Stock Code:1314

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Financial Statements

With Independent Auditors’ Report
For the Years Ended December 31, 2025 and 2024

Address: No.1, Jingjian Rd., Dashe Dist., Kaohsiung City 815, Taiwan (R.O.C.)
Telephone: 886-7-351-3521

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’ report and financial statements, the Chinese version shall prevail.

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Independent Auditors’ Report	3
4. Balance Sheets	4
5. Statements of Comprehensive Income	5
6. Statements of Changes in Equity	6
7. Statements of Cash Flows	7
8. Notes to the Financial Statements
(1) Company history	8
(2) Approval date and procedures of the financial statements	8
(3) New standards, amendments and interpretations adopted	8~10
(4) Summary of material accounting policies	10~27
(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty	27
(6) Explanation of significant accounts	27~75
(7) Related-party transactions	75~80
(8) Pledged assets	81
(9) Commitments and contingencies	81~86
(10) Losses Due to Major Disasters	87
(11) Subsequent Events	87
(12) Other	87~89
(13) Other disclosures
(a) Information on significant transactions	90~92
(b) Information on investees	92~93
(c) Information on investment in mainland China	94~95
(14) Segment information	95
9. List of major account titles	96~112

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, 2025 and 2024, 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, 2025 and 2024, 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 Financial Statement Audit and Attestation Engagements of 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 Accountant of the 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 note 9(c) to the financial statements on October 30, 2019, Core Pacific Dev. Corp., a subsidiary of the Company, entered into a real estate sales agreement with Core Pacific City Co., Ltd. for the land at Core Pacific Plaza, wherein Core Pacific Dev. Corp. signed a syndicated loan agreement with a consortium of banks on October 21, 2021, with the Company acting as the joint guarantor. However, the additional floor area for the land at Core Pacific Plaza is currently involved in a criminal dispute due to the incentives; hence, was seized by the Taipei District Court in October 2024, with a prohibition on disposal. Thereafter, Core Pacific Dev. Corp. filed three consecutive motions for appeal to the Taiwan High Court, who denied all three appeals. Currently, the case is still being decided by the Taipei District Court; hence, it is still not possible to determine whether the land of Core Pacific City Plaza will be prohibited from being disposed. Our opinion is not modified in respect of this matter.

3-1

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 4.87% and 5.41% of total assets at December 31, 2025 and 2024, respectively, and the related share of profit (loss) of associates accounted for using the equity method constituting (0.51)% and 81.09% of profit (loss) before 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.

Revenue recognition

Refer to Note 4(p) “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:

Understanding and testing the controls related to the sales and collection cycle to confirm the effectiveness of internal controls, and 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 samples of sales revenue transactions around the balance sheet date year end by vouching relevant documents to assess whether the revenue is accurately recognized in the appropriate period in the financial statement.
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 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, 2025, which is significant to the financial statements as a whole. CPDC evaluates the fair value of investment property according to IAS40, and re-measures such fair value on the reporting date. Since the valuation of investment property demands significant professional judgments, the assessment of fair value of investment property is considered one of the key audit matters.

3-2

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(n) “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, 2025, 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 indicators 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:

Obtained the Company impairment assessment documentation and recalculated whether the recorded impairment amount was consistent with the assessment.
Inquired of management regarding the impairment assessment process, and obtained an understanding of the key financial assumptions and valuation basis.
Evaluated whether management’s disclosures related to asset impairment were appropriate.

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.

3-3

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:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

3-4

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 Lee, Feng-Hui.

KPMG

Taipei, Taiwan (Republic of China)
March 12, 2026

Notes to Readers

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

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

(English Translation of Financial Statements Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Balance Sheets

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Assets	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
Current assets:
1100	Cash and cash equivalents (Note 6(a))	$ 817,281	1	2,706,374	3
1110	Current financial assets at fair value through profit or loss (Notes 6(b) and 8)	10,430	-	268,309	-
1120	Current financial assets at fair value through other comprehensive income (Notes 6(c))	-	-	17,180	-
1170	Notes and accounts receivable, net (Note 6(d))	1,278,219	1	1,937,904	2
1180	Accounts receivable due from related parties, net (Notes 6(d) and 7)	140,608	-	363,346	-
1200	Other receivables	51,333	-	61,665	-
1210	Other receivables due from related parties (Note 7)	56,956	-	57,680	-
1220	Current tax assets	19,140	-	31,330	-
130X	Inventories (Note 6(e))	1,483,901	1	1,986,389	2
1410	Prepayments	578,034	1	560,651	-
1461	Non-current assets classified as held for sale (Note 6(j))	491,012	-	3,567,998	3
1470	Other current assets (Note 6(f) and 8)	1,064,544	1	405,167	-
	Total current assets	5,991,458	5	11,963,993	10
Non-current assets:
1510	Non-current financial assets at fair value through profit or loss (Note 6(b))	12,843	-	20,324	-
1517	Non-current financial assets at fair value through other comprehensive income (Note 6(c) and 8)	685,443	1	1,431,949	1
1551	Investments accounted for using equity method (Note 6(g) and 8)	55,181,662	47	54,825,646	44
1600	Property, plant and equipment (Note 6(h) and 8)	15,593,725	14	17,061,857	14
1755	Right-of-use assets (Note 6(i))	416,767	-	461,470	-
1760	Investment property, net (Note 6(j) and 8)	37,934,648	33	37,929,509	31
1840	Deferred tax assets (Note 6(s))	11,009	-	11,009	-
1900	Other non-current assets (Note 8)	347,915	-	281,148	-
	Total non-current assets	110,184,012	95	112,022,912	90
Total assets		$ 116,175,470	100	123,986,905	100
Liabilities and Equity
---
Current liabilities:
Short-term loans (Note 6(k))
Current contract liabilities (Note 6(v))
Accounts payable
Accounts payable to related parties (Note 7)
Other payables (Note 7)
Current provisions (Notes 6(p) and 6(r))
Current lease liabilities (Note 6(o))
Long-term liabilities, current portion (Notes 6(l) and 6(m))
Other current liabilities, others
Total current liabilities
Non-Current liabilities:
Long-term loans (Note 6(l))
Non-current provisions (Note 6(p) and 6 (r))
Deferred tax liabilities (Note 6(s))
Non-current lease liabilities (Note 6(o) and 7)
Long-term bills payable (Note 6(n))
Other non-current liabilities, others
Total non-current liabilities
Total liabilities
Equity (Note 6(t)):
Ordinary shares
Capital surplus
Legal reserve
Special reserve
Unappropriated retained earnings
Total other equity interest
Total equity
Total liabilities and equity
December 31, 2025		December 31, 2024
---	---	---	---
Amount	%	Amount	%
$ 4,500,000	4	2,550,000	2
8,951	-	4,262	-
402,809	-	1,007,045	1
23,144	-	986	-
1,037,631	1	1,705,718	1
521,009	-	824,244	1
21,245	-	25,422	-
8,420,429	8	8,130,529	7
105,055	-	2,472,862	2
15,040,273	13	16,721,068	14
7,005,456	6	10,240,885	8
2,253,255	2	2,498,917	2
7,398,756	6	7,208,782	6
210,067	-	226,200	-
7,928,311	7	7,510,677	6
74,355	-	85,685	-
24,870,200	21	27,771,146	22
39,910,473	34	44,492,214	36
37,848,502	33	37,848,502	30
1,582,006	1	1,582,006	1
2,512,486	2	2,260,465	2
34,277,475	30	34,854,417	28
822,130	1	3,475,614	3
(777,602)	(1)	(526,313)	-
76,264,997	66	79,494,691	64
$ 116,175,470	100	123,986,905	100

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2025 and 2024

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

	2025		(restated) 2024
		Amount	%	Amount	%
4000	Operating revenue (Notes 6(v) and 7)	$ 13,984,549	100	19,040,411	100
5000	Operating costs (Note 6(e))	15,545,345	111	19,174,129	101
		(1,560,796)	(11)	(133,718)	(1)
5910	Less: Unrealized (loss) profit from sales	-	-	519	-
5920	Add: Realized (loss) profit from sales	(519)	-	(77)	-
	Gross loss from operations	(1,561,315)	(11)	(133,276)	(1)
	Operating expenses (Note 7):
6100	Selling expenses	429,309	3	506,734	2
6200	Administrative expenses	364,768	3	393,988	2
6300	Research and development expenses	167,240	1	199,571	1
	Total operating expenses	961,317	7	1,100,293	5
	Net operating loss	(2,522,632)	(18)	(1,233,569)	(6)
	Non-operating income and expenses:
7100	Interest income (Note 6(x))	49,327	-	132,880	1
7010	Other income (Notes 6(x) and 7)	326,609	2	279,551	1
7590	Other gains and losses (Note 6(x) and 7)	77,604	1	(1,248,743)	(7)
7050	Finance costs (Notes 6(o) and 6(x))	(575,374)	(4)	(609,536)	(3)
7060	Shares of profit (loss) of subsidiaries, associates and joint ventures accounted for using equity method, net (Note 6(g))	(343,487)	(2)	(800,162)	(4)
7215	Gains on disposals of investment property (Note4 and Note 6(j))	380,079	3	1,997,111	10
7255	Gains on fair value adjustment, investment property (Note 6(j))	152,424	1	2,581,475	14
7673	Impairment loss on property, plant, and equipment (Note 6(h))	(215,121)	(2)	(519,234)	(3)
	Total non-operating income and expenses	(147,939)	(1)	1,813,342	9
	Profit (loss) before tax	(2,670,571)	(19)	579,773	3
7950	Less: income tax expense (Note 6(s))	244,863	2	131,927	1
	Profit (loss) from continuing operations	(2,915,434)	(21)	447,846	2
	Profit (loss) from discontinued operations:
8100	Profit (loss) from discontinued operations, net of tax	(50,941)	-	(200,171)	(1)
	Profit (loss)	(2,966,375)	(21)	247,675	1
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))	(26,626)	-	5,544	-
8316	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income (Note 6(t))	25,785	-	227,631	1
8330	Share 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))	22,323	-	(69,534)	-
8349	Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	-	-	-	-
	Components of other comprehensive income that will not be reclassified to profit or loss	21,482	-	163,641	1
8360	Items that may be reclassified subsequently to profit or loss:
8361	Exchange differences on translation of foreign financial statements (Note 6(t))	(385,942)	(3)	522,881	3
8380	Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss (Note 6(t))	101,141	1	(98,096)	(1)
8399	Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss	-	-	-	-
	Components of other comprehensive income that may be reclassified subsequently to profit or loss	(284,801)	(2)	424,785	2
8300	Other comprehensive income, net of tax	(263,319)	(2)	588,426	3
8500	Total comprehensive income	$ (3,229,694)	(23)	836,101	4
	Net income attributable to:
8610	Shareholders of the parent
	(Loss) profit, attributable to continuing operation	$ (2,915,434)	(21)	447,846	2
	(Loss) profit, attributable to discontinued operation	(50,941)	-	(200,171)	(1)
	(Loss) profit, attributable to owners of parent	$ (2,966,375)	(21)	247,675	1
	Comprehensive (loss) income, attributable to:
8710	Shareholders of the parent
	Comprehensive income, attributable to continuing operation	$ (3,178,753)	(23)	1,036,272	5
	(Loss) profit, attributable to discontinued operation	(50,941)	-	(200,171)	(1)
	Comprehensive income, attributable to owners of parent	$ (3,229,694)	(23)	836,101	4
	Earnings (loss) per share (expressed in dollars) (Note 6(a))
9750	Basic earnings (loss) per share
	Basic earnings (loss) per share from continuing operations	$	(0.77)		0.12
	Basic earnings (loss) per share from discontinued operations		(0.01)		(0.05)
	Total basic earnings (loss) per share	$	(0.78)		0.07
9850	Diluted earnings (loss) per share
	Diluted (loss) earnings per share from continuing operation	$	(0.77)		0.12
	Diluted loss per share from discontinued operations		(0.01)		(0.05)
	Total diluted (loss) earnings per share	$	(0.78)		0.07

See accompanying notes to financial statements.

(English Translation of Financial Statements Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Statements of Changes in Equity

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	Ordinary shares	Capital surplus	Retained earnings			Other equity		Total equity
			Legal reserve	Special reserve	Unappropriated retained earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
Balance at January 1, 2024	$ 37,848,502	1,582,006	2,871,774	38,066,198	(611,309)	(718,012)	(380,569)	78,658,590
Profit for the year ended December 31, 2024	-	-	-	-	247,675	-	-	247,675
Other comprehensive income for the year ended December 31, 2024	-	-	-	-	16,158	424,785	147,483	588,426
Total comprehensive income for the year ended December 31, 2024	-	-	-	-	263,833	424,785	147,483	836,101
Appropriation and distribution of retained earnings:
Legal reserve used to offset accumulated deficits	-	-	(611,309)	-	611,309	-	-	-
Disposal of investments properties (Transfer of special reserve to unappropriated retained earnings)	-	-	-	(3,211,781)	3,211,781	-	-	-
Balance at December 31, 2024	37,848,502	1,582,006	2,260,465	34,854,417	3,475,614	(293,227)	(233,086)	79,494,691
Loss for the year ended December 31, 2025	-	-	-	-	(2,966,375)	-	-	(2,966,375)
Other comprehensive income for the year ended December 31, 2025	-	-	-	-	(21,228)	(284,801)	42,710	(263,319)
Total comprehensive income for the year ended December 31, 2025	-	-	-	-	(2,987,603)	(284,801)	42,710	(3,229,694)
Appropriation and distribution of retained earnings:
Legal reserve	-	-	252,021	-	(252,021)	-	-	-
Special reserve	-	-	-	3,223,593	(3,223,593)	-	-	-
Disposal of investments properties (Transfer of special reserve to unappropriated retained earnings)	-	-	-	(3,800,535)	3,800,535	-	-	-
Disposal of investments in equity instruments designated at fair value through other comprehensive income	-	-	-	-	(34,095)	-	34,095	-
Associated disposal of investments in equity instruments designated at fair value through other comprehensive income	-	-	-	-	43,293	-	(43,293)	-
Balance at December 31, 2025	$ 37,848,502	1,582,006	2,512,486	34,277,475	822,130	(578,028)	(199,574)	76,264,997

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, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	For the years ended December 31
	2025	(restated) 2024
Cash flows from (used in) operating activities:
(Loss) profit from continuing operations before tax	$ (2,670,571)	579,773
Loss from discontinued operations before tax	(50,941)	(200,171)
(Loss) profit before tax	(2,721,512)	379,602
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expense	870,227	975,683
Net gain on financial assets at fair value through profit	(6,054)	(55,588)
Interest expense	575,374	609,536
Interest income	(49,327)	(132,880)
Dividend income	(156,379)	(140,655)
Share of loss of subsidiaries, associates and joint ventures accounted for using equity method	343,487	800,162
Gain on disposal of property, plant and equipment	(413,329)	(633)
Gain on disposal of non-current assets classified as held for sale	(380,079)	(1,997,111)
Impairment loss (reversal of impairment gain) on non-financial assets	75,582	5,845
Unrealized loss from sales	-	(519)
Realized loss from sales	519	77
Impairment loss on property, plant and equipment	215,121	639,154
Gain on fair value adjustment of investment property	(152,424)	(2,581,475)
Other	192	-
Total adjustments to reconcile profit (loss)	922,910	(1,878,404)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	659,685	(52,719)
Decrease in accounts receivable due from related parties	222,738	107,494
Decrease in other receivables	9,268	140,036
Decrease (increase) in other receivable due from related parties	724	(19,542)
Decrease in inventories	426,906	507,898
Increase in prepayments	(17,383)	(197,108)
(Increase) decrease other current assets	(659,377)	175,923
Total changes in operating assets	642,561	661,982
Increase (decrease) in contract liabilities	4,689	(78,243)
(Decrease) increase in accounts payable	(604,236)	93,963
Increase in accounts payable to related parties	22,158	107
Decrease in other payable	(425,530)	(235,554)
(Decrease) increase in provisions	(548,897)	545,183
Increase other current liabilities	16,517	71,852
Total changes in operating liabilities	(1,535,299)	397,308
Total changes in operating assets and liabilities	(892,738)	1,059,290
Total adjustments	30,172	(819,114)
Cash outflow generated used in operations	(2,691,340)	(439,512)
Interest received	50,391	137,094
Interest paid	(570,626)	(608,518)
Income taxes paid	(42,699)	(500,337)
Net cash flows used in operating activities	(3,254,274)	(1,411,273)

See accompanying notes to financial statements.

7-1

(English Translation of Financial Statements Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	For the years ended December 31
	2025	(restated) 2024
Cash flows from (used in) investing activities:
Acquisition of financial assets at fair value through profit or loss	$ (10,000)	(9,265)
Proceeds from disposal of financial assets at fair value through profit or loss	281,414	68,241
Proceeds from disposal of financial assets at fair value through other comprehensive income	789,471	-
Acquisition of investments accounted for using equity method	(3,789,180)	(7,310,000)
Proceeds from capital reduction of investments accounted for using equity method	2,512,565	956,395
Proceeds from disposal of non-current assets classified as held for sale	4,095,362	6,400,161
Acquisition of property, plant and equipment	(437,745)	(910,073)
Proceeds from disposal of property, plant and equipment	470,490	1,399
Increase (decrease) in receipts in advance due to disposal of assets	(2,384,320)	1,688,179
Cash in flows due to combination	-	9,123
Decrease in other financial assets	-	3,400,000
(Increase) decrease in other non-current assets	(27,128)	18,973
Dividends received	470,494	597,001
Net cash flows from (used in) investing activities	1,971,423	4,910,134
Cash flows from (used in) financing activities:
Increase (decrease) in short-term loans	1,150,000	(1,096,000)
Proceeds from long-term debt	11,540,000	17,121,000
Repayments of long-term debt	(13,685,529)	(19,965,486)
Increase in long-term bills payable	58,710,000	64,990,000
Decrease in long-term bills payable	(58,280,000)	(65,190,000)
Payment of lease liabilities	(25,058)	(21,688)
Decrease in other non-current liabilities	(11,330)	(12,790)
Interest paid	(4,325)	(3,338)
Net cash (used in) flows from financing activities	(606,242)	(4,178,302)
Net decrease in cash and cash equivalents	(1,889,093)	(679,441)
Cash and cash equivalents at beginning of period	2,706,374	3,385,815
Cash and cash equivalents at end of period	$ 817,281	2,706,374

See accompanying notes to financial statements.

(English Translation of Financial Statements and Report Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

China Petrochemical Development Corporation (hereinafter referred to as the "Company") was founded on July 8, 1969 under the approval of Ministry of Economic Affairs, R.O.C. The Company migrated to No.1, Jingjian Rd., Dashe Dist., Kaohsiung City 815, Taiwan (R.O.C.) on July 18, 2016. The Company primarily engage in the production of petroleum, alkali-chlorine, phosphoric acid and other petrochemical products and by-products and the storage, transportation, purchase and sale of these products, related chemicals and their raw materials, and land development. The primary products are acrylonitrile, caprolactam and nylon.

(2) Approval date and procedures of the financial statements:

These financial statements were authorized for issue by the Board of Directors on March 12, 2026.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2025:

Amendments to IAS21 "Lack of Exchangeability"

(b) The impact of IFRS Accounting Standards endorsed by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2026, would not have a significant impact on its financial statements:

IFRS 17 "Insurance Contracts" and amendments to IFRS 17 "Insurance Contracts"
Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments"
Annual Improvements to IFRS Accounting Standards—Volume 11
Amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity"

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations	Content of amendment	Effective date per IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”	The new standard introduces three categories of income and expenses, two income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities.

• A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities.

• Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.

• Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes. | January 1, 2027
note: On September 25, 2025, the FSC issued a press release announcing that Taiwan will adopt IFRS 18 beginning in 2028. Entities that need to adopt the new standard earlier may do with the endorsement of the FSC. |

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

The Company is evaluating the impact on its financial position and financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 19 “Subsidiaries without Public Accountability: Disclosures” and amendments to IFRS 19 “Subsidiaries without Public Accountability: Disclosures”
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”

(4) Summary of material accounting policies:

The material accounting policies presented in the financial statements are summarized below. The following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”).

(b) Basis of preparation

(i) Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

1) Financial instruments at fair value through profit or loss are measured at fair value.
2) Financial assets at fair value through other comprehensive income are measured at fair value.
3) Non-current assets held for sale (or disposal groups) are measured at fair value;
4) Investment property is measured at fair value; and
5) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, adjusted for the effect of the asset ceiling as described in note 4(q).

(ii) Functional and presentation currency

The functional currency is determined based on the primary economic environment in which the Company operates. The financial statements are presented in New Taiwan Dollar (NTD), which is the Company's functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iii) As described in note 12(c), the consolidated financial statements have been prepared based on the going concern assumption after the Company’s assessment.

