Board press release

The 17th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on March 22, 2013. Major items of the agenda adopted were:

• 1. 2012 financial results
  CSC's operation results in 2012: revenues NT$207,193 million, income before income tax NT$6,131 million, net income NT$5,811 million, earnings per common share (after tax) NT$0.38.
• 2. Appropriation of distributable earnings for 2012
  CSC's distributable earnings for 2012 are NT$7,706 million including the listed unappropriated earnings from special reserve. Dividends will be appropriated according to CSC's Articles of Incorporation. In addition to the appropriation of distributable earnings for legal reserve, compensation to directors and supervisors and bonus to employees, the meeting suggested to appropriate NT$1.40 per share (stock dividend NT$0.1 and cash dividend NT$1.3) for dividends of preferred stocks and NT$0.5 per share (stock dividend NT$0.1 and cash dividend NT$0.4) for common stocks. The above resolutions will be proposed at stockholders' meeting on June 19, 2013.
• 3. Capital increase from earnings in 2012
  The meeting resolved to appropriate NT$1,531,074,450 from the distributable earnings in 2012 as a capital increase for replenishment of CSC's working capital. 153,107,445 common shares with NT$10 par value will be issued in one time. The rights and obligations of new shares are the same as current common shares.
• 4. Revamping portion of staves for No.1 blast furnace
  This project is to maintain the production capacity of No. 1 blast furnace. Major revamping items include portion of staves, cooling plates and needed repairs. The project will commence in April 2013 and is scheduled for completion in June 2015. Total investment amount is estimated to be NT$1,300 million.
• 5. Addition of quenching plate equipment for plate mill
  The direct quenching plate which will improve CSC's competitiveness is a product of hi-tech threshold and high value added. It will increase 1,700 metric tons of quenching plates per year for CSC when the project completes. The project will commence in April 2013 and is scheduled for completion in August 2015. Total investment amount is estimated to be NT$2,180 million.
• 6. Construction of titanium and nickel alloy finishing line
  Titanium and nickel alloy materials are good for high temperature resistance, low temperature resistance, strong acid resistance, alkali resistance, high strength and low density, as well as being popularly used in the industries of aerospace, biomedicine, petrochemical and electronics. In order to promote competitiveness of products, CSC will invest NT$1,818 million in the construction of titanium and nickel alloy finishing line with 7,767 metric tons of annual production capacity. The project will commence in April 2013 and is scheduled for completion in June 2015.
• 7. Joint venture with Rechi Precision Co., Ltd. to establish a brushless direct current motor company
  Brushless direct current motor has the properties of noiseless, low wear and long life cycle. Its highly efficient output is especially excellent in energy saving, environmental protection and motor efficiency. In order to expand and develop electrical sheets and raise the added value of iron oxide powder, CSC plans to invest NT$400 million in the establishment of a brushless direct current motor company through the joint ventures with Rechi Precision Co., Ltd., motor distributors and key component partners. CSC's ownership in the new company will be 25%. The new company will set up plants at Pingtung Export Processing Zone in Taiwan and Jiujiang, Jiangxi, China respectively. Annual production capacity of motors will be 24 million sets. Pingtung plant will be positioned as the design and R&D center.
• 8. To participate in cash capital increase of Kaohsiung Rapid Transit Corporation
  Kaohsiung Rapid Transit Corporation's (KRTC) board meeting has resolved to increase capital by NT$1,500 million. CSC's board meeting approved a ceiling of NT$806 million to participate in KRTC's capital increase in order to help KRTC's operation and fulfill social responsibilities.
• 9. Date and venue for CSC's 2013 shareholders' meeting
  • Date: June 19, 2013 (Wednesday) 9:00 a.m.
    Venue: CSC Auditorium (1, Chung Kang Road, Siaogang District, Kaohsiung, Taiwan)
  Date and place for accepting stockholders' draft resolutions and candidate nomination of directors and supervisors
  • Date: April 12-22, 2013
    Place: China Steel Corporation (1, Chung Kang Road, Siaogang District, Kaohsiung, Taiwan)

The 16th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on December 27, 2012. Major items of the agenda adopted were:

