything as stated in Paragraph 1 of Article 185-1 of the Company Act shall be explicitly stated in the cause of convening the meeting, but shall not be proposed as extemporary motions.The main content thereof may be posted on the website designated by the securities competent authority or the Company, and the website URL shall be specified in the notice too. …………………………………… Any shareholder holding 1% or more of the total outstanding shares of the Company may propose no more than one motion at the Company’s General Shareholders’ Meeting. Any additional proposal will not be included as a motion. Notwithstanding, where a shareholder proposesany suggestive motion to urge the Company to enhance public interests or fulfill its corporate social responsibility, the Board of Directors shall include such proposal as a motion.Any proposals	As the announcement mode was adjusted in response to the relevant provisions, the related provisions were amended accordingly.

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	After Amendments	Before Amendments	Notes:
	motion.Any proposals pertinent to the conditions specified in Paragraph 4 of Article 172-1 of the Company Act may be excluded by the Board from motions.……………………	pertinent to any conditions as specified in Paragraph 4 of Article 172-1 of the Company Act may be excluded by the Board from motions. ………………………
	Article 8. …………………………………… The chairperson shall announce the commencement of the meeting as soon as it is due and the information about the number of attendees without voting rights and the number of shares represented by the attendees.However, if current attendees represent less than half of the Company's outstanding shares,the chairperson may announce to postpone the meeting no more than twice for a period totaling no more than one hour.…………………………	Article 8. …………………………………… The chairperson shall announce the commencement of the meeting as soon as it is due. However, if current attendees represent less than half of the Company's outstanding shares, the chairperson may announce to postpone the meeting no more than twice for a period totaling no more than one hour. ……………………………	The related provisions were amended in order to improve corporate governance and maintain shareholders’ interests and rights.
	Article 13. (Election) In the event that an election of directors is held at a shareholders’ meeting, the election shall follow the procedure and regulation set forth by the Company. The election result shall be announced on the scene, including the list of elected directors and the final tallyand the list of directors losing in the election and votes won by them. ……………………………………	Article 13. (Election) In the event that an election of directors is held at a shareholders’ meeting, the election shall follow the procedure and regulation set forth by the Company and the election result shall be announced on the scene, including the list of elected directors and the final tally. ……………………………………	The related provisions were amended in order to improve corporate governance and maintain shareholders’ interests and rights.
	Resolution:

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Elections

Cause: To elect 13 directors (including 3 independent directors) of 22nd Term of the Company (Proposed by the Board of Directors)

• Notes: 1. The motion proposes to complete the re-election upon expiration of the term of office served by the Company’s directors.

• According to the Articles of Incorporation and the resolution made by the Board of Directors on January 28, 2021, 13 directors (including 3 independent directors) should be elected at the meeting.

• The re-elected directors should serve the term of office for three years, from June 11, 2021 (the date of re-election) until June 10, 2024.

• The election of the Company's directors is subject to the nomination system under the Company's Articles of Incorporation. The directors shall be elected by shareholders from the name list of candidates. For the academic degree, work experience and other information about the directors, please refer to Pages 37~38 of the Handbook.

Election results:

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List of Candidates for Directors

		List of Candidates for Directors
Name	Number of shareholding (Note)	Major academic degree (work experience)	Remarks
Lin Ta-Chun	7,168,881	Master, Boston University President of Feng Hsin Steel Co., Ltd. Supervisor of Lih Dar Steel Co., Ltd. Supervisor of Fengyu Resource Co.,Ltd.	Candidate for Director
Lin Chiu-Huang	5,526,000	Graduated from Taichung Municipal Feng Yuan Commercial High School Chairman of Board of Sun Young Lumber Products Co., Ltd. Supervisor of Gwo Huei Iron & Steel Co., Ltd. Supervisor of Gwo Uei Metals IndustryCo.,Ltd.	Candidate for Director
Lin Wen-Fu	5,388,871	Undergraduate, Feng Chia University Chairman of Board of Lih Dar Steel Co., Ltd. Director of Ta Chia Iron & Steel Co.,Ltd.	Candidate for Director
Lin Tsai-Hsiang	5,846,860	Graduated from Cal. State University Fullerton Assistant Manager of Dragon Steel Corporation Vice President of Taiwan Steel Union Co.,Ltd	Candidate for Director
Lin Chi-Jui	3,768,292	Graduated from the Department of Business Finance and Accounting, Bentley University Vice President of FengHsin Steel Co.,Ltd.	Candidate for Director
Yang Tsung-Ju	5,597,708	Phd, Graduate Institute of Physics, National Tsing Hua University Director of Fengying Development Enterprise Co., Ltd. Chairman of Board of Fengyuan Development Co.,Ltd.	Candidate for Director
Chen Hsin-Hung	3,119,997	Master,Syracuse University Chairman of Board of Gei Tai International Co., Ltd. Chairman of Board of Yiyuan Wood Industry Co., Ltd. Chairman of Board of Yifeng Gypsum Chemical Co., Ltd. Director and President of Chang Ying International Limited	Candidate for Director
Chung Shing-Lin	10,727,510	Graduated from Taichung Municipal Taichung First Senior High School Director of Feng Hsin Steel Co., Ltd. Supervisor of Feng Hsin Steel Co., Ltd. Supervisor of Fengxin Development Enterprise Co.,Ltd	Candidate for Director
Lai San-Ping	12,702,006	Graduated from Chung Yuan Christian University Vice President of Feng Hsin Steel Co., Ltd. Director of Gwo Huei Iron & Steel Co., Ltd. Director of Gwo Uei Metals IndustryCo.,Ltd.	Candidate for Director
Lin Kun-Tan	8,160,782	Graduated from National Chengchi University Chairman of Board of Gwo Huei Iron & Steel Co., Ltd. Chairman of Board of Gwo Uei Metals IndustryCo.,Ltd.	Candidate for Director

