CPDC - Interim / Quarterly Report 2021

Stock Code:1314

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Nine Months Ended September 30, 2021 and 2020

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

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (14) Segment information	Page
	1 2 3 4 5 6 7 8 8 8～9 9～13 14 14～68 68～71 71～72 72～77 77 77 77～78 79～83 83～84 85～86 87～89

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

Page

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Independent Auditors’ Review Report

To the Board of Directors China Petrochemical Development Corporation:

Introduction

We have reviewed the accompanying consolidated balance sheets of China Petrochemical Development Corporation and its subsidiaries as of September 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2021 and 2020, changes in equity and cash flows for the nine months ended September 30, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standard 65, “ Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect total assets amounting to $39,601,828 and $30,039,510 thousand, constituting 32.79% and 29.07% of consolidated total assets at September 30, 2021 and 2020, respectively, total liabilities amounting to $5,712,397 and $4,789,618 thousand, constituting 12.27% and 14.27% of consolidated total liabilities at September 30, 2021 and 2020, respectively, and total comprehensive income (loss) amounting to $2,520 thousand, $80,800 thousand, $(52,912) thousand and $(26,373) thousand, constituting 0.21%, (24.76)%, (1.57)% and 12.09% of consolidated total comprehensive income (loss) for the three months and nine months ended September 30, 2021 and 2020, respectively.

Furthermore, as stated in note 6(g), the other equity accounted investments of China Petrochemical Development Corporation and its subsidiaries in its investee companies of $1,372,123 thousand and $1,124,556 thousand as of September 30, 2021 and 2020, respectively, and its equity in net earnings on these investee companies of $112,793 thousand, $23,749 thousand, $282,607 thousand and $40,186 thousand for the three months and nine months ended September 30, 2021 and 2020, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

3-1

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of China Petrochemical Development Corporation and its subsidiaries as of September 30, 2021 and 2020, and of its consolidated financial performance for the three months and nine months ended September 30, 2021 and 2020, as well as its consolidated cash flows for the nine months ended September 30, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Emphasis of Matter

As described in notes 6(j) and 6(q) of the notes to the consolidated financial statements, a portion of the land at the Anshun plant, which is located in Annan Dist., Tainan City, was polluted. A remediation project was submitted for approval in accordance with the related regulations, and the relevant remediation project expenses had been accrued. Nevertheless, China Petrochemical Development Corporation has dissent regarding the attribution of responsibilities for remediation, and will continue to seek administrative and judicial remedies. Our opinion is not modified in respect of this matter.

The engagement partners on the reviews resulting in this independent auditors’ review report are Chen Mei Fang and Chung Tan Tan.

KPMG

Taipei, Taiwan (Republic of China) November 10, 2021

Notes to Readers

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

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2021, December 31, 2020, and September 30, 2020 (Expressed in Thousands of New Taiwan Dollars)

September 30, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 11,271,906 10 1110 Current financial assets at fair value through profit or loss (note 6(b)) 688,374 1 1120 Current financial assets at fair value through other comprehensive income (note 6(c)) 9,034 - 1170 Notes and accounts receivable, net (note 6(d)) 3,890,692 3 1180 Accounts receivable related parties, net (notes 6(d) and 7) 392,061 - 1200 Other receivables (notes 6(d) and 7) 210,173 - 1220 Current tax assets (note 4) 6,108 - 130X Inventories (note 6(e)) 20,543,259 17 1410 Prepayments 2,189,299 2 1470 Other current assets (note 6(f)) 2,611,006 2 Total current assets 41,811,912 35 Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 10,746,855 9 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 2,828,156 2 1551 Investments accounted for using equity method (note 6(g)) 2,252,583 2 1600 Property, plant and equipment (note 6(h)) 25,356,159 21 1755 Right-of-use assets (note 6(i)) 872,279 1 1760 Investment property, net (note 6(j)) 36,344,845 30 1780 Intangible assets (note 6(k)) 168,810 - 1840 Deferred income tax assets (notes 4 and 6(t)) 11,023 - 1900 Other non-current assets (note 8) 388,348 - Total non-current assets 78,969,058 65 Total assets $ 120,780,970 100	December 31, 2020 Amount % 7,479,899 7 829,533 1 9,195 - 1,784,564 2 51,106 - 144,294 - - - 12,665,959 12 1,246,404 1 2,878,214 3 27,089,168 26 10,746,855 10 2,799,521 3 2,038,003 2 23,226,955 22 872,937 1 37,626,827 36 159,173 - 11,023 - 339,528 - 77,820,822 74 104,909,990 100	September 30, 2020 Amount % 8,071,086 8 738,900 1 9,015 - 1,430,985 1 42,815 - 164,147 - - - 12,331,485 12 1,886,594 2 3,440,100 3 28,115,127 27 10,503,964 10 2,361,951 2 2,007,673 2 21,953,934 22 876,715 1 37,073,802 36 163,534 - 11,023 - 269,102 - 75,221,698 73 103,336,825 100 Liabilities and Equity Current liabilities: 2100 Short-term loans (note 6(l)) 2130 Current contract liabilities (note 6(w)) 2170 Accounts payable 2180 Accounts payable to related parties (note 7) 2200 Other payables (note 7) 2230 Current tax liabilities (note 4) 2250 Provisions-current (notes 4, 6(q) and 6(s)) 2280 Lease liabilities-current (note 6(p)) 2320 Long-term liabilities-current portion (note 6(m)) 2399 Other current liabilities, others Total current liabilities Non-Current liabilities: 2530 Bonds payable (note 6(n)) 2540 Long-term bank loans (note 6(m)) 2550 Provisions-non-current (notes 4, 6(q) and 6(s)) 2570 Deferred income tax liabilities (notes 4 and 6(t)) 2580 Lease liabilities-non-current (note 6(p)) 2611 Long-term bills payable (note 6(o)) 2670 Other non-current liabilities, others Total non-current liabilities Total liabilities Equity attributable to owners of parent: 3110 Common stock (note 6(u)) 3200 Capital surplus (note 6(u)) Retained earnings (note 6(u)): 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Others (note 6(u)): 3410 Exchange differences arising on translation of foreign operations 3420 Unrealized gains or loss on financial assets at fair value through other comprehensive income Total equity attributable to shareholders of the parent: 36XX Non-controlling interests Total equity Total liabilities and equity	September 30, 2021		December 31, 2020		September 30, 2020 Amount % 4,896,182 5 3,421 - 1,447,479 1 - - 1,158,404 1 - - 140,551 - 45,485 - 1,706,567 2 81,832 - 9,479,921 9 3,500,000 4 6,458,584 6 1,702,653 2 6,500,378 6 256,057 - 5,546,725 5 119,103 - 24,083,500 23 33,563,421 32 32,848,502 32 583,181 1 2,311,174 2 35,601,629 34 687,974 1 38,600,777 37 (994,144) (1) (1,324,452) (1) (2,318,596) (2) 69,713,864 68 59,540 - 69,773,404 68 103,336,825 100
			Amount %		Amount %
					3,615,000 4 1,676 - 1,394,928 1 - - 1,429,867 1 5,637 - 282,291 - 43,251 - 1,914,833 2 60,911 - 8,748,394 8 3,500,000 4 7,489,650 7 1,772,811 2 6,497,650 6 249,741 - 5,656,112 5 127,601 - 25,293,565 24 34,041,959 32 32,848,502 32 583,815 1 2,311,174 2 35,601,629 34 1,287,983 1 39,200,786 37 (966,202) (1) (854,259) (1) (1,820,461) (2) 70,812,642 68 55,389 - 70,868,031 68 104,909,990 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2021 and 2020

