CPDC - AGM Information 2021 | FinancialReports.eu

Stock Code: 1314

China Petrochemical Development Corporation

Annual Shareholder Meeting Handbook 2021

Time: May 28, 2021 (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 2021ANNUAL 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

I.	Meeting Procedures ........................................................................................................... 1
II.	Meeting Agenda ................................................................................................................ 2
III.	Report Items ...................................................................................................................... 3
IV.	Ratification Items .............................................................................................................. 5
V.	Discussion and Election Items ........................................................................................... 7
VI.	Extemporary Motion ....................................................................................................... 16
VII.	Adjournment .................................................................................................................... 16
VIII.	Attachments
	1. 2020 Business Report ................................................................................................. 17
	2. Audit Committee’s Review Report ............................................................................. 23
	3. Independent Accountant’s Audit Report & 2020 Financial Statements ..................... 24
	4. Earnings Distribution Table for 2020 ......................................................................... 42
IX.	Appendices
	1. Articles of Incorporation ............................................................................................. 43
	2. Rules for Election of Directors ................................................................................... 50
	3. Rules Governing the Proceedings of Shareholder Meetings ...................................... 53
	4. Registration Procedures for Attending Shareholder Meetings ................................... 58
	5. Shareholdings of the Company’s Directors ................................................................ 60

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Meeting Procedures

Report the number of shares represented at the meeting
Chairman announces start of the meeting
Chairman's remarks
Report Items
Ratification Items
Discussion and Election Items
Extemporary Motions
Adjournment

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Meeting Agenda

Time: May 28, 2021 (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:

(I) Report the number of shares represented at the meeting
(II) Declaration of the start of the meeting
(III) Opening remarks by the chairman
(IV) Report Items
2020 Business Report
Audit Committee’s Review Report on the 2020 Financial Statements
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 2020 Annual General Shareholders’ Meeting.
Status of the Implementation of Share Buyback Program in 2020.
Status of 2020-1 Secured Domestic Corporate Bonds issued in 2020.
Status of the employees' and directors' remuneration of 2020.
Other reporting items
(V) Ratification Items
Ratification of the 2020 Business Report and Financial Statements.
Ratification of the 2020 Earnings Distribution Proposal.
(VI) Discussion and Election Items
Discussion of the domestic capital raising proposal by public share issuance (cash offering) with an issue size no greater than 600 million common shares.
Election of the 22[th] Board of Directors
Release of restriction on competitive activities of directors.
(VII) Extemporary Motions
(VIII) Adjournment

Report Items

I. 2020 Business Report.

Description: 2020 Business Report (Please refer to Attachment 1).

II. Audit Committee’s Review Report on the 2020 Financial Statements.
Description: Audit Committee’s Review Report (Please refer to Attachment 2).
III. 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 2020 Annual General Shareholders’ Meeting.
Description: The motion resolved by the shareholders’ meeting on May 28, 2020 for 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 600 million common shares was not issued, in coordinate with the Company’s development plans to adjust the investment schedule.
IV. Status of the Implementation of Share Buyback Program in 2020.
Description:
(I) For the Company's credit standing and shareholders' rights and interests, the share buyback program was resolved at the board of directors meeting on March 27, 2020. The buyback period was from March 30, 2020 to May 29, 2020, the planned number of shares to be repurchased was 50,000,000 shares, with the repurchase price range from NT$5.03 to NT$7.5 per share.
(II) During the buyback period, as the market price was substantially higher than the max strike price of the treasury shares, and the Company’s stock price during the pre-determined buyback period did not experience a significant decline as compared to the market price, the Company did not execute the buyback program.
V. Status of 2020-1 Secured Domestic Corporate Bonds issued in 2020.
Description:
(I) To repay the Company’s bank loans and strengthen its financial structure, the Board resolved to approve the issuance of secured domestic corporate bonds on August 12, 2020.
(II) The issuance obtained the application approval letter from Taipei Exchange on September 10, 2020 and the listing approval letter on September 16, 2020.
(III) The Bond was priced on September 21, 2020, with the following terms:
1. Principal amount: NT$3.5 billion.
2. Par value: NT$1 million.
3. Maturity: 5 years.
4. Coupon rate: 0.64% p.a.
5. Issue price: The bond was priced at par.

(IV) Status of use of proceeds: As of the fourth quarter of 2020, the proceeds of NT3.5 billion from bond issuance were used to repay bank loans with no outstanding principal amount.
VI. Status of the employees' and directors' remuneration of 2020.
Description:
(I) In accordance with Article 32 of the 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.”
(II) The Company’s 2020 remuneration proposal to the employees representing 3% of earnings is NT$2,670,202. Director’s remuneration of no greater than 2% of earnings is NT$1,780,134. All payments were in cash.
VII. Other reporting items.

Ratification Items

ITEM 1:

(Proposed by the Board of Directors)

Proposal: Ratification of the 2020 Business Report and Financial Statements. Description:

I. The Company’s 2020 parent only and consolidated financial statements have been audited by Ms. Melody Chen and Ms. Tan-Tan Chung of KPMG.
II. The Company’s 2020 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.
III. Please refer to: Attachment 1: 2020 Business Report

Attachment 3: 2020 Parent Only and Consolidated Financial Statements

Resolution:

ITEM 2:

(Proposed by the Board of Directors)

Proposal: Proposal: Ratification of the 2020 Earnings Distribution Proposal. Description:

I. The Company’s 2020 beginning undistributed surplus was NT$508,480,202, and 2020 net profit after tax was NT$680,989,534, adding recognized undistributed surplus adjustments due to disposal of NT$126,298,940 in equity instruments measured at fair value through other comprehensive gains and losses, subtracting recognized undistributed surplus adjustments due to welfare project revaluation for the current year variable of NT$27,392,429, and offsetting retained earnings of NT$393,083 against changes in equity ownership of subsidiaries. The total surplus eligible for appropriation was NT$1,287,983,164. Pursuant to Article 237 of the Company Act, NT$77,950,296, namely, 10% of the earnings was appropriated as the legal surplus reserve. After setting aside a special surplus reserve of NT$1,210,032,868 of net increased amount of fair value from the adoption of fair value method to value the real estate investments, the end of period undistributed surplus was NT$0, and the Company intended not to distribute dividends.
II. Please refer to Attachment 4 for the Earnings Distribution Table for 2020.

Resolution:

Discussion and Election Items

ITEM 1:

(Proposed by the Board of Directors)

Proposal: Discussion of the capital raising proposal by domestic public share issuance (cash offering) with an issue size no greater than 600 million common shares.
Description: To enhance the Company’s financial condition for working capital needs and future business development, the Company requests approval from shareholders to authorize the Board of Directors to approve the capital raising proposal by public share issuance (cash offering) one time or at multiple times with an issue size no greater than 600 million common shares, based on market conditions. The main details of which are as follows:

Authorization for a Domestic Public Offering:

(I) 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 “Taiwan Securities Association Self-Regulatory Rules Governing Advising Capital Raising and Securities Issuance by Underwriters” and subject to market conditions. The final price shall be reported to the regulatory authority before issuance.
(II) 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:
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 28-1 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 "Taiwan Securities Association Rules Governing Underwriting and Resale of Securities by Securities Firms”, 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.
Issuance of public offering:

In accordance with Article 267, Paragraph 1 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.

(III) The Board requests the public offering methods above to be authorized to proceed under the related regulation.
(IV) The rights and obligations of the new common shares issued would be the same as previous shares.
(V) The proceeds collected during the common share issuance are intended to be used to repay bank borrowings, enhance working capital and prepare for future capital expenditures, improve operation efficiency, and should have a positive impact on future development.
(VI) 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 operation or business concerns, will also be delegated to the Chair for authorization.
(VII) 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.
(VIII) The issuance methods mentioned in article 2, if there needs to be adjustments to the method under regulation due to certain circumstances, the Board is authorized to conduct further procedures.
(IX) The Chair is authorized to handle all matters which are not addressed herein, in accordance with the applicable laws and regulations.

Resolution:

(Proposed by the Board of Directors)

ITEM 2:

Proposal: Election of the 22nd Board of Directors. Description:

I. The Company’s 21st Board of Directors (including independent directors) was elected and commenced service on April 11, 2018 and has its term until April 10, 2021. As their term is reaching expiration, the election of the 22nd Board of Directors is scheduled to take place at the Annual Shareholder Meeting.
II. Pursuant to Article 19 of the Articles of Incorporation, the Board is composed of seven to eleven directors, with a term of three years, with eligibility of consecutive terms. The total number of directors includes at least 3 independent directors. The nomination system shall be adopted for the election of directors.
III. The Board of CPDC resolved at the January 25, 2021 board meeting to elect 22[nd] Board of Directors of nine members, including 3 independent directors. The current term of the 21[st ] Board of Directors will extend to the election date, and the 22[nd] Board of Directors will be inaugurated with a term from May 28, 2021 to May 27, 2024.
IV. At the March 23, and April 14, 2021 Board of Directors' meetings, the Board audited and approved the following list of Independent Directors and Directors in accordance with regulations:
(I) List of Independent Directors Candidates

Independent Directors Candidates	Gender	Education	Professional Experience (including the current position)	Current Shareholdings	Note: Reasons for nominating candidates as independent directors who have served more than three terms
Yun-Peng Chu	Male	- Bachelor Economics, National Taiwan University - Master in Economics, National Taiwan University - Ph.D. in Economics, Maryland University	- Professor of Economics, National Central University - Professor, Chi-Jen Liu Lecture, School of Big Data Management, Soochow University, - Researcher, Research Center, Department of Economic Development, National Central University - Executive Yuan Officials - Chairman, Taiwan Insurance Guaranty Fund - Independent Director, Nan Ya Plastic Corporation - Chairman, Bozhen Service Co., Ltd. - Independent Director, Asia Cement Corporation - Independent Director, China Petrochemical Development Corporation	0	Independent director Yun-Peng Chu has a wealth of experience in finance, economics and public policies that enables him to promptly provide professional advice and judgments, and contribute to the enhancement of corporate governance. The Company needs his insights to guide CPDC’s future direction. The Board believes he continues to possess the requisite independence of judgment and action, and has not formed such associations with management (or others) as may compromise his ability to exercise impartial judgment or act without bias in the best interests of the Company. Moreover, taking into account the industry characteristics and the long-term development needs of the Company, such an independent director has a deep understanding of the Company's vision and long- term objectives, which enable him to fully contribute his experiences and oversee the operatingteam.