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Name	Number of shareholding (Note)	Major academic degree (work experience)	Remarks
		Chairman of Board of Yung Li Shing Construction Co., Ltd.
Yue Chao-Tang	0	Master, Graduate Institute of Accounting, National Chengchi University CPA of the R.O.C. Chairman of Board/President of Ernst& Young Director of Tien-Yeh Consulting Co., Ltd. Adjunct professor of National Chung Cheng University Independent director of Uni-President Enterprises Corporation Independent director of Johnson Health Tech	Candidate for Independent Director
Liao Liao-Yu	0	Graduated from Feng Chia University Taichung County Magistrate Minister, Ministry of the Interior Secretary-General to the President Senior Advisor to the President Independent director of China Metal Products Co.,Ltd.	Candidate for Independent Director
Wang Yea-Kang	0	Master, Graduate Institute of Urban Planning, National Chung Hsing University Chairman of Board of Taiwan Textile Research Institute Director-General, Industrial Development Bureau, Ministry of Economic Affairs Director-General, Small and Medium Enterprise Administration, Ministry of Economic Affairs Director-General, Department of Commerce, Ministry of Economic Affairs Secretary-General of Chinese National Federation of Industries Independent director of Eclat Textile Co., Ltd. Independent director of Wah Lee Industrial Corp. Independent director of Wisher Industrial Co.,Ltd.	Candidate for Independent Director

Note: The number of shares held on the date of suspended transfer registration of shares for the General Shareholders’ Meeting (April 13, 2021).

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Other Motions

Cause: To release the Company’s new directors from non-competition restrictions. (Proposed by the Board of Directors)

• Notes: 1. According to Article 209 of the Company Act, a director who does anything for himself or on behalf of another person within the scope of the company's business shall explain to the meeting of shareholders the essential contents of such an act secure its approval.

• Some of the Company's new directors might have invested or manage any company engaged in the business identical with or similar to the Company's business, and hold the position as a director in the company. In order to recruit professionals to serve as directors of the Company, without prejudicing the Company’s interest and right, a motion is proposed to the shareholders’ meeting requesting the release of the new directors from the non-competition restrictions referred to in Article 209 of the Company Act, in order to help the Company’s promotion of business.

• For the Company’s new directors who also hold a position in any other company concurrently, please refer to the following:

Name List of Directors Released from Non-Competition Restrictions

Type of Candidate	Name of Candidate	Name of Competed Company	Position
Director	Lai San-Ping	Gwo Huei Iron & Steel Co., Ltd. Gwo Uei Metals IndustryCo.,Ltd.	Director Director
Director	Lin Wen-Fu	Lih Dar Steel Co., Ltd. Ta Chia Iron & Steel Co.,Ltd.	Chairman of Board Director
Director	Lin Kun-Tan	Gwo Huei Iron & Steel Co., Ltd. Gwo Uei Metals Industry Co., Ltd. YungLi ShingConstruction Co.,Ltd.	Chairman of Board Chairman of Board Chairman of Board
Director	Lin Tsai-Hsiang	Gwo Huei Iron & Steel Co., Ltd. Gwo Uei Metals Industry Co., Ltd. Taiwan Steel Union Co.,Ltd	Representative as the director of the Company Representative as the director of the Company Vice President
Director	Chen Hsin-Hung	Gei Tai International Co.,Ltd.	Chairman of Board
Independent Director	Liao Liao-Yu	China Metal Products Co., Ltd.	Independent Director

Resolution:

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Extemporary Motions

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Parliamentary Rules for Shareholders’ Meetings

Article 1.

Any shareholders’ meeting of the Company shall be governed by these Rules, unless otherwise provided in laws or the Articles of Incorporation.

Article 2. (Convention of Shareholders’ Meetings and Meeting Notice)

Unless otherwise provided in laws, any shareholders’ meeting of the Company shall be convened by the Board of Directors.

The Company shall prepare the electronic version of the meeting notice, power of attorney form, information on motions for proposed resolutions, discussion motions, election or discharge of directors and supervisors, and causes of the motions, and send the same to the MOPS at least 30 days before a general shareholder’s meeting or at least 15 days before a special shareholders’ meeting. Meanwhile, the Company shall prepare the shareholders’ meeting handbook and supplementary materials for the meeting in an electronic version and send the same to MOPS at least 21 days before a general shareholders’ meeting or 15 days before a special shareholders’ meeting. The shareholders’ meeting handbook and supplementary materials of the meeting shall be prepared 15 days before the meeting date for shareholders to read at any time. They shall also be displayed in the Company and at the premises of the professional shareholder service agent entrusted by the Company, and shall be distributed at the meeting.