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

For the three months e 2021 Amount % 4000 Operating revenues (notes 6(w) and 7) $ 9,393,260 100 5000 Operating costs (note 6(e)) 8,281,117 88 Gross profit (loss) from operations 1,112,143 12 Operating expenses (note 7): 6100 Selling expenses 252,116 3 6200 Administrative expenses 305,686 3 6300 Research and development expenses 113,776 1 6450 Impairment loss determined in accordance with IFRS9 - - Total operating expenses 671,578 7 Net operating income (loss) 440,565 5 Non-operating income and expenses: 7100 Interest income (note 6(y)) 45,025 1 7010 Other income (notes 6(y) and 7) 92,498 1 7020 Other gains and losses (note 6(y)) 552,620 6 7050 Finance costs (notes 6(p) and 6(y)) (78,755) (1) 7060 Shares of profit (loss) of associates and joint ventures accounted for using equity method, net (note 6(g)) 110,831 1 7255 Gains on fair value adjustment, investment property (note 6(j)) - - Total non-operating income and expenses 722,219 8 Income (loss) before income tax 1,162,784 13 7950 Less: income tax expense (revenue) (notes 4 and 6(t)) (20,563) - Net income 1,183,347 13 8300 Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit or loss: 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 32,350 - 8320 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss - - 8349 Allocation of income tax to the above items - - Components of other comprehensive income that will not be reclassified to profit or loss 32,350 - 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences arising on translation of foreign operations 19,735 - 8370 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that may be reclassified to profit or loss (9,851) - 8399 Allocation of income tax to the above items - - Components of other comprehensive income that will be reclassified to profit or loss 9,884 - 8300 Other comprehensive income (loss), net 42,234 - 8500 Total comprehensive income $ 1,225,581 13 Net income (loss) attributable to: 8610 Shareholders of the parent $ 1,184,593 13 8620 Non-controlling interests (1,246) - $ 1,183,347 13 Comprehensive income (loss) attributable to: 8710 Shareholders of the parent $ 1,227,496 13 8720 Non-controlling interests (1,915) - $ 1,225,581 13 Earnings per share (note 6(v)) 9750 Basic earnings per share $ 0.36 9850 Diluted earnings per share $ 0.36	For the three months e	nded September 30 2020 Amount % 3,633,189 100 3,887,620 107 (254,431) (7) 162,148 4 202,992 6 119,896 3 (1,997) - 483,039 13 (737,470) (20) 39,059 1 77,803 2 222,006 6 (55,099) (1) 39,911 1 - - 323,680 9 (413,790) (11) 4,007 - (417,797) (11) 29,159 1 29 - - - 29,188 1 61,436 1 821 - - - 62,257 1 91,445 2 (326,352) (9) (416,230) (11) (1,567) - (417,797) (11) (324,223) (9) (2,129) - (326,352) (9) (0.13) (0.13)	For the nine months e	nded September 30 2020 Amount % 13,018,335 100 13,313,654 102 (295,319) (2) 441,553 4 536,354 4 299,371 2 - - 1,277,278 10 (1,572,597) (12) 124,269 1 298,442 2 376,617 3 (165,618) (1) 59,986 - 344,620 3 1,038,316 8 (534,281) (4) (580,429) (4) 46,148 - (77,501) (1) 3,655 - - - (73,846) (1) (192,532) (1) 2,030 - - - (190,502) (1) (264,348) (2) (218,200) (2) 49,937 (3,789) - 46,148 (213,538) (2) (4,662) - (218,200) (2) 0.02 0.02
			2021 Amount % 26,071,642 100 21,967,813 84 4,103,829 16 656,993 3 865,424 3 329,416 1 - - 1,851,833 7 2,251,996 9 140,521 - 178,086 1 556,667 2 (196,027) (1) 277,041 1 391,553 2 1,347,841 5 3,599,837 14 221,843 1 3,377,994 13 29,912 - 4,414 - - - 34,326 - (30,009) - (3,923) - - - (33,932) - 394 - 3,378,388 13 3,382,005 13 (4,011) - 3,377,994 13 3,384,437 13 (6,049) - 3,378,388 13 1.03 1.03

