CPDC - AGM Information 2022 | FinancialReports.eu

Stock Code: 1314

China Petrochemical Development Corporation

Annual Shareholder Meeting Handbook 2022

Type of Meeting: Physical Shareholders’ Meeting

Time: May 27, 2022 (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 2022 ANNUAL SHAREHOLDERS’ MEETING (THE “HANDBOOK”) OF CHINA PETROCHEMICAL DEVELOPMENT CORPORATION (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE AGENDA SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

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 ................................................................................................................ 11
VII.	Adjournment ............................................................................................................................. 11
VIII.	Attachments
	1. 2021 Business Report .......................................................................................................... 12
	2. Audit Committee’s Review Report ...................................................................................... 22
	3. Independent Accountant’s Audit Report & 2021 Financial Statements .............................. 23
	4. Earnings Distribution Table for 2021 .................................................................................. 43
	5. Comparison between Original and Amendments to the “Articles of Incorporation” .......... 44
	6. Comparison between Original and Amendments to the“Procedures for Loans,
	Endorsements, and Guarantees”......................................................................................... 49
	7. Comparison between Original and Amendments to the “Procedures for the
	Acquisition or Disposal of Assets”. ..................................................................................... 65
	8. Comparison between Original and Amendments to the “Rules Governing the
	Proceedings of Shareholder Meetings” ................................................................................ 66
IX.	Appendices
	1. Articles of Incorporation ...................................................................................................... 92
	2. Procedures for Loans, Endorsements, and Guarantees ...................................................... 100
	3. Procedures for the Acquisition or Disposal of Assets ....................................................... 106
	4. Rules for Election of Directors .......................................................................................... 123
	5. Rules Governing the Proceedings of Shareholder Meetings ............................................. 126
	6. Registration Procedures for Attending Shareholder Meetings .......................................... 132
	7. Shareholdings of the Company’s Directors ....................................................................... 134

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

2022 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
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CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

2022 Meeting Agenda

Type of Meeting: Physical Shareholders’ Meeting

Time: May 27, 2022 (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
2021 Business Report
Audit Committee’s Review Report on the 2021 Financial Statements
Status of the capital raising proposal by domestic public share issuance (cash offering) resolved by shareholders at the 2021 Annual General Meeting.
Status of the employees’ and directors’ remuneration of 2021
Other reporting items
(V) Ratification Items
Ratification of the 2021 Business Report and Financial Statements.
Ratification of the 2021 Earnings Distribution Proposal.
(VI) Discussion and Election Items
Amendment to the “Articles of Incorporation”
Amendment to the “Procedures for Loans, Endorsements, and Guarantees.”
Amendment to the “Procedures for the Acquisition or Disposal of Assets.”
Amendment to the “Rules Governing the Proceedings of Shareholder Meetings”
By-election for one Independent Director of the 22[nd] Board of Directors.
Release of restriction on competitive activities of directors.
(VII) Extemporary Motions
(VIII) Adjournment
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Report Items

I. 2021Business Report.
Description: 2021 Business Report (Please refer to Attachment 1).
II. Audit Committee’s Review Report on the 2021Financial Statements. Description: Audit Committee’s Review Report (Please refer to Attachment 2).
III. Status of the capital raising proposal by domestic public share issuance (cash offering) resolved by shareholders at the 2021 Annual General Meeting.

Description:

(I) Pursuant to the resolution of the Company’s annual shareholders meeting on July 2, 2021, shareholders approved the domestic public share issuance (cash offering) with an issue size no greater than 600 million common shares.
(II) In accordance with the authorization of the shareholders' meeting, the board of directors resolved the domestic share issuance by cash offering with the issue size no greater than 500 million common shares, which was approved by the Financial Supervisory Commission in letter No. 1100370634 dated November 5, 2021.
(III) The cash offering was completed and issued on December 21, 2021, with the following terms:
Total amount of issuance: NT$5,000,000 thousand.
Number of shares issued: 500,000 thousand common shares.
Price per share: NT$11.75.
Actual total amount raised: NT$5,875,005 thousand.
Listing date: December 24, 2021.
Place of listing: Taiwan Stock Exchange.
Effect on shareholders' equity: The cash capital increase will result in a dilution ratio of approximately 13% to the original shareholders' equity. Although this will result in an expansion of capital and dilution of earnings per share, the cash capital increase will enhance the Company's own capital, increase operational flexibility and strengthen the financial structure, which will be beneficial to the Company's future operations and development.
(IV) Planned use of proceeds and expected benefits: All the proceeds raised from the cash offering will be used to repay loans from financial institutions. In addition to saving interest expenses and improving the financial structure, it will reduce the dependence on financial institutions, increase the flexibility of capital deployment and reduce operational risks. The company repaid the loans to financial institutions at the end of the fourth quarter of 2021 after the completion of fund raising.
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IV. Status of the employees' and directors' remuneration of 2021

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 include 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 2021 remuneration proposal to the employees representing 3% of earnings is NT$124,488,194; Director’s remuneration of no greater than 2% of earnings is NT$82,992,129. All payments were in cash.
V. Other reporting items.
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Ratification Items

ITEM 1 ：

(proposed by the Board of Directors)

Proposal: Ratification of the 2021 Business Report and Financial Statements

Description:

I. The Company’s 2021 parent only and consolidated financial statements have been audited by Ms. Melody Chen and Ms. Tan-Tan Chung of KPMG.
II. The Company’s 2021 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: 2021 Business Report

Attachment 3: 2021 Parent Only and Consolidated Financial Statements

Resolution:

ITEM 2:

(Proposed by the Board of Directors)

Proposal: Ratification of the 2021 Earnings Distribution Proposal Description:

I. In accordance with the Company Act, the Securities and Exchange Act and the Articles of Incorporation of the Company, the profit distribution of the Company in 2021 has been proposed

by the Board of Directors as follows, and is verified by the Audit Committee.

II. The Company’s 2021 beginning undistributed surplus was NT$0, and 2021 net profit after tax was NT$3,603,208,093, adding recognized undistributed surplus adjustments due to disposal of NT$1,383,659 in equity instruments measured at fair value through other comprehensive gains, NT$1,421,586,275 reversal of special reserve from disposal of investment properties to retained earnings and losses, subtracting recognized undistributed subtraction adjustments due to remeasurement of defined benefit plans for the current year of NT$75,443,127. The total year-end surplus available for distribution is NT$4,950,734,900. Pursuant to Article 237 of the Company Act, NT$495,073,490, namely, 10% of the earnings was appropriated as the legal surplus reserve. After setting aside a special reserve of NT$2,676,122,171 net increase amount of fair value from the adoption of fair value method to value real estate investments, the proposed distribution is as follows:
(I) Cash dividends of NT$1,513,940,052 (NT$0.4 per share) were distributed to common stock.
(II) NT$265,599,187 of undistributed earnings at the end of the period.
(III) The cash dividends of common stock distributed in this surplus were NT$0.4 per share. If later on when the Company manages a capital increase by cash, repurchases shares of the Company, transfers, converts and cancels treasury shares, converts corporate bonds and converts employee stock warrants according to issuance and conversion methods and other capital stock changes that result changes in the shareholder's stock (dividends) distribution, it is recommended to authorize the Chairman of the Board to adjust the number of shares issued and outstanding as recorded in the Company's common stock shareholders roster with full authority according to the ex-dividends date in accordance with the dividends amount in the resolution of the 2022 shareholders' annual meeting.
(IV) The Board of Directors is authorized to stipulate the ex-dividend date for distribution after the approval of the shareholders' meeting.
III. Please refer to Attachment 4 for the Earnings Distribution Table for 2021.

Resolution:

Discussion and Election Items

ITEM 1

(Proposed by the Board of Directors)

Proposal: Amendment to the “Articles of Incorporation” Description:

I. To comply with the current regulations on earnings distribution and to benefit shareholders' participation in shareholders' meetings, it is proposed to amend certain articles of the Company's "Articles of Incorporation".
II. Please refer to Attachment 5 of this booklet for the Comparison between Original and Amendments to Articles of Incorporation.

Resolution ：

ITEM 2

(Proposed by the Board of Directors)

Proposal: Amendment to the “Procedures for Loans, Endorsements, and Guarantees.” Description:

I. In response to the future business development needs of the Company and its subsidiaries, the Company proposes to add new procedures for the lending of funds to others and to revise provisions of the “Procedures for Loans, Endorsements, and Guarantees" in accordance with the "Procedures for Lending and Endorsement of Funds and Guarantees to Public Companies.”
II. Please refer to Attachment 6 for the Comparison between Original and Amendments to Procedures for Loans, Endorsements, and Guarantees.

Resolution:

ITEM 3

(Proposed by the Board of Directors)

Proposal: Amendment to the “Procedures for the Acquisition or Disposal of Assets.” Description:

I. To comply with current regulations regarding the trading of derivative products and limits on contractual losses, the Company proposes to amend provisions of the Company’s "Procedures for the Acquisition or Disposal of Assets".
II. Please refer to Attachment 7 for the Comparison between Original and Amendments to "Procedures for the Acquisition or Disposal of Assets".

Resolution:

ITEM 4

(Proposed by the Board of Directors)

Proposal: Amendment to the “Rules Governing the Proceedings of Shareholder Meetings” Description:

I. In accordance with the amendments of regulation to add relevant provisions on video conference for the benefit of shareholders' participation in shareholders' meetings, the Company proposes to amend the “Rules Governing the Proceedings of Shareholder Meetings” for shareholders to attend virtual shareholders’ meetings.
II. Please refer to Attachment 8 for the Comparison between Original and Amendments to “Rules Governing the Proceedings of Shareholder Meetings”.

Resolution:

ITEM 5

(Proposed by the Board of Directors)

Proposal: By-election for one Independent Director of the 22[nd] Board of Directors. Description:

I. Pursuant to Article 19 of the Articles of Incorporation, the Board is composed of seven to eleven directors, each with a term of three years, with eligibility for election 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. In addition, Article 14-2 of the Securities and Exchange Act states, "If, for any reason, the number of independent directors is not sufficient to meet the requirements of the Articles of Incorporation, a by-election shall be held at the most recent shareholders' meeting.
II. The term of office of the Company's 22[nd] by-election of one independent director with a term that shall commence on May 27, 2022 and end on July 1, 2024 (same as the term of office of the 22[nd] Board of Directors of the Company).
III. The list of independent director candidate approved by the Board of Directors on April 13, 2022 is as follows:

Independent Directors Candidates	Gender	Education	Professional Experience (including the current position)	Current Shareholdings
Tsai Lian-Sheng	Male	- M.S., Institute of Continental Studies, Tamkang University - B.S., Department of International Trade, Feng Chia University	- Secretary General, National Federation of Industries, R.O.C. - Director of Vocational Research and Training Development Center, R.O.C. - Deputy Secretary General, Cross-Strait Entrepreneurs Summit - Advisor, Straits Exchange Foundation - Member of the Taipei City Government's Mainland Affairs Committee - Independent Director of Kung Sing Engineering Corporation (KSECO) - Independent Director of Yi Shin Textile Industrial Co. Ltd. - Independent Director of AcBel Polytech Inc.	0

Election results:

ITEM 6

(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 on behalf of other person that is within the Company’s business scope, the directors shall explain the essential contents of their activities at the shareholders’ meeting and obtain the shareholders’ approval.
II. In order to enable the directors of the company and the representatives appointed by the corporate directors to conduct the business smoothly, it is proposed to lift the restriction on the prohibition of competition for the 22[nd] directors and corporate director representatives of the Company.
III. The Company proposes the release of restrictions on competitive activities on the following directors.

Title	Name	Currentpart-time situation(relevant competition)
Independent Director	Tsai Lian-sheng	- Independent Director, Kung Sing Engineering CO., Ltd. - Independent Director, Yi Shin Textile Industrial CO., Ltd. - Independent Director,AcBel Polytech Inc.
Legal Representative of Corporate Director	Core Pacific Co., Ltd Representative: Ruey-LongChen	- Director (Legal Representative), Tatung CO.
Legal Representative of Corporate Director	Jen Huei Enterprise Co., Ltd. Representative: Jiun-Nan Bai	- Chairman, First Leasing Co. Ltd. - Director (Legal Representative), BES Engineering Corp. - Director (Legal Representative)1, Taivex Therapeutics Corporation
Corporate Director	BES Machinery Co., Ltd	- Core Pacific World Co., Ltd. - BES Construction Corporation(U.S.A.)
Legal Representative of Corporate Director	BES Engineering Corp. Representative: Hui-Lan Chu	- Director (Legal Representative), Core Pacific World Co., Ltd. - Chairman & President, BES Engineering Corp. - Director (Legal Representative), BES Construction Corporation (U.S.A) - Director (Legal Representative), Global BES Engineering (Myanmar) Co. Ltd - Director (Legal Representative), BES Engineering Vietnam CompanyLimited

1: Reinvestment companies of the Company using the equity method

Resolution:

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Extemporary Motion

Adjournment

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Attachment 1

China Petrochemical Development Corporation

2021 Business Report

The Company reported 2021 consolidated revenues of NT$35.163 billion, net operating profit of NT$2.514 billion and net profit after tax of NT$3.596 billion. The detailed breakdown of the Company’s 2021 operating performance is as follows:

(I) Sales of Major Products

Major Product Production & Sales Volumes in the Past 2 Years


Major Product P	roduction & Sales Volumes in the Past 2 Years Unit: Tons
Production Major Volume Product	FY 2021 (Consolidated)		FY 2020 (Consolidated)		Increase (Decrease) Volume
	Production	Sales	Production	Sales	Production	%	Sales	%
Acrylonitrile (AN)	209,188	236,260	203,797	241,965	5,391	3%	(5,705)	(2%)
Caprolactam (CPL), Nylon Chips	376,137	277,187	203,423	168,256	172,714	85%	108,931	65%
O-phenylphenol (OPP)	2,405	2,309	2,151	1,948	254	12%	361	19%

Note: The production volume includes transfers for internal use.

The decrease of Acrylonitrile (AN) sales was mainly due to the new production capacity added in mainland China; the increasing in overall supply led to sales decline.
The increase of Caprolactam (CPL) sales and production was mainly due to the economic recovery and improvement post-pandemic, regional balance, impact of global logistics, and accelerating demand from downstream firms, resulting in a significant sales increase in 2021.
The increase of O-phenylphenol (OPP) sales and production was mainly due to an expansion of high-value products and sales and marketing efforts, resulting in an increase of both production and sales.
(II) Operating Revenue and Expense and Profitability Analysis Operating Revenue and Expense:

Annual Income Statement

Unit: NT$ thousands

Year Line Item Line Item	FY 2021 (Consolidated)	FY 2020 (Consolidated)	Increase (Decrease)	%
Revenues	35,163,380	17,583,092	17,580,288	100%
Gross Profit	5,096,443	38,228	5,058,215	13232%
Operating Profit (Loss)	2,514,465	(1,812,878)	4,327,343	239%
Non-Operating Income and Expenses	1,475,213	1,916,654	(441,441)	(23%)
Pre-Tax Profit	3,989,678	103,776	3,885,902	3745%
Net Profit after Tax	3,596,227	674,660	2,921,567	433%
EPS (After Tax)	1.09	0.21	0.88	419%

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Operating revenue
The 2021 operating revenues increased by 100%, NT$17.58 billion versus the previous year, mainly due to the following reasons:
(1) The revenues from Acrylonitrile (AN) and related byproducts were NT$14.09 billion in 2021, increased 92% or NT$6.74 billion from the NT$7.35 billion reported in the previous year. The increase was mainly from an 85% increase in unit prices versus the previous year for Acrylonitrile (AN) products.
(2) The revenues from Caprolactam (CPL) and related byproducts were NT$14.786 billion in 2021, increased 129% or NT$8.327 billion from NT$6.459 billion reported in the previous year. The increase was mainly from a 63% increase in unit prices and 16% increase in sales volume versus the previous year for Caprolactam (CPL) products.
(3) The revenues from other departments (including subsidiaries) were NT$6.287 billion, increased 67% or NT$2.513 billion from the NT$3.774 billion reported in the previous year. The increase was mainly from subsidiary revenue improvements due to recovery post-pandemic and an increase in trading revenues.
Operating Profit

Net operating profit in 2021 increased by NT$4.327 billion, or 239% versus the previous year due to the following reasons:

(1) For Acrylonitrile (AN) products, the profit in 2021 increased by NT$2.78 billion versus the previous year because of the recovery after COVID-19 and force majeure factors in other countries that resulting in an increasing of sales prices.
(2) For Caprolactam (CPL) and byproducts, profits increased by NT$2.061 billion versus the previous year. The increase was mainly due to the recovery of the textile industry, increasing demand of nylon from downstream firms which resulted in an increase in sales and price of CPL.
(3) In 2021, overall operating expenses increased by NT$731million versus the previous year mainly due to increase in sales, transportation cost and remuneration because of the significant increasing in profits.
Non-Operating Income and Expenses

Non-operating profit, decreased by NT$441 million in 2021, or by 23%, due to the following reasons:

(1) An increase of NT$2.016 billion from the revaluation gain of investment property appraisal versus the previous year.
(2) An increase of NT$706 million from gains on disposals of investment property versus the previous year.
(3) An increase of NT$259 million from equity method profits from subsidiaries and related companies.
(4) An increase of NT$1.645 billion from the expense of the An-Shun remediation site.
(5) An increased loss of NT$916 million from impairment of assets versus the previous year.
(6) A decrease of NT$663 million from the gain on valuation of financial asset versus the previous year.
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(7) An increase of NT$196 million from interest expenses and transaction fees versus the previous year.
Net profit before and after taxes

2021 reported pre-tax profits were NT$3.99 billion, increased NT$3.886 billion or 3745% versus the previous year. 2021 reported net profits after tax were NT$3.596 billion (NT$1.09 per share), increased NT$2.922 billion or 433% from NT$675 million (NT$0.21 per share) in the previous year.

(III) Financial Performance Analysis:
Financial Status:

At the end of 2021, total consolidated assets amounted to NT135.4 billion; total liabilities were NT$54.9 billion, and shareholder equity was NT$80.5 billion.

Key Financial Ratios:

Current Ratio at the end of 2021 was 277%, Quick Ratio was 65%, and Debt Ratio (Debt to Total Assets) was 40%.

Cash and Cash Equivalents Status:
- Cash and cash equivalents net inflow from operating, investing, and financing activities was NT$170 million during 2021. The year-end cash and cash equivalent balance was NT$7.7 billion.
(IV) Key Management Work and Implementation Overview:

Key management work and implementation overview items are categorized into the following 6 categories: Production Management, Labor Safety and Environmental Protection, IT Management, HR Management, Financial Planning, and Sustainable Development. 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 build transportation and storage special areas for liquid ammonia (NH3), Phenols, and other major raw materials to improve feedstock purchasing flexibility and related logistic management. The Dashe Plant continue to promote VOCs (volatile organic compounds) detoxification improvement project which effectively lower down VOCs and reduces the perimeter concentration of volatile organic compounds. The Toufen Plant completed a smoke-free emission project for coal-burning cogeneration (combined heat and power, CHP) plant, in addition to improving combustion efficiency, improving the perception of chimney smoke, in part of the environmentally friendly corporate responsibility.