Said notice and announcement shall contain information on the cause of the meeting, and may be made in electronic form upon the consent of the respondents.

Motions for election or discharge of directors, alteration of the Articles of Incorporation, capital decrease, suspension of public offering, directors’ competition permission, capital increase from earnings, capital increase from capital surplus, dissolution/merger/demerger of the Company, or anything as stated in Paragraph 1 of Article 185-1 of the Company Act shall be explicitly stated in the cause of convening the meeting, but shall not be proposed as extemporary motions. The main content thereof may be posted on the website designated by the securities competent authority or the Company, and the website URL shall be specified in the notice too.

Where the cause of convening a shareholders’ meeting has specified re-election of the whole directors and the date of appointment, the date of appointment may not be changed via an extemporary motion or in any other manner at the same meeting upon completion of the re-election.

Any shareholder holding 1% or more of the total outstanding shares of the Company may propose no more than one motion at the Company’s General Shareholders’ Meeting. Any additional proposal will not be included as a motion. Notwithstanding, where a shareholder proposes any suggestive motion to urge the Company to enhance public interests or fulfill its corporate social responsibility, the Board of Directors shall include such proposal as a motion. Any proposals pertinent to any conditions as specified in Paragraph 4 of Article 172-1 of the Company Act may be excluded by the Board from motions.

The Company shall, by the book closure date before the date of a general shareholders’ meeting, announce the opening of proposal submission from shareholders, acceptance of submission in

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writing or in an electronic form, where shareholders shall submit their proposals, and the submission period. The submission period shall be no less than 10 days.

Each proposal is limited to 300 words or it will not be included as a motion. Each shareholder shall attend the general shareholders' meeting in person, or appoint a proxy to attend and engage in the discussion of the motion being proposed on behalf of him/her.

The Company shall inform any shareholder who has submitted a proposal of the result of the review of the proposal before the date when the notice of the shareholders’ meeting is sent, and list the motions meeting the requirements of this Article into the meeting notice. For proposals by shareholders not being included as motions, the Board shall explain the reasons for excluding such proposals from motions at the shareholders’ meeting.

Article 3.

Each shareholder may present a power of attorney prepared by the Company, which specifies the scope of powers, to appoint a proxy to attend the meeting on behalf of him/her.

One shareholder may appoint one proxy and present one power of attorney. A power of attorney shall be delivered to the Company 5 days prior to the scheduled date of the shareholders’ meeting. Where duplicate copies of the power of attorney are delivered, the earliest one delivered shall prevail, unless a declaration is made to cancel the earlier appointment of proxy.

After the delivery of the power of attorney to the Company, any shareholder who desires to attend the meeting in person or cast a vote by correspondence or electronic means shall inform the Company for the revocation of the appointment of proxy in writing 2 days prior to the scheduled date of the meeting. In the event of any such notice sent beyond the time limit, votes cast by the proxy at the meeting shall prevail.

Article 4. (Principles About Venue and Time of Shareholders’ meeting)

The venue where a shareholders’ meeting shall be convened shall be at the premises where the Company is located, or a place convenient for convening the shareholders’ meeting. The time for the meeting shall not be earlier than 9:00 am or later than 3:00 pm of the day.

Article 5. (Preparation for Sign-in Books, etc.)

The Company shall specify in its meeting notice the shareholders’ check-in time & place, and other notes to be attended.

The shareholders’ check-in time, as stated in the preceding paragraph, shall start no later than the time the meeting commences. The check-in place shall be clearly marked and a sufficient number of suitable personnel shall be assigned to deal with the check-in.

A shareholder or a proxy appointed by a shareholder (hereinafter referred to as the “shareholder”), shall bring with him/her the attendance card, sign-in card, or other certificates of attendance. The Company shall not arbitrarily require any additional identification documents like certificates of attendance from the shareholder. Persons requesting powers of attorney shall bring their ID documents for confirmation.

The Company shall prepare a sign-in book for present shareholders, or the present shareholders may hand in a sign-in card in lieu of check-in.

The Company shall present the meeting handbook, annual report, attendance card, speech memo, ballots, and other materials for the meeting to shareholders present at the meeting. If there is an election of directors to be held, attach a ballot for such purpose.

When the government or a juristic person is a shareholder, its proxy attending the meeting on behalf

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of it shall not be limited to one person. When a juristic person is appointed to attend a shareholders’ meeting as a proxy, it may designate only one person to act on behalf of it at the meeting.

Article 6. (Chairperson and Attendees)

If a shareholders’ meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman of Board. When the Chairman of Board is on leave or for any reason unable to exercise the powers of the chairman, the Chairman shall appoint one of the directors to act on behalf of him/her. If no such designation is made by the Chairman, the directors shall select one person from among themselves to serve as the chairperson.

It is advisable that any shareholders’ meetings convened by the Board of Directors be chaired by the Chairman of Board in person and attended by a majority of the directors and at least one independent director in person. The attendance shall be recorded in the meeting minutes.