Independent Directors Candidates	Gender	Education	Professional Experience (including the current position)	Current Shareholdings	Note: Reasons for nominating candidates as independent directors who have served more than three terms
					In conclusion, to meet the long- term development objectives, in recruiting independent directors, the Company will prioritize candidates with talents, experiences, and professional knowledge that complement the expertise of other directors and are able to enhance the overall operating effectiveness of the Board of Directors, so as to achieve the goal of a diversified Board of Directors.
Wen-Yen Pan	Male	- B.S. in Chemistry, National Taiwan Normal University - M.S. and Ph.D. in Chemical Engineering, University of Wyoming	- Senior Research Engineer, Monsanto Company - Chairman, Kuo Kuang Power Co., Ltd. - President & Chairman, CPC Corporation - Chairman, United Renewable Energy (Legal Representative) - Chairman, CTCI Foundation - Independent Director, UPC Technology Corporation - Director, CTCI - Independent Director, U- Ming Marine - Chairman, Shih Tzu Wang Wisdom Learning Co., Ltd - Independent Director, China Petrochemical Development Corporation	0	Independent director Wen-Yen Pan has a wealth of experience in the petrochemical industry that enables him to promptly provide professional advice and judgments, and contribute to the enhancement of corporate governance. The Company needs his insights to guide CPDC’s future direction. The Board believes he continues to possess the requisite independence of judgment and action, and has not formed such associations with management (or others) as may compromise his ability to exercise impartial judgment or act without bias in the best interests of the Company. Moreover, taking into account the industry characteristics and the long-term development needs of the Company, such an independent director has a deep understanding of the Company's vision and long- term objectives, which enable him to fully contribute his experiences and oversee the operating team. In conclusion, to meet the long- term development objectives, in recruiting independent directors, the Company will prioritize candidates with talents, experiences, and professional knowledge that complement the expertise of other directors and are able to enhance the overall operating effectiveness of the Board of Directors, so as to achieve the goal of a diversified Board of Directors.

Independent Directors Candidates	Gender	Education	Professional Experience (including the current position)	Current Shareholdings	Note: Reasons for nominating candidates as independent directors who have served more than three terms
Song-Nian Ye	Male	- Army Infantry Training Command Officer Reserve School Graduate	- Director, Union Wide Construction Co. Ltd. - Chairman, Union Wide Construction Co. Ltd. - Chairman, Lung Ling Construction Co. Ltd. - Chairman, Kung Cheng Construction Co. Ltd. - Independent Director, China Petrochemical Development Corporation	0	Not applicable.

*: Position currently held by the candidate

(II) List of Director Candidates

Director Candidates	Gender	Education	Professional Experience (including the current position)	Current Shareholdings
Core Pacific Co., Ltd Representative: Ruey-Long Chen	Male	Bachelor in Economics, National Chung Hsing University	- Minister, Ministry of Economic Affairs, R.O.C. - Independent Director, Formosa Chemicals & Fibre Corporation - Independent Director, Inventec Corporation - Director, Hannstar Board Corporation - Director, Asia Cement Corporation (Legal Representative) - Secretary-General, Cross-Strait CEO Summit - Chairman, Sinocon Industrial Standards Foundation - Director, Kaohsiung Monomer Co., Ltd. (Legal Representative)1 - Director, BES Engineering Corp. (Legal Representative) - Chairman, China Petrochemical Development Corporation (Legal representative) - Director, Taivex Therapeutics Inc. (Legal Representative)1 - Director, Dingyue Development Co., Ltd. (Legal Representative)1 - Legal Representative, Unichem Development Limited1 - Director, Weihua (Rudong) Trade Co., Ltd.1 - Director, WeiQiang International Trading (Shanghai) Co., Ltd.1 - Director, Jiangsu Weiming Petrochemical Corporation1 - Director, Changzhou Weicai New Material Science & Technology Co., Ltd.1 - Executive Director, Core Pacific Twin Tower (Myanmar) Co. Ltd.1 - Director, Weifong (Myanmar) Co. Ltd.1 - Director, Thanh Phong Construction Investment Co.,Ltd.*1	45,625,096
Core Pacific Co., Ltd. Representative: Shaw-Shin Yang	Male	B.A.in College of Kinesiology, The University of Taipei	- Chairman, Qmi Industrial Co., Ltd. - Chairman, Quint Major Industrial Co., Ltd. - Supervisor, Quint Yi Construction Co., Ltd.*	45,625,096

Director Candidates	Gender	Education	Professional Experience (including the current position)	Current Shareholdings
BES Machinery Co., Ltd Representative: Jiun-Nan Bai	Male	Bachelor Economics, National Taiwan University M.A. in Economics, National Taiwan University Ph.D. in Law, Chinese Culture University	- Senior Specialist, Council for Economic Planning and Development, Executive Yuan - Vice President, Bank of Communications - Chairman, Core Pacific Securities Investment Trust - Director, Core Pacific City Co., Ltd. (Legal Representative) - Independent Director, President Securities Corp. - Independent Director, Megaforce Company Limited - Chairman, First Leasing Co. Ltd. - Chairman, Bo-Mong Investment Co. Ltd. - Director, Wei Lih Food Industries (Legal Representative) - Director, Taivex Therapeutics Corporation (Legal Representative)1 - Director (Legal Representative), BES Engineering Corp. - Director, Jiangsu Core Pacific - Yamaichi Commercial Insurance Co. Ltd. - Vice Chairman, China Petrochemical Development Corporation(Legal representative)*	13,110,345
C.P. Leasing Co., Ltd. Representative: Kueng-Ming Lin	Male	B.A. in Electrical Engineering, National Taiwan University	- Chairman, Taiwan Health Care Association - Secretary-General, Cross-Strait CEO Summit - Chairman & President, Premier Venture Capital Corp. - Chairman, Premier Capital Management Corp. - General Manager and Director, Kun Chi Venture Capital Corp. - Chairman, Dexin Corp. - Chairman, Ruby Tech Corp. - Director, AMIT Inc. (Legal Representative) - Director, Zipcom Corporation - Director, Lung Hwa Electronics (Legal Representative) - Director, Terawins, Inc. (Legal Representative) - Director, DeltaMac (Taiwan) Co., Ltd. (Legal Representative) - Director, Development Consultants Co., Ltd. (Legal Representative) - Director, UISCO - Independent Director, Getac Technology Corp. - Director, China Petrochemical Development Corporation(Legal representative)	3,672,500
Yao Chuen Co., Ltd. Representative: Hui-Ting Shen	Male	B.A.in Department of Electronic Machinery and Information Management, Lehigh University EMBA in School of Economics and Management, Tsinghua University	- Director, Core Pacific City Co., Ltd. (Legal Representative) - Director, Sheen Chuen-Chi Cultural and Educational Foundation - Director, JEAN Pacific Development Co., Ltd.1 - Director, Core Pacific - Yamaichi International (H.K.) - Director, Jiangsu Core Pacific - Yamaichi Commercial Insurance Co. Ltd. - Chairman, Shanghai Core Pacific - Consultant Co. Ltd. (Legal Representative)* - Chairman(Legal Representative)& President,	400,000

Director Candidates	Gender	Education	Professional Experience (including the current position)	Current Shareholdings
			Beijing Core Pacific - Investment and Consultant Co. Ltd. - Vice Chairman, Yangzhou Living City Co., Ltd. - Director, Yangzhou Jingguo Industry Co., Ltd. - Director, Yangzhou Excellent Property Management Co., Ltd. - Director, Yangzhou Jingcai Property Co., Ltd. - Director, Yangzhou Jingge Boutique Hotel Co., Ltd. - Director, Anshan Jinghui Real Estate Co., Ltd. - Director, Changshu Jinghui Property Co., Ltd. - Director, Hangzhou Jinghua Technology Movie Art World Co., Ltd. - Director, China Petrochemical Development Corporation(Legal representative)
Jen Huei Enterprise Co., Ltd Representative: Hui-Lan Chu	Female	Master of Leisure Services Program Institute, Chaoyang University of Technology	- Taichung City Councilor - Municipal Adviser of Taichung City Government - Director of Economic Development Department, Taichung City Government - Director of Economic Development Bureau, Taichung City Government - Chairman, Sheen Chuen-Chi Cultural & Educational Foundation - Director, BES Construction Corporation (U.S.A) - Director, Global BES Engineering (Myanmar) Co. Ltd. - Director, BES Engineering Vietnam Company Limited* - Chairman (Legal Representative) & President, BES EngineeringInc. *	19,431,156

*: Position currently held by the candidate

1: Reinvestment companies of the Company using the equity method

Election results:

ITEM 3:

(Proposed by the Board of Directors)

Proposal: Release of restriction on competitive activities of directors. Description:

I. 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.
II. The Company proposes to release the 22[nd] 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.
III. The Company proposes the release of restrictions on competitive activities on the following directors. The content and scope will be provided by elected directors and the announcement at the meeting shall prevail. Details are drafted in the table below:

Title	Name	Current part-time situation (relevant competition)
Independent Director	Yun-Peng Chu	- Independent Director, Nan Ya Plastic Corporation - Independent Director, Asia Cement Corporation - Chairman, Rehoboth Biotech Corporation
Independent Director	Wen-Yen Pan	- Independent Director, UPC Technology Corporation - Director, CTCI
Independent Director	Song-Nian Ye	- Chairman, Kung Cheng Construction Co. Ltd. - Chairman, Union Wide Construction Co. Ltd. - Chairman, LungLingConstruction Co. Ltd.
Representative of Corporate Director	Core Pacific Co., Ltd	- Director, Jingdu Construction Development Co., Ltd.
Representative of Juristic Person Representative	Core Pacific Co., Ltd Representative: Ruey-Long Chen	- Independent Director, Formosa Chemicals & Fiber Corporation - Independent Director, Inventec Corporation - Director (Legal Representative), Asia Cement Corporation - Director of Kaohsiung Monomer Co., Ltd. (Legal Representative)1 - Director, Dingyue Development Co., Ltd. (Legal Representative)1 - Director (Legal Representative), BES Engineering Corp. - Legal Representative, Unichem Development Limited1 - Director, Weihua (Rudong) Trade Co., Ltd.1 - Director, WeiQiang International Trading (Shanghai) Co., Ltd.1 - Director, Jiangsu Weiming Petrochemical Corporation1 - Director, Changzhou Weicai New Material Science & Technology Co., Ltd.1 - Executive Director, Core Pacific Twin Tower (Myanmar) Co. Ltd.1 - Director, Weifong (Myanmar) Co. Ltd.1 - Director, Thanh Phong Construction Investment Co., Ltd.1 - Director, Taivex Therapeutics Corporation (Legal Representative)1
Representative of Juristic Person Representative	BES Machinery Co., Ltd Representative: Jiun-Nan Bai	- Chairman, First Leasing Co. Ltd. - Director, BES Engineering Corp. (Legal Representative) - Director, Taivex Therapeutics Corporation (Legal Representative)1

