CPDC — AGM Information 2019

Jun 11, 2019

Stock Code: 1314 China Petrochemical Development Corporation Annual Shareholder Meeting Handbook 2019 Time: May, 24[th] , 2019 (Friday), 9:30am Location: The Toufen Plant of China Petrochemical Development Corporation (No. 217, Sec.2, Ziqiang Road, Toufen Township, Miaoli County, Taiwan)

DISCLAIMER

THIS IS A TRANSLATION OF THE HANDBOOK FOR THE 2017 ANNUAL SHAREHOLDERS’ MEETING (THE “HANDBOOK”) OF CHINA PETROCHEMICAL DEVELOPMENT CORPORATION (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE AGENDA SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

China Petrochemical Development Corporation

TABLE OF CONTENTS

I.	Meeting Procedures………………………………………………………………………3
II.	Meeting Agenda…………………………………………………………………………..4
III.	Report Items………………………………………………………………………….5
IV.	Ratification Items…………………………………………………………………………7
V.	Discussion Items……………………………...…………………………........................10
VI.	Extemporary Motion……………………………………………………………….……18
VII.	Adjournment………………………………………………………………….…………18
VIII.	Attachments
	1. 2018 Business Report…………………………………………………………….…19
	2. Audit Committee’s Review Report………………………………………………….30
	3. Independent Accountant’s Audit Report & 2018 Financial Statements…………….31
	4. Earnings Distribution Table for 2018……………………..…………….………..…50
	5. Comparison between Original and Amendments to the “Procedures for Acquisition
	or Disposal of Assets”……………………………………………………………..... 52
IX.	Appendices
	1. Articles of Incorporation…………………………………………………………. ..95
	2. Rules Governing the Proceedings of Shareholder Meetings…………………..…. 104
	3. Procedures for the Acquisition or Disposal of Assets……………………………..110
	4. Registration Procedures for Attending Shareholder Meetings………………….....131
	5. Shareholdings of the Company’s Directors………………………………………..133

I. Meeting Procedures

1. Call to Order 2019 Annual Shareholders’ Meeting

(Report the number of shares represented at the meeting)

1. Chairman’s remarks

2. Reporting Items

3. Ratification Items

4. Discussion Items

5. Extemporary Motions

6. Adjournment

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II. Meeting Agenda

Time: May, 24[th] , 2019 (Friday), 9:30am

Location: The Toufen Plant of China Petrochemical Development Corporation (No. 217, Sec.2, Ziqiang Road, Toufen Township, Miaoli County, Taiwan)

Meeting Procedure:

1. Report the number of shares represented at the meeting

2. Declaration of the start of the meeting

3. Opening remarks by the chairman

4. Report Items

5. (1) 2018 Business Report

6. (2) Audit Committee’s Review Report on the 2018 Financial Statements

7. (3) Status of the capital raising proposal by means of public share issuance (cash offering) or the issuance of common shares to participate in a Global Depositary Receipts (“GDR”) offerings resolved by the shareholders at the 2018 Annual General Shareholders’ Meeting.

8. (4) Status of the employees & directors' remuneration of 2018

9. (5) Other reporting items

10. Ratification Items

11. (1) Ratification of the 2018 Business Report and Financial Statements.

12. (2) Ratification of the 2018 Earnings Distribution Proposal.

13. Discussion Items

14. (1) Proposal for a new share issue through capitalization of earnings.

15. (2) Discussion of the capital raising proposal by public share issuance (cash offering) or participating in global depositary receipt (“GDR”) issuance with an issue size no greater than 500 million common shares..

16. (3) Release of restriction on competitive activities of the 21[th] term directors.

17. (4) Amendment to the Operational Procedures for Acquisition and Disposal of Assets.

18. Extemporary Motions

19. Adjournment

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III. Report Items

1. 2018 Business Report.

2. Description: 2018 Business Report (Please refer to Attachment 1).

3. Audit Committee’s Review Report on the 2018 Financial Statements. Description: Audit Committee’s Review Report (Please refer to Attachment 2).

4. Status of the capital raising proposal by means of public share issuance (cash offering) or the issuance of common shares to participate in a Global Depositary Receipts (“GDR”) offerings resolved by the shareholders at the 2018 Annual General Shareholders’ Meeting.

5. Description: The motion resolved by the 2018 shareholders’ meeting on April 21, 2018 for capital increase by issuing common stocks shares to participate in the issuance of GDRs was not issued, in coordinate with investing and development plans to adjust the investment process.

6. Status of the employees & directors' remuneration of 2018. Description:

7. A. In accordance with Article 32 of the amended articles of incorporation: " If the Company has earnings, it shall set aside 3% of the balance as remuneration to the employees and no greater than 2% of the balance as remuneration to directors. When there are accumulated losses, the Company shall offset the appropriate amounts before remuneration. The above remuneration to the employees may be allotted in cash or stock, eligible personnel includes employees at subsidiaries that meet the requirement by the Board. The above remuneration to the directors shall be in cash. The earnings in paragraph one means the annual pre-tax earnings before deduction of the remuneration to employees and directors. Distribution of the employees’ and directors’ remuneration shall be resolved at board meetings, with over two-third of directors in attendance and approved by over half of the attending directors, and reported to the shareholder’s meeting.

8. B. The company’s 2018 employees’ remuneration proposal representing 3% of earnings is

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NT$146,408,521. Director’s remuneration of no greater than 2% of earnings is NT$97,605,681, with all payments in cash.

1. Other reporting items.

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IV. Ratification Items

ITEM 1:

(Proposed by the Board of Directors)

Proposal: Ratification of the 2018 Business Report and Financial Statements. Description :

1. The Company’s 2018 parent only and consolidated financial statements have been audited by Ms. Melody Chen and Ms. Tan-Tan Chung of KPMG.

2. The Company’s 2018 business report and financial statements have been reviewed and determined to be correct and accurate by the Audit Committee of the Company, and are hereby submitted for adoption.

3. Please refer to:

Attachment 1: 2018 Business Report

Attachment 3: 2018 Parent Only and Consolidated Financial Statements

Resolution :

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ITEM 2: (Proposed by the Board of Directors) Proposal: Ratification of the 2018 Earnings Distribution Proposal.

Description :

1. The profit distribution of the Company in 2018 has been proposed by the Board of Directors as follows, in accordance with the Company Act, the Securities and Exchange Act and the Articles of Incorporation of the Company, and is verified by the Audit Committee.

2. (1) The Company reported 2018 net profit after tax was NT$ (the same below) 4,290,269,039, adding the beginning balance of adding NT$844,326,443 after IFRS conversion, adding recognized undistributed surplus adjustments due to welfare project revaluation for the current year variable of NT$10,170,391, subtracting disposal of NT$947 in equity instruments measured at fair value through other comprehensive gains and losses. The total surplus eligible for appropriation was NT$5,144,764,926. A legal surplus reserve of NT$429,026,904 was appropriated in accordance to regulations; also, after set aside a special surplus reserve of NT$1,968,687,469 net increased amount set aside for special surplus reserve from the adoption of fair value method to value the real estate investments. Thus, the proposed distributions are as follows:

   1. Distribute common stock dividends of NT$2,699,857,267 (distribute NT$1 per share, of which cash dividends of NT$0.5 and stock dividends of NT$0.5).

   2. End of period undistributed surplus NT$47,193,286.

3. (2) The cash dividends of common stock distributed in this surplus were NT$0.5 per share and the stock dividends are distributed 50 free shares for every one thousand shares. If later on when the Company manages a capital increase by cash, re-purchases shares of the Company, transfers, converts and cancels treasury shares, converts corporate bonds and converts employee stock warrants according to issuance and conversion methods and other capital stock

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changes that result changes in the shareholder's stock (dividends) distribution, it is recommended to authorize the Chairman of the Board to adjust the number of shares issued and outstanding as recorded in the Company's common stock shareholders roster with full authority according to the exdividends date in accordance with the dividends amount in the resolution of the shareholders' annual general meeting.

(3) After the distribution of the cash dividends and stock dividends is passed by the shareholders' meeting and submitted to the Competent Authority for approval, authorize the Board of Directors to stipulate the ex-dividends date and distribute separately.

1. Please refer to Attachment 4 for the 2018 Earnings Distribution Table.

Resolution :

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V. Discussion Items

ITEM 1: (Proposed by the board of Directors)

Proposal: Proposal for a new share issue through capitalization of earnings.

Description:

1. In order to consider the future business development requirements, the Company proposes to appropriate shareholders' stock dividends of NT$ (the same below) 1,349,928,630 from the total surplus eligible for appropriation in 2018, at a par value of NT$10 per share, in accordance with Article 240 of the Company Act to manage issuance of 134,992,863 new common shares through capital transfer and increase, expecting to increase the paid-in capital of NT$1,349,928,630.

2. This Issuance of New Shares through Capitalization of Earnings is distributed based on the proportion of shares held by common stock shareholders recorded in the shareholders roster of the issuance of new share through capital increase date, distribute 50 free shares for every one thousand shares, and distribute odd lot shares of less than one share. The shareholder may transact the registration of making up the whole share in writing to the Company's Stock Affairs Office within five days from the ex-dividends date. If there is still less than one share not made up after the due date, it shall be paid in conversion to cash at par value and rounded up to one dollar in accordance with the stipulation specified in Article 240 of the Company Act, and authorize the Chairman to contact the specific personnel to purchase based on the par value.

3. If the dividends distribution is followed by capital increased by cash, purchase back the Company's shares, transfer or cancellation of treasury shares, convertible corporate bonds and conversion of common stock of employee stock warrants that affected the number of shares outstanding in circulation, resulted in changes of the shareholder stock dividend rate, it is recommended to authorize the Board of Directors to handle it in full authority in accordance with the Company Act or its related laws and regulations.

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1. The new shares issued in this capital increase are common stock shares, and the rights and obligations are the same as the originally issued common stock shares.

2. It is recommended to authorize the Board of Directors to manage in full authority on the relevant business matters related to this Issuance of New Shares through Capitalization of Earnings if there is any change in laws and regulations or revisions instructed by the Competent Authority, or with any change required by objective environment situation.

3. After this proposal of Capital Increased by Issuance of New Shares is passed by the Shareholders Annual Meeting and submitted to the Competent Authority for approval, authorize the Board of Directors to stipulate the Capital Increased by Issuance of New Shares date and distribute separately.

Resolution :

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ITEM 2:

• (Proposed by the board of Directors)

• Proposal: Discussion of the capital raising proposal by public share issuance (cash offering) or participation in a global depositary receipt (GDR) issuance with an issue size no greater than 500 million common shares.

• Description: To enhance the Company’s financial condition for working capital needs, investment in China, and future business development, the Company requests approval from shareholders to authorize the Board of Directors to issue one time or at multiple times new common shares for cash by public offering and/or participating in global depositary receipts (“GDRs”) with an issue size no greater than 500,000,000 shares, based on market conditions.

Authorization for a Domestic Public Offering:

• (1) The par value of new common shares to be issued per share is NT$10/share. It is proposed to authorize the Chair to coordinate with the underwriter(s) of the public offering to determine the actual issue price in accordance with the relevant provisions of “Guidelines of Public Offering and Issuance” from the Taiwan Securities Association and subject to market conditions. The final price shall be reported to the regulatory authority before issuance.

• (2) It is proposed to authorize the Board to choose either of the following methods to offer shares in a book building arrangement, or to offer the new shares in the public offering through the underwriter(s), while under the regulation of Article 28-1, Securities and Exchange Act:

• A. Book building method:

  • In accordance with Article 267, Paragraph I of the Company Act of Republic of China, 10% to 15% of the new shares must be offered to employees, and the Board shall authorize the Chair to contact specified investors to purchase the remaining 85~90% of new shares at market price. We proposed to seek approval from shareholders, under Article 281 of the Securities and Exchange Act, to waive subscription rights and to allow to use the book building method and offer shares to the public under the regulations “Guidelines of Public Offering and Issuance” from

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the Taiwan Securities Association, and should be no less than 90% of the arithmetic average of the closing price from 1, 3, or 5 trading days prior to the ex-dividend date (decided by the Board) minus the ex-dividend price. It is proposed to authorize the Chair to coordinate with the underwriter(s) of the public offering to determine the actual issue price under the market condition, and the final issue price shall be reported to the regulatory authority before issuance.

• B. Issuance of public offering:

In accordance with Article 267, Paragraph I of the Company Act, 10% to 15% of the new shares must be offered to employees. It is proposed that 10% of the new shares to be sold to the public through the underwriter(s) and the remaining 75%~80% of the shares will be subscribed by existing shareholders in accordance with their proportion of shareholdings. It is proposed that any new common shares not subscribed by employees and shareholders will be sold to persons designated by the Chair at the issue price. The exact market price would be calculated based on Article 6 of the “Guidelines of Public Offering and Issuance”, and should be no less than 70% of the arithmetic average of the closing price from 1, 3 or 5 trading days prior to the ex-dividend date (decided by the Board) minus the ex-dividend price.

• (3) The Board requests the public offering methods above to be authorized to proceed under the related regulation.

• (4) The rights and obligations of the new common shares issued would be the same as previous shares.

• (5) The proceeds collected during the common shares issuance are intended to be used to invest in China, enhance working capital and prepare for future capital expenditures, improve management efficiency, and should have a positive impact on future development.

• (6) The main content of the issuance plan, including issuance price, the number of shares authorized, related projects, fund raising goals, progressing schedule and possible benefits, will be authorized to the Board for further planning. Other conditions, if there shall be changes resulting from

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operational or environmental concerns, will also be delegated to the Chair for authorization.

• (7) After the issuance proposal receives permission from the regulatory authorities, it is proposed to authorize the Chair to appoint the subscription date, payment period, record date for capital increase and other related items during the issuance of new common shares.

• (8) The issuance methods mentioned in article 2, if there needs to be adjustments to the method under regulation due to certain circumstances, we will also authorize the Board to conduct further procedures.

• (9) The Chair is authorized to handle all matters which are not addressed herein, in accordance with the applicable laws and regulations.

Authorization of issue new common shares by participation of a GDR Offering:

• (1) In accordance with Article 267, Company Act of Republic of China, 10%15% of the new common shares shall be allocated for employees' subscription. The remaining 85%-90% of shares is proposed to seek approval from shareholders, under Article 28-1 of the Securities and Exchange Act, to be allocated as shares for the GDR program. It is proposed that any new common shares not subscribed by employees and domestic shareholders may be allocated to shares offered by the GDR program.

• (2) The exact market price would be calculated based on Article 9 of “Guidelines of Public Offering and Issuance” (short for “the Guidelines”), and should be no less than 90% of the arithmetic average closing price from 1, 3 or 5 trading days prior to the appointed pricing date (decided by the Board) minus the ex-dividend price. Since the market price might face severe volatility in short term, the exact issuance price is proposed to authorize the Chair that, within the limitation mentioned above, to coordinate with the underwriter(s) of the public offering to determine the actual issue price under international ordinary conditions, overseas capital market condition, domestic stock price and book building condition. If domestic applicable laws are amended during the pricing process, the pricing strategies may be adjusted in response. The pricing method of common shares issuance is subjected to applicable laws,

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and taking ordinary conditions of the secondary market into consideration. We believe the pricing method is based on a reasonable basis. Shareholders who decides not to participate in the DR subscription could still purchase common shares in the domestic market at a price close to overseas DR, without taking currency exchange risks and liquidity risks.

• (3) The main content of the issuance plan, including issuance criteria, amount of shares authorized, issuance price, proceeds planning, progressing schedule, possible benefits, and the choice of underwriter candidates, is proposed to authorize to the Board to conduct further plans; under other circumstances, such as instructions from regulatory authorities, or other related reasons that causes further adjustments, the Board is also fully authorized to make the decision. To assist the issuance proposal, it is proposed to the Board to authorize the Chair, or managers of the Company appointed by the Chair, to represent the Company in signing all contracts and documents related to the issuance, and process any paperwork accordingly.

• (4) The upper limit of common share issuance amount is 500,000,000 shares, the dilution rate shall not be higher than 15.63%, and this should not result in significant impact in shareholders’ rights. The proceeds collected during the common shares issuance and overseas GDR offering are to invest in China, enhance working capital and capital expenditures, to improve management efficiency, it should have a positive impact on the future development of the Company.

• (5) The rights and obligations of the new common shares issued would be the same as previous shares.

• (6) After receiving the regulatory authorities’ permission on the issuance proposal, it is proposed to authorize the Board to oversee issuance of new common shares. We also propose the shareholders to authorize the Board to manage other matters not mentioned and related tasks under applicable laws.

Resolution :

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ITEM 3: (Proposed by the Board of Directors)

Proposal: Release of restriction on competitive activities of the 21[th] term directors.

Description :

1. According to Article 209 of the Company Act, if directors’ activities for personal or others’ interests are related to the Company’s business scope, the directors shall explain the content of their activities and ask approval at the shareholders’ meeting the essential contents of such conduct and obtain the shareholders’ approval.

2. The Company proposes to release the 21[st] Board of Directors from restriction preventing the Company’s directors and legal representative directors from performing work from their positions in other companies for business reasons.

3. The Company proposes the release of restrictions on competitive activities on the following directors:

directors:
Title	Name / Company / representative	Positions held at other companies
Representative of a juridical person director	CORE PACIFIC CO., LTD Representative: Ko-Ming Lin 代表人：林克銘	--Director, Core Pacific Pioneer (Myanmar) Co., Ltd. -- Representative of a juridical person director, Thanh Phong Construction Investment Co., Ltd.
Representative of a juridical person director	CORE PACIFIC CO., LTD Representative: Hwa-Yeang Shen 代表人：沈華養	-- Representative of a juridical person director, BES Engineering Corp. -- Representative of a juridical person director, BES Machinery Co., Ltd. -- Representative of a juridical person director, Core Pacific City Co., Ltd. -- Representative of a juridical person director, Overseas Investment & Development Crop.

Resolution :

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ITEM 4: (Proposed by the Board of Directors)

Proposal: Amendment to the Operational Procedures for Acquisition and Disposal of Assets.

Description :

1. The Financial Supervisory Commission promulgated the Order No. Financial-SupervisorySecurities-Corporate-1073041072 on November 26, 2018 to amend the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies/” It is proposed to cooperate with the amendment of the Company's “Procedures of Acquisition and Disposal of Assets” relevant to applicable IFRS 16 Leases, and enhances the Company's Acquisition and Disposal of Assets information disclosure quality and clarifies the responsibility of external experts and other provisions of this section.

2. Refer to attachment 6: Comparison between Original and Amendments to the “Procedures for Acquisition and Disposal of Assets.”.

Resolution :

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VI . Extemporary Motion

VII. Adjournment

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Attachment 1

China Petrochemical Development Corporation

2018 Business Report

The Company reported the 2018 consolidated revenues of NT$38.503 billion, net operating profit of NT$3.075 billion and net profit after tax of NT$4.281 billion. The detailed breakdown of the Company’s 2018 operating performance is as follows:

1. Sales of Major Products

Major Product Production & Sales Volumes in the Past 2 Years

Unit: Tons

Major Produc	t Production & Sales	t Production & Sales	Volumes in the Past 2	Volumes in the Past 2	Years Unit: Tons	Years Unit: Tons	Years Unit: Tons	Years Unit: Tons
Production Volume Major Product	FY 2018		FY 2017		Increase (Decrease) Volume
	Production	Sales	Production	Sales	Production	%	Sales	%
Acrylonitrile (AN)	208,420	210,412	207,108	206,428	1,312	1%	3,984	2%
Caprolactam (CPL), Nylon Chips	374,390	355,680	379,708	365,260	(5,318)	(1%)	(9,580)	(3%)

The decrease of Caprolactam (CPL) production and sales was mainly due to the adjustment of production and sales in 2018 in cooperation with overall industry supply and demand and execution of sales plan.

1. Operating Revenue and Expense and Profitability Analysis Operating Revenue and Expense:

Annual Income Statement Annual Income Statement

Unit: NT$ thousands

Year Line Item	FY 2018 (Consolidated)	FY 2017 (Consolidated)	Increase (Decrease)	%
Revenues	38,503,121	33,335,970	5,167,151	16%
Gross Profit	5,176,159	5,371,581	(195,422)	(4%)
Operating Profit	3,075,082	3,584,036	(508,954)	(14%)
Non-Operating Profit and Loss	1,601,868	2,713,685	(1,111,817)	(41%)
Pre-Tax Profit	4,676,950	6,297,721	(1,620,771)	(26%)
Net Profit after Tax	4,280,995	6,087,322	(1,806,327)	(30%)
EPS (After Tax)	1.59	2.55	(0.96)	(38%)

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1. Operating revenue

The 2018 Operating revenues was increased by 16% versus the previous year, mainly due to the following reasons:

• (1) The revenues from Acrylonitrile (AN) and related byproducts were NT$12.011 billion in 2018, increased 24% or NT$2.346 billion from NT$9.665 billion versus the previous year. The increase was mainly from a 2% increase in sales volumes and a 28% increase in unit prices versus the previous year for Acrylonitrile (AN) products.

• (2) The revenues from Caprolactam (CPL) and byproduct were NT$23.157 billion in 2018, increased 10% or NT$2.065 billion from NT$21.092 billion versus the previous year. The increase was mainly from a 13% increase in unit price versus the previous year for Caprolactam (CPL) products.

• (3) The revenues from other departments (including subsidiaries) were NT$3.335 billion, increased 29% or NT$757 million from NT$2.578 billion versus the previous year. It is mainly resulted from an increase in subsidiary revenues from trading versus the previous year.

2. Operating Profit

Net operating profit in 2018 decreased by NT$509 million, or 14% versus the previous year due to the following reasons:

• (1) For Caprolactam (CPL) products, affected by the high level price of main raw material phenol, and the trade conflict between China and the United States in the fourth quarter has aggravated weakness for the macroeconomic, impacted the downstream market demand and the willingness for delivering the products, decreased the profitability of Caprolactam (CPL) series products by NT$1.861 billion versus the previous year.