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Ordinary shares	Ordinary shares	Capital surplus		Retained earnings		Total other equity interest	Total other equity interest	Total equity attributable to owners of parent	Non-controlling interests	Total equity
						Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
			Legal reserve	Special reserve	Unappropriated retained earnings
$ 28,348,502 - - - - - - 4,500,000 - - - $ 32,848,502 $ 32,848,502 - - - - - - - - $ 32,848,502		1,286,700 - -	2,137,330 - -	35,490,262 - -	1,779,147 49,937 3,650 53,587 (173,844) (111,367) (985,455) - (393) - 126,299 687,974 1,287,983 3,382,005 4,329 3,386,334 (77,951) (1,210,033) - - 1,384 3,387,717	(804,515) - (189,629) (189,629) - - - - - - - (994,144) (966,202) - (31,894) (31,894) - - - - - (998,096)	(1,120,657) - (77,496) (77,496) - - - - - - (126,299) (1,324,452) (854,259) - 29,997 29,997 - - - - (1,384) (825,646)	67,116,769 49,937 (263,475) (213,538) - - (985,455) 3,796,481 (393) - - 69,713,864 70,812,642 3,382,005 2,432 3,384,437 - - 1,178 - - 74,198,257	77,095 (3,789) (873) (4,662) - - - - - (12,893) - 59,540 55,389 (4,011) (2,038) (6,049) - - (1,178) (24,099) - 24,063	67,193,864 46,148 (264,348)
		-	-	-						(218,200)
			173,844 - - - - - -	- 111,367 - - - - -						- - (985,455) 3,796,481 (393) (12,893) -
			2,311,174	35,601,629						69,773,404
			2,311,174 - -	35,601,629 - -						70,868,031 3,377,994 394
	-		-	-						3,378,388
	- - - - -		77,951 - - - -	- 1,210,033 - - -						- - - (24,099) -
	$ 32,848,502		2,389,125	36,811,662						74,222,320

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months and nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Income (loss) before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net gain on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plant and equipment Loss on disposal of investment properties Loss on disposal of investments accounted for using equity method Impairment loss on non-financial assets Gain on fair value adjustment of investment property Gain on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in accounts receivable due from related parties (Increase) decrease in other receivables Increase in inventories Increase in prepayments Increase in other current assets Total changes in operating assets Increase (decrease) in contract liabilities Increase in accounts payable Increase in accounts payable to related parties Increase (decrease) in other payable Decrease in provisions Increase in other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash outflow generated from operations Interest received Interest paid Income taxes paid Net cash flows used in operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Cash inflows due to combination Proceeds from disposal of investment properties Decrease (increase) in other financial assets Increase in other non-current assets Dividends received Proceeds from cancellation of property purchasing Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term loans Decrease in short-term loans Proceeds from issuing bonds Proceeds from long-term debt Repayments of long-term debt Increase in long-term bills payable Decrease in long-term bills payable Payment of lease liabilities Increase (decrease) in other non-current liabilities Cash dividends paid Capital increase by cash Interest paid Change in non-controlling interests Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period See accompanying notes to consolidated financial statements.	For the nine months e	nded September 30 2020 (534,281) 709,310 10,437 (514,937) 165,618 (124,269) (49,014) (59,986) (180) - 580 13,983 (344,620) (30)
	2021 $ 3,599,837 821,138 6,521 (165,791) 196,027 (140,521) (66,029) (277,041) 117 (706,465) - 4,804 (391,553) (34) (718,827) (3,561,023) (340,955) (32,154) (7,882,104) (949,344) (215,023) (12,980,603) 90,046 819,226 10,432 434,328 (92,339) 41,498 1,303,191 (11,677,412) (12,396,239) (8,796,402) 82,516 (199,094) (85,641) (8,998,621) - 1,438 (456,173) 762,988 - - (3,108,915) 325 (17,192) - 2,380,000 482,231 (49,005) 120,790 186,000 302,487 12,086,399 (9,944,396) - 26,966,818 (19,734,769) 31,149,500 (27,992,300) (44,927) 16,490 - - (4,263) - 12,498,552 (10,411) 3,792,007 7,479,899 $ 11,271,906
		(193,108)
		215,779 14,949 122,291 (2,641,177) (390,689) (331,253)
		(3,010,100)
		(84,842) 131,110 - (576,777) (281,588) 24,823
		(787,274)
		(3,797,374)
		(3,990,482)
		(4,524,763) 91,612 (163,420) (27,893)
		(4,624,464)
		(387,499) 299,070 (921,072) 931,069 (140,000) 5,109 (2,439,738) 340 (1,099) 13 - (2,491,124) (118,362) 496,960 -
		(4,766,333)
		10,928,000 (9,510,606) 3,500,000 7,672,085 (7,935,735) 18,722,200 (17,672,200) (45,138) (6,513) (985,455) 3,796,481 (3,517) (13,286)
		8,446,316
		(100,686) (1,045,167) 9,116,253
		8,071,086

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2021 and 2020

(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 and its subsidiaries (hereinafter together referred to as the “Group”) 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, acetic acid and nylon.

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

The consolidated financial statements for the nine months ended September 30, 2021 and 2020 were authorized for issuance by the Board of Directors on November 10, 2021.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”
●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its consolidated financial statements:

－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”
●Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of significant accounting policies:

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC, and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2020. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2020.