Title	Name	Current part-time situation (relevant competition)
Representative of Corporate Director	C.P. Leasing Co., Ltd.	- Director, Jingdu Construction Development Co., Ltd.
Representative of Corporate Director Representative	C.P. Leasing Co., Ltd. Representative: Kueng-Ming Lin	- Director, Lung Hwa Electronics (Legal Representative) - Director, Development Consultants Co., Ltd. (Legal Representative) - Director of UISCO - Independent Director of Getac TechnologyCorp.
Representative of Corporate Director Representative	Yao Chun Co., Ltd. Representative: Hui-Ting Shen	- Director, JEAN Pacific Development Co., Ltd.1 - Vice Chairman, Yangzhou Living City Co., Ltd. - Director, Yangzhou Jingguo Industry Co., Ltd. - Director, Yangzhou Excellent Property Management Co., Ltd. - Director, Yangzhou Jingcai Property Co., Ltd. - Director, Yangzhou Jingge Boutique Hotel Co., Ltd. - Director, Anshan Jinghui Real Estate Co., Ltd. - Director, Changshu Jinghui Property Co., Ltd. - Director, Hangzhou Jinghua Technology Movie Art World Co., Ltd.
Representative of Corporate Director Representative	Jen Huei Enterprise Co., Ltd Representative: Hui-Lan Chu	- Chairman (Legal Representative) & President, BES Engineering Inc. - Director, BES Construction Corporation (U.S.A) - Director, Global BES Engineering (Myanmar) Co. Ltd. - Director, BES EngineeringVietnam CompanyLimited

1: Reinvestment companies of the Company using the equity method

Resolution:

Extemporary Motion

Adjournment

Attachment 1

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China Petrochemical Development Corporation 2020 Business Report

The Company reported 2020 consolidated revenues of NT$17.583 billion, net operating loss of NT$1.813 billion and net profit after tax of NT$675 million. The detailed breakdown of the Company’s 2020 operating performance is as follows:

(I) Sales of Major Products

Major Product Production & Sales Volumes in the Past 2 Years

Unit: Tons

Major Product Pr	oduction & Sales V	oduction & Sales V	olumes in the Past 2	olumes in the Past 2	Years Unit: Tons	Years Unit: Tons	Years Unit: Tons	Years Unit: Tons
Production Volume Major Product	FY 2020 (Consolidated)		FY 2019 (Consolidated)		Increase (Decrease) Volume
	Production	Sales	Production	Sales	Production	%	Sales	%
Acrylonitrile (AN)	203,797	267,761	211,188	221,970	(7,391)	(3%)	45,791	21%
Caprolactam (CPL), Nylon Chips	203,423	168,256	310,561	297,252	(107,138)	(34%)	(128,996)	(43%)
O-phenylphenol (OPP)	2,151	1,948	1,971	1,898	180	9%	50	3%

The sales of Acrylonitrile (AN) include the trading sales of the subsidiaries.
The decrease in Caprolactam (CPL) production and sales was mainly due to weak demand resulted from the COVID-19 pandemic and the low predatory price on imported CPL.
O-phenylphenol (OPP) is a raw material for the development of high value downstream applications and products, such as advanced optical materials, sterilization preservatives, electronic materials, and synthetic new resins.
(II) Operating Revenue and Expense and Profitability Analysis

Unit: NT$ thousands

			Unit: NT$ thousands	Unit: NT$ thousands
Year Line Item	FY 2020 (Consolidated)	FY 2019 (Consolidated)	Increase (Decrease) %
Revenues	17,583,092	29,624,094	(12,041,002)	(41%)
Gross Profit	38,228	1,627,580	(1,589,352)	(98%)
Operating Profit	(1,812,878)	(409,020)	(1,403,858)	(343%)
Non-Operating Profit and Loss	1,916,654	2,272,492	(355,838)	(16%)
Pre-Tax Profit	103,776	1,863,472	(1,759,696)	(94%)
Net Profit after Tax	674,660	1,733,635	(1,058,975)	(61%)
EPS (After Tax)	0.21	0.61	(0.40)	(66%)

Operating Revenue

The 2020 operating revenues decreased by 41% versus the previous year, mainly due to the following reasons:

(1) The revenues from Acrylonitrile (AN) and related byproducts were NT$7.35 billion in 2020, decreased 28% or NT$2.907 billion from NT$10.257 billion versus the previous year. The decrease was mainly from 27% decrease in unit prices versus the previous year for Acrylonitrile (AN) products.
(2) The revenues from Caprolactam (CPL) and byproduct were NT$6.77 billion in 2020, decreased 55% or NT$8.388 billion from NT$15.158 billion versus the previous year. The decrease was mainly from a 24% decrease in unit prices and a 50% decrease in sales volumes versus the previous year for Caprolactam (CPL) products.
(3) The revenues from other departments (including subsidiaries) were NT$3.463 billion, decreased 18% or NT$746 million from NT$4.209 billion versus the previous year. It mainly resulted from a decrease in subsidiary revenues from trading versus the previous year caused by the pandemic.
Operating Profit

The 2020 operating profit decreased by 343% or NT$1.404 billion versus the previous year, mainly due to the following reasons:

(1) For Caprolactam (CPL) products, impacted by the outbreak of COVID-19 pandemic, the demand from the downstream textile industry was completely frozen. Therefore, Caprolactam (CPL) around the globe are sold to Taiwan at low prices that affected the sales volume, selling price, and gross profit. While overall costs were diligently controlled to reduce loss by NT$178 million as compared to the previous year.
(2) With regard to Acrylonitrile (AN), due to the pandemic and volatile oil prices, topped with supply increase from new production capacity, the selling price dropped significantly and the profit decreased by NT$1.749 billion as compared to the previous year.
(3) In 2020, overall operating expenses decreased by NT$186 million versus the previous year.
Non-Operating Profit and Loss

Non-operating profit decreased by NT$356 million in 2020, or by 16%, due to the following reasons:

(1) A decrease of NT$3.275 billion from the revaluation gain of financial assets versus the previous year.
(2) A decrease of NT$2.901 billion from the asset impairment loss versus the previous year.
(3) An increase of NT$785 million from the revaluation gain of investment real estate versus the previous year.
(4) A decrease of NT$427 million from equity method profits from subsidiaries and related companies versus the previous year.
(5) An increase of NT$232 million from the expense of the An-Shun site versus the previous year.
(6) An increase of NT$81 million from the interest expenses versus the previous year.
(7) A decrease of NT$46 million from cost method dividends income versus the previous year.

Net profit (loss) before and after taxes

2020 reported pre-tax profits were NT$104 million, decreased NT$1.76 billion or 94% versus the previous year. 2020 reported net profits after tax were NT$675 million (NT$0.21 per share), decreased NT$1.059 billion or 61% from NT$1.734 billion (NT$0.61 per share) of the previous year.

(III) Financial Performance Analysis:
Financial Status:

At the end of 2020, total consolidated assets amounted to NT104.9 billion; total liabilities were NT$34 billion; and shareholder equity was NT$70.9 billion.

Key Financial Ratios:
Current Ratio at the end of 2020 was 310%, Quick Ratio was 151%, and Debt Ratio (Debt to Total Assets) was 32%.
Cash and Cash Equivalents Status:

Cash and cash equivalents outflow from operating, investing and financing activities was NT$1.6 billion during 2020. The year-end cash and cash equivalent balance was NT$7.5 billion.

(IV) Key Management Work and Implementation Overview:

2020 key management work and implementation overview are categorized into the following 6 categories: Production Management, Occupational Safety and Health and Environmental Protection, IT Management, HR Management, Financial Planning, and Corporate Social Responsibility. Descriptions are as follows:

Production Management:

The Company continues its planned investment project at Phase II of the Port of Kaohsiung Intercontinental Container Terminal to improve feedstock purchasing flexibility, as well as transportation and storage management. We also continue to promote smart automation at manufacturing facilities for predictive maintenance, and continue investing in projects at factories to increase production capacity, improve process efficiency, and to lower production costs.

Occupational Safety and Health and Environmental Protection:

As the petrochemical industry requires a large amount of resources, the Company pays special attention to environmental footprints in the operating process. All CPDC plants of the Company have introduced the ISO 14001 environmental management system to reduce the environmental impact of our plants as well as prevent pollution and spills. The management system ensures that all emissions and waste produced during production are treated in compliance with the laws and regulation. In addition, with the vision of green petrochemical, CPDC adopts mitigation and adaptation strategies to actively manage and proactively respond to and grasp climate change-related risks and opportunities. To ensure the factory management systems are in compliance with the latest international standards, our three key factory sites have passed certification of ISO 9001, ISO 14001, ISO 45001, ISO50001 standards with regard to quality, environmental protection, occupational safety and health, and energy management, and continued tracking certification.

(1) Occupational Safety and Health: The Company carried out a process safety management (PSM) guidance project in 2020 to promote the safety culture and to improve the effectiveness of PSM.
(2) Environmental Protection: In response to the international trend and the government’s policy of promoting environmental sustainability, the Company actively promotes environmental protection and green economy to achieve the sustainable development goals. In 2020, Hsiaokang Factory, Da-Sheh Factory, and Toufen Factory obtained a number of outstanding sustainability related awards.
IT Management:

To improve the overall operation and management performance, the Company implemented the Group-wide HR management system, secured the foundation for the corporate digital operation and transformation, and continued to optimize the digital mobile office and cloud video system under the information security protection mechanism to fulfill the demand for remote working in the post-pandemic era. To accelerate AI and data analytics applications to enhance competitiveness and create value, the Company has established a big data platform and hardware for AI computing, infused cutting edge resources from external institutions, and continues on researching innovative AI applications and building AI research and development platform, so as to elevate technological capacity to quickly replicate successful experience to generate synergy.

HR Management:

To support the Company’s dual core business, petrochemicals and land development, and the overseas expansion strategy, the Company continued to implement and strengthen the prevention efforts and employee care in Taiwan and overseas locations during the COVID19 pandemic. In addition, the Company continued to recruit talents devoted to overseas development and strengthen the cultivation of talents with professional skills and a positive mindset. Moreover, through the promotion of the “Smart Decision-Making platform” by CPDC Command Center, the Company strengthened the interconnections and application of all functions and stakeholders and proactively create an independent learning environment. Furthermore, the succession plan is implemented through job rotation. At the same time, the Company continued to strengthen the implementation of annual performance evaluation, uphold the principle of reward and punishment and survival of the fittest, improve the quality of human capital, so as to recruit new talents and build efficient teams, thereby creating a differentiated competitive advantage for the Company and moving towards a sustainable and quality direction.

