CPDC — AGM Information 2023

Jul 19, 2023

Stock Code: 1314

China Petrochemical Development Corporation

Annual Shareholder Meeting Handbook 2023

Type of Meeting: Physical Shareholders’ Meeting

Time: June 30, 2023 (Friday), 9:30am

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

DISCLAIMER

THIS IS A TRANSLATION OF THE HANDBOOK FOR THE 2023 ANNUAL SHAREHOLDERS’ MEETING (THE “HANDBOOK”) OF CHINA PETROCHEMICAL DEVELOPMENT CORPORATION (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE AGENDA SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

TABLE OF CONTENTS

I.	Meeting Procedures .................................................................................................................... 1
II.	Meeting Agenda ......................................................................................................................... 2
III.	Report Items ............................................................................................................................... 3
IV.	Ratification Items ....................................................................................................................... 4
V.	Discussion Items ......................................................................................................................... 6
VI.	Extemporary Motion ................................................................................................................ 10
VII.	Adjournment ............................................................................................................................. 10
VIII.	Attachments
	1. 2022 Business Report .......................................................................................................... 11
	2. Audit Committee’s Review Report ...................................................................................... 21
	3. Status of the Directors' Remuneration of 2022 .................................................................... 22
	4. Independent Accountant’s Audit Report & 2022 Financial Statements ............................. 24
	5. Loss Appropriation Table for 2022 ..................................................................................... 44
	6. Comparison between Original and Amendments to the“Procedures for the
	Acquisition or Disposal of Assets” ...................................................................................... 45
IX.	Appendices
	1. Articles of Incorporation ...................................................................................................... 55
	2. Procedures for the Acquisition or Disposal of Assets ......................................................... 63
	3. Rules Governing the Proceedings of Shareholder Meetings ............................................... 80
	4. Registration Procedures for Attending Shareholder Meetings ............................................ 91
	5. Shareholdings of the Company’s Directors ......................................................................... 93

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

2023 Meeting Procedures

1. Report the number of shares represented at the meeting

2. Chairman announces start of the meeting

3. Chairman's remarks

4. Report Items

5. Ratification Items

6. Discussion Items

7. Extemporary Motions

8. Adjournment

9. 1 -

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

2023 Meeting Agenda

Type of Meeting: Physical Shareholders’ Meeting

Time: June 30, 2023 (Friday), 9:30am

• Location: The Toufen Plant of China Petrochemical Development Corporation

• (No. 217, Sec.2, Ziqiang Road, Toufen City, 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

• 2022 Business Report.

• Audit Committee’s Review Report on the 2022 Financial Statements.

• 2022 Directors' Remuneration Report.

• Status of the employees’ and directors’ remuneration of 2022.

• Other reporting items.

• (V) Ratification Items

• Ratification of the 2022 Business Report and Financial Statements.

• Ratification of the 2022 Loss Appropriation Proposal.

• (VI) Discussion Items

• Discussion of the capital raising proposal by domestic public share issuance (cash offering) with an issue size no greater than 500 million common shares.

• Amendment to the “Procedures for the Acquisition or Disposal of Assets.”

• Release of restriction on competitive activities of directors.

• (VII) Extemporary Motions

• (VIII) Adjournment

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Report Items

• I. 2022 Business Report.

Description: 2022 Business Report (Please refer to Attachment 1).

• II. Audit Committee’s Review Report on the 2022 Financial Statements. Description: Audit Committee’s Review Report (Please refer to Attachment 2).

• III. 2022 Directors' Remuneration Report.

Description:

• (I) According to the Company’s Articles of Incorporation, if the Company has earnings, it shall set aside no greater than 2% of the balance as remuneration to the Directors. 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.

• (II) Please refer to Attachment 3 for the remuneration policy, the systems, standards and structure, and the Status of Directors' remuneration of 2022.

• IV. Status of the employees' and directors' remuneration of 2022.

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 2022 remuneration proposal to the employees representing 3% of earnings is NT$11,181,688; Due to the unstable global economic environment and the depressed market conditions of the petrochemical industry, the overall operation of the Company was not as expected. In order to cope with the subsequent uncertain economic challenges in the future and to balance the interests of shareholders, the Company intends not to distribute Directors' remuneration for 2022.

• V. Other reporting items.

• 3 -

Ratification Items

ITEM 1 ：

(proposed by the Board of Directors)

Proposal: Ratification of the 2022 Business Report and Financial Statements

Description:

• I. The Company’s 2022 parent only and consolidated financial statements have been audited by Ms. Melody Chen and Mr. Vincent Wu of KPMG.

• II. The Company’s 2022 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: 2022 Business Report

Attachment 4: 2022 Parent Only and Consolidated Financial Statements

Resolution:

• 4 -

ITEM 2:

(Proposed by the Board of Directors)

Proposal: Ratification of the 2022 Loss Appropriation Proposal

Description:

• I. The Company’s undistributed earnings at the beginning of the year 2022 amounted to NT$ 265,599,187 and the net profit after tax for 2022 amounted to NT$ 233,114,088, plus the recognized undistributed surplus for this year - adjustments due to remeasurement of defined benefit plans of NT$ 94,328,115, deduct the recognized undistributed earnings deduction item for this year - the net adjustment of the new bulletin for the first time (amendments to International Accounting Standard No. 16 "Property, Plant and Equipment") is NT$ 212,442,444, disposal in equity instruments measured at fair value through other comprehensive income of NT$ 393,023,392, the accumulated loss to be recovered is NT$ 12,424,446. It is proposed to recover it with Legal reserve NT$ 12,424,446, remaining loss to be recovered at the end of the period is NT$ 0, and no dividends to be appropriated this year.

• II. Please refer to Attachment 5 for the Loss Appropriation Table for 2022.

Resolution:

• 5 -

Discussion Items

ITEM 1

(Proposed by the Board of Directors)

• Proposal: Discussion of the capital raising proposal by domestic public share issuance (cash offering) with an issue size no greater than 500 million common shares.

• Description: To enhance the Company’s financial condition for working capital needs and future business development, the Company requests approval from shareholders to authorize the Board of Directors to approve the capital raising proposal by public share issuance (cash offering) with an issue size no greater than 500 million common shares, based on market conditions. The main details of which are as follows:

Authorization for a Domestic Public Offering:

• (I) The par value of new common shares to be issued per share is NT$10/share. It is proposed to authorize the Chair to coordinate with the underwriter(s) of the public offering to determine the actual issue price in accordance with the relevant provisions of “Taiwan Securities Association Self-Regulatory Rules Governing Advising Capital Raising and Securities Issuance by Underwriters” and subject to market conditions. The final price shall be reported to the regulatory authority before issuance.

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

• Book building method:

  • In accordance with Article 267, Paragraph I of the Company Act of Republic of China, 10% to 15% of the new shares must be offered to employees, and the Board shall authorize the Chair to contact specified investors to purchase the remaining 85~90% of new shares at market price. We proposed to seek approval from shareholders, under Article 28-1 of the Securities and Exchange Act, to waive subscription rights and to allow to use the book building method and offer shares to the public under the regulations “Taiwan Securities Association Rules Governing Underwriting and Resale of Securities by Securities Firms”, and should be no less than 90% of the arithmetic average of the closing price from 1, 3, or 5 trading days prior to the ex-dividend date (decided by the Board) minus the ex-dividend price. It is proposed to authorize the Chair to coordinate with the underwriter(s) of the public offering to determine the actual issue price under the market condition, and the final issue price shall be reported to the regulatory authority before issuance.

• 6 -

• Issuance of public offering:

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

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

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

• (V) The proceeds collected during the common share issuance are intended to be used to repay bank borrowings, enhance working capital and prepare for future expansion, improve operation efficiency that are deemed to have a positive impact on future development.

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

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

• (VIII) The issuance methods mentioned in article 2, if there needs to be adjustments to the method under regulation due to certain circumstances, the Board is authorized to conduct further procedures.

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

Resolution ：

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ITEM 2

(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, the Company proposes to amend provisions of the Company’s "Procedures for the Acquisition or Disposal of Assets".

• II. Please refer to Attachment 6 for the Comparison between Original and Amendments to "Procedures for the Acquisition or Disposal of Assets".

Resolution:

• 8 -

ITEM 3

(Proposed by the Board of Directors)

Proposal: Release of Restriction on Competitive Activities of Directors. Description:

• I. According to Article 209 of the Company Act, if directors’ activities for personal or 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 representatives appointed by the institutional directors to conduct the business smoothly, it is proposed to lift the restriction on the prohibition of competitive activities for the 22[nd] institutional director representatives of the Company (new activities).

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

Title	Name	Currentpart-time situation(relevant competition)
Representative of Institutional Director	Core Pacific Co., Ltd Representative: Ruey-LongChen	- Director (Legal Representative), Praxair Chemax Semiconductor Materials
Representative of Institutional Director	C.P. Leasing Co., Ltd. Representative: Kun Ming~~, ~~Lin	- Director (Legal Representative), Taivex Therapeutics Corporation*

• Reinvestment companies of the Company using the equity method.

Resolution:

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Extemporary Motion

Adjournment

• 10 -

Attachment 1

China Petrochemical Development Corporation

2022 Business Report

The Company reported 2022 consolidated revenues of NT$25.028 billion, net operating loss of NT$3.846 billion and net profit after tax of NT$205 million. The detailed breakdown of the Company's 2022 operating performance is as follows:

• (I) Sales of Major Products

Major Product Production & Sales Volumes in the Past 2 Years

Unit: Tons

					Unit: Tons	Unit: Tons	Unit: Tons	Unit: Tons
Production Volume Major Product	FY 2022 (Consolidated)		FY 2021 (Consolidated)		Increase (Decrease) Volume
	Production	Sales	Production	Sales	Production	%	Sales	%
Acrylonitrile(AN)	163,178	169,792	209,188	236,260	(46,010)	(22%)	(66,468)	(28%)
Caprolactam (CPL), Nylon Chips	240,547	174,747	376,137	277,187	(135,590)	(36%)	(102,440)	(37%)
O-phenylphenol(OPP)	2,348	1,850	2,405	2,309	(57)	(2%)	(459)	(20%)

Note: The production volume includes transfers for internal use.

• The main reason for the decrease in production and sales of Acrylonitrile (AN), Caprolactam (CPL), Nylon Chips and O-phenylphenol (OPP) this year compared with the previous year were the pandemic, the Ukrainian-Russian War, the increase in the cost of the key raw material liquid ammonia (NH3) far greater than those in mainland China which affects competitiveness, and the production expansion of mainland China peers.