• (2) For Acrylonitrile (AN) products, the demand grew normally, but for the supply in the first three quarters, global manufacturers were focused in maintenance resulted in increase in Acrylonitrile (AN) price and the profitability was increased by NT$1.314 billion.

• (3) In 2018, overall operating expenses increased by NT$314 million versus the

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previous year, mainly due to the increase in marketing expenses by approximately NT$167 million caused by the increase of export volumes and sales tax expenses, the management expenses increased by NT$147 million versus the previous year due to overseas factory construction expansion and research and development expenses due to project execution.

1. Non-Operating Profit and Loss

Non-operating profit, decreased by NT$1.112 billion in 2018, or by 41%, due to the following reasons:

• (1) A decrease of NT$2.668 billion from the disposal of equity interests during the year versus the previous year.

• (2) A decrease of NT$921 million from the revaluation loss of financial debt instruments (ECB) versus the previous year.

• (3) An increase of NT$574 million from cost method dividends income versus the previous year.

• (4) An increase of NT$111 million from equity method profits from subsidiaries and related companies.

• (5) An increase of NT$78 million from investment real estate evaluation profit during the year versus the previous year.

• Net profit (loss) before and after taxes

2018 reported pre-tax profits were NT$4.677 billion, or NT$1.621 billion decrease versus the previous year, a decrease of 26%. 2018 reported net profits after tax were NT$4.281 billion (NT$1.59 per share), a decrease of NT$1.806 billion, or decrease of 30% from the net profits after tax of NT$6.087 billion (NT$2.55 per share) reported in the previous year.

• (3) Financial Performance Analysis:

1. Financial Status:

At the end of 2018, total consolidated assets amounted to NT89.7 billion; total liabilities were NT$22.5 billion; and shareholder equity was NT$67.2 billion.

1. Key Financial Ratios:

Current Ratio at the end of 2018 was 289%, Quick Ratio was 244%, and Debt Ratio (Debt to Total Assets) was 25%.

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1. Cash and Cash Equivalents Status:

Cash and cash equivalents inflow from operating, investing and financing activities was NT$340 million during 2018. The year-end cash and cash equivalent balance was NT$13.5 billion.

• (4) Key Management Work and Implementation Overview:

2017 key management works and implementation overview are categorized into 6 categories of production management, labor safety and environmental protection, IT management, HR management, financial planning, and corporate social responsibility, illustrated as follows:

• Production Management:

The Company continues its plans to invest at the Port of Kaohsiung for transportation and storage special areas of liquid ammonia (NH3) and Phenols to improve raw material purchasing flexibility. We also continued to promote smart automation and establish video monitoring systems for factory forecast management, improving production process efficiency and lowering production costs. We continue to promote our value-added Nylon Chips project, entering the high-end Nylon Chips market and expand our product lines to improve profitability. The Da-She Factory implemented the Acrylonitrile (AN) plant repair and maintenance project and the main production process compressor performance improvement project to improve the production capacity and reduce energy consumption, and move toward the objective of one repair for every two years; The Toufen Factory implemented a smoke-free emission project for coal-burning heat and power plant, in addition to improving combustion efficiency, improving the perception of chimney smoke, and achieving the goal of natural gas emission standards.

• Labor Safety and Environmental Protection

In order to ensure the factory management systems in compliance with the latest international standards, all three of our factory sites have implemented quality, environmental protection, occupational safety and health, and energy management, all have passed certification of ISO 9001, ISO 14001, OHSAS18001/ TOSHMS, ISO50001 standards, and continued tracking certification; in order to further improve our production process safety management procedures, we established a production process safety promotion organization and implemented the production process safety analysis technology, production process accident investigator training, to improve

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factory safety. In addition, we continue to promote various health and wellness programs aggressively, building a healthy work environment, and all three factory sites have been awarded the Badge of Accredited Healthy Workplace (Smoke Free and Health Promotion). In order to adhere to the trends of global energy conservation and carbon reduction, the Toufen and Da-She Factory were also certified for Green Factory in 2018, continue to move toward the goal of cyclical economy and sustainable developments as our corporate vision.

● IT Management:

In order to improve overall operational and management performance, promote the global human resources management system, and strengthen the document control and electronic form signing and approval system, integrate the intelligent access control management system and command management platform, and strengthen the information host security protection mechanism, and implement Mobile Office and cloud video communication channel at the same time, to build the cornerstone for business operation communication, and simultaneously strengthen the procurement system integration management benefits; to keep up with the time and grasp the spirit of times and trends, strive to build the AI team, cultivate technological autonomy competence, and develop the market trend forecasts and AI innovative applications, gradually deepen and expand AI applications to create value.

● HR Management:

In order to support the Company's global organization strategy and development plans, actively recruit and cultivate global talents, control the competitiveness advantage based on the industrial trends, for the management personnel to lead toward south and west to explore territories, with the local success experience to duplicate the standardize operation mode rapidly. In the aspect of cultivating and retaining talents, the Company actively create a self-learning environment with job rotation and succession plans to improve the personnel multi-competency quickly. Grant encouragement awards and create the crisis of elimination with the principle of clear substantial reward and timely punishment, to allow fairness and rationalization of performance, for the young people can be promoted quickly due to competency and promote the organization to continue innovation and growth, and for the corporate revitalization towards greater accomplishments.

● Financial Planning:

Adhering to the Company’s investment development plans, tap capital markets and

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effectively utilize company-owned real estate assets and resources, obtain lower cost of capital loans, and to maintain a reasonable and safe cash flow. Also, through treasury management, invest in short-term financing products or trading of currency funds to increase profitability.

• Corporate Social Responsibility

Since 2013, CPDC has established a CSR Committee and issued a CSR report on an annual basis to disclose sustainable development management achievements. In 2018, the Company continued to participate in the Corporate Sustainability Award organized by Taiwan Institute for Sustainable Energy and received the 11th TCSA Taiwan Corporate Sustainability Award - Top50 CSR Report Platinum Award, actively moving toward the realization of "Green Petrochemical Enterprise" as the purpose with the spirit of innovation and change to practice Corporate Sustainable Management with actions. In addition. Also, CPDC continues to proactively resolve the environmental pollution issues at the Taiwan Alkaline An-Shun Factory, which was acquired during the government-controlled period in the Company history. For this historical burden, the Company has put in significant resources to research and develop the pollution remediation technology, establish a dedicated responsible team to promote the remediation task and revitalize the land, and the Company is followed by the request of Tainan City to continue the remediation so that there are still large expenditures, which affect the shareholders' rights. The Company will adopt all necessary means to strive for the rights of the Company and shareholders and also hopes to receive the support of shareholders and endeavor after legal right from the Tainan City Government, expecting to reproduce the vitality of the land and recreate the quality living environment for the area.

• (5) Future Prospect and R&D

Innovation and R&D has always been the core objective of moving toward the development of sustainable management. Currently, CPDC has three directions to implement R&D as follows:

For the existing manufacturing process improvement, we aim for continuing improvements of existing manufacturing process technology towards improving efficiency, lowering manufacturing costs, and developing cyclical production and green production process technologies with energy conservation, carbon reduction as our key objectives. In the related product development, we implement related byproducts and

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derivatives development on the current manufacturing processes, controlling the raw material advantages, and strengthening the integration of raw material supplies from up and downstream supply chains, developing cyclic ketone derivatives, nylon 6 downstream niche products and blending modified products, etc., and developing special chemicals and nylon engineering plastics and other multi-aspect applications;

In new product development, we have combined market intelligence, worked with existing development technology surveys, evaluated our advantages to produce high value products with market development potential (such as: established a special project development team, targeting high value products with market development potential (such as high refractive optical materials, lipid derivatives, hydrogenated products, and functional polymers, etc.). Based on the core technology and existing products, we increase the sales of high-value products and expand the layout of our industrial chain. At the same time, we actively communicate with downstream customers and provide all aspects of the product chain.

In order to consolidate the technological leadership of the existing product market, as well as to break through the technical barriers of new products and manifest the strong research and development energy, the Company has obtained 183 invention patents thus far. With the accumulation and growth of patents, the protection of intellectual property must continue to be implemented. The Company is also leading the industry and has introduced the TIPS (Taiwan Intellectual Property Management System) of the Ministry of Economic Affairs, Industrial Development Bureau, and passed certification in 2010, to establish a comprehensive and complete intellectual property protection system, continue to improve, to effectively and securely protect the Company’s key assets and R&D core technology.

In adherence to the global attention towards environmental protection issues, CPDC actively promotes and engages on environmental protection issues. Currently, we are working on biomass raw materials, and moving towards newly developed green manufacturing process development technologies to research green environmental protection, cyclical production, or reduce generation of pollutants. We hope that by directing our efforts, we shall be able to reduce the hazards on environment, combined with cyclical economic system and achieve our core objective of sustainable management.

• (6) Management Principles and Future Operational Outlook:

• Management Principles

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The Company shall focus on expanding the two-pronged business approaches of “Petrochemical Industry” and “Land Development” as the primary management principles. In our core petrochemical industry, we shall optimize the production capabilities of our current products and develop multiple high value new products for the short term; and establish overseas one-stop production base for the long term to develop new products and new technologies, and build the intelligent management system as the primary development strategy. We hope to establish a long-term and stable profitable operating niche and maintain overall competitiveness. For land development, our short-term domestic goal is to plan and activate the Company's land assets; while through the layout to penetrate overseas real estate development; for the long-term domestic and overseas goals are to promote relevant development plans through the phased zoning, through the layout in areas with land development and investment potential domestically and overseas, to develop green building products that are in compliance with environmentally friendly, energy-conservation and carbonreduction, hoping to create a new triple win situations for shareholders, corporation and society.

2. Future Operating Outlook:

CPDC believes that the response and management policies of environmental, social and corporate governance are important performance indicators. In facing the frequently changing management environment, the Company will adhere to the principle of respecting for the natural ecology and strive towards achievement as a green petrochemical industrial company, even with more aggressive and active attitude to breakthroughs and improve the competitiveness of self-development. The future operating prospects of the Company's two-pronged focus in the petrochemical core business and land development are illustrated described as follows:

(1) Petrochemical Core Business:

• A. Short-term Planning:

• Optimize the existing operation capabilities: In addition to increase the raw material and product troughs, expand own-product capacity and improve manufacturing efficiency, promote greenhouse gas reduction, also continue our efforts towards optimization of factory operations, accelerate our efforts in factory smart automation, and gradually introduce AI technologies, moving towards building a fully-automated factory.

26

• Develop Multiple High Value Products: In addition to continuously launch new products, increase added value for nylon products, and develop specialty chemical products with wide applications, lipid derivatives, and functional polymers, also engage in development of biomass raw materials, and move towards green production process development.

• B. Long-term Planning:

• Build an Integrated On-stop Overseas Production Base: To prevent price of intermediate raw materials from volatility that negatively affects the stability of profitability, the intermediate raw materials can be balanced locally and lower storage and transportation costs, integrating the energy and materials to reduce the energy consumption costs, and improve the advantage of cost competitiveness.

• Introduce New Products and New Technology: In addition to establishing our own technologies and launching new products sales, the Company will move toward biomass, green environmental protection manufacturing process development; in addition, we will develop our own AI application technologies through promotion of Smart Factory Automation systems, build the AI foundation for the petrochemical core business, and further develop AI applications, products, and services specifically for the petrochemical industry in the future to establish the advantages for technological competition.

• Establish Smart Management Systems: Improve the synergy of the Company's Command Center, plan to build the business intelligence management platform, where we expect to increase the quality of decisions and establish the advantage of management competitiveness through integration of market analysis, supply and production forecasts and adjustments, production monitoring and operating efficiency analysis and other information.

• The Company strives to achieve intelligent, green petrochemical corporation and hopes to improve the quality of the Company's operating infrastructure through the aforementioned short-term and long-term planning to become a global leader in Caprolactam (CPL), Acrylonitrile (AN), and their high value derivative products.

27

(2) Land Development:

• A. Short-term Planning:

• Aiming at planning and revitalizing the existing land assets of "Taiwan" as the goal: The Company is located in the 5A and 6th Special Zones of Kaohsiung Multi-Functional Commerce and Trade Park, and will follow the construction of the Asia New Bay Area developed by the Kaohsiung City Government and the relocation of the 205 Arsenal, to promote related development plans and move toward the direction of investment leasing, expecting to create the highest value for the Company’s land assets.

• Aiming at penetrating "overseas" real estate development through layout: Follow the new business opportunities brought by China “The Belt and Road Initiative” strategy, and the South East Asia emerging market, the Company will aggressively pursue overseas land development projects with investment potential in Vietnam and Myanmar, and purchase land with development value.

• B. Long-term Planning:

• Promote the “Taiwan” Land-related Development Plan in Phases and Area: Responding to the government's greening and energy-conservation policies, the Company aims at constructing buildings with carbon absorbing and suitable for living when develop and plan the programs.

• Develop the "Overseas" real estate development: Combining agricultural farming in Vietnam, Myanmar or other Southeast Asian development areas, obtaining petrochemical biomass raw materials, establishing a petrochemical core business production base and promoting residential and commercial development, with the ultimate goal of sustainable operation, production, loving and ecological wisdom town as the objective.

Our Company shall hold the principles of sustainable corporate management and living with the environment, in our development projects. Our strong respect for nature shall combine construction, art, humanities, charity, and create a prosperous future together with nature.

In the future, CPDC shall continue to push towards further developments in the petrochemical, land development two-pronged strategy, while remaining committed to our corporate social responsibility, and fulfilling our mission as citizens of this planet, and

28

achieving our vision of a green petrochemical industry. We remain steadfast in our goal to achieve corporate sustainable development and continue to work towards happiness and a quality of life for all humanity.

==> picture [35 x 35] intentionally omitted <==

Chairperson: Manager : Accounting Manager:

29

Attachment 2

China Petrochemical Development Corporation

Audit Committee Review Report

The Board of Directors has prepared the Company’s 2018 Business Report, Financial Statements, Consolidated Financial Statements and Loss Appropriation Statement for 2018. The CPA firm of KPMG was retained to audit China Petrochemical Development Corporation’s Financial Statements and Ms. Melody Chen and Ms. Tan Tan Chung have issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, Consolidated Financial Statements and loss appropriation proposal have been reviewed and determined to be correct and accurate by the Audit Committee of China Petrochemical Development Corporation. In accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, I hereby submit this report.

China Petrochemical Development Corporation 2019 Annual Shareholders’ Meeting

Convener of the Audit Committee:

==> picture [171 x 61] intentionally omitted <==

March 22th, 2019

30

Attachment 3

(English Translation of Financial Statements Originally Issued In Chinese) INDEPENDENT ACCOUNTANTS’ AUDIT REPORT

To the Board of Directors of China Petrochemical Development Corporation:

Opinion

We have audited the financial statements of China Petrochemical Development Corporation (CPDC), which comprise the balance sheets as of December 31, 2018 and 2017, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of the other auditors, the accompanying financial statements present fairly, in all material respects, the financial position of the CPDC as at December 31, 2018 and 2017, 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 (“IFRSs”), International Accounting Standards (“IASs”), interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the 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 CPDC in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

31

Emphasis of Matter

As described in Notes 6.h and 6.l of the notes to the financial statements, the Tainan City Government and Environment Protection Administration, the Executive Yuan publicly announced that a portion of the land at the Anshun plant was polluted and designated it as under pollution control. As China Petrochemical Development Corporation (CPDC) never used the land since it took over from its merger with Taiwan Alkali Industrial Corporation (TAIC), CPDC still has a dissenting view on the government perception about the condition of pollution. Aside from cooperating with the government in its control and management procedure, CPDC is seeking a way to define its responsibilities. In addition, CPDC submitted for approval a remediation project proposal to the Tainan City Government in accordance with the related regulations and accrued relevant remediation project expenses in June 2008. This remediation project proposal was approved in May 2009. CPDC also performed related remediation work according to the remediation project proposal. The first phase of remediation project was completed in September 2014. The management of CPDC is expecting that the second phase of remediation project will be completed in the next decade. Likewise, CPDC has accrued relevant remediation project expenses for the second phase of remediation project in December 2014. Our opinion is not modified in respect of this matter.

Other Matter

We have not audited certain investments, which were accounted for under the equity method. The financial statements as of and for the years then ended December 31, 2018 and 2017 of those of the investees accounted for under the equity method were audited by other auditors, whose reports have been furnished to us, and our opinion in so far as it relates to the amounts for the equity method investees were based solely on the reports of other auditors. These investments accounted for under the equity method represented 1.10% and 1.38% of total assets as of December 31, 2018 and 2017, respectively. The related shares of investment income from these investees including subsidiaries, associates and joint ventures accounted for using equity method represented (2.23)% and (0.06)% of consolidated net income before income tax for the years ended December 31, 2018 and 2017, respectively.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were significant in our audit of the financial statements as of and for the year then ended December 31, 2018. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Revenue recognition

Operating revenue is the most important source of cash flow for the CPDC, and it is a significant risk accounting subject in the financial statements. So revenue recognition is one of the key audit matters for our audit. Please refer to Note 4“Revenue Recognition” and Note 6 “Revenue” in the financial statements.

32

How the matter was addressed in our audit

Our key audit procedures included:

• Testing the CPDC’s internal accounting controls surrounding revenue recognition and key manual and systems-based controls in the order-to-cash transaction cycle. In addition, checking and reconciling the sales data recorded between the sales systems and general ledger; selecting samples to assess whether appropriate revenue recognition policies are applied through comparison with accounting standards;

• Analyzed and compared the sales amounts and volumes for the major customers of the CPDC. Based on samples selected, vouched significant transactions from both internal and external documents, to verify the authenticity of the transactions.

2. Assessment of the fair value of investment property

The book value of investment property of the CPDC represented 45% of

total assets as of December 31, 2018, which is deemed to be significant. The CPDC evaluate the fair value of investment property according to IAS40, and re-measure such fair value on the reporting date. Because the valuation of investment property at fair value demands significant professional judgments, the assessment of fair value of investment property is considered one of the key audit matters. Please refer to Note 4 “Investment Property”, Note 5 “Significant Accounting Judgments, Estimation, Assumptions, and Sources of Estimation Uncertainty”, and Note 6.h “Investment Property” of the financial statements for details of the information about fair value information on investment property.

How the matter was addressed in our audit

Our key audit procedures included:

• Obtain from the CPDC management the real estate appraisal report on investment property;

• Engage another appraiser to review such real estate appraisal report, and to evaluate the propriety of the ~~e~~ valuation method used, and the reasonableness of its main assumptions or input values (ex. discount rate and final rate of return);

• Evaluate the propriety of the disclosure of fair value of investment property.

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 and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

33

In preparing the financial statements, management is responsible for assessing the CPDC’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 CPDC or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the CPDC’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 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 CPDC’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 CPDC’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 CPDC to cease to continue as a going concern.

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

6. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the investees accounted for under the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance audit. We remain solely responsible for our audit opinion.

34

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period 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 accountants’ audit report are Chen Mei Fang and Chung Tan Tan.

