WEI CHIH - AGM Information 2021 | FinancialReports.eu

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WEI CHIH STEEL INDUSTRIAL CO., LTD.

2021 Annual Shareholders’ Meeting

Meeting Handbook

June 21, 2021

Chapter 1. Meeting Agenda................................................................................................page1 Chapter 2. Report Items......................................................................................................page2 I. 2020 Business Report..............................................................................................page2 II. Audit Committee's Review Report on the 2020 Financial Statements...................................................................................................................page2 III. Amendment Report of the Company's Codes of Ethical Conduct……………….page2 Chapter 3. Proposed Resolutions.........................................................................................page3 I. 2020 Business Report and Financial Statements......................................................page3 II. 2020 Provision for Loss Allowance........................................................................page3 Chapter 4. Discussion Items................................................................................................page5 I. Amendment to the Company’s Articles of Incorporation........................................page5 II. Amendment to the Company’s Procedures for Election of Directors......................................................................................................................page5 Chapter 5. Extraordinary Motions.......................................................................................page5 Chapter 6. Attachments........................................................................................................page6 I. Business Report........................................................................................................page6 II. Audit Committee's Review Report.........................................................................page10 III. Comparison Table of the Amendments to the Codes of Ethical Conduct........................................................................................................page 11 IV. Auditors’ Report and Financial Statements..........................................................page 13 V. Comparison Table of the Amendments to the Articles of Incorporation................page 25 VI. Comparison Table of the Amendments to the Procedures for Election of Directors........................................................................................................page 27 VII. Rules of Procedure for Shareholders’ Meetings...................................................page 31 VIII. The Company’s Articles of Incorporation............................................................page36 IX. Directors’ Shareholding Table................................................................................page41

Chapter 1. Meeting Agenda

WEI CHIH STEEL INDUSTRIAL CO., LTD. 2021 Annual Shareholders’ Meeting

Time: June 21, 2021 (Monday) 9:00 am

Venue: No. 123, Nanbu Village, Guantian Dist., Tainan City (The Company's

meeting room on the 6th floor)

I. Call the meeting to Order

II. Chairman's Speech

III Report Items

(I) 2020 Business Report.

(II) Audit Committee's Review Report on the 2020 Financial Statements.

(III) Amendment Report of the Company's Codes of Ethical Conduct.

IV. Proposed Resolutions

(I) 2020 Business Report and Financial Statements.

(II) 2020 Provision for Loss Allowance.

V. Discussion Items

(I) Amendment to the Company’s Articles of Incorporation.

(II) Amendment to the Company’s Procedures for Election of Directors.

VI. Extraordinary Motions

VII. Adjournment

Chapter 2. Report Items

I . 2020 Business Report.

Description: Please refer to page 6 to 9 of this Handbook for the 2020 Business Report.

II . Audit Committee's Review Report on the 2020 Financial Statements.

Description: Please refer to page page 10 of this Handbook for the Audit Committee's Review Report and Independent Auditors' Report.

III . Amendment Report of the Company's Codes of Ethical Conduct.

Description: Pursuant to the amendment requirements of Tai-Zheng-Zhi-Li-Zi No. 1090009468 issued by Taiwan Stock Exchange dated June 3, 2020 and relevant laws and regulations, certain articles of the Company’s Codes of Ethical Conduct was amended. Please refer to page page 11 to 12 of this Handbook for the comparison table of the amendments.

Chapter 3. Proposed Resolutions

Proposal I

Proposed by the Board of Directors

Proposal: 2020 Business Report and Financial Statements.

Description:

I. The Company's 2020 Financial Statements, including the balance sheet, consolidated statement of income, statement of changes in equity, and statement of cash flows, have been audited by Mr. Ren-Yao Xie, CPA, and Mr. BingZheng Su, CPA, of Crowe (TW) CPAs. The Business Report, Provision for Loss Allowance Proposal have been audited by the Audit Committee, which has issued a Review Report.
II. Please refer to page 6 to 9 and page 13 to 24 of this Handbook for the 2020 Business Report, Auditors Report and Financial Statements.

Resolution:

Proposal II

Proposed by the Board of Directors

Proposal: 2020 Provision for Loss Allowance. Description:

I. The Company’s accumulated loss was NT$1,085,165,071 in the previous period. Together with the net profit of NT$602,547,318 in 2020, less the re-measurement of the defined benefit plan of NT$4,041,180, the accumulated loss for the period amounted to NT$486,658,933. As the Company has accumulated loss, no dividend will be distributed in 2020.

I I. Proposal: The Company's 2020 Provision for Loss Allowance Table is as follows.

WEI CHIH STEEL INDUSTRIAL CO., LTD. Provision for Loss Allowance Table 2020

2020
	Unit: NT$
Accumulated loss in thepreviousperiod	(1,085,165,071)
Plus: Netprofit for theperiod	602,547,318
Less: Re-measurement of defined benefit plans	(4,041,180)
Accumulated loss for theperiod	(486,658,933)

Chairman: Rui-Xi Guo

Manager: Su-Hui Guo

Chief Auditor: Yue-Chin Li

Resolution:

Chapter 4. Discussion Items

Proposal I Proposed by

the Board of Directors

Proposal: Amendment to the Company’s Articles of Incorporation.

Description:

I. Pursuant to the amendment requirements of the Company Act and the needs of new business projects of the Company, certain articles of the Articles of Incorporation were amended. Please refer to page page 25 to 26 of this Handbook for the comparison table of the amendments.
II. Hereby submitted to for approval.

Resolution:

Proposal II Proposed by the Board of Directors

Proposal: Amendment to the Company’s Procedures for Election of Directors. Description:

I. Pursuant to the amendment requirements of the Company Act and the needs of business operation, certain articles of the Procedures for Election of Directors were amended. Please refer to page 27 to 30 of this Handbook for the comparison table of the amendments.
II. Hereby submitted to for approval.

Resolution:

Chapter 5. Extraordinary Motions

Adjournment

Chapter 6. Attachments

WEI CHIH STEEL INDUSTRIAL CO., LTD. 2020 Business Report

Under the impact of the COVID-19 epidemic, the sales volume in the hand tools, machinery, and screw and nut sectors declined in the first three quarters of 2020. However, in the steel bar industry, the government’s acceleration in public works projects and TSMC's rapid large-scale plant expansion has increased the overall demand for steel bars. The Company is committed to improving the steel rolling process and reduce production costs, as well as timely adjusting the optimal product portfolio, resulted in operating revenues of NT$8,690,155,000 and gross operating profit of NT$725,055,000 in 2020. The net profit for the period was NT$602,547,000, representing an increase of 208% from NT$195,189,000 in 2019.