• (II) Operating Revenue and Expense Status and Profitability Analysis:

• Annual Income Statement

Unit: NTD$ thousands

Year Line Item	FY 2022 (Consolidated)	FY 2021 (Consolidated)	Increase (Decrease)	%
Operating Revenue	25,027,795	35,163,380	(10,135,585)	(29%)
Gross Profit (Loss)	(1,233,448)	4,984,871	(6,218,319)	(125%)
Operating Profit (Loss)	(3,845,840)	2,402,893	(6,248,733)	(260%)
Non-Operating Income and Expenses	4,569,211	1,475,213	3,093,998	210%
Pre-Tax Profit	723,371	3,878,106	(3,154,735)	(81%)
Net Profit after Tax	205,397	3,484,655	(3,279,258)	(94%)
EPS (After Tax)	0.06	1.06	(1.00)	(94%)

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1. Operating Revenue

The 2022 operating revenues decreased by 29%, NT$10.135 billion versus the previous year, mainly due to the following reasons:

• (1) The revenues from Acrylonitrile (AN) and related byproducts were NT$9.16 billion in 2022, decreased 35% or NT$4.93 billion from the NT$14.09 billion reported in the previous year. The decrease was mainly from a 28% decrease in sales volume and a 19% decrease in unit prices versus the previous year for Acrylonitrile (AN) products.

• (2) The revenues from Caprolactam (CPL) and related byproducts were NT$10.204 billion in 2022, decreased 31% or NT$4.582 billion from NT$14.786 billion reported in the previous year. The decrease was mainly from a 45% decrease in sales volume versus the previous year for Caprolactam (CPL) products.

• (3) The revenues from other departments (including subsidiaries) were NT$5.664 billion, decreased 10% or NT$623 million from the NT$6.287 billion reported in the previous year. The decrease was mainly from subsidiary's trading revenue decrease due to pandemic and inflation.

• Operating Profit

Net operating profit in 2022 decreased by NT$6.248 billion, or 260% versus the previous year due to the following reasons:

• (1) For Acrylonitrile (AN) products, the profit in 2022 decreased by NT$3.456 billion versus the previous year because of inflation and interest rate hikes causing reduced demands, the Ukrainian-Russian war causing the increase in the cost of the main raw material liquid ammonia (NH3) far greater than those in mainland China, and the production expansion of mainland China peers, resulting in a decline in sales prices and sales volume.

• (2) For Caprolactam (CPL) and nylon chips, profits decreased by NT$2.414 billion versus the previous year. The decrease was mainly due to inflation and interest rate hikes, high downstream inventories, the Ukrainian-Russian war causing the increase in the cost of the main raw material liquid ammonia (NH3) far greater than those in mainland China, and the production expansion of mainland China peers, resulting in a decline in sales volume of CPL products.

• (3) In 2022, overall operating expenses increased by about NT$30million versus the previous year mainly due to increase in transportation costs and non-deductible taxes.

• Non-Operating Income and Expenses

Non-operating profit, increased by NT$3.093 billion in 2022, or by 210%, due to the following reasons:

• (1) An increase of NT$2.739 billion from the gain recognized in bargain purchase transaction versus the previous year.

• (2) A decrease of NT$1.664 billion from the remediation expense of the Anshun remediation site compared to the previous year.

• (3) A decreased loss of NT$915 million from impairment of assets versus the previous year.

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• (4) A decrease of NT$1.599 billion from the revaluation gain of investment property appraisal versus the previous year.

• (5) A decrease of NT$706 million from gains on disposals of investment property versus the previous year.

• Net profit before and after taxes

2022 reported pre-tax profits were NT$723 million, decreased NT$3.154 billion or 81% versus the previous year. 2022 reported net profits after tax were NT$205 million (NT$0.06 per share), decreased NT$3.279 billion or 94% from NT$3.484 billion (NT$1.06 per share) in the previous year.

• (III) Financial Performance Analysis:

• Financial Status: At the end of 2022, total consolidated assets amounted to NT141.1 billion; total liabilities were NT$61.6 billion, and shareholder equity was NT$79.5 billion.

• Key Financial Ratios: Current Ratio at the end of 2022 was 255%, Quick Ratio was 60%, and Debt Ratio (Debt to Total Assets) was 44%.

• Cash and Cash Equivalents Status: Cash and cash equivalents net outflow from operating, investing, and financing activities was NT$800 million during 2022. The year-end cash and cash equivalent balance was NT$6.8 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:

1. 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 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 Hsiaokang and Dashe Plant implemented high gravity (HG) wastewater ammonia nitrogen reduction systems to recover the ammonia nitrogen effectively and stably in the wastewater and practice the effectiveness of circular economy. The Douliu Plant completed the conversion of three heavy oil boilers to natural gas, and installed new economizers and air pollution control equipment on coal-fired steam boilers to improve boiler combustion efficiency and reduce pollutant emissions, in part of the environmentally friendly corporate responsibility.

1. 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

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emissions and waste produced during production are treated in compliance with the laws and regulations. With the vision of green petrochemicals, CPDC adopts a proactive attitude to face climate change issues and risks, and develops a carbon emission module on the smart decision-making platform to grasp the actual carbon emission status in real time, so as to adjust carbon reduction strategies and goals at any time. Each plant 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. In response to climate change issues, the Company fully introduced water efficiency management systems (ISO46001) in the second half of 2022, and its five factories are scheduled to obtain their first certification in 2023.

• (1) Occupational Safety and Health: Incorporated occupational safety and health management into the sustainable development strategy of the Company. Each plant formulated occupational safety and health management plans to maintain a safe working environment and employee health and passed the ISO 45001 occupational health and safety management system verification, and achieved the goal of zero industrial safety accidents, zero occupational accidents, and zero fines in in 2022. Continue to promote production safety management (PSM), with the goal of maintaining production conditions and safety status, implement production safety management performance indicators, set production safety management KPI indicators, and ensure the normal operation and execution effectiveness of the production safety management system. Implement a circular management mechanism in the form of plan-do-check-act (PDCA) to establish a proactive and positive safety culture.

• (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 2022, the Hsiaokang Plant won awards from the Kaohsiung City Government EPA in supporting global energy saving events and Air Quality Purification Zones Outstanding Awards; the Dashe Plant won Special Award for Water Conservation Counseling and Improvement from the Water Resources Agency, Air Quality Purification Zones Outstanding Awards and Green Purchasing Outstanding Promotion Awards from the Kaohsiung City Government; the Toufen Plant won the certificates of appreciation for Air Pollution Reduction from Miaoli Government EPA and for Maintenance of Zhonggang River Dongxing Bridge Wetland Park in Miaoli County from the Miaoli County Government.

3. IT Management:

To improve the overall operation and management performance, the Company completed implementing the Group-wide HR management system and enterprise resource planning system for subsidiaries, followed up with the digitalization of operational activities such as procurement operations, and gradually promoted the digitalization of various operational activities of the Company. By continuously accumulating the Company's internal operating data and improving the quality of digital decision-making, strengthening cross-functional collaboration and the energy of digital transformation of the enterprise, so as to facilitate the application of AI to optimize the Company's operational performance. In order to enhance competitiveness and company value, the Company uses AI and BI to analyze operational

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data, continuously invests in innovative applications, implements and promotes projects, and focuses on the three major application aspects of manufacturing process optimization, smart industrial safety and intelligent services to cultivate technological capacity and quality and accelerate the development of the Company's use of intelligent decision-making.

4. HR Management:

To continue the efforts in expansion to China and South East Asia, the Company continues to optimize productivity in managerial capabilities, implement and strengthen pandemic prevention in Taiwan and overseas locations, and provide remote work environment, health care and integrated insurance coverage. Through the introduction of new concepts and quality online coursework and materials, availability of remote, online and offline, virtual and real-world integration mechanisms, optimization of cross-border management model, and combining with horizontal, vertical and dense textualized stakes to stimulates learning motivation and enhance the value of our employees.

Through the “ Smart Decision-Making platform ” , the Company strengthened the interconnections and application of all functions and stakeholders and proactively created 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 highefficiency teams, so as to create differentiated competitive advantages and practical enterprise values, and constantly move towards the goal of sustainable operation.

5. Financial Planning:

In line with 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 take the initiative to seek preferential interest rates for sustainability 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 actively 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 to expand the Company's financial structure.

1. Sustainability Development:

With the vision of "pursuing green ecological development and coexisting with the environment and society", the Company 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[1] net zero carbon emissions target as the guiding framework for the Company's sustainable development.

1 In response to climate change, countries around the world have successively proposed declarations and actions of “2050 Net-Zero Emissions”. In March 2022, the National Development Council officially published “Taiwan’s Pathway to Net-Zero Emissions in 2050”. Accordingly, the relevant carbon emission data and strategic goals disclosed in this annual report are expressed in Western calendar.

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Under the guidance of the Sustainable Development Committee, in 2022, in addition to formulating CPDC's "Sustainability Report Preparation, Verification and Filing Procedures" in accordance with the "Rules Governing the Preparation and Filing of Sustainability Reports by TWSE Listed Companies" issued by the Taiwan Stock Exchange Corporation, we incorporated them into the internal control system to continuously strengthen the quality of the Company's non-financial information disclosure and report preparation, respond to major issues of concern to stakeholders, and disclose the Company's environmental, social, and economic actions and performance in all aspects; in order to lay a milestone for achieving our sustainable operation strategy, we continue to promote ESG projects and CSR actions with the following results:

(1) Environmental Sustainability:

• A. Received recognition from the International Carbon Disclosure Project (CDP) with a Management level (B) in the Climate Change project and the Management Level (B) in the Water Security project.

• B. Won the 2022 Taiwan Corporate Sustainability Award (TCSA) - respectively "Climate Leadership Award" and "Water Resource Management Leadership Award", affirming the Company's efforts and actions in reducing waste and water usage.

• C. The Dashe Plant was awarded the "Special Award for Implementing Water Conservation" from the Water Resources Department, Ministry of Economic Affairs and the award of NT$500,000.

• D. The Dashe Plant, together with Bureau of Energy of the Ministry of Economic Affairs and the Industrial Technology Research Institute, jointly organized the 2022 “ Demonstration and Application Forum on Waste Heat and Cold Recovery Technology ” in the hope of achieving energy conservation results in the industry. The project can facilitate the achievement of energy conservation and carbon reduction goals, which is expected to save 2,960,000 kWh of electricity consumption each year, reduce carbon emission by 1,587 tonnes of CO2e/year, and achieve the goal of sustainable environment.

• E. A carbon emission management module was established on the smart decisionmaking platform using technology to manage greenhouse gas emissions in a timely and effective manner.