KPMG

Taipei, Taiwan (Republic of China) March 22, 2019

35

(English Translation of Financial Statements Originally Issued in Chinese) CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

BALANCE SHEETS

December 31, 2018 and 2017

(Expressed in thousands of New Taiwan Dollars)

ASSETS Current assets Cash and cash equivalents (Notes 4 and 6 a.) Current financial assets at fair value through profit or loss (Notes 4 and 6 b.) Notes and accounts receivable, net (Notes 4 and 6 c.) Accounts receivable－related parties, net (Notes 4, 6 c. and 7) Other receivables (Notes 4 and 6 c. and 7) Inventories (Notes 4 and 6 d.) Prepayments Other current assets Total current assets Non-current assets Non-current financial assets at fair value through profit or loss (Notes 6 b.) Non-current financial assets at fair value through other comprehensive income (Notes 6 b.) Available-for-sale financial assets－non-current (Notes 4 and 6 b.) Financial assets carried at cost－non-current (Notes 4 and 6 b.) Investments accounted for using equity method (Notes 4 and 6 e.) Property, plant and equipment (Notes 4 and 6 g.) Investment property, net (Notes 4 and 6 h.) Deferred tax assets (Notes 4 and 6 o.) Other non-current assets (Notes 8) Total non-current assets	December 31, 2018 Amount ％ $ 8,465,372 10 1,016,992 1 2,466,935 3 244,187 - 106,181 - 1,973,971 2 561,673 1 313,520 1 15,148,831 18 3,248,545 4 1,963,687 2 - - - - 12,436,188 14 14,585,386 17 38,350,359 45 11,009 - 133,857 - 70,729,031 82	December 31, 2017 Amount ％ 6,912,818 9 990,664 1 3,412,086 4 200,806 - 42,802 - 2,213,042 3 610,604 1 302,464 - 14,685,286 18 - - - - 1,677,346 2 1,772,035 2 9,440,338 12 14,240,101 18 38,226,532 48 9,358 - 135,283 - 65,500,993 82
	Amount $ 8,465,372 1,016,992 2,466,935 244,187 106,181 1,973,971 561,673 313,520 15,148,831 3,248,545 1,963,687 - - 12,436,188 14,585,386 38,350,359 11,009 133,857 70,729,031	Amount 6,912,818 990,664 3,412,086 200,806 42,802 2,213,042 610,604 302,464 14,685,286 - - 1,677,346 1,772,035 9,440,338 14,240,101 38,226,532 9,358 135,283 65,500,993

LIABILITIES AND EQUITY Current liabilities Short-term loans (Note 6 i.) Current contract liabilities (Note 6 r.) Accounts payable Other payables (Note 7) Current tax liabilities (Notes 4 and 6 o.) Provisions－current (Notes 4, 6 l. and 6 n.) Long-term liabilities-current portion (Notes 4 and 6 i.) Other current liabilities Total current liabilities Non-current liabilities Long-term bank loans (Note 6 i.) Provisions－non-current (Notes 4, 6 l. and 6 n.) Deferred tax liabilities (Notes 4 and 6 o.) Long-term bills payable (Note 6 j.) Other non-current liabilities, others Total non-current liabilities Total liabilities Equity attributable to shareholders of the parent Share capital Common stock (Note 6 p.) Capital surplus (Note 6 p.) Retained earnings: (Note 6 p.) Legal reserve Special reserve Unappropriated earnings Others (Notes 4 and 6 p.) Exchange differences arising on translation of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Changes in fair value of available-for-sale financial assets Total equity TOTAL LIABILITIES AND EQUITY	2018	% 1 - 2 3 - 1 1 - 8 2 2 10 - - 14 22 32 1 2 39 6 47 (1) (1) - (2) 78 **100 **	2017	% - - 3 2 - - - - 5 3 3 11 - - 17 22 33 2 1 35 8 44 - - (1) (1) 78 100
	Amount $ 650,000 2,674 1,728,481 2,159,721 331,606 479,514 685,000 12,690 6,049,686 1,795,000 1,923,233 8,758,989 349,729 104,335 12,931,286 18,980,972 26,998,573 1,260,386 1,708,303 33,521,575 5,144,764 40,374,642 (488,212) (1,248,499) - (1,736,711) 66,896,890 $ 85,877,862		Amount 250,000 - 1,835,136 1,260,073 164,358 173,350 - 347,527 4,030,444 2,370,000 2,357,202 8,754,736 299,882 66,290 13,848,110 17,878,554 26,998,573 1,260,386 1,099,137 28,023,386 6,107,355 35,229,878 (392,378) - (788,734) (1,181,112) 62,307,725 80,186,279

$ 85,877,862 100 80,186,279 100

TOTAL ASSETS

December 31, December 31,

36

(English Translation of Financial Statements Originally Issued in Chinese) CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2018 and 2017

(Expressed in thousands of New Taiwan Dollars)

Operating revenue (Notes 4 and 6 s.) Operating costs (Notes 4 and 6 d.) Less: Unrealized (profit) loss on intercompany transactions Add: Realized profit (loss) on intercompany transactions Gross profit Operating expenses Selling expenses Administrative expenses Research and development expenses Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9 Profit from operations Non-operating income and expenses Other income (Notes 6 u. and 7) Other gains and losses (Notes 6 k. and 6 u.) Finance costs (Notes 6 l. and 6 u.) Share of profit of subsidiaries, associates and joint ventures accounted for using equity method (Notes 4 and 6 e.) Total non-operating income and expenses Income before income tax Less: Income tax expense (Notes 4 and 6 o.) Net income Other comprehensive income (loss): Items that will not be reclassified subsequently to profit or loss: Actuarial loss from defined benefit plans Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income Share of other comprehensive income of subsidiaries, associates and joint ventures Allocation of income tax to the above items Items that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations Changes in fair value of available-for-sale financial assets Unrealized gains (losses) from investments in debt instruments measured at fair value through other comprehensive income Share of other comprehensive income of subsidiaries ,associates and joint ventures Allocation of income tax to the above items Other comprehensive (loss) income for the year, net of income tax Total comprehensive income for the year Earnings per share (NTD) (Notes 4 and 6 q.) Basic earnings per share Diluted earnings per share	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,
	2018	％ 100 88 12 - - 12 1 2 1 - 4 8 3 (1) - 2 4 12 1 11 - (1) - - (1) - - - - - - (1) 10 1.59 1.58	2017
	Amount		Amount	％
	$ 36,969,800 32,624,724 4,345,076 (31,639) (749) 4,312,688 324,917 703,708 266,188 - 1,294,813 3,017,875 950,933 (230,055) (52,100) 949,617 1,618,395 4,636,270 346,001 4,290,269 14,866 (408,318) (37,175) - (430,627) (95,834) - - - - (95,834) (526,461) $ 3,763,808 $		32,160,867 27,530,090 4,630,777 749 (1,211) 4,630,315 211,936 755,511 191,507 - 1,158,954 3,471,361 496,269 1,625,690 (176,150) 857,571 2,803,380 6,274,741 183,085 6,091,656 14,928 - 771 - 15,699 (98,609) 391,878 - 47,571 - 340,840 356,539 6,448,195	100 86
				14 - -
				14
				1 2 - -
				3
				11
				2 5 (1) 3
				9
				20 1
				19
				- - - -
				-
				- 1 - - -
				1
				1
				20
				2.55
	$			2.53

37

(English Translation of Financial Statements Originally Issued in Chinese) CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2018 and 2017

(Expressed in thousands of New Taiwan Dollars)

Balance – January 1, 2017 Net income for the year ended December 31, 2017 Other comprehensive income (loss) for the year ended December 31, 2017 Total comprehensive income (loss) Appropriations and distribution of 2016 earnings： Special reserve used to cover accumulated deficits Conversion of convertible bonds Balance – December 31, 2017 Effects of retrospective application Balance on January 1, 2018 after adjustments Net income for the year ended December 31, 2018 Other comprehensive income (loss) for the year ended December 31, 2018 Total comprehensive income (loss) Appropriations and distribution of 2017 earnings： Legal Reserve Special Reserve Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance – December 31, 2018	Common Stock $ 23,199,897 - - - - 3,798,676 26,998,573 - 26,998,573 - - - - - - $ 26,998,573	Capital Surplus 18,141 - - - - 1,242,245 1,260,386 - 1,260,386 - - - - - - 1,260,386		**Retained earnings **	Unappropriated earnings (1,958,584) 6,091,656 15,699 6,107,355 1,958,584 - 6,107,355 844,326 6,951,681 4,290,269 10,170 4,300,439 (609,166) (5,498,189) (1) 5,144,764		Others	Changes in fair value of available-for-sale financial assets	Total Equity
						Exchange differences arising on translation of foreign operations (293,769) - (98,609) (98,609) - - (392,378) - (392,378) - (95,834) (95,834) - - - **(488,212) **	Unrealized gain or loss on financial assets at fair value through other comprehensive income
			Legal Reserve 1,099,137 - - - - - 1,099,137 - 1,099,137 - - - 609,166 - - 1,708,303	Special Reserve 29,981,970 - - - (1,958,584) - 28,023,386 - 28,023,386 - - - - 5,498,189 - 33,521,575
							- - - - - - - (807,702) (807,702) - (440,797) (440,797) - - - (1,248,499)	(1,228,183) - 439,449 439,449 - -	50,818,609
									6,091,656 356,539
									6,448,195
									- 5,040,921
								(788,734) 788,734 - - - - - - - -	62,307,725 825,358
									63,133,083
									4,290,269 (526,461)
									3,763,808
									- - (1)
									66,896,890

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(English Translation of Financial Statements Originally Issued in Chinese) CHINA PETROCHEMICAL DEVELOPMENT CORPORATION STATEMENTS OF CASH FLOWS For the years ended December 31, 2018 and 2017 (Expressed in thousands of New Taiwan Dollars)

Cash flows from operating activities: Income before income tax Adjustments to reconcile income before income tax to net cash provided by operating activities: Depreciation expense Amortization expense Profit on Financial assets at fair value through profit or loss Interest expense Loss on reassessment of embedded derivatives at fair value through profit or loss Interest income Effect of exchange rate changes on bonds payable Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Loss on disposal of property, plant and equipment Gain on disposal of investments Reversal of impairment loss on financial assets Impairment loss (reversal of) on non-financial assets Unrealized profit or loss on intercompany transactions Realized gain or loss on intercompany transactions Gain on redemption of bonds payable Gain arising from adjusting fair value of investment property Amortization of bond issued expense Total adjustments to reconcile income before income tax Change in operating assets and liabilities： Decrease (increase) in accounts receivable Increase in receivables－related parties (Increase) decrease in other receivables Decrease (increase) in inventories Decrease in prepayments Increase in other current assets Total changes in operating assets Increase current contract liabilities (Decrease) increase in accounts payable Decrease in payables－related parties Increase in other payables Decrease in provisions (Decrease) increase in other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash provided by operations Interest received Interest paid Income taxes paid Net cash provided by operating activities Cash flows from investing activities: Acquisition of current financial assets at fair value through profit or loss Proceeds from current financial assets at fair value through profit or	For the years ended December 31,
	2018 2017
	$ 4,636,270 6,274,741 1,202,591 1,191,594 2,522 525 (261,643) - 52,100 176,150 - 920,915 (164,358) (185,457) - (276,247) (949,617) (857,571) 6,941 465 - (2,674,417) - (156,062) 140,104 (22,875) 31,639 (749) 749 1,211 - (10,091) (119,574) (41,244) - 83,552
	(58,546) (1,850,301)
	945,151 (1,580,451) (43,381) (71,732) (73,370) 24,436 98,967 (668,361) 48,931 138,888 (11,056) (14,596)
	965,242 (2,171,816)
	2,674 - (106,655) 179,782 - (10,703) 918,652 797,208 (127,805) (122,114) (334,837) 187,628
	352,029 1,031,801
	1,317,271 (1,140,015)
	1,258,725 (2,990,316)
	5,894,995 3,284,425 174,349 188,858 (56,391) (89,929) (180,404) -
	5,832,549 3,383,354
	(2,138,319) - 624,255 -

• 39 -

loss Proceeds from disposal of financial assets carried at cost Return of capital of financial assets under cost method due to capital reduction Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Acquisition of property, plant and equipment Increase in other non-current assets Dividend received Net cash (used in) from investing activities Cash flows from financing activities: Increase in short-term loans Decrease in short-term loans Repayment of bond payable Increase in long-term bank loans Repayment of long-term bank loans Increase (decrease) in long-term bills payable Increase in other non-current liabilities Net cash provided (used in) by financing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of the year ash and cash equivalents, end of the year	- 1,419 - 10,635 (2,634,121) (993,882) - 3,052,814 (1,554,817) (1,179,620) (1,096) (89,444) 826,058 398,595
	(4,878,040) 1,200,517
	2,500,000 6,352,857 (2,100,000) (8,998,839) - (19,158) 2,650,000 1,770,000 (2,540,000) (2,572,500) 50,000 (470,000) 38,045 5,807
	598,045 (3,931,833)
	1,552,554 652,038 6,912,818 6,260,780
	$ 8,465,372 6,912,818

• 40 -

(English Translation of Consolidated Financial Statements Originally Issued In Chinese) INDEPENDENT ACCOUNTANTS’ AUDIT REPORT

To the Board of Directors of China Petrochemical Development Corporation:

Opinion

We have audited the consolidated financial statements of China Petrochemical Development Corporation and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of the other auditors, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2018 and 2017, and its consolidated financial performance and its consolidated 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 (“IFRSs”), International Accounting Standards (“IASs”), interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

==> picture [66 x 32] intentionally omitted <==

• 41 -

Emphasis of Matter

As described in Notes 6.g and 6.l of the notes to the consolidated financial statements, the Tainan City Government and Environment Protection Administration, the Executive Yuan publicly announced that a portion of the land at the Anshun plant was polluted and designated it as under pollution control. As China Petrochemical Development Corporation (CPDC) never used the land since it took over from its merger with Taiwan Alkali Industrial Corporation (TAIC), CPDC still has a dissenting view on the government perception about the condition of pollution. Aside from cooperating with the government in its control and management procedure, CPDC is seeking a way to define its responsibilities. In addition, CPDC submitted for approval a remediation project proposal to the Tainan City Government in accordance with the related regulations and accrued relevant remediation project expenses in June 2008. This remediation project proposal was approved in May 2009. CPDC also performed related remediation work according to the remediation project proposal. The first phase of remediation project was completed in September 2014. The management of CPDC is expecting that the second phase of remediation project will be completed in the next decade. Likewise, CPDC has accrued relevant remediation project expenses for the second phase of remediation project in December 2014. Our opinion is not modified in respect of this matter.

Other Matter

CPDC has prepared its parent-company-only financial statements as of and for the years ended December 31, 2018 and 2017, on which we have issued an unmodified opinion. We have not audited certain investments, which were accounted for under the equity method. The financial statements as of and for the years then ended December 31, 2018 and 2017 of those of the investees accounted for under the equity method were audited by other auditors, whose reports have been furnished to us, and our opinion in so far as it relates to the amounts for the equity method investees were based solely on the reports of other auditors. These investments accounted for under the equity method represented 1.05% and 1.36% of consolidated total assets as of December 31, 2018 and 2017, respectively. The related shares of investment income from these investees including subsidiaries, associates and joint ventures accounted for using equity method represented (2.21)% and (0.06)% of consolidated net income before income tax for the years ended December 31, 2018 and 2017, respectively.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were significant in our audit of the consolidated financial statements as of and for the year then ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Revenue recognition

Operating revenue is the most important source of cash flow for the Group, and it is a significant risk accounting subject in the consolidated financial statements. So revenue recognition is one of the key audit matters for our audit. Please refer to Note 4 “Revenue Recognition” and Note 6 “Revenue” in the consolidated financial statements.

• 42 -

How the matter was addressed in our audit

Our key audit procedures included:

• Testing the Group’s internal accounting controls surrounding revenue recognition and key manual and systems-based controls in the order-to-cash transaction cycle. In addition, checking and reconciling the sales data recorded between the sales systems and general ledger; selecting samples to assess whether appropriate revenue recognition policies are applied through comparison with accounting standards;

• Analyzed and compared the sales amounts and volumes for the major customers of the Group. Based on samples selected, vouched significant transactions from both internal and external documents, to verify the authenticity of the transactions.

2. Assessment of the fair value of investment property

The book value of investment property of the Group represented 43% of consolidated total assets as of December 31, 2018, which is deemed to be significant. The Group evaluate the fair value of investment property according to IAS40, and re-measure such fair value on the reporting date. Because the valuation of investment property at fair value demands significant professional judgments, the assessment of fair value of investment property is considered one of the key audit matters. Please refer to Note 4 “Investment Property”, Note 5 “Significant Accounting Judgments, Estimation, Assumptions, and Sources of Estimation Uncertainty”, and Note 6.h “Investment Property” of the consolidated financial statements for details of the information about fair value information on investment property.

How the matter was addressed in our audit

Our key audit procedures included:

• Obtain from the Group management the real estate appraisal report on investment property;

• Engage another appraiser to review such real estate appraisal report, and to evaluate the propriety of the ~~e~~ valuation method used, and the reasonableness of its main assumptions or input values (ex. discount rate and final rate of return);

• Evaluate the propriety of the disclosure of fair value of investment property.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

• 43 -

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 consolidated financial statements. As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’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 Group’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 consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

7. 44 -

We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period 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 accountants’ audit report are Chen Mei Fang and Chung Tan Tan.

KPMG

Taipei, Taiwan (Republic of China) March 22, 2019

• 45 -

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2018 and 2017

(Expressed in thousands of New Taiwan Dollars)

ASSETS Current assets Cash and cash equivalents (Notes 4 and 6 a.) Financial assets at fair value through profit or loss－current (Notes 4 and 6 b.) Current financial assets at fair value through other comprehensive income (Notes 4 and 6 b.) Available-for-sale financial assets－current (Notes 4 and 6 b.) Notes and accounts receivable, net (Notes 4 and 6 c.) Accounts receivable－related parties, net (Notes 4, 6 c. and 7) Other receivables (Notes 4 and 6 c. and 7) Inventories (Notes 4 and 6 d.) Prepayments Other current assets Total current assets Non-current assets Non-current financial assets at fair value through profit or loss (Note 6 b.) Non-current financial assets at fair value through other comprehensive income (Note 6 b.) Available-for-sale financial assets－non-current (Notes 4 and 6 b.) Financial assets carried at cost－non-current (Notes 4 and 6 b.) Investments accounted for using equity method (Notes 4 and 6 e.) Property, plant and equipment (Notes 4 and 6 g.) Investment property, net (Notes 4 and 6 h.) Intangible assets (Notes 4 and 6 i.) Deferred tax assets (Notes 4 and 6 p.) Other non-current assets (Note 8) Total non-current assets TOTAL ASSETS	December 31, 2018 Amount ％ $ 13,469,938 15 1,300,897 1 251,629 - - - 2,575,850 3 60,233 - 118,382 - 2,243,840 3 1,143,583 1 458,235 1 21,622,587 24 4,861,274 5 1,978,339 2 - - - - 2,405,411 3 19,501,534 22 38,350,359 43 188,061 - 11,023 - 786,366 1 68,082,367 76 $ 89,704,954 100	December 31, 2017 Amount ％ 10,111,495 13 1,368,657 2 - - 196,132 - 3,479,623 4 67,984 - 45,763 - 2,281,084 3 856,100 1 432,311 - 18,839,149 23 - - - - 1,677,346 2 2,992,035 3 2,241,041 3 16,935,430 21 38,226,532 47 24,338 - 9,372 - 683,717 1 62,789,811 77 81,628,960 100 LIABILITIES AND EQUITY Current liabilities Short-term loans (Note 6 j.) Current contract liabilities (Note 6 s.) Accounts payable Other payables (Note 7) Current tax liabilities (Notes 4 and 6 p.) Provisions－current (Notes 4, 6 m. and 6 o.) Long-term liabilities-current portion (Notes 4 and 6 j.) Other current liabilities, others Total current liabilities Non-current liabilities Long-term bank loans (Note 6 j.) Provisions－non-current (Notes 4, 6 m. and 6 o.) Deferred tax liabilities (Notes 4 and 6 p.) Long-term bills payable (Note 6 k.) Other non-current liabilities, others Total non-current liabilities Total liabilities Equity attributable to shareholders of the parent Share capital Common stock (Note 6 q.) Capital surplus (Note 6 q.) Retained earnings: (Note 6 q.) Legal reserve Special reserve Unappropriated earnings Others (Notes 4 and 6 q.) Exchange differences arising on translation of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Changes in fair value of available-for-sale financial assets Total equity attributable to shareholders of the parent Non-controlling interests Total equity TOTAL LIABILITIES AND EQUITY	December 31, 2018 Amount % $ 913,732 1 5,578 - 1,848,774 2 2,973,010 3 352,910 - 480,171 1 863,801 1 50,079 - 7,488,055 8 3,810,129 5 1,992,284 2 8,758,989 10 349,729 - 115,014 - 15,026,145 17 22,514,200 25 26,998,573 30 1,260,386 1 1,708,303 2 33,521,575 38 5,144,764 6 40,374,642 46 (488,212) (1) (1,248,499) (1) - - (1,736,711) (2) 66,896,890 75 293,864 - 67,190,754 75 $ 89,704,954 100	December 31, 2017 Amount % 250,000 - - - 1,959,985 3 1,298,374 2 202,703 - 174,007 - - - 356,630 - 4,241,699 5 3,269,165 4 2,437,684 3 8,754,736 11 299,882 - 77,335 - 14,838,802 18 19,080,501 23 26,998,573 33 1,260,386 2 1,099,137 1 28,023,386 34 6,107,355 8 35,229,878 43 (392,378) - - - (788,734) (1) (1,181,112) (1) 62,307,725 77 240,734 - 62,548,459 77 81,628,960 100
	Amount $ 13,469,938 1,300,897 251,629 - 2,575,850 60,233 118,382 2,243,840 1,143,583 458,235 21,622,587 4,861,274 1,978,339 - - 2,405,411 19,501,534 38,350,359 188,061 11,023 786,366 68,082,367 $ 89,704,954	Amount 10,111,495 1,368,657 - 196,132 3,479,623 67,984 45,763 2,281,084 856,100 432,311 18,839,149 - - 1,677,346 2,992,035 2,241,041 16,935,430 38,226,532 24,338 9,372 683,717 62,789,811 81,628,960	Amount $ 913,732 5,578 1,848,774 2,973,010 352,910 480,171 863,801 50,079 7,488,055 3,810,129 1,992,284 8,758,989 349,729 115,014 15,026,145 22,514,200 26,998,573 1,260,386 1,708,303 33,521,575 5,144,764 40,374,642 (488,212) (1,248,499) - (1,736,711) 66,896,890 293,864 67,190,754 $ 89,704,954	Amount 250,000 - 1,959,985 1,298,374 202,703 174,007 - 356,630 4,241,699 3,269,165 2,437,684 8,754,736 299,882 77,335 14,838,802 19,080,501 26,998,573 1,260,386 1,099,137 28,023,386 6,107,355 35,229,878 (392,378) - (788,734) (1,181,112) 62,307,725 240,734 62,548,459 81,628,960

• 46 -

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2018 and 2017

(Expressed in thousands of New Taiwan Dollars)

Operating revenue (Notes 4 and 6 s.) Operating costs (Notes 4 and 6 d.) Less: Unrealized (profit) loss on intercompany transactions Add: Realized profit (loss) on intercompany transactions Gross profit Operating expenses Selling expenses Administrative expenses Research and development expenses Impairment loss (impairment gain and reversal of impairment loss) determined in accordance with IFRS 9 Profit from operations Non-operating income and expenses Other income (Notes 6 v. and 7) Other gains and losses (Notes 6 l. and 6 v.) Finance costs (Notes 6 m. and 6 v.) Share of profit of associates and joint ventures accounted for using equity method (Notes 4 and 6 e.) Total non-operating income and expenses Income before income tax Less: Income tax expense (Notes 4 and 6 p.) Net income Other comprehensive income (loss): Items that will not be reclassified subsequently to profit or loss: Actuarial loss from defined benefit plans Unrealized losses from investments in equity instruments measured at fair value through other comprehensive income Share of other comprehensive loss of associated and joint ventures Allocation of income tax to the above items Items that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations Changes in fair value of available-for-sale financial assets Share of other comprehensive income (loss) of associates and joint ventures Allocation of income tax to the above items Other comprehensive (loss) income for the year, net of income tax Total comprehensive income for the year Net income attributable to： Shareholders of the parent Non-controlling interests Comprehensive income (loss) attributable to： Shareholders of the parent Non-controlling interests Earnings per share (NTD) (Notes 4 and 6 r.) Basic earnings per share Diluted earnings per share	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,
	2018	％ 100 87 13 - - 13 2 2 1 - 5 8 3 (1) - 2 4 12 1 11 - (1) - - (1) - - - - - (1) 10 11 - 11 10 - 10 1.59 1.58	2017
	Amount		Amount	％
	$ 38,503,121 33,326,959 5,176,162 - (3) 5,176,159 794,518 971,123 335,436 - 2,101,077 3,075,082 1,044,485 (251,071) (79,516) 887,970 1,601,868 4,676,950 395,955 4,280,995 16,731 (372,169) (70,122) - (425,560) (96,052) - - - (96,052) (521,612) $ 3,759,383 4,290,269 (9,274) $ 4,280,995 $ 3,763,808 (4,425) $ 3,759,383 $		33,335,970 27,964,951 5,371,019 - 562 5,371,581 627,746 923,451 236,348 - 1,787,545 3,584,036 530,773 1,594,771 (188,416) 776,557 2,713,685 6,297,721 210,399 6,087,322 13,416 - 2,283 - 15,699 (98,616) 403,037 37,430 - 341,851 357,550 6,444,872 6,091,656 (4,334) 6,087,322 6,448,195 (3,323) 6,444,872	100 84
				16 - -
				16
				2 2 1 -
				5
				11
				1 5 (1) 2
				8
				19 1
				18
				- - - -
				-
				- 1 - -
				1
				1
				19
				18 -
				18
				19 -
				19
				2.55
	$			2.53