(b) Basis of consolidation
(i) List of subsidiaries in the consolidated financial statements

The subsidiaries included in the consolidated financial statements were as follows:

Name of investors	Name of subsidiaries	Nature of business Manufacture of chemical products and their derivatives of phosphoric acid and fertilizer storage, transport, purchase, marketing business	Shareholding rat	Shareholding rat	io September 30, 2020 Notes % 100.00 TSCIC was established on June 16, 1998. Due to the business combination on August 1, 2018, CIC became a dissolved company and TSCIC became a surviving company. On April 29, 2021, the Board of Directors decided to reduce its capital amounting to $200,000 thousand. The base date of the reduction was May 20, 2021, and the relevant legal registration procedures had been completed on June 8, 2021. As of September 30, 2021, December 31 and September 30, 2020, TSCIC's actual paid in capital amounted to $760,000 thousand, $960,000 thousand and $960,000 thousand, respectively. (Continued)
			September 30, 2021 % 100.00	December 31, 2020 % 100.00
The Company	Tsou Seen Chemical Industries Corporation (TSCIC)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investors	Name of subsidiaries	Nature of business Water treatment works, plumbing works, apparatus and instrument installation work, refrigeration and air conditioning engineering and tank car repair and other services Holding company Real estate investment and development Holding company Petrochemical supporting facility construction Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub-fitted trading	Shareholding rat	Shareholding rat	io September 30, 2020 Notes % 100.00 CPDC GT was established on May 31, 1999. As of September 30, 2021, December 31 and September 30, 2020, CPDC GT's actual paid-in capital amounted to $150,000 thousand. % 100.00 CPDC (BVI) was established on January 9, 1998, registered in the British Virgin Islands, and is an international investment company. As of September 30, 2021, December 31 and September 30, 2020, CPDC (BVI)'s actual paid-in capital amounted to USD26,580 thousand. % 100.00 BES Twin Towers was established on March 1, 2011. It increased its capital by retained earnings amounting to $681,112 thousand on May 11, 2020. As of September 30, 2021, December 31 and September 30, 2020, BES Twin Towers' actual paid-in capital amounted to $5,800,121 thousand, $5,800,121 thousand and $4,362,121 thousand, respectively. % 100.00 UDL was established on May 20, 2008. As of September 30, 2021, December 31 and September 30, 2020, UDL's actual paid-in capital amounted to USD324,684 thousand, USD313,851 thousand and USD283,636 thousand, respectively. % 0.42 Weiming was established on May 16, 2013, and changed its name to Jiangsu Weiming New Material Co., Ltd. (original name: Jiangsu Weiming Petrochemical Corporation) on October 14, 2021. It increased its capital through UDL amounting to CNY70,000 thousand, CNY200,000 thousand and CNY200,000 thousand on June 28, 2021, November 13 and June 19, 2020, respectively. The said amounts were verified on June 29, 2021, November 17 and June 29, 2020, respectively. As of September 30, 2021, December 31 and September 30, 2020, Weiming's actual paid in capital amounted to CNY1,688,000 thousand, CNY1,618,000 thousand and CNY1,418,000 thousand, respectively. % 44.52 Weiqiang was established on May 9, 2013. As of September 30, 2021, December 31 and September 30, 2020, Weiqiang's actual paid-in capital amounted to CNY44,920 thousand.
			September 30, 2021 % 100.00 % 100.00 % 100.00 % 100.00 % 0.36 % 44.52	December 31, 2020 % 100.00 % 100.00 % 100.00 % 100.00 % 0.37 % 44.52
The Company The Company The Company The Company The Company The Company	CPDC Green Technology Corp. (CPDC GT) CPDC Investment (BVI) Co., Ltd. (CPDC (BVI)) BES Twin Towers Development Co., Ltd. (BES Twin Towers) Unichem Development Limited (UDL) Jiangsu Weiming New Material Co., Ltd. (Weiming) (original name: Jiangsu Weiming Petrochemical Corporation) Weiqiang International Trade (Shanghai) Co., Ltd. (Weiqiang)

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investors	Name of subsidiaries	Nature of business Engaged in construction, real estate, building constructional consulting, lease equipment and wholesale of building materials Commissioned to create a vendor to build the housing, commercial buildings and plant rental business, management of land development and playgrounds and other related business investment Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub-fitted trading Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub-fitted trading Engaged in biotechnology, pharmaceutical research and development and marketing Petrochemical supporting facility construction	Shareholding rat	Shareholding rat	io September 30, 2020 Notes % 100.00 Thanh Phong was established on May 22, 2017. The Company had reached agreement on cancellation of shares with the non-controlling interests, who owned 2.13% of outstanding shares. After the cancellation, the Company owned Thanh Phong 100% of outstanding shares. As of September 30, 2021, December 31 and September 30, 2020, Thanh Phong's actual paid-in capital amounted to VND458,637,500 thousand. % 100.00 The Company established Ding-Yue on October 11, 1995 and increased its capital amounting to $4,200,000 thousand and $2,500,000 thousand on June 16, 2021 and February 26, 2020, respectively. As of September 30, 2021, December 31 and September 30, 2020, its actual paid in capital amounted to $14,240,000 thousand, $10,040,000 thousand and $10,040,000 thousand, respectively. On October 21, 2021, the Company increased Ding-Yue’s capital amounting to $2,000,000 thousand. % 4.02 Weihua was established on December 10, 2012. As of September 30, 2021, December 31 and September 30, 2020, Weihua's actual paid-in capital amounted to CNY156,289 thousand. % 55.48 Weiqiang was established on May 9, 2013. As of September 30, 2021, December 31 and September 30, 2020, Weiqiang's actual paid-in capital amounted to CNY44,920 thousand. % 91.10 Taivex Therapeutics was established on February 11, 2010. TSCIC invested in Taivex Therapeutics on August 18, 2010. As of September 30, 2021, December 31 and September 30, 2020, Taivex's actual paid-in capital amounted to $507,399 thousand. % 99.58 Weiming was established on May 16, 2013, and changed its name to Jiangsu Weiming New Material Co., Ltd. (original name: Jiangsu Weiming Petrochemical Corporation) on October 14, 2021. It increased its capital through UDL amounting to CNY70,000 thousand, CNY200,000 thousand and CNY200,000 thousand on June 28, 2021, November 13 and June 19, 2020, respectively. The said amounts were verified on June 29, 2021, November 17 and June 29, 2020, respectively. As of September 30, 2021, December 31 and September 30, 2020, Weiming's actual paid in capital amounted to CNY1,688,000 thousand, CNY1,618,000 thousand and CNY1,418,000 thousand, respectively.
			September 30, 2021 % 100.00 % 100.00 % 4.02 % 55.48 % 91.10 % 99.64	December 31, 2020 % 100.00 % 100.00 % 4.02 % 55.48 % 91.10 % 99.63
The Company The Company Tsou Seen Chemical Industries Corporation Tsou Seen Chemical Industries Corporation Tsou Seen Chemical Industries Corporation Unichem Development Limited	Thanh Phong Construction Investment Co., Ltd. (Thanh Phong) Ding-Yue Development Co., Ltd. (Ding-Yue) Weihua (Rudong) Trade Co., Ltd. (Weihua) Weiqiang International Trade (Shanghai) Co., Ltd. (Weiqiang) Taivex Therapeutics Corporation (Taivex Therapeutics) Jiangsu Weiming New Material Co., Ltd. (Weiming) (original name: Jiangsu Weiming Petrochemical Corporation)