(2) Social Relationships:

• A. Breaking away from the linear economy of the petrochemical industry, it took us two years to develop and design, recycle old fishing nets, produce "sea waste recycling small fishing bags" and launch it on the crowdfunding platform, successfully reaching 191% of the target, and all the funds raised were donated to Kuroshio Ocean Education Foundation and Taiwan Environmental Information Association, which contributed to the environmental community.

• B. Supported the "Energy Saving, Carbon Reduction, Love the Earth, and Create a Sustainable Environment Together" composition and painting competition held by the Sheen Chuen-Chi Cultural and Educational Foundation, an affiliated organization of

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the CPDC group, a total of 64 elementary and junior high schools from eight major counties and cities participated. We also donated accompanying thermos bottles to rural schools to inspire children to protect the environment and promote the reduction of plastic use.

• C. Went deep into Siangong and Zhenhai elementary schools in Annan District, Tainan city, organized the environmental education activity "Plastic-free Ocean", conveyed the value of "Marine Waste Recycling and Reuse", and painted the abandoned buoys floating in the ocean as fish magnets, giving them new lives. Inspired children's awareness of ecological conservation and sustainable development through courses and practical productions, and implemented them in their lives.

• D. To maintain the relationship with community and neighbors and actively promote energy conservation and carbon reduction, the Hsiaokang Plant has successively organized workshops with Dalinpu Folk Culture Association, Society for Wildlife And Nature, General Religious Association, Kaohsiung Women's Care Association, Wanfu Charity Association, Longfeng Community Development Association, Fenglin Guanyin Charity Society, Happiness Promotion Health Association, and Coastal Hiking Association. The concept of energy conservation and carbon reduction, environmental protection and loving the earth were cooperated into the activities, so as to achieve the thorough implementation in daily life, to be more connected and friendly interacted with neighbors.

• E. The Toufen Plant actively participates in local development associations, such as Toufen Minsheng, Minzu, Tianliao, and Dongzhuang Community Development Associations, and is friendly to the elders and the neighbors. It also donated scholarships to Yongzhen and Liouhe Elementary Schools to encourage children to go further to the next level.

• F. The CPDC Douliu Plant and Liunan Village Community Development Association jointly visited the elderly during the Double Ninth Festival, caring for the elderly and achieving community outreach. It also participated in the environmental education activities of Sheen Chuen-Chi Cultural and Educational Foundation, an affiliate of the Group, attended the awards ceremony of Shiliu Junior High School, Jhendong Elementary School and Meilin Elementary School to present their awards and souvenirs.

• G. The CPDC Kaohsiung Dashe Plant cares for the environment and is friendly to neighbors. It adopted the turf of the Youchang Elementary School and took purifying the air quality as its spiritual purpose.

• H. The CPDC Tainan Anshun site renovated the surrounding environment, regularly pulled out the weeds around the community and renovated the collapsed walls. At the meantime, the dormitory area is open for joint inspections by the Environmental Protection Bureau, the Health Center, and the District Office to achieve sustainable environmental actions. It participated in the Sheen Chuen-Chi Cultural and Educational Foundation, an affiliate of the Group, and attended the awards ceremony of Yongkang Junior High School, Shuren Elementary School, Siangong Elementary School, and Zhenhai Elementary School in Tainan City to present the awards. It also

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assisted in the repair and renovation project of the collapsed wall of Siangong Elementary School, contributing to the development of the community. Every time a disaster occurs, it will take the initiative to care for the residents of the community, and regularly report the status to the disaster prevention cultural asset unit.

(3) Corporate Governance:

• A. CPDC has announced its goal of 2050 Net-Zero Emissions and recognized internationally with its various actions of promoting ESG. It is the only company in Taiwan's chemical industry that has been named to S&P Global Sustainability Yearbook Member for three consecutive years (2021-2023). It scored 75 points for the 2022 CSA (DJSI) Corporate Sustainability Assessment, and graded PR98 for chemical industry, an improvement from the previous year's 70 points, PR96. The Company has participated in the assessment of the Carbon Disclosure Project (CDP) for five consecutive years, and received recognition with Management level (B) in both the Climate Change project and the Water Security project.

• B. Won the 2022 Taiwan Corporate Sustainability Award (TCSA) of "Taiwan's Top 100 Sustainability Exemplary Awards" and "Gold Award in Traditional Manufacturing Industry". The recognitions not only affirmed CPDC's performance in promoting ESG, also demonstrated the Company's determination in sustainable governance.

• C. With “ Creating a Living Environment Together with the Earth ” as its core value, the Company received two recognitions from the 21st Golden Peak Awards, the "Top 10 Outstanding Enterprises" and the "Top 10 Outstanding Innovation and Research Award".

• D. The ground-breaking ceremony for the ""Core Pacific Plaza"" by Core Pacific Development Corporation, the fully-owned subsidiary of CPDC, is to create a new Grade A+ futuristic top-level commercial office park, integrating natural ecology into the commercial office space, so as to achieve office leisure, provide premium shared resources, and reduce the construction costs and carbon emissions of occupied companies, to achieve the concept of ESG sustainability. It also obtained a five-star high rating of ESG from the Global Real Estate Sustainability Benchmark (GRESB).

In the face of the wounds of history of the Dioxin pollution at the Taiwan Alkaline Anshun site in the state-run period, 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. We will also cooperate with local residents and the Tainan City government, combining green energy, greening, cultural and creative industries, not only to reproduce the prosperous city scene of the year, but also root the ESG concept deeply in local culture.

• (V) Future Prospect and R&D:

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

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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 and 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.

In new product development, we have combined market intelligence, cooperated with existing development technology surveys, evaluated our advantages to produce high value products with market development potential (such as high-refractive optical materials, electronic chemicals, electronic packaging materials, lithium battery additives, solid electrolytes, 5G high-frequency substrate materials, energy automobile and motorcycle materials, bio-based materials, biodegradable materials and green materials, etc.). 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 in 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 possible. We 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 operation.

(VI) Management Principles and Future Operational Outlook:

Taking sustainable operation as the core concept, the Company is committed to developing new products with market potential, continuously optimizing existing products, and expanding the two-pronged business approaches of "Petrochemical Business" and "Land Development" as the primary management principles, and "Forward-Looking Governance", "Intelligence Production", "Communication and Dialogue", and "Social Participations & Care" are CPDC's sustainable development strategies.

In terms of petrochemical business, due to the characteristics of the industry, the Company attaches great importance to ESG issues. In the short term, we will focus on the gradual transformation of existing factories towards low-carbon, make use of the intelligent management system to optimize the competitiveness of existing products, strengthen the expansion of refined products, and develop the electronic chemical raw material market; in the long run, we will establish overseas integrated green petrochemical production base with advanced technology,

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and expand the diversified operation of new materials to meet the comprehensive needs of customers.

For land development, our short-term goal is to revitalize the Company's domestic land assets and enter into overseas real estate development; in the long-term, we will promote relevant development plans by phases and zoning, invest in large-scale land with development potential and small and medium-sized construction projects, deploy overseas markets, develop environmentally friendly, energy-saving, carbon-absorbing and intelligent green building products, and create a new win-win situation for shareholders, corporation and society.

CPDC is committed to the development concept of sustainable operation and environmental coexistence, and actively promotes the dual strategy of petrochemical and land development. Building upon the smart decision-making platform, we plan and evaluate the optimal decisionmaking for the company, minimize operational risks, and continuously improve corporate governance. We never forget the corporate social responsibility we shoulder, fulfilling the mission of earth citizens and the vision of moving towards green petrochemicals. With a proactive attitude, we seek breakthroughs and enhance the competitiveness of self-development, carry out the stance of sustainable operation, and contribute to the promotion of social harmony and balanced development.

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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 Loss Appropriation Table for 2022. The CPA firm of KPMG was retained to audit China Petrochemical Development Corporation’s Financial Statements and Mr. Vincent Wu and Ms. Melody Chen have issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, Consolidated Financial Statements, and Loss Appropriation Table have been reviewed and determined to be correct and accurate by the Audit Committee of China Petrochemical Development Corporation. In accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, I hereby submit this report.

China Petrochemical Development Corporation 2023 Annual Shareholders’ Meeting

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Convener of the Audit Committee: 朱雲鵬