Financial Planning:

To meet the requirement of funds for the Company’s dual core business development, petrochemicals and land development, we expand cooperation with financial institutions and raise fund through capital market. With effective leveraging company-owned real estate assets and resources, we obtain lower cost of capital on loans and maintain a reasonable and safe cash flow level. In addition, through treasury management, invest in short-term financial products or money market funds to increase profitability.

Corporate Social Responsibility:

The Company's vision is “Pursuit of Green Growth; Coexistence and co-prosperity with the environment and society”. In 2020, the Company continued its efforts in ESG and was recognized by Taiwan and the international community. In addition to enhancing information disclosure, the Company also participated in international sustainability assessment and

obtained B-management level in the CDP Climate Change questionnaire reflecting the effectiveness of climate change governance and carbon management measures. The Company also ranked 12th in S&P Global CSA under the global chemical industry category and elected as a 2021 Sustainability Yearbook member for the first time. CPDC was the only Taiwan company in the chemical industry to be included in the yearbook, and was also awarded an “Industry Mover” distinction in the global chemical industry. In 2020, the Company’s ESG performance and information disclosure won the CSR Reporting Gold Award and the Top 50 Corporate Sustainability Awards in the 13th Taiwan Corporate Sustainability Awards (TCSA), and ranked in the top 6% to 20% in the Taiwan Corporate Governance Evaluation for 6 consecutive years.

In the face of the wounds of history of the Dioxin pollution at the Taiwan Alkaline An-Shun Factory in the state-run period, from the polluted land to the hearts of local residents, the Company has the courage to take on the task of remediation and continues to be inspected by the competent authority. We hope that after the completion of the remediation in the future, we can find the vitality of this land and create local prosperity with the residents and the city government.

(V) Future Prospect and R&D:

Innovation and R&D has always been the Company's core objective of moving toward the development of sustainable management. Currently, the Company's research and development are mainly focused on the following directions:

For the existing manufacturing process improvement, we aim for continuing improvements of existing manufacturing process technology towards improving efficiency, lowering manufacturing costs, and developing circular 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 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 multi-aspect applications of special chemicals and new blending modified products of nylon engineering plastics. The developing series includes engineering plastics, such as nylon 66 engineering plastics, PC composite materials, ABS composite materials, PC/ABS alloys, etc. The Company also develops products with good mechanical properties, flame retardant properties, low temperature resistance, heat resistance, weather resistance, antibacterial, conductive, antistatic, and other characteristics, which can be used in industrial fields including automobiles/locomotives, machinery, electronic parts, 3C household appliances, sports requisites, etc.

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 high refractive optical materials, ester derivatives, hydrogenated products, replacing benzene ring with base hydrogen technology, biological technology, electric products, and functional polymers, etc.) in line with the Company's development strategies. Based on the core technology and existing products, we increase the sales of high-value products, expand the layout of our industrial chain, and provide comprehensive services.

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 capability, the Company has obtained 227 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 since 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, the Company actively promotes and engages on environmental protection issues. Currently, we are embarking on the development of the biomass material field, devoting ourselves to research and development on products and new process paths including green, environmental protection, circular production while reducing generation of pollutants, etc. We hope that by directing our efforts, we shall be able to reduce the hazards on environment, combined with circular economic system and achieve our core objective of sustainable management.

(VI) Management Principles and Future Operational Outlook:

The Company focuses on expanding the two-pronged business approaches of "Petrochemical Industry" and "Land Development" as the primary management principles, and demonstrates our sustainable development strategies by Forward-Looking Governance, Intelligence Production, Communication and Dialogue, and Social Participations & Care.

For the petrochemical business, the Company will optimize the competitiveness of its existing products and develop high-value products in the short term. In the long term, the Company is working towards establishing overseas integrated production bases with the intelligent management system to develop new materials for diversified operation and meet the comprehensive needs of customers.

In terms of land development business, our short-term goals are to revitalize the Company's domestic land assets; while 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 large areas with land development and investment potential domestically and overseas, to develop green building products that are environmentally friendly, energy-conservation, carbon reduction, and intelligence, hoping to create new triple win situations for shareholders, corporation and the society, and demonstrate the Company’s vision of shouldering corporate social responsibility and moving towards green petrochemical. CPDC upholds the development concept of sustainable business and environmental symbiosis, and continuously promotes the process of the petrochemical and land development two-pronged strategy. We never forget the corporate social responsibility we shoulder, fulfill the mission of the global citizen and the vision towards green petrochemicals. We also seek new breakthroughs and enhance our development competitiveness with a more proactive attitude, and strive to maintain a sustainable business and contribute to society.

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Chairman: Manager: Accounting Manager:

Attachment 2

China Petrochemical Development Corporation

Audit Committee Review Report

The Board of Directors has prepared the Company’s Business Report, Financial Statements, Consolidated Financial Statements, and Earnings Distribution Table for 2020. 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 Earnings Distribution Proposal have been reviewed and determined to be correct and accurate by the Audit Committee of China Petrochemical Development Corporation. In accordance with Article 144 of the Securities and Exchange Act and Article 219 of the Company Act, I hereby submit this report.

China Petrochemical Development Corporation 2021 Annual Shareholders’ Meeting

Convener of the Audit Committee: 朱雲鵬

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March 23rd, 2021

Attachment 3

Independent Auditors’ Report

To the Board of Directors of China Petrochemical Development Corporation:

Opinion

We have audited the financial statements of China Petrochemical Development Corporation (“CPDC” or “the Company” ), which comprise the balance sheets as of December 31, 2020 and 2019, 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 other auditors (please refer to Other Matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits of the financial statements as of and for the year ended December 31, 2020 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. Furthermore, we conducted our audits of the financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No.1090360805 issued by the Financial Supervisory Commission, 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 Company 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. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Emphasis of Matter

As described in Notes 6(j) and 6(p) of the notes to the financial statements, a portion of the land at the Anshun plant ,which is located at Annan Dist., Tainan City, was polluted. 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. Nevertheless, CPDC has a dissenting view on the government perception about the condition of pollution and CPDC is seeking a way to define its responsibilities. Our opinion is not modified in respect of this matter.

Other Matter

We did not audit certain investments, which were accounted for under the equity method. The financial statements as of and for the years then ended December 31, 2020 and 2019 of those 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 1.17% and 1.00% of total assets as of December 31, 2020 and 2019, respectively. The related shares of investment income from these investees including subsidiaries, associates and joint ventures accounted for using equity method represented (79.22)% and (0.06)% of income before income tax for the years ended December 31, 2020 and 2019, respectively.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. 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.

Revenue recognition

Refer to Note 4(o) “ Revenue Recognition” , Note 6(v) “ Revenue from contracts with customers” in the financial statements.

Description of key audit matter:

Operating revenue is the most important source of cash flow for 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.

How the matter was addressed in our audit:

Our key audit procedures included:

Testing 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 CPDC. Based on samples selected, vouched significant transactions from both internal and external documents, to verify the authenticity of the transactions.
Assessment of the fair value of investment property

Refer to Note 4(j) “ Investment Property” , Note 5(a) “ Significant Accounting Judgments, Estimation, Assumptions, and Sources of Estimation Uncertainty”, and Note 6(j) “Investment Property”of the financial statements for details about fair value information on investment property.

Description of key audit matter:

The book value of investment property of CPDC represented 37% of total assets as of December 31, 2020, which is deemed to be significant. CPDC evaluates 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.

How the matter was addressed in our audit:

Our key audit procedures included:

Obtain from 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 evaluation 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.
Impairment assessment of property, plant, and equipment

Refer to Note 4(m) “ Impairment of non derivative financial assets” , Note 5(b) “ Significant Accounting Assumptions and Judgments, and Major Sources of Estimation Uncertainty” , and Note 6(h) “Property, plant and Equipment” of the financial statements for details of the information about impairment assessment on property, plant, and equipment.

Description of key audit matter:

The book value of property, plant, and equipment of CPDC represented 15% of total assets as of December 31, 2020, which is deemed to be significant. The overall economic trend, market competition and fluctuations in the price of petroleum and petrochemical products may affect the future operation of CPDC, and also affect the estimated economic benefits and recoverable amounts of these assets that the management of CPDC may estimate and determine in the future of the cash generating unit (“CGU”) of the assets, and to evaluate whether there are signs of impairment. The recoverable amounts of these assets have been determined based on the discounted cash flows forecasted by CPDC management which involved significant uncertainties and professional judgments. Therefore, we consider the assessment for impairment of property, plant, and equipment as one of the key audit matters for our audit.

How the matter was addressed in our audit:

Our key audit procedures included:

Obtain from CPDC management the results of their valuation of fixed assets and understand the significant assumptions used in their valuation model.
Review both the calculations of the value in use and the present value of the discounted cash flows forecasted. Evaluate the CGU, and external and internal impairment indicators identified by CPDC management, and ascertain that all fixed assets requiring annual impairment test are covered in the assessment made by management. Likewise, evaluate the reasonableness of the method used in measuring the recoverable amount of the assets (including the realization on the financial forecast, the calculation of recoverable amount and the assumptions considered for the cash flows forecast).

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

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

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

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

Auditor’s 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 auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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:

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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
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.
Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

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

KPMG

Taipei, Taiwan (Republic of China) March 23, 2021

Notes to Readers

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

The independent auditors’ report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and financial statements, the Chinese version shall prevail.