The 2020 Business Report and 2021 Business Plan are as follows:

I. 2020 Business Report�

(1) Production and sales performance:

Unit: NT$’000

				Unit: NT$’000	Unit: NT$’000	Unit: NT$’000
Year Types of product	Production			Sales
	2019	2020	Increase (decrease) %	2019	2020	Increase (decrease) %
Steel bar	4,156,802	4,916,055	18.27%	4,455,885	5,251,787	17.86%
Steel rod	719,592	715,920	-0.51%	804,744	882,056	9.61%
Steel coil	344,542	341,205	-0.97%	410,690	405,174	-1.34%
Steel billet	8,520,802	7,433,941	-12.76%	4,002,689	2,145,520	-46.40%
Other	16,402	23,245	41.72%	3,229	5,618	73.99%
Steel billet rolling for self use	(4,760,930)	(5,490,964)	15.33%
Total	8,997,210	7,939,402	-11.76%	9,677,237	8,690,155	-10.20%

Note: The production of billet steel includes rolling for self use

(2) Profit comparison

Unit: NT$’000

		2019	2020	Difference	Increase (decrease)%

Revenue	9,677,237	8,690,155	(987,082)	(10.20%)
Operatingcost	9,327,594	7,965,100	(1,362,494)	(14.61%)
Grossprofit	349,643	725,055	375,412	107.37%
Operatingexpenses	167,814	127,666	(40,148)	(23.92%)
Netprofit(loss)	181,829	597,389	415,560	228.54%
Non-operating revenue and expenses	9,733	5,140	(4,593)	(47.19%)
Net profit (loss) before tax	191,562	602,529	410,967	214.53%
Net profit (loss) for the period	195,189	602,547	407,358	208.70%

(3) Financial structure and profitability analysis

(3) Financial structure and profitability analysis	(3) Financial structure and profitability analysis
Year Analyzed item		2019	2020
Financial structure	Debt to assets ratio(%)	60.07	54.21
	Long-term capital to property, plant and equipment ratio(%)	122.14	132.23
Profitability	Return on assets(%)	4.20	10.49
	Return on equity (%)	8.35	22.16
	Net profit before tax to paid-in capital ratio(%)	5.88	18.50
	Netprofit margin(%)	2.02	6.93
	Earningsper share(NT$)	0.60	1.85

(4) Research and development
Continue to improve the raw material ratio and production process of steelmaking, which lowers the product impurity and surface defects, as well as maintains stable quality.
Continue to improve the steel rolling process to reduce the overall production cost and improve the overall competitiveness of the Company.
Adjust the surface cooling process of steel bars and steel rods to continuously improve the surface quality.
II. Summary of 2021 Business Plan:
(I) Business strategies:
1. Active expansion of the market share of steel bars

The Company is actively participating in the bidding of new plants to expand

the scope of customer services and increase the market share of steel bars through the new processing and molding plants. The monthly order target is 10,000 tons of steel billets and 40,000 tons of steel bars.

Continuous development of high value-added steel products
- The Company will continue to develop high value-added steel products and increase production and sales of niche products to exceed the monthly sales target of 10,000 tons.
Continuous development of international high unit price markets
- The Company’s steel bars are certified by countries around the globe and have passed the TAF ISO 17025 laboratory assessment. Its quality has been recognized across industries. The Company will continue to obtain more certifications from different countries in order to tap into the international market and mitigate the impact arising from changes in a single region.
(II) Business targets:

This year, the Company will continue to increase the production capacity of our steel rolling facilities. In addition to improving production technology, the Company will also reduce production costs by increasing production capacity and actively develop high value-added products to improve the overall operating profitability. The sales target is 450,000 tons of steel bars, 150,000 tons of steel billets, 100,000 tons of steel bars and coils. The Company will flexibly adjust the proportion of the products according to the changes in market demand.

III. Impact of Future Development Strategies, External Competitive Environment, Regulatory Environment and Overall Business Environment

Looking ahead to 2021, with the stabilization of the pandemic and economic recovery,

the demand of the steel market is expected to rebound and increase. The Company is cautiously optimistic about the prospect of the steel market.

In the domestic economic environment, the forward-looking infrastructure development program is expected to commence and Taiwanese manufacturers will return to set up factories. The Company will be cautiously optimistic and continue to create maximum value for the Company and its shareholders by adhering to sustainable operation and the above-mentioned management policies.

Chairman: Rui-Xi Guo Manager: Su-Hui Guo Chief Auditor: YueChin Li

WEI CHIH STEEL INDUSTRIAL CO., LTD. Audit Committee's Review Report

The Board of Directors has prepared the Company's 2020 Business Report, Financial Statements and Provision for Loss Allowance Proposal, of which the Financial Statements have been audited by Mr. Ren-Yao Xie, CPA, and Mr. Bing-Zheng Su, CPA, of Crowe (TW) CPAs. The Business Report, who have issued a Review Report. The above-mentioned Business Report, Financial Statements and Provision for Loss Allowance Proposal have been reviewed by the Audit Committee, which has not found any inconsistencies. Therefore, the Audit Committee hereby issues this report in compliance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

Sincerely,

WEI CHIH STEEL INDUSTRIAL CO., LTD.

Convener of the Audit Committee: Ji-Xiong Liu

March 26, 2021

WEI CHIH STEEL INDUSTRIAL CO., LTD.

Comparison Table of the Amendments to the Codes of Ethical Conduct

Approved by the Audit Committee and the Board of Directors on March 26, 2021

Articles	Amended articles	Original articles	Amendment reasons
Article 3	Prevention of conflicts of interest. The directors and managers of the Company shall faithfully perform their duties, conduct business in an objective and efficient manner, and avoid using their positions or power to provide improper benefits to the following persons or enterprises: �� The directors and managers themselves, their spouses, or relatives within the second degree of kinship. �� An enterprise in which the persons mentioned in the preceding paragraph have direct or indirect financial interests. �� An enterprise in which the directors and managers are the chairman, executive director or senior manager. Omitted	Prevention of conflicts of interest. The directors and managers of the Company shall faithfully perform their duties, conduct business in an objective and efficient manner, and avoid using their positions or power to provide improper benefits to the following persons or enterprises: �� Themselves, their spouses, parents, children, or relatives within the second degree of kinship. �� Enterprises in which the persons mentioned in the preceding paragraph have direct or indirect financial interests. �� An enterprise in which the directors and managers are the chairman, executive director or senior manager. Omitted	The texts were streamlined, considering parents and children are relatives within the second degree of kinship.
Article 9	Encourage reporting of any illegal or violation of the Codes of Ethical Conduct The Company shall strengthen the ethical awareness within the Company and encourage employees to report any	Encourage reporting of any illegal or unethical behavior The Company shall strengthen the ethical awareness within the Company and encourage employees to report any suspected orviolations of laws	The article was amended pursuant to the Ethical Corporate Management Best Practice

Articles	Amended articles	Original articles	Amendment reasons
	suspected or violations of laws and regulations or the Codes of Ethical Conduct to the independent directors, managers, chief internal auditor and other appropriate personnel. The Company allows anonymous whistleblowing and will make every effort to protect the safety of the whistleblower by not disclosing the name of the whistleblower to protect him/her from retaliation or threats.	and regulations or the Codes of Ethical Conduct to the independent directors, managers, chief internal auditor and other appropriate personnel. The Company will make every effort to protect the safety of the whistleblower by not disclosing the name of the whistleblower to protect him/her from retaliation or threats.	Principles for TWSE/GTSM Listed Companies.
Article 14	The Code was established on November 10, 2014. The 1st amendment was made on March 30, 2015. The 2nd amendment was made on August 10, 2017. The 3rd amendment was made on March 26, 2021.	The Code was established on November 10, 2014. The 1st amendment was made on March 30, 2015. The 2nd amendment was made on August 10, 2017.	Added an amendment date.