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

an investment in equity securities designated as at fair value through other comprehensive income;
a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
qualifying cash flow hedges to the extent that the hedges are effective.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(d) Classification of current and non-current assets and liabilities

The Company classifies the asset as current under one of the following criteria, and all other assets are classified as non current.

(i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(ii) It holds the asset primarily for the purpose of trading;
(iii) It expects to realize the asset within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Company classifies the liability as current under one of the following criteria, and all other liabilities are classified as non current.

(i) It expects to settle the liability in its normal operating cycle;
(ii) It holds the liability primarily for the purpose of trading
(iii) The liability is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

Bank overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(f) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI)

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company's right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above (e.g., financial assets held for trading and those that are managed and whose performance is evaluated on a fair value basis) are measured at FVTPL. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management's strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Company's management;
the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
how managers of the business are compensated — e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Company's continuing recognition of the assets.

5) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost including cash and cash equivalents, notes and accounts receivable, other receivables, guarantee deposit paid and other financial assets) and contract assets.

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

debt securities that are determined to have low credit risk at the reporting date; and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 90 days past due or the debtor is unlikely to pay its credit obligations to the Company in full.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Company is exposed to credit risk.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

significant financial difficulty of the borrower or issuer;
a breach of contract such as a default or being more than 90 days past due;
the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
it is probable that the borrower will enter bankruptcy or other financial reorganization; or
the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

6) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

5) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

(i) Manufacturing industry

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(ii) Construction industry

Inventories of the construction business are measured at the lower of cost and net realizable value. The cost of inventories includes expenditure incurred in bringing them to their existing location and condition and capitalized borrowing costs.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The net realizable value is estimated as follows:

1) Land held for development: net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses, or estimated by recent market value (development analytical method or comparison method).

2) Construction-in-progress: net realizable value is the estimated selling price (current market condition) in the ordinary course of business, less the estimated costs of completion and selling expenses, or estimated by recent market value.

(h) Non-current assets held for sale (or disposal groups) & Discontinued operations

Non-current assets or disposal groups comprising assets and liabilities that are highly probable to be recovered primarily through sale rather than through continuing use, are reclassified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Company's accounting policies. Thereafter, generally, the assets or disposal groups are measured at the lower of their carrying amount and fair value less costs to sell.

Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to assets not within the scope of IAS 36 – Impairment of Assets. Such assets will continue to be measured in accordance the Company's accounting policies.

Impairment losses on assets initially classified as held for sale and any subsequent gains or losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of the cumulative impairment loss that has been recognized.

Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted.

(i) Investments in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The financial statements include the Company's share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate's equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated Company's interests in the associate.

When the Company's share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(j) Investment in subsidiary

In the preparation of financial reports, the Company adopts the equity method assessment method for the investee companies that can be controlled. Under the equity method, in the financial report, the current profit and loss and other comprehensive gains and losses, and in the financial report of the consolidated basis, the current profit and loss and other comprehensive gains and losses are attributable to the owners of the parent company, and the financial reporting owners' equity and consolidated basis the interests of the owners of the parent company in the financial report are the same.

The Company's changes in the ownership interest of the subsidiaries did not result in loss of control and were treated as an interest transaction with the owners.

(k) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is initially measured at cost and subsequently at fair value with any change therein recognized in profit or loss.

Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognized in profit or loss. When investment property that was previously classified as property, plant and equipment is sold, any related amount included in 'other equity - revaluation surplus' is transferred to retained earnings.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(l) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

Land improvement	3~40 years
Buildings and constructions	2~60 years
Machine equipment	1~30 years
Transportation equipment	2~40 years
Other equipment	2~20 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(iv) Reclassification to investment property

When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified accordingly. Any gain arising on this remeasurement is recognized in profit or loss to the extent that it reverses a previous impairment loss on the specific property, with any remaining gain recognized in other comprehensive income and presented in 'other equity - revaluation surplus'.

Any loss is recognized in profit or loss. However, to the extent that an amount is included in the revaluation surplus for that property, the loss is recognized in other comprehensive income and reduces the revaluation surplus within equity.

(m) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate; or
there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee; or
there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
there is a change of its assessment on whether it will exercise an extension or termination option, or
there is any lease modifications.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

If an arrangement contains lease and non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less and leases of low-value assets, including Warehouse. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

For sale-and-leaseback transactions, the Company applies the requirements for determining when a performance obligation is satisfied in IFRS15 to determine whether the transfer of an asset is accounted for as a sale of the asset. If the transfer of an asset satisfies the requirement of IFRS15 to be accounted for as a sale of the asset, the Company derecognizes the transferred asset, then measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained. Accordingly, the Company recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. For leaseback transaction, the Company applies the lessee accounting policy. If the transfer of an asset does not satisfy the requirement of IFRS15 to be accounted for as a sale of the asset, the Company continues to recognize the transferred asset and recognizes the financial liability equal to the transfer proceeds.

(ii) As a leasor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

The Company recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The interest income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the lease. The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of 'rent income'.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(n) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties, measured at fair value to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(o) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

(i) Site dismantling

The estimated obligation on the dismantling, relocation or restoration of property, plant and equipment is recognized as decommissioning cost and liability of property, plant and equipment. The relevant costs of assets are adjusted by subsequent price variation for dismantling and restoration. Depreciation is provided per the remaining useful life of the adjusted cost.

(ii) Site restoration

In accordance with the Company’s published environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land, and the related expense, is recognized when the land is contaminated.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iii) Carbon fee

Carbon fees levied in accordance with Taiwan’s Climate Change Response Act and Regulations Governing the Collection of Carbon Fees are recognized when the annual greenhouse gas emissions are probably to exceed the threshold, and the amount is estimated based on the proportion of greenhouse gas emissions that have occurred as of the reporting date divided by the total annual greenhouse gas emissions.

(p) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

(i) Sale of goods

The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(ii) Commissions

When the Company acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognized is the net amount of commission made by the Company, and is recognized in proportion to the stage of completion of the transaction.

(iii) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(q) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(r) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities at the reporting date and their respective tax bases. Deferred taxes are recognized except for the following:

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction (i) affects neither accounting nor taxable profits (losses) and (ii) does not give rise to equal taxable and deductible temporary differences;

(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

the same taxable entity; or
different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(s) Earnings per share

The Company discloses the Company's basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee bonus.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(t) Operating segments

The Company discloses information of operating segments in the consolidated financial statements, which is therefore not included in the financial statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

In preparing these financial statements, management has made judgments and estimates about the future, including climate-related risks and opportunities, that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Company risk management and climate-related commitments where appropriate. Revisions to estimates are recognised prospectively in the period of the change and future periods.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is as follows:

(a) Fair valuation of investment property

The Company's investment property is measured at fair value deriving from external appraisal reports. When the presumed factors implemented in the evaluation process, e.g. discount rates and return on investment, change due to the evolving market and economy, the change may have an impact on the balance of the recognized assets and profit or loss. For more information regarding the valuation, please refer to note 6(j).

(b) Impairment of property, plant and equipment, and intangible assets

In the process of evaluating the potential impairment of tangible and intangible assets other than goodwill, the Company is required to make subjective judgments in determining the independent cash flows, useful lives, expected future income and expenses related to the specific asset groups considering of the nature of the industry. Any changes in these estimates based on changed economic conditions or business strategies and could result in significant impairment charges or reversal in future years. Please refer to note 6(h) for further description of the key assumptions used to determine the recoverable amount.

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand	$ 730	744
Checking and demand deposits	470,942	695,292
Time deposits	345,609	1,760,338
Cash equivalents	-	250,000
Cash and cash equivalents in the consolidated statement of cash flows	$ 817,281	2,706,374

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Time deposits with original maturity within three month which are held for the purpose of meeting short-term cash commitments, rather than for investment or other purposes, and are readily convertible to cash at the known amounts and subject to insignificant risk of value changes, are reported as cash equivalents. Please refer to note 6(f) for details of time deposits with original maturity between three months and one year which are accounted for as other financial assets under other current assets.

Please refer to note 6(y) for the fair value sensitivity analysis and interest rate risk of the financial assets and liabilities of the Company.

(b) Financial assets at fair value through profit or loss

	December 31, 2025	December 31, 2024
Current financial assets designated at fair value through profit or loss:
Beneficiary certificates	$ 10,430	-
Stocks listed on domestic markets	-	268,309
Subtotal	10,430	268,309
Non-current financial assets designated at fair value through profit or loss:
Stocks unlisted on domestic markets	12,843	20,324
Total	$ 23,273	288,633

The dividends income from the financial assets recognized at fair value through profit or loss for the years ended December 31, 2025 and 2024 amounted to $12,232 thousand and $8,575 thousand, respectively.

The Company has invested in the common stock of Core Pacific City Co., Ltd. as a financial investment, without having a representative on the board of directors, nor participating in their daily operations, nor engaging in their policy making process. Therefore, we determine that we do not have significant influence over the company. The investment is accounted for as a non current financial asset measured at fair value through profit or loss.

Please refer to note 8 for details of the financial assets at fair value through profit or loss of the Company pledged as collateral as of December 31, 2025 and 2024.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

	December 31, 2025	December 31, 2024
Equity investments at fair value through other comprehensive income-current:
Stocks listed on domestic markets	$ -	17,180
Subtotal	-	17,180
Equity investments at fair value through other comprehensive income - non-current
Stocks listed on domestic markets	273,412	768,577
Stocks unlisted on domestic markets	412,031	663,372
Subtotal	685,443	1,431,949
Total	$ 685,443	1,449,129

The Company designated the investments show above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term strategic purposes. Please refer to note 6(t) for the gain or loss on financial assets recognized at fair value through other comprehensive income.

On June 25, 2024, the Company's board of directors approved the merger of BES Twin Towers Development Co., Ltd. (BES Twin Towers), in which the Company held 100% of the shares and has acquired the Taiwan Business Bank equity held by BES Twin Towers, which was recognized as a current financial asset measured at fair value through other comprehensive income, resulting in the Company to become the sole surviving entity after the merger.

The dividend income from the financial assets recognized at fair value through other comprehensive income for the years ended December 31, 2025 and 2024 amounted to $144,147 thousand and $132,080 thousand, respectively.

Please refer to note 8 for details of the financial assets at fair value through other comprehensive income of the Company pledged as collateral as of December 31, 2025 and 2024.

(d) Notes and accounts receivable

	December 31, 2025	December 31, 2024
Notes and accounts receivables (including related parties)	$ 1,656,417	2,538,840
Less: Loss allowance	(237,590)	(237,590)
	$ 1,418,827	2,301,250

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

The Company applies the simplified approach to provide for its expected credit losses, i.e., the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

	December 31, 2025
	Carrying amount of notes receivable and accounts receivable	Weighted-average expected credit loss rate	Allowance for expected credit loss
Not past due	$ 1,245,453	0%	-
Over 0~30 days	101,706	0%	-
Over 31~120 days	71,668	0%	-
More than 1 year past due	237,590	100%	237,590
	$ 1,656,417		237,590
	December 31, 2024
	Carrying amount of notes receivable and accounts receivable	Weighted-average expected credit loss rate	Allowance for expected credit loss
Not past due	$ 2,301,250	0%	-
More than 1 year past due	237,590	100%	237,590
	$ 2,538,840		237,590

The movement of the allowance for notes and accounts receivables and notes receivable were as follows:

	For the years ended December 31,
	2025	2024
Balance at January 1	$ 237,590	237,590
Balance at December 31	$ 237,590	237,590

As of December 31, 2025 and 2024, the aforesaid receivables were not pledged as collateral.

For credit risk information, please refer to note 6(y).

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(e) Inventories

	December 31, 2025	December 31, 2024
Inventories, manufacturing business
Finished goods	$ 721,041	765,100
Work in progress	221,824	384,829
Raw materials	470,255	765,291
Fuel	7,944	8,158
Subtotal	1,421,064	1,923,378
Inventories, construction business
Land held for construction site	4,120	4,120
Payment for floor area ratio	13,535	13,535
Construction in progress	45,182	45,356
Subtotal	62,837	63,011
Total	$ 1,483,901	1,986,389

The details of the cost of sales were as follows:

	For the years ended December 31,
	2025	2024
Cost of goods sold	$ 14,501,401	18,316,598
Cost of land lease	101,999	119,902
Write-down of inventories	75,582	5,845
Net inventory (gain) loss	(2,010)	2,625
Unallocated fixed production overheads from idle facilities	943,263	876,842
Revenue from sale of scraps	(427)	(744)
Less: Attributable to discontinued operations	(74,463)	(146,939)
Net amount	$ 15,545,345	19,174,129

The allowance for inventory valuation and obsolescence loss was due to the decline of inventory to net realizable value or obsolescence, which was recognized as cost of goods sold. However, its reversal was due to the disappearance of the inventories abandoned that resulted in net realizable value which was lower than the costs, and the increase in net realizable value was due to the decrease of the operation costs.

As of December 31, 2025 and 2024, the aforesaid inventories were not pledged as collateral.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(f) Other current assets

	December 31, 2025	December 31, 2024
Restricted assets	$ 658,059	10,650
Other	406,485	394,517
	$ 1,064,544	405,167

Other financial assets are time deposits with original maturity between three months and one year.

Please refer to note 8 for details of the other current assets of the Company pledged as collateral as of December 31, 2025 and 2024.

(g) Investments accounted for using equity method

The Company's investments accounted for using the equity method at the reporting date were classified as follows:

	December 31, 2025	December 31, 2024
Subsidiaries	$ 48,993,469	49,254,056
Associates	6,188,193	5,571,590
Total	$ 55,181,662	54,825,646

(i) Subsidiaries

Please refer to the consolidated financial statements.

The Board of Directors of the Company resolved on December 11, 2025 to approve a merger with its 100%-owned subsidiary, Tsou Seen Chemical Industries Corporation, with the merger base date set for April 1, 2026.

(ii) Merge

1) The Company merged with BES Twin Towers, a fully owned subsidiary of the Company, on August 1, 2024, with the Company emerging as the sole surviving entity. The relevant legal procedures have been completed.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

On August 1st, 2024, the company acquired identifiable assets and liabilities assumed of BES Twin Towers. The details of the book value are as follows:

Cash and cash equivalents $ 4,123
Current financial assets 5,000
Financial assets at fair value through other comprehensive 19,455
Other receivables 1,265
Other current assets 126,848
Financial assets at fair value through profit or loss 9,344
Investment accounted for using equity method 2,963,138
Total identifiable net assets $ 3,129,173

(iii) The dividends income from the Company's investments accounted for using the equity method for the years ended December 31, 2025 and 2024 amounted to $314,115 thousand and $456,346 thousand, respectively. Furthermore, the Company received the payment $2,512,565 thousand and $956,395 thousand of the shares that were bought back from the Company's investments accounted for using the equity method for the years then ended. Additionally, the company increased cash capital with investments of $3,789,180 thousand and $7,310,000 thousand.

(iv) Please refer to note 8 for details of the investments accounted for using equity method of the Company pledged as collateral as of December 31, 2025 and 2024.

(h) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company were as follows:

	Land	Land improvements	Buildings	Machinery and equipment	Vehicles	Other facilities	Unfinished construction	Accumulated impairment	Total
Cost or deemed cost:
Balance as of January 1, 2025	$ 6,158,333	415,434	3,917,205	48,182,472	60,555	268,850	3,351,788	-	62,353,837
Additions	-	-	-	-	-	-	437,745	-	437,745
Disposal	(49,601)	(2,742)	(15,064)	(140,400)	(1,719)	(3,093)	-	-	(212,618)
Adjustment	-	207,485	159,165	580,630	474	9,334	(1,278,703)	-	(321,615)
Reclassification	-	-	2,400	11,185	(25)	(611)	-	-	12,869
Balance as of December 31, 2025	$ 6,108,732	628,177	4,063,700	48,633,887	59,286	273,680	2,518,830	-	62,278,218
Balance as of January 1, 2024	$ 6,158,333	419,492	3,510,609	48,236,386	61,387	248,081	3,450,606	-	62,084,894
Additions	-	-	-	-	-	-	910,073	-	910,073
Disposal	-	(3,920)	-	(600,709)	(832)	(554)	-	-	(606,015)
Adjustment	-	833	407,661	551,525	-	13,757	(1,008,891)	-	(35,115)
Reclassification	-	(971)	(1,065)	(4,730)	-	6,766	-	-	-
Balance as of December 31, 2024	$ 6,158,333	415,434	3,917,205	48,182,472	60,555	268,850	3,351,788	-	62,353,837
Depreciation and impairment loss:
Balance as of January 1, 2025	$ -	247,899	1,521,491	36,460,869	52,400	192,931	-	6,816,310	45,291,980
Depreciation for the period	-	14,565	88,598	714,329	1,575	14,770	-	-	833,837
Impairment loss	-	-	-	-	-	-	-	215,121	215,121
Disposal	-	(2,742)	(13,995)	(127,323)	(1,718)	(2,879)	-	(6,800)	(155,457)
Reclassification	-	-	-	515	(19)	(496)	-	-	-
Balance as of December 31, 2025	$ -	259,722	1,596,894	37,848,390	52,318	204,326	-	7,024,631	46,185,481

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

	Land	Land improvements	Buildings	Machinery and equipment	Vehicles	Other facilities	Unfinished construction	Accumulated impairment	Total
Balance as of January 1, 2024	$ -	254,374	1,437,439	36,075,911	51,095	179,495	-	6,337,510	44,315,024
Depreciation for the period	-	16,678	84,173	826,833	2,217	13,990	-	-	943,891
Impairment loss	-	-	-	-	-	-	-	639,154	639,154
Disposal	-	(3,153)	-	(440,356)	(832)	(554)	-	(160,354)	(605,249)
Reclassification	-	-	(121)	(1,519)	-	-	-	-	(1,640)
Balance as of December 31, 2024	$ -	247,899	1,521,491	36,468,869	52,480	192,931	-	6,816,310	45,291,980
Carrying amounts:
Balance as of December 31, 2025	$ 6,108,732	368,455	2,467,612	11,585,417	6,968	69,354	2,518,830	(7,824,631)	16,084,737
Balance as of January 1, 2024	$ 6,158,333	185,118	2,073,170	12,168,475	10,292	68,586	3,458,606	(6,337,510)	17,769,070
Balance as of December 31, 2024	$ 6,158,333	167,535	2,395,714	11,721,683	8,075	75,119	3,351,788	(6,816,310)	17,061,857

Note: Including discontinued operations.

(i) Impairment

The Company's main products, caprolactam and nylon, were affected by the imbalance of industrial supply and demand in the domestic market, the failure to improve and reduce the production cost of the manufacturing process, and the market competitors' continued expansion of production capacity. In the years 2025 and 2024, the Company adjusted its production and marketing strategy. The carrying amount of the relevant production lines at the Toufen plant was assessed to be higher than the recoverable amount, resulting in impairment losses of $215,121 thousand and $383,603 thousand. Furthermore, the conversion rate at our pilot plant after startup was not as expected, resulting in high production costs. The order booking situation at the Qiaotou plant was also not as expected. Therefore, the Company assessed that the related production line equipment is no longer cost effective, resulting in an impairment loss of $255,551 thousand recognized on December 31, 2024. The impairment loss is recognized under "Non-operating income and expenses" in the comprehensive income statement.

For the years ended December 31, 2025 and 2024, the estimated value in use was calculated using pre-tax discount rates of 8.73% and 7.91%. Use the higher amount between the value in use and the net fair value calculated by fair value less costs of disposal as the recoverable amount. The inputs used in the fair value measurement technique are classified as Level 3, and the market approach is adopted for the valuation.

(ii) Collateral

Please refer to note 8 for details of the property, plant and equipment of the Company pledged as collateral as of December 31, 2025 and 2024.