If a shareholders’ meeting is convened by any party with the power to convene the meeting, other than the Board of Directors, the meeting shall be chaired by the convener, and if there are two or more persons having the right to convene the meeting, the chairperson of the meeting shall be elected from among themselves.

The Company may appoint its attorneys-at-law, certified public accountants, or related persons retained by it to attend a shareholders’ meeting in a non-voting capacity.

Article 7. (Documentation of a Shareholders’ Meeting by Audio or Video)

The Company, beginning from the check-in time, shall make an uninterrupted audio and video recording of the check-in procedure, proceedings of the shareholders’ meeting, and voting and vote counting procedures.

The audio/video materials referred to in the preceding paragraph shall be maintained for at least 1 year. Notwithstanding, if a lawsuit has been instituted by any shareholder in accordance with Article 189 of the Company Act, the minutes of the shareholders' meeting involved shall be kept by the Company until the legal proceedings of the foregoing lawsuit have been concluded.

Article 8.

Attendance at shareholders’ meetings shall be calculated based on the quantity of shares. The quantity of shares represented by the shareholders’ attending the meeting shall be calculated according to the shares indicated by the sign-in book and sign-in cards handed in, plus the quantity of shares whose voting rights are exercised by correspondence or electronic means.

The chairperson shall announce the commencement of the meeting as soon as it is due. However, if current attendees represent less than half of the Company's outstanding shares, the chairperson may announce to postpone the meeting no more than twice for a period totaling no more than one hour. In the event of that postponement has been made twice and the shareholders present at the meeting still fail to represent one-half but represent more than one-third of the total outstanding shares, Paragraph 1 of Article 175 of the Company Act shall be applicable whereby a provisional resolution could be made, and a meeting shall be re-convened within one month upon service of the provisional resolution to each shareholder.

If the quantity of shares represented by the present shareholders reaches one-half of the total outstanding shares before the end of the meeting, the chairperson shall refer the provisional resolution to the shareholders’ meeting for the finalization pursuant to Article 174 of the Company Act.

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Article 9. (Discussion of Motions)

For a shareholders’ meeting is convened by the Board of Directors, the Board of Directors shall prepare the agenda, and related motions (including extemporary motions and amendments to the original motions) shall be subject to the voting by poll. The meeting shall be proceeded in accordance with the agenda unless otherwise resolved by a shareholders’ meeting.

The provisions referred to in the preceding paragraph shall apply mutatis mutandis even when the shareholders’ meeting is convened by any person with the power to convene the meeting, other than the Board of Directors.

The chairperson may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda referred to in the preceding two paragraphs (including extemporary motions), except by a resolution of the shareholders’ meeting. If the chairperson declares the meeting adjourned in violation of the parliamentary rules, a new chairperson shall be elected by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting. If the chairperson thinks the motions and amendments or extraordinary motions brought up by shareholders shall be ready to vote, the chairperson may proclaim the closure of discussion and put them to a vote, and arrange sufficient hours for the voting.

Article 10. (Speech by Shareholders)

Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chairperson.

An attending shareholder who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the contents of the speech do not correspond to the subject given on the speaker's slip, the spoken contents shall prevail.

Except with the consent of the chairperson, a shareholder may not speak more than twice on the same motion, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the agenda item's scope, the chairperson may terminate the speech.

When an attending shareholder is speaking, the other shareholders may not speak or interrupt unless they have sought and obtained the chairperson's consent and the shareholder that has the floor. The chairperson shall stop any violation.

When a juristic person shareholder appoints two or more representatives to attend a shareholders’ meeting, only one of the representatives appointed may speak on the same motion.

After a specific shareholder in the meeting has expressed an opinion, the Chairperson may respond to the issue personally or appoint specific personnel to respond to the issue.

Article 11. (Calculation of Voting Shares and Recusal System)

Voting at shareholders’ meetings shall be calculated based on the quantity of shares.

The shares held by shareholders having no voting right shall not be counted in the total number of issued shares while adopting a resolution at a shareholders’ meeting.

A shareholder who has a personal interest in the matter under discussion at a meeting, which may impair the Company's interest, shall not vote nor exercise the voting right on behalf of another shareholder.

The number of shares for which voting rights may not be exercised under the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders. Except for trust enterprises or shareholder service agents approved by the competent authority, when a person who acts as the proxy for two or more shareholders, the number of voting powers

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represented by him/her shall not exceed 3% of those represented by the total voting shares of the Company, otherwise, the portion of excessive voting power shall not be counted.

Article 12.

A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2 of Article 179 of the Company Act. When the Company holds a shareholders’ meeting, it may allow the shareholders to exercise voting rights by correspondence or electronic means. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders’ meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person. Notwithstanding, the shareholder shall be deemed having waived his/her rights with respect to the extemporary motions and amendments to the original motions of that meeting. Therefore, it is advisable that the Company avoid the submission of extemporary motions and amendments to original motions.

In case a shareholder elects to exercise his/her/its voting power by correspondence or electronic means referred to in the preceding paragraph, his/her/its declaration of intention shall be served to the Company two days prior to the scheduled meeting date of the shareholders' meeting, whereas if two or more declarations of the same intention are served to the company, the first declaration of such intention received shall prevail, unless an explicit statement to revoke the previous declaration is made in the declaration, which comes later.