• 47 -

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2018 and 2017

(Expressed in thousands of New Taiwan Dollars)

Equity Attributable to Shareholders of the Parent

Balance on January 1, 2017 Net income for the year ended December 31, 2017 Other comprehensive income (loss) for the year ended December 31, 2017 Total comprehensive income (loss) Appropriations and distribution of 2016 earnings： Special reserve used to cover accumulated deficits Conversion of convertible bonds Balance on December 31, 2017 Effects of retrospective application Balance on January 1, 2018 after adjustments Net income for the year ended December 31, 2018 Other comprehensive income (loss) for the year ended December 31, 2018 Total comprehensive income (loss) Appropriations and distribution of 2017 earnings： Legal reserve Special reserve Changes in non-controlling equities Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance on December 31, 2018	Common Stock $ 23,199,897 - - - - 3,798,676 26,998,573 - 26,998,573 - - - - - - - $ 26,998,573	Capital Surplus 18,141 - - - - 1,242,245 1,260,386 - 1,260,386 - - - - - - - 1,260,386		Retained earnings Special Reserve Unappropriated earnings 29,981,970 (1,958,584) - 6,091,656 - 15,699 - 6,107,355 (1,958,584) 1,958,584 - - 28,023,386 6,107,355 - 844,326 28,023,386 6,951,681 - 4,290,269 - 10,170 - 4,300,439 - (609,166) 5,498,189 (5,498,189) - - - (1) 33,521,575 5,144,764		Others	Changes in fair value of available- for-sale financial assets (1,228,183) - 439,449 439,449 - - (788,734) 788,734 - - - - - - - - -	Total 50,818,609 6,091,656 356,539 6,448,195 - 5,040,921 62,307,725 825,358 63,133,083 4,290,269 (526,461) 3,763,808 - - - (1) 66,896,890	Non- controlling interests 244,057 (4,334) 1,011 (3,323) - - 240,734 41,182 281,916 (9,274) 4,849 (4,425) - - 16,373 - 293,864	Total Equity
					Exchange differences arising on translation of foreign operations (293,769) - (98,609) (98,609) - - (392,378) - (392,378) - (95,834) (95,834) - - - - (488,212)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income - - - - - - - (807,702) (807,702) - (440,797) (440,797) - - - - **(1,248,499) **
			Legal Reserve 1,099,137 - - - - - 1,099,137 - 1,099,137 - - - 609,166 - - - 1,708,303	Special Reserve 29,981,970 - - - (1,958,584) - 28,023,386 - 28,023,386 - - - - 5,498,189 - - 33,521,575
										51,062,666 6,087,322 357,550
										6,444,872 - 5,040,921
										62,548,459 866,540
										63,414,999
										4,280,995 (521,612)
										3,759,383
										- - 16,373 (1)
										67,190,754

• 48 -

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2018 and 2017 (Expressed in thousands of New Taiwan Dollars)

Cash flows from operating activities: Income before income tax Adjustments to reconcile income before income tax to net cash provided by operating activities: Depreciation expense Amortization expense Net profit on financial assets or liabilities at fair value through profit or loss Interest expense Loss on reassessment of embedded derivatives at fair value through profit or loss Interest income Effect of exchange rate changes on bonds payable Shares of gain of subsidiaries and associates accounted for using equity method Loss on disposal of property, plant and equipment Gain on disposal of investments Impairment loss on financial assets Impairment loss (reversal of) on non-financial assets Realized gain or loss on intercompany transactions Gain on redemption of bonds payable Gain arising from adjusting fair value of investment property Amortization of bond issued expense Total adjustments to reconcile income before income tax Change in operating assets and liabilities： Change in operating assets： Decrease (increase) in accounts receivable Decrease (increase) in receivables－related parties (Increase) decrease in other receivables Increase in inventories Increase in prepayments (Increase) decrease in other current assets Total changes in operating assets Change in operating liabilities： Increase in contract liabilities (Decrease) increase in accounts payable Decrease in accounts payables－related parties Increase in other payables Decrease in provisions (Decrease) increase in other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash provided by operations Interest received Interest paid Income taxes paid Net cash provided by operating activities Cash flows from investing activities: Acquisition of current financial assets at fair value through profit or loss Proceeds from current financial assets at fair value through profit or loss Acquisition of financial assets carried at cost Proceeds from disposal of financial assets carried at cost Return of capital of financial assets under cost method due to capital reduction Proceeds from disposal of Investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other non-current assets Dividend received Net cash (used in) from investing activities Cash flows from financing activities: Increase in short-term loans Decrease in short-term loans Repayment of bond payable Increase in long-term bank loans Repayment of long-term bank loans Increase (decrease) in long-term bills payable Increase in other non-current liabilities Changes in non-controlling interests Net cash provided (used in) by financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents, beginning of the year Cash and cash equivalents, end of the year	For theyears ended December 31,	For theyears ended December 31,
	2018 $ 4,676,950 1,364,687 19,536 (242,864) 79,516 - (197,636) - (887,970) 6,998 (6,094) - 150,541 3 - (119,574) - 167,143 903,773 7,751 (78,301) (102,860) (287,483) (25,924) 416,956 5,578 (111,211) - 1,694,851 (139,236) (306,551) 1,143,431 1,560,387 1,727,530 6,404,480 203,318 (77,134) (253,419) 6,277,245 (3,267,115) 1,846,810 - - - - (4,046,481) 14,410 (188,697) (108,908) 653,668 (5,096,313) 3,349,694 (2,680,470) - 3,823,144 (2,560 ,000) 50,000 37,679 16,373 2,036,420 141,091 3,358,443 10,111,495 $ 13,469,938	2017
		6,297,721 1,234,460 19,669 (171,897) 188,416 920,915 (206,644) (276,247) (776,557) 737 (2,674,450) 1,137 (22,875) (562) (10,091) (41,244) 83,552
		(1,731,681)
		(1,555,926) (13,965) 107,534 (677,191) (10,803) 35,626
		(2,114,725)
		- 249,718 (10,703) 772,572 (120,742) 71,689
		962,534
		(1,152,191)
		(2,883,872)
		3,413,849 203,196 (96,847) (17,341)
		3,502,857
		(8,221) 8,867 (500,000) 1,419 10,635 3,052,814 (2,500,402) - (697) (92,846) 248,920
		220,489
		6,352,857 (8,998,839) (19,158) 2,449,949 (2,572,500) (470,000) 4,442 -
		(3,253,249)
		(36,668) 433,429 9,678,066
		10,111,495

• 49 -

Attachment 4

China Petrochemical Development Corporation Earnings Distribution Table for 2018

Currency Unit: NT$ Item Amounts Beginning of undistributed Earnings 0 Plus: IFRS Conversion adjusted net amount (Note 1) 844,326,443 Beginning of undistributed Earnings after IFRS Conversion 844,326,443 Plus(Subtract): Welfare project revaluation variable 10,170,391 Disposal in equity instruments measured at fair value through other comprehensive gains and losses. (947) Annual (2018) netprofit (Note 2) 4,290,269,039 Distributable Earnings Appropriation 5,144,764,926 Subtract: Legal reserve (429,026,904) The set aside special surplus reserve of net increased amount from the adoption of fair value method to value the real estate investments (Note 2) (1,968,687,469) Distribution items Distribute shareholder cash dividends (NT$0.5 per share). (1,349,928,637) Distribute shareholder stock dividends (NT$0.5 per share, distribute according to par value, that is distribute 50 free shares for everyone thousand shares) (1,349,928,630) End of Period Appropriation NT$47,193,286	Currency Unit: NT$ Item Amounts Beginning of undistributed Earnings 0 Plus: IFRS Conversion adjusted net amount (Note 1) 844,326,443 Beginning of undistributed Earnings after IFRS Conversion 844,326,443 Plus(Subtract): Welfare project revaluation variable 10,170,391 Disposal in equity instruments measured at fair value through other comprehensive gains and losses. (947) Annual (2018) netprofit (Note 2) 4,290,269,039 Distributable Earnings Appropriation 5,144,764,926 Subtract: Legal reserve (429,026,904) The set aside special surplus reserve of net increased amount from the adoption of fair value method to value the real estate investments (Note 2) (1,968,687,469) Distribution items Distribute shareholder cash dividends (NT$0.5 per share). (1,349,928,637) Distribute shareholder stock dividends (NT$0.5 per share, distribute according to par value, that is distribute 50 free shares for everyone thousand shares) (1,349,928,630) End of Period Appropriation NT$47,193,286
Item	Amounts
Beginning of undistributed Earnings Plus: IFRS Conversion adjusted net amount (Note 1)	0 844,326,443
Beginning of undistributed Earnings after IFRS Conversion	844,326,443
**Plus(Subtract): **
Welfare project revaluation variable Disposal in equity instruments measured at fair value through other comprehensive gains and losses. Annual (2018) netprofit (Note 2)	10,170,391 (947) 4,290,269,039
Distributable Earnings Appropriation	5,144,764,926
Subtract:
Legal reserve The set aside special surplus reserve of net increased amount from the adoption of fair value method to value the real estate investments (Note 2) Distribution items Distribute shareholder cash dividends (NT$0.5 per share). Distribute shareholder stock dividends (NT$0.5 per share, distribute according to par value, that is distribute 50 free shares for everyone thousand shares)	(429,026,904) (1,968,687,469) (1,349,928,637) (1,349,928,630)
End of Period Appropriation	NT$47,193,286

• Note 1: On January 1, 2018, the first time retained earnings adjustment was applied of conversion from International Accounting Standards (IASs) No. 39 to International Financial Reporting Standards (IFRS) No. 9. Please refer to the Note in 2018 "Applicable New Release and Amendment Guidelines and Interpretation" for related information.

• Note 2: Please refer to the content of the Note "Capital and Other Equities" in the 2018 Individual Financial Report for the net increased amount set aside for special surplus reserve from the adoption of fair value method to value the real estate investments. The Company’s previous year’s net increased amount set aside for special surplus reserve from the adoption of fair value method to value the real estate investments remains

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insufficient due to the loss of core business from the previous year, thus requiring set aside additional appropriation this year to make up the deficiency.

Note 3: The cash dividend is rounded off to the nearest NT Dollar, with the decimal places removed. The total rounded off amounts, are accounted as other income in the Company's financial statements.

Chairperson: Manager: Accounting Manager:

==> picture [35 x 35] intentionally omitted <==

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Attachment 5

Comparison between Original and Amendments to Procedures for Acquisition or Disposal of Assets

Items	Amended Version	Original Version	Reason
Article 2	The term "assets" as used in this Processing Procedure includes the following: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, investment property, and construction enterprise inventory) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Right-of-use assets. 6. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). 7. Derivatives 8. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with	The term “assets” as used in these Procedures is applicable within the scope enumerated below: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities, etc. 2. Real estate (including land, building and structures, real estate held for investment purposes, land usage right, inventories of construction enterprises) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Claims of financial institutions (including receivables, foreign exchange rebate, loans, and overdue receivables). 6. Derivatives. 7. Assets acquired or disposed of in connection with mergers, spin-off, acquisitions, or share transfer in accordance with law. 8. Other major assets.	A. In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018, Article 5 was added, and move the current Subparagraph 2 Land right- of-use to Subparagraph 5 provisions. B. Move the current Sub- paragraph 5 to Sub- paragraph 8, move the Subparagrap h 6 to Subparagrap h 9.

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Items	Amended Version	Original Version	Reason
	law. 9. Other major assets.
Article 3	Terms used in these Regulations are defined as follows: 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long- term purchase (sales) contracts. 2. Assets acquired or disposed of through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, de-mergers, or acquisitions conducted under the Business Mergers and	Term definitions used for these Procedures are as follow: 1. The term “Derivative Products” means forward contracts, options, futures, leverage contracts, or swaps, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests, and the hybrid contracts consisted by the above products. The term “Forward Contracts” does not include insurance contracts, fulfillment contracts, after-sales service contracts, long- term lease contracts or long-term purchase or sale agreements. 2. The term “Assets Acquired or Disposed by Mergers, Spin- off, Acquisition or Shares Transference Pursuant to Laws” means assets acquired or disposed of by mergers, spin-off, acquisition or share transfer, pursuant to Business Mergers and Acquisitions Act, Financial Holding Companies Act, Financial Institutions Merger Act or other acts; or share transfer from other companies by issuing new shares of its own as the consideration therefor (hereinafter “transfer of shares”) pursuant to the sixth paragraph of Article 156-8 of the Company Act. 3. The term “related party” and “subsidiaries” as used in these Procedures mean those parties	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor under Article 156-3 of the Company Act. 3. Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment. 5. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the Competent Authority is required, the earlier of the above date or the date of	defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. The term “professional appraisal” as used in these procedures, means a certified appraiser or a company in the business of appraising real property or equipment. 5. The term “date of occurrence” refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of Boards of Directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6. The term “investments in China” means investments made in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area by the Investment Commission of the Ministry of Economic Affairs, R.O.C. 7. The term “competent authorities” means the government entities in charge of the Stock and Exchange Act.

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Items	Amended Version	Original Version	Reason
	receipt of approval by the Competent Authority shall apply. 6. Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area. 7. The "Competent Securities Authorities" referred in this Processing Procedure: refers to the Competent Authorities of the Securities and Exchange Act.
Article 4	The Decision-making Procedures and Execution Units of the Approval Authority, Evaluation and Operating Procedures for the Acquisition and Disposal of Assets by the Company are as follows: 1. In acquiring or disposing of real property, equipment, or right-of-use assets: (1) Approval Authority, Evaluation and Operating Procedures: To be managed in accordance with the stipulations specified	Authority for approval, appraisal, procedures, transaction terms, and decision making processes of evaluation and management for the acquisition or disposal of assets: 1. The acquisition or disposal of real estate and other fixed assets: 1) Authority for approval, evaluation and management shall be in accordance with CPDC’s internal regulations “The Chart of Responsibilities of the Board of Directors and Managers,” “The Level of Authority for Managers Junior to the President,” “Rules Governing Fixed Assets	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	in the Company's "Segregation of Duties Table for the Board of Directors and Managers" and "Proper Level of Responsibilities Subordinated to General Manager", and "Regulations Governing Fixed Assets Management" and Article 7 of this Procedure. (2) Decision-making Procedures for the Transaction Terms: The market price, the assessed present value, the actual transaction price of the adjacent real property, the lease market price, or the valuation report issued by the professional appraiser shall be referenced to make decision. And select one with price inquiry, price comparison, and price negotiation or open tendering. (3) Execution Units: To be managed by the department in charge of real property or right-of-use assets. 2. Acquisition or disposal of intangible assets or its	Management” and Article 7 of this procedure. 2) Procedures to determine transaction terms shall be determined by reference to market value, publicly announced current value, recent market transaction price of neighboring or closely valued property or the report issued by a certified appraiser. Final prices shall be carried out by one of the following: price inquiry, price comparison, price negotiation or open tender. 3) The implementation unit shall be the department in charge of real property and fixed assets management. 2. Acquisition or disposal of securities, membership or intangible assets: 1) Authority of approval, evaluation and management shall be in accordance with CPDC’s internal regulation “The Chart of Responsibilities of the Board of Directors and Managers”, “The Level of Authority for Managers Junior to the President” and Article 8 of this procedure. 2) Procedures to Determine Transaction Terms: a. For securities purchased and sold on a centralized exchange market or OTC exchange, the price shall be decided by the market price at the time of the transaction. b. For securities not acquired or disposed of on a centralized

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Items	Amended Version	Original Version	Reason
	right-of-use assets or memberships: (1) Formosa TV 2019 Handbook Approval Authority, Evaluation and Operating Procedures: To be managed in accordance with the stipulations specified in the Company's "Segregation of Duties Table for the Board of Directors and Managers" and "Proper Level of Responsibilities Subordinated to General Manager" and Article 8 of this Procedure. (2) Decision-making Procedures for the Transaction Terms: 1. Where the securities t r a d i n g o f a cqui s i t i on or d i s p o s a l o f securities is done in the Stock Exchange M arket or t he Securities Firm Business Office, it shall be decided according to the warrants, securities or market price at t h a t t i m e . 2. Where the securities trading of	exchange market or OTC exchange, the price shall be determined by reference to net value per share, profitability, growth potential, financial analysis reports, prevailing interest rate, bond yield or price, creditability of debt issuers and transaction price at the time. c. For the acquisition or disposal of membership certificates or intangible assets, the price shall be integrally evaluated by reference to the fair market value, future anticipated added-value, and produced benefit. 3) Implementation unit: a. The evaluation of acquisition or disposal of securities described in the first sub-paragraph of Article 2, paragraph 1 of this Procedure shall be conducted by the finance department or re- investment department, and shall be executed by such upon obtaining appropriate approval in accordance with the Procedure. b. The evaluation of acquisition or disposal of non-securities assets, membership certificates, or intangible assets shall be conducted by the related departments, and shall be executed by such departments upon obtaining appropriate approval in accordance with the Procedure. 3. Acquisition or disposal of claims of financial institutions: In general, the Company does not invest in claims of financial

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Items	Amended Version	Original Version	Reason
	acquisition or disposal of securities is not done in the Stock Exchange Market or the Securities Firm Business Office, it shall be decided taking the net value per share, profitability, future development potential, professional opinion, market interest rate, bond coupon rate, debtor's credit or the transaction price at the time into consideration. 3. Where the acquisition or disposal of intangible assets or their right-of-use assets or memberships shall be decided in reference to the fair market price, profitability, future development potential or professional opinions. (3) Execution Units 1. Securities refer to the applicable scope specified in Article	institutions. In the event that the Company intends to engage in transaction with acquisition or disposal of financial institution claims, the Company shall report and obtain approval from the Board of Directors and formulation of the appropriate procedure shall follow.

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Items	Amended Version	Original Version	Reason
	2, Paragraph 1, Subparagraph 1 of this Processing Procedure. The acquisition or disposal shall be appraised by the Finance Department or the Reinvestment Management Unit, and after approved by the responsible approval authority, the Finance Department or the Reinvestment Management Unit shall manage the acquisition or disposal. 2. Where the acquisition or disposal of non- valuable securities, intangible assets or their right-of-use assets or membership shall be appraised by the relevant unit in charge, after approved by the responsible Approval Authority, each related unit in charge shall manage acquisition or disposal.

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Items	Amended Version	Original Version	Reason
	3. Acquisition or Disposal Claims of Financial Institutions: The Company does not engage in the acquisition or disposal of claims transaction of financial institutions in principle. In case of intending to engage in the acquisition or disposal of claims transaction of financial institutions later, it will report to the Board of Directors for approval before setting the appraisal and operating procedures.
Article 5	Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall meet the following requirements: 1. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the	Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters whom provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall not be a related party of any party to the transaction. Unless otherwise provided for by other laws, the Company engaging in the acquisition or disposal of assets shall retain the relevant contracts, meeting minutes, registry, appraisal report, and the opinion books by CPA, attorneys, and security underwriters at the Company for at least 5 years. Court documents can be substituted for reports or opinions issued by a CPA or certified	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received. 2. May not be a related party or de facto related party of any party to the transaction. 3. If the Company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other. When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraph shall comply with the following: 1. Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence. 2. When examining a case, they shall appropriately plan and	appraiser if the assets are acquired or disposed through court auction. In the case of the Company’s acquisition or disposal of assets has to be approved by the Board according to this procedure or the prescription of other laws, if a director shows dissent and the dissent is recorded or presented in a written statement, the dissent of the director should be submitted to the audit committee. When a transaction involving the acquisition or disposal of assets is submitted for discussion by the Board of Directors pursuant to the preceding paragraph, the Board of Directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the Board of Directors meeting. Any transaction involving major assets or derivatives shall be approved by more than half of all Audit Committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all Audit Committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two- thirds of all directors, and the resolution by the audit committee shall be recorded in the minutes

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Items	Amended Version	Original Version	Reason
	execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers. 3. They shall undertake an item- by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion. 4. They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with applicable laws and regulations. Where the Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes,logbooks,appraisal	of the Board of Directors meeting. The calculation of the transaction amounts referred to in article 7 and article 8 shall be done in accordance with Article 6, paragraph 2 of these Procedures, and “within the preceding year” as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.