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investors	Name of subsidiaries	Nature of business Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub-fitted trading Consultancy Engaged in trading of petroleum chemical products, electronic chemicals, a variety of industrial gases, gas mixtures and other manufacturing sub-fitted trading Engaged in engineering plastic and high-value petroleum chemical products Consult, design, construction, management service on engineering and sales of chemical products Holding company Investment and technical advisory services	Shareholding rat	Shareholding rat	io September 30, 2020 Notes % 95.98 Weihua was established on December 10, 2012. As of September 30, 2021, December 31 and September 30, 2020, Weihua's actual paid-in capital amounted to CNY156,289 thousand. % 100.00 Weida was established on November 26, 2012 and was dissolved on November 8, 2019. The liquidation process had been completed on December 30, 2020. As of September 30, 2021, December 31 and September 30, 2020, Weida's actual paid-in capital amounted to USD0 thousand, USD0 thousand and USD450 thousand, respectively. % 100.00 Weida PC was established on December 23, 2014 and was dissolved on October 29, 2019. The liquidation process had been completed on January 19, 2021. As of September 30, 2021, December 31 and September 30, 2020, Weida PC's actual paid-in capital amounted to CNY0 thousand, CNY6,000 thousand and CNY6,000 thousand, respectively. % 100.00 Weicai was established on January 6, 2015 and acquired by UDL on November 5, 2018. As of September 30, 2021, December 31 and September 30, 2020, Weicai's actual paid-in capital amounted to CNY414,955 thousand. % - Weiming Construction was established on October 26, 2020. It increased its capital through Weiming amounting to CNY14,920 thousand and CNY14,080 thousand on April 1 and January 26, 2021, respectively. The said amounts were verified on April 2, 2021. As of September 30, 2021, December 31 and September 30, 2020, Weiming Construction's actual paid in capital amounted to CNY30,000 thousand, CNY1,000 thousand and CNY0 thousand, respectively. % 100.00 Frontier Fortune was established on November 23, 2016. It increased its capital through BES Twin Towers amounting to USD50,000 thousand on October 22, 2020. As of September 30, 2021, December 31 and September 30, 2020, Frontier fortune's actual paid in capital amounted to USD93,060 thousand, USD93,060 thousand and USD43,060 thousand, respectively. % 100.00 Core Pacific Twin Star (Myanmar) was established on February 16, 2017. As of September 30, 2021, December 31 and September 30, 2020, Core Pacific Twin Star (Myanmar)'s actual paid-in capital amounted to USD5,500 thousand.
			September 30, 2021 % 95.98 % - % - % 100.00 % 100.00 % 100.00 % 100.00	December 31, 2020 % 95.98 % - % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
Unichem Development Limited Unichem Development Limited Unichem Development Limited Unichem Development Limited Jiangsu Weiming New Material Co., Ltd. (Weiming) (original name: Jiangsu Weiming Petrochemical Corporation) BES Twin Towers Development Co., Ltd. (BES Twin Towers) Frontier Fortune Investment Pte. Ltd. (Frontier Fortune)	Weihua (Rudong) Trade Co., Ltd. (Weihua) Weida (Zhangzhou) Consultant Service Co., Ltd. (Weida) Zhangzhou Weida Petrochemical Co., Ltd. (Weida PC) Changzhou Weicai New Material Science & Technology Co., Ltd. (Weicai) Weiming (Rudong) Construction Co., Ltd. (Weiming Construction) Frontier Fortune Investment Pte. Ltd. (Frontier Fortune) Core Pacific Twin Star (Myanmar) Investment Co., Ltd. (Core Pacific Twin Star (Myanmar))

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investors	Name of subsidiaries	Nature of business Real estate, research of petroleum market and consultancy Engineering, real estate and consultancy of construction Building construction, real estate management, development and sale Engineering, construction contracting business	Shareholding rat	Shareholding rat	io September 30, 2020 Notes % 99.99 Gemini Star (India) was established on January 8, 2019. As of September 30, 2021, December 31 and September 30, 2020, its actual paid-in capital amounted to INR21,000 thousand. % 97.70 Core Pacific Twin Star (Vietnam) was established on November 19, 2018. It increased its capital through Frontier Fortune Investment amounting to VND1,155,000,000 thousand on November 3, 2020. The Company had reached agreement on cancellation of shares with the non-controlling interests, who owned 0.99% of outstanding shares on August 10, 2021. After the cancellation, the Company owned Core Pacific Twin Star (Vietnam) 100% of outstanding shares. As of September 30, 2021, December 31 and September 30, 2020, its actual paid in capital amounted to VND2,005,000,000 thousand, VND2,025,000,000 thousand and VND870,000,000 thousand, respectively. % 80.00 Core Pacific Pioneer was established on May 24, 2018. As of September 30, 2021, December 31 and September 30, 2020, its actual paid-in capital amounted to MMK1,512,540 thousand. % 100.00 Da Yin Construction Engineering was established on November 24, 1972. As of September 30, 2021, December 31 and September 30, 2020, its actual paid- in capital amounted to $22,500 thousand.
			September 30, 2021 % 99.99 % 100.00 % 80.00 % 100.00	December 31, 2020 % 99.99 % 99.01 % 80.00 % 100.00
Frontier Fortune Investment Pte. Ltd. (Frontier Fortune) Frontier Fortune Investment Pte. Ltd. (Frontier Fortune) Core Pacific Twin Star (Myanmar) Investment Co., Ltd. (Core Pacific Twin Star (Myanmar)) Ding-Yue Development Co., Ltd (Ding-Yue)	Gemini Star (India) Private Limited. (Gemini Star (India)) Core Pacific Twin Star (Vietnam) Investment Co., Ltd. (Core Pacific Twin Star (Vietnam)) Core Pacific Pioneer (Myanmar) Co., Ltd. (Core Pacific Pioneer (Myanmar)) Da Yin Construction Engineering Co., Ltd. (Da Yin Construction Engineering)