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

Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (notes 4 and 6(a)) 1110 Current financial assets at fair value through profit or loss (notes 4 and 6(b)) 1170 Notes and accounts receivable, net (notes 4 and 6(d)) 1180 Accounts receivable related parties, net (notes 4, 6(d) and 7) 1200 Other receivables (notes 4, 6(d) and 7) 130X Inventories (notes 4 and 6(e)) 1410 Prepayments 1470 Other current assets (note 6(f)) Total current assets Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 4 and 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 4 and 6(c)) 1551 Investments accounted for using equity method (notes 4 and 6(g)) 1600 Property, plant and equipment (notes 4 and 6(h)) 1755 Right-of-use assets (notes 4 and 6(i)) 1760 Investment property, net (notes 4 and 6(j)) 1840 Deferred income tax assets (notes 4 and 6(s)) 1900 Other non-current assets (note 8) Total non-current assets Total assets	December 31, 2020 Amount % $ 1,008,698 1 661,224 1 1,526,506 2 89,369 - 73,046 - 2,225,117 2 583,674 1 2,012,475 2 8,180,109 9 7,832,673 8 2,500,585 2 28,658,681 29 15,208,808 15 144,335 - 37,612,887 37 11,009 - 268,747 - 92,237,725 91 $ 100,417,834 100	December 31, 2019 Amount % 3,347,128 4 624,964 1 1,534,864 2 173,060 - 52,546 - 1,881,035 2 822,458 1 369,145 - 8,805,200 10 7,247,062 8 1,738,008 2 23,822,451 26 13,094,097 14 101,087 - 36,716,577 40 11,009 - 127,349 - 82,857,640 90 91,662,840 100 Liabilities and Equity Current liabilities: 2100 Short-term loans (note 6(k)) 2130 Current contract liabilities (note 6(v)) 2170 Accounts payable 2200 Other payables (note 7) 2230 Current tax liabilities (notes 4 and 6(s)) 2250 Provisions-current (notes 4, 6(p) and 6(r)) 2280 Lease liabilities-current (notes 4 and 6(o)) 2320 Long-term liabilities-current portion (notes 4 and 6(l)) 2399 Other current liabilities, others Total current liabilities Non-Current liabilities: 2530 Bonds payable(notes 4 and 6(m)) 2540 Long-term bank loans (note 6(l)) 2550 Provisions-non-current (notes 4, 6(p) and (r)) 2570 Deferred income tax liabilities (notes 4 and 6(s)) 2580 Lease liabilities-non-current (note 6(o)) 2611 Long-term bills payable (note 6(n)) 2670 Other non-current liabilities, others Total non-currnet liabilities Total liabilities Equity: 3110 Common stock (note 6(t)) 3200 Capital surplus (note 6(t)) Retained earnings (note 6(t)): 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Others (notes 4 and 6(t)) 3410 Exchange differences arising on translation of foreign operations 3420 Unrealised gains or loss on financial assets at fair value through other comprehensive income Total equity Total liabilities and equity	December 31, 2020		December 31, 2019 Amount % 3,100,558 3 88,263 - 1,137,731 1 1,529,259 2 72,521 - 156,905 - 40,375 - 1,370,000 2 7,961 - 7,503,573 8 - - 3,460,000 4 1,899,668 2 7,020,975 8 61,388 - 4,494,177 5 106,290 - 17,042,498 19 24,546,071 27 28,348,502 31 1,286,700 1 2,137,330 2 35,490,262 39 1,779,147 2 39,406,739 43 (804,515) (1) (1,120,657) (1) (1,925,172) (2) 67,116,769 73 91,662,840 100
			Amount %
			$ 3,615,000 4 954 - 1,215,153 1 1,306,948 1 - - 281,634 - 32,583 - 1,160,000 1 8,918 - 7,621,190 7 3,500,000 4 4,410,000 4 1,704,687 2 6,497,063 6 112,919 - 5,656,112 6 103,221 - 21,984,002 22 29,605,192 29 32,848,502 33 583,815 1 2,311,174 2 35,601,629 36 1,287,983 1 39,200,786 39 (966,202) (1) (854,259) (1) (1,820,461) (2) 70,812,642 71 $ 100,417,834 100

See accompanying notes to financial statements.

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

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

4000 Operating revenue (notes 4、6(v)and 7) 5000 Operating costs (note 6(e)) 5910 Less: Unrealized (profit) loss from sales 5920 Add: Realized profit (loss) from sales Gross (loss) profit Operating expenses (note 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment loss determined in accordance with IFRS 9 Total operating expenses Loss from operations Non-operating income and expenses: 7100 Total interest income (note 6(x)) 7010 Other income (notes 6(x) and 7) 7590 Other gains and losses (note 6(x)) 7050 Finance costs (notes 6(o) and 6(x)) 7060 Shares of profit (loss) of associates and joint ventures accounted for using equity method, net (notes 4 and 6(g)) 7255 Gains on fair value adjustment, investment property (notes 4 and 6(j)) 7235 Gains on financial assets (liabilities) at fair value through profit or loss (notes 4 and 6(b)) 7673 Impairment loss on property, plant, and equipment (notes 4 and 6(h)) Total non-operating income and expenses Income before income tax 7950 Less: income tax expenses (notes 4 and 6(s)) Net income 8300 Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit or loss: 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Allocation of income tax to the above items Components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences arising on translation of foreign operations 8367 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8380 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that may be reclassified to profit or loss 8399 Allocation of income tax to the above items Components of other comprehensive income that will not be reclassified to profit or loss 8300 Other comprehensive income (loss), net 8500 Total comprehensive income Earnings per share (notes 4 and 6(u)) 9750 Basic earnings per share-retrospestive 9850 Diluted earnings per share-retrospestive	2020 Amount % $ 14,797,092 100 15,287,375 103 (490,283) (3) 7,042 - (1,742) - (484,983) (3) 348,055 2 464,098 3 337,654 2 - - 1,149,807 7 (1,634,790) (10) 71,019 - 363,470 3 (376,661) (3) (187,982) (1) 331,277 2 896,310 6 621,913 4 - - 1,719,346 11 84,556 1 (596,433) (4) 680,989 5 (24,657) - 375,078 2 14,883 - - - 365,304 2 (161,687) (1) - - - - - - (161,687) (1) 203,617 1 $ 884,606 6 $ 0.21 $ 0.21	2019 Amount % 26,797,793 100 25,764,405 96 1,033,388 4 1,742 - 31,639 - 1,066,769 4 350,248 1 528,108 2 321,522 1 - - 1,199,878 4 (133,109) - 63,473 - 318,302 1 (123,540) - (106,515) - 1,566,487 6 111,367 - 3,033,671 11 (2,901,096) (11) 1,962,149 7 1,829,040 7 90,591 - 1,738,449 7 (12,128) - 125,611 - 7,865 - - - 121,348 - (316,303) (1) - - - - - - (316,303) (1) (194,955) (1) 1,543,494 6 0.61 0.61

See accompanying notes to financial statements.

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

Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Share capital	Share capital	Capital surplus		Retained earnings		Total other equity interest Unrealized gains Exchange differences on translation of foreign financial statements (losses) on financial assets measured at fair value through other comprehensive income	Total other equity interest Unrealized gains Exchange differences on translation of foreign financial statements (losses) on financial assets measured at fair value through other comprehensive income	Total equity
						Exchange differences on translation of foreign financial statements
Ordinary shares			Legal reserve	Special reserve	Unappropriated retained earnings
$ 26,998,573 - - - - - - 1,349,929 - - 28,348,502 - - - - - - 4,500,000 - - $ 32,848,502		1,260,386 - -	1,708,303 - -	33,521,575 - -	5,144,764 1,738,449 (6,084) 1,732,365 (429,027) (1,968,687) (1,349,929) (1,349,929) - (410) 1,779,147 680,989 (27,393) 653,596 (173,844) (111,367) (985,455) - (393) 126,299 1,287,983	(488,212) - (316,303) (316,303) - - - - - - (804,515) - (161,687) (161,687) - - - - - - (966,202)	(1,248,499) - 127,432 127,432 - - - - - 410 (1,120,657) - 392,697 392,697 - - - - - (126,299) (854,259)	66,896,890 1,738,449 (194,955)
	-	-	-	-				1,543,494
	- - - 1,349,929 - -	- - - - 26,314 -	429,027 - - - - -	- 1,968,687 - - - -				- - (1,349,929) - 26,314 -
	28,348,502 - -	1,286,700 - -	2,137,330 - -	35,490,262 - -				67,116,769 680,989 203,617
	-	-	-	-				884,606
	- - - 4,500,000 - -		173,844 - - - - -	- 111,367 - - - -				- - (985,455) 3,796,481 241 -
	$ 32,848,502		2,311,174	35,601,629				70,812,642

See accompanying notes to financial statements.

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

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Income before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net gain on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Loss on disposal of property, plan and equipment Loss on disposal of investments accounted for using equity method Reversal of impairment loss on non-financial assets Unrealized loss from sales Realized loss (profit) from sales Impairment loss on property, plan and equipment Gain on fair value adjustment of investment property Gain on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Decrease in accounts receivable Decrease in accounts receivable due from related parties Decrease in other receivables (Increase) decrease in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Total changes in operating assets (Decrease) increase in contract liabilities Increase (decrease) in accounts payable Decrease in other payable Decrease in provisions Increase (decrease) in other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash (outflow) inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows (used in) from operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in other financial assets (Increase) decrease in other non-current assets Dividends received Decrease in deferred income tax liabilities Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term loans Proceeds from issuing bonds Proceeds from long-term debt Repayments of long-term debt Increase in long-term bills payable Decrease in long-term bills payable Payment of lease liabilities (Decrease) increase in other non-current liabilities Cash dividends paid Capital increase by cash Interest paid Net cash flows from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the years end	ed December 31 2019 1,829,040 1,243,821 2,522 (3,033,671) 106,515 (63,473) (137,950) (1,566,487) 2,765 - (85,089) (1,742) (31,639) 2,901,096 (111,367) (4)
	2020 $ 84,556 780,577 375 (621,913) 187,982 (71,019) (132,087) (331,277) 1,107 580 (69,591) (7,042) 1,742 - (896,310) (40) (1,156,916) 8,358 83,691 468 (274,491) 238,784 12,215 69,025 (87,309) 77,422 (252,010) (70,252) 957 (331,192) (262,167) (1,419,083) (1,334,527) 55,430 (178,968) (5,379) (1,463,444) (387,499) - (120,000) 120,042 (5,785,200) 5,109 (2,847,161) 110 (1,655,545) (141,773) 1,265,381 - (9,546,536) 15,228,000 (14,713,558) 3,500,000 12,513,900 (11,773,900) 26,152,200 (24,992,200) (48,813) (3,069) (985,455) 3,796,481 (2,036) 8,671,550 (2,338,430) 3,347,128 $ 1,008,698
		(774,703)
		932,071 71,127 47,081 187,448 (260,785) (55,625)
		921,317
		85,589 (590,750) (650,086) (346,174) (4,729)
		(1,506,150)
		(584,833)
		(1,359,536)
		469,504 70,027 (102,361) (349,676)
		87,494
		- 351,290 (2,835,278) 2,262,460 (11,244,492) - (2,607,379) - - 3,986 1,313,922 (2,288)
		(12,757,779)
		8,614,975 (6,164,417) - 6,170,000 (3,820,000) 5,850,000 (1,700,000) (48,334) 1,955 (1,349,929) - (2,209)
		7,552,041
		(5,118,244) 8,465,372
		3,347,128

See accompanying notes to financial statements.

Independent Auditors’ Report

To the Board of Directors of China Petrochemical Development Corporation:

Opinion

We have audited the consolidated financial statements of China Petrochemical Development Corporation (“CPDC”) and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, 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 other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, 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 developed by the International Financial Reporting Interpretations Committee (“ IFRIC” ) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2020 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. Furthermore, we conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, 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. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis of our opinion.