(iii) Property, plant and equipment under construction

For the years ended December 31, 2025 and 2024, the capitalized interests related to the property, plant and equipment under construction were $48,350 thousand and $38,027 thousand, respectively, which were calculated based on the capitalized interest rates ranging from 2.6458%~2.6500% and 2.4337%~2.6418%, respectively.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(i) Right-of-use assets

The Company leases assets including land, buildings, machinery and equipment and vehicles. Information about leases for which the Company as a lessee was presented below:

	Land	Buildings	Machinery and equipment	Vehicles	Other facilities	Total
Cost:
Balance as of January 1, 2025	$ 251,122	57,070	193,972	22,657	2,675	527,496
Additions	-	-	3,949	1,097	-	5,046
Disposal	-	(11,135)	(2,844)	(4,611)	-	(18,590)
Reclassification	-	(2,400)	(10,469)	-	-	(12,869)
Balance as of December 31, 2025	$ 251,122	43,535	184,608	19,143	2,675	501,083
Balance as of January 1, 2024	$ 106,693	45,935	161,532	10,895	-	325,055
Additions	144,429	11,135	-	18,690	-	174,254
Disposal	-	-	-	(6,928)	-	(6,928)
Reclassification	-	-	32,440	-	2,675	35,115
Balance as of December 31, 2024	$ 251,122	57,070	193,972	22,657	2,675	527,496
Accumulated depreciation and impairment losses:
Balance as of January 1, 2025	$ 29,390	15,572	13,134	7,803	127	66,026
Depreciation for the period	12,448	6,992	10,232	6,591	127	36,390
Disposal	-	(11,135)	(2,843)	(4,290)	-	(18,268)
Others	-	-	-	168	-	168
Balance as of December 31, 2025	$ 41,838	11,429	20,523	10,272	254	84,316
Balance as of January 1, 2024	$ 20,104	8,351	3,444	9,263	-	41,162
Depreciation for the period	9,286	7,221	9,690	5,468	127	31,792
Disposal	-	-	-	(6,928)	-	(6,928)
Balance as of December 31, 2024	$ 29,390	15,572	13,134	7,803	127	66,026
Carrying amounts:
Balance as of December 31, 2025	$ 209,284	32,106	164,085	8,871	2,421	416,767
Balance as of December 31, 2024	$ 221,732	41,498	180,838	14,854	2,548	461,470
Balance as of January 1, 2024	$ 86,589	37,584	158,088	1,632	-	283,893

(j) Investment property

The movement of investment property was as followed:

	Land	Buildings	Total
Cost or deemed cost:
Balance as of January 1, 2025	$ 37,917,458	12,051	37,929,509
Disposal	(147,285)	-	(147,285)
Change in fair value	152,424	-	152,424
Balance as of December 31, 2025	$ 37,922,597	12,051	37,934,648

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

	Land	Buildings	Total
Balance as of January 1, 2024	$ 41,768,328	12,051	41,780,379
Reclassification	9,423	-	9,423
Reclassification to non-current assets as held for sale	(6,441,768)	-	(6,441,768)
Change in fair value	2,581,475	-	2,581,475
Balance as of December 31, 2024	$ 37,917,458	12,051	37,929,509

On November 2, 2023, the Company sold the land located at No.1, Jingmao 5 Sec., Qianzhen District, Kaohsiung City at a public reserve price of $1,546,980 thousand by open tendering. Accordingly, the investment real estate-land was reclassified to non-current assets as held for sale. The Company completed the ownership transfer registration and received the full payment in February 2024, resulting in a disposal gain of $17,700 thousand.

On March 26, 2024, the Company sold the land located at No.1-1, Jingmao 5 Sec., Qianzhen District, Kaohsiung City at a public reserve price of $2,007,790 thousand by open tendering. Accordingly, the investment property-land was reclassified to non-current assets as held for sale. The Company completed the ownership transfer registration and received the full payment in June 2024, resulting in a disposal gain of $272,763 thousand.

On August 22, 2024, the Company sold the land located at No.16 and 17, Huimin Sec., Nanzi District, Kaohsiung City, for $2,846,860 thousand, at a public reserve price, resulting in its investment property-land were reclassified to non-current assets as held-for-sale. The Company completed the ownership transfer registration and received the full payment in December 2024, resulting in a disposal gain of $1,706,648 thousand.

On August 22, 2024, the Company sold the land located at No. 2-1 and 2, Jingmao 5 Sec., Qianzhen District, Kaohsiung City, for $2,065,990 thousand and $1,883,660 thousand, respectively, at a public reserve price, resulting in its investment property-land were reclassified to non-current assets as held for sale. The Company completed the ownership transfer registration and received the full payment in January 2025, resulting in a disposal gain of $350,586 thousand.

On September 26, 2025, the Company sold the land located at No. 926, Shuangxi Section, Toufen City, Miaoli County, through a public bidding process, for a transaction price of $180,210 thousand. The Company completed the ownership transfer registration and received the full payment in August 2025, resulting in a disposal gain of $29,493 thousand.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iv) Evaluation by income approach

The Company's following investment properties were subsequently measured at fair value using the income approach after initial recognition, and has been categorized as a Level 3 fair value based on the inputs to the valuation techniques used. The relevant contract information and key assumptions used in the method were as follows:

December 31, 2025

Subject	Qianjin Dist., Kaohsiung City	Qianzhen Dist., Kaohsiung City
Contract terms	None	None
Rental at local market rate (per py per month)	$850~$1,000/py	$450~$660/py
Current market rent for comparable properties in similar locations and condition (per py per month)	$850~$955/py	None
Current status	Unused	Leased (Note)
Income generated	$0	$450/py
Capitalization rate	4.185%	None
Discount rate	4.970%	4.519%
Appraised by external independent appraiser or self-appraisal	External independent appraiser	External independent appraiser
Appraiser offices	Colliers International Taiwan	CCIS Real Estate Joint Appraisers Firm
Appraiser names	Feng-Ru, Ke	Chih-Hao, Wu
Appraisal date	December 31, 2025	December 31, 2025
Fair value by external independent appraisers	$ 18,560	$ 5,807,361

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

December 31, 2024

Subject	Qianjin Dist., Kaohsiung City	Qianzhen Dist., Kaohsiung City
Contract terms	None	None
Rental at local market rate (per py per month)	$850~$1,000/py	$450~$660/py
Current market rent for comparable properties in similar locations and condition (per py per month)	$878~$924/py	None
Current status	Unused	Leased (Note)
Income generated	$0	$450
Capitalization rate	4.175%	None
Discount rate	4.595%	4.845%
Appraised by external independent appraiser or self-appraisal	External independent appraiser	External independent appraiser
Appraiser offices	Colliers International Taiwan	Colliers International Taiwan
Appraiser names	Feng-Ru, Ke	Feng-Ru, Ke
Appraisal date	December 31, 2024	December 31, 2024
Fair value by external independent appraisers	$ 19,640	5,583,000

Note: On December 27, 2023, the Board of Directors approved the lease of land No. 4-3 and 4-4, Qianzhen District, Kaohsiung City, and the lease contract was signed on January 3, 2024.

In accordance with Article 34 of the Regulations on Real Estate Appraisal, the procedures of the income approach include estimating the effective gross income and total expenses, computing the net operating income, determining the capitalization rate or discount rate, and computing the income. The attributes used by the Company for the estimations above were data from the last three years' data from the subject property and comparable properties which have similar characteristics, and these data were assessed and adjusted based on their persistency, stability, and growth to ensure the availability and reasonableness of these data. The movement of income (cash inflows) and expenditure (cash outflows) for future periods was based on the vacancies or losses, existing or future cash flow plans of the Company, and historical cash flows from the subject property, identical properties, or properties in the same industry. The estimation and computation of the net income were based on the highest and best use of the subject property and have taken into consideration the income generated from comparable properties in the same location based on their highest and best use.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

External appraisers use the risk premium method to decide on the direct capitalization rate and discount rate. The fixed deposit interest rate, government bonds rate, real estate investment risk, money supply-demand variation, the trend of real estate value and etc. are taken into consideration to decide the likely rate of return on the most common investment as a basis in order to derive the capitalization rate or discount rate. The differences in individual characteristics between the above most common investment and the subject property are compared in terms of their liquidity, risk, appreciation, and management.

(v) Evaluation through land development analysis

The Company classified its undeveloped land as investment property. The Company adopted the development land analysis approach to measure the fair value of the undeveloped land in accordance with Article 9 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and has been categorized as a Level 3 fair value based on the inputs to the valuation techniques used. The relevant information is summarized as follows:

December 31, 2025

Subject	Annan Dist., Tainan City	Qianzhen Dist., Kaohsiung City	Others
Estimated revenue	19,218,528	136,559,373 (Note1)	281,182
Gross profit margin	17%	15%–16%	18%
Rate of return	2.270%	4.940%–6.240%	2.75%
Appraiser offices	CCIS Real Estate Joint Appraisers Firm	Colliers International Taiwan and CCIS Real Estate Joint Appraisers Firm	Hon Bun Real Estate Appraisers Firm and Colliers International Taiwan
Appraiser names	Chih-Hao, Wu	Feng-Ru, Ke, Jian-Hui, Gu and Chih-Hao, Wu	Jian-Hui, Gu, You-Xuan, Chai and Ching-Tang, Li
Appraisal date	December 31, 2025	December 31, 2025	December 31, 2025
Fair value by external independent appraisers	$ 5,856,225	25,876,626	375,876

December 31, 2024

Subject	Annan Dist., Tainan City	Qianzhen Dist., Kaohsiung City	Others
Estimated revenue	14,675,375	132,949,815 (Note1)	821,751
Gross profit margin	17%	15%–16%	18%
Rate of return	2.250%	5.910%–6.210%	2.74%
Appraiser offices	CCIS Real Estate Joint Appraisers Firm	Colliers International Taiwan	Hon Bun Real Estate Appraisers Firm and Colliers International Taiwan
Appraiser names	Chih-Hao, Wu	Feng-Ru, Ke, Jian-Hui, Gu and You-Xuan, Chai	Jian-Hui, Gu, You-Xuan, Chai and Ching-Tang, Li
Appraisal date	December 31, 2024	December 31, 2024	December 31, 2024
Fair value by external independent appraisers	$ 5,818,704	29,608,000 (Note 2)	514,500

Note1: Some of the estimated revenue, as a whole, is determined based on the basic unit.

Note2: Including non-current assets classified as held for sale (or disposal groups) as of August 2024, amount to $3,567,998 thousand, and the unrealized valuation gain of $46,337 thousand, due to the classification as held for sale (or disposal group).

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

The Company’s plan for the development land includes determining the scope of land development, estimating the duration of development, surveying and analyzing costs, obtaining current market prices, conducting on-site surveys, and investigating and analyzing the degree of development in the local environment. There was no significant fluctuation revealed by the assessment of macroeconomic factors, i.e., market indexes, population, employment rate, market prices and rates, market equilibrium, and other relevant market factors; hence, these data were used for estimating the total selling price after development or construction, and this expected selling price was used to derive the price before development and construction.

Investment property included several rentals of real property to others. Each lease contract includes the original non-cancellable lease and the subsequent lease is negotiated with the lessee without collection of contingent rentals. Please refer to note 6(q) for the relevant information including rent revenue and the direct operating expenses incurred.

Please refer to note 8 for details of the investment property of the Company pledged as collateral as of December 31, 2025 and 2024.

In the era of pre-Taiwan Alkali Industrial Corporation (TAIC), TAIC had leased the lands located in Tainan and Chiayi area to the local peasants and fishermen, and the surviving tenants shall continue paying the rent to the Company according to the agreements. In the event of the resumption for self-business use or the sale of the lands, the leases shall be terminated under the contractual agreements and Land Laws. If there is any redemption in some cases, the Company will recognize and evaluate the possible expenses and costs case by case.

Anshun Land Located in Tainan City Annan District:

The Company had estimated the remediation expense according to the remediation plan. Please refer to note 6(p) for relevant remediation expenses and provisions.

(i) History:

1) In April 1983, MOEA ordered China Petrochemical Development Corp., the state-owned Company, the subsidiary of Chinese Petroleum Corporation (CPC) at the time, to merge with TAIC. The Company took charge of Anshun land of TAIC.

2) Tainan City Government (“TCG”) and other government authorities cited Article 75 of Taiwan’s Company Law that since the Company merged with TAIC, and was regarded as the surviving company, the Company should take all responsibilities for the rights and obligations of TAIC, along with the treatment projects and remediation plan.

3) TCG issued letters No. 09722000130 and No. 09722003360 in January and February 2008 respectively, and requested the Company to propose a remediation plan for the soil and groundwater pollution of the Anshun plant in accordance with the SGPR Act.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) Extension litigation:

a) TCG issued Letter No. 1080412260 requesting the Company to pay the amount of $59,624 thousand, of which, the Supreme Administrative Court ruled that the amount of $9,356 thousand is not payable; hence, the Company is only liable to pay the amount of $16,859 thousand, with the remaining amount of $32,955 thousand to be remanded to the Taiwan High Court for retrial, who ruled that the Company is not liable for the amount of $8,345 thousand and should only pay the amount of $24,610 thousand. However, the Company disagreed with the court's decision, and therefore, has filed an appeal to the Supreme Court, wherein the case was still in progress as of the reporting date.

b) TCG issued Letter No. 1090092471 requesting the Company to pay the amount of $32,718 thousand; of which, the Taiwan High Court ruled that the Company is not liable for the amount of $8,804 thousand. Of the remaining $23,422 thousand under dispute, the Company has been ordered to only pay for the amount of $17,981 thousand, excluding the portion of $5,441 thousand. TCG disagreed with the decision made by the Taiwan High Court, thus, proceeded to file an appeal to the Supreme Court, wherein the case was still in progress as of the reporting date.

c) TCG issued Letter No. 1110077064 requesting the Company to pay the amount of $30,748 thousand in disbursement, which was later adjusted to $19,431 thousand. However, the Company disagreed with the court's ruling and filed an administrative litigation to the Taiwan High Court, who ruled that the Company need not pay the amount of $6,356 thousand and only liable for the amount of $13,076 thousand. The Company was dissatisfied with the High Court's decision, and therefore, filed an appeal to the Supreme Court, wherein the case was still in progress as of the reporting date.

d) TCG issued Letter No. 1140001024 requiring the Company to pay the disbursement of $19,279 thousand. However, the Company refused to pay the said amount and filed an administrative appeal. In turn, TCG has denied the Company’s appeal, prompting the Company to initiate an administrative litigation to seek legal remedy, wherein the case was still in progress as of the reporting date.

(iii) Others:

The cumulative fee of invested and estimated control & management cost, and remediation fee were $6,928,326 thousand until December 31, 2025. The preceding remediation fee was estimated according to the current possible situations by the Company. However, unpredictable future events may cause large fluctuations in the total expected remediation fees. This will be closely monitored and evaluated by management.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

1) Anshun dormitory designated monuments case

Original Kagakude Negai O Ka Corporation’s dormitories of Tainan plant belonging to the Company was designated by the TCG, under the letter No. 1031053448B issued on November 17, 2014, as a municipal historic site. However, the administrative sanction has various areas of dispute, thus the Company was not satisfied with the judgment. Hence, the Company filed an administrative appeal for remedy in December 2014. The administrative appeal decision from the Ministry of Culture revoked the designated land of the Company as a historical site including 4 areas in August 2015. The Company appealed for the administrative remedy of the remaining areas, which was under hearing by the Supreme Court. In July 2020, the Supreme Administrative Court reversed the original judgement and remanded the case to KHAC for a new trial. KHAC revoked the original disposition and dismissed parts of the administrative appeal decision in June 2023. TCG filed an appeal, and currently this case is on trial in the Supreme Administrative Court.

2) Shulin Land of TAIC:

The Company estimated the remediation expense according to the control plan, and please refer to note 6(p) for relevant remediation expenses and provisions.

(k) Short-term loans

The short-term loans were summarized as follows:

	December 31, 2025	December 31, 2024
Unsecured bank loans	$ 550,000	1,000,000
Secured bank loans	3,950,000	1,550,000
Total	$ 4,500,000	2,550,000
Total short-term credit lines	$ 8,966,889	10,264,558
Range of interest rates	1.9535%–2.7500%	1.8782%–2.3900%

Please refer to note 8 for details of the related assets pledged as collateral.

(l) Long-term loans

The long-term loans were summarized as follows:

	December 31, 2025	December 31, 2024
Secured bank loans	$ 15,425,885	14,871,414
Less: current portion	(8,420,429)	(4,630,529)
Total	$ 7,005,456	10,240,885
Total long-term credit lines	$ 15,425,885	17,373,900
Range of interest rates	2.15%–3.7%	2.15%–2.9855%

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Secured bank loans from Mega International Commercial Bank

(i) Conditions of loan agreement

During the period covered in the financial statements, the material conditions of the loan agreements of the Company were summarized as follows:

1) The Company is required to maintain the following certain financial ratios and other matters based on the reviewed semi-annual consolidated financial statements and audited annual financial statements during the loan period.

a) Current ratio: not lower than 100%.

b) Debt-to-equity ratio (total liabilities divided by net worth): not higher than 150%.

c) Interest coverage ratio (income before tax plus depreciation expense, amortization expense, interest expenses and losses from pollution or litigation divided by interest expenses): not lower than 200%.

2) In the event that there is any non-compliance with the interest coverage ratio agreement for each fiscal year, the borrower may provide deposits and set up the first priority to pledge the maximum amount to the managing bank in the manner agreed by the managing bank, or deposit such deposits into the reserve account designated by the managing bank to make up the difference. In the event that there is any non-compliance with the financial ratios and limitations set forth in any paragraph of this agreement for each fiscal year, the period from the date of the announcement of the consolidated financial statements of such non-compliance to the date of the announcement of the next period of the consolidated financial statements shall be the period of improvement, and if the borrower completes the improvements within the period of improvement, the borrower shall not be deemed to be in breach of the financial commitments. If the improvement is not completed by the deadline, it may be subject to a breach of contract under this agreement. If the breach of contract occurs, the managing bank has the right to take actions in accordance with the contract directly or in accordance with the resolution of the majority of the credit syndicate.

The financial covenants under the loan agreement require the interest coverage ratio to be maintained twice the amount or above. In the second quarter of 2025, the Company did not meet the above financial ratio covenant; however, the Company still failed to remedy the breach by the end of 2025 within the required timeframe, and the banks may treat this as an event of default in accordance with the agreement.

Secured bank loans from CTBC Bank

(i) The financial covenants under the loan agreement include the requirement to maintain the following financial ratios based on the reviewed semi-annual consolidated financial statements and audited annual consolidated financial statements. In the event of any violation and if improvements are not made within the specified period, the CTBC Bank is entitled to reduce credit line, shorten the loan period, and have all principals and interests repaid immediately.

1) Current ratio: not lower than 120%.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

2) Debt-to-equity ratio (total liabilities divided by net worth): not higher than 100%.
3) Interest coverage ratio (income before tax plus depreciation expense, amortization expense and interest expenses divided by interest expenses): not lower than 200%.
4) Tangible net worth (total equity excluding intangible assets): not lower than $72 billion thousand.

Secured bank loans from Taiwan Life Insurance Co., Ltd.

The total credit line, which was mutually shared and endorsed by the Company and Core Pacific Dev. Corp.

Please refer to note 8 for details of the related assets pledged as collateral.

(m) Bonds payable

(i) The details of bonds payable were as follows:

	December 31, 2025	December 31, 2024
Secured non-convertible bonds	$ -	3,500,000
Less: current portion	-	(3,500,000)
Total	$ -	-
Maturity year	-	114

(ii) The Company issued domestic secured non-convertible bonds at the amount of $3,500,000 thousand in 2020, the terms were as follows:

	The first domestic secured non-convertible bond in 2020
	Bond A	Bond B	Bond C
Issue amount	$ 1,500,000	1,000,000	1,000,000
Issue date	2020.9.21	2020.9.21	2020.9.21
Issue period	5 years	5 years	5 years
Coupon rate	0.64 %	0.64 %	0.64 %
Interest payment date	September 21	September 21	September 21
Repayment and interest payment	Repayment on maturity, interest payment annually	Repayment on maturity, interest payment annually	Repayment on maturity, interest payment annually

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(n) Long-term bills payable

The components of long-term bills payable were as follows:

	December 31, 2025
	Acceptance institution	Period	Amount
Bills payable	Taching Bills Finance Corporation	2025.10.09~2026.01.06	$ 370,000
〃	International Bills Finance Corporation	2025.12.19~2026.03.18	750,000
〃	Mega Bills Finance Corporation	2025.11.27~2026.02.26	4,530,000
〃	China Bills Finance Corporation	2025.12.24~2026.03.30	2,300,000
			7,950,000
Less: Discount on long-term bills payable			(21,689)
Total			$ 7,928,311
	December 31, 2024
---	---	---	---
	Acceptance institution	Period	Amount
Bills payable	International Bills Finance Corporation	2024.11.06~2025.02.13	$ 350,000
〃	Taching Bills Finance Corporation	2024.10.15~2025.01.13	620,000
〃	China Bills Finance Corporation	2024.12.04~2025.01.17	2,000,000
〃	Mega Bills Finance Corporation	2024.11.13~2025.02.27	4,550,000
			7,520,000
Less: Discount on long-term bills payable			(9,323)
Total			$ 7,510,677

The Company had revolving commercial promissory note agreements with bills finance companies in order to finance its operating requirement. As of December 31, 2025 and 2024, the bills payable bear interest rates ranging from 1.53%~2.15%, respectively.