After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders’ meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made in the same manners by which the voting rights were exercised, two days prior to the Shareholders Meeting date. If the notice of retraction is submitted beyond said-noted time limit, the voting rights already exercised by correspondence or electronic means shall prevail. In case a shareholder has exercised his/her/its voting power by correspondence or electronic means and has also authorized a proxy to attend the shareholders' meeting on his/her/its behalf. The voting power exercised by the authorized proxy for said shareholder shall prevail.

Except as otherwise provided in the Company Act and in the Company’s Articles of Incorporation, the resolution of a motion shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each motion, the chairperson or a person designated by the chairperson shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each motion, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

When there is an amendment or an alternative to a motion, the chairperson shall present the amended or alternative motion together with the original motion and decide the order in which they will be put to a vote. When any one among them is passed, the other motions will then be deemed rejected, and no further voting shall be required.

Scrutineers and personnel dedicated to counting ballots on a motion shall be appointed by the chairperson, provided that all scrutineers shall be shareholders of the Company.

Ballot counting for shareholders’ meeting motions or elections shall be conducted in public at the place of the shareholders’ meeting. Immediately after ballot counting has been completed, the voting results, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting and recorded.

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Article 13. (Election)

In the event that an election of directors is held at a shareholders’ meeting, the election shall follow the procedure and regulation set forth by the Company and the election result shall be announced on the scene, including the list of elected directors and the final tally.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the scrutineers and kept in proper custody for at least 1 year. Notwithstanding, if a lawsuit has been instituted by any shareholder in accordance with Article 189 of the Company Act, the minutes of the shareholders' meeting involved shall be kept by the Company until the legal proceedings of the foregoing lawsuit have been concluded.

Article 14.

Resolutions adopted at a shareholders' meeting shall be recorded in the minutes of the meeting, affixed with the signature or seal of the chairperson and distributed to all shareholders of the Company within twenty (20) days after the close of the meeting. The production and distribution of the minutes of a shareholders' meeting may be effected by means of electronic transmission. The Company may distribute the meeting minutes referred to in the preceding paragraph by means of a public announcement made through the MOPS.

The minutes of a shareholders' meeting shall record the date and place of the meeting, name of the chairperson, method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting (including statistical tallies of the numbers of votes). The minutes shall be kept persistently throughout the life of the Company.

Article 15. (Public Disclosure)

On the day of a shareholders’ meeting, the Company shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies. It shall make an express disclosure of the same at the place of the shareholders’ meeting.

If matters put to a resolution at a shareholders’ meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation’s regulations, the Company shall upload the contents of such resolution to the MOPS within the prescribed time period.

Article 16. (Maintaining Order at the Meeting Place)

Staff handling administrative affairs of a shareholders’ meeting shall wear identification cards or armbands.

The chairperson may direct the proctors or security personnel to help maintain order at the meeting place.

Where the meeting place may be equipped with public address equipment, the chairperson shall stop any speech delivered by shareholders not using the equipment installed by the Company. When a shareholder violates the parliamentary rules and defies the chairperson's correction, obstructing the proceedings and refusing to heed calls to stop, the chairperson may direct the proctors or security personnel to escort the shareholder from the meeting.

Article 17. (Recess and Resumption of a Shareholders’ Meeting) When a meeting is in progress, the chairperson may announce a break based on time considerations.

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If a force majeure event occurs, the chairperson may rule the meeting temporarily suspended and announce the time when, in view of the circumstances, the meeting will be resumed.

If the meeting place is no longer available before all of the motions (including extemporary motions) on the meeting agenda have been addressed, the shareholders’ meeting may adopt a resolution to resume the meeting at another place.

A resolution may be adopted at a shareholders’ meeting to defer or resume the meeting within 5 days in accordance with Article 182 of the Company Act.

Article 18.

The Rules shall be implemented after a shareholders' meeting grants approval. The same procedure shall be followed when the Rules have been amended.

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Articles of Incorporation

Chapter I. General Provisions

• Article 1: The Company has been duly incorporated in accordance with the Company Act and named Feng Hsin Steel Co., Ltd.

• Article 2: The Company is engaged in the principal business specified below:

• Steelmaking and rolled steel manufacturing, repair, processing and trading.

• Cast steel, milling and iron foundry casting, manufacturing, processing and trading.

• Angle steel, flat-rolled steel, channel steel, steel plate and joist beam manufacturing, processing and trading.

• Ordinary and special steels, including reinforcing steels and round steels (bars and rods), manufacturing, processing and trading.

• Old (scrap) ship demolition and incidental services.

• Steel & iron products and processed goods and byproduct thereof manufacturing, processing and trading.

• Trading of raw materials, supplies, facilities and equipment for related products referred to in the previous paragraphs.

• Import of the goods referred to in the previous paragraphs.

• Engineering, management and consulting services for the related business referred to in the previous paragraphs.

• ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

• Article 3: The Company is headquartered in Taichung City, and may establish domestic or overseas branches under the resolution of the Board of Directors, where necessary.