March 13[th] , 2023

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Attachment 3

Status of the directors' remuneration of 2022

1. Remuneration to Directors and Independent Directors (Names and remuneration thereof to be disclosed individually)

														December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands	December 31, 2022 Unit: NT$ thousands
Title	Name	Remuneration to Directors								Ratio of Total Remuneration (A+B+C+D) to Net Income After Tax(%) (Note 10)				Relevant Remuneration Received by Directors Who are Also Employees								Ratio of Total Remuneration (A+B+C+D+E+F+G) to Net Income After Tax(%) (Note 10)				Remuneration Paid to Directors from an Invested Company Other than the Company’s Subsidiary or from Parent Company (Note 11)
		Remuneration (A) (Note 2)		Pension (B)		Remuneration to Directors (C) (Note 3)		Business Execution Expenses (D) (Note 4)						Salary, Bonus, and Allowance (E)		Severance Pay (F)		Employee Compensation (G) (Note 6)
		The Company	All companies in the consolidated financial statements (Note 7)	The Company	All companies in the consolidated financial statements (Note 7)	The Company	All companies in the consolidated financial statements (Note 7)	The Company	All companies in the consolidated financial statements (Note 7)	The Company		All companies in the consolidated financial statements		The Company	All companies in the consolidated financial statements (Note 7)	The Company	All companies in the consolidated financial statements (Note 7)	The Company		All companies in the consolidated financial statements (Note 7)		The Company		All companies in the consolidated financial statements (Note 7)
																		Amount in Cash	Amount in Stock	Amount in Cash	Amount in Stock
Chairman	Core Pacific Co., Ltd. Representative: Ruey-Long Chen	17,684	17,684	0	0	0	0	0	25	17,684	7.5860%	17,709	7.5967%	5,241	5,241	0	0	0	0	0	0	22,925	9.8342%	22,950	9.8450%	1,616
Director	Core Pacific Co., Ltd. Representative: Shao-Hsin Yang	0	0	0	0	0	0	446	446	446	0.1913%	446	0.1913%	0	0	0	0	0	0	0	0	446	0.1913%	446	0.1913%	0
Director and Vice Chairman	Jen Huei Enterprise Co., Ltd Representative: Jiun-Nan Bai (Note12)	4,531	4,531	0	0	0	0	24	39	4,555	1.9540%	4,570	1.9604%	0	0	0	0	0	0	0	0	4,555	1.9540%	4,570	1.9604%	0
Director	Jen Huei Enterprise Co., Ltd Representative: Hui-Lan Chu (Note 12)	0	0	0	0	0	0	111	111	111	0.0478%	111	0.0478%	0	0	0	0	0	0	0	0	111	0.0478%	111	0.0478%	0
Director Resigned on June 14, 2022	BES Engineering Corporation (Note 12) Representative: Hui-Lan Chu	0	0	0	0	0	0	91	91	91	0.0389%	91	0.0389%	0	0	0	0	0	0	0	0	91	0.0389%	91	0.0389%	0
Director	BES Engineering Corporation (Note 12) Representative: To be appointed	0	0	0	0	0	0	0	0	0	0.0000%	0	0.0000%	0	0	0	0	0	0	0	0	0	0.0000%	0	0.0000%	0
Director	Yao Chuen Co., Ltd. Representative: Hui-Ting Shen	0	0	0	0	0	0	446	446	446	0.1913%	446	0.1913%	0	0	0	0	0	0	0	0	446	0.1913%	446	0.1913%	0
Director	C.P. Leasing Co., Ltd. Representative: Kuen-Ming Lin	0	0	0	0	0	0	446	446	446	0.1913%	446	0.1913%	0	0	0	0	0	0	0	0	446	0.1913%	446	0.1913%	0
Independent Director	Lian-Sheng Tsai ◎ (Note 12)	1,330	1,330	0	0	0	0	0	0	1,330	0.5707%	1,330	0.5707%	0	0	0	0	0	0	0	0	1,330	0.5707%	1,330	0.5707%	0
Independent Director Resigned on May 26, 2022	Song-Nian Ye◎	899	899	0	0	0	0	0	0	899	0.3856%	899	0.3856%	0	0	0	0	0	0	0	0	899	0.3856%	899	0.3856%	0
Independent Director	Yun-Peng Chu◎☆	3,600	3,600	0	0	0	0	0	0	3,600	1.5443%	3,600	1.5443%	0	0	0	0	0	0	0	0	3,600	1.5443%	3,600	1.5443%	0
Independent Director	Wen-Yen Pan◎☆	3,600	3,600	0	0	0	0	0	0	3,600	1.5443%	3,600	1.5443%	0	0	0	0	0	0	0	0	3,600	1.5443%	3,600	1.5443%	0
1. Please state the policies, systems, standards, and structure of independent directors ‘remuneration payment, and describe the relevance to the amount of remuneration according to their responsibilities, risks, and time of investment: The remuneration to the Directors is authorized by the Board of Directors in accordance with the Company's Articles of Incorporation and is based on the Directors' participation in the Company's operations and the value of their contributions, with reference to domestic and international industry standards. If the Company makes any profit, the Board of Directors shall, in accordance with the Company's Articles of Incorporation, resolve the amount of remuneration to Directors. If the Independent Director is a member of a functional committee of the Company, in addition to the ordinary remuneration of a director, he/she shall be paid a different and reasonable remuneration, taking into account his/her responsibilities, risks and time commitment. (◎refers to Audit Committee member,☆refers to Remuneration Committee member) 2. Except as disclosed in the above chart, remuneration to directors received due to the service (e.g., as the consultant of non-employee of parent company/all companies included in the financial report/reinvestment business) provided to all companies listed in the financial statement in the most recent year: None

Note 1: Director) being listed separately, and the various payments shall be disclosed in aggregate.

Note 2: Refereed to the remuneration paid to directors in the most recent year (including their salaries, duty allowance, severance payments, bonuses, and performance rewards).

Note 3: The remuneration to directors approved by the Board of Directors prior to the motion for allocation of earnings submitted to the shareholders' meeting in the most recent year.

Note 4: Business expenses paid out to directors in the most recent year (including transport, special expenses, various allowances, accommodation, vehicles, and provision of physical goods such as cars). In the case of the provision of housing, motor vehicles and other means of transport or exclusive individual expenses, the nature and cost of the assets provided, the actual lease payment or lease payment measured at fair market value, oil and other payments shall be disclosed. If a driver is assigned, please specify the payment made by the Company to the driver, but exclude the same from the remuneration.

Note 5: Referred to the remuneration paid to directors in the recent year who simultaneously held another position in the Company (as a president, Vice president, manager, or an employee), including salaries, duty allowances, severance payments, bonuses, performance rewards, transport fees, special expenses, various allowances, accommodation, and provision of physical items such as a car. In the case of the provision of housing, motor vehicles and other means of transport or exclusive individual expenses, the nature and cost of the assets provided, the actual lease payment or lease payment measured at fair market value, oil and other payments shall be disclosed. If a driver is assigned, please specify the payment made by the Company to the driver, but exclude the same from the remuneration. The salary expenses recognized in accordance with IFRS 2 “Share-based Payment”, including acquisition of employee stock option certificates and restricted stock awards (RSA), and participation in subscription of new shares in a capital increase by cash, shall also be accounted for as remuneration.

Note 6: Referred to the employee compensation (including cash and stock) received by a director who simultaneously held another position in the Company (as a general manager, vice general manager, manager, and an employee) for the recent year, disclose the amount of remuneration distributed to employees after being approved by the Board for the past year. For amounts that are unable to estimate, propose the distribution amount for the year based on the actual distribution made last year, and fill out the Table 1-3.

Note 7: Total remuneration in various items paid out to the Company’s directors by all companies (including the Company) listed in the consolidated statements shall be disclosed.

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• Note 8: For the total remuneration in various items paid out to the Company’s directors, the name of each director shall be disclosed in the corresponding range of the remuneration.

• Note 9: It is required to disclose the various remuneration in the aggregate paid by the Company and all consolidated entities to each director, whose name is also required to be disclosed in the range of remuneration to which they belong.Total Amount on CPDC Name of in various items paid out to the Company’s directors by all companies (including the Company) listed in the consolidated statements shall be disclosed.

• Note 10: Net income after tax shall refer to the earnings after tax identified in the entity or the parent company only financial statement for the most recent year.

• Note 11: a. Compensations received by the directors from other non-subsidiary companies invested by the Company or the parent company shall be disclosed in this column (If there is none, please fill in "none").

• b. Where a director has received compensation from an investee other than the Company’s subsidiaries or the parent company, such remuneration shall be consolidated into column I of the Table of Remuneration Range, which column shall then be changed to the title of “Parent Company and All Reinvestment.”

• c. Remuneration denotes the rewards, compensation (including compensation for an employee, a director and a supervisor) and related remuneration in connection with business expenses that are paid to one of the Company’s directors who serves as a director, supervisor or manager for an investee other than the Company’s subsidiaries or the parent company.

• Note 12: (1) BES Machinery Co., Ltd., a corporate director of the Company, originally served as the 22nd Corporate Director of the Company for the term from July 2, 2021 to July 1, 2024. In accordance with the relevant provisions of Article 19 of the Business Mergers and Acquisitions Act, BES Machinery Co., Ltd. was merged by BES Engineering Corporation. After the merger, BES Engineering Corporation , was the surviving company and BES Machinery Co., Ltd. was the extinguished company, and the name of the surviving company was still BES Engineering Corporation. Both parties set March 25, 2022 as the base date of the merger, and in accordance with the Ministry of Economic Affairs' letter No. 87204541 on May 14, 1998, BES Engineering Corporation took over the duties of the corporate director of the Company on March 25, 2022, and the representative of the corporate director appointed by BES, Mr. Jiun-Nan, Bai, was dismissed ex-officio, and BES Engineering Corporation was reappointed as the representative of the corporate director, Ms. Hui-Lan, Chu, who resigned on June 14, 2022, and whose representative is still to be appointed.

• (2) On March 25, 2022, the corporate director of the Company, Mr. Jiun-Nan, Bai, was reassigned as the representative of the corporate director of Jen Huei Enterprise Co., Ltd., who was originally Ms. Hui-Lan, Chu.

• (3) The independent director of the Company, Mr. Lian-Sheng, Tsai, was elected with effect from May 27, 2022.

Since the contents of the remuneration disclosed in this table are different from the concept of income used in the Income Tax Act, the purpose of this table is for disclosure, not for taxation use.

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Attachment 4

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, 2022 and 2021 and January 1, 2021, 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, 2022 and 2021 and January 1, 2021, 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 Attestation of Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Account of Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 the financial statements of certain investee corporations, associates of the Company, which represented investments in other entities accounted for using the equity method. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for certain investee corporations, is based solely on the reports of other auditors. The investments in certain investee corporations accounted for using the equity method constituting 4.88% and 1.61% of total assets at December 31, 2022 and 2021, respectively, and the related share of profit of associates accounted for using the equity method constituting 11.52% and 6.46% of profit before income tax for the years then ended, 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.

1. 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, assessing whether appropriate revenue recognition policies are applied through comparison with accounting standards.

• Analyzing and comparing 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.

• Testing revenue transactions recorded around the year end by vouching relevant documents to ensure that the revenue is accurately recognized in the correct accounting period.

• 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, 2022, 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, 2022, 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 the CGU 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:

• Regarding CGUs identified with signs of impairment, we obtained the evaluation issued by the management in order to assess whether current operating conditions, historical trends, and industryspecific situation were taken into account while considering the future operating cash flows.

• Regarding CGUs tested for impairment, the valuation specialist from our firm assisted in evaluating whether the assumptions and the parameters of the weighted average cost of capital as well as its relevant factors used by the management for measuring the recoverable amount were reasonable through comparing with the current and industry-specific situation.