Independent Auditors’ Report

To the Board of Directors and Shareholders Wei Chih Steel Industrial Co., Ltd.

Opinion

We have audited the accompanying balance sheets of Wei Chih steel Industrial Co., Ltd. (the “Company”) as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial posioion of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards, International Accounting Standards, interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Repulic 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 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 and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company's financial statements for the year ended December 31, 2020 are stated as follows:

Valuation of inventory

Please refer to Note 4.7 to the financial statements for the accounting policy on inventories; Note 5.2.(6) for critical accounting judgments, estimates and key sources of assumption uncertainty of inventories, and Note 6.4 for inventory valuation.

Description of key audit matter

As of December 31, 2020, inventory was $1,846,041 thousand and accounted for 29% of the total assets. Items of material importance to the balance sheet, the valuation of inventory has beenidentified as a key audit matter.

How the matter was addressed in our audit:

In relation to to the key audit matter above, our principal audit procedures included evaluated the appropriateness of the approach applied to the inventory valuation; Confirm that management has included the integrity of the assessment inventory price decline; We tested the net realizable value of inventory items on a sample basis and evaluated the underlying assumptions and supporting documents, re-performed and calculated the appropriateness of net realizable value and the value written-off; Check whether inventory belonging to a falling itemhasbeen added to the appropriate inventory loss.

Impairment Reversal Assessment of property, plant and equipment

Please refer to Note 4.8 and 12 to the financial statements for the accounting policy onassessment of property, plant and equipment; Note 5.2.(4) for the detailt of assets impairment (reversal) (Non. Goodwill); and Note 6.7 for the details of Assessment of property, plant and equipment.

Description of key audit matter

As of December 31, 2020, property, plant and equipment was $3,510,813 thousand and accounted for 53% of the total assets, Items of material importance to the balance sheet. When management identifies signs of impairment, it is necessary to estimatetherecoverableamountoftheasset.In the course of asset impairment (reversal) assess ment, the value in use is the present value of future cash flows expectedto be generatedby the asset or cash generating unit, the application of value in use shall estimate the future cash inflows and outflows that may result from the continued use of the assets and the final disposal, and apply the appropriate discount rateto the cash flows. Judgments and assumptions involved in the assessment, including identification of cash generating units, future sales forecasts and estimated profits of products, need to be estimated by management. Therefore, the assessment of asset impairment (reversal) is one of the important items for the auditor to perform the audit of the financial report of Wei Chih Steel Industrial Co., Ltd.

How the matter was addressed in our audit:

In relation to the key audit matter above, based on ourknowledge of the company, assessing managemen’s identification of cash generation units that may impairment (reversal) and signs of internal and external impairment (reversal)�Consider whether all assets subject to annual impairment (reversal) are completely included in the assessment and evaluate the methodology used by management to assess the amounts recoverable and the reasonableness of assumptions. Assess the reasonableness of discounted cash flows through the Company’s historical performance and budget, evaluate whether long-term non-financial asset impairment (reversal) policies and other relevant information have been properly disclosed.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, 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 Company’s financial reporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' 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 the 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 financial statements.

As part of an audit in accordance with the 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 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 Company’s internal control.
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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the 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 auditors' 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 financia1 statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 ethica1 requirements regarding independence, and to communicate with them all re1ationships 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 the financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ 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.

The engagement partners on the audit resulting in this independent auditors’ report are Jen Yao Hsieh and Ping Chang Su.

Crowe (TW) CPAs Kaohsiung, Taiwan Republic of China March 26, 2021

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and standalone financial statements shall prevail.

Financial statements

WEI CHIH STEEL INDUSTRIAL CO., LTD.

BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

Assets	Note	December 31,	2020	December 31, 2019	December 31, 2019
		Amount	%	Amount	%
CURRENT ASSETS Cash and cash equivalents Notes receivable, net Accounts receivable, net Other receivables Current tax assets Inventories Prepayments Other financial assets - current Total current assets NONCURRENT ASSETS Financial assets at fair value through other comprehensive income - noncurrent Property, plant and equipment Right-of-use assets Intangible assets Deferred income tax assets Refundable deposits Other noncurrent assets - otehr Total noncurrent assets TOTAL ASSESTS Liabilities and Equity	6(1) 6(2) 6(3) 6(4) 6(5) 8 6(6) 6(7) 6(8) 6(10) 6(25) 11 6(11) 6(19)	$157,919 71,291 339,792 520 4 1,846,041 227,920 406	2 1 5 - - 29 3 -	$38,925 8,661 429,530 332 10 1,392,058 147,573 3,414	1 - 7 - - 23 2 -
		2,643,893	40	2,020,503	33
		259,561 3,510,813 68,258 1,621 45,776 22,698 13,200	4 53 1 - 1 1 -	283,817 3,644,604 74,903 565 45,356 22,459 -	5 60 1 - 1 - -
		3,921,927	60	4,071,704	67
		$6,565,820	100	$6,092,207	100
		$ - 275,792 190,803	- 4 3	$41,490 197,128 155,655	1 3 3
CURRENT LIABILITIES Short-term loans Contract liabilities - current Accounts payable

Accounts payable - related parties 7 Accounts payable Accounts payable - related parties 7 Other payables 6(12) Provisions - current 6(13) Lease liabilities - current 6(8) Current portion of long-term loans 6(14) Total current liabilities	222,804 217,206 274,365 357,202 14,989 6,626 363,665	3 3 4 5 - - 7	322,663 236,891 249,196 251,535 8,936 6,443 170,670	5 4 4 4 - - 3
	1,923,452	29	1,640,607	27

December 31,	2020	December 31, 2019	December 31, 2019
Amount	%	Amount	%
	23 - 1 1 -	$1,872,696 1,308 69,281 74,858 1,020	31 - 1 1 -
1,635,681	25	2,019,163	33
3,559,133	54	3,659,770	60
3,257,148 (486,659) 236,198	49 (7) 4	3,257,148 (1,085,165) 260,454	54 (18) 4
3,006,687	46	2,432,437	40
$6,565,820	100	$6,092,207	100

The accompanying notes are an integral part of the parent company only financial statements.