Emphasis of Matter

As described in Notes 6(j) and 6(q) of the notes to the consolidated financial statements, a portion of the land at the Anshun plant, which is located at Annan Dist., Tainan City, was polluted. 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. Nevertheless, CPDC has a dissenting view on the government perception about the condition of pollution and CPDC is seeking a way to define its responsibilities. 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, 2020 and 2019, on which we have issued an unmodified opinion with emphasis of matter and other matters paragraphs.

We did not audit the financial statements of Taivex Therapeutics Corporation, a subsidiary of the Group. Those statements were audited by another auditor, whose report has been furnished to us, and our opinion, insofar as it relates to the amount included for Taivex Therapeutics Corporation, is based solely on the report of another auditor. The financial statements of Taivex Therapentics Corporation reflect total assets constituting 0.27% of consolidated total assets at December 31, 2020, and total operating revenues constituting 0% of consolidated total operating revenues for the year ended December 31, 2020.

We did not audit certain investments, which were accounted for under the equity method. The financial statements as of and for the years then ended December 31, 2020 and 2019 of those 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 both represented 0.95% of consolidated total assets as of December 31, 2020 and 2019. The related shares of investment income from these investees including subsidiaries, associates and joint ventures accounted for using equity method represented 3.57% and (0.06)% of consolidated net income before income tax for the years ended December 31, 2020 and 2019, respectively.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. 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.

Revenue recognition

Refer to Note 4(q) “ Revenue Recognition” , Note 6(w) “Revenue from contracts with customers” in the consolidated financial statements.

Description of key audit matter:

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.

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.

Assessment of the fair value of investment property

Refer to Note 4(k) “ Investment Property” , Note 5(a) “ Significant Accounting Judgments, Estimation, Assumptions, and Sources of Estimation Uncertainty” , and Note 6(j) “ Investment Property” of the consolidated financial statements for details about fair value information on investment property.

Description of key audit matter:

The book value of investment property of the Group represented 36% of consolidated total assets as of December 31, 2020, which is deemed to be significant. The Group evaluates 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.

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 evaluation 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.
Impairment assessment of property, plant, and equipment

Refer to Note 4(o) “ Impairment of non derivative financial assets” , Note 5(b) “ Significant Accounting Assumptions and Judgments, and Major Sources of Estimation Uncertainty” , and Note 6(h) “Property, plant and Equipment” of the consolidated financial statements for details of the information about impairment assessment on property, plant, and equipment.

Description of key audit matter:

The book value of property, plant, and equipment of the Group represented 22% of consolidated total assets as of December 31, 2020, which is deemed to be significant. The overall economic trend, market competition and fluctuations in the price of petroleum and petrochemical products may affect the future operation of the Group, and also affect the estimated economic benefits and recoverable amounts of these assets that the management of the Group may estimate and determine in the future of the cash generating unit (“CGU”) of the assets, and to evaluate whether there are signs of impairment. The recoverable amounts of these assets have been determined based on the discounted cash flows forecasted by the Group management which involved significant uncertainties and professional judgments. Therefore, we consider the assessment for impairment of property, plant, and equipment as one of the key audit matters for our audit.

How the matter was addressed in our audit:

Our key audit procedures included:

． Obtain from the Group management the results of their valuation of fixed assets and understand the significant assumptions used in their valuation model.
． Review both the calculations of the value in use and the present value of the discounted cash flows forecasted. Evaluate the CGU, and external and internal impairment indicators identified by the Group management, and ascertain that all fixed assets requiring annual impairment test are covered in the assessment made by management. Likewise, evaluate the reasonableness of the method used in measuring the recoverable amount of the assets (including the realization on the financial forecast, the calculation of recoverable amount and the assumptions considered for the cash flows forecast).

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, IFRC, SIC endorsed and issued into effect 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.

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.

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

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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.

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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
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.

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. We remain solely responsible for our audit opinion.

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 auditors’ report are Chen Mei Fang and Chung Tan Tan.

KPMG

Taipei, Taiwan (Republic of China) March 23, 2021

Notes to Readers

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

The independent auditors’ audit report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and consolidated financial statements, the Chinese version shall prevail.

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

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1120 Current financial assets at fair value through other comprehensive income (note 6(c)) 1170 Notes and accounts receivable, net (note 6(d)) 1180 Accounts receivable related parties, net (notes 6(d) and 7) 1200 Other receivables (notes 6(d) and 7) 130X Inventories (note 6(e)) 1410 Prepayments 1470 Other current assets (note 6(f)) Total current assets Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1551 Investments accounted for using equity method (note 6(g)) 1600 Property, plant and equipment (note 6(h)) 1755 Right-of-use assets (note 6(i)) 1760 Investment property, net (note 6(j)) 1780 Intangible assets (note 6(k)) 1840 Deferred income tax assets (notes 4 and 6(t)) 1900 Other non-current assets (note 8) Total non-current assets Total assets	December 31, 2020 Amount % $ 7,479,899 7 829,533 1 9,195 - 1,784,564 2 51,106 - 144,294 - 12,665,959 12 1,246,404 1 2,878,214 3 27,089,168 26 10,746,855 10 2,799,521 3 2,038,003 2 23,226,955 22 872,937 1 37,626,827 36 159,173 - 11,023 - 339,528 - 77,820,822 74 $ 104,909,990 100	December 31, 2019 Amount % 9,116,253 9 783,180 1 321,647 - 1,646,764 2 57,764 - 253,779 - 9,702,458 10 1,495,905 2 609,223 2 23,986,973 26 9,942,994 10 2,038,393 2 2,318,796 2 20,275,279 21 848,504 1 36,719,706 38 177,464 - 11,023 - 149,358 - 72,481,517 74 96,468,490 100 Liabilities and Equity Current liabilities: 2100 Short-term loans (note 6(l)) 2130 Current contract liabilities (note 6(w)) 2170 Accounts payable 2200 Other payables (note 7) 2230 Current tax liabilities (notes 4 and 6(t)) 2250 Provisions-current (notes 4, 6(q) and 6(s)) 2280 Lease liabilities-current (note 6(p)) 2320 Long-term liabilities-current portion (note 6(m)) 2399 Other current liabilities, others Total current liabilities Non-Current liabilities: 2530 Bonds payable (note 6(n)) 2540 Long-term bank loans (note 6(m)) 2550 Provisions-non-current (notes 4, 6(q) and 6(s)) 2570 Deferred income tax liabilities (notes 4 and 6(t)) 2580 Lease liabilities-non-current (note 6(p)) 2611 Long-term bills payable (note 6(o)) 2670 Other non-current liabilities, others Total non-currnet liabilities Total liabilities Equity attributable to owners of parent: 3110 Common stock (note 6(u)) 3200 Capital surplus (note 6(u)) Retained earnings (note 6(u)): 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Others (note 6(u)): 3410 Exchange differences arising on translation of foreign operations 3420 Unrealised gains or loss on financial assets at fair value through other comprehensive income Total equity attributable to shareholders of the parent: 36XX Non-controlling interests Total equity Total liabilities and equity	December 31, 2020		December 31, 2019 Amount % 3,484,148 4 88,263 - 1,316,369 1 1,739,977 2 86,144 - 157,562 - 49,911 - 1,762,130 2 57,009 - 8,741,513 9 - - 6,721,783 7 1,967,230 2 7,020,975 7 203,332 - 4,494,177 5 125,616 - 20,533,113 21 29,274,626 30 28,348,502 30 1,286,700 1 2,137,330 2 35,490,262 37 1,779,147 2 39,406,739 41 (804,515) (1) (1,120,657) (1) (1,925,172) (2) 67,116,769 70 77,095 - 67,193,864 70 96,468,490 100
			Amount %
			$ 3,615,000 4 1,676 - 1,394,928 1 1,429,867 1 5,637 - 282,291 - 43,251 - 1,914,833 2 60,911 - 8,748,394 8 3,500,000 4 7,489,650 7 1,772,811 2 6,497,650 6 249,741 - 5,656,112 5 127,601 - 25,293,565 24 34,041,959 32 32,848,502 32 583,815 1 2,311,174 2 35,601,629 34 1,287,983 1 39,200,786 37 (966,202) (1) (854,259) (1) (1,820,461) (2) 70,812,642 68 55,389 - 70,868,031 68 $ 104,909,990 100

See accompanying notes to consolidated financial statements.

(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, 2020 and 2019

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

4000 Operating revenues (notes 4, 6(w) and 7) 5000 Operating costs (note 6(e)) Gross profit Operating expenses (note 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment loss determined in accordance with IFRS9 Total operating expenses Loss from operations Non-operating income and expenses: 7100 Interest income (note 6(y)) 7010 Other income (notes 6(y) and 7) 7020 Other gains and losses (note 6(y)) 7050 Finance costs (notes 6(p) and 6(y)) 7060 Shares of profit (loss) of associates and joint ventures accounted for using equity method, net (note 6(g)) 7235 Gains on financial assets at fair value through profit or loss (notes 4 and 6(b)) 7255 Gains on fair value adjustment, investment property (note 6(j)) 7673 Impairment loss on property, plant and equipment (notes 4 and 6(h)) Total non-operating income and expenses Income before income tax 7950 Less: income tax expenses (notes 4 and 6(t)) Net income 8300 Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit or loss: 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8320 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Allocation of income tax to the above items Components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences arising on translation of foreign operations 8370 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that may be reclassified to profit or loss 8399 Allocation of income tax to the above items Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income (loss), net 8500 Total comprehensive income Net income (loss) attributable to: 8610 Shareholders of the parent 8620 Non-controlling interests Comprehensive income (loss) attributable to: 8710 Shareholders of the parent 8720 Non-controlling interests Earnings per share (notes 4 and 6(v)) 9750 Basic earnings per share 9850 Diluted earnings per share	2020 Amount % $ 17,583,092 100 17,544,864 100 38,228 - 603,857 3 804,920 4 442,279 3 50 - 1,851,106 10 (1,812,878) (10) 161,379 1 563,870 3 (407,747) (2) (221,705) (1) 67,054 - 856,158 5 897,645 5 - - 1,916,654 11 103,776 1 (570,884) (3) 674,660 4 (24,832) - 360,247 2 29,889 - - - 365,304 2 (190,168) (1) 26,632 - - - (163,536) (1) 201,768 1 $ 876,428 5 $ 680,989 4 (6,329) - $ 674,660 4 $ 884,606 5 (8,178) - $ 876,428 5 $ 0.21 $ 0.21	2019 Amount % 29,624,094 100 27,996,514 95 1,627,580 5 748,690 3 886,255 3 401,655 1 - - 2,036,600 7 (409,020) (2) 123,028 - 597,172 2 (143,692) - (140,459) - 494,301 2 4,130,817 14 112,421 - (2,901,096) (10) 2,272,492 8 1,863,472 6 129,837 - 1,733,635 6 (12,224) - 130,071 - 5,719 - - - 123,566 - (317,231) (1) - - - - (317,231) (1) (193,665) (1) 1,539,970 5 1,738,449 6 (4,814) - 1,733,635 6 1,543,494 5 (3,524) - 1,539,970 5 0.61 0.61

See accompanying notes to consolidated financial statements.