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 Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

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

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

6. Obtain sufficient 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 Wu Cheng Yen and Chen Mei Fang.

KPMG

Taipei, Taiwan (Republic of China) March 13, 2023

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, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2022 Assets Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 4,242,352 4 1110 Current financial assets at fair value through profit or loss (note 6(b)) 175,236 - 1170 Notes and accounts receivable, net (note 6(d)) 914,484 1 1180 Accounts receivable due from related parties, net (notes 6(d) and 7) 269,025 - 1200 Other receivables 31,397 - 1210 Other receivables due from related parties (note 7) 1,523,930 1 1220 Current tax assets 20,271 - 130X Inventories (note 6(e)) 3,340,903 3 1410 Prepayments 324,730 - 1470 Other current assets (note 6(f)) 2,717,580 2 Total current assets 13,559,908 11 Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 32,667 - 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1,312,012 1 1551 Investments accounted for using equity method (note 6(g)) 49,054,012 41 1600 Property, plant and equipment (note 6(h)) 17,217,487 14 1755 Right-of-use assets (note 6(i)) 122,448 - 1760 Investment property, net (note 6(j)) 40,161,983 33 1840 Deferred income tax assets (note 6(s)) 11,009 - 1900 Other non-current assets (note 8) 315,924 - Total non-current assets 108,227,542 89 Total assets $ 121,787,450 100	December 31, 2021 (Restated) Amount % 2,782,774 2 187,229 - 2,773,447 2 612,517 1 86,443 - 9,360 - 5,377 - 3,222,256 3 620,835 1 441,543 1 10,741,781 10 5,117,918 4 2,741,382 2 42,957,479 37 16,057,288 14 150,045 - 38,850,641 33 11,009 - 332,541 - 106,218,303 90 116,960,084 100	January 1, 2021 (Restated) Amount % 1,008,698 1 661,224 1 1,526,506 2 89,369 - 63,314 - 9,732 - - - 2,225,117 2 583,674 1 2,012,475 2 8,180,109 9 7,832,673 8 2,500,585 2 28,557,380 29 15,208,808 15 144,335 - 37,612,887 37 11,009 - 268,747 - 92,136,424 91 100,316,533 100 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 2250 Current provisions (notes 6(p) and 6(r)) 2280 Current lease liabilities (note 6(o)) 2320 Long-term liabilities, current portion (notes 6(l)) 2399 Other current liabilities, others Total current liabilities Non-Current liabilities: 2530 Bonds payable (note 6(m)) 2540 Long-term loans (note 6(l)) 2550 Non-current provisions (note 6(p) and 6 (r)) 2570 Deferred income tax liabilities (note 6(s)) 2580 Non-current lease liabilities (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 Ordinary shares 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Others equity: 3410 Exchange differences on translation of foreign financial statements 3420 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total equity Total liabilities and equity	December 31, 2022		December 31, 2021 (Restated)		January 1, 2021 (Restated) 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 1,187,113 1 39,099,916 39 (966,633) (1) (854,259) (1) (1,820,892) (2) 70,711,341 71 100,316,533 100
			Amount %		Amount %
			$ 3,586,000 3 3,968 - 868,213 1 753 - 2,092,883 2 - - 884,711 1 27,051 - 2,015,000 1 10,478 - 9,489,057 8 3,500,000 3 13,109,900 11 2,007,293 2 7,251,126 6 94,987 - 6,821,433 5 124,182 - 32,908,921 27 42,397,978 35 37,848,502 31 1,579,658 1 2,884,198 2 38,066,198 31 (12,424) - 40,937,972 33 (512,359) - (464,301) - (976,660) - 79,389,472 65 $ 121,787,450 100		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 4,738,292 4 42,517,493 37 (950,314) (1) (576,946) - (1,527,260) (1) 80,293,036 69 116,960,084 100

• 29 -

See accompanying notes to financial statements.

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

Statements of Comprehensive Income

For the years ended December 31, 2022 and 2021

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

4000 Operating revenue (notes 6(v) and 7) 5000 Operating costs (note 6(e)) 5910 Less: Unrealized (profit) loss from sales 5920 Add: Realized profit (loss) from sales Gross (loss) profit 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 (loss) income Non-operating income and expenses: 7100 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 subsidiaries, associates and joint ventures accounted for using equity method, net (note 6(g)) 7140 Gains recognized in bargain purchase transaction (note 6(g)) 7255 Gains on fair value adjustment, investment property (note 6(j)) 7673 Impairment loss on property, plant, and equipment (note 6(h)) Total non-operating income and expenses Profit before income tax 7950 Less: income tax expense (note 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 (note 6(r)) 8316 Unrealized (losses) gains from investments in equity instruments measured at fair value through other comprehensive income (note 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 (note 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 (note 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 (note 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, net of tax 8500 Total comprehensive income Earnings per share (expressed in dollars) (note 6(u)) 9750 Basic earnings per share 9850 Diluted earnings per share	2022 Amount % $ 21,027,759 100 22,489,000 107 (1,461,241) (7) 7,409 - 1,476 - (1,452,356) (7) 797,000 4 393,288 2 278,273 1 - - 1,468,561 7 (2,920,917) (14) 96,873 - 456,610 2 13,610 - (350,298) (1) (645,056) (3) 2,739,244 13 1,311,342 6 - - 3,622,325 17 701,408 3 468,294 2 233,114 1 81,190 - (237,470) (1) (29,770) - - - (186,050) (1) 1,024,680 5 (586,725) (3) - - 437,955 2 251,905 1 $ 485,019 2 $ 0.06 $ 0.06	(Restated) 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 (1,170,735) (3) (259,640) (1) 109,127 - - - 2,911,289 9 (915,669) (3) 996,007 3 3,830,554 12 338,918 1 3,491,636 11 (78,021) - 242,236 1 39,039 - - - 203,254 1 (136,136) - 152,455 - - - 16,319 - 219,573 1 3,711,209 12 1.06 1.06

See accompanying notes to financial statements.

• 30 -

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

Statements of Changes in Equity

For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2021 Effects of retrospective application Balance at January1, 2021 after adjustments Profit for the year ended December 31, 2021 adjustments Other comprehensive income for the year ended December 31, 2021 after adjustments Total comprehensive income for the year ended December 31, 2021 after adjustments Appropriation and distribution of retained earnings: Legal reserve Special reserve Capital increase by cash Changes in ownership interests in subsidiaries Disposal of investments in equity instruments designated at fair value through other comprehensive income Disposal of investment properties Balance at December 31, 2021 Profit for the year ended December 31, 2022 Other comprehensive income for the year ended December 31, 2022 Total comprehensive income for the year ended December 31, 2022 Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends of ordinary share Changes in ownership interests in subsidiaries Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2022	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
	$ 32,848,502 - 32,848,502 - - - - - 5,000,000 - - - 37,848,502 - - - - - - - - $ 37,848,502			583,815 -		2,311,174 -		35,601,629 -		1,287,983 (100,870) 1,187,113 3,491,636 (75,443) 3,416,193 (77,951) (1,210,033) - - 1,384 1,421,586 4,738,292 233,114 94,328 327,442 (495,073) (2,676,122) (1,513,940) - (393,023) (12,424)		(966,202) (431) (966,633) - 16,319 16,319 - - - - - - (950,314) - 437,955 437,955 - - - - - (512,359)	(854,259) - (854,259) - 278,697 278,697 - - - - (1,384) - (576,946) - (280,378) (280,378) - - - - 393,023 (464,301)	70,812,642 (101,301)
		32,848,502		583,815		2,311,174		35,601,629						70,711,341
		- -		- -		- -		- -						3,491,636 219,573
		-		-		-		-						3,711,209
		- - 5,000,000 - - -		- - 869,362 1,124 - -		77,951 - - - - -								- - 5,869,362 1,124 - -
		37,848,502 - -		1,454,301 - -		2,389,125 - -								80,293,036 233,114 251,905
		-		-		-								485,019
		- - - - -		- - - 125,357 -		495,073 - - - -								- - (1,513,940) 125,357 -
		$ 37,848,502		1,579,658		2,884,198								79,389,472

• 31 -

See accompanying notes to financial statements.

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

Statements of Cash Flows

For the years ended December 31, 2022 and 2021

(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 Net gain on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (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 Impairment loss on non-financial assets Unrealized (loss) profit from sales Realized (profit) 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 Gain recognized in bargain purchase transaction Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Decrease (increase) in accounts receivable Decrease (increase) in accounts receivable due from related parties Decrease (increase) in other receivables (Increase) decrease in other receivable due from related parties Increase in inventories Decrease (increase) in prepayments Increase in other current assets Total changes in operating assets (Decrease) increase in contract liabilities (Decrease) increase in accounts payable (Decrease) increase in accounts payable to related parties (Decrease) increase in other payable Decrease in provisions (Decrease) 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 Retrospective restatement 2021 3,830,554 905,652 (183,189) 259,640 (54,028) (164,530) (109,127) - (706,465) 14,601 1,476 7,042 915,669 (2,911,289) 1,664,899 (12) -
	2022 $ 701,408 927,969 (4,393) 350,298 (96,873) (328,068) 645,056 201 - 130,919 (7,409) (1,476) - (1,311,342) - - (2,739,244) (2,434,362) 257,918 343,492 58,719 (14,571) (249,566) 296,105 (101,559) 590,538 (16,644) (757,459) (10,580) (454,375) (717,646) (47,240) (2,003,944) (1,413,406) (3,847,768) (3,146,360) 93,198 (340,521) (8,873) (3,402,556)
		(359,661)
		(3,341,327) (523,148) (35,283) 372 (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)
		(3,941,488)
		(110,934) 60,803 (256,246) (59,167)
		(365,544)

See accompanying notes to financial statements.

• 32 -

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

Statements of Cash Flows

For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) investing activities: Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Disposal of financial assets at fair value through profit or loss Proceeds from capital reduction of financial assets at fair value through profit or loss Acquisition 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 Increase in other receivables due from related parties Proceeds from cancellation of property purchasing Proceeds from disposal of investment properties (Increase) decrease in other financial assets Decrease (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 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 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 Retrospective restatement 2021 1,438 - - 620,576 2,751,363 (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.

• 33 -

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, 2022 and 2021, 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, 2022 and 2021, 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 Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of 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 Norm of Professional Ethics for Certified Public Account of Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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.

• 34 -

Other Matter

CPDC has prepared its parent-company-only financial statements as of and for the years ended December 31, 2022 and 2021, on which we have issued an unmodified opinion with an Emphasis of Matter paragraph and an Other Matter paragraph.

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 0.26% and 0.15% of consolidated total assets at December 31, 2022 and 2021, respectively, and total operating revenues constituting both 0% of consolidated total operating revenues for the years then ended, respectively.

We did not audit the financial statements of certain investee corporations, associates of the Group, which represented investments in other entities accounted for using the equity method. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for certain investee corporations, is based solely on the reports of other auditors. The investments in certain investee corporations accounted for using the equity method constituting 4.04% and 0.95% of consolidated total assets at December 31, 2022 and 2021, respectively, and the related share of profit of associates accounted for using the equity method constituting 19.57% and 8.44% of consolidated profit before income tax for the years then ended, 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.

1. 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, assessing whether appropriate revenue recognition policies are applied through comparison with accounting standards;

• ． Analyzing and comparing 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;

• ． Testing revenue transactions recorded around the year end by vouching relevant documents to ensure that the revenue is accurately recognized in the correct accounting period.

• 35 -

• 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 28% of consolidated total assets as of December 31, 2022, 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, 2022, 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 the CGU 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:

• ． Regarding CGUs identified with signs of impairment, we obtained the evaluation issued by the management in order to assess whether current operating conditions, historical trends, and industryspecific situation were taken into account while considering the future operating cash flows.

• ． Regarding CGUs tested for impairment, the valuation specialist from our firm assisted in evaluating whether the assumptions and the parameters of the weighted average cost of capital as well as its relevant factors used by the management for measuring the recoverable amount were reasonable through comparing with the current and industry-specific situation.

• 36 -

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 Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

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

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

6. 37 -

7. 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.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Wu Cheng Yen and Chen Mei Fang.