Financial statements

WEI CHIH STEEL INDUSTRIAL CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Item	Year Ended December 31	Year Ended December 31	Year Ended December 31	Year Ended December 31
	2020		2019
	Amount	%	Amount	%
OPERATING REVENUES 6(19) $8,690,155 OPERATING COSTS 6(4) (7,965,100) GROSS PROFIT (LOSS) 725,055 OPERATING EXPENSES Sales and marketing (53,747) General and administrative (73,919) Total operating expenses (127,666) INCOME FROM OPERATIONS 597,389 NON-OPERATING INCOME AND EXPENSES Interest revenue 6(21) 63 Other income 6(22) 32,717 Other gains and losses 6(23) 33,712 Finance costs 6(24) (61,352) Total non-operating income and expenses 5,140 INCOME BEFORE INCOME TAX 602,529 INCOME TAX EXPENSE 6(25) 18 NET INCOME 602,547 OTHER COMPREHENSIVE INCOME (LOSS) 6(26) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit obligation (4,041) Unrealised gains (loss) on investments in equity instruments (24,256) measured at fair value through other comprehensive income Total other comprehensive loss, net of income tax (28,297) TOTAL COMPREHENSIVE INCOME $574,250		100 (92)	$9,677,237 (9,327,594)	100 (96)
	725,055 (53,747) (73,919)	8 - (1)	349,643 (100,135) (67,679)	4 (1) (1)
	(127,666)	(1)	(167,814)	(2)
	597,389	7	181,829	2
		- - - -	147 20,326 63,740 (74,480)	- - 1 (1)
	5,140	-	9,733	-
		7 -	191,562 3,627	2 -
	602,547	7	195,189	2
		- - -	(79) (5,967)	- -
	(28,297)		(6,046)	-
	$574,250	7	$189,143	2

EARNINGS PER SHARE Basic

6(27) $1.85 $0.60

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

WEI CHIH STEEL INDUSTRIAL CO., LTD.

STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

Ordinary Shares Capital Surplus BALANCE AT JANUARY 1, 2019 $3,257,148 $46,190 Other capital reserves of changes: Capital surplus used to cover accumulated deficits - (46,190) Net income in 2019 - - Other comprehensive income (loss) in 2019, net of income tax - - Total comprehensive income in 2019 - - BALANCE AT DECEMBER 31, 2019 $3,257,148 - Net income in 2020 - - Other comprehensive income (loss) in 2020, net of income tax - - Total comprehensive income in 2020 - - BALANCE AT DECEMBER 31, 2020 $3,257,148 # $ -# #	Other Unrealized Gain (Loss) on Retained Earnings Financial assets at fair Unappropriated value through other Total Legal Reserve Earnings comprehensive income Equity $ - ($1,326,465) $266,421 $2,243,294 - 46,190 - - - 195,189 - 195,189 - (79) (5,967) (6,046) - 195,110 (5,967) 189,143 - (1,085,165) 260,454 2,432,437 - 602,547 - 602,547 - (4,041) (24,256) (28,297) - 598,506 (24,256) 574,250 $ - # ($486,659) # $236,198 # $3,006,687	Total Equity
		$2,243,294 - 195,189 (6,046)
		189,143
		2,432,437 602,547 (28,297)
		574,250

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

Financial statements

WEI CHIH STEEL INDUSTRIAL CO., LTD.

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Item	Year Ended December 31	Year Ended December 31
	2020	2019
CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments : Adjustments to reconcile profit (loss) Depreciation Amortization Interest expense Interest income Dividend income Gain on disposal and retirement of property, plant and equipment Transfer of property, plant and equipment to expenses Gain on reversal of impairment loss on non-financial assets Total adjustments to reconcile profit (loss) Net changes in operating assets and liabilities Decerase (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Total changes in operating assets Net changes in operating liabilities Increase (decrease) in contract liabilities Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in other payables	$602,529 313,986 165 61,352 (63) (8,714) 500 19,707 (26,559)	$191,562 280,525 144 74,480 (147) (17,306) (90) 4,291 (62,393)
	360,374	279,504
	(62,630) 89,738 (189) (455,749) (80,347)	11,716 (30,516) 2,103 512,539 54,870
	(509,177)	550,712
	78,664 (64,711) 5,484 94,511	148,184 (597,776) (198,972) 55,815

Item Increase (decrease) in provisions Increase (decrease) in net defined benefit liabilities Total changes in operating liabilities Total net changes in operating assets and liabilities Total adjustments Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Increase in other financial assets Decrease in other financial assets Increase in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term loans Proceeds from long-term loans Repayments of lease principal Net cash used in financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR	Year Ended December 31 2020 2019 6,053 (4,420) (10,001) (9,646) 110,000 (606,815) (399,177) (56,103) (38,803) 223,401 563,726 414,963 64 147 8,714 17,306 (59,814) (74,050) 6 1 512,696 358,367 ($155,192) ($100,357) - 90 (239) (170) (1,221) - - (3,323) 3,008 - (13,200) - (166,844) (103,760) (41,490) (111,420) (178,925) (213,335) (6,443) (6,357) (226,858) (331,112) 118,994 (76,505) 38,925 115,430 $157,919 $38,925	Year Ended December 31 2020 2019 6,053 (4,420) (10,001) (9,646) 110,000 (606,815) (399,177) (56,103) (38,803) 223,401 563,726 414,963 64 147 8,714 17,306 (59,814) (74,050) 6 1 512,696 358,367 ($155,192) ($100,357) - 90 (239) (170) (1,221) - - (3,323) 3,008 - (13,200) - (166,844) (103,760) (41,490) (111,420) (178,925) (213,335) (6,443) (6,357) (226,858) (331,112) 118,994 (76,505) 38,925 115,430 $157,919 $38,925	Year Ended December 31 2020 2019 6,053 (4,420) (10,001) (9,646) 110,000 (606,815) (399,177) (56,103) (38,803) 223,401 563,726 414,963 64 147 8,714 17,306 (59,814) (74,050) 6 1 512,696 358,367 ($155,192) ($100,357) - 90 (239) (170) (1,221) - - (3,323) 3,008 - (13,200) - (166,844) (103,760) (41,490) (111,420) (178,925) (213,335) (6,443) (6,357) (226,858) (331,112) 118,994 (76,505) 38,925 115,430 $157,919 $38,925

	110,000		(606,815)
	(399,177)		(56,103)
	(38,803)		223,401
	563,726 64 8,714 (59,814) 6		414,963 147 17,306 (74,050) 1
	512,696		358,367
	($155,192) - (239) (1,221) - 3,008 (13,200)		($100,357) 90 (170) - (3,323) - -
	(166,844)		(103,760)
	(41,490) (178,925) (6,443)		(111,420) (213,335) (6,357)
	(226,858)		(331,112)
	118,994 38,925		(76,505) 115,430
	$157,919		$38,925

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

WEI CHIH STEEL INDUSTRIAL CO., LTD. Comparison Table of the Amendments to the Articles of Incorporation