On August 15, 2025, the Accounting Research and Development Foundation issued a Q&A , clarified that, as the revolving commercial paper issued by the entity does not have the right, at the end of the reporting period, to defer settlement of the liability for at least twelve months after the reporting period, such liabilities shall be classified as current liabilities. In response, the FSC issued transitional provisions stating that, entities with revolving commercial paper issued on or after January 1, 2026 shall apply the classification guidance in the Q&A, while those issued on or before December 31, 2025 need not comply. Accordingly, the commercial paper issued by the Company in 2025 is classified as a non-current liability. For revolving issuances made on or after January 1, 2026, classification will be adjusted and reported as current liabilities in accordance with the above-mentioned guidance.

Please refer to note 8 for details of the related assets pledged as collateral.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(o) Lease liabilities

The lease liabilities of the Company were as follows:

	December 31, 2025	December 31, 2024
Current	$ 21,245	25,422
Non-current	$ 210,067	226,200

For the maturity analysis, please refer to note 6(y).

The amounts recognized in profit or loss were as follows:

	For the years ended December 31,
	2025	2024
Interest on lease liabilities	$ 4,325	3,338
Expenses relating to short-term leases	$ 16,977	28,498

The amounts recognized in the statement of cash flows for the Company were as follows:

	For the years ended December 31,
	2025	2024
Total cash outflow for leases	$ 46,360	53,524

(p) Provisions

	Site dismantling	Site restoration	Employee benefits	Carbon Fee	Total
Balance as of January 1, 2025	$ 1,690,578	1,578,956	53,627	-	3,323,161
Provisions made during the year	-	-	37,059	13,307	50,366
Provisions used during the year	-	(572,788)	(26,475)	-	(599,263)
Balance as of December 31, 2025	$ 1,690,578	1,006,168	64,211	13,307	2,774,264
Current	$ -	502,718	4,984	13,307	521,009
Non-current	1,690,578	503,450	59,227	-	2,253,255
	$ 1,690,578	1,006,168	64,211	13,307	2,774,264
Balance as of January 1, 2024	$ 1,709,218	835,030	233,730	-	2,777,978
Provisions made during the year	-	1,368,500	4,294	-	1,372,794
Provisions used during the year	(18,640)	(624,574)	(184,397)	-	(827,611)
Balance as of December 31, 2024	$ 1,690,578	1,578,956	53,627	-	3,323,161
Current	$ -	819,260	4,984	-	824,244
Non-current	1,690,578	759,696	48,643	-	2,498,917
	$ 1,690,578	1,578,956	53,627	-	3,323,161

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(i) Anshun Land Located in Tainan City Annan District:

On July 9, 2024, TCG approved the fourth remediation plan for the Anshun Plant, with the related remediation work to be completed by the specified improvement deadline on June 30, 2026. The Company additionally budgeted the amount of $1,003,000 thousand for the remediation plan in the fiscal year 2024.

(ii) Shulin Land of TAIC:

1) No. 540 and three other parcels of land located in Dongshan Section, Shulin District, New Taipei City, Taiwan, were originally owned by the Shulin Plant of TAIC. In April 1983, pursuant to an order issued by MOEA, the Company merged with TAIC, and thereby assumed ownership of the aforementioned land. The land was subsequently transferred to CPC. On August 16, 2010, the Environmental Protection Bureau of the New Taipei City Government designated the land as a “soil pollution control site.” In March 2011, the Bureau issued Letter No. 1000010000, declaring that the Company, as the surviving entity in the merger with TAIC, was deemed the responsible polluter. In accordance with applicable regulations, the Company postponed the initial phase of the soil pollution control plan for a portion of the Shulin land formerly owned by TAIC. This plan was registered with, and approved by, the Environmental Protection Bureau of the New Taipei City Government on May 16, 2014. Pursuant to the approved plan, the Company allocated a control budget of $273,750 thousand.

2) From 2017 to 2021, in response to the three changes in the designated storage site and relocation requirements of CPC, the Company submitted three corresponding amendments to the soil pollution control plan. Each amendment was subsequently registered with, and approved by, the Environmental Protection Bureau of the New Taipei City Government in accordance with applicable regulations.

3) In consideration of the maturity of the remediation methodology and its potential environmental impact, the Company submitted the fourth amendment to the soil pollution control plan to the Environmental Protection Bureau of the New Taipei City Government. Pursuant to the approval of the 4th phase of the soil pollution control plan for the Shulin Land of the former TAIC, the Company allocated an additional budget of $365,500 thousand in December 2024 to implement the relevant remediation measures. The budget will be further adjusted based on the actual progress and execution status of the remediation work. On March 31, 2025, the transfer of the title deed to CPDC Corp. had been completed, and the Company commenced its on-site control operations on April 1, 2025, with phase-by-phase excavation, backfilling, and thermal desorption system installation commencing in September of the same year.

(q) Operating lease

The Company leases out its property and has classified these leases as operating leases, because it does not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Please refer to note 6(j) that sets out information about the operating leases of investment property.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

	December 31, 2025	December 31, 2024
Less than one year	$ 62,287	61,822
One to two years	61,338	59,755
Two to three years	57,006	56,435
Three to four years	53,959	56,435
Four to five years	55,046	56,497
More than five years	249,279	335,674
Total undiscounted lease payments	$ 538,915	626,618

For the years ended December 31, 2025 and 2024, the income from the rental of investment property, property, plant and equipment amounted to $70,852 thousand and $67,172 thousand, respectively.

(r) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value were as follows:

	December 31, 2025	December 31, 2024
Present value of the defined benefit obligation	$ 356,889	368,584
Fair value of plan assets	(297,662)	(319,941)
Net defined benefit liabilities	$ 59,227	48,643

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company's Bank of Taiwan labor pension reserve account balance amounted to $293,647 thousand as of December 31, 2025. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

2) Movements in present value of the defined benefit obligations

The movement in present value of the defined benefit obligations for the Company were as follows:

	For the years ended December 31,
	2025	2024
Defined benefit obligation, January 1	$ 368,585	393,375
Current service costs and interest costs	12,044	11,789
Remeasurements loss (gain):
—Actuarial loss (gain) due to experience adjustments	37,410	7,732
—Actuarial loss (gain) arising from financial assumptions	8,279	4,324
Benefits paid	(69,429)	(48,635)
Defined benefit obligation, December 31	$ 356,889	368,585

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

	For the years ended December 31,
	2025	2024
Fair value of plan assets, January 1	$ 319,941	164,629
Interest income	6,379	2,667
Remeasurements loss (gain):
—Actuarial gain due to experience adjustments	19,063	17,600
Contributions paid by the employer	10,958	183,680
Benefits paid	(58,679)	(48,635)
Fair value of plan assets, December 31	$ 297,662	319,941

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

	For the years ended December 31,
	2025	2024
Current service cost	$ 4,744	5,454
Net interest of net liabilities for defined benefit obligations	921	3,668
	$ 5,665	9,122
Operating costs	$ 5,060	8,055
Selling expenses	-	34
Administrative expenses	588	859
Research and development expenses	17	174
	$ 5,665	9,122

5) Remeasurement of net defined benefit liability (asset) recognized in other comprehensive income

The Company’s remeasurement of the net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2025 and 2024, was as follows:

	For the years ended December 31,
	2025	2024
Accumulated balance, January 1	$ (181,529)	(187,073)
Recognized during this year	(26,626)	5,544
Accumulated balance, December 31	$ (208,155)	(181,529)

6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

	For the years ended December 31,
	2025	2024
Discount rate	1.750%	2.000%
Future salary increases rate	2.000%	2.000%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $4,566 thousand.

The weighted average lifetime of the defined benefits plans is 11.17 years.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

7) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

	Impact on the defined benefit obligations
	Increased 0.25%	Decreased 0.25%
December 31, 2025
Discount rate	$ (8,279)	8,535
Future salary increasing rate	8,297	(8,090)
December 31, 2024
Discount rate	(9,252)	9,558
Future salary increasing rate	9,348	(9,096)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis on the same basis for prior.

(ii) Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The cost of the pension contributions to the Labor Insurance Bureau for the years ended December 31, 2025 and 2024 amounted to $39,024 thousand and $41,503 thousand, respectively.

(iii) The pension recognized consists of pension expenses and pensions for professional management. The pension expenses for professional management were $4,768 thousand and $717 thousand for the years ended December 31, 2025 and 2024, respectively.

(iv) Short-term compensated absences liabilities

As of December 31, 2025 and 2024, the Company’s short-term compensated absences liabilities were both $4,984 thousand.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(s) Income tax

(i) Income tax expense

The components of income tax expense (benefit) for the years ended December 31, 2025 and 2024 were as follows:

	For the years ended December 31,
	2025	2024
Current income tax expense (benefit)
Current period	$ 2,642	(508,463)
	2,642	(508,463)
Deferred tax expense
Change in land value-added tax	244,863	131,927
Change in unrecognized deductible temporary differences	(2,642)	508,463
	242,221	640,390
Income tax expense	$ 244,863	131,927

For the years ended December 31, 2025 and 2024, income tax expenses recognized under other comprehensive income were both $0 thousand.

Reconciliation of income tax (benefit) and profit before tax for the years ended December 31, 2025 and 2024, were as follows:

	For the years ended December 31,
	2025	2024
Profit (loss) before income tax	$ (2,721,512)	379,602
Income tax using the Company’s domestic tax rate	$ (544,302)	75,920
Non-deductible expenses	1,143	2,209
Tax-exempt income	(191,747)	(400,655)
Current-year losses for which no deferred tax asset was recognized	739,693	430,376
Change in unrecognized temporary differences	(742,334)	78,087
Changes of permanent differences	69,987	(315,366)
Change in land value-added tax	244,863	131,927
Non-deductible current-year tax losses	92,828	87,795
Others	574,732	41,634
Income tax expense	$ 244,863	131,927

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) Deferred tax assets and liabilities

1) Deferred tax assets have not been recognized in respect of the following items:

	December 31, 2025	December 31, 2024
Decommissioning liabilities	$ 176,881	151,283
Remediation project	597,704	601,669
Pollution remediation	408,464	977,287
Allowance for doubtful receivables	224,578	224,578
Investment property, property, plant and equipment	2,429,287	2,731,053
Tax loss	9,734,714	8,988,543
Write-down of inventories	158,345	82,763
Others	102,289	88,293
	$ 13,832,262	13,845,469

The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilize the benefits therefrom.

As of December 31, 2025, the expiration years of tax loss unrecognized as deferred tax assets were as follows:

The Company

Year of loss	Unused tax loss	Expiry date
2016	$ 1,870,634	2026
2020	561,135	2030
2023	3,068,532	2033
2024	535,949	2034
2025	3,698,464	2035
	$ 9,734,714

2) Deferred tax liabilities:

As of December 31, 2025 and 2024, the balance of deferred income tax liabilities for the provision of land value-added tax was $7,398,756 thousand and $7,208,782 thousand, respectively.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

3) Deferred tax assets:

The deferred tax assets for the years ended December 31, 2025 and 2024 were as follows:

December 31, 2025 (i.e., beginning balance)	Taxable Loss
	$ 11,009
December 31, 2024 (i.e., beginning balance)	$ 11,009

(iii) Assessment of tax

The Company’s tax returns for the years through 2023 were assessed by the Tax Authority.

(iv) Global minimum top-up tax :

In some of the Company’s operating locations, new tax laws implementing the global minimum tax have been enacted and are in effect. The Company is closely monitoring the legislative progress of the global minimum tax in other jurisdictions where it operates. As of December 31, 2025, the assessment indicates that the application of this new tax law has no significant impact on the Company. The Company will recognize the supplementary tax as current income tax when it actually occurs, while the deferred income tax accounting treatment related to the supplementary tax will be subject to temporary mandatory exemption.

(t) Capital and other equity

(i) The issuance of common stock

As of December 31, 2025 and 2024 the authorized, issued and outstanding capital of the Company all amounted to $37,848,502 thousand, divided into 3,784,850 thousand shares, with par value of $10 per share.

Reconciliation of shares outstanding for the years ended December 31, 2025 and 2024 was as follows:

(In thousands of shares)

	Common Stock
	For the years ended December 31,
	2025	2024
Ending Balance (i.e, beginning balance)	3,784,850	3,784,850

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) Capital surplus

The balances of capital surplus were as follows:

	December 31, 2025	December 31, 2024
Premium of common stock	$ 1,408,088	1,408,088
Difference arising from subsidiary’s share price and its carrying value	26,314	26,314
Recognize changes in ownership interests in subsidiaries	127,115	127,115
Changes in equity of associates and joint ventures accounted for using equity method	2,348	2,348
Other	18,141	18,141
Total	$ 1,582,006	1,582,006

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(iii) Retained earnings

As specified in Company’s Articles of Incorporation, if the Company has earnings, after payment of taxation, it shall offset the losses in previous years, and set aside a legal reserve and special reserve 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 the current year, the Board of Directors shall prepare an earnings distribution proposal and submit to the shareholders’ 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.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

Considering the future earnings development, capital needs, industrial competition and the interests of shareholders, the Company transferred the profit of $4,194,973 thousand from the disposal of investment of Xinchang Chemical Industry Co., Ltd. in the year of 2011 as a special reserve in the year of 2012, providing reserves for sustainable development and long-term financial planning. The carrying amount of such special reserve all amounted to $4,194,973 thousand as of December 31, 2025 and 2024.

By adopting the exemptions allowed under IFRS 1 First-time Adoption of International Financial Reporting Standards during the Company’s first-time adoption of the International Financial Reporting Standards approved by the Financial Supervisory Commission (IFRSs), unrealized asset revaluation gains in shareholders’ equity of $5,281,790 thousand was reclassified to retained earnings. The net increase in retained earnings due to the first-time adoption of IFRSs amounted to $4,235,076 thousand. In accordance with Rule issued by the Financial Supervisory Commission, a special reserve is appropriated from the distribution of retained earnings as a result of an increase in retained earnings due to the first-time adoption of IFRSs. When the related assets are used, disposed of, or reclassified, this special reserve is reversed as distributable earnings proportionately. The carrying amount of such special reserve all amounted to $3,820,239 thousand and $3,977,561 thousand as of December 31, 2025 and 2024, respectively.

The Company changed the subsequent measurement of investment properties from cost model to fair value model. In accordance with Rule issued by the Financial Supervisory Commission, on the first-time adoption of fair value model for the subsequent measurement of investment properties, the Company set aside an equal amount of special reserve when the fair value increment of investment properties is transferred to retained earnings. The Company appropriated to the special reserve an amount of $21,224,233 thousand. The carrying amount of such special reserve all amounted to $16,497,351 thousand and $18,170,681 thousand as of December 31, 2025 and 2024.

For every year the Company distributes earnings, a special reserve is appropriated in the following order:

a) Each year, a special reserve is appropriated from current year’s net income and prior years’ undistributed earnings for the same amount as the net increase in the fair value of investment property using the fair value model. A special reserve is also appropriated for the same amount as the cumulated net increase in the fair value for the year when the undistributed earnings are not distributed. When the investment property is disposed of, this special reserve is reverted proportionately to distributable earnings. As of December 31, 2025 and 2024, the Company appropriated to the special reserve all amounted to $9,764,912 thousand and $8,511,202 thousand.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

b) A special reserve is appropriated by the parent company for the difference between market value and book value of parent company shares being held by a subsidiary times the percentage of the parent company’s equity investment in the said subsidiary, if the stock price of the parent company is lower than the its value. If the market value recovers subsequently, this special reserve is reverted proportionately to distributable earnings.

c) A portion of current-period earnings and undistributed prior-period earnings is appropriated as a special reserve during earnings distribution. Such appropriation of special reserve is based on the difference between the total net amount of contra accounts in the shareholders’ equity and the carrying amount of special reserve. Similarly, a portion of undistributed prior period earnings (which does not qualify for earnings distribution) is likewise appropriated as a special reserve on account of cumulative changes to other shareholders’ equity pertaining to prior periods. The subsequent reversals of the contra accounts in the shareholders’ equity shall qualify for additional earnings distributions.

3) Earnings Distribution

The shareholders’ meeting of the Company held on May 15, 2025 and May 30, 2024 approved the appropriation of earnings for 2024 and the offsetting of losses for 2023, respectively.

Information regarding the distribution of the Company’s earnings in the previous years can be found on the Market Observation Post System after the relevant meetings have been held.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iv) Other equity

	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
Balance at January 1, 2025	$ (293,227)	(233,086)
Exchange difference on subsidiaries and associates accounted for using equity method	(284,801)	-
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	-	25,785
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, subsidiaries and associates accounted for using equity method	-	16,925
Disposal of financial assets measured at fair value through other comprehensive income	-	34,095
Associated disposal of financial assets measured at fair value through other comprehensive income	-	(43,293)
Balance at December 31, 2025	$ (578,028)	(199,574)
Balance at January 1, 2024	$ (718,012)	(380,569)
Exchange difference on subsidiaries accounted for using equity method	424,785	-
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	-	227,631
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, subsidiaries and associates accounted for using equity method	-	(80,148)
Balance at December 31, 2024	$ (293,227)	(233,086)

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(u) (Loss) earnings per share

The Company’s (loss) earnings per share were calculated as follows:

	For the years ended December 31,
	2025	2024
Net income (loss) attributable to ordinary shareholders of the Company
Continuing operations	$ (2,915,434)	447,846
Discontinued operations	(50,941)	(200,171)
Total	$ (2,966,375)	247,675
Weighted-average number of outstanding ordinary shares (thousand shares)	$ 3,784,850	3,784,850
Basic (loss) earnings per share (NT dollars)
Continuing operations	$ (0.77)	0.12
Discontinued operations	(0.01)	(0.05)
Total	$ (0.78)	0.07
	For the years ended December 31,
	2025	2024
Net income (loss) attributable to ordinary shareholders of the Company
Continuing operations	$ (2,915,434)	447,846
Discontinued operations	(50,941)	(200,171)
Total	$ (2,966,375)	247,675
Weighted average number of outstanding ordinary shares (thousand shares)	3,784,850	3,784,850
Effect of dilutive potential ordinary shares
Effect of employee share bonus (thousand shares)	576	1,597
Weighted-average number of outstanding ordinary shares (in thousands) (after adjustments of the effect of dilutive potential ordinary shares)	3,785,426	3,786,447
	For the years ended December 31,
	2025	2024
Diluted earnings (loss) per share (NT dollars)
Continuing operations	$ (0.77)	0.12
Discontinued operations	(0.01)	(0.05)
Total	$ (0.78)	0.07

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(v) Revenue from contracts with customers

(i) Disaggregation of revenue

The Company primarily engages in the production of petrochemical products and by-products and the storage, transportation, purchase and sale of these products, related chemicals and their raw materials. For the details of products and sales area, please refer to note 14(b) and (c) of the consolidated financial statements.

(ii) Contract balances

	December 31, 2025	December 31, 2024	January 1, 2024
Notes receivable	$ 37,117	9,455	120,287
Accounts receivable (including related parties)	1,619,300	2,529,385	2,473,328
Less: allowance for impairment	(237,590)	(237,590)	(237,590)
	$ 1,418,827	2,301,250	2,356,025
Contract liabilities	$ 8,951	4,262	82,505

For details on accounts receivable and allowance for impairment, please refer to note 6(d).

The amounts of revenue recognized for the years ended December 31, 2025 and 2024 that were included in the contract liability balance at the beginning of the periods were $4,262 thousand and $82,505 thousand, respectively.

The changes in contract liabilities were primarily due to the timing differences between the satisfaction of performance obligations and customer payments.

(w) Remunerations to employees and directors

On May 15, 2025, the Company resolved at the shareholders' meeting to amend its Articles of Incorporation. According to the amended Company Article of Incorporation, if the Company incurs profit for the year, the profit shall first be used to offset against any accumulated deficits. Thereafter, a maximum of 2% (in cash) of the remaining net profit shall be allocated as directors' remuneration, and 3% (in shares or in cash) as employee remuneration, including 1% to those base-level employees. The distribution should also include those employees of the Company's subsidiaries who meet certain requirements. Prior to the amendment, the Articles of Incorporation stipulated that, if the Company incurs profit for the year, the profit shall first be used to offset against any accumulated deficits. Thereafter, a maximum of 2% (in cash) of the remaining net profit shall be allocated as directors' remuneration, and 3% (in shares or in cash) as employee remuneration, including those employees of the Company's subsidiaries who meet certain requirements.

The Company incurred a loss before tax for the year ended December 31, 2025; therefore, no remunerations to employees and directors were accrued during the periods. Relevant information can be accessed through public information platforms such as the Market Observation Post System.