KPMG

Taipei, Taiwan (Republic of China) March 13, 2023

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.

• 38 -

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

Consolidated Balance Sheets

December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1120 Current financial assets at fair value through other comprehensive income (note 6(c)) 1170 Notes and accounts receivable, net (note 6(d)) 1180 Accounts receivable due from related parties, net (notes 6(d) and 7) 1200 Other receivables (notes 6(d) and 7) 1220 Current tax assets 130X Inventories (note 6(e)) 1410 Prepayments 1470 Other current assets (note 6(f)) Total current assets Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1551 Investments accounted for using equity method (note 6(g)) 1600 Property, plant and equipment (note 6(h)) 1755 Right-of-use assets (note 6(i)) 1760 Investment property, net (note 6(j)) 1780 Intangible assets (note 6(k)) 1840 Deferred income tax assets (note 6(u)) 1900 Other non-current assets (note 8) Total non-current assets Total assets	December 31, 2022 Amount % $ 6,824,456 5 329,931 - 18,122 - 1,498,413 1 261,200 - 108,761 - 27,248 - 47,941,867 34 1,346,163 1 6,242,892 5 64,599,053 46 45,054 - 1,326,664 1 6,322,678 5 27,190,100 19 874,654 1 40,181,547 28 182,616 - 11,009 - 389,554 - 76,523,876 54 $ 141,122,929 100	Retrospective restatement 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 25,119,743 19 864,464 1 38,867,067 29 172,308 - 11,023 - 497,942 - 77,885,865 58 135,241,310 100	Retrospective restatement January 1, 2021 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 23,125,654 22 872,937 1 37,626,827 36 159,173 - 11,023 - 339,528 - 77,719,521 74 104,808,689 100 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 (notes 6(v) and 7) 2230 Current tax liabilities 2250 Current provisions (notes 6(r) and 6(t)) 2280 Current lease liabilities (note 6(q)) 2320 Long-term liabilities, current portion (notes 6(m) and 6(n)) 2399 Other current liabilities, others Total current liabilities Non-Current liabilities: 2530 Bonds payable (note 6(n)) 2540 Long-term loans (note 6(m)) 2550 Non-current provisions (notes 6(r) and 6(t)) 2570 Deferred income tax liabilities (note 6(u)) 2580 Non-current lease liabilities (note 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 Ordinary shares (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 on translation of foreign financial statements 3420 Unrealized gains (losses) from financial assets measured 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, 2022 Amount % $ 16,023,388 11 1,427,706 1 65,846 - 1,510,965 1 753 - 2,048,938 2 24,031 - 885,021 1 60,864 - 3,299,685 2 19,378 - 25,366,575 18 4,545,992 3 15,130,090 11 2,077,512 2 7,251,744 5 249,495 - 6,821,433 5 161,839 - 36,238,105 26 61,604,680 44 37,848,502 27 1,579,658 1 2,884,198 2 38,066,198 27 (12,424) - 40,937,972 29 (512,359) (1) (464,301) - (976,660) (1) 79,389,472 56 128,777 - 79,518,249 56 $ 141,122,929 100	Retrospective restatement December 31, 2021 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 4 140,232 - 34,189,407 25 54,926,788 40 37,848,502 28 1,454,301 1 2,389,125 2 35,390,076 26 4,738,292 4 42,517,493 32 (950,314) (1) (576,946) - (1,527,260) (1) 80,293,036 60 21,486 - 80,314,522 60 135,241,310 100	Retrospective restatement January 1, 2021 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 1,187,113 1 39,099,916 37 (966,633) (1) (854,259) (1) (1,820,892) (2) 70,711,341 68 55,389 - 70,766,730 68 104,808,689 100

• 39 -

See accompanying notes to consolidated financial statements.

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

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2022 and 2021

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

4000 Operating revenues (notes 6(x) and 7) 5000 Operating costs (note 6(e)) Gross (loss) 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 (loss) income 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 (z)) 7060 Shares of profit (loss) of associates and joint ventures accounted for using equity method, net (note 6(g)) 7140 Gains recognized in bargain purchase transaction (note 6(g)) 7673 Impairment loss on property, plant and equipment (notes 4 and 6(h)) 7255 Gains on fair value adjustment, investment property (note 6(j)) Total non-operating income and expenses Profit before income tax 7950 Less: income tax expense (note 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 (note 6(t)) 8316 Unrealized (losses) gains from investments in equity instruments measured at fair value through other comprehensive income (note 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 (note 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 on translation of foreign financial statements (note 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 (note 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, net of tax 8500 Total comprehensive income Profit attributable to: 8610 Shareholders of the parent 8620 Non-controlling interests Comprehensive income attributable to: 8710 Shareholders of the parent 8720 Non-controlling interests Earnings per share (expressed in dollars) (note 6(w)) 9750 Basic earnings per share 9850 Diluted earnings per share	2022 Amount % $ 25,027,795 100 26,261,243 105 (1,233,448) (5) 1,218,873 5 979,322 4 411,946 1 2,251 - 2,612,392 10 (3,845,840) (15) 256,587 1 514,861 2 57,906 - (455,640) (2) 141,773 1 2,739,244 11 - - 1,314,480 5 4,569,211 18 723,371 3 517,974 2 205,397 1 81,962 - (234,022) (1) (33,990) - - - (186,050) (1) 467,450 2 (29,772) - - - 437,678 2 251,628 1 $ 457,025 2 $ 233,114 1 (27,717) - $ 205,397 1 $ 485,019 2 (27,994) - $ 457,025 2 $ 0.06 $ 0.06	Retrospective restatement 2021 Amount % 35,163,380 100 30,178,509 86 4,984,871 14 901,185 3 1,217,655 3 461,963 1 1,175 - 2,581,978 7 2,402,893 7 188,200 1 486,612 1 (1,199,926) (3) (323,681) (1) 325,902 1 - - (915,669) (3) 2,913,775 8 1,475,213 4 3,878,106 11 393,451 1 3,484,655 10 (78,291) - 252,449 1 29,096 - - - 203,254 1 9,571 - 5,104 - - - 14,675 - 217,929 1 3,702,584 11 3,491,636 10 (6,981) - 3,484,655 10 3,711,209 11 (8,625) - 3,702,584 11 1.06 1.06

See accompanying notes to consolidated financial statements.

• 40 -

(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, 2022 and 2021 (Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2021 Effects of retrospective application Balance at January 1, 2021 after adjustments Profit for the year ended December 31, 2021 after adjustments Other comprehensive income for the year ended December 31, 2021 after adjustments Total comprehensive income for the year ended December 31, 2021 after adjustments Appropriation and distribution of retained earnings: Legal reserve Special reserve Capital increase by cash Changes in ownership interests in subsidiaries Changes in non-controlling interests Disposal of investments in equity instruments designated at fair value through other comprehensive income Reversal of special reserve Balance at December 31, 2021 after adjustment Profit for the year ended December 31, 2022 Other comprehensive income for the year ended December 31, 2022 Total comprehensive income for the year ended December 31, 2022 Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends on ordinary shares Changes in ownership interests in subsidiaries Changes in non-controlling interests Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2022							Equity attributable	Equity attributable	t	o owners of parent	o owners of parent							Non-controlling interests	Total equity
	Ordinary shares			Capital surplus				Retained earnings				Total other equity interest			r	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 othe comprehensive income
						Legal reserve		Special reserve		Unappropriated retained earnings
	$ 32,848,502 - 32,848,502 - - - - - 5,000,000 - - - - 37,848,502 - - - - - - - - - $ 37,848,502			583,815 -		2,311,174 -		35,601,629 -		1,287,983 (100,870) 1,187,113 3,491,636 (75,443) 3,416,193 (77,951) (1,210,033) - - - 1,384 1,421,586 4,738,292 233,114 94,328 327,442 (495,073) (2,676,122) (1,513,940) - - (393,023) (12,424)		(966,202) (431) (966,633) - 16,319 16,319 - - - - - - - (950,314) - 437,955 437,955 - - - - - - (512,359)		(854,259) - (854,259) - 278,697 278,697 - - - - - (1,384) - (576,946) - (280,378) (280,378) - - - - - 393,023 (464,301)		70,812,642 (101,301) 70,711,341 3,491,636 219,573 3,711,209 - - 5,869,362 1,124 - - - 80,293,036 233,114 251,905 485,019 - - (1,513,940) 125,357 - - 79,389,472		55,389 - 55,389 (6,981) (1,644) (8,625) - - - (1,124) (24,154) - - 21,486 (27,717) (277) (27,994) - - - (125,357) 260,642 - 128,777	70,868,031 (101,301)
		32,848,502		583,815		2,311,174		35,601,629											70,766,730
		- -		- -		- -		- -											3,484,655 217,929
		-		-		-		-											3,702,584
		- - 5,000,000 - - - -		- - 869,362 1,124 - - -		77,951 - - - - - -													- - 5,869,362 - (24,154) - -
		37,848,502 - -		1,454,301 - -		2,389,125 - -													80,314,522 205,397 251,628
		-		-		-													457,025
		- - - - - -		- - - 125,357 - -		495,073 - - - - -													- - (1,513,940) - 260,642 -
		$ 37,848,502		1,579,658		2,884,198													79,518,249

• 41 -

See accompanying notes to consolidated financial statements.

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

Consolidated Statements of Cash Flows

For the years ended December 31, 2022 and 2021

(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 Gain on disposal of investment properties Impairment loss on non-financial assets Gain on fair value adjustment of investment property Unrealized remediation expense Gain on lease modification Gain recognized in bargain purchase transaction Impairment loss on property, plant and equipment Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Decrease (increase) in accounts receivable Decrease (increase) in accounts receivable due from related parties Decrease (increase) in other receivables Increase in inventories Decrease (increase) in prepayments Increase in other current assets Total changes in operating assets Increase in contract liabilities (Decrease) increase in accounts payable (Decrease) increase in accounts payable to related parties (Decrease) increase in other payable Decrease in provisions (Decrease) 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 Retrospective restatement 2021 3,878,106 1,110,782 9,189 1,175 (193,148) 323,681 (188,200) (313,215) (325,902) 33 (706,465) 14,854 (2,913,775) 1,664,899 (34) - 915,669 (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) (29,454,311) 209,524 (323,396) (92,459) (29,660,642)
	2022 $ 723,371 1,289,752 8,879 2,250 (21,965) 455,640 (256,587) (328,166) (141,773) 1,174 - 141,824 (1,314,480) - (17) (2,739,244) - (2,902,713) 290,043 216,144 40,102 (5,918,812) 392,712 (370,265) (5,350,076) 45,234 (248,060) (10,580) (485,207) (636,030) (108,342) (1,442,985) (6,793,061) (9,695,774) (8,972,403) 223,538 (397,182) (67,122) (9,213,169)

See accompanying notes to consolidated financial statements.