Articles	Amended articles	Original articles	Amendment reasons
Article 1	The Company was incorporated under the name of�� � � (WEI CHIH STEEL INDUSTRIAL CO., LTD.) pursuant to the articles of the Company Act governing the “Company Limited by Shares”.	The Company was incorporated under the name of�� ��pursuant to the articles of the Company Act governing the “Company Limited by Shares”.	Added the Company’s English name.
Article 2	The Company's businesses are shown on the left: 1. CA01020 Iron and Steel Rolling and Extruding 2. CA01050 Steel Secondary processing 3. CA02990 Other Metal Products Manufacturing 4. CA01010 Iron and Steel Smelt 5. CA01030 Iron and Steel Casting 6. CA01070 Scrapped Car and Boat Dismantling and Scrap Iron and Steel Metal Processing 7. CA01990 Other Non-ferrous Metal Basic Industries 8. CA02010 Manufacture of Metal Structure and Architectural Components 9. CA02030 Screw, Nut and Rivet Manufacturing 10. F106010 Wholesale of Hardware 11. F199010 Wholesale of Recycling Materials 12. F401010 International Trade 13. CD01060 Aircraft and Parts Manufacturing 14. J101030 Waste Disposing 15. J101040 Waste Treatment 16. J101090 Waste Disposal 17. C901040 Manufacture of Ready- mix Concrete 18. C901050 Cement and Concrete Products Manufacturing 19. C901990 Other Non-Metallic Mineral Products Manufacturing	The Company's businesses are shown on the left: 1. Manufacture, processing, trading of steel bars, flat iron, angle iron, U-shaped iron, polished bars, round iron, steel coils and other steel products. 2. Manufacture, processing and trading of large steel billets, small steel billets, steel ingots, structural steels and alloy steels, tool steels, low carbon steels, medium carbon steels, high carbon steels, and other special steels. 3. Import of scrap iron and sales of disassembled vessels. 4. Manufacturing, repairing, trading of hardware machinery, iron and electric materials, and other metal equipment. 5. Steel making and rolling business. 6. Import and export business. 7. CD01060 Aircraft and Parts Manufacturing. 8. J101030 Waste Disposing. 9. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.	Added a number of business items, while the original text description of business items was changed to business codes of business items in accordance with the requirements of the laws and regulations.
	19.

		20. EZ99990 Other Engineering 21. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Article 6		The Company's shares are registered, signed or affixed with sealed by the directors on behalf of the Company, approved by the bank that may act as the share issuer according to the laws before issuance.	The Company's shares are registered, signed or affixed with seals by over three directors, and approved by the competent authority before issuance.	Amended pursuant to Article 162 of the Company Act
Article 33		The Articles of Incorporation was established on September 15, 1982, ...(omitted). The 31st amendment was made on June 28, 2017. The 32nd amendment was made on June 21, 2021.	The Articles of Incorporation was established on September 15, 1982, ...(omitted). The 31st amendment was made on June 28, 2017.	Added an amendment date.

WEI CHIH STEEL INDUSTRIAL CO., LTD.

Comparison Table of the Amendments to the Procedures for Election of Directors

Articles	Amended articles	Original articles	Amendment reasons
Article 3	The person with the right to convene a meeting shall prepare ballots of the number equal to the number of directors to be elected, fill in the number of rights, and distribute them to the shareholders attending the shareholders' meeting.	The Board of Directors shall prepare ballots of the number equal to the number of directors to be elected, fill in the number of rights, and distribute them to the shareholders attending the shareholders' meeting.	Amended pursuant to Article 173 of the Company Act
Article 5	For the election of directors, a ballot box shall be set up by the person with the right to convene a meeting. The ballot box shall be opened and inspected by the scrutineer before the voting.	For the election of directors, a ballot box shall be set up by the Board of Directors. The ballot box shall be opened and inspected by the scrutineer before the voting.	Amended pursuant to Article 173 of the Company Act
Article 6	Deleted	If the candidate is a shareholder, voters shall fill in the account name of the candidate and the shareholder account number in the "Candidate" column of the ballot. If the candidate is not a shareholder, the name and ID card unified number shall be filled in. However, if the government or a corporate shareholder is a candidate, the name of the government or corporate shareholder shall be filled in in the "Candidate" column of the ballot, as well as the name of the government or corporate shareholder and its representative. If there are more than one representative, the names of the representatives shall be filled in separately.	Deleted pursuant to Jin-Guan- Zheng-Jiao- Zi No. 1080311451 issued by the Financial Supervisory Commission
Article 6	A ballot is deemed null and void under any of the following circumstances: (I) A ballot not prepared by the person with the right to convene a meeting. (II) A blank ballot is inserted into the ballot box. (III) The handwriting is illegible or has been altered.	Article 7 A ballot is deemed null and void under any of the following circumstances: (I)A ballot that is not designated for these Procedures. (II) A blank ballot is inserted into the ballot box. (III) The handwriting is illegible or has been altered.	Changed the article number and amended pursuant to Jin-Guan- Zheng-Jiao- Zi No. 1080311451

		(IV) The name of the candidate on the ballot is not included in the list of director candidates. (V) Unrelated content, other than the number of election rights allocated, are filled in. (VI) A ballot is filled in with two or more candidates.	(IV) Where the candidate is a shareholder and his/her account name, shareholder account number do not match with the register of shareholders; where the candidate is not a shareholder and his/her name and ID card unified number do not match with the register of shareholders. (V) Unrelated content, other than the account name (name) or shareholder account number (ID card uniform number) of the candidate and the number of election rights allocated, is filled in. (VI) The account name (name) or shareholder account number (ID card uniform number) of the candidate are not filled in. (VII) A ballot filled in with two or more candidates.	issued by the Financial Supervisory Commission
	Article 7	The Company's independent directors and non-independent directors shall be elected from the list of candidates at the shareholders’ meeting pursuant to the prescribed number of candidates to be elected in the Company's Articles of Incorporation and related announcements. According to the results of electric voting and ballots, candidates who obtain the most voting rights from the ballots are elected as independent directors and non-independent directors. In the event that two or more candidates obtain the same number of ballots and the number of candidates exceeds the prescribed number, the candidates who obtain the same number of ballots shall draw lots to determine the election results. In the event that a candidate is absent, the chair maydraw a lot for and on	Article 8 The Company's independent directors and non- independent directors shall be elected from the list of candidates at the shareholders’ meeting pursuant to the number of candidates to be elected prescribed by the Company's Articles of Incorporation and related announcements. According to the results of electric voting and ballots, candidates who obtain the most voting rights from the ballots are elected as independent directors and non-independent directors. In the event that two or more candidates obtain the same number of ballots and the number of candidates exceeds the prescribed number, the candidates who obtain the same number of ballots shall draw	Changed the article number.

	his/her behalf.	lots to determine the election results. In the event that a candidate is absent, the chair may draw a lot for and on his/her behalf.
Article 8	After the voting is completed, ballots will be opened on the spot and the results will be announced by the chair or the person designated by the chair on the spot.	Article 9 After the voting is completed, ballots will be opened on the spot and the results will be announced by the chair on the spot.	Changed the article number and amended according to the normalpractice.
Article 9	The election shall be ineffective if it does not comply with Article 26-3 of the Securities and Exchange Act.	Article 10 The election shall be ineffective if it does not comply with Article 26-3 and 26-4 of the Securities and Exchange Act.	Changed the article number.
Article 10	The election of directors shall take into account the overall structure of the Board of Directors. Members of the Board of Directors shall possess knowledge, skills, and attainment necessary to perform their duties, which are detailed as follows: 1.Operational judgment. 2.Accounting and financial analysis skills. 3.Business management skills. 4.Crisis management skills. 5.Industry knowledge. 6.International market awareness. 7.Leadership. 8.Decision-making ability. The majority of the directors shall not be a spouse or a relative within the second degree of kinship of another director. The Company's Board of Directors shall consider adjusting the composition of the Board of Directors based on the results of the performance evaluation.	None	Added content
Article 11	The qualifications and election of the Company’s independent directors shall comply with the "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies" and "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies".	None	Added content

	Article 12	The Company's Board of Directors shall issue a notice of election to the elected directors.	Article 11 The Company's Board of Directors shall issue a notice of election to the elected directors.	Changed the article number.
	Article 13	Matters not prescribed in these Procedures shall comply with the Company Act, the Company’s Articles of Incorporation, and related laws and regulations.	Article 12 Matters not prescribed in these Procedures shall comply with the Company Act, the Company’s Articles of Incorporation, and related laws and regulations.	Changed the article number.
	Article 14	These Procedures and the amendments thereto shall become effective from the date it is approved at the shareholders’ meeting.	Article 13 These Procedures and the amendments thereto shall become effective from the date it is approved at the shareholders’ meeting.	Changed the article number.