For the year ended December 31, 2024, the Company's employee remuneration of $11,740 thousand, resolved by the Board of Directors, was consistent with the amount recognized in the financial statements. Relevant information is available on the Market Observation Post System website.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(x) Non-operating income and expense

(i) Interest income

The details of interest income were as follows:

	For the years ended December 31,
	2025	2024
Interest income from bank deposits	$ 48,159	101,608
Other interest income	1,168	31,272
Total	$ 49,327	132,880

(ii) Other income

The details of other income were as follows:

	For the years ended December 31,
	2025	2024
Rent income	$ 32,622	30,371
Dividend income	156,379	140,655
Other income, others	138,496	109,046
Less: Discontinued operations	(888)	(521)
Total	$ 326,609	279,551

(iii) Other gains and losses

The details of other gains and losses were as follows:

	For the years ended December 31,
	2025	2024
Gain on disposals of property, plant, and equipment	$ 413,329	632
Foreign exchange (losses) gains	(205,702)	226,950
Service fee charge	(112,015)	(141,717)
Losses on work stoppages	(17,263)	(19,101)
Gain on valuation of financial asset	6,054	55,588
Remediation expense	-	(1,368,500)
Other gains and losses	(4,791)	(2,628)
Less: Discontinued operations	(2,008)	33
Other gains and losses, net	$ 77,604	(1,248,743)

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iv) Finance costs

The details of finance costs were as follows:

	For the years ended December 31,
	2025	2024
Interest expense	$ (575,374)	(609,536)
Finance costs, net	$ (575,374)	(609,536)

(y) Financial Instruments

(i) Credit risk

1) Exposure to credit risk

As of December 31, 2025 and 2024, the carrying amount of financial assets represents the Company’s maximum credit exposure.

2) The concentration of credit risk

The Company’s "Customer Credit Evaluation Group" has established a credit policy. The Customer Credit Evaluation Group may, based on the two most recent years’ and the most recent period’s certified financial statements or other information necessary for the evaluation of individual customers, refer to the evaluation reports of external credit rating agencies, and take into account the Company’s credit risk, capital position, the domestic and international economic environment, the economic climate, the customers’ industry status, the size and creditworthiness, and the collateral provided by the customers, to assign credit ratings and determine the credit limits of individual customers, and the limits are subject to periodic review. Customers who do not meet the Company’s benchmark credit ratings may only trade with the Company on a prepayment basis.

Due to the Company’s large customer base, the sales of the Company were not significantly concentrated in a small number of customers and the sales of the area are dispersion. There were not significantly concentrated on credit risk of accounts receivable. In order to reduce credit risk, the Company evaluated the financial status regularly which did not usually require customers to provide guarantee.

3) Credit risk of receivables

For credit risk exposure of notes and accounts receivables, please refer to note 6(d).

Other financial assets at amortized cost includes other receivables, time deposits and guarantee deposits paid. All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected credit losses. As of for the years ended December 31, 2025 and 2024, the allowance for impairment both amounted to $0 thousand.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

	Carrying amount	Contractual cash flows	Within 6 months	6-12 months	1-2 years	2-5 years	More than 5 years
December 31, 2025
Non-derivative financial liabilities
Accounts payable	$ 425,953	425,953	425,953	-	-	-	-
Other payables	1,037,631	1,037,631	1,037,631	-	-	-	-
Other current liabilities, other	7,254	7,254	7,254	-	-	-	-
Other non-current liabilities, other	70,077	70,077	37,718	8,008	802	850	22,699
Lease liabilities	231,312	264,364	14,182	11,015	17,508	48,114	173,545
Floating-rate loans (Note)	13,156,890	13,520,583	3,706,109	6,735,196	721,175	2,358,103	-
Fixed-rate loans (Note)	6,768,995	6,910,794	6,191,529	23,582	47,165	141,495	507,023
Long-term bills payable (Note)	7,928,311	7,950,000	-	-	7,950,000	-	-
	$ 29,626,423	30,186,656	11,420,376	6,777,801	8,736,650	2,548,562	703,267
December 31, 2024
Non-derivative financial liabilities
Accounts payable	$ 1,008,031	1,008,031	1,008,031	-	-	-	-
Other payables	1,705,718	1,705,718	1,614,176	53,923	2,258	8,322	27,039
Other current liabilities, other	7,983	7,983	7,983	-	-	-	-
Other non-current liabilities, other	81,407	81,407	49,300	6,689	1,685	1,034	22,699
Lease liabilities	251,622	288,696	14,829	14,392	24,352	47,335	187,788
Floating-rate loans (Note)	13,608,500	14,022,851	3,757,906	3,371,775	6,095,474	797,696	-
Fixed-rate loans (Note)	3,812,914	3,984,726	2,197,944	34,421	1,056,678	141,495	554,188
Long-term bills payable (Note)	7,510,677	7,520,000	-	-	7,520,000	-	-
Bonds payable	3,500,000	3,516,140	-	3,516,140	-	-	-
	$ 31,486,852	32,135,552	8,650,169	6,997,340	14,700,447	995,882	791,714

The Company does not expect that the cash flow of the due date analysis will occur significantly earlier, or the actual amount will be significantly different.

Note: The amount within 6 months includes recyclable long-term loans.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iii) Currency risk

1) Currency risk exposure

The Company’s significant currency risk were those from its exposure to foreign currency risk was as follows:

	December 31, 2025			December 31, 2024
	Foreign Currency	Exchange rate	NTD	Foreign Currency	Exchange rate	NTD
Financial assets
Monetary items
USD	$ 33,984	31.419	1,067,756	63,956	32.794	2,097,383
EUR	323	36.860	11,901	-	34.130	10
CNY	17,310	4.493	77,775	52,276	4.479	234,146
Non-Monetary items
CNY	20,654	4.493	92,797	23,841	4.479	106,786
USD	231,932	31.419	7,287,083	322,802	32.794	10,585,994
VND	3,083,333	0.001	3,700	36,057,692	0.001	46,875
Financial liabilities
Monetary items
USD	$ 3,118	31.419	97,958	6,177	32.794	202,560

2) Sensitivity analysis

The Company’s exposure to foreign currency risk arises from the foreign currency exchange rate fluctuations on cash and cash equivalents, receivables, payables, and loans, which are denominated in foreign currency. A strengthening of 1% of the USD, EUR, VND and CNY against the NTD as on December 31, 2025 and 2024 would have increased the net profit after tax by $8,476 thousand and $17,032 thousand for the years then ended, respectively; other comprehensive income would have increased $73,836 thousand and $108,304 thousand for the years ended December 31, 2025 and 2024, respectively. The analysis is performed on the same basis for both periods.

3) Foreign exchange gains (losses) on monetary items

Due to the Company’s diversity of functional currency, the information on foreign exchange gains or losses on monetary items is disclosed by total amount. For the years ended December 31, 2025 and 2024, foreign exchange gains (losses) (including realized and unrealized portions) amounted to losses of $(205,702) thousand and gains of $226,950 thousand, respectively.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the risk exposure to interest rates on the derivative and non-derivative financial instruments on the reporting date. For financial instruments bearing floating-rate, the sensitivity analysis assumes the floating-rate liabilities are outstanding for the whole year on the reporting date. The Company’s internal management reported the increases/decreases in the interest rates and the exposure to changes in interest rates of 1% is considered by management to be a reasonable change of interest rate.

If the interest rate increases by 1%, the Company’s net profit before tax will decrease by $131,569 thousand and $136,085 thousand for the years ended December 31, 2025 and 2024, respectively, assuming all other variable factors remain constant. This is mainly due to the fact that the Company’s borrowing at variable rates.

(v) Other market price risk

If the equity price changes, and if it is based on the same basis for both years and assumes that all other variables remain the same, the impact to comprehensive income will be as follows:

	For the years ended December 31,
	2025		2024
Prices of securities at the reporting date	Other comprehensive income	Profit after tax	Other comprehensive income	Profit after tax
Increasing 1%	$ 6,854	186	14,491	2,309
Decreasing 1%	$ (6,854)	(186)	(14,491)	(2,309)

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(vi) Fair value information

1) Fair value hierarchy

The carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy, were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	December 31, 2025
	Book value	Fair value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss
Beneficiary certificates	$ 10,430	10,430	-	-	10,430
Stocks unlisted on domestic markets	12,843	-	-	12,843	12,843
Subtotal	23,273	10,430	-	12,843	23,273
Financial assets at fair value through other comprehensive income
Stocks listed on domestic markets	273,412	273,412	-	-	273,412
Stocks unlisted on domestic markets	412,031	-	-	412,031	412,031
Subtotal	685,443	273,412	-	412,031	685,443
Financial assets measured at amortized cost
Cash and cash equivalents	817,281	-	-	-	-
Notes and accounts receivables	1,418,827	-	-	-	-
Other receivables	108,289	-	-	-	-
Other financial assets	848,359	-	-	-	-
Subtotal	3,192,756	-	-	-	-
Total	$ 3,901,472	283,842	-	424,874	708,716
Non-financial assets
Investment property	$ 37,934,648	-	-	37,934,648	37,934,648
Non-current assets held for sale	491,012	-	-	491,012	491,012
Total	$ 38,425,660	-	-	38,425,660	38,425,660
Financial liabilities measured at amortized cost
Short-term loans	$ 4,500,000	-	-	-	-
Accounts and other payable	1,463,584	-	-	-	-
Long-term liabilities, current portion	8,420,429	-	-	-	-
Long-term loans	7,005,456	-	-	-	-
Long-term bills payable	7,928,311	-	-	-	-
Other financial liabilities	77,331	-	-	-	-
Lease liabilities	231,312	-	-	-	-
Total	$ 29,626,423	-	-	-	-

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

	December 31, 2024
	Book value	Fair value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss
Stocks listed on domestic markets	$ 268,309	268,309	-	-	268,309
Stocks unlisted on domestic markets	20,324	-	-	20,324	20,324
Subtotal	288,633	268,309	-	20,324	288,633
Financial assets at fair value through other comprehensive income
Stocks listed on domestic markets	785,757	785,757	-	-	785,757
Stocks unlisted on domestic markets	663,372	-	-	663,372	663,372
Subtotal	1,449,129	785,757	-	663,372	1,449,129
Financial assets measured at amortized cost
Cash and cash equivalents	2,706,374	-	-	-	-
Notes and accounts receivable	2,301,250	-	-	-	-
Other receivables	119,345	-	-	-	-
Other financial assets	141,783	-	-	-	-
Subtotal	5,268,752	-	-	-	-
Total	$ 7,006,514	1,054,066	-	683,696	1,737,762
Non-financial assets
Investment property	$ 37,929,509	-	-	37,929,509	37,929,509
Non-current assets held for sale	3,567,998	-	-	3,567,998	3,567,998
Total	$ 41,497,507	-	-	41,497,507	41,497,507
Financial liabilities measured at amortized cost
Short-term loans	2,550,000	-	-	-	-
Accounts and other payable	2,713,749	-	-	-	-
Long-term liabilities, current portion	8,130,529	-	-	-	-
Long-term loans	10,240,885	-	-	-	-
Long-term bills payable	7,510,677	-	-	-	-
Other financial liabilities	89,390	-	-	-	-
Lease liabilities	251,622	-	-	-	-
Total	$ 31,486,852	-	-	-	-

2) Valuation techniques for financial instruments which is not measured at fair value:

The Company’s valuation techniques and assumptions used for financial instruments not measured at fair value are the discounted cash flows method.

3) Valuation techniques for financial instruments measured at fair value:

The Company determines the input value with reference to the analysis of the financial status and operating results, recent transaction price, related equity instruments are quoted in non-active markets, similar tools offer in the active market and comparable company evaluation multiplier of the investee company and periodically updates the input value and information and any other necessary fair value adjustments to ensure that the evaluation results are reasonable.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

a) Non-derivative financial instruments

Financial instruments, if there is a public market offer, then the public market offer for the fair value, such as listing (cabinet) company stock.

The fair value of the financial instruments held by the Company in the case of a non-active market is as follows:

No public offer debt investment tools: The discounted cash flow model is used to estimate fair value, it is mainly assumed that it is measured by discounting the expected future cash flows of the investee by the rate of return of the monetary time value and the investment risk.

No public offer equity instruments: net asset value method and comparable listed company method are used. The main assumptions are based on the net per share of the investee and the fair value estimated using the market comparable company method, as well as the estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) of the investee and the earnings multiples derived from the market quotations of comparable listed companies. These estimates have been adjusted for the discount impact due to the lack of market liquidity of the equity securities.

b) Derivative financial instruments

Derivative financial instruments are evaluated according to the evaluation model accepted by the market users, such as the discount method and the option pricing model.

4) There have been no transfers from each level for the years ended December 31, 2025 and 2024.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

5) Statements of changes in fair value measurements of financial assets in Level 3

	Non-current assets held for sale	Investment property	Financial assets reported at fair value through profit or loss	Financial assets reported at fair value through other comprehensive income
			Designated at initial recognition	Non-public quoted equity instruments
January 1, 2025	$ 3,567,998	37,929,509	20,324	663,372
Disposal	(3,567,998)	(147,285)	-	(313,500)
Transfer to non-current assets held for sale	491,012	-	-	-
Total gain and losses recognized in profit or loss	-	152,424	(7,481)	-
Total gain and losses recognized in other comprehensive income	-	-	-	62,159
December 31, 2025	$ 491,012	37,934,648	12,843	412,031
	Non-current assets held for sale	Investment property	Financial assets reported at fair value through profit or loss	Financial assets reported at fair value through other comprehensive income
			Designated at initial recognition	Non-public quoted equity instruments
January 1, 2024	$ 1,529,280	41,780,379	24,643	641,250
Acquired in a business combination	-	-	9,344	-
Disposal	(4,403,050)	-	-	-
Reclassification	-	9,423	-	-
Transfer to non-current assets held for sale	6,441,768	(6,441,768)	-	-
Total gain and losses recognized in profit or loss	-	2,581,475	(13,663)	-
Total gain and losses recognized in other comprehensive income	-	-	-	22,122
December 31, 2024	$ 3,567,998	37,929,509	20,324	663,372

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

6) Quantitative information on the measurement of fair value of significant unobservable input values (level 3)

Level 3 refers to the measurement of the fair value of the input parameters are not based on market availability of information, must be based on the assumption that the appropriate estimates and adjustments. If the evaluation model cannot be developed on its own, the fair value of the counterparty is used as the fair value. According to IFRS13, for the fair value of the third level classified at the fair value level, the firm shall provide quantitative information about the significant unobservable input values used for the fair value measure. Businesses do not need to create quantitative information to comply with this disclosure, if quantified unobservable input value is not built when enterprises are measuring fair value (for instance, when a firm uses an unadjusted previous transaction price or a third-party pricing information), e.g. part of the Company's investment in non-active market equity and debt instruments. The fair value of the Company's investment property belongs to the third level, which is determined in accordance with IFRSs, i.e., outsourcing to external appraisers for assessment based on market evidence (please refer to note 6(j)). Due to the impracticability to evaluate the relationship between the unobservable input value and fair value, the quantitative information is not disclosed. The fair value of the aforesaid assets at December 31, 2025 and 2024 was $38,425,660 thousand and $41,497,507 thousand, respectively.

The Company holds investments in equity shares, which is classified as financial assets at fair value through profit or loss, whose fair value belongs to level 3.

Most of fair value assets belonging to level 3 possesses no more than one significant unobservable input value. Only the equity instruments with inactive market may possess multiple unobservable input values which are all independent from and irrelevant to each other.

Quantified information of significant unobservable inputs was as follows:

Item	Valuation technique	Significant unobservable inputs	Inter-relationship between significant unobservable inputs and fair value measurement
Financial assets at fair value through other comprehensive income - equity investments without an active market	• Public company comparable method	• Net Asset Value	• Not applicable
	• Net Asset Value Method	• P/E ratio 9.37~9.8 as multiply on December 31, 2024.	• The higher the P/E ratio, the higher the fair value
		• Lack of market liquidity, discount rate 20% on December 31,2024.	• Lack of market liquidity, the more the discount, the lower the fair value

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Item	Valuation technique	Significant unobservable inputs	Inter-relationship between significant unobservable inputs and fair value measurement
Financial assets at fair value through other comprehensive income	Net asset value method	• Net asset value
• Lack of market liquidity, discount rate 30% on December 31,2025 and 2024.	• Not applicable
• Lack of market liquidity, the more the discount, the lower the fair value
Financial assets at fair value through profit or loss	Net asset value method	• Net asset value	• Not applicable

7) The evaluation process for fair value belonging to level 3

The Company’s fair value evaluation involves observable input value requiring unobservable parameters for significant adjustments or unobservable input value, both of which belong to level 3. The main source of such input value is external appraisers’ reports. The results of the evaluation are then reviewed to assure the consistency with the source of the evaluation and the reasonability.

The evaluation of investment property complies with FSC’s regulations of the evaluation methods and parameters, and is conducted by external appraisers.

8) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The fair value of the financial instruments is reasonable, and the self-built evaluation model is not used for the fair value of the level 3. Therefore, it is not necessary to perform the sensitivity analysis of the possible alternative assumptions.

(z) Financial risk management

(i) Overview

The Company have exposures to the following risks from its financial instruments:

1) Credit Risk
2) Liquidity risk
3) Market risk

The following discusses the Company’s objectives, policies and processes for measuring and managing the risks mentioned above. For more quantitative information about the financial instruments, please refer to other related notes of the financial statements.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) Risk management framework

The Board of Directors has overall responsibility for the oversight of the risk management framework in order to develop and monitor the Company’s risk management policies and to report regularly on its activities.

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through their training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Audit Committee of the Company oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee of the Company is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(iii) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s cash and receivables from customers.

1) Accounts receivable and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company’s customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk, particularly in the current deteriorating economic circumstances.

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer, which represent the maximum open amount without requiring approval from the Risk Management Committee; these limits are reviewed quarterly. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a prepayment basis.

The Company establishes an impairment allowance that represents its estimate of incurred losses in respect of trade receivables. The two components of this impairment allowance are specific loss component that relates to individually significant exposure and collective loss component which the loss was incurred but not identified. The collective component is based on historical payment experience of similar financial assets.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

2) Investments

The credit risk exposure in the bank deposits and other financial instruments are measured and monitored by the Company’s finance department. As the Company deals with the banks and other external parties with good credit standing and financial institutions, corporate organization and government agencies which are graded above investment level, management believes that the Company does not have compliance issues and significant credit risk.

(iv) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company buys and sells derivatives, and also incurs financial liabilities, in order to manage market risk. All such transactions are carried out within the guidelines set by the Risk Management Committee.

1) Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities, primarily the New Taiwan Dollar (NTD). The currencies used in these transactions are denominated in NTD, USD and CNY.

The Company’s currency risk is not hedged as some of the currencies of the Company’s foreign currency receivables and payables are the same, producing a natural hedge effect.

2) Interest rate risk

The Company’s interest rate risk comes from long-term and short-term bank loans. The long-term bonds issued by the Company is fixed-rate loan, so there is no risk caused by the fluctuations of interest rates and fair value interest rate. The long-term and short-term bank loans with floating-rate are exposed to interest rate risk, but most of risk is offset by cash and cash equivalents holding in floating-rate deposits.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

3) Other market price risk

The Company does not enter into any commodity contracts other than to meet the Company’s expected usage and sales requirements; such contracts are not settled on the net basis.

(aa) Capital management

The Company meets its objectives for managing capital is to safeguard the capacity to continue to operate, to continue to provide a return to shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, reduce the capital for redistribution to shareholders, issue new shares, or sell assets to settle any liabilities.

The Company and other entities in the same industry use the debt-to-equity ratio to manage capital. This ratio is determined using is the total net debt and divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt.

The Company’s debt-to-equity ratio at the end of the reporting period as of December 31, 2025 and 2024 were as follows:

	December 31, 2025	December 31, 2024
Total liabilities	$ 39,910,473	44,492,214
Less: cash and cash equivalents	(817,281)	(2,706,374)
Net debt	$ 39,093,192	41,785,840
Total equity	$ 76,264,997	79,494,691
Total liabilities and equity	$ 115,358,189	121,280,531
Debt-to-equity ratio	33.89 %	34.45 %

On December 31, 2025, the decrease of debt-to-equity ratio resulted from a reduction in borrowings, which led to a decrease in net debt.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ab) Investing and financing activities not affecting current cash flow

The Company’s non-cash financing activities for the years ended December 31, 2025 and 2024, involved acquiring night-of-use assets through leasing. For details, please refer to Note6(i).