• 42 -

(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, 2022 and 2021

(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 other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Proceeds from capital reduction of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Proceeds from disposal of investment properties (Increase) decrease in other financial assets Decrease (increase) in other non-current assets Dividends received Proceeds from cancellation of property purchasing Net cash flows from 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 Decrease in short-term bills payable Proceeds from issuing bonds Repayments of bonds Proceeds from long-term debt Repayments of long-term debt Increase in long-term bills payable Decrease in long-term bills payable Payment of lease liabilities Increase in other non-current liabilities Cash dividends paid Capital increase by cash Interest paid Change in non-controlling interests Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase 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 Retrospective restatement 2021 - 1,438 - (667,920) 1,311,894 3,794,637 (4,081,974) 746 (23,954) 2,380,000 1,488,312 (158,644) 367,976 186,000 4,598,511 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) 12,631 - 5,869,362 (5,604) - 25,246,276 (13,922) 170,223 7,479,899 7,650,122
	2022 $ (5,000) - 15,000 (169,831) 181,129 - (3,211,254) 328 (4,619) - (4,395,649) 108,260 7,687,658 - 206,022 15,669,226 (10,965,894) - (38,341) - (25,000) 17,001,501 (14,178,562) 48,570,000 (47,000,000) (75,152) 21,607 (1,513,940) - (4,956) 260,642 7,721,131 460,350 (825,666) 7,650,122 $ 6,824,456

See accompanying notes to consolidated financial statements. - 43 -

Attachment 5

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China Petrochemical Development Corporation Loss Appropriation Table for 2022

Currency Unit: NT$	Currency Unit: NT$
Item	Amounts
Beginning of undistributed earnings	265,599,187
Plus (Subtract):
Net adjust amount by first adoption of the new bulletin of: Amendments to International Accounting Standard No. 16 “ Property, Plant and Equipment ”	(212,442,444)
Disposal in equity instruments measured at fair value through other comprehensive income	(393,023,392)
Adjustments due to remeasurement of defined benefit plans	94,328,115
2022 Net profit after tax	233,114,088
Loss to be recovered	(12,424,446)
Legal reserve	12,424,446
Loss to be recovered at the end of this period	$0

Note 1: The Company’s 2022 end of period loss to be recovered was $0 and intended not to appropriate dividend.

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

Chairman: General Manager: Accounting Manager:

• 44 -

Attachment 6

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

Items	Amended Version	Original Version	Reason
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 meet the following requirements: 1~3, (omitted) When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraphshall comply with the self-regulatory rules of the industry associations to which they belongand with the following provisions: 1. Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence. 2. Whenconductinga case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers.	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 meet the following requirements: 1~3, (omitted) When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraph shall comply with the following provisions: 1. Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence. 2. Whenauditinga case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers.	1. Amended in accordance with Article 5 of the revised Regulations Governing the Acquisition and Disposal of Assets by Public Companies on January 28th, 2022. 2. Based on the fact that industry associations to which external experts belong have established relevant regulations for the business they undertake, Item 2 is hereby amended to stipulate that when issuing an appraisal report or opinion, the professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters shall comply with the self- regulatory rules of the industry associations to which they belong, in addition to complying with the provisions listed in the paragraph 2 of

• 45 -

Items		Amended Version		Original Version	Reason
	3. They shall undertake an item- by-item evaluation of the appropriatenessand reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion. 4. They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information usedis appropriate andreasonable, and that they have complied with applicable laws and regulations. (omitted hereunder)		3. They shall undertake an item- by-item evaluation of the completeness, correctnessand reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion. 4. They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonableand correct,and that they have complied with applicable laws and regulations. (omitted hereunder)		the original version, for the purpose of amending the relevant self- regulatory rules for the issuance of opinions by its owners or personnel and clarifying the procedures and responsibilities to be followed by external experts. 3. In view of the fact that the preceding external experts, in accordance with the provisions of these Procedures, undertake and issue an appraisal report or opinion on reasonableness, which do not refer to the verification of financial reports, the word "verifying" in paragraph 2, subparagraph 2 is hereby amended to "conducting". 4. In consideration of the external experts’ evaluation of the sources of data used, the parameters, and the information, and with reference to Article 9, paragraph 4, subparagraph 4, Item 3-5 of the Regulations Governing the

• 46 -

Items	Amended Version	Original Version	Reason
			Preparation of Financial Reports by Securities Issuers,103 Ji Mi Zi No.0000000298 of the ROC Accounting Research and Development Foundation announced on December 25, 2014, and the relevant provisions regarding the source of information, the appropriateness and reasonableness of the parameters and others in Article 27 of Appraisal Standards Bulletin No. 8, provisions of paragraph 2, subparagraph 3 and 4 are hereby amended in order to be consistent with the actual situation.
Article 6	Under any of the following circumstances, a public company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1~6, (OMITTED) 7. Where an asset transaction other than any of those referred to in the preceding six subparagraphs, or an	Under any of the following circumstances, a public company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1~6, (OMITTED) 7. Where an asset transaction other than any of those referred to in the preceding six subparagraphs, or an	1. Amended in accordance with Article 31 of the revised Regulations Governing the Acquisition and Disposal of Assets by Public Companies on January 28th, 2022. 2. Considering that the current trading of domestic government bonds has been exempted from announcement and

• 47 -

Items	Amended Version	Original Version	Reason
	investment in the mainland China area reaches 20 percent or more of the Company’s paid-in capital or NT$300 million. Provided, this shall not apply to the following circumstances: (1) Trading of domestic government bondsor foreign government bonds with a rating that is not lower than the sovereign rating of Taiwan. (2) Trading of bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. (omitted hereunder)	investment in the mainland China area reaches 20 percent or more of the Company’s paid-in capital or NT$300 million. Provided, this shall not apply to the following circumstances: (1) Trading of domestic government bonds. (2) Trading of bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. (omitted hereunder)	report, Item 1 of subparagraph 7 in Article 1 is hereby amended. For the purpose of easing the issuance of trading of bonds, trading of foreign government bonds with a rating that is not lower than the sovereign rating of Taiwan is also exempted from announcement and report.
Article 7	In acquiring or disposing of real estate or equipment by the Company, unless otherwise transacting with a government agency, commissioning others to build on its own land, leased land by appointing a constructor, or acquiring or disposing equipment for business use, where the transaction amount reaches 20% of the Company’s paid- in capital or NT$300 million, the Company shall obtain an appraisal report( the format shall be in accordance with the regulations of the regulatory authority) issued by a professional appraisal and further comply with the following provisions prior to the date of occurrence of event:	In acquiring or disposing of real estate or equipment by the Company, unless otherwise transacting with a government agency, commissioning others to build on its own land, leased land by appointing a constructor, or acquiring or disposing equipment for business use, where the transaction amount reaches 20% of the Company’s paid- in capital or NT$300 million, the Company shall obtain an appraisal report( the format shall be in accordance with the regulations of the regulatory authority) issued by a professional appraisal and further comply with the following provisions prior to the date of occurrence of event:	1. Amended in accordance with Article 9 of the revised Regulations Governing the Acquisition and Disposal of Assets by Public Companies on January 28th, 2022. 2. The provisions in paragraph 1, subparagraph 3 describing that a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards

• 48 -

Items	Amended Version	Original Version	Reason
	1~2, (omitted) 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser. Except where a limited price, specified price, or special price	1~2, (omitted) 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisalin accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (abbreviated as ARDF hereafter) andrender a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for	No. 20 published by the ROC ARDF are hereby deleted, considering that Article 5 has been amended to add requirements that the external experts shall comply with the self- regulatory rules of the industry associations to which they belong when issuing an opinion, which already covers the procedures for a certified public accountant to follow when issuing an opinion. 2. When a current construction enterprise cannot obtain an appraisal report in time and there is a legitimate reason for the delay, after obtaining the report within 2 weeks commencing immediately from the date of occurrence, if the discrepancy between the appraisal result and the transaction amount reaches a certain percentage as stipulated in paragraph 1, subparagraph 3, a certified public accountant shall be engaged again to perform the

• 49 -

Items	Amended Version	Original Version	Reason
	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 appraisal report shall be obtained within 2 weeks counting inclusively from the date of occurrence, and the certified public accountant's opinion under subparagraph 3 of the preceding paragraphshall be obtained within 2 weeks counting inclusively from the day the appraisal report is obtained.	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.	appraisal. Therefore, considering the demand of operational time, paragraph 2 is hereby amended. The time limit for obtaining an opinion from a certified public accountant for the construction enterprise has been eased to two weeks from the date of obtaining the appraisal report.
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. This requirement does not apply, however, to securities with publicly quoted prices in an active market or in compliance	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	1. Amended in accordance with Article 10 and 11 of the revised Regulations Governing the Acquisition and Disposal of Assets by Public Companies on January 28th, 2022. 2. The rest of the reasons is the same as Article 7, Reason 2.

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Items	Amended Version	Original Version	Reason
	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.	Auditing Standards No. 20 published by the ARDF.This requirement does not apply, however, to securities with publicly quoted prices in an active market or in compliance with regulations set by the Financial Supervisory Commission. In acquiring or disposing of membership certificates or intangible assets with a transaction amount of 20 percent of the Company’s paid-in capital or NT$300 million or more, except in cases where the counterparty of the transaction is the government agency, the Company shall engage a certified public accountant to provide an opinion regarding the reasonableness of the transaction price prior to the date of occurrence of the event. The CPA shall do so in accordance 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	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	1. Amended in accordance with Article 15 of the revised Regulations Governing the Acquisition and Disposal of Assets by Public Companies on January 28th, 2022. 2. Paragraph 2 to 7 of the original version are moved to paragraph 3 to 8 of the revised version.