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Items	Amended Version	Original Version	Reason
	reports and CPA, attorney, and securities underwriter opinions at the company, where they shall be retained for 5 years except where another act provides otherwise. Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion. With respect to the Company's acquisition or disposal of assets that is subject to the approval of the board of directors under this Processing Procedure or other laws or regulations, if a director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to the Audit Committee. When the Board of Directors discussing the proposal of preceding paragraph, the Board of Directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the Board of Directors meeting. Any transaction involving major assets or derivatives shall be approved bymore than half of

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Items	Amended Version	Original Version	Reason
	all Audit Committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all Audit Committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two- thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting. The calculation of the transaction amounts referred to in the Article 7 and Article 8 of this Processing Procedure shall be done in accordance with Article 6, Paragraph 2 of this Processing Procedure and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained according to this Processing Procedure need not be counted toward the transaction amount.
Article 6	Under any of the following circumstances, where the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the	For acquisition or disposal of assets, provided that one of the following conditions exists, the Company shall publicly announce and file the relevant data and information to the Financial Supervisory Commission’s	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of

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Items	Amended Version	Original Version	Reason
	appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1. Acquisition or disposal of real property or right-of-use assets thereof from or to a related party, or acquisition or disposal of assets other than real property or right- of-use assets thereof from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more; However, this shall not apply to trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger, de-merger, acquisition, or transfer of shares. 3. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the company. 4.Where equipment or right-of-	designated Market Observation Post System, or MOPS in the appropriate format as prescribed by regulations within two days commencing immediately from the date of occurrence of the event: 1. Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of the Company’s paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements or subscription or redemption of domestic money market funds issued by securities investment trust enterprises. 2. Merger, spin-off, acquisition, or transfer of shares. 3. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in these Procedures adopted by the Company. 4. For acquisition or disposal of assets which are for operating using, and the trading counterparty are not related party, and the paid-in capital referred to in the following subparagraphs 1) Paid- up capital bellow NT$10 billion, transaction amount more	Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	use assets thereof for business use are acquired or disposed of, and furthermore the transaction counterparty is not a related party, the transaction amount reaches NT$1 billion or more.: 5. Acquisition or disposal in the construction business of real property or right-of- use assets thereof for construction use, and furthermore the transaction counterparty is not a related party, and the transaction amount reaches NT$500 million; and it is disposing of real property from a completed construction project that it constructed itself, and furthermore the transaction counterparty is not a related party, then the threshold shall be a transaction amount reaching NT$1 billion or more. 6. Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and	thanNT$500 million. 2) Paid- up capital more than NT$10 billion, transaction amount more than NT$1 billion. 5. The real property for construction use acquired or disposed by construction business, where the trading counterparty is not a related party and the transaction amount is more than NT$500 million. 6. Where land is acquired under an arrangement on engaging others to build on the Company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction is more than NT$500 million. 7. Where an asset transaction other than any of those referred to in the preceding six subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of the Company’s paid-in capital or NT$300 million. Provided, this shall not apply to the following circumstances: 1) Trading of government bonds. 2) Securities trading by investment professionals on foreign or domestic securities exchanges or over-the-counter

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Items	Amended Version	Original Version	Reason
	furthermore the transaction counterparty is not a related party, and the amount the company expects to invest in the transaction reaches NT$500 million. 7.Where an asset transaction other than any of those referred to in the preceding six subparagraphs or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; However, for the following conditions, such restriction may not be applied: (1) Trading of domestic government bonds. (2) C. Trading of bonds under re-purchase and re-sale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year.	markets, or subscription of securities in the domestic primary market or ordinary bonds which aren’t related to equity. 3) Trading of bonds under repurchase/resale agreements or subscription or redemption of domestic money market funds issued by securities investment trust enterprises. The transaction amounts in the preceding paragraphs shall be calculated in accordance with the methods provided below: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. “Within the preceding year” as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with

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Items	Amended Version	Original Version	Reason
	3. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use assets thereof within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with this Processing Procedure need not be counted toward the transaction amount. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by the company and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month. When The Company at the time of public announcement makes an error or omission in an item	these Procedures need not be counted toward the transaction amount. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by itself and any subsidiaries of companies that are not domestic public companies and file the information in the prescribed format into the Financial Supervisory Commission’s designated MOPS by the 10th day of each month. When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced within 2 days and reported in their entirety. Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the preceding article, a public report of relevant information shall be made on the MOPS designed by the Financial Supervisory Commission within 2 days commencing immediately from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction. 2. The merger, spin-off,

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Items	Amended Version	Original Version	Reason
	required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission. Where any of the following circumstances occur with respect to a transaction that the Company has already publicly announced and reported in accordance with the preceding article, a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction. 2. The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.	acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.
Article 7	In acquiring or disposing of real property, equipment, or right-of- use assets thereof where the transaction amount reaches 20 percent of the Company's paid- in capital or NT$300 million or	In acquiring or disposing of real estate or equipment by the Company, unless otherwise transacting with a government agency, commissioning others to build on its own land, leased land	In compliance with the amendments of the "Regulations Governing the Acquisition and

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Items	Amended Version	Original Version	Reason
	more, the Company, unless transacting with a domestic government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment or right- of-use assets thereof held for business use, shall obtain an appraisal report (format content shall be managed in accordance with the stipulations specified by the Competent Authorities) prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors; the same procedure shall also be followed whenever there is any subsequent change to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3. Where anyone of the	by appointing a constructor, or acquiring or disposing equipment for business use, where the transaction amount reaches 20% of the Company’s paid- in capital or NT$300 million, the Company shall obtain an appraisal report issued by a professional appraisal and further comply with the following provisions prior to the date of occurrence of event: 1. Due to special circumstances, where a limited price, specified price or special price is deemed as the basis of reference for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction. 2. Where the transaction amount is more than NT$ 1 billion, appraisals from two or more professional appraisers shall be obtained. 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal	Disposal of Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may	in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (abbreviated as ARDF hereafter) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: 1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. 2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser. Except where a limited price, specified price, or special price is employed by a construction enterprise as the reference basis for the transaction price, if an appraisal report cannot be obtained in time and there is a legitimate reason for the delay, the report, and the certified public

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Items	Amended Version	Original Version	Reason
	elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date. However, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser. Except where a limited price, specified price, or special price is employed by a construction enterprise as the reference basis for the transaction price, if an appraisal report cannot be obtained in time and there is a legitimate reason for the delay, the report, and the certified public accountant's opinion under subparagraph 3 of the preceding paragraph, shall be obtained within 2 weeks counting inclusively from the date of occurrence.	accountant's opinion under subparagraph 3 of the preceding paragraph, shall be obtained within 2 weeks commencing immediately from the date of occurrence.
Article 8	Where the Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the company's paid-in capital or NT$300	In acquiring or disposing of securities, prior to the date of occurrence of the event, the Company shall obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in evaluating the transaction price. In addition, if the transaction amount is 20 percent of the Company's paid-in capital or NT$300 million or	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	million or more, the company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation (ARDF). This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC). Where the Company acquires or disposes intangible assets or right-of-use assets thereof or memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a domestic government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the	more, the Company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to securities with publicly quoted prices in an active market or in compliance with regulations set by the Financial Supervisory Commission. In acquiring or disposing of membership certificates or intangible assets with a transaction amount of 20 percent of the Company’s paid-in capital or NT$300 million or more, except in cases where the counterparty of the transaction is the government agency, the Company shall engage a certified public accountant to provide an opinion regarding the reasonableness of the transaction price prior to the date of occurrence of the event. The CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

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Items	Amended Version	Original Version	Reason
	Accounting Research and Development Foundation (ARDF).
Article 9	Where the Company intends to acquire or dispose of real property or right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or right- of-use assets thereof from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except in trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, shall be managed in accordance with the provisions specified in Article 7 and Article 8 of this Procedure, the Company may not proceed to enter into a transaction contract or make a payment until following matters have been approved by the Audit Committee, and after submitted to the Board of Directors for resolution. When discussing the proposal, the Board of Directors shall take into full consideration each independent director's opinions. If an independent	When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of the Company’s paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except for trading government bonds, RP and RS bonds, and the purchase or redemption of domestic money market funds issued by securities investment trust enterprises, in addition to following the provisions in Article 7 and 8 of this Procedures, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been submitted and approved by the Audit Committee and obtained resolutions by the Board of Directors. When a proposal is submitted for discussion by the Board of Directors, the Board of Directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the Board of Directors	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018; and on future operational requirements, it is proposed to have detailed specifications for the acquisition or disposal of equipment for business use with the subsidiaries, and clearly specified to authorize the Chairman to decide the amount.

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Items	Amended Version	Original Version	Reason
	director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a transaction counterparty. 3. With respect to the acquisition of real property or right-of-use assets thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Paragraph 4, Paragraph 6 of this Article and Paragraph 1 of Article 10. 4. The date and price at which the related party originally acquired the real property, the original transaction counterparty, and that transaction counterparty's relationship to the company and the related party. 5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.	meeting. 1. The purposes, necessity, and anticipated benefits of the acquisition or disposition of the assets; 2. The reasons for selecting the related persons as the transaction counterparty; 3. Relevant information for evaluating the reasonableness of the terms of the anticipated transaction pursuant to the provisions of Items 4 and 6 of this Article and Article 10-1; 4. Information such as the date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party; 5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the uses of fund; 6. Transactions value of 10 percent of the Company’s total assets or more, accountant’s opinions, or appraisal reports in compliance with the provisions of Article 7 or 8 of these Procedure; 7. Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transactions referred to in the preceding paragraphs with

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Items	Amended Version	Original Version	Reason
	6. For the transaction amount reaches more than 10% of the Company's total assets, an appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with Article 7 or Article 8 specified in this Processing Procedure. 7. Restrictive covenants and other important stipulations associated with the transaction. Where in preceding paragraph, the Company intends to acquire or dispose of real property or right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or right-of-use assets thereof from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, the calculation of the transaction amounts shall be done in accordance with Article 6, Paragraph 2 of this Processing Procedure, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction, and for the part has been approved by the Audit Committee in accordance with the provisions specified in this Processing Procedure, and	amounts reach 20 percent of the Company’s paid-in capital, 10 percent of total assets or NT$300 million or more shall follow the provisions in the 2nd paragraph of Article 6 of these Procedures. “Within the preceding year” as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which have been submitted and approved by the Audit Committee and passed resolutions by the Board of Directors in accordance with these Procedures need not be counted toward the transaction amount. Matters for which paragraph 1 requires approval by the Audit Committee shall first be approved by more than half of all Audit Committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all Audit Committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two- thirds of all directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting. In acquiring or disposing of assets, the Company shall determine if the counterparty of the transaction is a related party, and in judging the relationship, in

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Items	Amended Version	Original Version	Reason
	submitted to the Board of Directors for resolution need not be counted toward the transaction amount. Where the matters require consent by the Audit Committee in accordance with the provisions of Paragraph 1, it shall first be approved by more than half of all Audit Committee members and then submitted to the Board of Directors for resolution. If approval of more than half of all Audit Committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting. When acquiring or disposing assets, the Company shall judge whether the transaction counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered when judging whether or not the transaction counterparty is a related party. 3. With respect to the acquisition of real property or right-of-use assets thereof from a related party, the reasonableness of the transaction costs shall be appraised in accordance with the followingmethods,also engage	addition to legal formalities, the substance of the relationship shall also be considered. In acquiring real property from a related party, the Company shall evaluate the reasonableness of the transaction costs by the following means, and shall also engage a CPA to check the appraisal and render a specific opinion. 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. “Necessary interest on funding” is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. Where land and structures are combined as a single property

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Items	Amended Version	Original Version	Reason
	a CPA to check the appraisal and render a specific opinion. 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. Where land and structures thereupon are combined as a	purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. Where the Company acquires real property from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with provisions prescribed in the 1st paragraph of this Article, and paragraph 4 of this Article does not apply: 1. The related party acquired real property by inheritance or as a gift. 2. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction. 3. The real property is acquired through signing of a joint development contract with the related party, or contracting with a related party in the construction of real estate such as contracted construction with its own land or contracted construction on leased land. With respect to the acquisition or disposal of business-use equipment between the Company and its subsidiaries, the Board of Directors may delegate the chairman to make decision under a pre-approved transaction amount by the board or in pursuant to the amount set forth

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Items	Amended Version	Original Version	Reason
	single property purchased or leased under one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. Where the Company acquires real property or right-of-use assets thereof from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with the Paragraph 1 of this Article, and the Paragraph 4 of this Article do not apply: 1. The related party acquired the real property or right-of- use assets thereof through inheritance or as a gift. 2. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction. 3. The real property is acquired through the signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land. 4. The real property right-of-use assets for business use are	in the Company’s internal guideline “The Chart of Responsibilities of the Board of Directors and Managers.” The decisions shall subsequently be submitted to and ratified by the next Board of Directors meeting.

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Items	Amended Version	Original Version	Reason
	acquired by the Company and subsidiaries, or by the Company in which it directly or indirectly holds 100 percent of the issued shares or authorized capital. With respect to the types of transactions listed below between the Company and its subsidiaries, authorize the Chairman to decide such matters when the transaction is within a certain amount, and subsequently submitted to and ratified by the next Board of Directors meeting: 1. Acquisition or disposal of equipment or right-of-use assets thereof held for business use. 2. Acquisition or disposal of real property right-of-use assets held for business use. The transaction amount in the preceding paragraph within a certain amount shall be calculated as follows: 1. For each transaction amount is more than NT$30 million (inclusive), for the transaction is less than NT$30 million, the transaction shall be managed in accordance with the stipulations specified in the Company's "Segregation of Duties Table for the Board of Directors and Managers"

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Items	Amended Version	Original Version	Reason
	and "Proper Level of Responsibilities Subordinated to General Manager". 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year is more than NT$100 million (inclusive), but less than NT$300 million, and the "within the preceding year" refers to the year preceding the date of occurrence of the current transaction, and for the part has been approved by the Audit Committee in accordance with the provisions specified in this Processing Procedure, and submitted to the Board of Directors for resolution need not be counted toward the transaction amount.
Article 10	Where the Company acquires real property thereof from a related party and the results of appraisals conducted in accordance with Paragraph 4 of the preceding Article are uniformly lower than the transaction price, it shall be managed in accordance with Paragraph 3 of this Article. However, in case of any one of the followingconditions,and	Where the Company acquires real property from a related party, in the event that the results of the appraisal conducted in accordance with Paragraph 4 of the preceding Article are uniformly lower than the transaction price, the Company shall carry out the acquisition in accordance with Paragraph 3 of this Article. However, where the following circumstances exist,	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26,

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Items	Amended Version	Original Version	Reason
	the objective evidence and the opinion on the reasonability issued by real property appraiser and CPA are obtained, then such restriction may not be applied: 1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: (1) Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministryof Finance,	objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply: Where the related party acquired undeveloped land or leased land for development, proof of compliance may be submitted with one of the following conditions: Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The term “Reasonable construction profit” shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower. The completed transactions of other floors of the same property or adjacent area by unrelated parties within the preceding year, where the terms of the transactions are similar and the reasonable price discrepancies of different floors or land area with market practice have been taken into consideration.	2018,

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Items	Amended Version	Original Version	Reason
	whichever is lower. (2) Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or leasing practices. 2.Where a public company acquiring real property, or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of completed transactions involving neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Completed transactions involving neighboring or closely valued parcels of land in the preceding paragraph inprinciple	The completed leases by unrelated parties for other floors of the same property within the preceding year, where the terms of the leases are similar after considering the reasonable price discrepancies among floors in accordance with prevailing market practice. Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. The aforementioned item “completed transactions for adjacent area” in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close to the latest official land price promulgated by the government. The term “the area of the property thereof are similar” in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50% of the property in the planned transaction. The term “within the preceding year” refers to the year retrospectively preceding the date of occurrence of the acquisition of the real property. Where the Company acquires real

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Items	Amended Version	Original Version	Reason
	refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions involving similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property or obtainment of the right-of-use assets thereof. Where the Company acquires real property or right-of-use assets thereof from a related party and the results of appraisals conducted in accordance with Paragraph 4, Paragraph 6 of Article 9, and Paragraph 1 of this Article of this Processing Procedure are uniformly lower than the transaction price, the following steps shall be taken: 1. A special reserve shall be set aside in accordance with Article 41, Paragraph 1 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or	property from a related party, in the event that the results of the appraisal conducted in accordance with Paragraph 4 and Paragraph 6 of Article 9 and Paragraph 1 of this Article are lower than the transaction price in all cases, the Company shall take the following steps: A special reserve shall be set aside according to Paragraph 1, Article 41 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised value, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve required by law shall be set aside pro rata to the shareholding in accordance with Article 41-1 of the Securities and Exchange Act. Audit Committee shall comply with Article 218 of the Company Act. Actions taken pursuant to the two preceding subparagraphs shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. Where the Company has set aside a special reserve under the preceding paragraph, the Company shall not utilize the special reserve until it has

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Items	Amended Version	Original Version	Reason
	issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Paragraph 1 of Article 41 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company. 2. The Audit Committee shall comply with Article 218 of the Company Act. 3. Actions taken pursuant to the preceding two subparagraphs shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased or leased at a premium, or they have been disposed of, or the leasing contract has been terminated, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirmingthat there	recognized a loss or decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the Financial Supervisory Commission has given its consent. Where the Company obtains real property from a related party, it shall also comply with Paragraphs 3 and 4 of this Article if there is other evidence indicating that the acquisition was not an arm’s-length transaction.

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Items	Amended Version	Original Version	Reason
	was nothing unreasonable about the transaction, and the Financial Supervisory Commission (FSC) has given its consent. Where the Company obtains real property or right-of-use assets thereof from a related party, it shall also comply with the Paragraph 3 and Paragraph 4 of this Article if there is other evidence indicating that the acquisition was not an arm's length transaction.
Article 11	For the calculation of 10 percent of total assets under this Processing Procedure, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used. In the case of a subsidiary of the Company whose shares have no par value or a par value other than NT$10-for the calculation of transaction amounts of 20 percent of paid-in capital under this Processing Procedure, 10 percent of equity attributable to owners of the parent shall be substituted; for calculations under the provisions of this Processing Procedure regarding transaction amounts relative to paid-in capital of NT$10 billion, NT$20 billion of equity	For the calculation of 10 percent of total assets under these Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used. In the case of the Company’s subsidiaries whose shares have no par value or a par value other than NT$10, for the calculation of transaction amounts of 20 percent of paid-in capital under these Procedures, 10 percent of equity attributable to owners of the parent shall be substituted. The Company shall announce and report on behalf of any subsidiary that is not a domestic public company any matters that such subsidiary is required to announce and report	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	attributable to owners of the parent shall be substituted. For information that is required to be publicly announced and reported on acquisitions and disposals of assets by the subsidiaries of the Company that is not itself a public company in Taiwan shall be reported by the Company, its announcement and report standard relative to paid- in capital or total assets shall be based on Paragraph 1 and 2. If a subsidiary of the Company has acquisitions and disposals of assets, the Company shall supervise the subsidiary to stipulate and implement the "Acquisition or Disposal of Assets Processing Procedure" in accordance with the provisions, and shall supervise the subsidiary to self-evaluate the "Acquisition or Disposal of Assets Processing Procedure" stipulated by itself at least once a year, whether it complies with the relevant guideline provisions specified by the Competent Securities Authorities and whether the acquisition or disposal of assets transaction is processed in accordance with the procedures set by itself, and deliver the self-evaluation report to the internal auditors of the Company for review or audit. With respect to the types of transactions listed below, when to be conducted between the	pursuant to the provisions on acquisitions and disposals of assets. The disclosure requirement for transaction amount reaches 20 percent of paid-in-capital or 10 percent of the total assets shall refer to the Company’s paid-in-capital or total assets defined in Paragraphs 1 and 2 of this Article. The Company shall supervise its subsidiaries adopt and implement the procedures for the acquisition or disposal of assets (Subsidiary Procedures) in compliance with the Regulations. The Company shall also see to it that its subsidiary: conduct annual internal audit on the Subsidiary Procedures in compliance with the Regulations set forth by the competent authorities, its assets acquisitions and disposal activities and implementation in compliance with the Subsidiary Procedure, and it produces written audit report and submit to the Company’s Internal Audit for inspection and audit.