(i) Reconciliation of liabilities arising from financing activities was as follows:

	Non-cash changes
	January 1, 2025	Cash flows	Foreign exchange movement	Other	December 31, 2025
Short-term loans	$ 2,550,000	1,150,000	-	800,000	4,500,000
Long-term loans	14,871,414	(2,145,529)	-	2,700,000	15,425,885
Long-term bills payable	7,510,677	430,000	-	(12,366)	7,928,311
Bonds payable	3,500,000	-	-	(3,500,000)	-
Lease liabilities	251,622	(29,383)	-	9,073	231,312
Total liabilities from financing activities	$ 28,683,713	(594,912)	-	(3,293)	28,085,508
	Non-cash changes
	January 1, 2024	Cash flows	Foreign exchange movement	Other	December 31, 2024
Short-term loans	$ 3,646,000	(1,096,000)	-	-	2,550,000
Long-term loans	17,715,900	(2,844,486)	-	-	14,871,414
Long-term bills payable	7,712,256	(200,000)	-	(1,579)	7,510,677
Bonds payable	3,500,000	-	-	-	3,500,000
Lease liabilities	99,055	(25,026)	-	177,593	251,622
Total liabilities from financing activities	$ 32,673,211	(4,165,512)	-	176,014	28,683,713

(7) Related-party transactions:

(a) Parent company and ultimate controlling company

The Company is the ultimate parent company.

(b) Names and relationships with related parties

The followings are entities that have had transactions with related party during the periods covered in the financial statements.

Name of related party	Relationship with the Company
CPDC Green Technology Corp. (CPDC GT)	Subsidiary of the Company
Tsou Seen Chemical Industries Corporation (TSCIC)	"
Taivex Therapeutics Corporation (Taivex)	"
Core Pacific Development Corporation (Core Pacific Dev. Corp.)	"
Da-Ying Construction Ltd. (Da Yin)	"
CPDC Investment (BVI) Co Ltd. (CPDC (BVI))	"

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Name of related party	Relationship with the Company
Thanh Phong Construction Investment Co., Ltd. (Thanh Phong)	Subsidiary of the Company
Unichem Development Ltd. (UDL)	"
Weihua (Rudong) Trade Co., Ltd. (Weihua)	"
Weiqiang International Trade (Shanghai) Co., Ltd. (Weiqiang)	"
Changzhou Weicai New Material Science & Technology Co., Ltd. (Weicai) (Note 3)	"
Jiangsu Weiming New Material Co., Ltd. (Weiming)	"
Weiming (Rudong) Construction Co., Ltd. (Weiming Construction)	"
BES Twin Towers (Note 2)	"
Frontier Fortune Investment Pte. Ltd. (Frontier Fortune)	"
Core Pacific Twin Star (Myanmar) Investment Company Ltd. (Core Pacific Twin Star (Myanmar))	"
Core Pacific Twin Star (Vietnam) Investment Co., Ltd. (Core Pacific Twin Star (Vietnam))	"
Core Pacific Pioneer (Myanmar) Company Ltd. (Core Pacific Pioneer (Myanmar))	"
Kaohsiung Monomer Company Limited	Investee as accounted for using equity method
Jean Pacific Development Co., Ltd.	"
Chung Kung Safeguarding & Security Corp. (CKS&S)	"
BES Engineering Corporation	"
Chung Kung Management and Maintenance of Apartments Co., Ltd.	Investee as accounted for using equity method of CKS&S
Chain Yarn Co., Ltd. (Chain Yarn) (Note 1)	The Company is the director of the entity
Linde Taiwan Technologies Limited (Original name: Praxair Chemax Semiconductor Materials Co., Ltd.)	"
Chung Kung Management Consultant Co., Ltd.	Subsidiary of CKS&S
Coreasia Human Resources Management Co., Ltd.	Subsidiary of BES Engineering
Sheen Chuen-Chi Cultural & Educational Foundation	The director is corporate director representative of the Company

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Name of related party	Relationship with the Company
Core Pacific City Co., Ltd.	Substantive related party
All board of directors, general manager and deputy general manager	The main managements of the Company

Note 1: In April 2025, the Company disposed of its entire shareholdings in Chain Yarn and relinquished its corporate directorship. As a result, it has ceased to be a related party.

Note 2: The Company merged with BES Twin Towers Development Co., Ltd., a fully-owned subsidiary of the Company, on August 1, 2024, with the Company emerging as the sole surviving company, based on a resolution approved during its board meeting held on June 25, 2024, resulting in the Company to directly hold Frontier Fortune Investment Pte. Ltd.

Note 3: Unichem Development Limited (UDL) entered into the share transfer agreement for Weicai and completed the business registration transfer on October 15, 2025. As a result, it has ceased to be a related party.

(i) Sales

The amounts of significant sales by the Company to related parties were as follows:

	For the years ended December 31,
	2025	2024
Subsidiary	$ 587,696	748,674
Associates	682,825	748,771
Other related parties	253,507	1,098,501
	$ 1,524,028	2,595,946

The terms for related party sale transactions were the same as those for the general sale of goods, except that for TSCIC and Weihua, the collection period was 2 months and 3 months, respectively, and for Weiqiang and Weiming, the collection period was based on the contractual installment payment.

(ii) Purchases

The amounts of significant purchases by the Company from related parties were as follows:

	For the years ended December 31,
	2025	2024
Subsidiary	$ 18,340	108,427
Other related parties	2,348	8,837
	$ 20,688	117,264

The terms for related party purchase transactions were the same as those of other unrelated vendors.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iii) Receivables from related parties

The receivables from related parties were as follows:

Accounts	Types of related parties	December 31, 2025	December 31, 2024
Accounts receivable	Subsidiary	$ 70,206	90,408
Accounts receivable	Associates	70,402	78,787
Accounts receivable	Other related parties	-	194,151
Other receivables	Subsidiary	41,801	41,801
Other receivables	Associates	14,782	15,269
Other receivables	Other related parties	373	610
		$ 197,564	421,026

(iv) Payables to related parties

The payables to related parties were as follows:

Accounts	Types of related parties	December 31, 2025	December 31, 2024
Accounts payable	Subsidiary	$ 23,144	-
Accounts payable	Other related parties	-	986
Other payables	Subsidiary	442	15,100
Other payables	Associates	8,811	426,424
Other payables	Other related parties	126	126
		$ 32,523	442,636

(v) Loans to Related Parties

The loans to related parties were as follows:

	December 31, 2025	December 31, 2024
Interest revenue	$ -	30,625

(vi) Guarantees and endorsements

The Company provides to the subsidiaries:

	December 31, 2025	December 31, 2024
Balance of endorsement guarantee	$ 9,209,300	14,438,145
Used amounts	$ 8,979,300	12,627,535

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

The subsidiaries provide to the Company.

	December 31, 2025	December 31, 2024
Balance of endorsement guarantee	$ 2,900,000	4,920,000
Used amounts	$ 1,900,000	1,900,000

Please refer to note 8 for details of the investment properties pledged by the Company as collateral for subsidiaries’ bank financing.

(vii) Other

	For the years ended December 31,
	2025	2024
Subsidiary
Rent income	$ 84	84
Other income	-	50,382
Payment in advance	2,413	70,918
Associates
Rental income	13,786	13,701
Other income	22,890	22,463
Security service fees	(27,972)	(25,806)
Other related parties
Rental income	11,870	12,750
Other income	1,445	2,209
Other expenses	(320)	(384)

Please refer to note 6(q) for lease of land and buildings to related parties.

(viii) Lease

1) Lease liability

	Lease liability
	December 31, 2025	December 31, 2024
Associates	$ 2,821	8,389

2) Depreciation expense

	For the years ended December 31,
	2025	2024
Associates	$ 5,568	5,568

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

3) Interest expense

Associates	For the years ended December 31,
	2025	2024
	$ 97	97

The rent is based on the market rental rates and is paid monthly.

(ix) The Company had contracts with BES Engineering, for mechanical engineering services projects and paid commission on the basis of actual construction. The relevant amounts are as follows:

	December 31, 2025	December 31, 2024
Total amount	$ -	1,377,800
Unpaid fee	$ -	419,127
Guaranteed bill received	$ 1,847	139,627

Please refer to Note 7 (c) 4. for the amount payable to related parties that has not yet been paid.

(x) The Company had contracts with subsidiary, for mechanical engineering services projects and paid commission on the basis of actual construction. The relevant amounts are as follows:

	December 31, 2025	December 31, 2024
Paid fee	$ 89,585	140,108
Total amount	$ -	106,450
Unpaid fee	$ -	34,488

(d) Key management personnel compensation

	For the years ended December 31,
	2025	2024
Short-term employee benefit	$ 47,191	59,192
Post-employment benefits	2,292	2,507
	$ 49,483	61,699

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(8) Pledged assets:

The carrying values of assets pledged as security were as follows:

Assets pledged as security	Purpose of pledge	December 31, 2025	December 31, 2024
Restricted assets (listed as other current assets)	Guarantee for priority right-of-use of harbor	$ 10,650	10,650
Restricted assets (listed as current and non-current assets)	Collateral for long-term and short-term financial credit	707,409	-
Property, plant and equipment	Collateral for long-term and short-term financial credit, Mega & Endorsement and guarantee for subsidiary	7,867,532	7,706,432
Investment property	Collateral for short-term, mediumterm and long-term financial credit, syndicated loan (Mega), bonds payable, long-term bills payable and guarantee for subsidiary	32,747,157	36,142,217
Investments accounted for using equity method	Long-term bills payable and long-term loans	4,337,934	4,588,193
Non-current financial assets at fair value through other comprehensive income	Long-term bills payable	267,375	739,600
Current financial assets at fair value through profit or loss	Long-term bills payable	-	251,600
Other non-current assets	Deposit for lawsuit	94,040	98,613
		$ 46,032,097	49,537,305

(9) Commitments and contingencies:

(a) As of December 31, 2025 and 2024, the Company had the following unused letters of credit:

(i) Unused letters of credit:

	December 31, 2025	December 31, 2024
USD	$ 14,838	14,118
EUR	690	690
NTD	701,000	988,000
CNY	2,240	-
JPY	9,415	-

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) The unrecognized commitments of the Company are as follows:

1) Total price

	December 31, 2025	December 31, 2024
Construction and remediation	$ 2,743,523	6,670,737

2) Unpaid amount

	December 31, 2025	December 31, 2024
Construction and remediation	$ 717,449	2,137,886

(iii) The amount which the Company issued guarantee notes for bank loans, sales, purchases, as well as research and development projects, in aggregate, were as follows:

	December 31, 2025	December 31, 2024
USD	$ 40,010	40,000
NTD	30,071,000	26,328,963

(b) The Company signed an agreement to purchase raw materials such as benzene, hydrogen and methylbenzene from CPC. Under this contract, the Company may purchase specified monthly volume of these raw materials at current month prices announced by the CPC with prepayment or domestic letter of credit.

(i) The case of loss compensation for the Kaohsiung gas explosion

CPC was issued the permits of road excavation of No.950129 on December 15, 1990 and No.050076 on April 13, 1991 by the Maintenance Office, Public Works Bureau of KCG, who agreed CPC to excavate for the laying of pipelines. The Public Works Bureau of KCG abolished the foregoing permits after the gas explosion event occurred at the nighttime in Kaohsiung City on July 31, 2014. With regard to the circumstance that administrative agencies shall compensate for the loss in accordance with the laws due to the legitimate abolishment, the Company filed a petition for relief to KHAC in February 2018 in order to protect the legitimate rights and interests of the Company. In December 2019, KHAC made the judgement that the Company lost the case, and the Company filed an appeal in January 2020. Upon finding the appeal meritorious, the Supreme Administrative Court reversed the original judgement and remanded to KHAC for a new trial. KHAC made the judgement that the Company lost the case in January 2024, and the Company filed an appeal within the peremptory period in disagreement with such judgement to the Supreme Administrative Court, the Supreme Administrative Court upheld the Company's appeal and reversed original judgement of KHAC. The case is currently pending before the Supreme Administrative Court.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(ii) Matters related to the performance of the joint credit agreement for the land of Core Pacific Plaza

On October 30, 2019, Core Pacific Dev. Corp., a wholly owned subsidiary of the Company, signed a purchase contract with Core Pacific City Company Limited for the land of Core Pacific Plaza. To pay the purchase price of the aforementioned land, Core Pacific Dev. Corp., as the borrower, and the Company, as the joint guarantor, signed a joint credit agreement with a consortium of banks including Shin Kong Bank on October 21, 2021. Core Pacific Dev. Corp. also set the first priority maximum mortgage on the aforementioned land and existing buildings to Shin Kong Bank. Due to suspected illegal disputes related to the increased floor area reward obtained by Core Pacific City Company Limited from the Taipei City Government for the land of Core Pacific Plaza, the Taipei District Prosecutors Office (hereinafter referred to as Taipei Prosecutors Office) obtained a ruling from the Taiwan Taipei District Court (hereinafter referred to as Taipei District Court) to allow the seizure of the land of Core Pacific Plaza. On October 1, 2024, the Taipei Prosecutors Office entrusted the land administration authority to register the land as prohibited from disposal. The following is an explanation of the land seizure, suspected illegal activities involving Core Pacific Dev. Corp.’s former executives, and the performance of the bank joint credit agreement:

1) The Taipei District Court has ruled to allow the seizure of the subject land, wherein Core Pacific Dev. Corp. disagreed with the ruling and filed an interlocutory appeal to the Taiwan High Court, by which the effect of the seizure is yet to be determined as follows:

In September 2024, the Taipei Prosecutors Office applied to the Taipei District Court for the seizure of the land of Core Pacific Plaza, citing that the increased floor area reward benefits were considered "criminal proceeds." On September 30, 2024, the Taipei District Court approved the seizure with the criminal ruling No. 98 of 2024 (hereinafter referred to as "the original ruling"). Subsequently, on October 1, 2024, the Taipei Prosecutors Office entrusted the land administration authority to register the land of Core Pacific Plaza as prohibited from disposal with document No. 1139100592. Due to doubts about the reasons for the original ruling, Core Pacific Dev. Corp. filed an appeal, and after further rulings by the Taiwan Taipei District Court, the Taiwan High Court remanded the case for the third time. The High Court stated that Core Pacific Dev. Corp. did not obtain the subject land from Core Pacific City Company Limited through illegal means, and although the subject land received a 20% floor area reward due to the illegal actions of the suspects in the criminal case, the illegal benefit should refer to the 20% floor area reward, not the subject land itself. The original court did not explain how the subject land was considered criminal proceeds and subject to seizure, nor did it address whether seizing the entire subject land violated the principle of proportionality. The High Court also noted that whether Core Pacific Dev. Corp. has completed the floor area reward requirements for the Core Pacific Plaza redevelopment project and obtained the 20% floor area reward, and if not, whether the seizure is still permissible, affects the calculation of the illegal benefit amount and the justification for the seizure. The original court did not investigate and clarify these issues. Additionally, the first floor of the Core Pacific Plaza redevelopment project on the subject land is not yet completed, and B1 and B2 are also not fully constructed. The original court found that the project cannot currently apply for a usage license or the first ownership registration (preservation registration) due to incomplete construction. Therefore, whether the 20% floor area reward is merely an expected benefit at this stage remains to be determined. If Core Pacific Dev. Corp. changes the design, whether the floor area reward for the disputed

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

building will still exist is also in question. These issues relate to whether the aforementioned benefit constitutes criminal proceeds under Article 38-1, Paragraph 1 of the Criminal Code and whether it can be seized under Article 133, Paragraph 2 of the Code of Criminal Procedure, which requires further investigation and clarification by the original court. The land administration authority will determine whether to cancel the aforementioned prohibition on disposal registration based on the final court ruling. This falls within the scope of the court’s fact finding and legal application, and it is currently impossible to determine whether the land of Core Pacific Plaza will ultimately remain prohibited from disposal. Furthermore, whether the actions involved in this criminal case are illegal and whether the increased floor area reward obtained by Core Pacific Dev. Corp. is considered criminal proceeds must be confirmed through court trial and final judgment.

2) The following are the personal illegal acts and remarks alleged by the Core Pacific Dev. Corp.’s executives during the criminal investigation procedures, which are still being decided by the court for the final and binding judgement:

Regarding the former CEO of Core Pacific Dev. Corp., Shen Qingjing, his term ended on September 30, 2024, upon which he stepped down from his position as CEO. As for the former Chairman Zhu Yahu, he resigned from his position on April 28, 2023 due to personal reasons. Although both individuals were under criminal detention related to the increased floor area reward for the land of Core Pacific Plaza, the criminal cases involving Shen Qingjing and others are still in the trial stage. Whether the alleged personal misconduct is indeed illegal must be confirmed through court trial and final judgment, with oral arguments concluded on December 24, 2025, at the Taipei District Court has scheduled the judgment to be rendered on March 26, 2026. Additionally, media reports that Zhu Yahu confessed to his actions during the criminal investigation and received a deferred prosecution pertaining to his personal conduct. It cannot be directly concluded that his personal actions have a significant relationship with Core Pacific Dev. Corp.’s purchase of the land with a 20% increased floor area reward from Core Pacific City Company Limited. This determination must await for the final court judgment.

3) Status of the $14,900,000 thousand syndicated loan agreement is as follows:

As previously explained, after the original ruling allowing the seizure of the land of Core Pacific Plaza was overturned by the Taiwan High Court, the Taipei District Court issued a new ruling still allowing the seizure of the land. However, this ruling was revoked and remanded to the Taipei District Court for further handling after Core Pacific Dev. Corp. filed an appeal. Therefore, whether the subsequent seizure or prohibition of disposal of the land of Core Pacific Plaza constitutes a breach of the joint credit agreement is still uncertain and should be determined after the final court ruling. Furthermore, since the Company, Core Pacific Dev. Corp., and Shin Kong Bank Consortium (hereinafter referred to as "the bank consortium"), have signed the joint credit agreement, obtaining a loan of $14.9 billion, Core Pacific Dev. Corp. has consistently made repayments on time without delay. Shin Kong Bank publicly explained this at the shareholders’ extraordinary meeting on October 9, 2024. However, after the Taipei Prosecutors Office entrusted the land administration authority to register the prohibition on disposal, the Company and Core Pacific Dev. Corp. held consultation meetings with the bank consortium to communicate. Subsequently, in November 2024, the bank consortium agreed to waive

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

the potential breach of contract caused by the criminal ruling of the Taipei District Court seizing the land of Core Pacific Plaza. On November 27, 2024, the Company’s Board of Directors resolved to sign the second supplemental agreement to the syndicated loan facility with the bank consortium, adjusting the total credit limit from $14.9 billion to $13.38 billion. Core Pacific Dev. Corp. has gradually repaid part of the borrowings, with the remaining syndicated loan balance of $7.38 billion being amended under the fourth supplemental agreement signed on November 5, 2025, which stipulates the loan payment can be made in an installment basis before November 5, 2026, with the approval of the boards of both the Company and Core Pacific Dev. Corp.

4) The following is explanation for the 20% floor area incentives of Core Pacific Plaza:

Regarding the case where the Criminal Division of the Taipei District Court ruled to allow the seizure of the land of Core Pacific Plaza, the main point of contention is the 20% floor area reward included in the current 840% floor area ratio of Core Pacific Plaza obtained through urban planning. Initially, this 20% floor area reward was applied for by Core Pacific City Company Limited to the Taipei City Government and was approved at the 783rd meeting of the Taipei City Urban Planning Committee on September 9, 2021. It was subsequently announced and approved by the Taipei City Government on November 1, 2021, under document No. 11030520111, as part of the detailed plan for the “Amendment to the Land Use Zoning Control Regulations for the Third Commercial Zone (Special) of Lot 156, Subsection 3, Xisong Section, Songshan District, Taipei City”, wherein Core Pacific Dev. Corp. signed an agreement with the Taipei City Government on October 6, 2022, stating that upon completing the three urban contribution rewards for Resilient City, Smart City, and Livable City, and paying the full amount of the required deposit, Core Pacific Dev. Corp. would obtain a total of 20% floor area reward. In summary, the aforementioned 20% floor area reward was legally and remuneratively obtained based on relevant announcements and laws of the Taipei City Government and by fulfilling the obligations stipulated in the agreement. Additionally, on October 24, 2024, the Taipei City Government held a meeting with Core Pacific Dev. Corp. to discuss the public safety issues during the construction period of the new construction project No. 9999 of Core Pacific Plaza, in which Core Pacific Dev. Corp. agreed to cooperate with the meeting conclusions and temporarily suspend the construction of the 20% floor area reward obtained legally through the disputed urban planning case, without abandoning the 20% floor area reward. They will promptly handle the design change of the construction permit and, after the court confirms the legality of the 20% floor area reward for Core Pacific Plaza, revert to the original construction permit (i.e., No.9999). In line with the above meeting discussions, Core Pacific Development Corporation submitted a design change application for the original construction permit to the Taipei City Government in April 2025, specifically concerning the 20% floor area bonus. To clarify its position and ensure transparency for investors, the Company issued a material information announcement on April 27, 2025. The suspension of the 20% bonus construction was initiated by a letter sent to the Taipei City Government in January 2025. Subsequently, in coordination with the competent authority, Core Pacific Dev. Corp. voluntarily withdrew its applications for the 4% Resilient City, 8% Smart City, and 8% Livable City bonuses on April 9, 2025, and initiated the relevant design change procedures. Core Pacific Dev. Corp. will comply with the final court ruling regarding the legitimacy of the 20% floor area bonus.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

5) The Company and Core Pacific Dev. Corp.’s former and current management personnel are under investigation by the judicial authorities for suspected misconduct.