Labor Safety and Environmental Protection:

As the petrochemical industry requires many resources, the Company pays special attention to environmental footprints in the operating process. All CPDC plants 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

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regulations. In addition, with the vision of green petrochemical, CPDC adopts mitigation and adaptation strategies to actively manage and proactively respond to and grasp climate changerelated risks and opportunities. Each plant operates under the P-D-C-A continuous improvement and sustainable management model in quality, environmental protection, occupational safety and health, and energy management systems, and complies with the latest version of ISO international standards and implements internal and external audits and management review systems to review operations. Each factory has passed the latest version of ISO9001, ISO14001, ISO45001, and ISO50001, and conducts annual inspection and verification to maintain the effectiveness of the management system.

(1) Occupational Safety and Health:

To improve production safety management capabilities, in 2021, we continued to progress in production safety management planning, completed production safety operating procedures, layer of protection analysis (LOPA) operating procedures, and production safety management KPI operating guidelines. We implemented “Production Safety Management Compliance Internal Audit Training” and “Production Safety Evaluation, LOPA, Production Safety management KPI procedures training” and other courses. With standardization execution for each factory, we improved our operations of safety management, completed audits for each factory of each class A and class C level hazardous occupational workspace compliance auditing and track areas of improvement. For occupational safety operations, each factory establishes OSHA plans, with dedicated units responsible for safety and supervisory personnel executing safety management work and promoting safety protocols for hazardous activities. With the Headquarter AudioVisual Command Center providing online supervision, on-site supervisors execute local management controls, ensuring safety operations are executed. Our Hsiaokang Factory in 2021 was awarded Bureau of Labor and Kaohsiung City Government awards in OSHA rating excellent in workplace safety standards, and the Healthy Workplace Promotion Certificating from the Health Promotion Administration of the Ministry of Health and Welfare. The Dashe Factory in 2021 assisted the Dashe Industrial Zone Service Center Regional Evaluation in ranking number one in the Southern District, obtaining a Safety Award by the Industrial Development Bureau of the Ministry of Economic Affairs.

(2) Environmental protection:

Supporting international trends and the government initiatives in environmental sustainability policies, CPDC proactively promotes environmental and green economy activities, in achieving our goals in sustainable development. In 2021, we won accolades from the international organization Carbon Disclosure Project (CDP) awarding a Management Level (B-) in climate change, and the Leadership Level (A-) in water security, and domestically from the Taiwan Corporate Sustainability Award (TCSA) won three environmental leadership awards: namely the “Climate Change”, “Circular Economy”, the “Water Resources” Leadership Awards. Also, each factory continues to proactively support and execute our policies in environmental protection. In 2021, the Hsiaokang Factory won awards from the Kaohsiung City Government EPA in supporting global energy saving events, and Kaohsiung City Business Units GHG reduction event, Bronze Metal. The Dashe Factory won air quality clean air zone contribution excellence

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awards, Green Factory Certification, Kaohsiung City EPA Green Procurement Excellence Performance, and the Toufen Factory won the Miaoli Government EPA, Air pollution reduction award and the Miaoli Government Liquid Cellulose-decomposing Bacteria promotion award.

3. IT Management:

To improve the overall operation and management performance, the Company continued implementing the Group-wide HR management system and enterprise resource planning system to secure the foundation for cross-function collaboration, corporate digital operation and transformation. The accumulation of digital operation data and analysis will help with improving the quality of digital decision-making, as well as facilitate the application of AI to optimize the company's operational performance. 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, continues infusing innovative AI applications and building AI research and development platform to cultivate technological capacity. In the three major application areas of process optimization, smart industrial safety and intelligent services, to accelerate the development of the company's use of intelligent decision-making.

4. HR Management:

To enable domestic and overseas colleagues to focus on carrying out business, and to continue the efforts in expansion to China and South East Asia, the Company continues to optimize productivity in managerial capabilities, and continue to implement and strengthen local domestic and international pandemic prevention efforts, providing remote work workplace environment, health care and integrated insurance coverage. Implementing new concepts and quality online coursework and materials to motivate colleagues to keep up with learning and to elevate overall satisfaction. 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. Concurrently, we uphold the principle of reward and punishment and survival of the fittest, and continue strengthening carrying out the performance appraisal to place the suitable talent for the right position and to build the high-efficiency teams.

Facing the changing market conditions post-pandemic, continued availability of remote, online and offline, virtual and real-world integration and tools will continue to provide a cross boarder management business model and optimization. Combined with documented horizontal, vertical and 360o well-rounded linkage of cross-functional relationships to create differentiated competitive advantages and provide substantial utilization value for corporate operations towards a sustainable growth.

5. Financial Planning:

To meet the capital requirements of the Company's petrochemical and land development dual strategy, we continue to strengthen our partnership with financial institutions and raise capital through the capital market, making good use of the Company's real estate and other resources to obtain lower cost borrowings and maintain reasonable and safe cash flow; and through the Company's ESG performance, we actively seek preferential interest rates for sustainability

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linked loans (SLLs) from financial institutions to reduce borrowing costs. In addition, the Company invests in short-term financial instruments or currency funds to increase profits. In the future, we will continue to strive for sustainable performance-linked loan lines from financial institutions in line with the Company's ESG achievements, improve credit ratings with sound financial ratios, and issue green finance or sustainable development-related products.

6. Sustainability Development:

In 2021, the Company actively kept promoting ESG projects with the vision of "pursuing green ecological development and coexisting with the environment and society", and established the CPDC Sustainable Development Strategy Blueprint 2.0, which combines the 12 United Nations Sustainable Development Goals (SDGs), and set out short-, medium- and long-term greenhouse gas reduction commitments to move toward the 2050 net zero carbon emissions target as the guiding framework for the Company's sustainable development.

In accordance with the " Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies" amended by the Taiwan Stock Exchange, the Company's Board approved the amendment to the "Corporate Social Responsibility Best Practice Principles" to "Sustainable Development Best Practice Principles". The CPDC Board also approved the formal establishment of the Company’s "Sustainable Development Committee", and the "Organizational Procedures of the Sustainable Development Committee" formulated for compliance and operation of the committee, so as to integrate sustainable development into the Company's management strategy.

In terms of ESG performance, we have actively participated in various sustainability assessments, strengthened the disclosure of non-financial information, and deepened the interaction with various stakeholders. CPDC in 2021received many recognitions in Taiwan and internationally, including:

(1) The only company in Taiwan's chemical industry that has been named to S&P Global Sustainability Yearbook for two consecutive years and is ranked 16th in the global chemical industry.
(2) Received recognition from the International Carbon Disclosure Project (CDP) with a Management level (B-) in the Climate Change project and the Leadership Level (A-) in the Water Security project.
(3) Awarded the 2021 Taiwan Corporate Sustainability Award (TCSA). In addition to receiving the "Taiwan Sustainable Corporate Performance Award" and the "Corporate Sustainability Report Award - Traditional Manufacturing Industry Gold Award", CPDC was the only company in the chemical industry to receive all three environmental leadership awards, namely the "Climate Change, "Circular Economy”, and "Water Resources” Leadership Awards.
(4) Received two recognitions from the 21st Golden Peak Awards, the "Top 10 Outstanding Enterprises" and the "Top 10 Outstanding Innovation and Research Award".
(5) Awarded 1111 Job Bank 2021 Happy Company - "Manufacturing Industry Gold Award".
(6) CPDC's Dashe plant received the 110th Annual Water Conservation Award from the Water Resources Department, Ministry of Economic Affairs, and was awarded the "Special Merit Award in the Industrial Group".
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(7) CPDC's HsiaoKang Plant was awarded "5-star Award for Excellent Occupational Safety and Health Unit 2021" by the Ministry of Labor.
(8) CPDC's Hsiaokang Plant was awarded the "i-Sports Enterprise 2021" with the Sports Enterprise Certification by the Ministry of Education.

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 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 cyclohexanone derivatives.

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, Lithium battery elements and cellular phones & 5G basic materials, biodegradable plastics, 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.

To consolidate the technological leadership of the existing product market, as well as to accelerate the development of new products and manifest the strong research and development capability, the Company has obtained 234 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 protect the Company’s key assets and R&D core technology effectively and securely.

In line with the global ESG trends, we are actively promoting ESG and looking for new opportunities for our future business by responding to sustainable transformation as early as

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possible. We are currently focusing on the development of biomass materials and are committed to product development and research towards new manufacturing processes such as green and environmental protection, circular production, and reduction of pollutants, in the hope of reducing environmental hazards and integrating with the circular economy system to achieve our core goal of sustainable growth.

(VI) Management Principles and Future Operational Outlook:

Management Principles

The Company focuses on expanding the two-pronged business approaches of "Petrochemical Business" 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. In our core petrochemical business, we shall optimize the production capabilities of our current products and develop multiple high value new products for the short term; in the long term, the Company is working towards establishing 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 land assets; while through the layout to penetrate overseas real estate development; for the long-term domestic and overseas goals are to promote relevant development plans through the phased zoning, through the layout in areas with and development and investment potential domestically and overseas, to develop green building products that are in compliance with environmentally friendly, energy-conservation and carbon- reduction, hoping to create a new triple win situations for shareholders, corporation and society, and demonstrate CPDC’s vision of shouldering corporate social responsibility and moving towards a vision of a green petrochemical business.

Future Operating Outlook:

CPDC believes that the response and management policies on environmental, social, and corporate governance issues are important performance indicators. In facing the ever changing operating environment, the Company will adhere to the principle of respecting for the natural ecology and strive towards achievement as a green petrochemical business, minimize the environmental footprint, continue to heighten overall ESG performance and developing sustainable products toward green financing and attract sustainable investment. The future operating prospects of the Company’s two-pronged focus in the petrochemical core business and land development are described as follows:

Petrochemical Core Business:
(1) Short-term Planning:
- ① Optimize the competitiveness of existing products: Increase the flexibility of raw material and product deployment by installing additional raw material and product shore tanks, enhance product value, introduce new technologies, and integrate the use of heat and cold energy to significantly reduce energy consumption and enhance competitiveness. Engage and participate in international energy savings and carbon reduction initiatives, proactively plan for aggressive carbon reduction targets and move towards circular economy, green factory production capabilities.
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② Develop diverse new high-value products market: We will continue to develop highvalue specialty nylon products, specialty chemicals, esters, electronic grade semiconductor products, and functional polymers for applications; while engaging in developing biomass materials, degradable plastics, and recycled plastics supporting the trend towards more environmentally friendly products.
(2) Long-term Planning:
① Establish an integrated overseas production base: Accelerate the promotion of integrated production to avoid the impact of fluctuations in the price of intermediate raw materials, which affects the stability of profits; local balance of intermediate raw materials can save storage and transportation costs, and high integration of materials and energy can reduce energy costs and establish a competitive cost advantage.
② Constructing a smart management system: The Audio-Video Command Center implements various enterprise resource management transformations, strengthens the essence of management through AI technology applications, builds a smart decisionmaking platform, and implements textual extension applications of documented horizontal, cross-functional linkage relationship and builds functional modules, hoping to create a smart system and provide complete information through long-term integration of production monitoring, supply and demand analysis, market scheduling, price forecasting, and operational performance analysis data. To improve the quality of decision making and establish management and technological competitiveness.

2. Land Development:

(1) Short-term Planning:
① Aim to develop and revitalize existing land assets in Taiwan ： The Company's land in Special Zone 5A and Special Zone 6 of the Kaohsiung Multipurpose Economic and Trade Park will be developed in line with the Kaohsiung City Government's promotion of the development of the "Asian New Bay Area" and the relocation schedule of the 205th Military Industrial Plant of the Ministry of National Defense. Until then, we will continue to revitalize the land, not only in line with the urban development strategy, but also to create the highest value for the Company's land assets.
② Targeting overseas real estate development in emerging growth regions ： In response to new business opportunities arising from the emergence of emerging markets in Southeast Asia, we are actively exploring large areas of land with potential for development in Vietnam and Myanmar and other related countries, either by acquiring land and equity, or through the Company’s standalone development or strategic cooperation with existing, undeveloped projects.
(2) Long-term Planning:
① Promote Taiwan-related development projects in phases and by regions.

To respond to the government's policy of greening and energy saving and urban development projects, in addition to enhancing the development intensity of large

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areas of land, we aim to develop appropriate, safe and intelligent building products by using green buildings, carbon absorbing civilization, and integrating existing ESG elements, metaverse and AI technology.

② Develop overseas real estate development

In Vietnam, Myanmar, or other Southeast Asian regions, we aim to combine organic farming to obtain petrochemical biomass raw materials and establish petrochemical production bases (including agricultural and industrial areas) to drive residential and commercial development, with the goal of sustainable operation, production, living and ecological smart cities.

CDPC is committed to the development concept of sustainable operation and environmental coexistence and continues to promote the dual strategy of petrochemical and land development, hoping to improve the company's operational quality through short-term and long-term planning, and to integrate with the environment and society, and never forgetting the mission of corporate social responsibility, good global citizenship, and the vision of moving towards green petrochemicals.

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Chairman: General Manager: Accounting Manager:

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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 2021. 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 2022 Annual Shareholders’ Meeting

Convener of the Audit Committee: 朱雲鵬

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March 14[th] , 2022

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Attachment 3

I. 2021 Parent Only Financial Report

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, 2021 and 2020, 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, 2021 and 2020, 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 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the 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.

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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, 2021 and 2020 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 1.61% and 1.17% of total assets as of December 31, 2021 and 2020, respectively. The related shares of investment income from these investees including subsidiaries, associates and joint ventures accounted for using equity method represented 6.28% and (79.22)% of income before income tax for the years ended December 31, 2021 and 2020, 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 33% of total assets as of December 31, 2021, 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.

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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 14% of total assets as of December 31, 2021, 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.

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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.

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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 14, 2022

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.

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

Balance Sheets

December 31, 2021 and 2020

(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) 1220 Total current tax assets (notes 4) 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 (notes 4 and 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (notes 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, 2021 Amount % $ 2,782,774 2 187,229 - 2,773,447 2 612,517 1 95,803 - 5,377 - 3,222,256 3 620,835 1 441,543 1 10,741,781 10 5,117,918 4 2,741,382 2 43,171,377 37 16,057,288 14 150,045 - 38,850,641 33 11,009 - 332,540 - 106,432,200 90 $ 117,173,981 100	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 Liabilities and Equity Current liabilities: 2100 Short-term loans (note 6(k)) 2130 Current contract liabilities (note 6(v)) 2170 Accounts payable 2180 Accounts payable to related parties (note 7) 2200 Other payables (note 7) 2230 Current tax liabilities (note 4) 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-current liabilities Total liabilities Equity (note 6(t)): 3110 Common stock 3200 Capital surplus Retained earnings : 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Others equity: 3410 Exchange differences arising on translation of foreign operations 3420 Unrealized gains or loss on financial assets at fair value through other comprehensive income Total equity Total liabilities and equity	December 31, 2021		December 31, 2020 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
			Amount %
			$ 1,096,360 1 20,612 - 1,625,672 1 11,333 - 2,339,521 2 13,128 - 478,077 1 44,167 - 300,000 - 57,718 - 5,986,588 5 3,500,000 3 11,808,900 10 3,131,573 3 6,763,683 6 108,032 - 5,254,518 4 113,754 - 30,680,460 26 36,667,048 31 37,848,502 32 1,454,301 1 2,389,125 2 35,390,076 31 4,950,734 4 42,729,935 37 (948,859) (1) (576,946) - (1,525,805) (1) 80,506,933 69 $ 117,173,981 100

See accompanying notes to financial statements.

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

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(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 profit (loss) from operations 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 Net operating income (loss) 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 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 Profit before income tax 7950 Less: income tax expenses (benefit) (notes 4 and 6(s)) Profit 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 (notes 4 and 6(r)) 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income (notes 4 and 6(t)) 8330 Shares of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss (notes 4 and 6(t)) 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 (notes 4 and 6(t)) 8380 Shares of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that may be reclassified to profit or loss (notes 4 and 6(t)) 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 Earnings per share (notes 4 and 6(u)) 9750 Basic earnings per share 9850 Diluted earnings per share	2021 Amount % $ 30,564,118 100 26,177,163 86 4,386,955 14 (1,476) - (7,042) - 4,378,437 14 444,164 1 770,032 3 329,694 1 - - 1,543,890 5 2,834,547 9 54,028 - 267,607 1 (1,353,924) (4) (259,640) (1) 220,699 1 2,911,289 9 183,189 1 (915,669) (3) 1,107,579 4 3,942,126 13 338,918 1 3,603,208 12 (78,021) - 242,236 1 39,039 - - - 203,254 1 (138,595) - - - 155,938 1 - - 17,343 1 220,597 2 $ 3,823,805 14 $ 1.09 $ 1.09	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

See accompanying notes to financial statements.

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

Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Ordinary shares	Ordinary shares	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
			Legal reserve	Special reserve	Unappropriated retained earnings
$ 28,348,502 - - - - - - 4,500,000 - - 32,848,502 - - - - - 5,000,000 - - - $ 37,848,502		1,286,700 - -	2,137,330 - -	35,490,262 - -	1,779,147 680,989 (27,393) 653,596 (173,844) (111,367) (985,455) - (393) 126,299 1,287,983 3,603,208 (75,443) 3,527,765 (77,951) (1,210,033) - - 1,384 1,421,586 4,950,734	(804,515) - (161,687) (161,687) - - - - - - (966,202) - 17,343 17,343 - - - - - - (948,859)	(1,120,657) - 392,697 392,697 - - - - - (126,299) (854,259) - 278,697 278,697 - - - - (1,384) - (576,946)	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 3,603,208 220,597
	-		-	-				3,823,805
	- - 5,000,000 - - -		77,951 - - - - -					- - 5,869,362 1,124 - -
	$ 37,848,502		2,389,125					80,506,933

See accompanying notes to financial statements.

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

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net gain on financial assets 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 Gain on disposal of investment properties Loss on disposal of investments accounted for using equity method Impairment loss (reversal of impairment loss) on non-financial assets Unrealized profit (loss) from sales Realized loss from sales Impairment loss on property, plant and equipment Gain on fair value adjustment of investment property Unrealized remediation expense Gain on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in accounts receivable due from related parties (Increase) decrease in other receivables Increase in inventories (Increase) decrease in prepayments (Increase) decrease in other current assets Total changes in operating assets Increase (decrease) in contract liabilities Increase in accounts payable Increase in accounts payable to related parties Increase (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	For the years end	ed December 31 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)
	2021 $ 3,942,126 905,652 - (183,189) 259,640 (54,028) (164,530) (220,699) - (706,465) - 14,601 1,476 7,042 915,669 (2,911,289) 1,664,899 (12) (471,233) (3,341,327) (523,148) (34,911) (1,011,740) (37,161) (34,826) (4,983,113) 19,658 410,519 11,333 952,546 (41,570) 48,800 1,401,286 (3,581,827) (4,053,060) (110,934) 60,803 (256,246) (59,167) (365,544)
		(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)

See accompanying notes to financial statements.