• Article 4: The Company shall make announcements, if any, in the form of a circular letter and run in a prominent position on the daily news circulated in the municipal city or county (city) in which the Company is situated, or in the manner referred to in the Company Act and related laws.

  • Chapter II. Shares

• Article 5: The Company’s authorized capital stock shall be in the amount of NT$7 billion, divided into 700 million shares, at a par value of NT$10 per share, and may be issued in batch.

• Article 6: The stock certificates of the Company shall be nominal and issued after being signed or sealed by no less than three directors on behalf of the Company and authenticated by the competent authority or the registration organization authorized by it pursuant to

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laws.

• Article 7: The Company may issue shares without printing physical stock certificates, and shall register these issued shares with a securities depository organization.

• Article 8: Unless otherwise provided by laws and securities regulations, a shareholder of the Company shall complete the registration of stock transfer, if any, in accordance with the “Regulations Governing the Administration of Shareholder Services of Public Companies.”

• Article 9: Registration for the stock transfer in the roster of shareholders shall be suspended 60 days before any general shareholders’ meeting, 30 days before any special shareholders’ meeting, or 5 days before the record date for determination of the shareholders entitled to dividends, bonuses or any other profits distributed by the Company.

  • Chapter III. Shareholders’ Meeting

• Article 10: Shareholders’ meetings of the Company consist of the general shareholders’ meeting to be convened by the Board of Directors once a year pursuant to Article 172 of the Company Act within six months after the close of each fiscal year and the special shareholders’ meeting to be convened pursuant to laws whenever necessary.

• Article 11: A shareholder who cannot attend a shareholders’ meeting with causes may appoint a proxy to attend the meeting on behalf of him/her/it by executing a power of attorney in accordance with Article 177 of the Company Act.

• Article 12: Unless otherwise provided in the Company Act, the shareholders’ meeting shall be convened by the Board of Directors and chaired by the Chairman of Board. In case the Chairman is on leave or fails to exercise his/her powers with causes, he/she may appoint a proxy in the manner referred to in Article 208 of the Company Act.

• Where the shareholders’ meeting is convened by any person with the power to convene the meeting, other than the Board of Directors, the chairperson shall be designated in accordance with Article 182-1 of the Company Act.

• Article 13: A shareholder shall be entitled to one voting right for each share held by him/her/it, unless otherwise provided by laws.

• Article 14: Resolutions at a shareholders’ meeting shall, unless otherwise provided for in Company Act, be adopted by a majority of voting rights of the shareholders present, who represent more than one-half of the total outstanding shares.

• The Company’s shareholders are allowed to exercise their voting rights by electronic means, pursuant to the competent authority's requirements. A shareholder who exercises his/her/its voting power by electronic means shall be deemed to have attended the meeting in person. Other related matters shall be governed by the relevant laws and regulations.

• Article 15: Resolutions adopted at a shareholders' meeting shall be recorded in the minutes of the meeting, affixed with the signature or seal of the chairperson and distributed to all

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shareholders of the Company within twenty (20) days after the close of the meeting. The Company may distribute the meeting minutes referred to in the preceding paragraph in the manners prescribed by the Company Act. The minutes of a shareholders' meeting shall record the date and place of the meeting, name of the chairperson, method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. The minutes shall be kept persistently throughout the life of the Company.

  - Chapter IV. Director

• Article 16: The Company shall appoint 7~15 directors, who shall held the office for a term of 3 years, via the candidate nomination system. They shall be elected by the shareholders’ meeting from the list of candidates and may be reelected for a second term of office. There shall be at least 3 independent directors included in said directors. The requirements for professional qualifications and other matters related to independent directors are governed by related laws and regulations.

• The remunerations to the director and independent directors shall commensurate with their level of engagement in and contribution to the operation of the Company with reference to the standards applicable in the same industry and shall be determined by the Board of Directors under authorization.

The Company establishes the Audit Committee in accordance with Article 14-4 of the Securities and Exchange Act. The Committee, consisting of all independent directors, is responsible for exercising the powers and related matters determined by the Board of Directors pursuant to the relevant laws.

The Company may take out for directors the liability insurance during their term of office.

• Article 17: When the number of vacancies in the Board of Directors of the Company equals one-third of the total number of directors, the Board of Directors shall, within the time limit prescribed in Article 201 of the Company Act, convene a shareholders’ meeting to elect succeeding directors to fill the vacancies. The succeeding directors are required to fulfill the unexposed term of office of their predecessors only.

• Article 18: In case no election of succeeding directors is effected after the expiration of the term of office of the existing directors, the term of office of the existing directors shall be extended until the time succeeding directors have been elected and assumed their office. However, the competent authority may, ex officio, order the Company to elect succeeding directors within a given time limit. If no re-election is effected after the expiry of the given time limit, the existing directors shall be discharged ipso facto from such expiration date.

• Article 19: The total registered shares owned by the whole directors and the percentage thereof shall be governed by the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.”

• Article 20: The Board of Directors shall consist of directors, and one Chairman shall be elected from among the directors upon the resolution adopted by a majority of the directors present at a meeting attended by more than two-thirds of the whole directors, who shall execute

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all of the Company’s businesses pursuant to laws, Articles of Incorporation, and any resolution made by a shareholders’ meeting and Board of Directors meeting.