The transaction amount of $37.2 billion, in which Core Pacific Dev. Corp. acquired the Core Pacific Plaza land from Core Pacific City Co., Ltd., allegedly constituted an irregular activity in violation against the Securities and Exchange Act, prompting the Investigation Bureau of the Ministry of Justice to conduct an investigation on both the Company and Core Pacific Dev. Corp., wherein the former and current senior managers were being interviewed in May 2025, and the related personnel were scheduled for reinterviews in November and December 2025. As the judicial investigation remains ongoing, no individuals have been formally indicted or convicted as of the reporting date.

(iii) Dispute Regarding the Sale of Land at Lot 3, Subsection 2, Xiande Section

1) The land located at Lot 3, Subsection 2, Xiande Section, Qianzhen District, Kaohsiung City (hereinafter referred to as the “Disputed Land”) was publicly tendered at a base price by Cushman & Wakefield Taiwan on behalf of the Company on August 22, 2024.

2) On the bid opening date, Yuan Cheng Corporation (hereinafter referred to as “Yuan Cheng”) was awarded the bid and signed a bid confirmation letter. However, Yuan Cheng subsequently refused, without justification, to execute the real estate sale and purchase agreement for the Disputed Land. Accordingly, on October 14, 2024, the Company issued a statutory notice to terminate Yuan Cheng’s bid award and forfeit the bid deposit in the amount of $66 million.

3) In January 2025, Yuan Cheng contested the forfeiture and filed a lawsuit to the Taipei District Court, seeking the return of the bid deposit. The case is currently under judicial review.

(d) Contingent liabilities

(i) Dispute from the senior managers - the Case of Disclosure of Secrets

Due to the involvement of former senior managers in violations of the Trade Secrets Act, a criminal complaint was filed. In February 2024, the Taiwan Miaoli District Court sentenced the former general manager and former employees for attempted breach of trust, and one former employee of violating Article 13-1, Paragraph 1, Subparagraph 2 of the Trade Secrets Act. In the civil lawsuit, the former employee was ordered to compensate the Company the amount of $13.77 million, plus interest. The case is currently under second-instance review by the Intellectual Property and Commercial Court. Additionally, a separate lawsuit for damages due to trade secret infringement has been filed against the former senior managers in the Taiwan Taipei District Court. In January 2025, the court ruled that the former general manager and former employees shall be jointly and severally liable to compensate the Company in the amount of $13.34 million, plus interest, and that the former employee shall additionally compensate the Company the amount of $13.77 million, plus interest. For details on the deposit guarantee, please refer to Note 8.

(ii) CPC Corporation asserted that it was unable to use the site normally due to the pollution control activities carried out by the Company, and therefore filed a civil claim for damages in September 2025, seeking compensation of approximately $202,000 thousand. The case is currently under first instance review at the Taiwan Taipei District Court, and the judgment has not yet been finalized.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(10) Losses Due to Major Disasters: None

(11) Subsequent Events:

(a) The Board of Directors of the Company resolved to approve a capital injection into its 100%-owned major subsidiary, Core Pacific Dev. Corp., amounting to 65,000,000 shares, at $10 per share, for a total consideration of $650,000 thousand, on February 25, 2026.

(b) The Board of Directors of the Company resolved to approve a merger with its 100%-owned subsidiary, Tsou Seen Chemical Industries Corporation (TSCIC), on December 11, 2025. The merger base date has been set for April 1, 2026, following its announcement on January 29, 2026.

(12) Other:

(a) The nature of operating costs and expenses were as follows:

	For the years ended December 31
By item	2025			2024
	Operating cost	Operating expense	Total	Operating cost	Operating Expense	Total
Employee benefits
Salary	668,902	236,658	905,560	685,860	249,234	935,094
Labor and health insurance	66,515	20,895	87,410	69,638	23,770	93,408
Pension	35,097	14,359	49,456	39,420	11,909	51,329
Remuneration of directors	-	8,190	8,190	-	8,671	8,671
Others	33,537	9,612	43,149	36,330	11,251	47,581
Depreciation	773,272	96,955	870,227	886,091	89,592	975,683
Amortization	-	-	-	-	-	-

Note: Including discontinued operations.

Additional information on the number of employees and employee benefits expense of the Company are summarized as follows:

	For the years ended December 31,
	2025	2024
Number of employees	976	1,101
Number of non-employee directors	8	9
Average employee benefits expense	$ 1,121	1,032
Average employee salary expenses	$ 935	856
Average employee salary adjustment	9.23 %	9.74 %
Supervisor salary expenses	$ -	-

The policies of the Company's remunerations (including directors, managers and employees) are as follows:

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

The policies, standards, combinations, procedure of decision-making of remunerations, and their relation to business performance and future risk:

(i) The remuneration to the Company’s (Executive) Chairman, vice chairman and directors was based on remuneration, transportation allowance and attendance allowance applicable in the same industry domestically and overseas, taking the performance and risk into consideration, and paid in accordance with Article 28 of the Company’s Articles of Incorporation. According to Article 32 of the Articles of Incorporation, 2% of the earnings shall be allocated as remuneration to directors according to the motion for allocation of shareholders’ dividend.

(ii) The remuneration to the Company’s managers (including salary, allowance and bonus, etc.) will be evaluated based on market intelligence, seniority, responsibilities, experience, performance and risk, and paid in accordance with Article 29 of the Company Act. The Company established the Remuneration Committee in September 2011.

(iii) The remuneration to the Company’s employees (including salary, allowance and bonus, etc.) will be evaluated based on performance, responsibilities, market intelligence and the Company’s financial ability, and paid in accordance with the Company’s remuneration policies.

(iv) Regarding the procedures for establishing remuneration, in addition to considerations of the overall operating performance, industry outlook, risk management, and future development, we also consider personal performance and contributions to the company’s overall performance in the remuneration. Related performance evaluation and remuneration considerations are submitted to the remuneration committee and the board of directors for approval. Depending on operating conditions and related regulations, we also further review and revise our remuneration as necessary, with the aim in achieving a balance between sustainable management and risk controls.

(b) On March 22, 2019, Kaohsiung Urban Planning Commission (KUPC) announced that Dashe Industrial Park (DIP), where the Company’s plant is located, will be categorized from Special Zone to Zone B. In light of the above matter, all the companies involved in this case are making their best effort to negotiate and compromise with KUPC, requesting KUPC to change DIP’s status to Zone A instead of Zone B. On November 10, 2020, the Company had received the minutes of the meeting with regards to the changes on the urban planning case of DIP concerning its execution, which prompted KUPC to suggest to the Bureau of Industry, MOEA to invite the Kaohsiung City Government (KCG) and all relevant parties to clarify the appeals and suggestions made by the companies involved. Thereafter, KCG will explicitly indicate the details in the urban planning documentation to all concerned parties in order to preclude the disputes. Conclusion of the meeting of the Task Force on "The Impact of the Transformation of DIP into Industrial Zone B on the Petrochemical Industry" held by the Bureau of Industrial Parks, Ministry of Economic Affairs on March 27, 2024: First, the Industrial Development will continue to inquire about the needs of manufacturers in the Taishe Park and provide guidance on relevant application matters. Second, if manufacturers in Taishe Park have relevant needs, please submit a project plan based on the principles for review and approval by the KCG. Third, if there are relevant requirements for the license period, manufacturers are requested to specify the relevant content in the plan, and then the Industrial Development Administration Ministry of Economic Affairs and the Bureau of Industrial Parks, Ministry of Economic Affairs will assist in discussing and handling the case with the KCG. As of the date of this report, KCG has yet to proceed on the procedures of the downgrading of the zone mentioned above.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(c) To meet its future working capital requirements and enhance its overall resource utilization, the Company has formulated an asset disposal/activation plan and is actively raising funds to materialize the said plan, with the board’s approval on the following:

(i) The Board of Directors approved the disposal of the Qiaotou plant on May 14, 2025.

(ii) The Board of Directors approved the base price for the disposal of certain investment property located in Kaohsiung City on July 8, 2025.

The public bidding process for the above asset disposal plans are currently underway.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1	Weiming	Weiming Construction	Other receivables	Yes	23,813	23,813	20,219	3%-5.5%	2	-	Operating	-	-	-	539,737	889,606
2	Weihua	Weicai	Other receivables	No	31,451	-	-	5.50 %	2	-	Operating	-	-	-	107,156	187,156
3	TSCIC	Weicai	Other receivables	No	43,987	-	-	5.00 %	2	-	Operating	-	-	-	119,845	119,845
4	UDL	Weicai	Other receivables	No	44,930	-	-	1.65 %	2	-	Operating	-	-	-	61,158	61,158
5	CPDC GT	Weicai	Other receivables	No	44,930	-	-	1.725 %	2	-	Operating	-	-	-	20,689	20,689

Note 1: Numbering nature of borrowing as follows:
Transaction for business between two parties – 1
Short-term financing – 2

Note 2: The financing limit for total and individual were 15% and 10% of net value of Jiangsu Weiming New Material Co., Ltd.

Note 3: The financing limit was 20% of net value of Weihua (Radong) Trade Co., Ltd.

Note 4: The financing limit was 20% of net value of Tsou Seen Chemical Industries Corporation.

Note 5: The financing limit was 1% of net value of Unichem Development Limited.

Note 6: The financing limit was 30% of net value of CPDC Green Technology Corp.

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of exporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements guarantees to third parties on behalf of subsidiary	Subsidiary endorsements guarantees to third parties on behalf of parent company	Endorsements guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0	The Company	Core Pacific Dev. Corp.	2	45,758,998	12,815,000	8,760,000	8,530,000	1,380,000	11.49 %	76,264,997	Y	N	N
0	The Company	Weiming	2	45,758,998	548,280	449,300	449,300	449,300	0.59 %	76,264,997	Y	N	Y
0	The Company	Shiny Chemical Industrial Co., Ltd.	5	45,758,998	78,086	78,086	78,086	-	0.10 %	76,264,997	N	N	N
0	The Company	Weicai	2	45,758,998	783,255	-	-	-	- %	76,264,997	N	N	Y
0	The Company	Lushan Warehouse Co., Ltd.	5	45,758,998	55,366	55,366	55,366	-	0.07 %	76,264,997	N	N	N
0	The Company	China General Terminal & Distribution Corporation	5	45,758,998	14,903	14,903	14,903	-	0.02 %	76,264,997	N	N	N
1	Core Pacific Dev. Corp.	The Company	3	20,515,783	4,920,000	2,900,000	1,900,000	-	3.80 %	41,031,567	N	Y	N
2	Weiming	Weigang	4	539,737	224,650	134,790	130,926	-	0.18 %	809,606	N	N	Y
2	Weiming	UDL	4	539,737	4,493	4,493	-	-	0.01 %	809,606	N	N	Y
3	Weihua	Weiming	4	1,339,455	1,172,673	1,172,673	1,150,118	449,300	1.54 %	1,339,455	N	N	Y
4	Weiming Construction	Weiming	4	142,189	134,341	134,341	134,341	134,341	0.18 %	142,189	N	N	Y

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Note 1: The information of guarantees and endorsements for other parties of the Company and its subsidiaries are disclosed separately and numbering as follows:

Parent company – 0

Subsidiary starts from 1

Note 2: The relationship between the guarantee and the guarantor are as follows:

Transactions between the companies.
The Company directly or indirectly holds more than 50% voting right.
When other companies directly or indirectly hold more than 50% voting rights of the Company.
The Company directly or indirectly holds more than 90% voting right.
A company that is mutually protected under contractual requirements based on the needs of the contractor.
A company that is endorsed by all the contributing shareholders in accordance with their shareholding ratio due to joint investment relationship.
Under the Consumer Protection Act, performance guarantees for pre-sale contracts for companies in the same industry.

Note 3: The Company endorsed the operation method for the total amount of guarantees and the limit for endorsement of a single enterprise:

The total amount of guarantee for endorsement shall not exceed 100% of the Company's net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.
The guarantee amount for a single enterprise endorsement shall not exceed 60% of the Company's net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.

Note 4: Core Pacific Dev. Corp. endorsed the operation method for the total amount of guarantees and the limit for endorsement of a single enterprise:

The total amount of guarantee for endorsement shall not exceed 100% of its net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.
The guarantee amount for a single enterprise endorsement shall not exceed 50% of its net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.

Note 5: Jiangsu Weiming New Material Co., Ltd. (Weiming) endorsed the operation method for the total amount of guarantees and the limit for endorsement of a single enterprise:

The total amount of guarantee for endorsement shall not exceed 15% of its net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.
The guarantee amount for a company with business dealings endorsement shall not exceed 10% of its net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.

Note 6: Weihua (Rudong) Trade Co., Ltd. (Weihua) endorsed the operation method for the total amount of guarantees and the limit for endorsement of a single enterprise:

The total amount of guarantee for endorsement shall not exceed 250% of its net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.
The guarantee amount for a company with business dealings endorsement shall not exceed 250% of its net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.

Note 7: Weiming (Rudong) Construction Co., Ltd. (Weiming Construction) endorsed the operation method for the total amount of guarantees and the limit for endorsement of a single enterprise:

The total amount of guarantee for endorsement shall not exceed 110% of its net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.
The guarantee amount for a Companies with business dealings endorsement shall not exceed 110% of its net assets. The net assets referred to above are based on the latest audited or reviewed financial statements.

(iii) Securities held as of December 31, 2025 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance
				Shares/Units	Carrying value	Percentage of ownership (%)	Fair value
The Company	Capital Taiwan Technology Innovation Active ETF	-	Current financial assets designated at fair value through profit or loss	1,000,000	10,430	-	10,430
	Core Pacific CityCo., Ltd.	Substantive related party	Non-current financial assets designated at fair value through profit or loss	3,832,966	12,843	38.22	12,843
*	KGI Financial Holding Co., Ltd.	-	Non-current financial assets at fair value through other comprehensive income	15,850,006	273,412	0.09	273,412
*	Handy Chemical Corporation Ltd.	The Company is a supervisor of the investee company	*	386,000	26,437	4.57	26,437
*	Overseas Investment & Development Corp.	-	*	2,600,000	26,000	2.89	26,000
*	Linde Taiwan Technologies Limited	The Company is a director of the investee company	*	6,368,177	344,416	33.00	344,416
*	ZOWIE Technology Corporation	-	*	8,815	358	0.03	358
*	Aetas Technology Inc.	-	*	287,961	-	0.58	-
*	oNetworks Inc.	-	*	106,509	14,820	1.78	14,820

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance
				Shares/Units	Carrying value	Percentage of ownership (%)	Fair value
TSCIC	Taiwan Tea Corporation	-	Current financial assets designated at fair value through profit or loss	4,031,000	53,612	0.51	53,612
"	Good Company	-	Non-current financial assets at fair value through other comprehensive income	750,000	-	2.08
"	TaiBx, Inc.	-	"	722,500	14,652	0.64	14,652

(iv) Related-party transactions for purchases and sales with amounts exceeding the lower of $100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship	Transaction details				Transactions with terms different from others		Notes/Accounts receivable (payable)
			Purchase/Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company	TSCIC	Subsidiary	Sales	(485,288)	(3.47)%	Credit for 90 days	-	OA 90 days	-	-%
"	KMC	Affiliated company accounted for using equity method	Sales	(682,825)	(4.88)%	Credit for 30 days	-	OA 30 days	70,402	4.25%
"	Weiming	Subsidiary	Sales	(102,408)	(0.73)%	Base on contract	-	Base on contract	71,668	4.33%
"	Chain Yarn	Other related parties	Sales	(253,507)	(1.81)%	Credit for 60 days	-	OA 60 days	-	-%
Weihua	Weiming	Same parent company	Sales	(207,503)	(69.25)%	Base on contract	-	Base on contract	133,196	92.08%
Weiming	Weiqian	Same parent company	Sales	(715,208)	(13.63)%	Base on contract	-	Base on contract	-	-%
"	Weihua	Same parent company	Sales	(202,769)	(3.87)%	Base on contract	-	Base on contract	-	-%
Weiqian	Weiming	Same parent company	Sales	(720,114)	(53.52)%	Base on contract	-	Base on contract	-	-%

(v) Receivables from related parties with amounts exceeding the lower of $100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue		Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
Weihua	Weiming	Same parent company	133,196	2.34	-	-	-	-

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2025 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investor	Location	Main businesses and products	Original investment amount		Balance as of December 31, 2025			Net income (losses) of investor	Share of profits/losses of investor	Note
				Ending balance	Beginning balance	Shares	Percentage of ownership	Carrying value
The Company	KMC	Taiwan	Production and sales of Methyl Methacrylate Monomer.			20,000,000	40.00 %	565,904	7,028	2,811	Note 1
"	CKS&S	Taiwan	Security and related services	14,400	14,400	1,440,000	24.00 %	21,735	11,404	2,737	"
"	Jean Pacific Development Co., Ltd.	Taiwan	Real estate construction and development and urban renewal, etc.	620,000	620,000	62,000,000	40.00 %	1,493,773	2,185,534	874,214	"
"	BES Engineering	Taiwan	Contracting of civil and construction projects, investment, construction and sales of real estate, and the development of industrial zones planned by the government	1,470,919	1,470,919	172,615,175	10.74 %	4,106,781	639,207	62,469	"
"	Cere Pacific Dev. Corp.	Taiwan	Contracting construction companies to build state houses, commercial buildings, land development and other related operations and investment	42,075,000	38,460,000	4,207,500,000	100.00 %	40,941,694	(213,156)	(213,322)	Note 2&5&7
"	CPDC (BVI)	British Virgin Islands	Building company	904,946	904,946	26,580,000	100.00 %	791,064	(15,709)	(15,709)	Note 2&4&5

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

Name of investor	Name of investor	Location	Main businesses and products	Original investment amount		Balance as of December 31, 2025			Net income (losses) of investor	Share of profits/losses of investor	Note
				Ending balance	Beginning balance	Shares	Percentage of ownership	Carrying value
The Company	TSCIC	Taiwan	Fertilizer storage, transportation, purchase and sales	50,000	160,000	21,000,000	100.00 %	599,229	(68,264)	(68,264)	Note 2&5&9
*	CPDC GT	Taiwan	Mechanical engineering	50,000	100,000	10,000,000	100.00 %	68,966	(28,971)	(28,971)	Note 2&5&15
*	UDL	Hong Kong	Holding company	11,095,327	10,921,147	366,240,612	100.00 %	6,115,822	(977,284)	(977,284)	Note 2&4&5
*	Frontier Fortune	Singapore	Holding company	474,320	2,761,596	19,375,945	100.00 %	379,397	31,777	31,777	Note 2&5&4
*	Thanh Phong	Vietnam	Construction engineering, real estate management, construction-related technical consultants, leasing machinery and equipment, wholesale of building materials, etc.	27,664	52,952	-	100.00 %	3,700	(148)	(148)	Note 2&5&4
CPDC (BVI)	Core Pacific Overseas Holding Ltd.	British Virgin Islands	Holding company	808,564	808,564	26,580,000	45.19 %	786,411	(34,587)	-	Note 2&4&6
Core Pacific Dev. Corp.	Da Ying	Taiwan	Engineering, construction contracting business	30,000	60,000	-	100.00 %	22,052	(3,772)	-	Note 2&3&5
*	Haading Enterprise Co., Ltd.	Taiwan	Real estate construction and development and urban renewal, etc.	49,010	49,010	4,901,000	10.00 %	48,655	(1,897)	-	Note 2&6
TSCIC	Taivex	Taiwan	Engaged in biotechnology, pharmaceutical research and development and marketing	696,720	696,720	46,224,551	65.34 %	99,888	(66,728)	-	Note 2&5&6
Frontier Fortune	Gemini Core Pacific Twin Star (Myanmar)	Myanmar	Holding company and consultancy	169,921	169,921	5,500,001	100.00 %	157,614	3,544	-	Note 2&4&5
*	Core Pacific Twin Star (Vietnam)	Vietnam	Engineering, real estate and consultancy of construction	262,116	1,864,224	-	100.00 %	197,943	20,035	-	Note 2&3&4
Core Pacific Twin Star (Vietnam)	BES Engineering (Vietnam)	Vietnam	Engineering, real estate and consultancy of construction	106,446	741,866	-	40.00 %	31,763	13,742	-	Note 2&3&4
Core Pacific Twin Star (Myanmar)	Core Pacific Pioneer (Myanmar)	Myanmar	Building construction, real estate management, development and sale	24,804	24,804	800,000	80.00 %	13,521	27	-	Note 2&4&5