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

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

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 Proceeds from capital reduction of financial assets at fair value through profit or loss 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 Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Proceeds from cancellation of property purchasing Proceeds from disposal of investment properties Decrease (increase) in other financial assets Increase in other non-current assets Dividends received 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 (decrease) in other non-current liabilities Cash dividends paid Capital increase by cash Interest paid Net cash flows from financing activities Net increase (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 2020 (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
	2021 $ - 1,438 2,751,363 - 620,576 (15,843,590) - 1,200,000 (2,807,140) - 186,000 2,380,000 1,605,758 (63,793) 565,111 (9,404,277) 13,873,892 (14,298,145) - 36,415,100 (32,123,400) 42,437,700 (40,590,500) (47,662) 10,533 - 5,869,362 (2,983) 11,543,897 1,774,076 1,008,698 $ 2,782,774

See accompanying notes to financial statements.

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II. 2021 Consolidated Financial Report

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, 2021 and 2020, 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, 2021 and 2020, 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 audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“ the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. 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(r) 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.

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Other Matter

CPDC has prepared its parent-company-only financial statements as of and for the years ended December 31, 2021 and 2020, 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 0.15% and 0.27% of consolidated total assets at December 31, 2021 and 2020, and total operating revenues constituting both 0% of consolidated total operating revenues for the year ended December 31, 2021 and 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, 2021 and 2020 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, 2021 and 2020. The related shares of investment income from these investees including subsidiaries, associates and joint ventures accounted for using equity method represented 8.20% and 3.57% of consolidated net income before income tax for the years ended December 31, 2021 and 2020, 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(x) “ 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.
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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 29% of consolidated total assets as of December 31, 2021, 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 19% of consolidated total assets as of December 31, 2021, 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).
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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.
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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 14, 2022

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.

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

Consolidated Balance Sheets

December 31, 2021 and 2020

(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)) 1120 Current financial assets at fair value through other comprehensive income (notes 4 and 6(c)) 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) 1220 Current tax assets (note 4) 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 (notes 4 and 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (notes 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)) 1780 Intangible assets (notes 4 and 6(k)) 1840 Deferred income tax assets (notes 4 and 6(u)) 1900 Other non-current assets (note 8) Total non-current assets Total assets	December 31, 2021 Amount % $ 7,650,122 6 357,219 - 9,674 - 3,391,732 3 477,344 - 115,814 - 6,104 - 42,131,583 31 1,738,875 1 1,476,978 1 57,355,445 42 6,973,779 5 3,050,053 2 2,329,486 2 25,333,641 19 864,464 1 38,867,067 29 172,308 - 11,023 - 497,942 - 78,099,763 58 $ 135,455,208 100	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 Liabilities and Equity Current liabilities: 2100 Short-term loans (note 6(l)) 2110 Short-term bills payable (note 6(o)) 2130 Current contract liabilities (note 6(x)) 2170 Accounts payable 2180 Accounts payable to related parties (note 7) 2200 Other payables (note 7) 2230 Current tax liabilities (note 4) 2250 Provisions-current (notes 4, 6(r) and 6(t)) 2280 Lease liabilities-current (notes 4 and 6(q)) 2320 Long-term liabilities-current portion (note 6(m)) 2399 Other current liabilities, others Total current liabilities Non-Current liabilities: 2530 Bonds payable (notes 4 and 6(n)) 2540 Long-term bank loans (note 6(m)) 2550 Provisions-non-current (notes 4, 6(r) and 6(t)) 2570 Deferred income tax liabilities (notes 4 and 6(u)) 2580 Lease liabilities-non-current (notes 4 and 6(q)) 2611 Long-term bills payable (note 6(p)) 2670 Other non-current liabilities, others Total non-current liabilities Total liabilities Equity attributable to owners of parent: 3110 Common stock (note 6(v)) 3200 Capital surplus (note 6(v)) Retained earnings (note 6(v)): 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Other equity (note 6(v)): 3410 Exchange differences arising on translation of foreign operations 3420 Unrealized 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, 2021		December 31, 2020 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
			Amount %
			$ 12,737,689 10 1,429,955 1 20,612 - 1,759,025 1 11,333 - 2,564,997 2 39,477 - 478,734 - 56,324 - 1,511,515 1 127,720 - 20,737,381 15 4,684,096 4 13,905,589 10 3,200,532 2 6,764,316 5 240,124 - 5,254,518 4 140,233 - 34,189,408 25 54,926,789 40 37,848,502 28 1,454,301 1 2,389,125 2 35,390,076 26 4,950,734 4 42,729,935 32 (948,859) (1) (576,946) - (1,525,805) (1) 80,506,933 60 21,486 - 80,528,419 60 $ 135,455,208 100

See accompanying notes to consolidated financial statements.

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(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, 2021 and 2020

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

4000 Operating revenues (notes 4, 6(x) and 7) 5000 Operating costs (note 6(e)) Gross profit from operations 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 Net operating income (loss) Non-operating income and expenses: 7100 Interest income (note 6(z)) 7010 Other income (notes 6(z) and 7) 7020 Other gains and losses (note 6(z)) 7050 Finance costs (notes 6(q) and 6(z)) 7060 Shares of profit (loss) of associates and joint ventures accounted for using equity method, net (notes 4 and 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 (notes 4 and 6(j)) 7673 Impairment loss on property, plant and equipment (notes 4 and 6(h)) Total non-operating income and expenses Profit before income tax 7950 Less: income tax expense (benefit) (notes 4 and 6(u)) Profit 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 (notes 4 and 6(t)) 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income (notes 4 and 6(v)) 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 (notes 4 and 6(v)) 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 (notes 4 and 6(v)) 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 (notes 4 and 6(v)) 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 Profit 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	2021 Amount % $ 35,163,380 100 30,066,937 86 5,096,443 14 901,185 3 1,217,655 3 461,963 1 1,175 - 2,581,978 7 2,514,465 7 188,200 1 486,612 1 (1,393,074) (4) (323,681) (1) 325,902 1 193,148 1 2,913,775 8 (915,669) (3) 1,475,213 4 3,989,678 11 393,451 1 3,596,227 10 (78,291) - 252,449 1 29,096 - - - 203,254 1 10,595 - 5,104 - - - 15,699 - 218,953 1 $ 3,815,180 11 $ 3,603,208 10 (6,981) - $ 3,596,227 10 $ 3,823,805 11 (8,625) - $ 3,815,180 11 $ 1.09 $ 1.09	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

See accompanying notes to consolidated financial statements.

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(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, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

			Equity attributable	o owners of parent				Non-controlling interests	Total equity
Ordinary shares	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
		Legal reserve	Special reserve	Unappropriated retained earnings
$ 28,348,502 - - - - - - 4,500,000 - - - 32,848,502 - - - - - 5,000,000 - - - - $ 37,848,502	1,286,700 - -	2,137,330 - -	35,490,262 - -	1,779,147 680,989 (27,393) 653,596 (173,844) (111,367) (985,455) - (393) - 126,299 1,287,983 3,603,208 (75,443) 3,527,765 (77,951) (1,210,033) - - - 1,384 1,421,586 4,950,734	(804,515) - (161,687) (161,687) - - - - - - - (966,202) - 17,343 17,343 - - - - - - - (948,859)	(1,120,657) - 392,697 392,697 - - - - - - (126,299) (854,259) - 278,697 278,697 - - - - - (1,384) - (576,946)	67,116,769 680,989 203,617	77,095 (6,329) (1,849) (8,178) - - - - (241) (13,287) - 55,389 (6,981) (1,644) (8,625) - - - (1,124) (24,154) - - 21,486	67,193,864 674,660 201,768
	-	-	-				884,606		876,428
		173,844 - - - - - -	- 111,367 - - - - -						- - (985,455) 3,796,481 - (13,287) -
		2,311,174 - -	35,601,629 - -						70,868,031 3,596,227 218,953
		-	-						3,815,180
		77,951 - - - - - -							- - 5,869,362 - (24,154) - -
		2,389,125							80,528,419

See accompanying notes to consolidated financial statements.

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(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, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss Net gain on financial assets 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, plant and equipment Property, plant and equipment transferred to expenses Gain on disposal of investment properties Loss on disposal of investments accounted for using equity method Impairment loss (reversal of impairment loss) on non-financial assets Impairment loss on property, plant and equipment Gain on fair value adjustment of investment property Unrealized remediation expense Gain on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Increase in accounts receivable (Increase) decrease in accounts receivable due from related parties (Increase) decrease in other receivables Increase in inventories (Increase) decrease in prepayments (Increase) decrease in other current assets Total changes in operating assets Increase (decrease) in contract liabilities Increase in accounts payable Increase in accounts payable to related parties Increase (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	For the years end	ed December 31 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)
	2021 $ 3,989,678 1,110,782 9,189 1,175 (193,148) 323,681 (188,200) (313,215) (325,902) 33 - (706,465) - 14,854 915,669 (2,913,775) 1,664,899 (34) (600,457) (3,703,111) (426,238) (17,179) (29,480,480) (498,920) (87,076) (34,213,004) 18,936 364,097 11,333 1,138,895 (119,026) 66,809 1,481,044 (32,731,960) (33,332,417) (29,342,739) 209,524 (323,396) (92,459) (29,549,070)

See accompanying notes to consolidated financial statements.

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(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, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

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 Proceeds from capital reduction of financial assets at fair value through profit or loss 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 Proceeds from disposal of investment properties Decrease (increase) in other financial assets Increase in other non-current assets Dividends received Proceeds from cancellation of property purchasing Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term loans Increase in short-term bills payable 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 increase (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 2020 (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
	2021 $ - 1,438 3,794,637 (667,920) 1,311,894 - - (4,193,610) 746 (23,954) - 2,380,000 1,488,312 (158,644) 367,976 186,000 4,486,875 25,516,793 (14,298,145) 1,429,955 1,209,096 36,715,971 (32,990,955) 42,437,700 (40,590,500) (60,028) 12,632 - 5,869,362 (5,604) - 25,246,277 (13,859) 170,223 7,479,899 $ 7,650,122

See accompanying notes to consolidated financial statements.

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Attachment 4

==> picture [80 x 39] intentionally omitted <==

China Petrochemical Development Corporation Earnings Distribution Table for 2021

Currency Unit: NT$	Currency Unit: NT$
Item	Amounts
Beginning of undistributed earnings	0
Plus (Subtract):
Disposal in equity instruments measured at fair value through other comprehensive income	1,383,659
Special surplus reserve from sales of invested real estate is transferred to retained earnings	1,421,586,275
Adjustments due to remeasurement of defined benefit plans	(75,443,127)
2021 Net profit after tax	3,603,208,093
Earnings available for distribution	4,950,734,900
Subtract:
Legal reserve	(495,073,490)
Special reserve from 2021 increase from the adoption of fair value method to value the real estate investments (Note 1)	(2,459,024,041)
Special reserve from prior period increases from the adoption of fair value method to value the real estate investments (Note 2)	(217,098,130)
Distribute shareholder cash dividends (NT$0.4 per share). (Note 3)	(1,513,940,052)
End of undistributed earnings	$265,599,187

Note 1: Please refer to the content of the Note "Capital and Other Equities" in the 2021 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.
Note 2: Due to the lack of earning from the previous years resulted in the insufficient appropriation from the adoption of fair value method to value the real estate investments. The insufficient appropriation will be complemented by the earning of this fiscal year.
Note 3: The cash dividend is rounded off to the nearest NT Dollar, with the decimal places removed. The total rounded off amounts, are accounted as other income in the Company’s financial statements.

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Chairman: General Manager: Accounting Manager:
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Attachment 5

Comparison between Original and Amendments to Articles of Incorporation

Comparison between Original and Amendments to Articles of Incorporation	Comparison between Original and Amendments to Articles of Incorporation	Comparison between Original and Amendments to Articles of Incorporation	Comparison between Original and Amendments to Articles of Incorporation

Items	Amended Version	Original Version
			Reason
Article 7	The share certificates hereof shall be name-bearing certificates, numbered,and duly signed by or affixed with seals by the Directors representing the Company,and duly authenticated by the competent authority or the issuance registry institution accredited by the competent authority before issuance.The shares issued by the Company could waive the printing of share certificates but shall be registered at TDCC. The Company’s share certificates, orother securities shall be duly issued in accordance with the requirements set forth under of the Company Law and other relevantregulations.	The share certificates hereof shall be name-bearing certificates, duly signed by or affixed with seals by the Chairperson and a minimum of two Directors, and duly authenticated by the competent authority or the issuance registry institution accredited by the competent authority before issuance. The Company’s share certificates shall be duly issued in accordance with the requirements set forth under Articles 162, 162-1 and 162-2 of the Company Law.	It’s adjusted in
			accordance with the
			competent
			institution’s policy of
			Registration for
			dematerialized
			securities and Articles
			161~162, 162-1 and
			162-2 of the
			Company Law.

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. When the shareholder’s meeting is held, the meeting could be held by video conference or other methods announced by the central competent authority	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.	1. 2nd item is added. 2. Article 172-2 of the Company Law, which was amended on Dec. 29, 2021, allows the public companies apply the regulation on video conferences of shareholders' meetings. According to the paragraph of Article 172-1, the company's Articles of Incorporation may stipulate that when the shareholders'

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Items	Amended Version	Original Version
			Reason
			meeting is held, it shall be held by means of video conference or announcement by the central competent authority. Regulations Governing the Administration of Shareholder Services of Public Companies was amended and announced on March 4, 2022, the same shall apply in accordance with Paragraph 3 of Article 44-9. In order to cooperate with the competent authority to promote the policy of video shareholders meeting and also in response to the need of digital era, providing the convenient access for shareholders to participate in the meeting to meet the actual need, the board’s resolution is convened by video conference in shareholder’s meeting and it is specially revised in accordance with the provisions previously disclosed.

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Items	Amended Version	Original Version
			Reason
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 hasearnings, 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, 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	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 hasnet profits, 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 theundistributed cumulativeprofitsfrom previous years and fromcurrent 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	The Company’s Article of Incorporation was amended in order to comply with the letter No. 10802432410 issued by Ministry of Economic Affairs on Jan. 9, 2020 and letter No. 1090250022 and 10901500221 issued by Financial Supervisory Commission on March 31, 2021.

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Items	Amended Version	Original Version
			Reason
	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. In the 2nditem, a legal capital reserve and special capital shall set aside in accordance with relevant laws and regulations or requested by the authorities in charge, including other net equities after the subtraction of the cumulative profits from previous years and net increased amount from the adoption of fair value method to value the real estate investments, special reserve shall be set aside from the unappropriated earnings from the previous years. if any insufficient, it shall be set aside from the current fiscal year hereof. The current earnings mentioned in item 2 and 4, includes the net profit after the taxation of the current year with the other items calculated as the unappropriated earnings.	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.
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;	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;	Added the date of amendment for the Article of Incorporation.

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Items	Amended Version	Original Version
			Reason
	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 13rd 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 31th amendment was made on June 8th, 2017. The 32th amendment was made on May 28th, 2020. The 33th amendment was made on May 27, 2022.	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 13rd 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 31th amendment was made on June 8th, 2017. The 32th amendment was made on May 28th, 2020.

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Attachment 6

Comparison between Original and Amendments to Procedures for Loans, Endorsements, and Guarantees

Amended Version	Original Version	Reason
Article 4 Wherethe Companyand each subsidiary of the Company intends to make loans to others, they shall follow Operational Procedures for Loaning Funds to Others, formulating the procedure andshall approved by the audit committee and the board and submit to shareholder’s meeting for approval. If a director expresses dissent and there is a record or written statement, the dissent shall be submitted to the shareholders'meeting for discussion, and the same shall applied to the amendment.	Article 4 The Company does not intend to loan funds to others, it is relieved from formulating the Operational Procedures for Loaning Funds to Others. Where a subsidiary of the Company intends to make loans to others, such subsidiary shall formulate its Operational Procedures for Loaning Funds to Others (Subsidiary Loan Procedures, SLP) according to the Regulations,submit the Subsidiary Loan Procedures for approval by the shareholders'meeting, and it shall comply with the SLP when loaning funds.	Petrochemical industry and land development are dual main projects of the Company and its subsidiaries, in respond to the future business expansion. In order to increase the subsidiary's flexible capital planning for project investment, and enhance the subsidiary's risk-taking ability adequately, Article 4 of not intending to loan funds to others was amended to intend to make loans to others, they shall follow Operational Procedures for Loaning Funds to Others and formulate theprocedures.
Article 5 In accordance with the Article 15 of the Company Law, where its subsidiaries short-term is necessary provided that the amount of such financing facility shall not exceed forty percent of the amount of the net value of the Company, the Company is allowed to loan to shareholders or others only under this situation. The term"short-term" as used in the preceding paragraph means one year, or where the company's operating cycle exceeds one year, one operating cycle. The term"financing amount"as used in paragraph 1 of this Article means the cumulative balance of the public company's short-term financing. The restriction in paragraph 1 shall		1. This Article was added. 2. This article was added due to the loan’s counterpart, limits and deadlines. 3. The amount of such financing facility is forty percent of the amount of the net value of the Company, mainly considers the total amount of peer’s capital loans and the limit of individual objects. The total amount of corporate capital loans and the limit of individual objects are mostly 20%~40% of the net value.

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Amended Version	Original Version	Reason
not apply to inter-company loans of funds between overseas companies in which the public company holds, directly or indirectly, 100% of the voting shares, nor to loans of fund to the public company by any overseas company in which the public company holds, directly or indirectly, 100% of the voting shares. However, the Public Company shall still prescribe limits on the aggregate amount of such loans and on the amount of such loans permitted to a single borrower, and shall specify limits on the durations of such loans.
Article 6 If the Company proposes to loan funds to others, it shall follow he Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies to formulate the procedures. if the procedures need to be amended, the matter shall be approved by one-half or more of all audit committee members and then submitted to the board of directors for a resolution and for approval by the shareholder’s meeting. If the preceding item that has not been approved with the consent of one-half or more of all audit committee members may be undertaken upon the consent of two- thirds or more of all directors and the resolution of the audit committee shall be recorded in the minutes of the directors meeting. If a director expresses dissent and there is a record or written statement, the dissent shall be submitted to the shareholders'meeting for discussion. "All audit committee members"as used in item 1& 2 shall mean the		1. This Article was added. 2. The amended procedures of Operational Procedures for Loaning Funds to Others shall be proposed for the resolution by the board and for approval by the shareholder’s meeting.

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Amended Version	Original Version	Reason
actual number of persons currently holding those positions. If the independent directors have been established, in accordance with item 1&2, the procedures of Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies was submitted to the board for discussion, Independent directors'opinions shall be taken into consideration, if there is any specific expression of assent or dissent and their reasons for dissent shall be included in the minutes of the board of directors' meeting.
Article 7 Procedures for the Company’s Loan to Others as following, I. The evaluation standard for Loan to Others (1) For subsidiaries of the Company that need short- term financing funds, the reasons and circumstances for obtaining loans and funds shall be listed. (2) For the current loan to individual subsidiaries, the loan limit shall not exceed 20% of the net value of the Company's most recent financial statement. (3) The current total amount of capital loans shall not exceed 40% of the net value of the company's most recent financial statement. II. For the subsidiaries of the Company that have short-term financing through this procedure, the financing period is limited to one year, but if the Company's operating cycle is longer than one year, the operating cycle shall prevail, and the principle of		1. This Article was added. 2. Added evaluation and review standards for Loaning funds to others, interest calculation period and interest rate calculation, operation process, tracking evaluation and overdue claims processing.
I. II.