WEI CHIH STEEL INDUSTRIAL CO., LTD. Rules of Procedure for Shareholders’ Meetings

Approved at the shareholders’ meeting on June 23, 2021

Article To establish a strong governance system and sound supervisory capabilities for the 1 Company's shareholders’ meetings, and to strengthen management capabilities, these Rules are adopted pursuant to Article 5 of the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies. Article Unless otherwise provided by the laws and regulations, the Company's Rules of 2 Procedure for Shareholders Meetings shall be as provided in these Rules. Article Unless otherwise provided by the laws and regulations, the Company's shareholders’ 3 meetings shall be convened by the Board of Directors. The Company shall prepare electronic versions of the shareholders’ meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of an annual shareholders’ meeting or 15 days before the date of an extraordinary shareholders’ meeting. In addition, 21 days before the date of an annual shareholders’ meeting or 15 days before the date of an extraordinary shareholders’ meeting, the Company shall also have prepared the shareholders meeting handbook and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent designated thereby as well as being distributed on-site at the meeting place.

The cause or subject of a meeting of shareholders to be convened shall be indicated in the individual notice to be given to shareholders; and the notice may, as an alternative, be given by electronic means, after obtaining prior consent from the recipient thereof. Article For each shareholders’ meeting, a shareholder may appoint a proxy to attend the 4 meeting by providing the proxy form issued by the Company and stating the scope of the proxy's authorization. Article The venue for a shareholders’ meeting shall be the premises of the Company, or a place 5 easily accessible to shareholders and suitable for a shareholders’ meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

Article The Company shall specify in its shareholders’ meeting notices the time during which 6 shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel shall be assigned to handle the registrations. Shareholders and their proxies (collectively, "shareholders") shall attend shareholders’ meetings based on attendance cards, sign-in cards, or other certificates of attendance. The Company may not arbitrarily add requirements for other documents beyond those presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.

Attending shareholders may hand in a sign-in card in lieu of signing in. The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors ballots shall also be furnished.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders’ meeting. When a juristic person is appointed to attend as a proxy, it may designate only one person to represent it in the meeting.

Article Shareholders’ meetings convened by the Board of Directors shall be chaired by the 7 Chairman in person.

If the Chairman is absent or unable to exercise his/her duties for any reason, the Chairman shall designate a director as the proxy. If a director is not designated by the Chairman, the directors shall elect a chair among themselves.

If a shareholders meeting is convened by a party with the power to convene but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

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

Article The Company shall prepare sound or video recording of the entire process of the 8 shareholders' meeting.

The recorded materials of the preceding paragraph shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

Article Participation at a shareholders' meeting shall be calculated based on the number of 9 shares. The number of shares represented by participating shareholders shall be calculated based on the attendance cards with the number of voting powers exercised in writing or by electronic means.

The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one-third of the total number of issued shares, the chair shall declare the meeting adjourned.

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one-third or more of the total number of issued shares, the Company may adopt a tentative resolution pursuant to Article 175, paragraph 1 of the Company Act.

When, prior to the conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

Article If a shareholders meeting is convened by the Board of Directors, the meeting agenda 10 shall be set by the Board of Directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders’ meeting. The provisions of the preceding paragraph apply mutatis mutandis to a shareholders’ meeting convened by a party with the power to convene that is not the Board of

Directors.

The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders’ meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the Board of Directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting. The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed, call for a vote, and schedule sufficient time for voting.

Article Before speaking, an attending shareholder must specify on a speaker's slip the subject of 11 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 chair. A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail. Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

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

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

After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

Article Voting at a shareholders’ meeting shall be calculated based on the number of shares. 12 With respect to resolutions of shareholders’ meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of the Company, that shareholder may not vote on that item, and may not exercise voting rights as a proxy for any other 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.

With the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as a proxy by two or more shareholders, the voting rights represented by that proxy may not exceed three percent of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Article A shareholder shall be entitled to one vote for each share held, except when the shares 13 are restricted shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act. When the Company holds a shareholders’ meeting, it shall adopt exercise of voting rights by electronic means and may adopt exercise of voting rights by correspondence. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders’ meeting notice. A shareholder who exercises his/her voting power at a shareholders meeting in writing or by electronic means shall be deemed to have attended the said shareholders’ meeting in person, but shall be deemed to have waived his/her voting power in respect of any extraordinary motion and/or the amendment to the contents of the original proposal at the said shareholders’ meeting. Thus, the Company is advised to avoid proposing the extraordinary motion and/or the amendment to the contents of the original proposal. A shareholder intending to exercise voting rights in writing or by electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company two days before the date of the shareholders’ meeting. However, when duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent. When a shareholder exercises voting rights in writing or by 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 known to the Company, by the same means by which the voting rights were exercised, before two business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both in writing or by electronic means and by appointing a proxy to attend a shareholders’ meeting, the voting rights exercised by the proxy in the meeting shall prevail.

Except as otherwise provided in the Company Act and the Company's Articles of Incorporation, the passage of a proposal 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 proposal, the chair or a person designated by the chair 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 proposal, 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 proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any of them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company.

Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders’ meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote. Article The election of directors at a shareholders meeting shall be held in accordance with the

14 applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article Matters relating to the resolutions of a shareholders’ meeting shall be recorded in the 15 meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed by electronic means.

The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.

The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their voting results. The minutes shall be retained for the duration of the existence of the Company.

Article If matters put to a resolution at a shareholders’ meeting constitute material information 16 under applicable laws or regulations or under the regulations prescribed by the competent authority, the Company shall upload the content of such resolution to the MOPS within the prescribed period.

Article The chair may direct the proctors or security personnel to help maintain order at the 17 meeting place. When proctors or security personnel maintain order at the meeting place, they shall wear an armband or identification card.

Article When a meeting is in progress, the chair may announce a break based on time 18 considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

Article These Procedures and the amendments thereto shall become effective from the date it is 19 approved at the shareholders’ meeting.

Articles of Incorporation of WEI CHIH STEEL INDUSTRIAL CO.,LTD

Amendment date: June 28, 2017

Chapter I General Provisions

Article 1 The Company was incorporated under the name of �� pursuant to the articles of the Company Act governing the “Company Limited by Shares”.

Article 2 The Company's businesses are shown on the left:

Manufacture, processing, trading of steel bars, flat iron, angle iron, U-shaped iron, polished

bars, round iron, steel coils and other steel products.