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Items	Amended Version	Original Version	Reason
	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. 1. The purposes, necessity, and anticipated benefits of the acquisition or disposition of the assets; 2. The reasons for selecting the related persons as the transaction counterparty; 3. Relevant information for evaluating the reasonableness of the terms of the anticipated transaction pursuant to the provisions of Items 4 and 6 of this Article and Article 10-1; 4. Information such as the date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company	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. 1. The purposes, necessity, and anticipated benefits of the acquisition or disposition of the assets; 2. The reasons for selecting the related persons as the transaction counterparty; 3. Relevant information for evaluating the reasonableness of the terms of the anticipated transaction pursuant to the provisions of Items 4 and 6 of this Article and Article 10-1; 4. Information such as the date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company	3. Add paragraph 2. (1) In order to strengthen the management of related party transactions and to protect the Company's minority shareholders' rights to express their opinions on transactions between the Company and related parties, and to regulate the requirement that major related party transactions shall be submitted to the shareholders meeting for approval in advance, and to avoid major related party transactions through subsidiaries that are not domestic public companies, the provisions are hereby stipulated that the company may not proceed to avoid the need to submit relevant information to the shareholders meeting for approval in advance until the relevant files have been approved by the board of directors, when the Company

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Items	Amended Version	Original Version	Reason
	and the related party; 5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the uses of fund. 6. Transactions value of 10 percent of the Company’s total assets or more, accountant’s opinions, or appraisal reports in compliance with the provisions of Article 7 or 8 of these Procedure; 7. Restrictive covenants and other important stipulations associated with the transaction. If the transaction amount in the preceding article reaches 10 percent or more of the company’s total assets, the company shall submit the materials in all the subparagraphs of paragraph 1 to the shareholders meeting for approval before the transaction contract may be entered into and any payment made. However, this restriction does not apply to transactions between the company and its subsidiaries or between its subsidiaries. The calculation of the transactions referred toin paragraph 1with amounts reach 20 percent of the Company's paid-in capital, 10 percent of total assets or NT$300 million or moreand the preceding paragraph shall follow the provisions in the 2nd paragraph	and the related party; 5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the uses of fund. 6. Transactions value of 10 percent of the Company’s total assets or more, accountant’s opinions, or appraisal reports in compliance with the provisions of Article 7 or 8 of these Procedure; 7. Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transactions referred to in the preceding paragraphs with 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	or its subsidiaries that are not public companies have transactions of the acquisition or disposal of assets with a related party and the transaction amount reaches more than 10% of the Company's total assets. In the case of matters raised by subsidiaries that are not public companies, the approval of those matters shall be performed by the parent company of the public company. (2) In consideration of the overall business planning needs of the Company and its subsidiaries, or between subsidiaries, the Company may exempt intercompany transactions from shareholders meeting resolutions under the proviso. 3. The paragraph 2 of the original Article is added accordingly, and the calculation of the transaction amount is amended to include the transaction submitted to the shareholders meeting for approval.

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Items	Amended Version	Original Version	Reason
	of Article 6 of these Procedures. "Within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which have been submitted and approved by the Audit Committee and passed resolutions by the Board of Directors andthe shareholders meetingin 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.	Procedures. "Within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which have been submitted and approved by the Audit Committee and passed resolutions by the Board of Directors in accordance with these Procedures need not be counted toward the transaction amount. Matters for which paragraph 1 requires approval by the Audit Committee shall first be approved by more than half of all Audit Committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all Audit Committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two- thirds of all directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

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Appendix 1

China Petrochemical Development Corporation Articles of Incorporation

Duly amended at the 33[th] amendment in the annual shareholder meeting convened on May 27, 2022

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).

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

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

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

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

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

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

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

Chapter 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, 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, or other securities shall be duly issued in accordance with the requirements set forth under of the Company Law and other relevant regulations.

• 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.

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

Chapter Three: Shareholder Meetings

• Article 11 The shareholder meeting hereof is divided into the annual shareholder meeting and special shareholder meeting. The former shall be convened annually within six months from the closing of each fiscal year. The latter may be duly convened according to relevant laws whenever the Company deems necessary. When the shareholder’s meeting is held, the meeting could be held by video conference or other methods announced by the central competent authority.

• 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.

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

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

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

Chapter 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:

1. Resolve the Company’s business policies.

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

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

4. Resolve decisions regarding investment and reinvestment.

5. Appoint and discharge managers.

6. Review budgets and prepare financial statements.

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

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

9. Enforce the decisions resolved in the shareholder meeting.

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

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

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

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

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

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

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

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

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

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

Article 26 The duties of the audit committee are:

1. Supervise the business operations of the Company.

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

3. Audit the books and documents of the Company.

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

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

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Article 27 (Delete)

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

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

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

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

Chapter Five: Managers and Other Employees

• Article 29 Unless otherwise prescribed by law, the Company shall have one Chief Executive Officer (CEO), one General Manager, 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.

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Chapter Six: Accounting

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

• Business report;

• Financial statements;

• Proposals of profit allotment or loss coverage.

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

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

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

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

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

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

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In the 2nd item, 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.

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, 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.

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Appendix 2

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

Amended and resolved at the annual shareholder meeting convened on May 27, 2022.

• 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.
  

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

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

1. The amount of any individual transaction.

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

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

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

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

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

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

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

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

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

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

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

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professional appraisal and further comply with the following provisions prior to the date of occurrence of event:

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

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

3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal 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:

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

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

6. 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 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.

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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.

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

2. The reasons for selecting the related persons as the transaction counterparty;

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

4. Information such as the date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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• 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:

1. A special reserve shall be set aside according to Paragraph 1, Article 41 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised value, and may not be distributed or used for

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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.

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

2. 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

With respect to the types of transactions listed below, when to be conducted between the Company and its subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, shall be conducted in accordance with the delegation of authority policy of the board of each subsidiary:

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• Acquisition or disposal of equipment or right-of-use assets thereof held for business use.

• Acquisition or disposal of real property right-of-use assets held for business use.

• 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:

• 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

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Chapter III - Public Disclosure of Information of the Regulations:

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

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

• Essentials of performance evaluation:

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

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

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

• Total contract amount and limit on maximum loss:

• 1) Hedging operation:

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

The maximum contract loss shall not exceed 15% of the contract amount, applicable to individual contracts and all contract.

• 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.

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.

• 3) Trading-purpose operation:

The Company does not engage in trading-purpose operation.

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

1. The scope of risk management includes:

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

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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.

  - 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).

1. 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.

2. 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.

3. 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.

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

5. 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

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established operating strategy and if the risk undertaken is within the company's permitted acceptable level.

1. 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.

   • 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.

2. 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.

3. 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.

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

5. 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.

6. 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.

7. 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.

8. 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

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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.

• 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.

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

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

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

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

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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.

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

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

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

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

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

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

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

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

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

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

1. Handling of breach of contract.

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

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

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

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

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

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

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

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

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

12. 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.

13. 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 3

China Petrochemical Development Corporation Rules Governing the Proceedings of Shareholder Meetings

Amended and resolved at the annual shareholder meeting convened on May 27, 2022.

• 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, the Company’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.

The Company shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors 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. The Company 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. 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. In addition, before 15 days before the date of the shareholders meeting, the Company 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 the Company’s Stock Affairs Office.

The Company shall provide a Shareholder Handbook and meeting supplementary materials mentioned in the preceding paragraph on the day 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.

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4. When a video conference of shareholders meeting is held, the electronic file shall be sent to the video-conferencing platform.

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 the Company for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. However, a shareholder proposal proposed for urging the company to promote public interests or fulfill its social responsibilities may still be included in the list of proposals to be discussed at a regular meeting of shareholders by the board of directors. In addition, when the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda.

Prior to the book closure date before a regular shareholders meeting is held, the Company 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, the Company 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 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 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.

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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 proxy cancellation 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 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.

• 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 and video conference platform with the number of voting powers exercised in writing or by electronic means.

When the Company convenes a shareholders’ meeting, shareholders may exercise their voting power in writing or by way of electronic transmission; the method of exercising their voting power shall be describes in the shareholders’ meeting notice. A shareholder who exercises his/her voting power at a 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

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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 proxy cancellation 2 days before the shareholders’ meeting. If the cancellation notice is submitted after that time, votes cast at the meeting by the written form or electronic votes shall prevail. If the voting rights are exercised by written form or electronically, and also appoint a proxy to attend the meeting, votes cast at the meeting by the proxy shall prevail.

• Article 5 The venue for a shareholders meeting shall be the premises of the Company, 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.

• 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. The same shall be true for a representative of an institutional director that serves as chair.

It is advisable that shareholders meetings convened by the board of directors be attended by a majority of the directors, and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minutes.

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.

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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.

If the shareholders' meeting is held by video conference, the company should record the background operation interface of the video conference platform.

• 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 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 Company Act.

• 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.

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

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

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

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

• Article 12 Shareholders' 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 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 questions on the video conference platform of the shareholders' meeting for public information.

• 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.

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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 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 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 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.

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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 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.

• 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 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

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day of the shareholders 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. In the event of a virtual shareholders meeting, the Company shall upload the abovementioned statistical statement of the number of proxy shares to the virtual meeting platform at least 30 minutes before the meeting starts, and keep this information disclosed until the end of the meeting.

During the Company'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, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

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 shareholders meeting by video, the total number of shares attending the shareholders meeting reaches the statutory quota for the shareholders meeting, and the shareholders meeting should resume. 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.

• (4) If all the motions have been declared results, but no provisional motion has been made, the handling method.

• III. To hold a video-conference shareholders meeting and to specify appropriate alternatives for shareholders who would have difficulty participating in a vide conference.

Article 22 In the event of a virtual shareholders meeting, the Company shall disclose real-time results of votes and election immediately after the end of the voting session on the virtual meeting

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platform according to the regulations, and this disclosure shall continue at least 15 minutes after the chair has announced the meeting adjourned.

• Article 23 When the Company 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.

• Article 24 In the event of a virtual shareholders meeting, the Company 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 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 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 the Company 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.

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When postponing or resuming a meeting according to the second paragraph, the Company 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.

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, the Company shall handle the matter based on the date of the shareholders meeting that is postponed or resumed under the second paragraph.

• Article 25 When convening a virtual-only shareholders meeting, the Company shall provide appropriate alternative measures available to shareholders with difficulties in attending a virtual shareholder meeting online.

• Article 26 The regulation will be implemented after the approval by the shareholder’s meeting. The same shall apply to the amendment.

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Appendix 4

China Petrochemical Development Corporation Registration Procedures for Attending Shareholder Meetings

Duly established on March 28, 2013

Article 1 (Purpose) These procedures are established to ensure smoothness of the shareholders' meeting and protect shareholders' rights and implement corporate governance practices.

Article 2 (Basis for Establishment) The procedure is enacted based on the sample template for the "Rules of Procedure for Shareholders Meetings" issued by Financial Supervisory Commission (FSC) regulatory decree number 1020002909 issued on February 26, 2013 and Taiwan Stock Exchange reference number 1020003468 issued on February 27, 2013.

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:

1. Three years' experience in shareholder services

2. Certified (Senior) Securities Specialist.

3. 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 Board of Directors.

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Appendix 5

Shareholdings of the Company’s Directors

(As of May 2, 2023)

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		Lian-Sheng Tsai		0	0
Director	166505	BES Engineering Corporation	To be appointed	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 supervisors do not apply.

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

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