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	Amended Version	Original Version	Reason
III. IV.	one-time received shall be the principle. The interest calculation method refers to the company's short-term capital cost, plus the one-year average interest rate of the five major banks, and the interest is calculated on a monthly basis or settled once due. The short-term capital cost mentioned above refers to the highest interest rate at which the company can borrow short-term funds from financial institutions. The five major banks are Bank of Taiwan, Cooperative Treasury Bank, First Bank, South China Bank and Taiwan Land Bank. The interest rate is the fixed rate of fixed deposits. The detailed review of the capital loan includes: (1) The necessity and rationality of lending funds to others. (2) Credit investigation and risk assessment of the borrower. (3) The impact on the company's operational risks, financial status and shareholders'rights and interests. (4) Whether the collateral should be obtained and the appraised value of the collateral. Procedures for Loaning of Funds. (1) Before the Company makes funds to others, the relevant department shall sign the opinion on whether to make loan, as well as the loan term, interest calculation method, etc., according to the review procedures in the preceding paragraph, and submit it to the chairman for approval and the board of directors for resolution.
	(1)

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V.	(2)
	(3)

		(1)

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			Original Version	Reason
	(2) Investigate the property available for execution by the principal and secondary debtors, and apply for preservation measures in accordance with the law when necessary. (3) Apply for the execution of the property of the principal and subordinate debtors. (4) Other necessary security measures. 3. If the company believes that the main debtor and the subordinate debtor are indeed unable to repay all the debts, it may consider the actual situation and, under the principle of capital preservation, propose a handling opinion and report to the board of directors for approval to establish a settlement. 4. If the foreign creditor's rights cannot be repaid on time due to the change of foreign exchange laws and regulations by the local government, the case may be reported to the board of directors for approval.	(2)
		(3)
		(4)

Article8 If the Company and its each subsidiary makes loans, Financial Department shall establish a reference book to record the details of the object, amount, date of approval of the board of directors, date of fund loan, and matters that should be prudently evaluated in accordance with Paragraph 1, Subparagraph 3 of the preceding article for reference. Audit reports shall be written every quarter and submit to Investment Department of			Article5 If the Company’s subsidiary makes loans to others, it is required to conduct internal audit on its lending activities and the implementation in compliance with SLP, and to produce written audit reports every quarter to submit to the Company’s Internal Audit and Investment Department for inspection and audit	1. Article 5 is adjusted to Article 8. 2. The article was amended in order to evaluate, supervise and control the risk.

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Amended Version	Original Version	Reason
the Company for review and internal auditors for review or audit. If material violations are discovered, the audit committee and independent directors shall be notified in writing immediately.
Article 9 Due to changes in circumstances, the company shall formulate an improvement plan when the loan counterpart does not conform to the provisions of this standard or the balance exceeds the limit, submit the relevant improvement plan to the audit committee and independent directors, and complete the improvement according to the planned schedule.		1. This article was added. 2. This article was added for the loan counterpart who does not meet the requirements or the balance exceeds the relevant regulations
Article10 The Company’s subsidiaries shall report the balance of loaned funds in the preceding month to the Investment Department of the Company for compilation by the 5thday of each month. The Company shall announce and report the balance of loaned funds in the preceding month ofthe Companyand its subsidiaries by the 10thday of each month. Ifthe Companyor Company’s subsidiary makes loans to others, it shall report the amount and balance to the Company’s Investment Department before 5pm on the date of occurrence. If loans of funds reach one of the following levels, the Company shall announce and report such event within two days commencing immediately from the date of occurrence: 1. The aggregate balance of loans to others bythe Companyand Company’s subsidiaries reaches 20% or more of the Company’s net worth as stated in its latest financial statement.	Article6 The Company’s subsidiaries shall report the balance of loaned funds in the preceding month to the Investment Department of the Company for compilation by the 5thday of each month. The Company shall announce and report the balance of loaned funds in the preceding month of its subsidiaries by the 10thday of each month. If the Company’s subsidiary makes loans to others, it shall report the amount and balance to the Company’s Investment Department before 5pm on the date of occurrence. If loans of funds reach one of the following levels, the Company shall announce and report such event within two days commencing immediately from the date of occurrence: 1. The aggregate balance of loans to others by the Company’s subsidiaries reaches 20% or more of the Company’s net worth as stated in its latest financial statement.	1. Article 6 was adjusted to Article 10. 2. The Companywas added in the description and the words were amended as left by the bottom line.

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Amended Version	Original Version	Reason
2. The balance of loans bythe Company and its subsidiaries to a single enterprise reaches 10% or more of the Company’s net worth as stated in its latest financial statement. 3. The amount of new loans of funds bythe Company and its subsidiaries reaches NT$10 million or more and reaches 2% or more of the Company’s net worth as stated in its latest financial statement. The Company shall announce and report on behalf of any subsidiary that is not a domestic public company any matters that such subsidiary is required to announce and report pursuant to subparagraph 3 of thepreceding paragraph.	2. The balance of loans by the subsidiaries to a single enterprise reaches 10% or more of the Company’s net worth as stated in its latest financial statement. 3. The amount of new loans of funds by the subsidiaries reaches NT$10 million or more and reaches 2% or more of the Company’s net worth as stated in its latest financial statement. The Company shall announce and report on behalf of any subsidiary that is not a domestic public company any matters that such subsidiary is required to announce and report pursuant to subparagraph 3 of thepreceding paragraph.
Article11 The Company shall make endorsements or provide guarantees accordingto theseprocedures.	Article7 The Company shall make endorsements or provide guarantees accordingto theseprocedures.	The Article No. was changed without the content adjustment.
Article12 The parties to whom the Company may provide endorsement and/or guarantee include the following: 1. 2. A company in which the Company directly and indirectly holds more than 50% of the voting shares. 3. A company that directly and indirectly holds more than 50% of the Company’s voting shares. Companies whose voting shares are at least 90% owned, directly or indirectly by the Company may provide endorsements/guarantees for each other; and the amount of endorsements/guarantees shall not exceed 10% of the net worth of the Company. This restriction shall not apply to endorsements/guarantees made between companies where the	Article8 The parties to whom the Company may provide endorsement and/or guarantee include the following: 1. 2. A company in which the Company directly and indirectly holds more than 50% of the voting shares. 3. A company that directly and indirectly holds more than 50% of the Company’s voting shares. Companies whose voting shares are at least 90% owned, directly or indirectly by the Company may provide endorsements/guarantees for each other; and the amount of endorsements/guarantees shall not exceed 10% of the net worth of the Company. This restriction shall not apply to endorsements/guarantees made between companies where the	The Article No. was changed without the content adjustment.

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Amended Version

Original Version ginal Version inal Version

Amended Version Original Version ginal Version inal Version Reason Company holds, directly or indirectly, Company holds, directly or indirectly, 100% of the voting shares. 100% of the voting shares. Where the Company fulfills its Where the Company fulfills its contractual obligations by providing contractual obligations by providing mutual endorsements/guarantees for mutual endorsements/guarantees for another company in the same another company in the same industry or for joint builders for industry or for joint builders for purposes of undertaking a purposes of undertaking a construction project, or where all construction project, or where all capital contributing shareholders capital contributing shareholders make endorsements/guarantees for make endorsements/guarantees for their jointly invested company in their jointly invested company in proportion to their shareholding proportion to their shareholding percentages, or where companies in percentages, or where companies in the same industry provide among the same industry provide among themselves joint and several security themselves joint and several security for a performance guarantee of a for a performance guarantee of a sales contract for pre-construction sales contract for pre-construction homes pursuant to the Consumer homes pursuant to the Consumer Protection Act for each other, such Protection Act for each other, such endorsements/guarantees may be endorsements/guarantees may be made free of the restriction of the made free of the restriction of the preceding two paragraphs. preceding two paragraphs. Capital contribution referred to in Capital contribution referred to in the preceding paragraph shall mean the preceding paragraph shall mean capital contribution directly by capital contribution directly by Company, or through a company in Company, or through a company in which the Company holds 100% of which the Company holds 100% of the voting shares. the voting shares. Article 13 Article 9 The Article No. was Scope of Endorsements/Guarantees Scope of Endorsements/Guarantees changed without the The term "endorsements/guarantees" The term "endorsements/guarantees" content adjustment. as used in these Procedures refers to as used in these Procedures refers to the following: the following: 1. Financing endorsements/guarantees, 1. Financing endorsements/guarantees, including: including: a. Bill discount financing. a. Bill discount financing. b. Endorsement or guarantee made b. Endorsement or guarantee made to meet the financing needs of to meet the financing needs of another company. another company. c. Endorsement and/or guarantee c. Endorsement and/or guarantee of the notes issued by the of the notes issued by the Company to non-financial Company to non-financial institutions and entities to meet institutions and entities to meet the financing needs of the the financing needs of the Company. Company.

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Amended Version Original Version Reason 2. Customs duty endorsement/ 2. Customs duty endorsement/ guarantee, meaning an endorsement guarantee, meaning an endorsement or guarantee for the Company or guarantee for the Company itself or another company with itself or another company with respect to customs duty matters. respect to customs duty matters. 3. Other endorsements/guarantees, 3. Other endorsements/guarantees, meaning endorsements or meaning endorsements or guarantees beyond the scope of the guarantees beyond the scope of above two subparagraphs. the above two subparagraphs. 4. Any creation by the Company of a 4. Any creation by the Company of a pledge or mortgage on its chattel pledge or mortgage on its chattel or real property as security for the or real property as security for the loans of another company. loans of another company. Article 14 Article 10 The Article No. was The limit on the aggregate amount of The limit on the aggregate amount changed without the the endorsement/guarantee provided of the endorsement/guarantee content adjustment. by the Company and its subsidiaries provided by the Company and its shall not exceed 100% of the subsidiaries shall not exceed 100% Company’s net worth as stated in its of the Company’s net worth as stated latest financial statement. in its latest financial statement. The aggregate amount of endorsement The aggregate amount of endorsement /guarantee provided by the Company /guarantee provided by the Company and its subsidiaries to any single and its subsidiaries to any single institution or entity shall not exceed institution or entity shall not exceed 60% of the Company’s net worth as 60% of the Company’s net worth as stated in its latest financial statement. stated in its latest financial statement. Where an endorsement/guarantee is Where an endorsement/guarantee is made to any single entity due to made to any single entity due to needs arising from business dealings, needs arising from business in addition to the restrictions dealings, in addition to the specified in the preceding restrictions specified in the subparagraph, the amount of preceding subparagraph, the amount endorsement/ guarantees provided of endorsement/ guarantees provided by the Company and its subsidiaries by the Company and its subsidiaries shall not exceed the greater of the shall not exceed the greater of the purchase or sales amount to the purchase or sales amount to the entity at the time of the endorsement entity at the time of the endorsement /guarantee or the most recent year. /guarantee or the most recent year. If the Company or its subsidiaries If the Company or its subsidiaries provide endorsement/ guarantees for provide endorsement/ guarantees for a subsidiary whose net worth is a subsidiary whose net worth is lower than half of its paid-in capital, lower than half of its paid-in capital, detailed review of the necessity and detailed review of the necessity and rationality, credit status and risk rationality, credit status and risk assessment shall be conducted, and assessment shall be conducted, and relevant follow-up monitoring and relevant follow-up monitoring and

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Amended Version	Original Version	Reason
control measures shall be expressly prescribed. In determining the paid-in capital of the above-mentioned subsidiary whose stock has no par value or a par value other than NT$10, the paid-in capital calculation shall be the sum of share capital plus capital surplus minus the issuepremium.	control measures shall be expressly prescribed. In determining the paid-in capital of the above-mentioned subsidiary whose stock has no par value or a par value other than NT$10, the paid-in capital calculation shall be the sum of share capital plus capital surplus minus the issuepremium.
Article15 When providing endorsements/ guarantees, the Company should consider and assess the necessity, rationality, credit status, risks impacts on business operations, financial condition and shareholders’ equity, and the necessity to acquire collateral and appraisal of collateral. The assessment and analysis shall be reviewed by the Finance Department and submitted to the Board of Directors for approval. A person-in- charge violate these Procedures is subject to disciplinary review and action in accordance to the Company’s disciplinary guideline.	Article11 When providing endorsements/ guarantees, the Company should consider and assess the necessity, rationality, credit status, risks impacts on business operations, financial condition and shareholders’ equity, and the necessity to acquire collateral and appraisal of collateral. The assessment and analysis shall be reviewed by the Finance Department and submitted to the Board of Directors for approval. A person-in- charge violate these Procedures is subject to disciplinary review and action in accordance to the Company’s disciplinary guideline.	The Article No. was changed without the content adjustment.
Article16 The Company shall prepare a memorandum book for its endorsement/guarantees activities and record in detail the following information for the record: the entity for which the endorsement/ guarantee is made, the amount, the date of passage by the Board of Directors or of authorization by the chairman of the board, the date the endorsement/ guarantee is made, and the matters to be carefully evaluated under of theprecedingarticle.	Article12 The Company shall prepare a memorandum book for its endorsement/guarantees activities and record in detail the following information for the record: the entity for which the endorsement/ guarantee is made, the amount, the date of passage by the Board of Directors or of authorization by the chairman of the board, the date the endorsement/ guarantee is made, and the matters to be carefully evaluated under of theprecedingarticle.	The Article No. was changed without the content adjustment.
Article17 The Company’s internal auditors shall perform audit on the Company’s endorsements/ guarantees activities and the implementation at least quarterlyandproduce written	Article13 The Company’s internal auditors shall perform audit on the Company’s endorsements/ guarantees activities and the implementation at least quarterlyandproduce written	The Article No. was changed without the content adjustment.

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Amended Version

records accordingly. In the event that a material violation is found, the internal audit shall immediately notify the Audit Committee and independent directors in writing.

Article 18

The Company shall use the corporate chop registered with the Ministry of Economic Affairs as the dedicated chop for endorsements/guarantees. The chop shall be kept in the custody of a designated person approved by the Board of Directors and may be used to seal or issue negotiable instruments only in prescribed procedures.

When providing a guarantee for a foreign company, the endorsement/ guarantee letter shall be executed and signed by the chairman of the board of directors (or the person designated by the chairman). Article 19

If a subsidiary of the Company intends to provide endorsements/ guarantees for others to satisfy its business requirements, such subsidiary shall formulate its own Operational Procedures for Endorsements/Guarantees (Subsidiary Endorsements/Guarantees Procedure, SEGP) in compliance with the Regulations, submit the SEGP for approval by the shareholders' meeting, and it shall comply with the SEGP when providing endorsements/ guarantees.

If the Company’s subsidiary provides endorsements/guarantees for others, it is required to conduct internal audit on its endorsements/guarantees activities and the implementation in compliance with SEGP, and to produce written audit reports every quarter to submit to the Company’s Internal Audit and Investment

Original Version

Reason

records accordingly. In the event that a material violation is found, the internal audit shall immediately notify the Audit Committee and independent directors in writing.

Article 14 The Article No. was The Company shall use the corporate changed without the chop registered with the Ministry of content adjustment. Economic Affairs as the dedicated chop for endorsements/guarantees. The chop shall be kept in the custody of a designated person approved by the Board of Directors and may be used to seal or issue negotiable instruments only in prescribed procedures.

The Article No. was changed without the content adjustment.

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Amended Version

Department for review and audit. Before providing any endorsement/ Guarantees Pursuant to Article 8, paragraph 2, a subsidiary in which the Company holds, directly or indirectly, 90% or more of the voting shares shall submit the proposed endorsement/Guarantee to the Company’s Board of Directors for a resolution, provided that this restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares When the Company makes endorsements/guarantees for others, it shall take into full consideration each independent director's opinions; independent directors' opinions specifically expressing assent or dissent and their reasons for dissent shall be included in the minutes of the board of directors' meeting.

Article 20

The Company’s subsidiary shall report the balance of endorsements /guarantees in the preceding month to the Investment Department of the Company for compilation by the 5[th] day of each month. The Company shall announce and report the balance of endorsements/guarantees in the preceding month of itself and its subsidiaries by the 10[th] day of each month.

Original Version

Article 16

Reason

The Article No. was changed without the content adjustment.

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Amended Version

Departments. If the balance of endorsements/ guarantees by the Company and its subsidiaries reaches one of the following levels, the Company shall announce and report such event within two days commencing immediately from the date of occurrence:

The aggregate balance of endorsements/guarantees by the Company and its subsidiaries reaches 50% or more of the Company’s net worth as stated in its latest financial statement.
The balance of endorsements/ guarantees by the Company and its subsidiaries for a single enterprise reaches 20% or more of the Company’s net worth as stated in its latest financial statement.
The balance of endorsements/ guarantees by the public company and its subsidiaries for a single enterprise reaches NT$10 millions or more and the aggregate amount of all endorsements/guarantees for, carrying value of equity method investment in, and balance of loans to, such enterprise reaches 30 percent or more of public company's net worth as stated in its latest financial statement.
The amount of new endorsements/ guarantees provided by the Company or its subsidiaries reaches NT$30 million or more, and reaches 5% or more of the Company’s net worth as stated in its latest financial statement. The Company shall announce and report on behalf of any subsidiary that is not a domestic public company any matters that such subsidiary is required to announce and report pursuant to subparagraph 4 of the preceding paragraph.

Original Version

The aggregate balance of endorsements/guarantees by the Company and its subsidiaries reaches 50% or more of the Company’s net worth as stated in its latest financial statement.
The balance of endorsements/ guarantees by the Company and its subsidiaries for a single enterprise reaches 20% or more of the Company’s net worth as stated in its latest financial statement.
The balance of endorsements/ guarantees by the public company and its subsidiaries for a single enterprise reaches NT$10 millions or more and the aggregate amount of all endorsements/guarantees for, carrying value of equity method investment in, and balance of loans to, such enterprise reaches 30 percent or more of public company's net worth as stated in its latest financial statement.
The amount of new endorsements/ guarantees provided by the Company or its subsidiaries reaches NT$30 million or more, and reaches 5% or more of the Company’s net worth as stated in its latest financial statement. The Company shall announce and report on behalf of any subsidiary that is not a domestic public company any matters that such subsidiary is required to announce and report pursuant to subparagraph 4 of the preceding paragraph.