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Items	Amended Version	Original Version	Reason
	subsidiaries of the Company and the Company, or the Company directly or indirectly holds 100 percent of the issued shares or authorized capital, shall be managed in accordance with the stipulations authorized by the Board of Directors of the subsidiaries: 1. Acquisition or disposal of equipment or right-of-use assets thereof held for business use. 2. Acquisition or disposal of real property right-of-use assets held for business use.
Article 12	The total amount of the Company and its subsidiaries may purchase or lease real property not for business use and its right-of-use assets or securities and limit of investment in individual securities are as follows: 1. The total amount of real property and its right-of- use assets that are purchased or leased not for business use shall not exceed 30% of the shareholders' equity of the Company. 2. The total amount of securities purchased shall not exceed the shareholders' equity of the Company and shall comply with the latest regulations of each Competent Authority. The limit of investment in individual securities shall	The ceiling on total amounts of real property and securities acquired by the Company and each subsidiary for non-business use, and the limits on individual securities are: 1. The total amount of real property purchased for non- business use shall not exceed 30% of the shareholders’ equity of the Company. 2. The total amount of the securities purchased shall not exceed the shareholders’ equity of the Company and shall meet the latest requirements promulgated by the respective competent authorities. The limit on investment in the individual securities shall not exceed 20% of the shareholders’ equity of the Company.	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	not exceed 20% of the shareholders' equity of the Company.
Article 13	The principles and strategies for the Company engaging in derivatives trading are as follows: 1. Type of Transactions: (1) The derivatives that the Company engages in include forward contracts, option contracts, future contracts, leveraged contracts or swap contracts whose value is derived from specified interest rates, financial instrument prices, commodity prices, foreign exchange rates, index price or rates, credit ratings or credit index, or other variable, or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. (2) The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term	The Company shall comply with the following trading principles and guidelines when engaging in derivatives trading: 1. Types of derivatives products: 1) The Company may engage in trading in derivatives products including forward contracts, options, futures, leverage contracts, or swaps, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests, and the hybrid contracts consisted by the above products. 2) “Forward Contracts” referred to in the preceding subparagraph A does not include insurance contracts, fulfillment contracts, after-sales service contracts, long-term lease contracts or long-term purchase or sale agreements. 2. Operating (hedging) strategies: Trading in derivatives products by The Company must be associated with risk exposures on revenues and expenditures, assets, liabilities or shareholders’ equity arising from the Company’s business operation. 3. Segregation of duties: 1) The Company shall not engage in derivatives trading unless approved by the Board of Directors or the competent	In compliance with the amendments of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" promulgated on November 26, 2018,

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Items	Amended Version	Original Version	Reason
	purchase (sales) contracts. 2. Operating (Hedge) Strategy: The derivatives trading engaged by the Company must be mainly related to the risk exposures of the Company's incomes and expenditures, assets, liabilities or the shareholders' equity. 3. Segregation of Duties: (1) The Company engages in derivatives trading shall be approved in accordance with Responsible Person in Charge or the Board of Directors stipulated in the Company's "Segregation of Duties Table for the Board of Directors and Managers" and "Proper Level of Responsibilities Subordinated to General Manager" before the transaction is allowed. (2) For the transaction personnel, confirmation personnel and settlement personnel of the Company engaged in derivatives trading, except for the specific responsible personnel assigned by	superintendents in accordance with the “The Chart of Authority and Responsibilities of the Board of Directors and Managers” and “The Level of Authority for Managers Junior to the President.” 2) Where the Company engages in trading derivatives products, the personnel in charge of transaction, confirmation and settlement shall be appointed by the chairman or the president. Moreover, where the Finance Department engages in trading derivatives products, the personnel in charge of transaction, confirmation and settlement shall be assigned by the Vice President of Finance. 3) Where the derivatives trading is associated with the Company’s products, raw materials or commodities, transactions shall be carried out by the Sales Department, Procurement or other assigned department(s) and supported by the Finance Department. Trading in relation to interest rates or exchange rates, shall be carried out by the Finance Department. 4. Disclosure - Public announcement and regulatory filing: The disclosure provisions are adopted in accordance with provisions prescribed in Chapter III - Public Disclosure of Information of the Regulations: 1) In the event where losses

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Items	Amended Version	Original Version	Reason
	the Chairman or the General Manager, the Finance Department may assign the trading personnel, confirmation personnel and settlement personnel of the derivatives trading, and assigned by the Finance Department Vice President. (3) When engage with the derivatives trading related to products or raw materials of the Company shall be conducted by the Sales Department or the Purchasing Department or the designated department, and assisted by the Finance Department. When engage with derivatives trading related to financial interest rates or foreign exchange rates, etc., are conducted by the Finance Department. 4. Announcement and Report of Information According to the relevant provisions specified in Chapter III Public Disclosure of Information	from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in these Procedures, the Company shall file a public report of relevant information on the MOPS within 2 days commencing immediately from the date of occurrence of the event. 2) The Company shall compile monthly reports on the balance of derivatives trading engaged in up to the end of the preceding month and file the information in the prescribed format into the MOPS by the 10th day of each month. 5. Essentials of performance evaluation: The accounting unit of the Finance Department shall on a monthly basis prepare and submit positions statements of derivatives trading to the senior superintendents authorized by the Board, the President and the Chairman for review, and shall submit these statements and report to the Board of Directors. 1) Hedging transactions: The basis for performance evaluation depends on the profit/loss resulted from the difference of acquisition costs of the hedged item and the derivative trading. 2) Specific-purpose transactions: Evaluation shall be based on the actual profit/loss of the transaction. 6. Total contract amount and limit on maximum loss:

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Items	Amended Version	Original Version	Reason
	of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" set by the Competent Securities Authorities: (1) If the loss of derivatives trading reaches the maximum amount of all or individual contract losses stipulated in the disposition procedures, it shall be reported within two days from the date of the fact occurrence. (2) The balance information of the derivatives trading in the previous month shall be announced and reported before the 10th of each month. 5. Key Points of Performance Evaluation: The Accounting Unit of the Finance Department shall prepare the report on a monthly basis, and shall report to the high level person in charge personnel authorized by the Board of Directors, General Manager and Chairman of the Board for reference, and report to the Board of Directors. (1)Hedgingtransactions:	1) Hedging operation: The total amount of hedging contracts shall not exceed the anticipated net portion of the account receivables yielded from business operation or the net position after asset and liabilities offsetting for the next six months. No stop-loss limits shall be set for hedging transaction. 2) Specific-purpose operation: The total amount of transactions of specified purposes shall not exceed the total amount of the items of transaction for the specified purposes. No stop-loss limit shall be fixed for hedging transactions for specified purposes and have definite hedging positions. 3) Trading-purpose operation: The Company does not engage in trading-purpose operation.

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Items	Amended Version	Original Version	Reason
	the gains and losses generated between the costs of hedged item acquisitions and engaged derivative transactions are the basis for performance evaluation. (2) Specific-purpose transactions: the actual profit and loss is the basis for performance evaluation. 6. Stipulation for the Maximum Limit of Total Contract Amount and Loss (1) Hedging Operations: The total amount of the Company's overall hedging contract is limited to the net of the Company's receivables and payables generated from the business or assets and liabilities offset within six months. Hedging shall not set stop loss limits. (2) Specific Purpose Operations: The total amount of the specific purpose transaction contract is limited to the total amount of the transactions for that specific purpose. This type of

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Items	Amended Version	Original Version	Reason
	transaction is to hedge specific purpose with clear corresponding hedge and shall not set stop loss limits. (3) Transactional Operations: The Company does not engage in transactional operations.

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Appendix 1

China Petrochemical Development Corporation

Articles of Incorporation

Duly amended at the 31[th] amendment in the annual shareholder meeting convened on June 8, 2017

Chapter One: General Provisions

• Article 1 This Company is duly incorporated under the name of “中國石油化學工業開 發股份有限公司 ” in Chinese and “China Petrochemical Development Corporation” in English.

Article 2 The scope of business of this Company shall be as follows:

1. To manufacture petroleum, sodium chloride, phosphoric acid and such chemicals and derivatives thereof.

2. To engage in the import and export, storage, delivery, purchase, and sale of the above-mentioned products, raw materials, chemicals and chemical materials.

3. To engage in the purchase and sale, import and export of the abovementioned business related items and/or general items.

4. To provide technological services for the products (by-products), manufacturing process and operation of equipment as enumerated in the aforementioned paragraphs.

5. To engage in research and development for chemicals.

6. To buy, sell, classify categories and distribute goods (clothing, electric appliances, books, stationery, automobile and motorcycle products, household appliances, and recreational facilities).

7. To operate restaurants and hotel businesses.

8. To engage in such business of the design and sale of computer software and registration and processing of computer information.

9. To delegate construction firms to build commercial buildings, to lease and sell public condominiums, to delegate construction firms to build factories for general industrial use, to lease or sell warehouses, to accept the delegation from the government authority in charge of the industries to develop, lease, sell and manage industrial areas.

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11. To invest in recreational resorts and golf driving ranges (not to exceed a maximum of five holes).

12. To invest and build parking facilities within urban planning areas.

13. To invest in petroleum (gas) refilling stations to supply and sell gasoline, diesel, and liquefied petroleum gas for special purposes and concurrently invest in basic lubricating maintenance shops for automobiles and motorcycles.

14. To operate new power plant(s).

15. To undertake environmental protection projects (clean-away, disposal of general waste, general industrial waste, hazardous industrial waste and the engineering thereof).

16. To engage in the import and export and sale of feed and feed additives.

17. ZZ99999. In addition to the approved scope of business, the Company may engage in all businesses except those which are otherwise prohibited or restricted by law.

18. Article 3 The Company shall have its head office in Kaohsiung City and may have its factories duly established in appropriate locations within the territory of the Republic of China, and may set up branches and/or business offices established at various locations inside or outside the territory of the Republic of China whenever the Company deems it necessary for the actual operation of business and the same has been approved by the Board of Directors.

19. Article 4 If the Company deems it is necessary to carry out its business, the Company may provide endorsements and guarantees and act as a guarantor.

The total amount of the Company’s reinvestment may exceed 40% of the total paid-in capital.

Any matters regarding the endorsement and guarantee and reinvestment shall be resolved by the Board of Directors.

• Article 5 Public announcements of the Company shall be duly made in accordance with Article 28 of the Company Law and other relevant laws and regulations.

Chapter Two: Shares

Article 6 The total capital amount of the Company is thirty-six billion New Taiwan Dollars (NT$36,000,000,000), which is divided into three billion six hundred million (3,600,000,000) shares with a par value of ten New Taiwan Dollars (NT$10) each and will be issued in installments by the Board of Directors.

An amount of three hundred million New Taiwan Dollars (NT$300,000,000)

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from the above total capital amount divided into thirty million (30,000,000) shares with a par value of ten New Taiwan Dollars (NT$10) each are reserved for the issuance of employee stock options by installments by the Board of Directors.

In compliance with related regulations to share repurchasing, the Board is authorized to buy back the issued shares per its discretion.

• Article 7 The share certificates hereof shall be name-bearing certificates, duly signed by or affixed with seals by the Chairperson and a minimum of two Directors, and duly authenticated by the competent authority or the issuance registry institution accredited by the competent authority before issuance. The Company’s share certificates shall be duly issued in accordance with the requirements set forth under Articles 162, 162-1 and 162-2 of the Company Law.

• Article 8 The Company shall take charge of stock affairs in accordance with the Company Law, “Regulations Governing Stock Affairs of Public Companies” and relevant laws and regulations.

• Article 9 The Company’s issuance of new shares by means of increasing share capital shall be implemented in accordance with relevant laws and regulations, and 10%-15% of the total amount of the new shares shall be reserved for subscription by employees. The shares which are not subscribed to by the current shareholders may be open to public issuance or be subscribed by specific persons through negotiation.

• Article 10 No registration of transfer of shares shall be made within sixty days (60) prior to an annual shareholder meeting, nor within thirty days (30) prior to a special (extraordinary) shareholder meeting, nor within five (5) days prior to the day on which dividend, bonus or other benefits is scheduled to be paid by the Company.

Chapter Three: Shareholder Meetings

• Article 11 The shareholder meeting hereof is divided into the annual shareholder meeting and special shareholder meeting. The former shall be convened annually within six months from the closing of each fiscal year. The latter may be duly convened according to relevant laws whenever the Company deems necessary.

• Article 12 The notices for shareholder meetings shall set out the discussion items at the meeting and be served to all shareholders through their addresses shown in the shareholder register thirty (30) days in advance of an annual shareholder meeting and fifteen (15) days in advance of a special shareholder meeting. Subject to the consent of the shareholders, the aforementioned notices may be

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served by electronic methods. Such notices may be duly served to shareholders who hold fewer than one thousand shares each by means of public announcement according to Article 26-2 of the Securities and Exchange Act. With respect to the discussion items at the meeting and if the law or regulation has provided otherwise, the laws shall prevail.

• Article 13 Unless otherwise provided for in the Company Law, resolutions shall be adopted by a majority vote at a meeting which is attended by shareholders who represent a majority of the total issued shares.

• Article 14 A shareholder of the Company shall have one vote for each common share he or she holds unless otherwise prescribed by law.

• Article 15 A shareholder may issue a proxy in the form printed by the Company to expressly stipulate the scope of authorized powers to authorize representative(s) to attend a shareholder meeting on his or her behalf.

The use of the proxy mentioned in the preceding paragraph shall be complied with the Company Law, “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” and relevant laws and regulations.

• Article 16 Where a shareholder meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairperson. During the Chairperson’s absence or unavailability for performance of duties for any reasons, the delegation shall be duly handled in accordance with Article 208 of the Company Law.

Where a shareholder meeting is convened by a convener other than the Board of Directors, such meeting shall be chaired by the convener. In case of two or more conveners, one shall be elected or appointed from among themselves to chair the meeting.

• Article 17 All resolutions passed at the shareholder meeting shall be recorded in the written minutes, which shall be signed or affixed with seal by the Chairperson and served to all shareholders within twenty (20) days after the meeting. The minutes, the attendance book and the proxies shall be duly archived by the Board of Directors according to the relevant laws.

The minutes of the shareholder meeting mentioned in the preceding paragraph shall be duly produced and archived in accordance with Article 183 of the Company Law.

The minutes of shareholder meeting, financial statements and the decisions regarding allotment of earnings or coverage of loss shall be duly distributed to the shareholders in accordance with Articles 183 and 230 of the Company Law.

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• Article 18 A shareholder meeting shall be convened at the Company’s head office or any other place within the territory of the Republic of China as resolved by the Board of Directors.

Chapter Four: Directors

• Article 19 The Company will have a Board of Directors consisting of Seven to Eleven directors. Each director will serve an office term of three years and may be reelected. Three Directors shall be independent.

The Company’s Directors shall be elected through cumulative voting. The Company shall adopt candidate nomination system for the election of Directors. Shareholders shall elect Directors from the list of director candidates published by the Company. All procedures shall comply with related regulations of the Company Act and Securities and Exchange Act.

The elections of Independent Directors and non-independent Directors shall proceed as one election, but the number elected shall be calculated separately.

The Board consists of directors. Pursuant to Article 208 of the Company Act, directors shall elect one chairperson and one vice chairperson. The total number of shares held by the entire board shall exceed the minimum requirements specified in the relevant Securities and Exchange Act. The Company may purchase liability insurance for Directors to protect them against potential liabilities arising from exercising their duties during their tenure. For all matters related to the purchase of the insurance, the Board of Directors is authorized with full powers to act as required.

Article 20 The duties of the Board of Directors are as follows:

1. Resolve the Company’s business policies.

2. Enact and amend rules regarding the Company’s organization, and incorporate and dissolve the Company’s branch(es).

3. Review the rules of endorsement, guarantee and other major regulations and agreements.

4. Resolve decisions regarding investment and reinvestment.

5. Appoint and discharge managers.

6. Review budgets and prepare financial statements.

7. In the shareholder meeting, propose amendments to the Articles of Incorporation, change in capital, dissolution, merger, acquisition and division of the Company.

8. In the shareholder meeting, propose allotment of earnings and coverage of loss.

9. Enforce the decisions resolved in the shareholder meeting.

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11. Resolve other major decisions and exercise other duties and obligations as granted by relevant laws and regulations and by the shareholder meeting.

12. Article 21 The Board of Directors meeting shall be convened once every three months at minimum. The notices of a Board of Directors meeting shall expressly indicate the subject(s) of the meeting and be served to all Directors seven days prior to the date scheduled for the meeting. In case of an emergency, a Board of Directors meeting may be convened at any time. Unless otherwise prescribed by law, a Board of Directors meeting shall be duly convened and chaired by the Chairperson. Upon the Chairperson’s leave, absence or unavailability for performance of duties, the delegation shall be duly handled at the meeting in accordance with Article 208 of the Company Act.

The first Board of Directors meeting of every session shall be convened by the Director who wins the most ballots representing the voting rights during the election.

The notices to the Board of Directors meeting mentioned in the preceding paragraph may be served in writing or by means of facsimile or e-mail.

• Article 22 Unless otherwise provided for in the Company Act, decisions at the Board of Directors meeting shall be resolved by a majority vote in the meeting which is attended by Directors who represent a majority of the total number of Directors.

• Article 23 A director may duly authorize another director by written proxy to attend a Board of Directors meeting and to exercise the vote for all the matters discussed in that meeting, provided that the authorized Director may only accept one representation.

• Article 24 The Chairperson shall exercise its duties in accordance with relevant laws and regulations, the Company’s Articles of Incorporation, the decisions resolved at the shareholder meeting and Board of Directors meeting. The Chairperson is the representative of the Company.

• Article 25 In the event that an Independent Director is terminated from his position with or without cause, the Board of Directors shall fill the vacant board seat during the next shareholders’ meeting.

In the event that over one third of the Directors or all Independent Directors are vacant from their positions, the Board of Directors shall call for a special shareholder’s meeting to fill the vacant board seats within sixty days from the inception of the vacancy.

The term for the elected Directors due to any of the above-mentioned scenarios shall be the remaining terms of the vacancy.

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Article 26 The duties of the audit committee are:

1. Supervise the business operations of the Company.

2. Investigate the Company’s business operations and financial status.

3. Audit the books and documents of the Company.

4. Audit books and documents prepared by the Board of Directors and submitted at the shareholder meeting, and report to the Shareholder Meeting.

5. Exercise other duties and obligations as granted by laws and regulations and by the Shareholder Meeting.

Article 27

(Delete)

Article 28 The salary and remuneration of Directors shall be duly proposed by the Company’s Remuneration Committee and submitted to the Board of Directors for final approval based on the extent of their participation in the business operations and the level of their contribution to the Company with reference to the international or domestic industrial standards.

The organizational rules and regulations for implementing the duties of the Remuneration Committee mentioned in the preceding paragraph shall be duly enacted by the Board of Directors in accordance with Article 14-6 of the Securities and Exchange Act, other relevant laws and regulations and requirements of the competent authority.

• Article 28-1 In view of the business confidentiality pertaining to general operations, production technologies, or formulation of raw materials which are vulnerable to be illegally replicated by our downstream customers and their affiliates into manufacturing processes resulting in unintended pricing or unfair market competition or the possibility that downstream customers might ally to control the supply of our products to the market, thus leading to involuntary price increases and hence causing financial loss, the Company shall enhance the regulations pertaining to the Directors represented by downstream customers or related parties to carry out their fiduciary duties in directorship and business confidentiality and internal control process to oversee related transactions, in order to protect the best interest of our shareholders.

Major shareholder with over 1% of total shares outstanding, Directors (including legal representatives), managers, and employees should adhere to the Standards of Ethical Conduct and the Management Integrity Code.

Chapter Five: Managers and Other Employees

• Article 29 Unless otherwise prescribed by law, the Company shall have one Chief Executive Officer (CEO), one General Manager and a certain number of Vice General Managers who shall be duly appointed, discharged and compensated in accordance with Article 29 of the Company Law, Article 14-6 of the Securities and Exchange Act and other relevant laws and regulations.

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Unless otherwise prescribed by law, the Board of Directors is authorized with full power to resolve various duties mentioned in the preceding paragraph, and the Board of Directors may authorize the Chairperson with full power to make the decision.

Other employees shall be duly hired by the Chairperson and General Manager in accordance with relevant laws and regulations and the rules of the Company.

• Article 30 If it is necessary for business operation, the Company may retain a certain number of consultants. The matters related to the engagement, discharge and compensation shall be proposed by the Chairperson and resolved by Board of Directors. The above resolution shall be adopted by a majority vote at the Board of Directors meeting which is attended by Directors who represent a majority of the total number of director seats.

Chapter Six: Accounting

• Article 31 Upon closing of each fiscal year, the Board of Directors shall prepare the following documents and shall forward the same to the Audit Committee for auditing no later than the thirty (30) days prior to the meeting date of the annual shareholder meeting:

• Business report;

• Financial statements;

• Proposals of profit allotment or loss coverage.

Article 32 If the Company has earnings, it shall set aside 3% of the balance as remuneration to the employees and no greater than 2% of the balance as remuneration to directors. When there are accumulated losses, the Company shall offset the appropriate amounts before remuneration.

The above remuneration to the employees may be allotted in cash or stock, eligible personnel includes employees at subsidiaries that meet the requirement by the Board. The above remuneration to the directors shall be in cash.

The earnings in paragraph one means the annual pre-tax earnings before deduction of the remuneration to employees and directors.

Distribution of the employees’ and directors’ remuneration shall be resolved at board meetings, with over two-third of directors in attendance and approved by over half of the attending directors, and reported to the shareholder’s meeting.

• Article 32-1 The Company may duly use its reserve to distribute dividends, appropriate capital, and issue new shares in accordance with relevant laws and regulations.

If the Company has earnings, after payment of taxation, it shall offset the losses in previous years, and set aside a legal capital reserve and special capital in accordance with relevant laws and regulations or requested by the authorities in

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charge. With respect to any balance herein together with the undistributed cumulative profits from previous years and from current year, the Board of Directors shall prepare an earnings distribution proposal and submit to the shareholder meeting for approval according to the following dividend policy.

The Company is in a highly capital intensive industry, subject to volatility and high levels of competition. Where the Company is subject to the influence of the global economy and changes in industrial performance, the Company should take into account the Company’s business operations, capital needs and status of the competitive environment, interests of shareholders and the Company’s own financial planning in the allotment of its profits. Under such circumstances, the Company may set aside profits into a special reserve either in whole or in part to assure financial stability and sustainability. The Company may allot dividends in cash or stock. In the case that the allotment is made by way of stock dividend, the ratio for the stock dividend shall not exceed 50% of the total distribution unless the ratio of the Company’s total liabilities to total assets is equivalent or above 50% or otherwise prescribed in relevant laws and regulations.

Chapter Seven: Bylaws

• Article 33 The Company’s Organization Rules shall be separately enacted by the Board of Directors.

• Article 34 Any matters inadequately provided for herein shall be subject to provisions concerned set forth in the Company Law and relevant laws and regulations.

• Article 35 These Articles were duly enacted on April 24, 1969 and were duly amended on December 20, 1973 as the 1[st] amendment; May 27, 1976 as the 2[nd] amendment; June 27, 1978 as the 3[rd] amendment; April 24, 1979 as the 4[th] amendment, April 22, 1980 as the 5[th] amendment; April 28, 1981 as the 6[th] amendment; May 8, 1982 as the 7[th] amendment; January 7, 1983 as the 8[th] amendment; April 1, 1983 as the 9[th] amendment; February 10, 1984 as the 10[th] amendment; February 28, 1991 as the 11[th] amendment; April 28, 1992 as the 12[th] amendment; April 15, 1993 as the 13[rd] amendment; July 26, 1994 as the 14[th] amendment; October 28, 1994 as the 15[th] amendment; December 28, 1995 as the 16[th] amendment; June 7, 1997 as the 17[th] amendment; June 19, 1998 as the 18[th] amendment; May 24, 2000 as the 19[th] amendment; June 14, 2001 as the 20[th] amendment; June 26, 2002 as the 21[st] amendment; May 12, 2003 as the 22[nd] amendment; June 21, 2004 as the 23[rd] amendment; June 10, 2005 as the 24[th] amendment; June 30, 2006 as the 25[th] amendment; June 18, 2010 as the 26[th] amendment; June 24, 2011 as the 27[th] amendment; and June 27 , 2012 as the 28[th] amendment. The twenty-ninth amendment was made on June 28, 2013. The 30[th] amendment was made on June 24, 2016. The 31th amendment was made on June 8th, 2017.