• Article 21: The Company’s business policies and other important motions shall be adopted subject to resolutions made by a Board of Directors meeting.

• Except for the first meeting of each term of the Board of Directors, which shall be convened pursuant to Article 203 of the Company Act, the other meetings of the Board of Directors shall be convened and chaired by the Chairman. In case the Chairman is unable to exercise his power and authority, he/she may appoint one director to act on his/her behalf. In the absence of such a designation, the directors shall elect from among themselves an acting chairman.

To convene a meeting of the Board of Directors, a notice setting forth therein the subject(s) to be discussed at the meeting shall be served to each director within 7 days. In the case of an emergency, the Company may convene a meeting of the Board of Directors at any time.

The notice referred to in the preceding paragraph shall set forth therein the subject(s) to be discussed at the meeting and may be given in writing or via email or fax.

• Article 22: Unless otherwise provided in the Company Act, a meeting of the Board of Directors shall be attended by a majority of the whole directors. Any resolution made by the meeting shall be adopted only upon approval of a majority of the directors present at the meeting. If a director is unable to attend the meeting for any cause, he/she may appoint another director to attend the meeting as his/her proxy, by issuing a power of attorney identifying the scope of the powers for the subject to be discussed at the meeting, provided that each director may only appoint one director to act as his/her proxy.

• Article 23: Resolutions adopted at a meeting of the Board of Directors shall be recorded in the minutes of the meeting, affixed with the chairperson's signature or seal and distributed to each director within twenty (20) days after the close of the meeting. The meeting minutes shall record the date and place of the meeting, name of the chairperson, method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. The minutes shall be kept persistently throughout the life of the Company.

Article 24: (Deleted)

Chapter V. Managers and Officers

• Article 25: The Company appoints one President and several managers. The appointment, dismission and remuneration thereof are governed by Article 29 of the Company Act.

  • Chapter VI. Final Account

• Article 26: At the end of each fiscal year, the Board of Directors shall prepare the following statements, submit the same to a general shareholders’ meeting for ratification:

• Business report

• Financial statements

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1. Motion for allocation of earnings or covering of loss

2. Article 27: Where the Company has annual profits at the end of a financial year, the Company may distribute not less than 2% of the profits for such year to employees as the employees’ compensation and may distribute not more than 2% thereof to directors as the remuneration to directors. Notwithstanding, the Company's accumulated losses, if any, shall have been covered first.

3. Article 27-1: If the Company has retained earnings according to its annual financial account, it may, after paying all taxes, and making up all past losses, set aside a 10% legal reserve and provide or reverse special reserve. The remainder, if any, plus accumulated unappropriated earnings shall be allocated as shareholder bonus subject to the motion proposed by the Board of Directors and resolved by a shareholders’ meeting.

4. No further legal reserve shall be provided, where the legal reserve referred to in the preceding paragraph has amounted to the Company’s total paid-in capital. The industry developed by the Company has become matured and sought stable profit under the robust financial structure. Therefore, the motion for allocation of shareholder bonus proposed by the Board of Directors supports allocation of cash dividend primarily. Notwithstanding, if the Company has to spend any major capital expenditure, no more than 70% of the dividends to be allocated in then year may be distributed in the form of stocks.

5. The Board of Directors proposes the motion for distribution of shareholder bonus pursuant to Paragraph 1. The shareholder bonus refers to more than 50% (inclusive) of the balance after the current net income less the legal reserve and special reserve to be provided in the current period, as well as the non-recurring non-operating gains. Notwithstanding, when the allocable earnings are less than 10% of the paid-in capital or the current net income is less than 2% of the paid-in capital, a motion for suspended allocation of the shareholder bonus may be proposed.

   • Chapter VII. Supplementary Provisions

6. Article 28: The Company’s total investment may be exempted from the restriction on the investment no more than 40% of the paid-in capital referred to in Article 13 of the Company Act.

7. Article 29: The Company may make guarantees in accordance with the “Regulations for Making of Endorsements/Guarantees” set forth by the Company.

8. Article 30: Any matters not covered herein shall be governed by the Company Act and other related laws.

9. Article 31: The Articles of Incorporation shall be enforced upon approval of a shareholders’ meeting. The same shall apply where these Articles are amended.

10. The Articles were enacted on December 9, 1968.

11. 1st amendments hereto were made on March 10, 1969.