Reason

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Amended Version Original Version Reason Article 21 Article 17 The Article No. was In case the Company needs to exceed In case the Company needs to exceed changed without the the limits set out in the Endorsements the limits set out in the Endorsements content adjustment. /Guarantees Procedures to /Guarantees Procedures to accommodate business needs, and accommodate business needs, and where the conditions set out in the where the conditions set out in the Endorsements/Guarantees Endorsements/Guarantees Procedures are complied with, Procedures are complied with, approval by a resolution of the board approval by a resolution of the board of directors shall be obtained and of directors shall be obtained and over half of all the directors shall act over half of all the directors shall act as joint guarantors for any loss that as joint guarantors for any loss that may be caused to the company by may be caused to the company by the excess endorsements/guarantees. the excess endorsements/guarantees. It shall also amend the Operational It shall also amend the Operational Procedures for Endorsements/ Procedures for Endorsements/ Guarantees accordingly and submit Guarantees accordingly and submit the same to the shareholders’ the same to the shareholders’ meeting for ratification after the fact. meeting for ratification after the fact. If the shareholders’ meeting does not If the shareholders’ meeting does give consent, the company shall not give consent, the company shall adopt a plan to discharge the amount adopt a plan to discharge the amount in excess within a given time limit. in excess within a given time limit. When obtaining above mentioned When obtaining above mentioned approval from the board of directors approval from the board of directors in the preceding paragraph, the in the preceding paragraph, the Company shall take into full Company shall take into full consideration each independent consideration each independent director's opinions; independent director's opinions; independent directors' opinions specifically directors' opinions specifically expressing assent or dissent and their expressing assent or dissent and reasons for dissent shall be included their reasons for dissent shall be in the minutes of the board of included in the minutes of the board directors' meeting. of directors' meeting. If, as a result of changes of If, as a result of changes of circumstances, the party to whom an circumstances, the party to whom an endorsement/Guarantees is provided endorsement/Guarantees is provided no longer meets the requirements set no longer meets the requirements set forth in these Procedures, or the forth in these Procedures, or the amount of endorsement/Guarantees amount of endorsement/Guarantees exceeds the limit, the Company shall exceeds the limit, the Company shall adopt corrective plans and submit adopt corrective plans and submit them to the Audit Committee and them to the Audit Committee and independent directors and the independent directors and the proposed correction actions should proposed correction actions should be implemented within the period be implemented within the period specified in the plan. specified in the plan.

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Amended Version	Original Version	Reason
Article22 The Company’s Finance Department and its subsidiaries shall assess and recognize contingent losses brought about by endorsements/ guarantees, adequately disclose relevant information in the financial reports, and provide certified public accounts with relevant information for implementation of necessary audit procedures.	Article18 The Company’s Finance Department and its subsidiaries shall assess and recognize contingent losses brought about by endorsements/ guarantees, adequately disclose relevant information in the financial reports, and provide certified public accounts with relevant information for implementation of necessary audit procedures.	The Article No. was changed without the content adjustment.
Article23 These Procedures shall be submitted to Audit Committee for approval and submit to Board of Directors for ratification and shareholder meeting for approval, If any director expresses dissent and recorded or while the issues is revised, the objection shall send to the Audit Committee and submitted to the shareholders for discussion.	Article19 These Procedures shall be submitted to Audit Committee for approval and submit to Board of Directors for ratification and shareholder meeting for approval, If any director expresses dissent and recorded or while the issues is revised, the objection shall send to the Audit Committee and submitted to the shareholders for discussion.	The Article No. changed without the content adjustment.

Note 1: The Company and its subsidiaries shall develop petrochemical and land development as a dualpronged strategy. Considering the addition of subsidiaries for project investments and flexibility in capital deployment, and the need to strengthen subsidiary company risk mitigation, there is a need to add provisions to the Company’s procedures for loans to others.
Note 2: Considering industry peers (petrochemical and construction peers), limits to lending to others and individual limits often exceed 20~40% of net equity. Thus, we propose to revise provisions to the procedures for lending to others to a total limit of 40%, and a limit of 20% to a single entity.
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Attachment 7

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

Items	Amended Version	Original Version	Reason
Article 13	The company's principles and policies for Derivatives are as follows: 1-5 are omitted hereafter. 6. Transaction Contract Dollar Amount And Loss Control a. Hedging operation： The dollar amount of total contracts outstanding shall not exceed the net position / exposure for the next six months. The maximum contract loss shall not exceed 15% of the contract amount, applicable to individual contracts and all contracts b. particular purpose operation: The total amount of the particular purpose transaction contract shall not exceed the total amount of the particular purpose transaction item. This type of transaction is a hedging for a specific purpose, with a clear corresponding hedging position, and the upper limit of the contract loss shall not exceed 15% of the contract amount, which is applicable to individual contracts and all contracts. (Following are omitted)	The company's principles and policies for Derivatives are as follows: 1-5 are omitted hereafter. 6. Transaction Contract Dollar Amount And Loss Control a. Hedging operation： The dollar amount of total contracts outstanding shall not exceed the net position / exposure for the next six months. There is no loss limitation for hedging b. particular purpose operation: The total amount of the particular purpose transaction contract shall not exceed the total amount of the particular purpose transaction item. This type of transaction is a hedging for a specific purpose, with a clear corresponding hedging position,no loss limitation is required. (Following are omitted)	Our company with the purpose to comply with the provisions of Article 19, Paragraph 1, item 1 of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” we decided to adjust derivative financial product transactions to which the total amount of contracts for engaging in derivative product transactions and the upper limit of total and individual contract losses are determined. It mainly refers to the upper limit of all or individual contract losses in the industry, which is mostly 15% of the total or individual contract amount which is the reason we adjusted item 6 from no loss limitation to the maximum contract loss shall not exceed 15% of the contract amount, applicable to individual contracts and all contracts.

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Attachment 8

Comparison between Original and Amendments to Rules Governing the Proceedings of Shareholder Meetings

Items	Amended Version	Original Version	Reason
Article 2	Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the board of directors. The method of holding the shareholders'meeting of the company is based on physical meeting in principle. Any change in method of holding the shareholders'meeting shall be approved by the board of directors, and it shall be made no later than before the notice of the shareholders'meeting is dispatched. 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	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	1. Item 2 added in order to inform shareholders ways of holding the shareholders’ meeting, it shall be approved by the board of directors and be sent it before the shareholders’ meeting. 2. Item 3 is adjusted in compliance with the adjusting version article 6 of the Rules Governing the Proceedings of Shareholder Meetings on 2021/12/16 if the company's paid-in capital at the end of the fiscal year is NT$10 billion or more of if the foreign and mainland China capital ratio is over 30%, the electronic file should be sent 30 days before the ordinary shareholders' meeting for shareholders in foreign lands to be aware of relative information 3. Items 2 and 4 are adjusted in order to meet the need of holding shareholder’s' meeting in different methods which whether it’s in person or through video

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Items	Amended Version	Original Version	Reason
	date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at this corporation Stock Affairs Office as well as being distributed on- site at the meeting place. However, if the company's paid- in capital at the end of the fiscal year is NT$10 billion or more of if the foreign and mainland China capital ratio is over 30%, the electronic file should be sent 30 days before the ordinary shareholders'meeting 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. The Company shall provide a Shareholder Handbook and meeting supplementary materials mentioned in the preceding paragraph on the day	date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at this corporation Stock Affairs Office as well as being distributed on- site at the meeting place. 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.	conference, shareholders can all receive the procedure manual and meeting supplementary materials. 4. Item 12-14 was adjusted if the shareholder wants to change method to attend shareholder meeting after the power of attorney delivered, they shall notify the company in a written form for the cancellation of the entrustment 2 days before the shareholders’ meeting.

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Items	Amended Version	Original Version	Reason
	of the shareholders’meeting in the following ways: 1. When a physical shareholders meeting is held, it shall be distributed on the spot of the shareholders meeting. 2. When a video-assisted shareholders’meeting is held, it shall be distributed on the spot of the shareholders meeting and sent the electronic version to the video-conferencing platform. 3. When a video conference of shareholders meeting is held, the electronic file shall be sent to the video-conferencing platform. A shareholder holding 1 percent or more of the total number of issued shares may submit a proposal to this Corporation 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.	A shareholder holding 1 percent or more of the total number of issued shares may submit a proposal to this Corporation 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.

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Items	Amended Version	Original Version	Reason
	Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce that it will receive shareholders 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. Shareholder-submitted 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 notices 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	Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce that it will receive shareholders 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. Shareholder-submitted 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 notices 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

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Items	Amended Version	Original Version	Reason
	issue a proxy in the form printed by the Company to expressly stipulate the scope of authorized powers 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. A shareholder shall appoint a proxy, and only one person shall be entrusted, it shall be delivered to the company 5 days before the shareholders’meeting and if it is duplicates, the one delivered first shall be counted. However, for those who declare to revoke the previous consignors are not included. After the proxy is delivered to the company, shareholders who wish to attend the shareholders’ meeting in person or to exercise their voting rights either in person or through electronic method, shall notify the company in a written form for the cancellation of the entrustment 2 days before the shareholders’meeting. In case of overdue revocation, the entrusted agent who attend and exercise the voting rights should be based on. After the proxy is delivered to the company, shareholders who wish to attend the shareholders ‘meeting by video shall notify the company in written form for the cancellation of the	issue a proxy in the form printed by the Company to expressly stipulate the scope of authorized powers 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.

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Items	Amended Version	Original Version	Reason
	entrustment. 2 days before the shareholders’meeting. In case of overdue revocation, the entrusted agent who attend and exercise the voting rights should be based on.
Article 3	The shareholders' meeting notice shall include the shareholders, solicitors, and entrusted agents,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.For the video conference, registration should be accepted on the shareholders’ meeting platform 60 minutes before the start of the meeting. Shareholders who have completed the registration shall be counted as who have attended the shareholders’ meeting in person. 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	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	1. the first item was amended for the abbreviation of the shareholders 2. Item 2 was amended for the time and procedure for video conference registration.

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Items	Amended Version	Original Version	Reason
	rights, the Company shall establish Registration Procedures for attending shareholder meetings and submit these procedures for approval by the Board of Directors. For the shareholders who wish to attend the video conference shall register 2 days before the shareholders’meeting. The company shall upload the provide our shareholders the procedure manual, annual report and meeting supplementary materials to the video conference platform 30 minutes before the shareholders’meeting until the end of the meeting.	rights, the Company shall establish Registration Procedures for attending shareholder meetings and submit these procedures for approval by the Board of Directors.	3. item 6 was amended for shareholders who wish to attend video conference shall register 2 days before the shareholders meeting. 4. item 7 was amended for company shall upload the provide our shareholders the procedure manual, annual report and meeting supplementary materials to the video conference platform.
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 andvideo conference platformwith 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	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	1. item 2 was amended for the total number of shares attended by shareholders should be added to the number of shares registered by video conference, 2. item 4-5 was amended to specify ways to change methods to attend shareholders meeting should be the same cancelling way as exercising voting rights

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Items	Amended Version	Original Version	Reason
	voting power shall be describes in the shareholders’ meeting notice. A shareholder who exercises his/her voting power at a shareholder 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. If the voting rights in the preceding paragraph are exercised in written form or in electronic form, the statement of intent shall be delivered to the company 2 days before the shareholders'meeting. However, those who express their intentions before the declaration of revocation are not included to this limitation. After shareholders exercising their voting rights in written form or electronically, shareholders who wish to attend the shareholders‘meeting by video shall notify the company in written form for the cancellation of the entrustment 2 days before the shareholders’ meeting. In case of overdue revocation, the entrusted agent who attend and exercise the voting rights should be based on.	in the shareholders’ meeting notice. A shareholder who exercises his/her voting power at a shareholder 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.

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Items	Amended Version	Original Version	Reason
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. When the shareholders meeting is held by video conference, it shall not be limited on the venue of the preceding paragraph.	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	Item 2 was amended to specify the venue will not be restricted when the shareholders’ meeting is held through video conference.
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. If the shareholders'meeting is held by video conference, the company shall record and preserve the shareholders' registration, questioning, voting, and company vote counting results, etc., and make continuous and uninterrupted audio and video recording of the entire video conference. The materials, audio and video recordings which mentioned above shall be properly preserved by the company during the period, the audio and video recordings shall be provided to those who are entrusted to handle the video conference affairs for preservation.		1. The 2. 3 items are added with reference to Article 183 of the Company Law and Article 18 of the Law on Procedures for Board Meetings of Public Companies, the company shall record and preserve the shareholders' registration, questioning, voting, and company vote counting results, etc., The whole process of the meeting shall be recorded without interruption and shall be properly preserved during the existence of the company, and shall be provided to those who are entrusted to handle video conference affairs for preservation, hereby adds a second and third item.

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Items	Amended Version	Original Version	Reason
	If the shareholders'meeting is held by video conference, the company should record the background operation interface of the video conference platform.		2. To preserve the relevant information of the video conference, in addition to the second item which stipulates that the company should record the video conference continuously and uninterruptedly, it is also advisable to record the background operation interface of the video conference. Computer software, hardware equipment and information security may be required, so the company may adjust according to the feasibility of the equipment conditions, hereby adds a fourth item.
Article 9	The Chairman shall announce the meeting immediately after the meeting time has expired, but if no shareholders representing more than half of the total number of issued shares are present, the Chairman may announce an adjournment of the meeting for a maximum of two times, with the total time of the adjournment not exceeding one hour. If less than one-third of the total number of issued shares are still not present after the second postponement, the chairman shall declare the meeting adjourned.If the shareholders'meeting is held by video conference, the Company shall also announce the	When the meeting time has been reached, the chairman shall immediately announce the meeting, but if no shareholders representing more than half of the total number of issued shares are present, the chairman may announce an adjournment of the meeting, which shall be limited to two times, and the total time of the adjournment shall not exceed one hour. If less than one-third of the total number of issued shares are still not present after two postponements, the chairman shall declare the meeting adjourned. If the second postponement is still insufficient and the shareholders representing at least one-third of	1. If the Chairman of the Company announces that a shareholders' meeting is suspended by video conference, the Company shall announce the suspension of the meeting on the video conference platform of the shareholders' meeting, so that the shareholders can be informed immediately. 2. If the Company resolves to convene a separate shareholders' meeting by video conference, shareholders who wish

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Items	Amended Version	Original Version	Reason
	adjournment on the video conference platform of the shareholders'meeting.If there are not enough shareholders representing at least one-third of the total number of issued shares to attend the meeting after two postponements, a bogus resolution may be made in accordance with Article 175 of the Company Act,and the shareholders shall be notified of the bogus resolution to reconvene the shareholders' meeting within one month; if the shareholders'meeting is convened by video conference, shareholders who wish to attend the meeting by video shall re- register with the Company in accordance with Article 3. However, for special resolution matters stipulated by the Act, the resolution shall be made in accordance with the provisions of the Act. If, before the conclusion of the meeting, the number of shares represented by the shareholders present reaches more than half of the total number of shares outstanding, the chairman may re-submit a fictitious resolution to the meeting for resolution in accordance with Article 174 of the CompanyAct.	the total number of issued shares are present, a sham resolution may be made in accordance with Article 175 of the Company Act. However, in the case of special resolutions required by law, the resolution shall be made in accordance with the provisions of the law. If, before the end of the meeting, the number of shares represented by the shareholders present reaches more than half of the total number of outstanding shares, the chairman may re-submit the fictitious resolution to the meeting for resolution in accordance with Article 174 of the CompanyAct.	to attend the meeting by video conference shall register with the Company and hereby amend the resolution.
Article 12	Shareholders' questions on the agenda should be addressed only after all the items have been read out or reported by the chairman or his or her designee. Each shareholder may not speak more than twice on the same motion without the consent of	Shareholders' questions on the agenda should beaddressed only after all the items have been read out or reported by the chairman or his or her designee. Each shareholder may not speak more than twice on the same motion without the consent of

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Items	Amended Version	Original Version	Reason
	the chairman, and each speech may not exceed three minutes. The time and number of speeches by shareholders on each motion for recognition and discussion of the items listed on the agenda and on each motion proposed in the provisional motion procedure shall be subject to the latter part of the preceding paragraph. The time and number of speeches of shareholders on each motion not on the provisional agenda shall be as provided in the latter part of the first paragraph. If a shareholder speaks in violation of the regulations or exceeds the scope of the topic, the chairman may stop him/her from speaking. If a shareholders'meeting is convened by video conference, shareholders participating by video may ask questions by text on the video conference platform after the chairman announces the meeting and before the meeting is adjourned, and the number of questions shall not exceed two for each motion, and each time shall be limited to 200 words, without applying the provisions of Articles 11, 13(2) and 1 to 4 of this Article. If the previous questions do not violate the regulations or are within the scope of the motion, it is appropriate to disclose the	the chairman, and each speech may not exceed three minutes. The time and number of speeches by shareholders on each motion for recognition and discussion of the items listed on the agenda and on each motion proposed in the provisional motion procedure shall be subject to the latter part of the preceding paragraph. The time and number of speeches of shareholders on each motion not on the provisional agenda shall be as provided in the latter part of the first paragraph. If a shareholder speaks in violation of the regulations or exceeds the scope of the topic, the chairman may stop him/her from speaking.	1. To specify the manner, procedures and restrictions for shareholders who participate in shareholders' meetings by video, the company hereby adds a fifth item. 2. To help other shareholders understand the content of the questions asked by shareholders, the Company may select questions that are not related to the topics of the shareholders' meeting, except for those questions that should be disclosed on the video platform, the company hereby adds a sixth item.