Manufacture, processing and trading of large steel billets, small steel billets, steel ingots, structural steels and alloy steels, tool steels, low carbon steels, medium carbon steels, high carbon steels, and other special steels.
Import of scrap iron and sales of disassembled vessels.
Manufacturing, repairing, trading of hardware machinery, iron and electric materials, and other metal equipment.
Steelmaking and rolling business.
Import and export business.
CD01060 Aircraft and Parts Manufacturing.
J101030 Waste Disposing.
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 based in Tainan City and may set up domestic or overseas subsidiaries when necessary, upon the resolution of the Board of Directors.

Article 4 (Deleted)

Chapter II Shares

Article 5 The total capital amount of the Company is NT$7,200,000,000, which is divided into 720,000,000 shares with a par value of NT$10 per share. The Board of Directors is authorized to issue the outstanding shares in installments.
Article 6 The Company's shares are registered, signed or affixed with seals by over three directors, and approved by the competent authority before issuance.
Article 6-1 The shares issued by the Company are exempt from printing and should be registered with the centralized securities depository.
Article 7 Unless otherwise provided by other laws and regulations, the Company shall handle stock affairs in accordance with the "Regulations Governing the Administration of Shareholder Services of Public Companies".
Article 8 (Deleted)
Article 9 (Deleted)
Article 10 (Deleted)
Article 11 Registration for the transfer of shares shall be closed sixty days before the date of each annual shareholders' meeting, thirty days before the date of each extraordinary meeting, or five days before the base date on which dividends, bonuses, or any other benefits are distributed by the

Company.

Chapter III Shareholders' Meeting

Article 12 Shareholders' meetings are classified into two types, annual shareholders' meetings and extraordinary meetings. Annual shareholders' meetings are convened once per annum within six months after the end of each fiscal year. The Board of Directors shall notify the shareholders 30 days prior to the meeting. Extraordinary meetings are convened when necessary. The Board of Directors shall notify the shareholders 15 days prior to the meeting.
Article 13 A shareholder may appoint a proxy to attend the shareholders’ meeting by providing the proxy form issued by the Company and stating the scope of the proxy's authorization. Unless otherwise provided by the laws and regulations and the Securities and Exchange Act, proxies attending the meeting are governed by the "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies".
Article 14 Unless otherwise provided in the Company Act, the Chairman shall be the chair of the shareholders' meeting. In the absence of the Chairman, the Vice Chairman shall be the chair. In the absence of the Vice Chairman, the Chairman shall designate a person to act as the chair. If no such person is designated, the directors shall elect a chairperson from among themselves. The shareholders' meeting shall be conducted in accordance with the Company's Rules of Procedure for Shareholders’ Meetings.
Article 15 Unless otherwise provided or restricted by the laws and regulations, each shareholder of the Company is entitled to one vote right per share, which may be exercised in writing or by electronic means.
Article 16 Unless otherwise provided by laws and regulations, resolutions at the shareholders’ meeting shall be approved by a majority of the attending shareholders at a meeting attended by shareholders representing a majority of the total issued shares.
Article 17 Resolutions at the shareholders’ meeting shall be recorded in meeting minutes, which shall be signed or sealed by the chair and distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed by electronic means.
The meeting minutes in the preceding paragraph shall be announced through the MOPS.
The meeting minutes shall record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their voting results. The minutes shall be retained in the Company together with the attendance book and proxy forms.

Chapter IV Board of Directors, Audit Committee and Functional Committees

Article 18 The Company shall have seven to nine directors. There shall be no less than three independent directors, which shall account for no less than one-fifth of the directors, with a term of office of three years and are subject to re-election.
In accordance with Article 192-1 of the Company Act, the election of directors shall adopt a candidate nomination system. The directors shall be elected from the list of candidates at the shareholders' meeting. Independent directors and non-independent directors shall be elected

together and the prescribed number of directors elected shall be calculated separately.

If a director's term of office expires without re-election, the director's term of office may be extended until the re-elected director assumes office.

The Company has established the Audit Committee to replace the supervisors in accordance with Article 14-4 of the Securities and Exchange Act. The Audit Committee shall be composed of all independent directors and shall consist of not less than three members, one of whom shall be the convener. The exercise of its powers and related matters shall be governed by the relevant laws and regulations, and determined by the Board of Directors.

Article 19 The Board of Directors of the Company may establish functional committees in accordance with the laws. The qualifications of their members, the exercise of their powers, and related matters shall be governed by the relevant laws and regulations, and determined by the Board of Directors.
Article 20 The Board of Directors shall be composed of the directors. One Chairman and one Vice Chairman shall be elected by and from among the directors to perform duties of the Company in accordance with the laws and regulations, the Articles of Incorporation, and the resolutions of the shareholders' meetings and the Board meetings.
Article 21 If the number of directors' vacancies reaches one-third of the Board of Directors, the Board of Directors shall convene a shareholders' meeting within 60 days to fill the vacancies. The term of office of a re-elected director shall be filling the remaining term of office of the original director.
Article 22 Board meetings shall be convened by the Chairman. The directors shall be noticed seven days prior to the meeting. In case of an emergency, a Board meeting may be convened at any time. If the Chair is absent or unable to exercise his/her duties for any reason, a proxy shall be appointed in accordance with Article 208 of the Company Act.
The Company's Board meeting may be convened in writing, by e-mail or by facsimile.
Article 23 Unless otherwise provided in the Company Act, a resolution of the Board meeting shall be approved by a majority of the attending shareholders at a meeting attended by a majority of the shareholders. If a Director is unable to attend for any reason, he/she may issue a proxy form listing the scope of authority and appoint other directors to attend the meeting on his/her behalf, provided that the proxy can only be appointed by one director.
Article 24 Resolutions at the Board meetings shall be recorded in the meeting minutes. The meeting minutes mentioned in the preceding paragraph shall be prepared in accordance with Article 183 of the Company Act.
Article 25 The Company may provide remuneration to the directors, regardless of the Company's revenue, for the performance of their duties for the Company. The Board of Directors is authorized to determine their remuneration in accordance with their participation in and contribution to the Company's operations at a level not exceeding the highest salary set forth in the Company's remuneration plan.

Article 25-1 (Deleted)

Chapter V Managers and Employees

Article 26 The Company shall have one President and several Vice Presidents, senior managers and managers. Their appointment and dismissal shall be approved by a majority of the attending shareholders at a meeting attended by a majority of the shareholders. However, the appointment and dismissal of the Vice President, senior managers and managers shall be nominated by the President.

Article 27 Other employees of the Company are appointed and dismissed by the President in accordance with the Recruitment Management Procedures under the internal procedures.

Chapter VI Final Accounts

Article 28 Upon closing of each fiscal year, the Board of Directors shall prepare the following documents and submit them to the shareholders’ meeting for approval:

Business Report
Financial Statements
Proposals of earnings distribution or provision for loss allowance.

Article 29 The Company shall set aside 0.3% to 1% of its profits as employee compensation, which shall be distributed in shares or cash by resolution of the Board of Directors. The compensation shall be distributed to employees of subordinate companies who meet certain requirements. The Company may set aside 2% or less of the above-mentioned profits as director compensation. The employee compensation and director compensation shall be reported to the shareholders' meeting. When there are accumulated losses, the Company shall offset the loss before distributing employee compensation and director compensation according to the above-mentioned ratios.