(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, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

			Equity attributable	o owners of parent				Non-controlling interests	Total equity
Share capital	Capital surplus		Retained earnings		Total other equity interest		Total equity attributable to owners of parent
					Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
Ordinary shares		Legal reserve	Special reserve	Unappropriated retained earnings
$ 26,998,573 - - - - - - 1,349,929 - - - 28,348,502 - - - - - - 4,500,000 - - - $ 32,848,502	1,260,386 - -	1,708,303 - -	33,521,575 - -	5,144,764 1,738,449 (6,084) 1,732,365 (429,027) (1,968,687) (1,349,929) (1,349,929) - - (410) 1,779,147 680,989 (27,393) 653,596 (173,844) (111,367) (985,455) - (393) - 126,299 1,287,983	(488,212) - (316,303) (316,303) - - - - - - - (804,515) - (161,687) (161,687) - - - - - - - (966,202)	(1,248,499) - 127,432 127,432 - - - - - - 410 (1,120,657) - 392,697 392,697 - - - - - - (126,299) (854,259)	66,896,890 1,738,449 (194,955) 1,543,494 - - (1,349,929) - 26,314 - - 67,116,769 680,989 203,617 884,606 - - (985,455) 3,796,481 241 - - 70,812,642	293,864 (4,814) 1,290 (3,524) - - - - - (213,245) - 77,095 (6,329) (1,849) (8,178) - - - - (241) (13,287) - 55,389	67,190,754 1,733,635 (193,665)
	-	-	-						1,539,970
	- - - - 26,314 - -	429,027 - - - - - -	- 1,968,687 - - - - -						- - (1,349,929) - 26,314 (213,245) -
	1,286,700 - -	2,137,330 - -	35,490,262 - -						67,193,864 674,660 201,768
	-	-	-						876,428
		173,844 - - - - - -	- 111,367 - - - - -						- - (985,455) 3,796,481 - (13,287) -
		2,311,174	35,601,629						70,868,031

See accompanying notes to consolidated financial statements.

(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, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Income before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss Net gain on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates and joint ventures accounted for using equity method Loss on disposal of property, plan and equipment Property, plan and equipment transferred to expenses Loss on disposal of investments accounted for using equity method Impairment loss on property, plant and equipment Reversal of impairment loss on non-financial assets Gain on fair value adjustment of investment property Gain on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable Decrease in accounts receivable due from related parties Decrease (increase) in other receivables Increase in inventories Decrease (increase) in prepayments Decrease (increase) other current assets Total changes in operating assets (Decrease) increase in contract liabilities Increase (decrease) in accounts payable Decrease in other payable Decrease in provisions Increase in other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash outflow generated from operations Interest received Interest paid Income taxes paid Net cash flows used in operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method 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 Cash inflows due to combination Increase in other financial assets Increase in other non-current assets Dividends received Decrease in deferred income tax liabilities Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term loans Proceeds from issuing bonds Proceeds from long-term debt Repayments of long-term debt Increase in long-term bills payable Decrease in long-term bills payable Payment of lease liabilities Increase in other non-current liabilities Cash dividends paid Capital increase by cash Interest paid Change in non-controlling interests Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the years end	ed December 31 2019 1,863,472 1,435,252 10,002 - (4,130,817) 140,459 (123,028) (303,466) (494,301) 2,560 - - 2,901,096 (78,554) (112,421) (5)
	2020 $ 103,776 977,720 13,172 50 (856,158) 221,705 (161,379) (257,817) (67,054) 1,060 7,855 580 - (72,892) (897,645) (49) (1,090,852) (137,988) 6,658 148,673 (2,888,937) 249,501 4,323 (2,617,770) (86,587) 78,559 (330,249) (69,690) 3,902 (404,065) (3,021,835) (4,112,687) (4,008,911) 122,193 (214,756) (38,574) (4,140,048) (387,499) 299,070 (1,020,256) 1,037,947 (140,000) 5,109 (3,861,905) 594 (3,265) 13 (2,264,814) (188,851) 705,763 - (5,818,094) 15,228,000 (15,092,960) 3,500,000 13,093,148 (12,005,856) 26,152,200 (24,992,200) (59,547) 1,985 (985,455) 3,796,481 (4,734) (13,287) 8,617,775 (295,987) (1,636,354) 9,116,253 $ 7,479,899
		(753,223)
		929,086 2,469 (140,146) (7,365,613) (352,190) (149,481)
		(7,075,875)
		82,686 (532,405) (1,250,720) (347,663) 6,923
		(2,041,179)
		(9,117,054)
		(9,870,277)
		(8,006,805) 135,730 (136,482) (395,955)
		(8,403,512)
		- - (3,761,066) 3,321,452 (480,000) - (5,299,416) 12,890 (6,681) 41,733 - (854) 1,292,178 (2,288)
		(4,882,052)
		9,589,034 (7,009,177) - 8,006,120 (4,108,757) 5,850,000 (1,700,000) (56,778) 10,602 (1,349,929) - (4,875) (186,931)
		9,039,309
		(107,430) (4,353,685) 13,469,938
		9,116,253

See accompanying notes to consolidated financial statements.

Attachment 4

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China Petrochemical Development Corporation Earnings Distribution Table for 2020

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Currency Unit: NT$	Currency Unit: NT$
Item	Amounts
Beginning of undistributed earnings	508,480,202
Plus (Subtract):
Disposal in equity instruments measured at fair value through other comprehensive income	126,298,940
Welfare project revaluation variable	(27,392,429)
Recognition of changes in ownership interests in subsidiaries to offset retained earnings	(393,083)
Annual (2020) net profit	680,989,534
Distributable earnings	1,287,983,164
Subtract:
Legal reserve	(77,950,296)
The set aside special surplus reserve of 2020 net increased amount from the adoption of fair value method to value the real estate investments (Note 2)	(1,210,032,868)
End of undistributed earnings	0

Note 1: The Company’s 2020 end of period undistributed earnings was $0 and intended not to appropriate dividend.

Note 2: Please refer to the content of the Note "Capital and Other Equities" in the 2020 Parent Only 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.

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Chairman: Manager: Accounting Manager:

Appendix 1

China Petrochemical Development Corporation Articles of Incorporation

Duly amended at the 32nd amendment in the annual shareholder meeting convened on May 28, 2020

Chapter 1 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:
To manufacture petroleum, sodium chloride, phosphoric acid and such chemicals and derivatives thereof.
To engage in the import and export, storage, delivery, purchase, and sale of the abovementioned products, raw materials, chemicals and chemical materials.
To engage in the purchase and sale, import and export of the above-mentioned business-related items and/or general items.
To provide technological services for the products (by-products), manufacturing process and operation of equipment as enumerated in the aforementioned paragraphs.
To engage in research and development for chemicals.
To buy, sell, classify categories and distribute goods (clothing, electric appliances, books, stationery, automobile and motorcycle products, household appliances, and recreational facilities).
To operate restaurants and hotel businesses.
To engage in such business of the design and sale of computer software and registration and processing of computer information.
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.
To invest in recreational resorts and golf driving ranges (not to exceed a maximum of five holes).
To invest and build parking facilities within urban planning areas.
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.
To operate new power plant(s).
To undertake environmental protection projects (clean-away, disposal of general waste, general industrial waste, hazardous industrial waste and the engineering thereof).

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

Article 6 The total capital amount of the Company is thirty-six billion New Taiwan Dollars (NT$45,000,000,000), which is divided into four billion five hundred million (4,500,000,000) 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) 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 Chairman 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 3 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 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 Chairman. During the Chairman’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.
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 4 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 re-elected. 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 chairman and one vice chairman. 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:
Resolve the Company's business policies.
Enact and amend rules regarding the Company's organization and incorporate and dissolve the Company's branch(es).
Review the rules of endorsement, guarantee and other major regulations and agreements.
Resolve decisions regarding investment and reinvestment.
Appoint and discharge managers.
Review budgets and prepare financial statements.
In the shareholder meeting, propose amendments to the Articles of Incorporation, change in capital, dissolution, merger, acquisition and division of the Company.
In the shareholder meeting, propose allotment of earnings and coverage of loss.
Enforce the decisions resolved in the shareholder meeting.
Resolve other major decisions and exercise other duties and obligations as granted by relevant laws and regulations and by the shareholder meeting.
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 Chairman. Upon the Chairman'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 Chairman 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 Chairman 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.
Article 26 The duties of the audit committee are:
Supervise the business operations of the Company.
Investigate the Company's business operations and financial status.
Audit the books and documents of the Company.
Audit books and documents prepared by the Board of Directors and submitted at the shareholder meeting, and report to the Shareholder Meeting.
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 5 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. 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 Chairman with full power to make the decision. Other employees shall be duly hired by the Chairman 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 resolved by the 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 6 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 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 7 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 1st amendment; May 27, 1976 as the 2nd amendment; June 27, 1978 as the 3rd amendment; April 24, 1979 as the 4th amendment, April 22, 1980 as the 5th amendment; April 28, 1981 as the 6th amendment; May 8, 1982 as the 7th amendment; January 7, 1983 as the 8th amendment; April 1, 1983 as the 9th amendment; February 10, 1984 as the 10th amendment; February 28, 1991 as the 11th amendment; April 28, 1992 as the 12th amendment; April 15, 1993 as the 13th amendment; July 26, 1994 as the 14th amendment; October 28, 1994 as the 15th amendment; December 28, 1995 as the 16th amendment; June 7, 1997 as the 17th amendment; June 19, 1998 as the 18th amendment; May 24, 2000 as the 19th amendment; June 14, 2001 as the 20th amendment; June 26, 2002 as the 21st amendment; May 12, 2003 as the 22nd amendment; June 21, 2004 as the 23rd amendment; June 10, 2005 as the 24th amendment; June 30, 2006 as the 25th amendment; June 18, 2010 as the 26th amendment; June 24, 2011 as the 27th amendment; and June 27 , 2012 as the 28th amendment. The twenty-ninth amendment was made on June 28, 2013. The 30th amendment was made on June 24, 2016. The 31st amendment was made on June 8, 2017. The 32nd amendment was made on May 28, 2020.

Appendix 2

China Petrochemical Development Corporation Rules for Election of Directors

Resolved at the annual shareholder meeting convened on May 28, 2020.