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Items	Amended Version	Original Version	Reason
	questions on the video conference platform of the shareholders'meeting for public information.
Article 16	The chairman of the board of directors shall designate the person(s) to monitor and count the votes for the motion. However, the scrutineer shall be a shareholder. Unless otherwise provided by law or the Company's Articles of Incorporation, a motion shall be approved by a majority of the votes of the shareholders present. In the event of a vote, the chairman or his or her designee shall announce the total number of votes of the shareholders present on a case- by-case basis, and then the shareholders shall vote on the motion on a case-by-case basis, and the results of the shareholders' approval, disapproval and abstention shall be entered into the Market Observation Post System on the day after the shareholders' meeting. The vote counting operation for the shareholders' meeting, or the election proposal shall be conducted in an open place at the shareholders' meeting, and the voting results, including the number of votes counted, shall be announced and recorded on the spot after the vote counting is completed. When the shareholders'meeting is convened by video conference, the shareholders	The chairman of the board of directors shall designate the person(s) to monitor and count the votes for the motion. However, the scrutineer shall be a shareholder. Unless otherwise provided by law or the Company's Articles of Incorporation, a motion shall be approved by a majority of the votes of the shareholders present. In the event of a vote, the chairman or his or her designee shall announce the total number of votes of the shareholders present on a case- by-case basis, and then the shareholders shall vote on the motion on a case-by-case basis, and the results of the shareholders' approval, disapproval and abstention shall be entered into the Market Observation Post System on the day after the shareholders' meeting. The vote counting operation of the shareholders' meeting or the election proposal shall be conducted in an open place at the shareholders' meeting, and the voting results, including the number of votes counted, shall be announced and recorded on the spot after the vote counting is completed.	1. If the shareholders' meeting is held by video conference, in order to provide sufficient time for the shareholders participating by video to vote, from the time the chairman announces the opening of the meeting to the time the voting is announced, voting on the original motions can be conducted, and the counting of votes must be done in a single count in order to match the voting time of the shareholders participating by video, and hereby add fourth and fifth item. 2. If a shareholder who has registered for a video-assisted shareholders' meeting wishes to attend the physical shareholders' meeting in person instead, he/she should deregister in the same manner as he/she registered two days before the shareholders' meeting; if he/she deregisters after the deadline, he/she can only participate in the shareholders' meeting

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Items	Amended Version	Original Version	Reason
	participating by video shall vote on the motions and the election motions through the video conference platform after the chairman announces the opening of the meeting and shall complete the voting before the chairman announces the end of the voting, and any delay shall be deemed as abstention. If a shareholders'meeting is convened by video conference, except for special reasons as directed by the chairman, the vote shall be counted, and the voting and election results announced as a one-time event after the chairman announces the close of voting. When the Company convenes a video-assisted shareholders' meeting, shareholders who have registered to attend the shareholders'meeting by video in accordance with Article 3 and wish to attend the physical shareholders'meeting in person shall deregister in the same manner as they have registered two days prior to the shareholders'meeting; if they deregister after that time, they may attend the shareholders' meeting by video only. If a shareholder exercises his or her voting rights in writing or electronically and does not revoke his or her intention to attend the shareholders'meeting by video, he or she may not exercise his or her voting rights on the original motion or propose amendments to the		by video, and hereby add sixth item. 3. With reference to the Ministry of Economic Affairs' Letter No. 10102404740 dated February 24, 2012 and Letter No. 10102414350 dated May 3, 2012, a shareholder who has exercised his or her voting rights electronically and has not revoked his or her intention may not propose amendments to the original motion and may not exercise his or her voting rights again, but the shareholder may still attend the shareholders' meeting on the date of the shareholders' meeting and may propose a motion on the spot. In addition, considering that both written and electronic voting is one of the ways for shareholders to exercise their rights, and based on the principle of fair treatment, written voting should also follow the spirit of the previous regulation of electronic voting in order to protect shareholders' rights, I hereby stipulate in Item 7 that shareholders who

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Items	Amended Version	Original Version	Reason
	original motion or exercise his or her voting rights on the amendments to the original motion, except for a temporary motion. The minutes of the shareholders' meeting shall be prepared, signed, or sealed by the chairman, and distributed to the shareholders within 20 days after the meeting. The minutes may be prepared and distributed electronically. The minutes may be distributed by means of an announcement entered into the Market Observation Post System. The Company shall record the year, month, day, place, name of the chairman, method of resolution, main points of the proceedings, and voting results (including the number of votes) of the meeting and shall disclose the number of votes received by each candidate in the event of an election of directors. The minutes shall be kept permanently for the duration of the Company's existence. If a shareholders'meeting is held by video conference, the minutes of the meeting shall include, in addition to the matters required to be recorded in the preceding paragraph, the starting and ending time of the shareholders'meeting, the manner in which the meeting is held, the names of the chairman and the minutes, and the manner	The minutes of the shareholders' meeting shall be prepared, signed or sealed by the chairman, and distributed to the shareholders within 20 days after the meeting. The minutes may be prepared and distributed electronically. The aforementioned minutes may be distributed by means of an announcement entered into the Market Observation Post System. The Company shall record the year, month, day, place, name of the chairman, method of resolution, main points of the proceedings, and voting results (including the number of votes) of the meeting, and shall disclose the number of votes received by each candidate in the event of an election of directors. The records shall be kept permanently for the duration of the Company's existence.	exercise their voting rights by written or electronic means may still register to participate in the shareholders' meeting by video if they have not revoked their intention to do so, but with the exception of those who may propose and exercise their voting rights on the provisional motion. However, they may not vote on the original motion or the amendment to the original motion, and may not propose an amendment to the original motion, except for temporary motions, in which they may propose and exercise their voting rights. 4. In order to facilitate shareholders' understanding of the results of the video conference, alternative measures for shareholders with digital disparity, and the handling of disruptions and the circumstances under which such disruptions occur, I hereby request the Company, when preparing the minutes of the shareholders' meeting, to record, in addition to the matters required to be

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Items	Amended Version	Original Version	Reason
	and circumstances in which the video conference platform or video participation is impaired due to natural disasters, events or other force majeure circumstances. In addition to the aforementioned provisions, the Company shall also set forth in the minutes of the meeting alternative measures for shareholders who have difficulties in participating in the shareholders'meeting by video means.		recorded in accordance with Item 10, the starting and ending times of the meeting, the manner in which the meeting was held, the names of the chairman and recorder, and the time of the video conference platform or the time of the meeting when participation by video conference is impaired due to natural disasters, events or other force majeure, and hereby add an eleventh item. 5. If a video shareholders' meeting is convened, the notice of convening shall specify the appropriate alternative measures for shareholders who have difficulties in participating in the shareholders' meeting by video means, and I hereby stipulate that the alternative measures for such shareholders with digital disparity shall be specified in the minutes of the meeting, and hereby add twelfth item.
Article 20	For the number of shares acquired by the solicitor, the number of shares represented by a proxy and the number of shares attended by shareholders in writing or electronically, on the day of the shareholders	Article 20 The regulation will be implemented after the approval by the shareholder’s meeting. The same shall apply to the amendment.	1. this article is newly- added. The original article 20 is adjusted to article 26. 2. In order to let shareholders know the number of shares

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Items	Amended Version	Original Version	Reason
	meeting, the company or its shareholder services agent shall compile a statistical statement of the number of shares obtained by the solicitor and shall make an express disclosure of the same at the site of the shareholders meeting. To convene a virtual-only shareholders meeting, appropriate alternative measures available to shareholders with difficulties in attending a virtual shareholders meeting online shall be specified. During this Corporation's virtual shareholders meeting, when the meeting is called to order, the total number of shares represented at the meeting shall be disclosed on the virtual meeting platform. The same shall apply whenever the total number of shares represented at the meeting and a new tally of votes is released during the meeting. If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation regulations, this Corporation shall upload the content of such resolution to the MOPS within the prescribed time period.		acquired by the solicitor, the number of shares represented by the proxy, and the number of shares attended by written or electronic means, the company shall clearly disclose it at the shareholders meeting. If the company holds a video conference, it shall be uploaded to the video conference platform of the shareholders' meeting, and the first paragraph shall be added. 3. In order for the shareholders to participate in the video conference of the shareholders’ meeting to know simultaneously whether the shareholders’ attendance rights have reached the threshold for holding the shareholders’ meeting, it is stipulated that the company should disclose the total number of shareholders’ shares attending the meeting on the video conference platform when announcing the meeting. The total number of shares and voting rights of shareholders shall also be disclosed on the video conference

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Items	Amended Version	Amended Version	Reason
			platform, and the second paragraph shall be added. 4. To explain the company's external announcement method, the third paragraph is added.
Article 21	When the shareholders'meeting is held by video conference, the following matters shall be stated in the notice of convening the shareholders'meeting: I. Shareholders'participation in video conferences and methods for exercising their rights. II. Due to natural disasters, incidents or other force majeure circumstances, the handling of obstacles to the video conference platform or participating in video conferences should include at least the following: (1) The obstacles cannot be ruled out as to the meeting needs to be adjourned or resumed, and if the meeting needs to be postponed or resumed. (2) Shareholders who have not registered to participate in the original shareholders meeting by video conferencing shall not participate in the postponed or resumed of the meeting. (3) To hold a video-assisted shareholders meeting, if the video conference cannot be resumed, after deducting the number of shares attending the		1. This article is newly-added. In order to make shareholders aware of the relevant rights and restrictions on participating in the shareholders' meeting before the shareholders' meeting, it is stipulated that the content of the notice of convening the shareholders' meeting should include: the shareholders' participation in the video conference and the method of exercising the relevant rights; in the event of natural disasters, incidents or other force majeure events, the handling of obstacles to the video conference platform or participation in video conferences should at least include the date when the meeting needs to be postponed or resumed and the meeting should be postponed or resumed under how long of the interruption; Article 44-20, paragraph 1,2,4, 5 of the Regulations Governing the Administration of
	I.
	II.

		(1)
		(2)
		(3)

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Items			Reason
	(4) III. To	(4)	Shareholder Services of Public Companies; all the motions have been declared results, but no provisional motion has been made, the handling method; to hold a video- conference shareholders meeting and to specify appropriate alternatives for shareholders who would have difficulty participating in a video- conference.

Article 22	In the event of a virtual shareholders meeting, this Corporation shall disclose real- time results of votes and election immediately after the end of the voting session on the virtual meeting platform according to the regulations, and this disclosure shall continue at least 15 minutes after the chair has announced the meeting adjourned.		1. This article is newly- added. 2. In order to allow shareholders participating in the video conference of the shareholders' meeting to immediately know the voting status and election results of

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Items	Amended Version	Reason
		various proposals, sufficient information disclosure time is regulated.
Article 23	When this Corporation convenes a virtual-only shareholders meeting, both the chair and secretary shall be in the same location, and the chair shall declare the address of their location when the meeting is called to order.	1. This article is newly- added. 2. When the shareholders' meeting is held by video conference and there is no physical meeting place, the chairman and the recorder should be at the same place. In addition, in order to let shareholders know the location of the chairman, the chairman should announce the address of his location at the meeting.
Article 24	In the event of a virtual shareholders meeting, this Corporation may offer a simple connection test to shareholders prior to the meeting, and provide relevant real-time services before and during the meeting to help resolve communication technical issues. In the event of a virtual shareholders meeting, when declaring the meeting open, the chair shall also declare, unless under a circumstance where a meeting is not required to be postponed to or resumed at another time under Article 44- 20, paragraph 4 of the Regulations Governing the Administration of Shareholder Services of Public Companies, if the virtual meeting platform or	1. This article is newly- added. 2. In order to reduce the communication problems of video conferences, taking into account foreign practices, a connection test may be provided before the conference, and related services will be provided immediately before and during the conference to assist in handling technical communication problems. The first paragraph is added. 3. if the virtual meeting platform or participation in the virtual meeting is

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Items	Amended Version	Original Version	Reason
	participation in the virtual meeting is obstructed due to natural disasters, accidents or other force majeure events before the chair has announced the meeting adjourned, and the obstruction continues for more than 30 minutes, the meeting shall be postponed to or resumed on another date within five days, in which case Article 182 of the Company Act shall not apply. For a meeting to be postponed or resumed as described in the preceding paragraph, shareholders who have not registered to participate in the affected shareholders meeting online shall not attend the postponed or resumed session. For a meeting to be postponed or resumed under the second paragraph, the number of shares represented by, and voting rights and election rights exercised by the shareholders who have registered to participate in the affected shareholders meeting and have successfully signed in the meeting, but do not attend the postpone or resumed session, at the affected shareholders meeting, shall be counted towards the total number of shares, number of voting rights and number of election rights represented at the postponed or resumed session. During a postponed or resumed session of a shareholders meeting held under the second paragraph, no further discussion		obstructed due to natural disasters, accidents or other force majeure events before the chair has announced the meeting adjourned, and the obstruction continues for more than 30 minutes, the meeting shall be postponed to or resumed on another date within five days, in which case Article 182 of the Company Act shall not apply. The 2nd paragraph is added. If the company, video conference platform, shareholders, solicitors or entrusted agents fail to hold or participate in video conferences intentionally or negligently, it is not within the scope of this article. 4. For a meeting to be postponed or resumed as described in the preceding paragraph, shareholders who have not registered to participate in the affected shareholders meeting online shall not attend the postponed or resumed session under Article 44-20, paragraph 2 of the Regulations Governing the Administration of Shareholder Services

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Items	Amended Version	Original Version	Reason
	or resolution is required for proposals for which votes have been cast and counted and results have been announced, or list of elected directors and supervisors. When this Corporation convenes a hybrid shareholders meeting, and the virtual meeting cannot continue as described in second paragraph, if the total number of shares represented at the meeting, after deducting those represented by shareholders attending the virtual shareholders meeting online, still meets the minimum legal requirement for a shareholder meeting, then the shareholders meeting shall continue, and not postponement or resumption thereof under the second paragraph is required. under the circumstances where a meeting should continue as in the preceding paragraph, the shares represented by shareholders attending the virtual meeting online shall be counted towards the total number of shares represented by shareholders present at the meeting, provided these shareholders shall be deemed abstaining from voting on all proposals on meeting agenda of that shareholders meeting. when postponing or resuming a meeting according to the second paragraph, this Corporation shall handle the preparatory work based on the date of the original shareholders meeting in		of Public Companies. The 3rd paragraph is added. As for the convening of a video- assisted shareholders meeting, the shareholders who originally participated in the physical shareholders meeting may continue to physically participate in the postponed or resumed meeting. 5. For a meeting to be postponed or resumed under the second paragraph, the number of shares represented by, and voting rights and election rights exercised by the shareholders who have registered to participate in the affected shareholders meeting and have successfully signed in the meeting, but do not attend the postpone or resumed session, at the affected shareholders meeting, shall be counted towards the total number of shares, number of voting rights and number of election rights represented at the postponed or resumed session. The 4th paragraph is added. 6. During a postponed or resumed session of a shareholders meeting held under the second

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Items	Amended Version	Original Version	Reason
	accordance with the requirements listed under Article 44-20, paragraph 7 of the Regulations Governing the Administration of Shareholder Services of Public Companies. For dates or period set forth under Article 12, second half, and Article 13, paragraph 3 of Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies, and Article 44-5, paragraph 2, Article 44-15, and Article 44-17, paragraph 1 of the Regulations Governing the Administration of Shareholder Services of Public Companies, this Corporations hall handle the matter based on the date of the shareholders meeting that is postponed or resumed under the second paragraph.		paragraph, no further discussion or resolution is required for proposals for which votes have been cast and counted and results have been announced, or list of elected directors and supervisors to reduce the meeting time and cost of the continuation meeting. The 5th paragraph is added. 7. When this Corporation convenes a hybrid shareholders meeting, and the virtual meeting cannot continue as described in second paragraph, if the total number of shares represented at the meeting, after deducting those represented by shareholders attending the virtual shareholders meeting online, still meets the minimum legal requirement for a shareholder meeting, then the shareholders meeting shall continue, and not postponement or resumption thereof under the second paragraph is required. The 6 paragraph is added. 8. under the circumstances where a meeting should

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Items	Amended Version	Original Version	Reason
			continue as in the preceding paragraph, the shares represented by shareholders attending the virtual meeting online shall be counted towards the total number of shares represented by shareholders present at the meeting, provided these shareholders shall be deemed abstaining from voting on all proposals on meeting agenda of that shareholders meeting. The 7th paragraph is added. 9. when postponing or resuming a meeting according to the second paragraph, this Corporation shall handle the preparatory work based on the date of the original shareholders meeting in accordance with the requirements listed under Article 44-20, paragraph 7 of the Regulations Governing the Administration of Shareholder Services of Public Companies. The 8th paragraph is added. 10. For dates or period set forth under Article 12, second half, and Article 13, paragraph 3 of Regulations Governing the Use of

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Items	Amended Version	Original Version	Reason
			Proxies for Attendance at Shareholder Meetings of Public Companies, and Article 44-5, paragraph 2, Article 44-15, and Article 44-17, paragraph 1 of the Regulations Governing the Administration of Shareholder Services of Public Companies, this Corporations hall handle the matter based on the date of the shareholders meeting that is postponed or resumed under the second paragraph. The 9th paragraph is added.
Article 25	When convening a virtual-only shareholders meeting, this Corporation shall provide appropriate alternative measures available to shareholders with difficulties in attending a virtual shareholder meeting online.		1. This article is newly- added. 2. When the company convenes a video shareholder meeting, considering the digital gap, it may be a hindrance for shareholders to participate in the shareholders meeting by video. Appropriate alternative measures should be provided for shareholders, such as exercising voting rights in writing or providing shareholders with the necessary equipment to participate in the meeting.

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Items	Amended Version	Original Version	Reason
Article26	The regulation will be implemented after the approval by the shareholder’s meeting. The same shall apply to the amendment.	Article 20 The regulation will be implemented after the approval by the shareholder’s meeting. The same shall apply to the amendment.	In order to be cooperated with the added article, the article No. is adjusted.

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Appendix 1

China Petrochemical Development Corporation Articles of Incorporation

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

Chapter One: General Provisions

Article 1 This Company is duly incorporated under the name of “ 中國石油化學工業開發股份有限公司 ” in Chinese and “China Petrochemical Development Corporation” in English.
Article 2 The scope of business of this Company shall be as follows:
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.
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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 Two: Shares

Article 6 The total capital amount of the Company is forty-five 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 Chairperson and a minimum of two Directors, and duly authenticated by the competent authority or the issuance registry institution accredited by the competent authority before issuance. The Company’s share certificates shall be duly issued in accordance with the requirements set forth under Articles 162, 162-1 and 162-2 of the Company Law.
Article 8 The Company shall take charge of stock affairs in accordance with the Company Law, “Regulations Governing Stock Affairs of Public Companies” and relevant laws and regulations.
Article 9 The Company’s issuance of new shares by means of increasing share capital shall be implemented in accordance with relevant laws and regulations, and 10%-15% of the total amount of the new shares shall be reserved for subscription by employees. The shares which are not subscribed to by the current shareholders may be open to public issuance or be subscribed by specific persons through negotiation.
Article 10 No registration of transfer of shares shall be made within sixty days (60) prior to an annual shareholder meeting, nor within thirty days (30) prior to a special (extraordinary) shareholder meeting, nor within five (5) days prior to the day on which dividend, bonus or other benefits is scheduled to be paid by the Company.
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Chapter Three: Shareholder Meetings

Article 11 The shareholder meeting hereof is divided into the annual shareholder meeting and special shareholder meeting. The former shall be convened annually within six months from the closing of each fiscal year. The latter may be duly convened according to relevant laws whenever the Company deems necessary.
Article 12 The notices for shareholder meetings shall set out the discussion items at the meeting and be served to all shareholders through their addresses shown in the shareholder register thirty (30) days in advance of an annual shareholder meeting and fifteen (15) days in advance of a special shareholder meeting. Subject to the consent of the shareholders, the aforementioned notices may be served by electronic methods. Such notices may be duly served to shareholders who hold fewer than one thousand shares each by means of public announcement according to Article 26-2 of the Securities and Exchange Act. With respect to the discussion items at the meeting and if the law or regulation has provided otherwise, the laws shall prevail.
Article 13 Unless otherwise provided for in the Company Law, resolutions shall be adopted by a majority vote at a meeting which is attended by shareholders who represent a majority of the total issued shares.
Article 14 A shareholder of the Company shall have one vote for each common share he or she holds unless otherwise prescribed by law.
Article 15 A shareholder may issue a proxy in the form printed by the Company to expressly stipulate the scope of authorized powers to authorize representative(s) to attend a shareholder meeting on his or her behalf.

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

Article 16 Where a shareholder meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairperson. During the Chairperson’s absence or unavailability for performance of duties for any reasons, the delegation shall be duly handled in accordance with Article 208 of the Company Law.
Where a shareholder meeting is convened by a convener other than the Board of Directors, such meeting shall be chaired by the convener. In case of two or more conveners, one shall be elected or appointed from among themselves to chair the meeting.
Article 17 All resolutions passed at the shareholder meeting shall be recorded in the written minutes, which shall be signed or affixed with seal by the Chairperson and served to all shareholders within twenty (20) days after the meeting. The minutes, the attendance book and the proxies shall be duly archived by the Board of Directors according to the relevant laws.