• 1. Revamp of pre-programmed automatic and electrical control system for No. 2 hot strip mill of Rolling Mill Department II─Hot Rolled Products
  No.2 hot strip mill of Rolling Mill Department II has been in operation for 16 years. It is estimated to spend NT$2,270 million to revamp the pre-programmed automatic and electrical control system for No.2 hot strip mill from January 2013 to December 2017, a five-year project, in order to reduce the risk of breakdown of equipment, as well as promote processing capacity of the production line to develop new steel grades. The benefits of this project include reducing the rate of loss by delay, improving equipment properties and functions, and reducing CO2 emission by total of 2,988.56 metric tons per year through power saving and low-temperature rolling.
• 2. Raise capital of CSC's wholly-owned subsidiary “CSC Steel Australia Holdings Pty Ltd” by US$270 million to invest in mineral assets.
• 3. Consolidation and merger of Horng Yih Investment Corporation, Long Yuan Fa Investment Corporation, and Goang Yaw Investment Corporation
  According to the investment agreement when CSC purchased the stocks of Chung Hung Steel Corporation (original name was Yieh Loong Enterprise Co., Ltd.) in February 2000, CSC also bought Horng Yih Investment Corporation, Long Yuan Fa Investment Corporation, and Goang Yaw Investment Corporation, which held the stocks of Chung Hung Steel. In order to simplify CSC Group's financial statements, CSC decides to consolidate and merge the three bought-in corporations. The reference date for the consolidation and merger will be on January 1, 2013.
• 4. Issuance of domestic corporate bonds amounted to NT$20,000 million
  CSC will issue domestic corporate bonds at suitable time before the end of 2013 in order to replenish long-term working capital. Total amount of issuance will be within NT$20,000 million.

The 15th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on August 27, 2012. Major items of the agenda adopted were:

• 1. Financial report for the first half of 2012
  Revenues NT$110,675 million, pretax income NT$1,929 million, net income NT$1,943 million and earnings per share (EPS) NT$0.13.
• 2. Revamp of No. 2 Continuous Annealing Line (No. 2 CAL)
  Since No. 2 CAL has been operated for 20 years since 1992, the revamping project was approved in the meeting for the need of developing high-grade and high-strength new steel products. It is estimated that the project will be able to reduce production cost, as well as decrease CO2 emission about 562.4 metric tons per year owing to the saving use of electric power after the project is finished. The project will commence in September 2012 and is scheduled for completion in April 2015, totaling 32 months.
• 3. Increase of investment in Formosa Ha Tinh Steel Corporation amounted US$40 million
  CSC invested US$135 million to own 5% of the charter capital of Formosa Ha Tinh Steel Corporation in 2010. Since the investment project of Formosa Ha Tinh Steel has been revised, its total amount of investment has also been re-estimated to increase US$2,117 million comparing with the original plan. In addition, Formosa Ha Tinh Steel's self-own capital has been increased to be US$3,500 million for improving its financial structure. CSC revalued the project accordingly and still deemed it to be feasible. Therefore, the meeting resolved to increase US$40 million of investment to the project for enabling CSC to keep its 5% of holding ratio in Formosa Ha Tinh Steel's capital.
• 4. Setup of a steel service center (or coil center) in Qingdao City, Shangdong Province, China
  CSC will invest to set up a steel service center in Qingdao City, Shangdong Province, China, with Rechi Precision Co., Ltd. and China Steel Global Trading Corporation in order to explore the sales channels and establish a sales place in Northern China. The planned capital will be US$20 million in which CSC invests US$12 million for holding 60% shares.

The 14th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on June 15, 2012. Major items of the agenda adopted were:

• 1. Addition of waste gas desulfurization system for No.3 sinter plant
  This project will commence in July 2012 and is scheduled for completion in October 2014. After completion, the sulfur oxides emission can be not only lowered to less than the emission standard of 100ppm, but also diminished by 4,325kgs per day, which will improve the environmental quality effectively.
• 2. Budget increase and completion-date extension for the revamp of No.4 Blast Furnace 1st Campaign
  This revamping project, approved in the board meeting on July 16, 2010 totaling NT$5 billion, commenced in August 8, 2010 and planned to complete in July 31, 2013. Original project will adopt the cooling copper stave to revamp at the middle and bottom of the blast furnace and the cooling cast iron stave at other portion. However, CSC has recently learnt that some overseas blast furnaces with copper staves have encountered malfunctions. Therefore, for stabilizing the production and preventing the potential costs of future maintenance and suspension, the design of the cooling stave will be changed to use the same cooling plates as the current campaign uses. The budget will be increased by NT$373 million, and the completion date will be extended to November 30, 2014.

In addition, the board meeting on February 21, 2012 approved the investment of 10% of shares of MCG Coal Holdings' MDL162 mine via China Steel Australia Holdings Pty Ltd, amounting to AUD50 million, and in addition to the future capital expenditures of construction and development according to the shareholding rate. However, because Peabody, the major shareholder of MDL162, determined to execute its pre-emptive right, the transaction has been failed. Since CSC hasn't paid the sums, the board meeting therefore approved to cancel the transaction.