(c) Income taxes

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period using the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period.

(d) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make judgments, estimates and assumptions 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.

The preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2020. For related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2020.

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash on hand Checking and demand deposits Time deposits Cash equivalents Cash and cash equivalents	September 30, 2021 $ 1,728 3,488,834 4,581,334 3,200,010 $ 11,271,906	December 31, 2020 1,806 3,668,398 3,659,705 149,990 7,479,899	September 30, 2020
			1,789 4,018,698 2,877,773 1,172,826
			8,071,086

Time deposits with original maturity within three months 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(z) for the fair value sensitivity analysis and interest rate risk of the financial assets and liabilities of the Group.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Current financial assets designated at fair value through profit or loss: Beneficiary certificates Structured deposits Stocks listed on domestic markets Subtotal Non-current financial assets designated at fair value through profit or loss: Stocks unlisted on domestic markets Total	September 30, 2021 $ - 21,510 666,864 688,374 10,746,855 $ 11,435,229	December 31, 2020 11,791 - 817,742 829,533 10,746,855 11,576,388	September 30, 2020
			11,781 - 727,119
			738,900
			10,503,964
			11,242,864

Please refer to note 6(y) for the gain or loss on financial assets recognized at fair value through profit or loss.

The dividends income from the financial assets recognized at fair value through profit or loss for the nine months ended September 30, 2021 and 2020 amounted to $38,612 thousand and $20,110 thousand, respectively.

The Group holds 582,362 thousand shares of the common and preferred stock of Core Pacific City Co., Ltd as of September 30, 2021, December 31 and September 30, 2020. The amount accounted for gain from investments in equity instruments at fair value through profit or loss was $0 thousand and $560,970 thousand for the nine months ended September 30, 2021 and 2020, respectively.

Please refer to note 8 for details of the financial assets at fair value through profit or loss of the Group pledged as collateral as of September 30, 2021, December 31 and September 30, 2020.

Equity investments at fair value through other comprehensive income - current： Stock listed on domestic markets Equity investments at fair value through other comprehensive income - non- current Stocks listed on domestic markets Stocks unlisted on domestic markets Subtotal Total	September 30, 2021 $ 9,034 2,062,711 765,445 2,828,156 $ 2,837,190	December 31, 2020 9,195 2,059,052 740,469 2,799,521 2,808,716	September 30, 2020
			9,015
			1,619,454 742,497
			2,361,951
			2,370,966

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group designated the investments show above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term strategic purposes.

Please refer to note 6(u) for the gain or loss on financial assets recognized at fair value through other comprehensive income.

The dividends income from the financial assets recognized at fair value through other comprehensive income for the three months ended September 30, 2021 and 2020 and the nine months ended September 30, 2021 and 2020, amounted to $25,337 thousand, $28,904 thousand, $27,417 thousand and $28,904 thousand, respectively.

On September 15, 2020, the Company’s Board of Directors approved a resolution to invest in Chain Yarn Co., Ltd. by purchasing 30,000 thousand common shares amounting to $300,000 thousand, which was accounted for as non-current financial assets at fair value through other comprehensive income.

The director of Praxair Chemax Semiconductor Materials Co., Ltd. (hereinafter referred to as “PRAXAIR”) delegated by the Company, was elected as the new Chairman in the directors’ meeting on January 30, 2013. However, Praxair Inc. did not recognize the director delegated by the Company as the Chairman, resulting in the new Chairman being unable to exercise his authority. Also, the supervisor appointed by the Company was prevented from auditing the accounts and records pursuant to the Company Law, hence, the new Chairman and the designated supervisor representing PRAXAIR, filed an action asking the vice chairman and general manager to provide the accounts and records and requested to return the seal, business invasion and others in a criminal and civil lawsuit. The vice chairman delegated by Praxair Inc. claimed privilege to act as the Chairman and filed legal actions declaring the non-existence of the new Chairman’s commission of authority and also sent a letter to the court requesting a dissolution of PRAXAIR, which was rejected by the courts. The supervisor appointed by Praxair Inc. illegally called a temporary shareholders’ meeting in 2013 to propose the dissolution of the Company and reelection of directors and supervisors. Hence, the Company filed legal actions declaring the withdrawal of the resolution from the illegal temporary shareholders’ meetings and the resolutions from the temporary shareholders’ meeting was not established. Currently, the supervisor filed legal action against the manager for submitting the accounts and the records, after winning the 1st and 2nd trial, the defendant appealed but was dismissed by the 3rd trial instance. This case was remanded to the Taipei High Court, but the verdict was dismissed in 2015. The Company was not satisfied with the appeal and it was denied by 2nd trial instance. The judgment was binding and final on December 2017. On the other side, the vice chairman designated by Praxair Inc. filed legal action declaring the non-existence of the new Chairman’ s commission of authority, after the judgment from the High Court that the Chairman designated by the Company won the verdict, the defendant appealed to the 3rd instance, with the Supreme Court dismissing the appeal. The whole case confirms the appointed relationship between the Chairman designated by the Company and PRAXAIR exists. On November 19, 2016, the letter from Ministry of Economic Affairs states that the former chairman of directors, appointed by the Company, is the Chairman of PRAXAIR, and restored the representative duty per the judgment No. 2455 from the Supreme High Court in 2015. However, according to the requirement from Ministry of Economic Affairs, both sides were not able to hold the legitimate reelection prior to January 9, 2017 which resulted in vacancy of directors and supervisors of PRAXAIR. In order to strive for the rights and interests of the shareholders, the Company immediately brought the arbitration per joint venture agreement of both sides and applied for an auditor and provisional administrator to instruct