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

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

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

Chapter Four: Directors

Article 19 The Company will have a Board of Directors consisting of Seven to Eleven directors. Each director will serve an office term of three years and may be re-elected. Three or more Directors shall be independent.
The Company’s Directors shall be elected through cumulative voting. The Company shall adopt candidate nomination system for the election of Directors. Shareholders shall elect Directors from the list of director candidates published by the Company. All procedures shall comply with related regulations of the Company Act and Securities and Exchange Act.
The elections of Independent Directors and non-independent Directors shall proceed as one election, but the number elected shall be calculated separately.
The Board consists of directors. Pursuant to Article 208 of the Company Act, directors shall elect one chairperson and one vice chairperson. The total number of shares held by the entire board shall exceed the minimum requirements specified in the relevant Securities and Exchange Act. The Company may purchase liability insurance for Directors to protect them against potential liabilities arising from exercising their duties during their tenure. For all matters related to the purchase of the insurance, the Board of Directors is authorized with full powers to act as required.

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

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
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convened and chaired by the Chairperson. Upon the Chairperson’s leave, absence or unavailability for performance of duties, the delegation shall be duly handled at the meeting in accordance with Article 208 of the Company Act.

The first Board of Directors meeting of every session shall be convened by the Director who wins the most ballots representing the voting rights during the election.
The notices to the Board of Directors meeting mentioned in the preceding paragraph may be served in writing or by means of facsimile or e-mail.
Article 22 Unless otherwise provided for in the Company Act, decisions at the Board of Directors meeting shall be resolved by a majority vote in the meeting which is attended by Directors who represent a majority of the total number of Directors.
Article 23 A director may duly authorize another director by written proxy to attend a Board of Directors meeting and to exercise the vote for all the matters discussed in that meeting, provided that the authorized Director may only accept one representation.
Article 24 The Chairperson shall exercise its duties in accordance with relevant laws and regulations, the Company’s Articles of Incorporation, the decisions resolved at the shareholder meeting and Board of Directors meeting. The Chairperson is the representative of the Company.
Article 25 In the event that an Independent Director is terminated from his position with or without cause, the Board of Directors shall fill the vacant board seat during the next shareholders’ meeting.
In the event that over one third of the Directors or all Independent Directors are vacant from their positions, the Board of Directors shall call for a special shareholder’s meeting to fill the vacant board seats within sixty days from the inception of the vacancy.

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

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

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

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

Chapter Five: Managers and Other Employees

Article 29 Unless otherwise prescribed by law, the Company shall have one Chief Executive Officer (CEO), one General Manager, a certain number of Vice General Manager, and, in order to meet the Company’s operation or management requirement, a certain number of other 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 Chairperson with full power to make the decision.

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

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

Chapter Six: Accounting

Article 31 Upon closing of each fiscal year, the Board of Directors shall prepare the following documents and shall forward the same to the Audit Committee for auditing no later than the thirty (30) days prior to the meeting date of the annual shareholder meeting:
Business report;
Financial statements;
Proposals of profit allotment or loss coverage.
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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 Seven: Bylaws

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

Article 34 Any matters inadequately provided for herein shall be subject to provisions concerned set forth in the Company Law and relevant laws and regulations.
Article 35 These Articles were duly enacted on April 24, 1969 and were duly amended on December 20, 1973 as the 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,
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1984 as the 10th amendment; February 28, 1991 as the 11th amendment; April 28, 1992 as the 12th amendment; April 15, 1993 as the 13rd 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 31th amendment was made on June 8th, 2017. The 32th amendment was made on May 28th, 2020.

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Appendix 2

China Petrochemical Development Corporation Procedures for Loans, Endorsements, and Guarantees

Amended and resolved at the annual shareholder meeting convened on May 28, 2020.

Chapter I General Principles

Article 1 These Operational Procedures (Procedures) are formulated in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies promulgated by the Financial Supervisory Commission (the Regulations). Any other matters not provided herein shall comply with the applicable laws, rules and regulations.
Article 2 "Subsidiary" and "parent company (the Company)" referred to in these procedures shall be determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers .
The Company’s financial reports are prepared according to the International Financial Reporting Standards, where "net worth" referred in these Procedures means the equity attributable to the owners of the parent company on the balance sheet under the Regulations Governing the Preparation of Financial Reports by Securities Issuers .
Article 3 The term "announce and report" as used in these Procedures means the process of entering data to the information reporting website designated by the Financial Supervisory Commission (FSC).
“Date of occurrence” in these Procedures means the date of contract signing, date of payment, dates of boards of directors' resolutions, or other date that can confirm the counterparty of loaning of funds or making of endorsements/guarantees and monetary amount of the transaction, whichever date is earlier.

Chapter II Loans of Funds to Others

Article 4 The Company does not intend to loan funds to others. Pursuant to article 8 paragraph 3 of the Regulations, the Company is relieved from formulating the Operational Procedures for Loaning Funds to Others.
Where a subsidiary of the Company intends to make loans to others, such subsidiary shall formulate its Operational Procedures for Loaning Funds to Others (Subsidiary Loan Procedures, SLP) according to the Regulations, submit the Subsidiary Loan Procedures for approval by the shareholders' meeting, and it shall comply with the SLP when loaning funds.
Article 5 If the Company’s subsidiary makes loans to others, it is required to conduct internal audit on its lending activities and the implementation in compliance with SLP, and to produce written audit reports every quarter to submit to the Company’s Internal Audit and Investment Department for inspection and audit.
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Article 6 The Company’s subsidiaries shall report the balance of loaned funds in the preceding month to the Investment Department of the Company for compilation by the 5[th] day of each month. The Company shall announce and report the balance of loaned funds in the preceding month of its subsidiaries by the 10[th] day of each month.

If the Company’s subsidiary makes loans to others, it shall report the amount and balance to the Company’s Investment Department before 5pm on the date of occurrence. If loans of funds reach one of the following levels, the Company shall announce and report such event within two days commencing immediately from the date of occurrence:

The aggregate balance of loans to others by the Company’s subsidiaries reaches 20% or more of the Company’s net worth as stated in its latest financial statement.
The balance of loans by the subsidiaries to a single enterprise reaches 10% or more of the Company’s net worth as stated in its latest financial statement.
The amount of new loans of funds by the subsidiaries reaches NT$10 million or more and reaches 2% or more of the Company’s net worth as stated in its latest financial statement.

Chapter III Endorsements/Guarantees for Others

Article 7 The Company shall make endorsements or provide guarantees according to these procedures.
Article 8 The parties to whom the Company may provide endorsement and/or guarantee include the following:
A company with which it does business.
A company in which the Company directly and indirectly holds more than 50% of the voting shares.
A company that directly and indirectly holds more than 50% of the Company’s voting shares.

Companies whose voting shares are at least 90% owned, directly or indirectly by the Company may provide endorsements/guarantees for each other; and the amount of endorsements/guarantees shall not exceed 10% of the net worth of the Company. This restriction shall not apply to endorsements/guarantees made between companies where the Company holds, directly or indirectly, 100% of the voting shares.

Where the Company fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project, or where all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages, or where companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other, such endorsements/guarantees may be made free of the restriction of the preceding two paragraphs.

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Capital contribution referred to in the preceding paragraph shall mean capital contribution directly by Company, or through a company in which the Company holds 100% of the voting shares.

Article 9 Scope of Endorsements/Guarantees

The term "endorsements/guarantees" as used in these Procedures refers to the following:

Financing endorsements/guarantees, including:
- a. Bill discount financing.
- b. Endorsement or guarantee made to meet the financing needs of another company.
- c. Endorsement and/or guarantee of the notes issued by the Company to non-financial institutions and entities to meet the financing needs of the Company.
Customs duty endorsement/guarantee, meaning an endorsement or guarantee for the Company itself or another company with respect to customs duty matters.
Other endorsements/guarantees, meaning endorsements or guarantees beyond the scope of the above two subparagraphs.
Any creation by the Company of a pledge or mortgage on its chattel or real property as security for the loans of another company.
Article 10 The limit on the aggregate amount of the endorsement/guarantee provided by the Company and its subsidiaries shall not exceed 100% of the Company’s net worth as stated in its latest financial statement.

The aggregate amount of endorsement/guarantee provided by the Company and its subsidiaries to any single institution or entity shall not exceed 60% of the Company’s net worth as stated in its latest financial statement.

Where an endorsement/guarantee is made to any single entity due to needs arising from business dealings, in addition to the restrictions specified in the preceding subparagraph, the amount of endorsement/ guarantees provided by the Company and its subsidiaries shall not exceed the greater of the purchase or sales amount to the entity at the time of the endorsement/guarantee or the most recent year.

If the Company or its subsidiaries provide endorsement/ guarantees for a subsidiary whose net worth is lower than half of its paid-in capital, detailed review of the necessity and rationality, credit status and risk assessment shall be conducted, and relevant followup monitoring and control measures shall be expressly prescribed.

In determining the paid-in capital of the above-mentioned subsidiary whose stock has no par value or a par value other than NT$10, the paid-in capital calculation shall be the sum of share capital plus capital surplus minus the issue premium.

Article 11 When providing endorsements/guarantees, the Company should consider and assess the necessity, rationality, credit status, risks impacts on business operations, financial condition and shareholders’ equity, and the necessity to acquire collateral and appraisal of collateral. The assessment and analysis shall be reviewed by the Finance Department and submitted to the Board of Directors for approval. A person-in-charge violate these Procedures is subject to disciplinary review and action in accordance to the Company’s disciplinary guideline.
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Article 12 The Company shall prepare a memorandum book for its endorsement/guarantees activities and record in detail the following information for the record: the entity for which the endorsement/ guarantee is made, the amount, the date of passage by the Board of Directors or of authorization by the chairman of the board, the date the endorsement/ guarantee is made, and the matters to be carefully evaluated under of the preceding article.
Article 13 The Company’s internal auditors shall perform audit on the Company’s endorsements/ guarantees activities and the implementation at least quarterly and produce written records accordingly. In the event that a material violation is found, the internal audit shall immediately notify the Audit Committee and independent directors in writing.
Article 14 The Company shall use the corporate chop registered with the Ministry of Economic Affairs as the dedicated chop for endorsements/guarantees. The chop shall be kept in the custody of a designated person approved by the Board of Directors and may be used to seal or issue negotiable instruments only in prescribed procedures.
When providing a guarantee for a foreign company, the endorsement/guarantee letter shall be executed and signed by the chairman of the board of directors (or the person designated by the chairman).
Article 15 If a subsidiary of the Company intends to provide endorsements/ guarantees for others to satisfy its business requirements, such subsidiary shall formulate its own Operational Procedures for Endorsements/Guarantees (Subsidiary Endorsements/Guarantees Procedure, SEGP) in compliance with the Regulations, submit the SEGP for approval by the shareholders' meeting, and it shall comply with the SEGP when providing endorsements/guarantees.

Before providing any endorsement/Guarantees Pursuant to Article 8, paragraph 2, a subsidiary in which the Company holds, directly or indirectly, 90% or more of the voting shares shall submit the proposed endorsement/Guarantee to the Company’s Board of Directors for a resolution, provided that this restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares

When the Company makes endorsements/guarantees for others, it shall take into full consideration each independent director's opinions; independent directors' opinions specifically expressing assent or dissent and their reasons for dissent shall be included in the minutes of the board of directors' meeting.
Article 16 The Company’s subsidiary shall report the balance of endorsements /guarantees in the preceding month to the Investment Department of the Company for compilation by the 5[th] day of each month. The Company shall announce and report the balance of endorsements/guarantees in the preceding month of itself and its subsidiaries by the 10[th] day of each month.
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A subsidiary of the Company provides endorsements/guarantees for others shall report the amount and balance to the Company’s Investment Department before 5pm on the date of occurrence. Such amount should be added to the Company’s balance of endorsements/ guarantees by the Finance Departments. If the balance of endorsements/ guarantees by the Company and its subsidiaries reaches one of the following levels, the Company shall announce and report such event within two days commencing immediately from the date of occurrence:

The aggregate balance of endorsements/guarantees by the Company and its subsidiaries reaches 50% or more of the Company’s net worth as stated in its latest financial statement.
The balance of endorsements/guarantees by the Company and its subsidiaries for a single enterprise reaches 20% or more of the Company’s net worth as stated in its latest financial statement.
The balance of endorsements/guarantees by the public company and its subsidiaries for a single enterprise reaches NT$10 millions or more and the aggregate amount of all endorsements/guarantees for, carrying value of equity method investment in, and balance of loans to, such enterprise reaches 30 percent or more of public company's net worth as stated in its latest financial statement.
The amount of new endorsements/guarantees provided by the Company or its subsidiaries reaches NT$30 million or more, and reaches 5% or more of the Company’s net worth as stated in its latest financial statement.

Article 17 In case the Company needs to exceed the limits set out in the Endorsements/Guarantees Procedures to accommodate business needs, and where the conditions set out in the Endorsements/Guarantees Procedures are complied with, approval by a resolution of the board of directors shall be obtained and over half of all the directors shall act as joint guarantors for any loss that may be caused to the company by the excess endorsements/guarantees. It shall also amend the Operational Procedures for Endorsements/Guarantees accordingly and submit the same to the shareholders’ meeting for ratification after the fact. If the shareholders’ meeting does not give consent, the company shall adopt a plan to discharge the amount in excess within a given time limit.

When obtaining above mentioned approval from the board of directors in the preceding paragraph, the Company shall take into full consideration each independent director's opinions; independent directors' opinions specifically expressing assent or dissent and their reasons for dissent shall be included in the minutes of the board of directors' meeting.

If, as a result of changes of circumstances, the party to whom an endorsement/Guarantees is provided no longer meets the requirements set forth in these Procedures, or the amount of endorsement/Guarantees exceeds the limit, the Company shall adopt corrective plans and submit them to the Audit Committee and independent directors and the proposed correction actions should be implemented within the period specified in the plan.

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Article 18 The Company’s Finance Department and its subsidiaries shall assess and recognize contingent losses brought about by endorsements/ guarantees, adequately disclose relevant information in the financial reports, and provide certified public accounts with relevant information for implementation of necessary audit procedures.

Chapter IV Supplemental Provisions

Article 19 These Procedures shall be submitted to Audit Committee for approval and submit to Board of Directors for ratification and shareholder meeting for approval, If any director expresses dissent and recorded or while the issues is revised, the objection shall send to the Audit Committee and submitted to the shareholders for discussion.
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Appendix 3

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

Amended and resolved at the annual shareholder meeting convened on May 28th, 2020.

Article 1 These Operational Procedures (Procedures) are formulated in accordance with the Regulations Governing the Acquisition and Disposal of Assets by Public Companies promulgated by the Financial Supervisory Commission (the Regulations).
In the case that this Procedure is incomplete, all procedures shall be in accordance with related Articles of Securities and Exchange Act.
Article 2 The term “assets” as used in these Procedures is applicable within the scope enumerated below:
Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities, etc.
Real estate (including land, building and structures, real estate held for investment purposes, land usage right, inventories of construction enterprises) and equipment.
Memberships.
Patents, copyrights, trademarks, franchise rights, and other intangible assets.
Right –of –use assets
Claims of financial institutions (including receivables, foreign exchange rebate, loans, and overdue receivables).
Derivatives.
Assets acquired or disposed of in connection with mergers, spin-off, acquisitions, or share transfer in accordance with law.
Other major assets.
Article 3 Term definitions used for these Procedures are as follow:
The term “Derivative Products” means forward contracts, options, futures, leverage contracts, or swaps, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests, and the hybrid contracts consisted by the above products. The term “Forward Contracts” does not include insurance contracts, fulfillment contracts, after-sales service contracts, long-term lease contracts or longterm purchase or sale agreements.
The term “Assets Acquired or Disposed by Mergers, Spin-off, Acquisition or Shares Transference Pursuant to Laws” means assets acquired or disposed of by mergers, spinoff, acquisition or share transfer, pursuant to Business Mergers and Acquisitions Act, Financial Holding Companies Act, Financial Institutions Merger Act or other acts; or share transfer from other companies by issuing new shares of its own as the consideration therefor (hereinafter “transfer of shares”) pursuant to the sixth paragraph of Article 1568 of the Company Act.
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The term “related party” and “subsidiaries” as used in these Procedures mean those parties defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
The term “professional appraisal” as used in these procedures, means a certified appraiser or a company in the business of appraising real property or equipment.
The term “date of occurrence” refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of Boards of Directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.
The term “investments in China” means investments made in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area by the Investment Commission of the Ministry of Economic Affairs, R.O.C.
The term “competent authorities” means the government entities in charge of the Stock and Exchange Act.
Article 4 Authority for approval, appraisal, procedures, transaction terms, and decision making processes of evaluation and management for the acquisition or disposal of assets:
The acquisition or disposal of real estate and other fixed assets:
- 1) Authority for approval, evaluation and management shall be in accordance with CPDC’s internal regulations “The Chart of Responsibilities of the Board of Directors and Managers,” “The Level of Authority for Managers Junior to the President,” “Rules Governing Fixed Assets Management” and Article 7 of this procedure.
- 2) Procedures to determine transaction terms shall be determined by reference to market value, publicly announced current value, recent market transaction price of neighboring or closely valued property or the report issued by a certified appraiser. Final prices shall be carried out by one of the following: price inquiry, price comparison, price negotiation or open tender.
- 3) The implementation unit shall be the department in charge of real property and fixed assets management.
Acquisition or disposal of securities, membership or intangible assets:
- 1) Authority of approval, evaluation and management shall be in accordance with CPDC’s internal regulation “The Chart of Responsibilities of the Board of Directors and Managers”, “The Level of Authority for Managers Junior to the President” and Article 8 of this procedure.
- 2) Procedures to Determine Transaction Terms:
  - a. For securities purchased and sold on a centralized exchange market or OTC exchange, the price shall be decided by the market price at the time of the transaction.
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 - b. For securities not acquired or disposed of on a centralized exchange market or OTC exchange, the price shall be determined by reference to net value per share, profitability, growth potential, financial analysis reports, prevailing interest rate, bond yield or price, creditability of debt issuers and transaction price at the time.

 - c. For the acquisition or disposal of membership certificates or intangible assets, the price shall be integrally evaluated by reference to the fair market value, future anticipated added-value, and produced benefit.
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- 3) Implementation unit:
  - a. The evaluation of acquisition or disposal of securities described in the first subparagraph of Article 2, paragraph 1 of this Procedure shall be conducted by the finance department or re-investment department and shall be executed by such upon obtaining appropriate approval in accordance with the Procedure.
  - b. The evaluation of acquisition or disposal of non-securities assets, membership certificates, or intangible assets shall be conducted by the related departments and shall be executed by such departments upon obtaining appropriate approval in accordance with the Procedure.
Acquisition or disposal of claims of financial institutions: In general, the Company does not invest in claims of financial institutions. In the event that the Company intends to engage in transaction with acquisition or disposal of financial institution claims, the Company shall report and obtain approval from the Board of Directors and formulation of the appropriate procedure shall follow.
Article 5 Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters whom provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall not be a related party of any party to the transaction.