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Appendix 2

China Petrochemical Development Corporation Rules Governing the Proceedings of Shareholder Meetings

Amended and resolved at the annual shareholder meeting convened on June 25, 2015.

• Article 1 These Rules are duly enacted in accordance with Article 182~1 of the Company Law.

Unless otherwise prescribed by relevant laws and ordinances or the Company’s Articles of Incorporation, the Company shall duly convene the shareholders’ meeting exactly in accordance with these Rules.

• Article 2 Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the board of directors.

This Corporation 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 or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders meeting or before 15 days before the date of a special shareholders meeting. This Corporation shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have prepared the shareholders meeting agenda 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 this Corporation Stock Affairs Office as well as being distributed on-site at the meeting place

A shareholder holding 1 percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. In addition, when the circumstances of any subparagraph of Article 1721, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda.

Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days.

Shareholder-submitted proposals are limited to 300 words, and no proposal

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containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the regular shareholders meeting and take part in discussion of the proposal.

Prior to the date for issuance of notice of a shareholders meeting, this Corporation shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. At the shareholders meeting the board of directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.

The term “shareholders” as set forth in these Rules denotes shareholders themselves and the proxies entrusted by shareholders.

For each event of a shareholder meeting, a shareholder may issue a proxy in the form printed by the Company to expressly stipulate the scope of authorized powers to authorize representative(s) to attend a shareholder meeting on his or her behalf. The use of the proxy shall be complied with the Company Law, “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” and relevant laws and regulations.

Article 3 The shareholders’ meeting notice shall include the check-in time, report-in location, and other considerations to be sent to shareholders together with the attendance card.

Registration shall be open at least 60 minutes prior to the start of the shareholders’ meeting with the registration location clearly marked and adequate qualified personnel available for processing.

Attending shareholders shall present attendance cards with represented shares clearly marked.

Shareholders should be issued an official attendance card by the Company, and present original ID documents to attend the shareholders’ meeting. Shareholders attending on behalf of others must have a proxy form along with official identification available for verification.

To uphold Corporate Governance standards and protect shareholder rights, the Company shall establish Registration Procedures for attending shareholder meetings, and submit these procedures for approval by the Board of Directors.

Article 4 The participation and voting by shareholders shall be duly calculated based on the number of shares they hold.

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.

Article 5 The venue for a shareholders meeting shall be the premises of this Corporation, or a place 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

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Article 6 The shareholder meeting shall be duly chaired by the chairman if convened by the Board of Directors. In the chairman’s absence or unavailability, the vice chairman shall chair the meeting on his behalf. In the event that the vice chairman is absent or unavailable as well, the chairman shall, in advance, appoint a director to act in his place. In the event that the chairman does not appoint an agent, one director shall be elected from among themselves to act in his place.

The terms of office shall more than 6 months and the person who shall be a managing director or director familiar with the operation of the company as if aforementioned chairman be a corporate director.

It is advisable that shareholders meetings convened by the board of directors be attended by a majority of the directors.

In the event that the shareholder meeting is convened by a person outside the Board of Directors, the shareholder meeting shall be chaired by that convener. In case of two or more conveners, one of them shall be elected from among themselves to chair the meeting.

The Company may appoint the retained Attorney(s)-at-Law, Certified Public Accountant(s) or relevant personnel to participate in a shareholder meeting as an observer.

• Article 7 The staff members who take charge of the shareholder meeting affairs shall wear identification certificates or armbands.

• Article 8 The Company shall record the entire process of from accepting reporting, meeting procedure so as voting process.

Recorded or videotaped and shall be archived for a minimum of one year.

• Article 9 The chairperson shall call the meeting to order at the time scheduled for the meeting. In the event that the meeting is attended by shareholders representing less than half of the total issued shares, the chairperson may announce a postponement of the meeting, however, there may not be more than two postponements in total and the total time accumulated in the postponement(s) shall not exceed one hour. In the event that the meeting is still attended by shareholders representing less than one-third of the total issued shares after two postponements, the chairperson may announce that the meeting should be canceled. In the event that the meeting is attended by shareholders not up to the specified quorum but representing more than one-third of the total issued shares after two postponements, a tentative resolution may be passed in accordance with Article 175 of the Company Law. A decision on an extraordinary issue specified by law shall be duly resolved according to the relevant laws and ordinances.

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In the event that the total number of shares represented by attending shareholders reaches a majority of the total issued shares before that same shareholder meeting is adjourned, the chairperson may bring the tentative resolution(s) so adopted into the shareholder meeting anew to be duly resolved in accordance with Article 174 of the Company Law.

• Article 10 In the event that the shareholder meeting is convened by the Board of Directors, the agenda shall be worked out by the Board of Directors. The shareholder meeting shall be duly convened based on the arranged agenda, which shall not be changed unless duly resolved by the shareholder meeting.

In the event that the shareholder meeting is convened by a convener beyond the Board of Directors, the provision set forth under the preceding paragraph may apply, mutatis mutandis.

The chairperson shall not announce adjournment of the meeting until the agenda in the two preceding paragraphs is completed (including occasional (extemporaneous) motions) unless duly resolved in the meeting.

After a shareholder meeting is adjourned, the shareholders may not appoint another chairperson to renew that meeting at the same arena or a new arena. In the event that the chairperson announces adjournment of the meeting against the Rules Governing the Proceedings of Shareholder Meetings, however, a member of the Board may be elected by a majority of the present shareholders to act as the chairperson to reconvene the meeting.

• Article 11 An attending shareholder shall issue and submit a floor note before speaking at the shareholder meeting. The floor note shall expressly describe the subject of his or her opinions and his or her shareholder account number (or the code of the participation certificate) so that the chairperson may fix the order of speaking.

A shareholder who has submitted a floor note but does not speak is deemed to have not taken the floor. In the event that the actual contents of the shareholder’s statement are found inconsistent with the entries of the floor note, the shareholder’s spoken statement shall prevail.

While an attending shareholder is taking the floor, other shareholder(s) shall not interrupt or interfere with the current floor unless agreed upon by the chairperson and the speaking shareholder. The chairperson shall stop an offender.

• Article 12 On the same issue, each shareholder shall not take the floor more than twice and a shareholder shall not speak more than three minutes for each round unless agreed upon by the chairperson.

The chairperson may stop a shareholder who violates the specified requirements or has spoken beyond the scope of the subject at issue.

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• Article 13 In the event that a juristic (corporate) person is entrusted to participate in a shareholder meeting, that juristic (corporate) person may appoint only one representative to participate in the meeting.

In the event that a juristic (corporate) person shareholder appoints two or more representatives to participate in a shareholder meeting, only one representative may speak for the same issue.

• Article 14 After a shareholder speaks on the floor, the chairperson may answer either by himself or herself or through a designee.

• Article 15 Where the chairperson believes an issue has been discussed in the meeting up to the level for voting, the chairperson may announce discontinuance of the discussion process and bring that issue to a vote.

• Article 16 The ballot inspector(s) and ballot recorder(s) of issues in shareholder meeting shall be appointed by the chairperson. The ballot recorder(s) may be selected from company’s stock affairs department for stock affairs but the ballot inspector(s) shall be selected from the shareholders.

• Unless otherwise provided for in law and company’s articles of incorporation, decisions at the shareholder meeting shall be resolved by a majority vote of the shareholders attending the meeting. An issue is deemed to have been duly resolved after the chairperson enquires from all participants but no objection is heard. The validity of the decision so resolved is equally valid as a decision duly resolved through the balloting process.

The recording procedure of issues of shareholder meetings shall be processing publicly in shareholder meetings and the results including statistical weights shall be reported on the spot and shall be recorded into the minutes of the meeting.

• Article 17 In the event that an amendment or a substitute comes out of the same issue, the chairperson shall fix the order of balloting in consolidation with the original issue. When one among them is duly resolved, other issue(s) is (are) deemed to have been vetoed and no voting process is required.

• Article 18 During the process of the meeting, the chairperson may announce a recess at an appropriate time. Upon occurrence of force majeure, if any, the chairperson may rule that the meeting be temporarily suspended and announce the time to resume the meeting as the actual situation may justify. Or the shareholder meeting may resolve a decision to postpone or resume the meeting without a notice within five days, in accordance with Article 182 of the Company Law.

• Article 19 All present shareholders are obliged to comply with the Rules Governing the Proceedings of Shareholder Meetings, comply with decisions resolved and

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maintain sound order of the arena of the meeting.

In the event that a shareholder violates the Rules Governing the Proceedings of Shareholder Meetings, defies the chairperson’s rectification or obstructs progress of the meeting or objects to the action to stop him or her, the chairperson may instruct the rectification (or security) personnel to help maintain order of the meeting.

The rectification (or security) personnel who maintain order of the meeting site shall wear the “rectification officer” arm-band or identification certificate or wear security personnel uniforms.

• Article 20 These Rules and any amendments hereof shall be put into enforcement after being resolved at the shareholder meeting.

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Appendix 3

China Petrochemical Development Corporation Procedures for the Acquisition or Disposal of Assets

Amended and resolved at the annual shareholder meeting convened on June 8, 2017.

• Article 1 These Operational Procedures (Procedures) are formulated in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies promulgated by the Financial Supervisory Commission (the Regulations).

In the case that this Procedure is incomplete, all procedures shall be in accordance with related Articles of Securities and Exchange Act.

Article 2 The term “assets” as used in these Procedures is applicable within the scope enumerated below:

1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities, etc.

2. Real estate (including land, building and structures, real estate held for investment purposes, land usage right, inventories of construction enterprises) and equipment.

3. Memberships.

4. Patents, copyrights, trademarks, franchise rights, and other intangible assets.

5. Claims of financial institutions (including receivables, foreign exchange rebate, loans, and overdue receivables).

6. Derivatives.

7. Assets acquired or disposed of in connection with mergers, spin-off, acquisitions, or share transfer in accordance with law.

8. Other major assets.

Article 3 Term definitions used for these Procedures are as follow:

1. The term “Derivative Products” means forward contracts, options, futures, leverage contracts, or swaps, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests, and the hybrid contracts consisted by the above products. The term “Forward Contracts” does not include insurance contracts, fulfillment contracts, after-sales service contracts, long-term lease contracts or longterm purchase or sale agreements.

2. The term “Assets Acquired or Disposed by Mergers, Spin-off, Acquisition or Shares Transference Pursuant to Laws” means assets acquired or disposed of by mergers, spin-off, acquisition or share transfer, pursuant to Business Mergers and Acquisitions Act, Financial Holding Companies Act, Financial

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Institutions Merger Act or other acts; or share transfer from other companies by issuing new shares of its own as the consideration therefor (hereinafter “transfer of shares”) pursuant to the sixth paragraph of Article 156-8 of the Company Act.

1. The term “related party” and “subsidiaries” as used in these Procedures mean those parties defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

2. The term “professional appraisal” as used in these procedures, means a certified appraiser or a company in the business of appraising real property or equipment.

3. The term “date of occurrence” refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of Boards of Directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.

4. The term “investments in China” means investments made in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area by the Investment Commission of the Ministry of Economic Affairs, R.O.C.

5. The term “competent authorities” means the government entities in charge of the Stock and Exchange Act.

Article 4 Authority for approval, appraisal, procedures, transaction terms, and decision making processes of evaluation and management for the acquisition or disposal of assets:

1. The acquisition or disposal of real estate and other fixed assets:

   • 1) Authority for approval, evaluation and management shall be in accordance with CPDC’s internal regulations “The Chart of Responsibilities of the Board of Directors and Managers,” “The Level of Authority for Managers Junior to the President,” “Rules Governing Fixed Assets Management” and Article 7 of this procedure.

   • 2) Procedures to determine transaction terms shall be determined by reference to market value, publicly announced current value, recent market transaction price of neighboring or closely valued property or the report issued by a certified appraiser. Final prices shall be carried out by one of the following: price inquiry, price comparison, price negotiation or open tender.

   • 3) The implementation unit shall be the department in charge of real property and fixed assets management.

2. Acquisition or disposal of securities, membership or intangible assets:

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4. 1) Authority of approval, evaluation and management shall be in accordance with CPDC’s internal regulation “The Chart of Responsibilities of the Board of Directors and Managers”, “The Level of Authority for Managers Junior to the President” and Article 8 of this procedure.

5. 2) Procedures to Determine Transaction Terms:

6. a. For securities purchased and sold on a centralized exchange market or OTC exchange, the price shall be decided by the market price at the time of the transaction.

7. b. For securities not acquired or disposed of on a centralized exchange market or OTC exchange, the price shall be determined by reference to net value per share, profitability, growth potential, financial analysis reports, prevailing interest rate, bond yield or price, creditability of debt issuers and transaction price at the time.

8. c. For the acquisition or disposal of membership certificates or intangible assets, the price shall be integrally evaluated by reference to the fair market value, future anticipated added-value, and produced benefit.

3) Implementation unit:

  - a. The evaluation of acquisition or disposal of securities described in the first sub-paragraph of Article 2, paragraph 1 of this Procedure shall be conducted by the finance department or re-investment department, and shall be executed by such upon obtaining appropriate approval in accordance with the Procedure.

  - b. The evaluation of acquisition or disposal of non-securities assets, membership certificates, or intangible assets shall be conducted by the related departments, and shall be executed by such departments upon obtaining appropriate approval in accordance with the Procedure.

1. Acquisition or disposal of claims of financial institutions: In general, the Company does not invest in claims of financial institutions. In the event that the Company intends to engage in transaction with acquisition or disposal of financial institution claims, the Company shall report and obtain approval from the Board of Directors and formulation of the appropriate procedure shall follow.

2. Article 5 Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters whom provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall not be a related party of any party to the transaction.

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Unless otherwise provided for by other laws, the Company engaging in the acquisition or disposal of assets shall retain the relevant contracts, meeting minutes, registry, appraisal report, and the opinion books by CPA, attorneys, and security underwriters at the Company for at least 5 years.

Court documents can be substituted for reports or opinions issued by a CPA or certified appraiser if the assets are acquired or disposed through court auction.

In the case of the Company’s acquisition or disposal of assets has to be approved by the Board according to this procedure or the prescription of other laws, if a director shows dissent and the dissent is recorded or presented in a written statement, the dissent of the director should be submitted to the audit committee.

When a transaction involving the acquisition or disposal of assets is submitted for discussion by the Board of Directors pursuant to the preceding paragraph, the Board of Directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the Board of Directors meeting.

Any transaction involving major assets or derivatives shall be approved by more than half of all Audit Committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all Audit Committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution by the audit committee shall be recorded in the minutes of the Board of Directors meeting.

The calculation of the transaction amounts referred to in article 7 and article 8 shall be done in accordance with Article 6, paragraph 2 of these Procedures, and “within the preceding year” as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.

Article 6 For acquisition or disposal of assets, provided that one of the following conditions exists, the Company shall publicly announce and file the relevant data and information to the Financial Supervisory Commission’s designated Market Observation Post System, or MOPS in the appropriate format as prescribed by regulations within two days commencing immediately from the date of occurrence of the event:

1. Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of the Company’s paid-in capital, 10 percent or more of the Company's total assets,

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or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements or subscription or redemption of domestic money market funds issued by securities investment trust enterprises.

1. Merger, spin-off, acquisition, or transfer of shares.

2. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in these Procedures adopted by the Company.

3. For acquisition or disposal of assets which are for operating using, and the trading counterparty are not related party, and the paid-in capital referred to in the following subparagraphs

1) Paid- up capital bellow NT$10 billion, transaction amount more thanNT$500 million.

2) Paid- up capital more than NT$10 billion, transaction amount more than NT$1 billion.

1. The real property for construction use acquired or disposed by construction business, where the trading counterparty is not a related party and the transaction amount is more than NT$500 million.

2. Where land is acquired under an arrangement on engaging others to build on the Company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction is more than NT$500 million.

3. Where an asset transaction other than any of those referred to in the preceding six subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of the Company’s paid-in capital or NT$300 million. Provided, this shall not apply to the following circumstances:

1) Trading of government bonds.

2) Securities trading by investment professionals on foreign or domestic securities exchanges or over-the-counter markets, or subscription of securities in the domestic primary market or ordinary bonds which aren’t related to equity.

• 3) Trading of bonds under repurchase/resale agreements or subscription or redemption of domestic money market funds issued by securities investment

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trust enterprises.

The transaction amounts in the preceding paragraphs shall be calculated in accordance with the methods provided below:

1. The amount of any individual transaction.

2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year.

3. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year.

4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

“Within the preceding year” as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Procedures need not be counted toward the transaction amount.

The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by itself and any subsidiaries of companies that are not domestic public companies and file the information in the prescribed format into the Financial Supervisory Commission’s designated MOPS by the 10th day of each month.

When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced within 2 days and reported in their entirety.

Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the preceding article, a public report of relevant information shall be made on the MOPS designed by the Financial Supervisory Commission within 2 days commencing immediately from the date of occurrence of the event:

1. Change, termination, or rescission of a contract signed in regard to the original transaction.

2. The merger, spin-off, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract.

3. Change to the originally publicly announced and reported information.

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5. Article 7 In acquiring or disposing of real estate or equipment by the Company, unless otherwise transacting with a government agency, commissioning others to build on its own land, leased land by appointing a constructor, or acquiring or disposing equipment for business use, where the transaction amount reaches 20% of the Company’s paid- in capital or NT$300 million, the Company shall obtain an appraisal report issued by a professional appraisal and further comply with the following provisions prior to the date of occurrence of event:

6. Due to special circumstances, where a limited price, specified price or special price is deemed as the basis of reference for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction.

7. Where the transaction amount is more than NT$ 1 billion, appraisals from two or more professional appraisers shall be obtained.

8. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (abbreviated as ARDF hereafter) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

   • 1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.

   • 2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.

9. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

Except where a limited price, specified price, or special price is employed by a construction enterprise as the reference basis for the transaction price, if an appraisal report cannot be obtained in time and there is a legitimate reason for the delay, the report, and the certified public accountant's opinion under subparagraph 3 of the preceding paragraph, shall be obtained within 2 weeks commencing immediately from the date of occurrence.

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• Article 8 In acquiring or disposing of securities, prior to the date of occurrence of the event, the Company shall obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in evaluating the transaction price. In addition, if the transaction amount is 20 percent of the Company's paid-in capital or NT$300 million or more, the Company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to securities with publicly quoted prices in an active market or in compliance with regulations set by the Financial Supervisory Commission.

In acquiring or disposing of membership certificates or intangible assets with a transaction amount of 20 percent of the Company’s paid-in capital or NT$300 million or more, except in cases where the counterparty of the transaction is the government agency, the Company shall engage a certified public accountant to provide an opinion regarding the reasonableness of the transaction price prior to the date of occurrence of the event. The CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

• Article 9 When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of the Company’s paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except for trading government bonds, RP and RS bonds, and the purchase or redemption of domestic money market funds issued by securities investment trust enterprises, in addition to following the provisions in Article 7 and 8 of this Procedures, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been submitted and approved by the Audit Committee and obtained resolutions by the Board of Directors. When a proposal is submitted for discussion by the Board of Directors, the Board of Directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the Board of Directors meeting.

• The purposes, necessity, and anticipated benefits of the acquisition or disposition of the assets;

• The reasons for selecting the related persons as the transaction counterparty;

• Relevant information for evaluating the reasonableness of the terms of the anticipated transaction pursuant to the provisions of Items 4 and 6 of this Article and Article 10-1;

• Information such as the date and price at which the related party originally

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acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party;

1. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the uses of fund;

2. Transactions value of 10 percent of the Company’s total assets or more, accountant’s opinions, or appraisal reports in compliance with the provisions of Article 7 or 8 of these Procedure;

3. Restrictive covenants and other important stipulations associated with the transaction.

The calculation of the transactions referred to in the preceding paragraphs with amounts reach 20 percent of the Company’s paid-in capital, 10 percent of total assets or NT$300 million or more shall follow the provisions in the 2nd paragraph of Article 6 of these Procedures. “Within the preceding year” as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which have been submitted and approved by the Audit Committee and passed resolutions by the Board of Directors in accordance with these Procedures need not be counted toward the transaction amount.

Matters for which paragraph 1 requires approval by the Audit Committee shall first be approved by more than half of all Audit Committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all Audit Committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

In acquiring or disposing of assets, the Company shall determine if the counterparty of the transaction is a related party, and in judging the relationship, in addition to legal formalities, the substance of the relationship shall also be considered. In acquiring real property from a related party, the Company shall evaluate the reasonableness of the transaction costs by the following means, and shall also engage a CPA to check the appraisal and render a specific opinion.

1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. “Necessary interest on funding” is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.

2. Total loan value appraisal from a financial institution where the related party

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has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties.

Where land and structures are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph.

Where the Company acquires real property from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with provisions prescribed in the 1st paragraph of this Article, and paragraph 4 of this Article does not apply:

1. The related party acquired real property by inheritance or as a gift.

2. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction.

3. The real property is acquired through signing of a joint development contract with the related party, or contracting with a related party in the construction of real estate such as contracted construction with its own land or contracted construction on leased land.

With respect to the acquisition or disposal of business-use equipment between the Company and its subsidiaries, the Board of Directors may delegate the chairman to make decision under a pre-approved transaction amount by the board or in pursuant to the amount set forth in the Company’s internal guideline “The Chart of Responsibilities of the Board of Directors and Managers.” The decisions shall subsequently be submitted to and ratified by the next Board of Directors meeting.