Article 1 Unless otherwise provided for in relevant laws and regulations or the company's Articles of Incorporation, the Directors of the company shall be duly elected in accordance with the Rules specified herein.
Article 2 Unless otherwise approved by the competent authority, over a majority of the total number of Director seats shall not be served by the ones in the relationship of a spouse or a relative within the second degree of kinship.
Membership of the board shall be in consideration of operational needs, demands of future development, and a diversified composition in order to fulfill corporate needs.
In order to achieve the ideal goal of corporate governance, membership of board shall possess acknowledge, skills, and attainment on duties.
Article 3 The Company shall duly elect Directors from persons with disposing capacity by the shareholder meeting. The Company's Independent Directors shall be duly elected under candidate nomination system as set forth under Article 14-2 of the Securities and Exchange Act.

The numbers of Independent Directors and non-independent Directors elected shall be calculated respectively.

Article 4 The Company's Directors shall be duly elected by means of cumulative voting. Each common share with voting right is entitled to the number of ballots which are equivalent to the numbers of Directors and Supervisors to be elected.

The ballots may be used to vote for one candidate or may be divided to vote for several candidates. The number of shares held by shareholders shall be pursuant to the entries in the Company's Register of Shareholders.

Article 5 The Company's Independent Directors, non-independent Directors shall be elected from among the candidates who win more ballots represented by voting rights in order of the overall numbers, within the quota pursuant to the Articles of Incorporation and relevant promulgations of the Company. In the event that two or more candidates win the same number of ballots and the number of candidates exceeds the specified quota, the candidates who win the same number of ballots shall draw lots to determine the election results. In the event that a candidate is absent, the chairperson may draw a lot for and on his or her behalf.
Article 6 The Company shall prepare election ballots of the number equal to the number of the Director(s) that shall be elected, bearing the codes of the shareholder attendance certificates and the number of voting rights. The election ballots shall be distributed to the common shareholders who are present at the shareholder meeting. The names of the voters may be entered into the ballots or filled out with the attendance certificates codes instead.

Article 7 Before the election process starts, the chairperson shall appoint a certain number of ballot inspectors and counters to perform the respective duties. The ballot inspectors shall be selected from among the shareholders. The ballot counters may be assigned from the Company's Stock Affairs office for stock affairs.
Article 8 The ballot inspector(s) shall perform the following duties:
Check and examine the ballot box(es) in public before the start of the balloting process.
Hand over the ballots to the ballot counter(s) upon completion of the balloting process.
Check and scrutinize invalid ballot(s).
Check and verify the statistics of ballots and voting rights.
Help the chairperson maintain the order upon the balloting and ballot opening process.

The ballot box(es) mentioned in Paragraph 1 and Paragraph 2 above shall be prepared and provided by the Board of Directors.

Article 9 A voter shall write down or enter the following data into the box of "candidates" on the ballot before casting the ballot into the ballot box mentioned in the preceding Article:

Where the candidate is a natural person (individual) shareholder, the voter shall expressly enter the name and serial number of that candidate. Where the candidate is a natural person (individual) but not a shareholder, the voter shall expressly enter the name and ID card number (or code of identity certificate) of that candidate.
Where the candidate is a juristic (corporate) person or government shareholder, the voter shall expressly enter the name and serial number of that candidate.
Where the candidate is the representative assigned by juristic (corporate) person or government shareholder, the voter shall expressly enter the name or title and serial number of juristic (corporate) person or government shareholder and the name of that representative. In the event of several representatives, the above requested information shall be entered or filled out respectively.

Article 10 An election ballot is deemed null and void under any of the following circumstances:

Where the voter does not use the election ballot designated under the Rules.
Where the voter does not cast the election ballot into the ballot box specified under Article 8 of the Rules.
Where the ballot is illegible or the ballot has been damaged, contaminated to be deemed illegible.
Where a blank election ballot is cast into the ballot box.
Where the data is not filled out or entered in accordance with Article 9 of the Rules.
Where the data filled out or entered in accordance with Article 9 of the Rules are found to have been tampered with.
Where the data filled out or entered in accordance with Article 9 of the Rules are found inconsistent with the submitted supporting certificate(s) or document(s).
Other than the data filled out or entered in accordance with Article 9 of the Rules, the ballot is found having borne other wording or symbols.

Where the aggregate of the voting rights cast by voter is found in excess of the total voting rights lawfully held by voters and lawful proxies.
Where the quota of candidates exceeds the quota of candidates to be elected.
Where the name of an Independent Director entered into the ballot is found not included in the candidate list.
Article 11 The counting procedure of the issues shall be processed publicly in shareholder meetings, and the calculation shall be based on the number of voting rights voted on-site at the shareholders' meeting plus the number of voting rights exercised by way of electronic transmission.
Article 12 Ballots shall be counted at the spot upon completion of casting the ballots, and the elected directors including number of votes shall be announced by the Chairman, or, under the instruction of the Chairman, by the emcee.
The ballots shall be sealed and signed off by the ballot inspectors and be kept for at least a year. In the event a lawsuit regarding the Directors election under Article 189 of the Company Law, those ballots shall be archived until the conclusion of the lawsuit.
Article 13 The Board of Directors shall issue a "notice of election" to the Directors who are elected in the election process.
Article 14 These Rules shall become effective from the date they are approved at the Meeting. The same applies in case of revision.

Appendix 3

China Petrochemical Development Corporation

Rules Governing the Proceedings of Shareholder Meetings

Resolved at the annual shareholder meeting convened on May 28, 2020.

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 cause or subject of a meeting of shareholders to be convened shall be indicated in the individual notice to be given to shareholders; and the notice may, as an alternative, be given by means of electronic transmission, after obtaining a prior consent from the recipient thereof. 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. However, a shareholder proposal proposed for urging the company to promote public interests or fulfill its social responsibilities may still be included in the list of proposals to be discussed at a regular meeting of shareholders by the board of directors. In addition, when the circumstances of any subparagraph of Article 172-1, 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, in written or electronic method, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days. Shareholdersubmitted proposals are limited to 300 words, and no proposal 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. A shareholder shall have one voting power in respect of each share; however, this limit is not applicable to those who are restricted, or who do not have the right to vote under Paragraph 2, Article 179 of the Company Act. 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. When the Company convenes a shareholders' meeting, shareholders may exercise their voting power in writing or by way of electronic transmission; the method of exercising their voting power shall be describes in the shareholders' meeting notice. A shareholder who exercises his/her voting power at a shareholders meeting in writing or by way of electronic transmission shall be deemed to have attended the said shareholders’ meeting in person, but shall be deemed to have waived his/her voting power in respective of any extemporary motion and/or the amendment to the contents of the original proposal at the said shareholders’ meeting. Thus, the Company is advised to avoid proposing extemporary motion and/or the amendment to the contents of the original proposal.

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

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 shareholder's 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. 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. Relevant motions (including extemporary motion and the amendment to the contents of the original proposal) shall be passed on a one agenda by one agenda basis. 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 Shareholders' inquiries regarding the reporting matters set out in the agenda shall not be allowed until all the reporting matters have been read out or reported by the chairman or a person designated by the chairman. 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 provisions of the preceding paragraph apply mutatis mutandis to the time and number of shareholders' speech with regard to each ratification item and discussion item set out in the agenda, and various proposals proposed by an extraordinary motion. The provisions of the first paragraph apply mutatis mutandis to the time and number of shareholders' speech with regard to various inquiries in the proceeding of extraordinary motion. The chairperson may stop a shareholder who violates the specified requirements or has spoken beyond the scope of the subject at issue.
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 The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; 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, and arrange a sufficient voting time.
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. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form. The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS. The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of the Company.

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. If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.
Article 19 All present shareholders are obliged to comply with the Rules Governing the Proceedings of Shareholder Meetings, comply with decisions resolved and 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.

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 backup 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 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:

Three years' experience in shareholder services
Certified (Senior) Securities Specialist.
Passed examination by the competent authority on shareholder service. 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.

Appendix 5

Shareholdings of the Company’s Directors

(As of March 30, 2021)

				(As of	March 30, 2021)
Title	Account Number	Name	Name of Representative	Number of Shares	% of Shareholding
Chairman	158659	Core Pacific Co., Ltd.	Ruey-Long Chen	45,625,096	1.39%
Director	158659	Core Pacific Co., Ltd.	Not applicable
Vice Chairman	316573	BES Machinery Co., Ltd.	Jiun-Nan Bai	13,110,345	0.40%
Independent Director		Yun-Peng Chu		0	0
Independent Director		Wen-Yen Pan		0	0
Independent Director		Song-Nian Ye		0	0
Director	133727	Sheen Chuen-Chi Cultural and Educational Foundation	Hui-Ting Shen	1,870,332	0.06%
Director	133727	Sheen Chuen-Chi Cultural and Educational Foundation	Kueng-Ming Lin
Director	101204	Jen Huei Enterprise Co., Ltd.	Jiun-Huei Guo	19,431,156	0.59%
Number of shares held by all directors				80,036,929	2.44%

Note 1: Ownership ratios were calculated based on the total number of the Company’s outstanding shares 3,284,850,130 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 78,836,403 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.

AI assistant

CPDC — AGM Information 2021

51772_rns_2021-07-14_653e3576-a4b4-40b1-a70a-cf4eab9a635e.pdf

China Petrochemical Development Corporation

Annual Shareholder Meeting Handbook 2021

DISCLAIMER

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

TABLE OF CONTENTS

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Meeting Procedures

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Meeting Agenda

Report Items

Ratification Items

Discussion and Election Items

(II) List of Director Candidates

Extemporary Motion

Adjournment

China Petrochemical Development Corporation 2020 Business Report

(V) Future Prospect and R&D:

(VI) Management Principles and Future Operational Outlook:

China Petrochemical Development Corporation

Audit Committee Review Report

Independent Auditors’ Report

Opinion

Basis for Opinion

Emphasis of Matter

Other Matter

Key Audit Matters

Description of key audit matter:

How the matter was addressed in our audit:

Description of key audit matter:

How the matter was addressed in our audit:

Description of key audit matter:

How the matter was addressed in our audit:

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

Auditor’s Responsibilities for the Audit of the Financial Statements

KPMG

Notes to Readers

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

Balance Sheets

December 31, 2020 and 2019

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

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

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

Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

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

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Independent Auditors’ Report

Opinion

Basis for Opinion

Emphasis of Matter

Other Matter

Key Audit Matters

Description of key audit matter:

How the matter was addressed in our audit:

Description of key audit matter:

How the matter was addressed in our audit:

Description of key audit matter:

How the matter was addressed in our audit:

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

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

KPMG

Notes to Readers

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

Consolidated Balance Sheets

December 31, 2020 and 2019

(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, 2020 and 2019

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

(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, 2020 and 2019

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

CPDC AGM Information 2021