Note1: The Company adopts the equity method to evaluate the investment company.
Note2: The Company has direct or indirect control of the invested company. If the invested company has direct or indirect control, it shall expose the relevant information of the following 2 to 10 transactions of the investee company.
Note3: Limited company expressed by the amount of capital, no shares issued.
Note4: The original investment amount is the foreign currency, at the prevailing exchange rate.
Note5: This transaction has been written off when the consolidated statement has been prepared.
Note6: In accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, only profit or loss of the Company's directly associates and joint ventures accounted for using equity method should be revealed.
Note7: The Company increased capital by 1,000,000 thousand and 2,615,000 thousand on December 25, 2024 and July 8, 2025, respectively, to Core Pacific Dev. Corp.
Note8: TSCIC approved a resolution by the Board of Directors on April 17 and August 7, 2025 to reduce capital by 100,000 thousand and 50,000 thousand in cash.
Note9: Thanh Phong's reduction of capital by 25,288 thousand in cash has been approved by the shareholders on August 25, 2025.
Note10: Frontier Fortune approved a resolution by the Board of Directors on March 10, 2025 to reduce capital by $1,602,108 thousand to Core Pacific TwinStar (Vietnam).
Note11: Da Ying's reduction of capital by 30,000 thousand in cash has been approved by the shareholders on February 10, 2025.
Note12: The Company approved a resolution by the Board of Directors on December 25, 2024, to increase $174,180 thousand in cash into Weicai through UDL.
Note13: BES Engineering (Vietnam) approved a resolution by the Board of Directors to reduce its capital by $635,420 thousand in cash, on November 29, 2024.
Note14: Frontier Fortune approved a resolution by the Board of Directors to reduce its capital by $711,081, $479,120 and $1,097,075 thousand in cash, on December 4, 2024, April 17 and June 13, 2025, respectively.
Note15: CPDC GT approved a resolution by the Board of Directors to reduce its capital by $50,000 thousand in cash on August 5, 2025.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2025	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2025	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) in current period (Note 2)	Carrying value at the end of period	Accumulated remittance of earnings in current period
					Outflow	Inflow
Weihua	Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub-fitted trading	763,460	(2) · (3)	763,460	-	-	763,460	(11,815)	100.00%	(11,815)	535,782	-
Weiqianq	Wholesale of chemical raw materials, plastic raw materials, rubber raw materials and their products (except dangerous goods), commission agency (except auction), import and export and related supporting business	211,560	(1) · (3)	211,560	-	-	211,560	(25,300)	100.00%	(25,300)	170,857	-
Weiming	Production and sales of nylon6, cyclohexanone, electricity, steam and its by-products; construction of supporting facilities for petrochemical projects	8,770,377	(1) · (2)	8,770,377	-	-	8,770,377	(817,306)	100.00%	(817,306)	5,397,375	-
Weicai (Note4)	Engaged in engineering plastic and high valued petroleum chemical products	1,743,762	(2)	1,324,893	174,180	-	1,499,073	(196,521)	100.00%	(196,521)	-	-
Weiming Construction (Invested through Weiming)	Engaged in engineering consultant services, engineering construction, engineering management, and trading of petroleum chemical product	129,665	(3)	-	-	-	-	(1,379)	100.00%	(1,379)	129,263	-

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2025	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
12,138,411	14,536,521	Note 5

Note1: There are three ways to invest as follows:

(a) The Company direct investment to China.

(b) The Company through third regional company (UDL) investment to China.

Note2: In the field "net income (losses) of the investee":

(a) If it is in preparation, no investment profit or loss, should be explained.

(b) There are three ways to identify the basis of investment profit or loss, should be explained.

(b.1) financial statements audit by international accounting firm with a relationship with Taiwan accounting firm.

(b.2) financial statements audit by the Company's audit CPA.

(b.3) others.

Note3: The amount in this table should be presented in New Taiwan Dollar.

Note4: Unichem Development Limited (UDL) entered into the share transfer agreement for Weicai and completed the business registration transfer on October 15, 2025.

Note5: The cumulative investment amount or investment proportion to China cannot over the Company's net value of 60%. The Company acquired certified documents of operating headquarters issued by the Industrial Development Bureau, MOEA, hence, it is not subject to the above regulations. The validity period is extended to October 7, 2027.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions” and “Business relationships and significant intercompany transactions”.

(14) Segment information:

Please refer to the Consolidated Financial Statements for the year ended December 31, 2025.

China Petrochemical Development Corporation

Statement of cash and cash equivalents

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description		Amount
Cash			$ 730
Bank deposits	Check deposits		147,845
	Demand deposits		205,561
	Foreign currency deposits	CNY 1,340	117,536
		USD 3,549
	Time deposits	USD11,000	345,609
	Subtotal		816,551
Total			$ 817,281

China Petrochemical Development Corporation

Statement of financial assets measured at fair value through profit or loss - current

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Name of financial instruments	Description	Shares	Par value	Total amount	Acquisition cost	Fair value		Provided for guarantee or pledge	Note
						Unit price	Total amount
Beneficiary certificates	Capital Taiwan Technology Innovation Active ETF	1,000,000	-	-	10,000	10.43	10,430	None

China Petrochemical Development Corporation

Statement of accounts receivable

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Amount	Note
Non-related party
1022	$ 184,448
1019	162,839
1001	157,439
34637	153,992
35262	120,865
Others	736,226	No customer balance exceeds 5% individually
Subtotal	1,515,809
Related party
Weihua (Rudong) Trade Co., Ltd.	(1,462)
Kaohsiung Monomer Company Limited	70,402
Jiangsu Weiming New Material Co., Ltd. (Weiming)	71,668
Subtotal	140,608
Less: Loss allowance	(237,590)
Total	$ 1,418,827

China Petrochemical Development Corporation

Statement of other receivables

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
VAT refund receivable		$ 30,940
Interest receivable		1,998
Other	Service work payments and others	18,395
Total		$ 51,333

Statement of inventories

Item	Cost	Fair value	Note
Finished goods	$ 829,956	1,150,441	Market value is the net realizable value
Work-in-process	228,560	198,032	〃
Raw materials	512,460	493,951	〃
Fuel	8,433	7,941	〃
Subtotal	1,579,409	1,850,365
Less: allowance for reduction of inventory to market	(158,345)
Net carrying amount	1,421,064
Land held for construction site	4,120
Payment for floor area ratio	13,535
Construction in progress	45,182
Subtotal	62,837
Total	$ 1,483,901

100

China Petrochemical Development Corporation

Statement of prepayments

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Fair value
Prepayment for purchases	Raw materials purchases	$ 346,610
Other prepaid expenses	Customs fee and other	231,424
Total		$ 578,034

Statement of other current assets

Item	Description	Amount	Note
Temporary payments		$ 1,995
Inventory of supplies		404,490
Restricted assets	Time deposits and Reserve Account	658,059	Guarantee and Pledge
Total		$ 1,064,544

101

China Petrochemical Development Corporation

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Name of investee	Beginning Balance		Addition		Decrease		Ending Balance			Net Assets Value		Provide a guarantee or pledge (note 8)	Note
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Percentage	Amount	Unit price	Total amount
The Equity Method - Non-listed company
Kaohsiung Monomer Company Limited	20,000,000	$ 846,676	-	8,456	-	289,228	20,000,000	40.00	565,904	-	565,904	Long-term guarantee of bills	Note 2
Chung Kung Safeguarding & Security Corp.	1,440,000	20,778	-	2,972	-	2,015	1,440,000	24.00	21,735	-	21,735	None	x
Core Pacific Dev. Corp.	3,846,000,000	37,540,017	361,500,000	3,615,000	-	213,323	4,207,500,000	100.00	40,941,694	-	40,941,694	x	Note 3
CPDC Investment (BVI) Co., Ltd.	26,580,000	832,882	-	11,890	-	52,908	26,580,000	100.00	791,864	-	791,864	x	x
Tson Seen Chemical Industries Corporation	36,000,000	826,448	-	(68,407)	15,000,000	158,812	21,000,000	100.00	599,229	-	599,229	x	Note 2, Note 3
CPDC Green Technology Corporation	15,000,000	147,936	-	(28,971)	5,000,000	49,999	10,000,000	100.00	68,966	-	68,966	x	Note 2
Unichem Development Limited	360,240,612	6,929,508	6,000,000	174,180	-	987,866	366,240,612	100.00	6,115,822	-	6,115,822	x	x
Frontier Fortune Investment Pte. Ltd.	93,060,000	2,823,603	-	(156,930)	73,684,055	2,287,276	19,375,945	100.00	379,397	-	379,397	x	x
Jiangsu Weiming New Material Co., Ltd.	29,382,000	19,302	-	(36)	-	2,534	29,382,000	0.31	16,732	-	16,732	x	x
Weiqiang International Trade (Shanghai) Co., Ltd.	92,260,000	87,484	-	(11,419)	-	-	92,260,000	44.52	76,065	-	76,065	x	x
Thanh Phong Construction Investment Co., Ltd.	23,637,500,000	46,875	-	-	22,000,000,000	43,175	1,637,500,000	100.00	3,700	-	3,700	x	Note 1, Note 2
Jean Pacific Development Co., Ltd.	62,000,000	619,559	-	874,214	-	-	62,000,000	40.00	1,493,773	-	1,493,773	x	Note 2
The Equity Method - Listed company
BES Engineering Corporation	164,348,449	4,084,577	8,266,726	22,204	-	-	172,615,175	10.74	4,106,781	12.80	2,209,474	158,545,000 shares provided for long-term guarantee of bills
Total		$ 54,825,645		4,443,153		4,087,136			55,181,662		53,284,355

Note 1: The original investment amount was in foreign currency and disclosed based on the exchange rate at that time.
Note 2: The market value indicated by non-listed companies is the equity net value.
Note 3: The difference represents the unrealized gross profit from sales.

102

China Petrochemical Development Corporation

Statement of changes in financial assets measured at fair value through profit or loss - non-current

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Financial Instruments	Beginning Balance		Addition		Decrease		Ending Balance		Pledge	Note
	Shares	Fair value	Shares	Amount	Shares	Amount	Shares	Fair value
Common stock of Core Pacific City Co., Ltd.	3,832,966	$ 20,324	-	-	-	7,481	3,832,966	12,843	None

103

China Petrochemical Development Corporation

Statement of financial assets measured at fair value through other comprehensive income - non-current

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Name of investee	Beginning Balance		Addition		Decrease		Ending Balance		Pledge (Note 8)
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount
Common stock
Handy Chemical Co., Ltd.	386,000	$ 26,437	-	-	-	-	386,000	26,437	None
Overseas Investment & Development Corp.	2,600,000	26,000	-	-	-	-	2,600,000	26,000	"
Linde Taiwan Technologies Limited	6,368,177	310,682	-	33,734	-	-	6,368,177	344,416	"
ZOWIE Technology Corporation	8,815	358	-	-	-	-	8,815	358	"
Chain Yarn Co., Ltd.	28,500,000	285,075	-	28,425	28,500,000	313,500	-	-	"
Aetas Technology Inc.	287,961	-	-	-	-	-	287,961	-	"
ioNetworks Inc.	106,509	14,820	-	-	-	-	106,509	14,820	"
KGI Financial Holding Co., Ltd.	44,684,712	768,577	350,006	37,087	29,184,712	532,252	15,850,006	273,412	15,500,000 shares provided as collateral for long-term bills guarantees.
Total		$ 1,431,949		99,246		845,752		685,443

104

China Petrochemical Development Corporation

Statement of other non-current assets

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount	Note
Refundable deposits	Telephone, house and golf card, etc.	$ 130,300	Deposit for lawsuit $94,040
Restricted assets	Restricted deposits pledged for secured borrowings	60,000
Others	PCTG process design package	85,542
	Syndicated loan charges	2,283
	Bank loan charges fee	26,222
	Software maintenance and services	35,206
	Licensing and authorization	8,362
Total		$ 347,915

Statement of short-term loans

Creditor	Amount	Interest rate	Pledged
Unsecured loan	$ 550,000	1.9535%~2.4000%	None
Secured loan	3,950,000	2.2500%~2.7500%	Property, plant and equipment and investment property
Total	$ 4,500,000

105

China Petrochemical Development Corporation

Statement of trade payables

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount	Note
Non-related party
660	Raw material	$ 179,678
22186	"	97,836
1055	Power source	65,407
Others	Raw material	59,888	No customer balance exceeds 5% individually
Subtotal		402,809
Related party
Tsou Seen Chemical Industries Corporation	Finished goods	23,144
Subtotal		23,144
Total		$ 425,953

Statement of other payables

Item	Description	Amount
Payroll and bonus payable		$ 448,412
Interest payable		19,305
Other payables	Dividends payable	5,551
	Slot rental, storage and package	19,268
	House tax, professional service fee, and others	277,525
	Constructions	267,570
Total		$ 1,037,631

106

China Petrochemical Development Corporation

Statement of other current liabilities

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Payable collection	Withholding salary income tax, labor and health insurance and other	$ 7,250
Other	Advance (deferred) income and temporary payment of company payments	97,805
Total		$ 105,055

107

China Petrochemical Development Corporation

Statement of long-term loans

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Creditor	Description	Amount		Contract Term	Interest Rate	Mortgage or Guarantee
		Less than One Year	More than One Year
Hua Nan Commercial Bank	Two-year medium-term loan	$ 1,000,000	-	2024.06.14~2026.06.12	2.1500 %	Property, plant and equipment
"	Five-year medium-term loan	66,500	66,500	2022.04.01~2027.11.19	2.1900 %	"
"	"	40,000	60,000	2023.03.14~2028.03.14	2.1700 %	"
"	"	143,500	358,750	2024.05.21~2029.08.21	2.1500 %	"
Mega International Commercial Bank	Three-year medium-term loan	-	1,500,000	2025.09.22~2028.09.22	2.9894 %	Investment property
"	"	-	560,000	"	2.8280 %	"
"	Five-year syndicated loan - case A	1,875,000	-	2021.07.28~2026.07.28	3.0423 %	Property, plant and equipment
Land Bank of Taiwan	Twenty-year term loan	32,789	586,206	2021.09.29~2041.09.29	2.3800 %	"
Bank of Taiwan	Three-year medium-term loan	100,000	675,000	2025.09.22~2028.09.22	2.8309 %	Property, plant and equipment and investment property
"	"	550,000	-	2023.12.29~2026.12.29	2.2500 %	"
Bank of Kaohsiug	Two-year medium-term loan	-	2,300,000	2025.02.27~2027.02.27	2.4000 %	Investment property
First Commercial Bank	Three-year medium-term loan	-	600,000	2024.05.10~2027.05.10	2.3500 %	Property, plant and equipment
Taiwan Life Insurance Company	Four-year medium-term loan	1,900,000	-	2021.04.29~2026.11.05	3.7000 %	Investment property
Farglory Life Insurance Inc	Three-year medium-term loan	1,676,640	-	2023.08.18~2026.08.18	2.6500 %	"
Sunny Commercial Bank	Three-year medium-term loan	1,036,000	-	2023.10.12~2026.10.12	2.3600 %	"
President Securities Corporation	Three-year medium-term loan	-	299,000	2024.02.16~2027.02.16	2.5600 %	Investment accounted for using equity method
		$ 8,420,429	7,005,456

108

China Petrochemical Development Corporation

Statement of long-term bills payable

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Acceptance Institution	Period	Interest Rate	Amount	Mortgage or guarantee
Bills payable	International Bills Finance Corporation	2025.12.19~2026.3.18	1.9400 %	$ 200,000	Investment property and investment accounted for using equity method
"	"	2025.12.29~2026.3.18	2.0400 %	550,000	"
"	Taching Bills Finance Corporation	2025.10.9~2026.1.6	1.9300 %	300,000	Investment accounted for using equity method
"	"	2025.10.9~2026.1.6	1.9300 %	70,000	Investment property
"	China Bills Finance Corporation	2025.12.24~2026.3.24	2.1100 %	670,000	"
"	"	2025.12.30~2026.3.30	2.1100 %	740,000	"
"	"	2025.12.26~2026.3.26	2.1500 %	890,000	Investment accounted for using equity method
"	Mega Bills Finance Corporation	2025.11.28~2026.1.27	2.1500 %	500,000	Property, plant and equipmen
"	"	2025.12.1~2026.1.30	2.1500 %	600,000	Investment property
"	"	2025.12.29~2026.2.25	1.5200 %	750,000	"
"	"	2025.12.29~2026.2.26	1.5200 %	680,000	"
"	"	2025.11.27~2026.1.20	1.9200 %	1,050,000	Property, plant and equipment
"	"	2025.12.29~2026.2.24	1.5200 %	950,000	"
				7,950,000
Less: discount on long-term bills payable				(21,689)
Total				$ 7,928,311

109

China Petrochemical Development Corporation

Statement of other non-current liabilities

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Deposits received	Performance bond and Project award	$ 70,077
Deferred sale of land benefits	Sale of land in Pingnan to wholly owned subsidiary	4,278
		$ 74,355

Statement of deferred tax liabilities

Item	Description	Amount	Note
Land value added tax provisions		$ 7,398,756

110

China Petrochemical Development Corporation

Statement of operating costs

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Subtotal	Total
Raw materials
Balance on January 1	$ 806,493
Add: purchases of raw materials	8,287,159
Transferred to indirect materials	(2,690)
Recognized as operating expenses	(3,299)
Less: balance on December 31	(512,460)
Unallocated fixed production overheads from idle facilities	(27,062)
Material loss	(10)
Recognized as manufacturing overhead	(36,321)
Other	(60)
		8,511,750
Direct labor		704,000
Manufacturing overhead		1,847,541
Less: unallocated fixed production overheads from idle facilities		(825,845)
Manufacturing cost		10,237,446
Add: finished goods, January 1		386,854
Purchase		26,568
Less: work-in-process inventory, December 31		(228,560)
Unallocated fixed production overheads from idle facilities		(10,473)
Inventory loss		(997)
Recognized as unfinished construction		(22,477)
Cost of goods manufactured		10,388,361
Add: finished goods, January 1		804,636
Purchase		4,409,514
Inventory Overages		3,017
Borrowings in the current period		3,589
Less: receipt of unfinished construction		(16,414)
Finished goods, December 31		(829,956)
Unallocated fixed production overheads from idle facilities		(79,883)
Recognized as manufacturing overhead		(1,511)
Recognized as operating expenses		(7,553)
Advances to Affiliates and other		(172,399)
Cost of goods sold		14,501,401
Cost from land leasing		101,999
Write-down of inventories (Reversal of write-downs)		75,582
Net inventory loss		(2,010)
Unallocated fixed production overheads from idle facilities		943,263
Revenue from sale of scraps		(427)
Operating costs		$ 15,619,808

111

China Petrochemical Development Corporation

Statement of selling expenses

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Amount	Note
Freight-out	$ 343,172
Tax	51,268
Other expenses	35,287	Does not exceed 5% individually
Total	$ 429,727

Statement of administrative expenses

Item	Amount	Note
Salary	$ 211,990
Depreciation	33,852
Professional service fee	31,601
Insurance premium	25,475
Other expenses	61,858	Does not exceed 5% individually
Total	$ 364,776

112

China Petrochemical Development Corporation

Statement of research and development expenses

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Items	Amount	Note
Depreciation	$ 63,102
Salary	38,440
Professional service fee	21,210
Other expenses	43,710	Does not exceed 5% individually
Total	$ 166,462

Note: 1. Please refer to Note 6 (h) for detailed changes in the cost and accumulated depreciation of property, plant, and equipment.
2. Please refer to Note 6 (i) for detailed changes in the cost and accumulated depreciation of right-of-use assets.
3. Please refer to Note 6 (j) for detailed changes in investment property.
4. Please refer to Note 6 (p) for detailed changes in provisions for liabilities.
5. Please refer to Note 6 (x) for detailed changes in other gains and losses.

AI assistant

CPDC — Audit Report / Information 2025

51772_rns_2026-04-23_f532e09e-8b3c-4186-9950-bcb504fa81e1.pdf

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Table of contents

Independent Auditors' Report

Opinion

Basis for Opinion

Emphasis of Matter

Other Matter

Key Audit Matters

Auditor’s Responsibilities for the Audit of the Financial Statements

Notes to Readers

(English Translation of Financial Statements Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Balance Sheets

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Financial Statements Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Statements of Comprehensive Income

(English Translation of Financial Statements Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Statements of Cash Flows

(English Translation of Financial Statements Originally Issued in Chinese)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Statements of Cash Flows

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(4) Summary of material accounting policies:

(a) Statement of compliance

(b) Basis of preparation

(i) Basis of measurement

(ii) Functional and presentation currency

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

(6) Explanation of significant accounts:

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION

Notes to the Financial Statements

CPDC Audit Report / Information 2025