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2nd amendments hereto were made on June 30, 1970. 3rd amendments hereto were made on October 20, 1972. 4th amendments hereto were made on October 10, 1973. 5th amendments hereto were made on May 7, 1975. 6th amendments hereto were made on September 27, 1976. 7th amendments hereto were made on May 35, 1979. 8th amendments hereto were made on December 31, 1979. 9th amendments hereto were made on December 5, 1980. 10th amendments hereto were made on January 15, 1984. 11th amendments hereto were made on May 25, 1987. 12th amendments hereto were made on May 15, 1988. 13th amendments hereto were made on July 1, 1988. 14th amendments hereto were made on January 21, 1990. 15th amendments hereto were made on June 5, 1990. 16th amendments hereto were made on July 10, 1990. 17th amendments hereto were made on May 19, 1991. 18th amendments hereto were made on April 12, 1992. 19th amendments hereto were made on April 24, 1993. 20th amendments hereto were made on April 30, 1994. 21st amendments hereto were made on April 29, 1995. 22nd amendments hereto were made on June 18, 1996. 23rd amendments hereto were made on May 19, 1997. 24th amendments hereto were made on September 15, 1998. 25th amendments hereto were made on May 24, 2000. 26th amendments hereto were made on May 31, 2001. 27th amendments hereto were made on May 30, 2002. 28th amendments hereto were made on June 3, 2004. 29th amendments hereto were made on June 3, 2005. 30th amendments hereto were made on June 6, 2006. 31st amendments hereto were made on June 15, 2007. (1st) 32rd amendments hereto were made on June 15, 2007. (2nd) 33rd amendments hereto were made on June 15, 2010. 34th amendments hereto were made on June 21, 2012. 35th amendments hereto were made on June 12, 2014. 36th amendments hereto were made on June 17, 2015. 37th amendments hereto were made on June 8, 2016.

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Statement of Current Shareholdings of the Company’s Directors Record Date: April 13, 2021

Job Title	Name	Date of Election	Shareholding when elected	Shareholding when elected	Current shareholding	Current shareholding
			Quantity (shares)	% of the shares issued then	Quantity (shares)	% of the shares issued then
Chairman of Board	Lin Ming-Ju	107.06.08	12,668,159	2.18%	12,825,159	2.21%
Director	Chen Mu-Tse	107.06.08	2,723,543	0.47%	2,723,543	0.47%
Director	Lai San-Ping	107.06.08	13,202,006	2.27%	12,702,006	2.18%
Director	Lin Wen-Fu	107.06.08	7,058,871	1.21%	5,388,871	0.93%
Director	Lin Chiu-Huang	107.06.08	7,526,000	1.29%	5,526,000	0.95%
Director	Lin Kun-Tan	107.06.08	8,160,782	1.40%	8,160,782	1.40%
Director	Lin Ta-Chun	107.06.08	11,169,881	1.92%	7,168,881	1.23%
Director	Chung Chao-Chuan	107.06.08	11,587,530	1.99%	11,587,530	1.99%
Director	Yang Tsung-Ju	107.06.08	5,597,708	0.96%	5,597,708	0.96%
Director	Lin Chi-Jui	107.06.08	3,768,292	0.65%	3,768,292	0.65%
Independent Director	Liao Liao-Yu	107.06.08	0	0%	0	0%
Independent Director	Wang Yea-Kang	107.06.08	0	0%	0	0%
Independent Director	Yue Chao-Tang	107.06.08	0	0%	0	0%
Total			83,462,772	14.35%	75,448,772	12.97%

Total quantity of shares issued on June 8, 2018:581,599,424 shares Total quantity of shares issued on April 13, 2021:581,599,424 shares

• Note: 1. The statutory quantity of shares to be held by the whole directors should be 18,611,181 shares. Until April 13, 2021, a total of 75,448,772 shares have been held by the whole directors.

• The Company has established the Audit Committee. Therefore, no requirements about the statutory quantity of shares to be held by the supervisors shall apply.

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Effect of Bonus Stock Distribution on the Company’s Operation Performance, EPS and ROE.

Year Item	Year Item	Year Item	2021 (Projected)
Paid-in capital - beginning			5,815,994,240
Allocation of stocks and dividends this year	Cash dividend per share		3.50
	Stock dividends per share (from capitalization of earnings) (shares)		--
	Stock dividends per share (from capitalization of capital surplus) (shares)		--
Changes in Operation Performa nce	Operating income		Note 1
	Year-on-year percentage variation of operating income		Note 1
	Net income		Note 1
	Year-on-year percentage variation of net income		Note 1
	EPS		Note 1
	Year-on-year percentage variation of EPS		Note 1
	Yearly average return on investment (a reciprocal of yearly average P/E ratio)		Note 1
Pro forma EPS and P/E ratio	If allocation of cash dividends in whole adopted instead of that from capitalization of earnings.	Pro forma EPS	Note 1
		Pro forma annual average ROE	Note 1
	If no capitalization of capital surplus is effected	Pro forma EPS	Note 1
		Pro forma annual average ROE	Note 1
	If allocation of cash dividends adopted instead of that from capitalization of capital surplus and earnings	Pro forma EPS	Note 1
		Pro forma annual average ROE	Note 1

• Notes: 1. Not required to disclose such information, as the Company has not yet prepared or published the financial forecast 2021.

• The Company shall explain the basic assumptions based on by the projected or pro forma information.

• Pro forma EPS, if allocation of cash dividends in whole adopted instead of that from capitalization of earnings. = [Net income-Imputed interest expenses to be borne by cash dividends[ ] × (1-Tax rate)] / [Total quantity of shares issued at the end of the year-Quantity of shares distributed from earnings[] ] Imputed interest expenses to be borne by cash dividends[] = Amount of capitalization of earnings × Lending interest rate for one-year loan

Quantity of shares distributed from earnings[**] : Quantity of shares increased upon distribution of shares from earnings.

1. Annual average P/E ratio = Annual average market price per share/EPS in annual financial statements

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Chairman of Board

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