• Article 10 Where the Company acquires real property from a related party, in the event that the results of the appraisal conducted in accordance with Paragraph 4 of the preceding Article are uniformly lower than the transaction price, the Company shall carry out the acquisition in accordance with Paragraph 3 of this Article. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply:

• Where the related party acquired undeveloped land or leased land for development, proof of compliance may be submitted with one of the following conditions:

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• 1) Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The term “Reasonable construction profit” shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.

• 2) The completed transactions of other floors of the same property or adjacent area by unrelated parties within the preceding year, where the terms of the transactions are similar and the reasonable price discrepancies of different floors or land area with market practice have been taken into consideration.

• 3) The completed leases by unrelated parties for other floors of the same property within the preceding year, where the terms of the leases are similar after considering the reasonable price discrepancies among floors in accordance with prevailing market practice.

• Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

The aforementioned item “completed transactions for adjacent area” in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close to the latest official land price promulgated by the government. The term “the area of the property thereof are similar” in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50% of the property in the planned transaction. The term “within the preceding year” refers to the year retrospectively preceding the date of occurrence of the acquisition of the real property.

Where the Company acquires real property from a related party, in the event that the results of the appraisal conducted in accordance with Paragraph 4 and Paragraph 6 of Article 9 and Paragraph 1 of this Article are lower than the transaction price in all cases, the Company shall take the following steps:

1. A special reserve shall be set aside according to Paragraph 1, Article 41 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised value, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve required by law shall be set aside pro rata to the shareholding in accordance with Article 41-1 of the Securities and Exchange Act.

2. Audit Committee shall comply with Article 218 of the Company Act.

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4. Actions taken pursuant to the two preceding subparagraphs shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

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

Where the Company obtains real property from a related party, it shall also comply with Paragraphs 3 and 4 of this Article if there is other evidence indicating that the acquisition was not an arm’s-length transaction.

• Article 11 For the calculation of 10 percent of total assets under these Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.

In the case of the Company’s subsidiaries whose shares have no par value or a par value other than NT$10, for the calculation of transaction amounts of 20 percent of paid-in capital under these Procedures, 10 percent of equity attributable to owners of the parent shall be substituted.

The Company shall announce and report on behalf of any subsidiary that is not a domestic public company any matters that such subsidiary is required to announce and report pursuant to the provisions on acquisitions and disposals of assets. The disclosure requirement for transaction amount reaches 20 percent of paid-in-capital or 10 percent of the total assets shall refer to the Company’s paid-in-capital or total assets defined in Paragraphs 1 and 2 of this Article.

The Company shall supervise its subsidiaries adopt and implement the procedures for the acquisition or disposal of assets (Subsidiary Procedures) in compliance with the Regulations. The Company shall also see to it that its subsidiary: conduct annual internal audit on the Subsidiary Procedures in compliance with the Regulations set forth by the competent authorities, its assets acquisitions and disposal activities and implementation in compliance with the Subsidiary Procedure, and it produces written audit report and submit to the Company’s Internal Audit for inspection and audit.

• Article 12 The ceiling on total amounts of real property and securities acquired by the Company and each subsidiary for non-business use, and the limits on individual

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securities are:

1. The total amount of real property purchased for non-business use shall not exceed 30% of the shareholders’ equity of the Company.

2. The total amount of the securities purchased shall not exceed the shareholders’ equity of the Company and shall meet the latest requirements promulgated by the respective competent authorities. The limit on investment in the individual securities shall not exceed 20% of the shareholders’ equity of the Company.

3. Article 13 The Company shall comply with the following trading principles and guidelines when engaging in derivatives trading:

4. Types of derivatives products:

   • 1) The Company may engage in trading in derivatives products including forward contracts, options, futures, leverage contracts, or swaps, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests, and the hybrid contracts consisted by the above products.

   • 2) “Forward Contracts” referred to in the preceding subparagraph A does not include insurance contracts, fulfillment contracts, after-sales service contracts, long-term lease contracts or long-term purchase or sale agreements.

5. Operating (hedging) strategies:

Trading in derivatives products by The Company must be associated with risk exposures on revenues and expenditures, assets, liabilities or shareholders’ equity arising from the Company’s business operation.

1. Segregation of duties:

2. 1) The Company shall not engage in derivatives trading unless approved by the Board of Directors or the competent superintendents in accordance with the “The Chart of Authority and Responsibilities of the Board of Directors and Managers” and “The Level of Authority for Managers Junior to the President.”

3. 2) Where the Company engages in trading derivatives products, the personnel in charge of transaction, confirmation and settlement shall be appointed by the chairman or the president. Moreover, where the Finance Department engages in trading derivatives products, the personnel in charge of transaction, confirmation and settlement shall be assigned by the Vice President of Finance.

4. 3) Where the derivatives trading is associated with the Company’s products, raw materials or commodities, transactions shall be carried out by the Sales Department, Procurement or other assigned department(s) and supported by

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the Finance Department. Trading in relation to interest rates or exchange rates, shall be carried out by the Finance Department.

1. Disclosure - Public announcement and regulatory filing:

The disclosure provisions are adopted in accordance with provisions prescribed in Chapter III - Public Disclosure of Information of the Regulations:

• 1) In the event where losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in these Procedures, the Company shall file a public report of relevant information on the MOPS within 2 days commencing immediately from the date of occurrence of the event.

• 2) The Company shall compile monthly reports on the balance of derivatives trading engaged in up to the end of the preceding month and file the information in the prescribed format into the MOPS by the 10th day of each month.

• Essentials of performance evaluation:

The accounting unit of the Finance Department shall on a monthly basis prepare and submit positions statements of derivatives trading to the senior superintendents authorized by the Board, the President and the Chairman for review, and shall submit these statements and report to the Board of Directors.

• 1) Hedging transactions: The basis for performance evaluation depends on the profit/loss resulted from the difference of acquisition costs of the hedged item and the derivative trading.

• 2) Specific-purpose transactions: Evaluation shall be based on the actual profit/loss of the transaction.

• Total contract amount and limit on maximum loss:

• 1) Hedging operation:

The total amount of hedging contracts shall not exceed the anticipated net portion of the account receivables yielded from business operation or the net position after asset and liabilities offsetting for the next six months.

No stop-loss limits shall be set for hedging transaction.

• 2) Specific-purpose operation:

The total amount of transactions of specified purposes shall not exceed the total amount of the items of transaction for the specified purposes.

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No stop-loss limit shall be fixed for hedging transactions for specified purposes and have definite hedging positions.

• 3) Trading-purpose operation:

The Company does not engage in trading-purpose operation.

Article 14 The Company shall adopt the following risk management measures while engaging in derivatives trading:

1. The scope of risk management includes:

2. 1) Credit risk management: In principle, the counterparties for transactions shall be domestic financial institutions with sound credit standing or internationally renowned financial institutions whom are capable of providing professional information.

3. 2) Market price risk management: In principle, the chosen market shall be where the price quotation information is publicly and adequately available. The Company shall monitor and verify changes in market conditions and the positions from time to time.

4. 3) Liquidity risk management: The products chosen for transactions shall primarily be the prevailing derivatives products in the international community, with high liquidity, large transaction volume and are readily available for trade.

5. 4) Cash flow risk management: The Company shall assess its cash flow on a regular basis to maintain adequate liquid capital and credit capacity for financing to meet the settlement requirement and to ensure the stability of its working capital.

6. 5) Operation risk management: The authorized amount set by the Company and the operational procedures shall be in compliance with these Procedures, and shall be included as part of the internal audit. Each operation step shall be authorized and supervised by superior superintendents.

7. 6) Legal risk management: The documents to be signed by the Company with the transaction counterparts shall not be officially executed unless reviewed by the legal counsel and/or personnel with expertise from the departments with relevant business, and the head(s) of the responsible department(s).

8. Personnel engaged in derivatives trading may not serve concurrently in other operations such as confirmation and settlement. The counterparties to the transactions shall be given notice on the assignment or discharge of personnel in charge of transaction and confirmation before the effective date so as to preserve the Company’s interests.

9. Risk measurement, monitoring, and control personnel shall be assigned to a different department that the personnel in the preceding subparagraph and shall report to the Board of Directors or senior management who are not responsible for

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decision-making in the transaction or positions.

1. Departments in charge of the transactions of derivatives products shall cooperate with the Finance Department to evaluate the transactions. Derivatives trading positions held by the Company shall be evaluated at least once per week; however, positions for hedge trades required by business shall be evaluated at least twice per month. Evaluation reports shall be submitted to senior management personnel authorized by the Board of Directors.

Article 15 The supervision and management over transactions of derivatives products by the Company, and the internal audit system:

1. Where the Company engaging in derivatives trading, the Board of Directors shall faithfully supervise and manage such trading in accordance with the following principles:

2. 1) Whether the authorized and designate senior management personnel and the president have been constantly attending the monitoring and control of derivatives trading risk.

3. 2) Whether the authorized and designated senior management and the president periodically evaluate if derivatives trading performance is consistent with established operating strategy and if the risk undertaken is within the company's permitted acceptable level.

4. Senior management personnel authorized for derivatives trading by the Board of Directors and the president shall manage the activities in accordance with the following principles:

5. 1) Periodically evaluate the risk management measures currently employed are appropriate and are faithfully conducted in accordance with the Regulations and these Procedures for engaging in derivatives trading formulated by the Company.

6. 2) They shall supervise the transactions and profit/loss status and shall adopt the necessary countermeasures and report to the Board of Directors immediately whenever abnormalities are found.

7. Where the Company engages in derivatives trading, the Accounting Unit of the Finance Department shall establish a log book in which record the matters as required under the relevant laws and regulations. Such log books shall be archived and retained for the duration as required by law.

8. The internal auditors of the Company shall periodically look into the appropriateness of the internal control over derivatives products and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to these Procedures, and prepare an audit report. Where a material violation is found, the Audit Committee shall be informed in writing.

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Article 16 In the event that a subsidiary of the Company intends to engage in derivatives trading to accommodate business need:

1. Such subsidiary shall, in accordance with the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” promulgated by the competent authority in charge of securities affairs, adopt its Procedures for derivatives trading and shall not engage in these activities until such procedures pass the resolution by its Board of Directors and shareholder meeting.

2. Such subsidiary shall conduct at least annual internal audit on its derivatives activities and the implementation in compliance with its Procedures, and to produce written audit reports and submit to the Company’s Internal Audit for inspection and audit.

3. Where the subsidiary of the Company is not a domestic public company:

   • 1) In the event where losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in its Procedures, the subsidiary shall report the information to the Investment Department of the Company for compilation on the date of occurrence of the event. The Company shall make public announcement and file relevant information on behalf of the subsidiary within 2 days commencing immediately from the date of occurrence of the event.

   • 2) The subsidiary shall report the balance of derivatives trading in the preceding month to the Investment Department of the Company for compilation by the 5th day of each month. The Company shall announce and file the balance of derivatives trading in the preceding month of itself and its subsidiaries by the 10th day of each month.

4. Article 17 Where the Company conducts a merger, spin-off, acquisition, or transfer of shares, the department in charge shall, prior to convening the Board of Directors to resolve on the matter, engage a Certified Public Accountant, attorney, or securities underwriter to render an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other assets to shareholders, and submit it to the Board of Directors for discussion and resolution. However, merging the subsidiaries which direct and indirect holds 100% issued shares or amount of capital, or the merging between the subsidiaries which direct and indirect holds 100% issued shares or amount of capital, do not need to render an opinion on the reasonableness by professions.

5. Article 18 The Company participating in a merger, spin-off or acquisition shall prepare a public report to shareholders detailing important contractual content and relevant matters prior to the shareholders meeting and include it along with the expert opinion referred to in the preceding Article when sending shareholders meeting invitation for reference in deciding whether to approve the merger, spin-off, or acquisition. Provided, where a provision of another act exempts the Company from convening a

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shareholders meeting to approve the merger, spin-off, or acquisition, this restriction shall not apply.

Where the shareholders meeting of any one of the companies, participating in a merger, spin-off, or acquisition, fails to convene or pass a resolution due to inadequate quorum, insufficient votes, or other legal restriction, or the proposal is vetoed by the shareholders meeting, the companies participating in the merger, spinoff or acquisition shall immediately make public statement on the reasons, the followup measures, and the preliminary date of the next shareholders meeting.

• Article 19 Unless otherwise prescribed by law or the Financial Supervisory Commission is notified in advance of extraordinary circumstances and grants consent, the Company participating in the merger, spin-off or acquisition shall convene the Board of Directors meeting and shareholders meeting on the day of the transaction to resolve matters relevant to the merger, spin-off or acquisition.

Unless otherwise prescribed by law or the Financial Supervisory Commission is notified in advance of extraordinary circumstances and grants consent, the Company participating in a transfer of shares shall call a Board of Directors meeting on the day of the transaction.

When participating in a merger, spin-off, acquisition, or transfer of another company's shares, the Company that is listed on an exchange or has its shares traded on an OTC market shall prepare a full written record of the following information and retain it for 5 years for reference:

1. Basic information of the personnel: Including the titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning of any merger, spin-off, acquisition, or transfer of another company’s shares or the implementation of the plan prior to disclosure of such information.

2. Dates of material events: Including the dates of signing any letter of intent or memorandum of understanding, retaining a financial advisor or legal counsel, execution of a contract, and the convening of a Board of Directors meeting.

3. Material documents and minutes: Including documents for merger, spin-off, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of Board of Directors meetings.

When participating in a merger, spin-off, acquisition, or transfer of another company's shares, the Company that is listed on an exchange or has its shares traded on an OTC market shall, within 2 days commencing immediately from the date of passage of a resolution by the Board of Directors, report (in the prescribed format and via the Internet-based information system) the information set out in subparagraphs 1 and 2 of the preceding paragraph to the Financial Supervisory Commission for

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recordation.

Where any of the companies participating in a merger, spin-off, acquisition, or transfer of shares is neither listed on an exchange nor traded on an OTC market, the company(s) so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the requirements as set forth under paragraphs 3 and 4 of this Article.

• Article 20 Each and every person participating in or possessing knowledge of the plan for merger, spin-off, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to the public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, spin-off, acquisition, or transfer of shares.

• Article 21 A Public Company that participates in a merger, spin-off, acquisition, or transfer of shares shall not arbitrarily alter the share exchange ratio or acquisition price unless under any of the circumstances enumerated below, and shall stipulate the circumstances permitting alteration in the contract for the merger, spin-off, acquisition, or transfer of shares:

• Capital increase (re-capitalization) in cash, issuance of convertible corporate bonds, or issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, and other equity based securities.

• An action such as a disposal of major assets that would affect the Company’s financial operations.

• Occurrence of an event such as a major disaster or major change in technology that would affect shareholder equity or share price.

• An adjustment where any of the companies participating in the merger, spin-off, acquisition, or transfer of shares from another company, buys back treasury stock.

• An increase or decrease in the number of entities or companies participating in the merger, spin-off, acquisition, or transfer of shares.

• Other terms/conditions that the contract stipulates may be altered and the altered terms/conditions have been publicly disclosed.

Article 22 A contract for participation by a public company in a merger, spin-off, acquisition, or shares transfer shall expressly record the rights and obligations of the companies participating in the merger, spin-off, acquisition, or transfer of shares, and also record the matters enumerated below:

1. Handling of breach of contract.

2. Principles for handling equity-based securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is spin-off.

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4. The amount of treasury stock that the participating companies are permitted under law to buy back after the record (base) date of calculation of the share exchange ratio, and the principles for handling thereof.

5. The manner to deal with a change in the number of participating entities or companies.

6. Preliminary progress schedule for plan execution, and anticipated completion date of the execution.

7. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.

8. Article 23 After public disclosure of the information, if any company participating in the merger, spin-off, acquisition, or share transfer intends to further carry out a merger, spin-off, acquisition, or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, spin-off, acquisition, or share transfer; except where the number of participating companies is decreased and a participating company’s shareholders meeting has resolved a decision authorizing the Board of Directors to alter the limits of authority. Such a participating company may be exempted from calling another shareholders meeting to resolve the matter anew.

9. Article 24 Where any of the companies participating in a merger, spin-off, acquisition, or transfer of shares is not a public company, the public company(s) shall sign an agreement with that non-public company whereby the latter is obliged to comply with the provisions of set forth under Article 19, Article 20 and Article 23.

10. Article 25 A person-in-charge of the subject matters under these Procedures who violates these Procedures is subject to disciplinary review and action in accordance to the Company’s disciplinary guideline.

11. Article 26 These Procedures and any amendment hereto shall be submitted for approval by more than half of the Audit Committee and submitted to the Board of Directors for approval, then submitted to the Shareholders’ Meeting for ratification. If any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to the Audit Committee.

The discussion by the Board of Directors pursuant to the preceding paragraph, each independent director's opinions shall be taken into full consideration. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the Board of Directors meeting.

If approval of more than half of all Audit Committee members as required in paragraph 1 is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution by the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

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The terms “all Audit Committee members” in paragraph 1 and “all directors” in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

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Appendix 4

China Petrochemical Development Corporation Registration Procedures for Attending Shareholder Meetings

Duly established on March 28, 2013

Article 1 (Purpose) These procedures are established to ensure smoothness of the shareholders’ meeting and protect shareholders’ rights and implement corporate governance practices. Article 2 (Basis for Establishment) The procedure is enacted based on the sample template for the “Rules of Procedure for Shareholders Meetings” issued by Financial Supervisory Commission (FSC) regulatory decree number 1020002909 issued on February 26, 2012 and Taiwan Stock Exchange reference number 1020003468 issued on February 27, 2012.

Article 3 (Reporting-in Times) The company’s stock transfer unit handles shareholder check in, when deciding the place, related people and equipment the company should be objective. The company should announce the time of the shareholders’ meeting. In addition, the company should allow shareholders to check in 60 minutes before the meeting starts.

Article 4 (Video Recording and Surveillance) The Company shall video record the complete check-in process. After checking identification of the attending shareholder, the company should quickly complete documentation and complete the check-in process and allow the shareholder to participate in the shareholder meeting.

If the check-in process is not completed as indicated in article 7, then additional back-up personnel should be available to assist and not hold up the check-in process for other shareholders.

If a delay occurs, personnel should calmly explain and persuade the affected shareholder and keep order as to avoid situations that may impact shareholder rights. If needed, personnel should inform officers of the law and allow law enforcement to assist in maintaining order.

Article 5 (Check-in Equipment and Personnel) Shareholders meeting check-in team are in charge of the following: Equipment required: 3 computers, 2 printers, 3 back-up computers and 1 printer. Check-in counter:

Team 1: Reissue of shareholders’ meeting notice and other related material (memorabilia). The team is also responsible for shareholders who will not participate in the meeting but will like to have related materials and

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memorabilia.

Team 2 and Team 3: Shareholder check-in. Check meeting notice and stamp original seal or check signature matched with identification (identification card, driver’s license, National Health Insurance card, or other government identification). After check-in, provide meeting notice, votes, attendance card, statement slip, memorabilia and meeting related material (Shareholders’ hand book and annual report)

• Article 6 (Staff Requirement)

During check-in there should be enough staff. Staff should be given training. At least three people should have the following requirements:

1. Three years’ experience in shareholder services

2. Certified (Senior) Securities Specialist.

3. Passed examination by the competent authority on shareholder service.

4. Article 7 (Check-in Time)

Expect for special cases (For example, a request to split vote by foreign institutional investors), the check-in process for each shareholder should be less than 1.5 minutes, if process is not completed within 1.5 minutes, Monitor team should immediately provide support and understand the situation.

Monitor Team: one to two team members, monitor check-in and deal with unexpected situations.

Guide Team: one to two team members, guide shareholders to the check-in counter and to their seat after check-in.

Data Team: one to two team members, report latest attendance statistics to the chairman, meeting unit and master of ceremonies.

Article 8 (Information disclosure) Before the start of the shareholder meeting, the data team should provide the latest attendance statistics to the meeting secretary, Chairman, and Master of Ceremonies at least 3 minutes before the start of the meeting. To comply with articles 12 and 13 of the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies”, the Company should prepare and present attendance statistics at the start of the meeting.

Article 9 (Post-Meeting Evaluation) After the conclusion of the shareholders’ meeting, the shareholder check-in situation should be reported the Board of Directors, if there are any mistakes an improvement report should be submitted.

Article 10 These Rules and any amendments hereto, shall be implemented after adoption by the shareholders meeting.

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Appendix 5

Shareholdings of Directors

(As of March 26, 2019)

Title	Account Number	Name	Name	Name of Representative	Number of Shares	% of Shareholding
Chairman	158659	Core Pacific Development and Investment Company		Ko-Ming Lin	39,285,806	1.46%
Director	158659	Core Pacific Development and Investment Company		Hwa-Yeang Shen
Vice Chairman	316573	BES Engineering Corporation		Jiun-Nan Bai	12,486,043	0.46%
Independen Director	t	Steve Ruey-Long Chen			0	0
Independen Director	t	Yun-Peng Chu			0	0
Independen Director	t	Pan, Wen-Yen			0	0
Director	133727	Sheen Chuen-Chi Cultural and Educational Foundation		Lian-Sheng Tsai	1,781,269	0.07%
Director	133727	Sheen Chuen-Chi Cultural and Educational Foundation		Kuen-Ming Lin
Director	101204	Jen Huei Enterprise Co. Ltd.		Jiun-Huei Guo	16,123,959	0.60%
			Number of shares held byall		69,677,077	2.58%

Note 1: Ownership ratios were calculated based on the total number of the Company’s outstanding shares 2,699,857,267 shares.

Note 2: As required under Article 26 of the Securities and Exchange Act and Article 2 of the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies, all directors of the Company shall hold a minimum of 64,796,575 shares. As CPDC has established the audit committee that satisfies the requirements of the Securities and Exchange Act, the minimum shareholding requirements for directors and supervisors do not apply.

Note 3: Total number of shares held by all directors meets the minimum shareholding requirement.

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