Article 29-1 The Company shall, after paying taxes on its profit after tax and offsetting the accumulated loss, set aside 10% as a legal reserve. However, if the legal reserve has reached the Company's paid-in capital, no further provision shall be made, and the remainder shall be provided or reversed as a special reserve in accordance with the laws and regulations. If there is any balance, the Board of Directors shall, together with the accumulated undistributed earnings, prepare a proposal for the distribution of earnings and submit it to the shareholders' meeting for resolution on the distribution of dividends to shareholders.

The Company's dividend policy is to allocate no less than 10% of the distributable earnings to shareholders each year in accordance with the Company's current and future development plans, taking into account the investment environment, domestic and international competition, the need to maintain a solid long-term financial structure, and the interests of shareholders. However, if the accumulated distributable earnings are less than 1% of the paid-in capital, they may not be distributed. The distribution of dividends to shareholders is based on a balanced policy of cash and share dividends. Dividends shall be distributed in the form of cash dividends of not less than 10% of the total dividends paid for the year, unless there are capital needs to improve the financial structure or for major capital expenditures.

Chapter VII Miscellaneous

Article 30 The Company may provide guarantees for other companies.

Article 31 The Company's Organization Rules and Procedures shall be prescribed by the Board of Directors. Article 32 Matters not mentioned herein shall be subject to the Company Act and other relevant laws and regulations.

Article 33 These Articles of Incorporation were established on September 15, 1982. The 1st amendment was made on October 15, 1982. The 2nd amendment was made on November 5, 1983. The 3rd amendment was made on July 7, 1986. The 4th amendment was made on June 26, 1989. The 5th amendment was made on June 1, 1990. The 6th amendment was made on June 10, 1991. The 7th amendment was made on May 15,

The 8th amendment was made on May 15, 1992. The 9th amendment was made on July 16, 1992. The 10th amendment was made on July 30, 1992. The 11th amendment was made on April 20, 1993. The 12th amendment was made on July 18, 1994. The 13th amendment was made on May 14, 1996. The 14th amendment was made on November 22, 1996. The 15th amendment was made on March 27, 1997. The 16th amendment was made on March 17, 1998. The 17th amendment was made on March 17, 1998. The 18th amendment was made on June 25, 1999. The 19th amendment was made on June 22, 2000. The 20th amendment was made on June 20, 2001. The 21st amendment was made on June 26, 2002. The 22nd amendment was made on June 29, 2005. The 23rd amendment was made on June 23, 2006. The 24th amendment was made on June 22, 2007. The 25th amendment was made on June 25, 2008. The 26th amendment was made on June 25, 2010. The 27th amendment was made on June 28, 2012. The 28th amendment was made on June 20, 2014. The 29th amendment was made on December 28, 2015. The 30th amendment was made on June 29, 2016. The 31st amendment was made on June 28, 2017.

WEI CHIH STEEL INDUSTRIAL CO., LTD. Directors’ Shareholding Table

I. The Company has established the Audit Committee, in which all independent directors replace the supervisors in accordance with Article 14-4 of the Securities and Exchange Act.
II. As required under Article 2 of the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies, the minimum shareholdings of all directors other than independent directors of the Company shall be 13,028,592 shares.
III. As of the closing date of the 2021 shareholders’ meeting (April 23, 2021) the total number of issued shares of the Company is 325,714,800 shares. The shareholdings of individual and all directors set forth in the shareholders’ register are as follows:

Title	Shareholder account name	Elected date	Number of shares held when elected	Number of shares held when elected	Number of shares held currently	Number of shares held currently
			Number of shares held when elected	Shareholding	Number of shares held	Shareholding
Chairman	Rui-Xi Guo	June 23, 2020	9,261,092	2.84%	9,261,092	2.84%
Director	Representative of Enhui Investment Co., Ltd.: Su-HuiGuo	June 23, 2020	31,065,201	9.54%	31,065,201	9.54%
Director	Shi-Xian Guo	June 23, 2020	2,745,237	0.84%	2,745,237	0.84%
Director	Representative of Enhui Investment Co., Ltd.: Qing-WenGuo	June 23, 2020	31,065,201	9.54%	31,065,201	9.54%
Independent Director	Ji-Xiong Liu	June 23, 2020	0	0.00%	0	0.00%
Independent Director	Xu-Sheng Xia	June 23, 2020	0	0.00%	0	0.00%
Independent Director	Jia-Hui Ding	June 23, 2020	0	0.00%	0	0.00%
Total shareholding of directors (excluding independent directors)			43,071,530	13.22%	43,071,530	13.22%

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WEI CHIH — AGM Information 2021

51954_rns_2021-09-08_9c9eef64-90bc-4468-a39e-3db0cfc0abd6.pdf

Meeting Handbook

Table of Contents

Chapter 1. Meeting Agenda

WEI CHIH STEEL INDUSTRIAL CO., LTD. 2021 Annual Shareholders’ Meeting

Chapter 2. Report Items

Chapter 3. Proposed Resolutions

Proposal: 2020 Business Report and Financial Statements.

Proposed by the Board of Directors

WEI CHIH STEEL INDUSTRIAL CO., LTD. Provision for Loss Allowance Table 2020

Chapter 4. Discussion Items

the Board of Directors

Proposal: Amendment to the Company’s Articles of Incorporation.

Chapter 5. Extraordinary Motions

Adjournment

Chapter 6. Attachments

WEI CHIH STEEL INDUSTRIAL CO., LTD. 2020 Business Report

I. 2020 Business Report�

(1) Production and sales performance:

(2) Profit comparison

WEI CHIH STEEL INDUSTRIAL CO., LTD. Audit Committee's Review Report

WEI CHIH STEEL INDUSTRIAL CO., LTD.

Comparison Table of the Amendments to the Codes of Ethical Conduct

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Valuation of inventory

Description of key audit matter

How the matter was addressed in our audit:

Impairment Reversal Assessment of property, plant and equipment

Description of key audit matter

How the matter was addressed in our audit:

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

Auditors' Responsibilities for the Audit of the Financial Statements

Notice to Readers

Financial statements

WEI CHIH STEEL INDUSTRIAL CO., LTD.

BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

WEI CHIH STEEL INDUSTRIAL CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

WEI CHIH STEEL INDUSTRIAL CO., LTD.

STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

Financial statements

WEI CHIH STEEL INDUSTRIAL CO., LTD.

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

WEI CHIH STEEL INDUSTRIAL CO., LTD. Comparison Table of the Amendments to the Articles of Incorporation

WEI CHIH STEEL INDUSTRIAL CO., LTD.

Comparison Table of the Amendments to the Procedures for Election of Directors

WEI CHIH STEEL INDUSTRIAL CO., LTD. Rules of Procedure for Shareholders’ Meetings

Directors.

Articles of Incorporation of WEI CHIH STEEL INDUSTRIAL CO.,LTD

Chapter I General Provisions

Chapter II Shares

Chapter III Shareholders' Meeting

Chapter IV Board of Directors, Audit Committee and Functional Committees

Chapter V Managers and Employees

Chapter VI Final Accounts

Chapter VII Miscellaneous

WEI CHIH STEEL INDUSTRIAL CO., LTD. Directors’ Shareholding Table

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WEI CHIH AGM Information 2021