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

the central section office of the Ministry of Economic Affairs to allow Praxair Inc. to conduct the change of registration on July 6, 2017. The Company filed a request for the arbitration of International Chamber of Commerce in 2017 and received the award issued by the International Court of International Chamber of Commerce on September 3, 2018. A part of the award favored for the Company and confirmed that the Company was entitled to receive the dividends from PRAXAIR for the year of 2013. In order to protect the Company’ s right, the Company submitted a lawsuit withdrawing a part of such Arbitration award against the Company to Taipei District Court. On December 13, Taipei District Court dismissed the Company’ s claim of withdrawing the ICC’ s decision. The Company filed an appeal on January 8, 2020, but such appeal was dismissed by Taiwan High Court on September 1, 2020. The Company appealed forthwith to the Supreme Court on September 21, 2020.

As of September 30, 2021, December 31 and September 30, 2020, the Group provided as collateral portion of its financial assets. Please refer to note 8 for details of the related assets pledged as collateral.

(d) Notes, accounts and other receivables

Notes receivable Accounts receivable (including related parties) Other receivables Less: allowance for doubtful receivables Net amount	September 30, 2021 $ 1,103,201 3,512,409 210,173 (332,857) $ 4,492,926	December 31, 2020 375,689 1,906,374 149,618 (451,717) 1,979,964	September 30, 2020
			341,046 1,577,360 169,390 (449,849) 1,637,947

The Group 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, trade 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:

September 30, 2021	September 30, 2021
Carrying amount of account receivables $ 4,494,499 55,675 33,192 4,827 237,590 $ 4,825,783	Weighted average expected credit loss 0%~2.07% 0%~1.07% 0%~2.86% 0%~17.78% 100%	Allowance for expected credit loss
		92,865 594 950 858 237,590
		332,857

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020	December 31, 2020
Carrying amount of account receivables Weighted average expected credit loss $ 2,054,328 0%~4.60% 9,103 0%~0.94% 9,422 0%~3.18% 2,378 0%~16.67% 356,450 100% $ 2,431,681 September 30, 2020		Allowance for expected credit loss
		94,485 86 300 396 356,450
		451,717

	Weighted average expected credit loss 0%~5.51% 0%~3.47% 0%~8.29% 100%	Allowance for expected credit loss
		93,431 998 788 354,632
		449,849

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

Balance at January 1 Amounts written off Foreign exchange gains/(losses) Balance at September 30	For the nine months ended September 30, 2021 2020 $ 451,717 451,529 (119,275) - 415 (1,680) $ 332,857 449,849
	2021 $ 451,717 (119,275) 415 $ 332,857

The consolidated subsidiaries, Weihua (Rudong) Trade Co., Ltd. and Weiqiang International Trade (Shanghai) Co., Ltd., filed civil complaints against Shanghai Tongye Coal Chemical Group Co. Ltd. in Shanghai to claim for the delay of payment of their accounts receivable from Shanghai Tongye Coal Chemical Group Co., Ltd. The ruling had been made due to the lack of assets for liquidation, the bankruptcy procedure was concluded. The unrecoverable allowance of $119,275 thousand had been written off. For relevant information, please refer to note 9(j).

As of September 30, 2021, December 31 and September 30, 2020, the aforesaid receivables were not pledged as collateral.

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

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Inventories

Finished goods Work in progress Raw materials Fuel Merchandise inventories Subtotal Prepayment for land Land held for construction site Land held for construction site- compensation for levied land Payment for floor area ratio Construction in progress Subtotal Total	September 30, 2021 $ 1,640,551 344,775 1,902,292 17,870 379,439 4,284,927 15,340,010 419,560 9,423 13,535 475,804 16,258,332 $ 20,543,259	December 31, 2020 604,363 390,589 1,527,523 14,345 277,376 2,814,196 9,340,010 415,441 9,423 13,535 73,354 9,851,763 12,665,959	September 30, 2020
			533,607 310,619 1,478,567 13,023 144,336
			2,480,152
			9,340,010 415,441 9,423 13,535 72,924
			9,851,333
			12,331,485

A resolution was made during the Board of Directors’ meeting held on September 25, 2019 for the Group to acquire Core Pacific City’s permanent land ownership. The Group won the bidding on the same date. On October 30, 2019, the Group subsequently entered into a purchase agreement with Core Pacific City Co., Ltd. to buy the land located at Songshan District, Taipei City, as a construction site, for the amount of $37,200,010 thousand. Both parties have agreed to put the property, which includes the land and the existing construction into a trust. As of September 30, 2021, December 31 and September 30, 2020, the accumulated payments were $15,340,010 thousand, $9,340,010 thousand and $9,340,010 thousand, and the unpaid amounts were $21,860,000 thousand, $27,860,000 thousand and $27,860,000 thousand, respectively. Due to the delayed transfer of the aforesaid land, the cumulative amount of compensation payable to Core Pacific City Co., Ltd. due by the Group was $280,800 thousand. As of September 30, 2021, the unpaid amount was $60,000 thousand.