The 13th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on May 14, 2012. Major items of the agenda adopted were:

• 1. Consolidated balance sheets on the IFRS transition date as of January 1, 2012 and ROC GAPP consolidated financial statements for the first quarter of 2012
  Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” announced by Financial Supervisory Commission, Executive Yuan on December 22, 2011, and the first-time adoption for the accounting policies of International Financial Reporting Standards (IFRS), CSC has prepared its IFRS opening consolidated balance sheets on the transition date as of January 1, 2012, showing the total assets NT$618.221 billion, total liabilities NT$308.757 billion, stockholders' equity of parent company NT$286.252 billion and non-controlling interest NT$23.212 billion. Under ROC Generally Accepted Accounting Principles (ROC GAAP), consolidated operating revenues were NT$93.926 billion, total consolidated net income NT$323 million, and net losses per basic common share NT$0.05.
• 2. Material Information Declaration of financial effects on CSC's IFRS conversion
  The outcome of the financial effects for CSC's first time to adopt IFRS on the opening date as of January 1, 2012 will increase consolidated assets and consolidated liabilities by NT$6.536 billion and NT$9.179 billion respectively, as well as will decrease consolidated stockholders' equity by NT$2.643 billion or book value per share by NT$0.16.
• 3.The issuing period of domestic common corporate bonds to be issued in fiscal year 2012 will be extended
  Concerning the issuing time of domestic common corporate bonds totaling no more than the amount of NT$20 billion to be issued in fiscal year 2012, which has been approved in the board meeting since December 28, 2011, will be extended from 3-7 years to 5-10 years in order to grasp the proper issuing time.

The 11th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on February 21, 2012. Major items of the agenda adopted were:

• 1. Investment of 10% interest of MCG's MDL162 totaled AUD102 millionT
  CSC will purchase 10% of MCG Coal Holdings' interest in MDL162 mine through CSC Steel Australia Holdings Pty Ltd amounted to AUD50 million. In addition, about AUD52 million in the future capital expenditures of construction and development will be needed from CSC. Both amounts totaled AUD102 million (about NT$3,060 million). CSC will off take about 600,000 metric tons of metallurgical coal per year by execution of an off-take agreement when this project completes.
• 2. Date and venue for CSC's 2012shareholders' meeting
  • Date: June 15, 2012 (Friday) 9:00 a.m.
    Venue: CSC Auditorium (1, Chung Kang Road, Siaogang District, Kaohsiung, Taiwan)
  Date and place for accepting stockholders' draft resolutions
  • Date: April 11-22, 2012
    Place: CSC (1, Chung Kang Road, Siaogang District, Kaohsiung, Taiwan)
• 3.Change of part management positions to be effective on March 1, 2012
  The current Executive Vice President Mr. King-Ling Du will retire on March 1, 2012. Vice President of Corporate Planning Mr. Kin-Tsau Lee will be promoted to succeed Mr. Du. Former Assistant Vice President of Engineering, current President of InfoChamp Systems Corporation, Mr. Mou-Pin Wang will be promoted as Vice President of Corporate Planning.

The 10th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on December 28, 2011. Major items of the agenda adopted were:

• 1. To subscribe for 1.6 billion shares of Dragon Steel Corporation (DSC) through the private offering of capital increase
  A resolution of capital increase through private offering was made by DSC's board meeting on December 23, 2011 for the funding of DSC's expansion project. DSC will issue 1.6 billion common shares with the share price of NT$10 (par value NT$10) to raise NT$16 billion. CSC, the sole shareholder with 100% ownership of DSC, will subscribe for the total amounts.
• 2. To issue domestic corporate bonds amounted to NT$20,000 millio
  In order to replenish working capital, CSC will issue domestic corporate bonds at suitable time before the end of 2012. Total amount of issuance will not exceed NT$20,000 million.
• 3. Vice President of Production Mr. Jyh-Yuh Sung will be promoted as President
  The current President Mr. Ou Chaw-Hwa will retire on February 1, 2012. Vice President of Production Mr. Jyh-Yuh Sung will be promoted to succeed Mr. Ou.
• 4. To change part of management positions
  • (1) Vice President of Engineering Mr. Tsung-Ren Jeng will be transferred to the new position as Vice President of Production. Former General Manager of Plant Engineering and Maintenance Department, currently President of China Steel Machinery Corporation, Mr. Wen-Du Hsu will be promoted as Vice President of Engineering. The change will be effective on February 1, 2012.
  • (2) Vice President of Technology Mr. Yu-Soong Chen will leave his office to act as the Chairman of Chung Hung Steel Corporation. Assistant Vice President of Technology Mr. Shyi-Chin Wang will be promoted as Vice President of Technology. This change will be effective on January 1, 2012.