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

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

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

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

Any transaction involving major assets or derivatives shall be approved by more than half of all Audit Committee members and submitted to the Board of Directors for a

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

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

Article 6 For acquisition or disposal of assets, provided that one of the following conditions exists, the Company shall publicly announce and file the relevant data and information to the Financial Supervisory Commission’s designated Market Observation Post System, or MOPS in the appropriate format as prescribed by regulations within two days commencing immediately from the date of occurrence of the event:
Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of the Company’s paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements or subscription or redemption of domestic money market funds issued by securities investment trust enterprises.
Merger, spin-off, acquisition, or transfer of shares.
Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in these Procedures adopted by the Company.
For acquisition or disposal of assets which are for operating using, and the trading counterparty are not related party, and the paid-in capital referred to in the following subparagraphs
- 1) Paid- up capital bellow NT$10 billion, transaction amount more thanNT$500 million.
- 2) Paid- up capital more than NT$10 billion, transaction amount more than NT$1 billion.
The real property for construction use acquired or disposed by construction business, where the trading counterparty is not a related party and the transaction amount is more than NT$500 million.
Where land is acquired under an arrangement on engaging others to build on the Company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction is more than NT$500 million.
Where an asset transaction other than any of those referred to in the preceding six subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of the Company’s paid-in capital or NT$300 million. Provided, this shall not apply to the following circumstances:
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1) Trading of government bonds.
2) Securities trading by investment professionals on foreign or domestic securities exchanges or over-the-counter markets, or subscription of securities in the domestic primary market or ordinary bonds which aren’t related to equity.
3) Trading of bonds under repurchase/resale agreements or subscription or redemption of domestic money market funds issued by securities investment trust enterprises.

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

The amount of any individual transaction.
The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year.
The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year.
The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

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

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

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

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

Change, termination, or rescission of a contract signed in regard to the original transaction.
The merger, spin-off, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract.
Change to the originally publicly announced and reported information.

Article 7 In acquiring or disposing of real estate or equipment by the Company, unless otherwise transacting with a government agency, commissioning others to build on its own land,

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leased land by appointing a constructor, or acquiring or disposing equipment for business use, where the transaction amount reaches 20% of the Company’s paid- in capital or NT$300 million, the Company shall obtain an appraisal report issued by a professional appraisal and further comply with the following provisions prior to the date of occurrence of event:

Due to special circumstances, where a limited price, specified price or special price is deemed as the basis of reference for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction.
Where the transaction amount is more than NT$ 1 billion, appraisals from two or more professional appraisers shall be obtained.
Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (abbreviated as ARDF hereafter) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:
1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.
No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

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

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

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

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

The purposes, necessity, and anticipated benefits of the acquisition or disposition of the assets;
The reasons for selecting the related persons as the transaction counterparty;
Relevant information for evaluating the reasonableness of the terms of the anticipated transaction pursuant to the provisions of Items 4 and 6 of this Article and Article 10-1;
Information such as the date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party;
Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the uses of fund;
Transactions value of 10 percent of the Company’s total assets or more, accountant’s opinions, or appraisal reports in compliance with the provisions of Article 7 or 8 of these Procedure;
Restrictive covenants and other important stipulations associated with the transaction.

The calculation of the transactions referred to in the preceding paragraphs with amounts reach 20 percent of the Company’s paid-in capital, 10 percent of total assets or NT$300 million or more shall follow the provisions in the 2nd paragraph of Article 6 of these Procedures. “Within the preceding year” as used herein refers to the year preceding the

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date of occurrence of the current transaction. Items for which have been submitted and approved by the Audit Committee and passed resolutions by the Board of Directors in accordance with these Procedures need not be counted toward the transaction amount.

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

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

Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. “Necessary interest on funding” is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum nonfinancial industry lending rate announced by the Ministry of Finance.
Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties.

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

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

The related party acquired real property by inheritance or as a gift.
More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction.
The real property is acquired through signing of a joint development contract with the related party, or contracting with a related party in the construction of real estate such as contracted construction with its own land or contracted construction on leased land.

With respect to the acquisition or disposal of business-use equipment between the Company and its subsidiaries, the Board of Directors may delegate the chairman to make decision under a pre-approved transaction amount by the board or in pursuant to the

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amount set forth in the Company’s internal guideline “The Chart of Responsibilities of the Board of Directors and Managers.” The decisions shall subsequently be submitted to and ratified by the next Board of Directors meeting.

Article 10 Where the Company acquires real property from a related party, in the event that the results of the appraisal conducted in accordance with Paragraph 4 of the preceding Article are uniformly lower than the transaction price, the Company shall carry out the acquisition in accordance with Paragraph 3 of this Article. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply:
Where the related party acquired undeveloped land or leased land for development, proof of compliance may be submitted with one of the following conditions:
- 1) Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The term “Reasonable construction profit” shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
- 2) The completed transactions of other floors of the same property or adjacent area by unrelated parties within the preceding year, where the terms of the transactions are similar and the reasonable price discrepancies of different floors or land area with market practice have been taken into consideration.
- 3) The completed leases by unrelated parties for other floors of the same property within the preceding year, where the terms of the leases are similar after considering the reasonable price discrepancies among floors in accordance with prevailing market practice.
Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

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

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

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A special reserve shall be set aside according to Paragraph 1, Article 41 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised value, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve required by law shall be set aside pro rata to the shareholding in accordance with Article 41-1 of the Securities and Exchange Act.
Audit Committee shall comply with Article 218 of the Company Act.
Actions taken pursuant to the two preceding subparagraphs shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

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

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

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

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

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

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

Article 12 The ceiling on total amounts of real property and securities acquired by the Company and each subsidiary for non-business use, and the limits on individual securities are:
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The total amount of real property purchased for non-business use shall not exceed 30% of the shareholders’ equity of the Company.
The total amount of the securities purchased shall not exceed the shareholders’ equity of the Company and shall meet the latest requirements promulgated by the respective competent authorities. The limit on investment in the individual securities shall not exceed 40% of the shareholders’ equity of the Company.
Article 13 The Company shall comply with the following trading principles and guidelines when engaging in derivatives trading:
Types of derivatives products:
- 1) The Company may engage in trading in derivatives products including forward contracts, options, futures, leverage contracts, or swaps, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests, and the hybrid contracts consisted by the above products.
- 2) “Forward Contracts” referred to in the preceding subparagraph A does not include insurance contracts, fulfillment contracts, after-sales service contracts, long-term lease contracts or long-term purchase or sale agreements.
Operating (hedging) strategies:
- Trading in derivatives products by The Company must be associated with risk exposures on revenues and expenditures, assets, liabilities or shareholders’ equity arising from the Company’s business operation.
Segregation of duties:
- 1) The Company shall not engage in derivatives trading unless approved by the Board of Directors or the competent superintendents in accordance with the “The Chart of Authority and Responsibilities of the Board of Directors and Managers” and “The Level of Authority for Managers Junior to the President.”
- 2) Where the Company engages in trading derivatives products, the personnel in charge of transaction, confirmation and settlement shall be appointed by the chairman or the president. Moreover, where the Finance Department engages in trading derivatives products, the personnel in charge of transaction, confirmation and settlement shall be assigned by the Vice President of Finance.
- 3) Where the derivatives trading is associated with the Company’s products, raw materials or commodities, transactions shall be carried out by the Sales Department, Procurement or other assigned department(s) and supported by the Finance Department. Trading in relation to interest rates or exchange rates, shall be carried out by the Finance Department.
Disclosure - Public announcement and regulatory filing:
- The disclosure provisions are adopted in accordance with provisions prescribed in Chapter III - Public Disclosure of Information of the Regulations:
- 1) In the event where losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in these Procedures, the Company shall file a public report of relevant information on the MOPS within 2 days commencing immediately from the date of occurrence of the event.
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2) The Company shall compile monthly reports on the balance of derivatives trading engaged in up to the end of the preceding month and file the information in the prescribed format into the MOPS by the 10th day of each month.
Essentials of performance evaluation:

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

1) Hedging transactions: The basis for performance evaluation depends on the profit/loss resulted from the difference of acquisition costs of the hedged item and the derivative trading.
2) Specific-purpose transactions: Evaluation shall be based on the actual profit/loss of the transaction.
Total contract amount and limit on maximum loss:
1) Hedging operation:

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

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

2) Specific-purpose operation:

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

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

3) Trading-purpose operation:

The Company does not engage in trading-purpose operation.

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

The scope of risk management includes:
1) Credit risk management: In principle, the counterparties for transactions shall be domestic financial institutions with sound credit standing or internationally renowned financial institutions whom are capable of providing professional information.
2) Market price risk management: In principle, the chosen market shall be where the price quotation information is publicly and adequately available. The Company shall monitor and verify changes in market conditions and the positions from time to time.
3) Liquidity risk management: The products chosen for transactions shall primarily be the prevailing derivatives products in the international community, with high liquidity, large transaction volume and are readily available for trade.
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- 4) Cash flow risk management: The Company shall assess its cash flow on a regular basis to maintain adequate liquid capital and credit capacity for financing to meet the settlement requirement and to ensure the stability of its working capital.
- 5) Operation risk management: The authorized amount set by the Company and the operational procedures shall be in compliance with these Procedures, and shall be included as part of the internal audit. Each operation step shall be authorized and supervised by superior superintendents.
- 6) Legal risk management: The documents to be signed by the Company with the transaction counterparts shall not be officially executed unless reviewed by the legal counsel and/or personnel with expertise from the departments with relevant business, and the head(s) of the responsible department(s).
Personnel engaged in derivatives trading may not serve concurrently in other operations such as confirmation and settlement. The counterparties to the transactions shall be given notice on the assignment or discharge of personnel in charge of transaction and confirmation before the effective date so as to preserve the Company’s interests.
Risk measurement, monitoring, and control personnel shall be assigned to a different department that the personnel in the preceding subparagraph and shall report to the Board of Directors or senior management who are not responsible for decisionmaking in the transaction or positions.
Departments in charge of the transactions of derivatives products shall cooperate with the Finance Department to evaluate the transactions. Derivatives trading positions held by the Company shall be evaluated at least once per week; however, positions for hedge trades required by business shall be evaluated at least twice per month. Evaluation reports shall be submitted to senior management personnel authorized by the Board of Directors.
Article 15 The supervision and management over transactions of derivatives products by the Company, and the internal audit system:
Where the Company engaging in derivatives trading, the Board of Directors shall faithfully supervise and manage such trading in accordance with the following principles:
- 1) Whether the authorized and designate senior management personnel and the president have been constantly attending the monitoring and control of derivatives trading risk.
- 2) Whether the authorized and designated senior management and the president periodically evaluate if derivatives trading performance is consistent with established operating strategy and if the risk undertaken is within the company's permitted acceptable level.
Senior management personnel authorized for derivatives trading by the Board of Directors and the president shall manage the activities in accordance with the following principles:
- 1) Periodically evaluate the risk management measures currently employed are appropriate and are faithfully conducted in accordance with the Regulations and these Procedures for engaging in derivatives trading formulated by the Company.
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- 2) They shall supervise the transactions and profit/loss status and shall adopt the necessary countermeasures and report to the Board of Directors immediately whenever abnormalities are found.
Where the Company engages in derivatives trading, the Accounting Unit of the Finance Department shall establish a log book in which record the matters as required under the relevant laws and regulations. Such log books shall be archived and retained for the duration as required by law.
The internal auditors of the Company shall periodically look into the appropriateness of the internal control over derivatives products and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to these Procedures, and prepare an audit report. Where a material violation is found, the Audit Committee shall be informed in writing.
Article 16 In the event that a subsidiary of the Company intends to engage in derivatives trading to accommodate business need:
Such subsidiary shall, in accordance with the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” promulgated by the competent authority in charge of securities affairs, adopt its Procedures for derivatives trading and shall not engage in these activities until such procedures pass the resolution by its Board of Directors and shareholder meeting.
Such subsidiary shall conduct at least annual internal audit on its derivatives activities and the implementation in compliance with its Procedures, and to produce written audit reports and submit to the Company’s Internal Audit for inspection and audit.
Where the subsidiary of the Company is not a domestic public company:
- 1) In the event where losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in its Procedures, the subsidiary shall report the information to the Investment Department of the Company for compilation on the date of occurrence of the event. The Company shall make public announcement and file relevant information on behalf of the subsidiary within 2 days commencing immediately from the date of occurrence of the event.
- 2) The subsidiary shall report the balance of derivatives trading in the preceding month to the Investment Department of the Company for compilation by the 5th day of each month. The Company shall announce and file the balance of derivatives trading in the preceding month of itself and its subsidiaries by the 10th day of each month.
Article 17 Where the Company conducts a merger, spin-off, acquisition, or transfer of shares, the department in charge shall, prior to convening the Board of Directors to resolve on the matter, engage a Certified Public Accountant, attorney, or securities underwriter to render an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other assets to shareholders, and submit it to the Board of Directors for discussion and resolution. However, merging the subsidiaries which direct and indirect holds 100% issued shares or amount of capital, or the merging between the subsidiaries which direct and indirect holds 100% issued shares or amount of capital, do not need to render an opinion on the reasonableness by professions.
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Article 18 The Company participating in a merger, spin-off or acquisition shall prepare a public report to shareholders detailing important contractual content and relevant matters prior to the shareholders meeting and include it along with the expert opinion referred to in the preceding Article when sending shareholders meeting invitation for reference in deciding whether to approve the merger, spin-off, or acquisition. Provided, where a provision of another act exempts the Company from convening a shareholders meeting to approve the merger, spin-off, or acquisition, this restriction shall not apply.

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

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

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

Basic information of the personnel: Including the titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning of any merger, spin-off, acquisition, or transfer of another company’s shares or the implementation of the plan prior to disclosure of such information.
Dates of material events: Including the dates of signing any letter of intent or memorandum of understanding, retaining a financial advisor or legal counsel, execution of a contract, and the convening of a Board of Directors meeting.
Material documents and minutes: Including documents for merger, spin-off, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of Board of Directors meetings.

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

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

Article 20 Each and every person participating in or possessing knowledge of the plan for merger, spin-off, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to the public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, spin-off, acquisition, or transfer of shares.
Article 21 A Public Company that participates in a merger, spin-off, acquisition, or transfer of shares shall not arbitrarily alter the share exchange ratio or acquisition price unless under any of the circumstances enumerated below, and shall stipulate the circumstances permitting alteration in the contract for the merger, spin-off, acquisition, or transfer of shares:
Capital increase (re-capitalization) in cash, issuance of convertible corporate bonds, or issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, and other equity based securities.
An action such as a disposal of major assets that would affect the Company’s financial operations.
Occurrence of an event such as a major disaster or major change in technology that would affect shareholder equity or share price.
An adjustment where any of the companies participating in the merger, spin-off, acquisition, or transfer of shares from another company, buys back treasury stock.
An increase or decrease in the number of entities or companies participating in the merger, spin-off, acquisition, or transfer of shares.
Other terms/conditions that the contract stipulates may be altered and the altered terms/conditions have been publicly disclosed.
Article 22 A contract for participation by a public company in a merger, spin-off, acquisition, or shares transfer shall expressly record the rights and obligations of the companies participating in the merger, spin-off, acquisition, or transfer of shares, and also record the matters enumerated below:
Handling of breach of contract.
Principles for handling equity-based securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is spin-off.
The amount of treasury stock that the participating companies are permitted under law to buy back after the record (base) date of calculation of the share exchange ratio, and the principles for handling thereof.
The manner to deal with a change in the number of participating entities or companies.
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Preliminary progress schedule for plan execution, and anticipated completion date of the execution.
Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.
Article 23 After public disclosure of the information, if any company participating in the merger, spin-off, acquisition, or share transfer intends to further carry out a merger, spin-off, acquisition, or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, spin-off, acquisition, or share transfer; except where the number of participating companies is decreased and a participating company’s shareholders meeting has resolved a decision authorizing the Board of Directors to alter the limits of authority. Such a participating company may be exempted from calling another shareholders meeting to resolve the matter anew.
Article 24 Where any of the companies participating in a merger, spin-off, acquisition, or transfer of shares is not a public company, the public company(s) shall sign an agreement with that non-public company whereby the latter is obliged to comply with the provisions of set forth under Article 19, Article 20 and Article 23.
Article 25 A person-in-charge of the subject matters under these Procedures who violates these Procedures is subject to disciplinary review and action in accordance to the Company’s disciplinary guideline.
Article 26 These Procedures and any amendment hereto shall be submitted for approval by more than half of the Audit Committee and submitted to the Board of Directors for approval, then submitted to the Shareholders’ Meeting for ratification. If any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to the Audit Committee.

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

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

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

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Appendix 4

China Petrochemical Development Corporation 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.
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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.
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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.
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Appendix 5

China Petrochemical Development Corporation Rules Governing the Proceedings of Shareholder Meetings

Amended and 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 meeting agenda and supplemental materials shall also be displayed at this Corporation Stock Affairs Office as well as being distributed on-site at the meeting place.

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 a proposal to this Corporation 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.

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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.

Shareholder-submitted 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.

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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
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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.

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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.

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.

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

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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.
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Appendix 6

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).

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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.

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Appendix 7

Shareholdings of the Company’s Directors

(As of March 29, 2022)

				(As of	March 29, 2022)
Title	Account Number	Name	Name of Representative	Number of Shares	% of Shareholding
Chairman	158659	Core Pacific Co. Ltd.	Ruey-Long Chen	53,980,916	1.43%
Director	158659	Core Pacific Co. Ltd.	Shaw-Shin Yang
Vice Chairman	101204	Jen Huei Enterprise Co. Ltd.	Jiun-Nan Bai	21,797,310	0.58%
Independent Director		Yun-Peng Chu		0	0
Independent Director		Wen-Yen Pan		0	0
Independent Director		Song-Nian Ye (resignation effective May 26, 2022)		0	0
Director	166505	BES Engineering Corporation	Hui Lan Zhu	183,037,540	4.84%
Director	101177	C.P. Leasing Co. Ltd.	Kueng-Ming Lin	2,100,516	0.06%
Director	848471	Yao Chuen Co., Ltd.	Hui-Ting Shen	448,708	0.01%
Number of shares held by all directors				261,364,990	6.91%

Note 1: Ownership ratios were calculated based on the total number of the Company’s outstanding shares 3,784,850,130 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 90,836,403 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.
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AI assistant

CPDC — AGM Information 2022

51772_rns_2022-08-12_916e30fb-c748-4b3b-b864-385377d8fb74.pdf

China Petrochemical Development Corporation

Annual Shareholder Meeting Handbook 2022

DISCLAIMER

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

TABLE OF CONTENTS

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

2022 Meeting Procedures

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

2022 Meeting Agenda

Report Items

Ratification Items

ITEM 1 ：

ITEM 2:

Discussion and Election Items

ITEM 1

ITEM 2

ITEM 3

ITEM 4

ITEM 5

ITEM 6

Extemporary Motion

Adjournment

Attachment 1

China Petrochemical Development Corporation

2021 Business Report

Annual Income Statement

3. IT Management:

4. HR Management:

5. Financial Planning:

6. Sustainability Development:

Management Principles

Future Operating Outlook:

2. Land Development:

China Petrochemical Development Corporation

Audit Committee Review Report

I. 2021 Parent Only Financial 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, 2021 and 2020

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

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(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

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

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

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

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(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:

CPDC AGM Information 2022