The 8th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on August 23, 2011. Major items of the agenda adopted were:

• 1. Financial report for the first half of 2011
  Revenues NT$120,134 million, pretax income NT$17,304 million, net income NT$15,344 million and earnings per share (EPS) NT$1.1.
• 2. Investment of NT$ 200 million in "Taiwan Medtech Fund " (the Company)
  One of the Company's shareholders is National Development Fund, Executive Yuan. The fund scale to be collected is US$200 million (no less than NT$5,000 million). Fund life will be 10 years, available to extend one time but no more than 3 years. The Company will focus its major investments on medical devices industry.
• 3. Investment of US$66.58 million in India for setting up a production line of electrical steels
  In order to grasp the opportunity of high growth of demand in India for electrical steels, as well as to enter the markets Middle East, Europe and North Africa via India, CSC will co-invest with international strategic partners for building an annealing-and-coating line to produce electrical steel coils at Bharuch District of Cujarat State in India. The production line will produce 200 thousand metric tons of non-oriented electrical steels per year. Total investment amount of the project will be round US$178 million in which CSC will invest about US$66.58 million. The project will commence in September 2011 and is scheduled for starting test run in October 2013.
• 4. Offering to buy all the capital-increase shares amounted to NT$1,000 million in China Steel Global Trading Corporation
  China Steel Global Trading Corporation (CSGT), one of CSC's subsidiaries, is responsible for the export of CSC Group's steel products. In order to expand its sales channels and invest in coil centers, CSGT will raise NT$1,000 million through capital increase with price NT$10 per share. CSC will offer to buy all the above capital-increase shares.
• 5. Approval of “Organizational Regulations for the Compensation Committee of China Steel Corporation”
  The Board meeting approved the “Organizational Regulations for the Compensation Committee of China Steel Corporation” which is pursuant to “Article 14-6, Paragraph 1 of the Securities and Exchange Act” and “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter” promulgated by the Financial Supervisory Commission, Executive Yuan on March 18, 2011. Three independent directors, Mr. Ting-Peng Liang, Mr. Juu-En Chang and Mr. Shen-Yi Lee, were designated as the committee members. Mr. Ting-Peng Liang was also appointed as the convener for the committee meeting.
• 6. Issuance of domestic corporate bonds amounted to NT$20,000 million for the fiscal year 2011
  In order to increase working capital to meet the principle of long-term stable going concern, CSC will issue its domestic corporate bonds amounted to NT$20,000 million for the fiscal year 2011. The Chairman was authorized to decide the time of issuance according to the status of steel market and CSC's need of working capital.
• 7. Finance Assistant Vice President Chung-Yi Lin will be promoted to replace Mr. King-Hsing Chang as Finance Vice President to be effective on October 1, 2011. Mr. Chang will retire on the same day.

The 7th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on March 23, 2011 Major items of the agenda adopted were:
The 7th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held in June 15, 2011. The meeting resolved an investment of NT$500 million for establishing TaiAN Green Energy and BioTech Venture Capital Co., Ltd. (a temporary name) with total target capital of NT$1,500 million. The lasting period of the VC company will be seven years and can be extended to ten years upon the consent of the majority of shareholders. TaiAn Technologies Corporation (one of CSC's subsidiaries) is entrusted to manage the above-said VC company. Areas of investment include green energy and biotechnology. Besides CSC, it is planned to invite National Development Fund of Executive Yuan, and other domestic important enterprises interested in biotech and green energy to join this project to enhance the development of the industries of environmental protection, green energy, and biotech.

The 6th meeting of the 14th Board of Directors of China Steel Corporation (CSC) was held on March 23, 2011. Major items of the agenda adopted were:

• 1. Addition of waste gas desulfurization system for NO.4 sinter plant
  CSC will invest NT$1,008 million in this project to reduce the sulfur oxides emission by approximately 4,721 kilograms per day after project completion. The project will commence in April 2011 and is scheduled for completion in September 2013.
• 2. Addition of B4154 crane and move of ladle building area for Basic Oxygen Furnace I of Steelmaking Department
  CSC will invest NT$897 million in this project to raise the safety level of the crane operation and smooth the production, by adding new plant buildings at ladle area to separate the production and maintenance activities. The project will commence in April 2011 and is scheduled for completion in February 2014.
• 3. Revamping the welder for No.2 Pickling & Cold Rolling Mill of Rolling Mill Department Ⅲ
  CSC will invest NT$290 million in this project to replace the existing flash butt welder at No.2 Pickling & Cold Rolling Mill by the laser beam welder. When the project completes, it will (1) increase the high-grade steel production, (2) reduce operation cost, and (3) reduce the emission of carbon dioxide by 748.6 metric tons per year owing to the less consumption of electricity, water, nitrogen and oxygen. The project will commence in April 2011 and is scheduled for completion in October 2013.
• 4. Purchase of the buildings from China Steel Structure Co. Ltd.
  he land owned by CSC located at Darengong section Nos. 1001 and 1002, Siaogang District, Kaohsiiung, is currently leased to China Steel Structure Co. Ltd. (CSSC). To retrieve the land for building the Non-Grain-Oriented electrical steel sheets production line, CSC has negotiated with CSSC to move CSSC's machines and facilities out. CSC will pay NT$181 million in total to buy 29 units of CSSC's buildings on the above land according to the leasing contract.
• 5. Relief of Business Strife Limitation for Directors
  For safeguarding the rights and interests of investments, the following concurrent positions of directors were approved in the meeting pursuant to Article 209 of Company Law:
  • (1) Chairman Jo-Chi Tsou concurrently Director of China Ecotek Corporation
  • (2) Director Chaur-Hwa Ou concurrently Director of China Hi-ment Corporation
  • (3) Director King-Ling Du concurrently Chairman of China Ecotek Corporation
  • (4) Director Jyh-Yuh Sung concurrently Director of China Ecotek Corporation and Director of Taiwan Rolling Stock Co., Ltd.
  The above resolutions will be proposed at stockholders' meeting on June 15, 2011.
• 6. Date and venue for CSC's 2011 shareholders' meeting
  • Date: June 15, 2011 (Wednesday) 9:00 a.m.
    Venue: CSC Auditorium, No.1, Chung Kang Road, Siaogang District, Kaohsiung,?????? Taiwan

China Steel Corporation (CSC) held its board meeting on February 22, 2011. Major items of the agenda adopted were:

• 1. 2010 financial results
  CSC's operation results in 2010: revenues NT$239,187 million, income before income tax NT$44,094 million, net income NT$37,587 million, earnings per common share NT$2.83.
• 2. Appropriation of net income for 2010
  CSC's distributable earnings for 2010 totaled NT$33,893 million. According to CSC's Articles of Incorporation, after appropriating the annual income for legal reserve, compensation to directors and supervisors, and bonus to employees, the remainder shall be appropriated for dividends of preferred stocks and common stocks. The Board suggested that the dividend for both preferred stocks and common stocks is NT$2.49 per share (NT$0.5 for stock dividend and NT$1.99 for cash dividend).
• 3. Capital increase from earnings for 2010
  For fleshing CSC's working capital out, the meeting decided to appropriate NT$6,783,084,450 from the distributable earnings in 2010 as a capital increase. 678,308,445 common shares with NT$10 par value will be issued in one time. The rights and obligations of new shares will be the same as current common shares.
• 4. Date and venue for CSC's 2011 shareholders' meeting
  • Date: June 15, 2011 (Wednesday) 9:00 a.m.
    Venue: CSC Auditorium (1, Chung Kang Road, Siaogang District, Kaohsiung, Taiwan)
  Date and place for accepting stockholders' draft resolutions
  • Date: April 12-21, 2011
    Place: CSC (1, Chung Kang Road, Siaogang District, Kaohsiung, Taiwan)
• 5. Increase cash capital and issue new stocks to participate in the issuance of global depository receipts (GDR)
  CSC will increase cash capital and issue new stocks to participate in the issuance of GDR in order to enlarge production capacity, promote product grade and consecutively push several large scale investment projects. Number of stocks to be issued will be between 700 millions and 840 millions.
• 6. Change of partial management personnel to be effective on March 1, 2011 for meeting business needs
  • (1) Corporate Planning Vice President King-Ling Du will be promoted to replace Mr. Lo-Min Chung as Executive Vice President.
  • (2) Administration Assistant Vice President Mr. Hsiung Lee will be promoted to replace Mr. Kin-Tsau Lee as Administration Vice President and Mr. Kin-Tsau Lee will succeed as Corporate Planning Vice President.
  • (3) Commercial Assistant Vice President Mr. Jih-Gang Liu will be promoted to replace Mr. Tsong-Ying Huang as Commercial Vice President.