The Group signed a contract in March 2020 to purchase 203 pieces of land including Sanyu Section, Shilin District, Taipei City, which is expected to be used for bulk transfer. As of September 30, 2021 , the Group paid the full price and completed the registration of land ownership transfer.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The details of the cost of sales were as follows:

For the three months ended September 30, 2021 2020 $ 8,088,120 3,467,049 1,938 21,826 (463) 386 195,057 399,298 (3,535) (939) $ 8,281,117 3,887,620	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 8,088,120 1,938 (463) 195,057 (3,535) $ 8,281,117	2021 21,330,907 4,804 (2,114) 643,051 (8,835) 21,967,813	2020
		12,200,208 13,983 3,030 1,100,071 (3,638)
		13,313,654

As of September 30, 2021, December 31 and September 30, 2020, the aforesaid inventories were not pledged as collateral.

(f) Other current assets

Other current assets
Other financial assets Others	September 30, 2021 $ 1,992,983 618,023 $ 2,611,006	December 31, 2020 2,475,214 403,000 2,878,214	September 30, 2020
			2,701,524 738,576
			3,440,100

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

(g) Investments accounted for using equity method
(i) The Group’ s investments accounted for using the equity method at the reporting date were classified as follows:

Associates	September 30, 2021 $ 2,252,583	December 31, 2020 2,038,003	September 30, 2020
			2,007,673

(ii) The Group’ s investments accounted for using the equity method that are individually insignificant were as follows:

Carrying value of insignificant associates	September 30, 2021 $ 5,409,434	December 31, 2020 4,867,651	September 30, 2020
			4,796,072

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Attribution to the Group Profit from continuing operations Other comprehensive income Total comprehensive income	For the three months ended September 30,	For the three months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
	2021 $ 110,831 (9,851) $ 100,980	2020 39,911 850 40,761		2021 277,041 491 277,532	2020
					59,986 5,685 65,671

(iii) On March 27, 2020, a resolution was made during the Board meeting of the Company to invest $140,000 thousand in Jean Pacific Development Co., Ltd. according to the proportion of shareholding.

(iv) Collateral

As of September 30, 2021, December 31 and September 30, 2020, the Group provided as collateral portion of its investments in aforesaid equity-accounted investees. Please refer to note 8 for details of the related assets pledged as collateral.

(v) The unreviewed financial statements of investments accounted for using equity method

As of September 30, 2021 and 2020, except for Jean Pacific Development Co., Ltd., Zhong Gong Baoquan Ltd., Kaohsiung Monomer Company Limited and Core Pacific Overseas Holdings Ltd., investments were accounted for by using the equity method, and the share of profit or loss and other comprehensive income of those investments were calculated based on the financial statements that have not been reviewed.

(h) Property, plant and equipment

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

Cost or deemed cost: Balance as of January 1, 2021 Additions Disposal Adjustment Return Effect of movements in exchange rate Balance as of September 30, 2021 Balance as of January 1, 2020 Additions Disposal Reclassification Adjustment Effect of movements in exchange rate Balance as of September 30, 2020	Land $ 5,730,777 - - - - - $ 5,730,777 $ 5,730,777 - - - - - $ 5,730,777	Land improvements 293,880 - - - - - 293,880 292,822 - (1,747) 742 - - 291,817	Buildings 4,560,436 - - 12,132 - (4,748) 4,567,820 3,741,728 117,597 - 24,060 - (16,897) 3,866,488	Machinery and equipment 44,020,701 12,338 (78,853) 838,830 - (3,196) 44,789,820 43,102,929 23,096 (94,318) 1,012,215 - (13,859) 44,030,063	Vehicles 86,911 5,808 (544) 210 - (76) 92,309 81,998 4,832 (2,388) 4,610 - (269) 88,783	Other facilities 278,762 5,858 (215) 28,373 - (200) 312,578 269,529 3,020 (1,030) 8,559 (2,000) (1,167) 276,911	Construction in progress 9,922,491 3,084,911 - (879,545) (186,000) (23,593) 11,918,264 8,319,324 2,291,193 - (1,050,186) (1,425) (81,904) 9,477,002	Accumulated impairment - - - - - - - - - - - - - -	Total
									64,893,958 3,108,915 (79,612) - (186,000) (31,813)
									67,705,448
									61,539,107 2,439,738 (99,483) - (3,425) (114,096)
									63,761,841

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CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Depreciation and impairment loss: Balance as of January 1, 2021 Depreciation for the period Disposal Effect of movements in exchange rate Balance as of September 30, 2021 Balance as of January 1, 2020 Depreciation for the period Disposal Effect of movements in exchange rate Balance as of September 30, 2020 Carrying amounts: Balance as of January 1, 2021 Balance as of September 30, 2021 Balance as of January 1, 2020 Balance as of September 30, 2020	Land $ - - - - $ - $ - - - - $ - $ 5,730,777 $ 5,730,777 $ 5,730,777 $ 5,730,777	Land improvements 227,439 4,104 - - 231,543 223,021 4,634 (1,747) - 225,908 66,441 62,337 69,801 65,909	Buildings 1,514,351 105,028 - (895) 1,618,484 1,388,882 92,216 - (2,645) 1,478,453 3,046,085 2,949,336 2,352,846 2,388,035	Machinery and equipment 34,641,268 630,973 (78,414) (1,826) 35,192,001 34,383,105 534,968 (94,209) (5,867) 34,817,997 9,379,433 9,597,819 8,719,824 9,212,066	Vehicles 57,052 5,689 (541) (46) 62,154 56,899 4,424 (2,337) (112) 58,874 29,859 30,155 25,099 29,909	Other facilities 188,315 18,576 (215) (147) 206,529 173,343 16,227 (1,030) (443) 188,097 90,447 106,049 96,186 88,814	Construction in progress - - - - - - - - - - 9,922,491 11,918,264 8,319,324 9,477,002	Accumulated impairment 5,038,578 - - - 5,038,578 5,038,578 - - - 5,038,578 (5,038,578) (5,038,578) (5,038,578) (5,038,578)	Total
									41,667,003 764,370 (79,170) (2,914) 42,349,289 41,263,828 652,469 (99,323) (9,067) 41,807,907 23,226,955 25,356,159 20,275,279 21,953,934

As of September 30, 2021, December 31 and September 30, 2020, the Group provided as collateral, a portion of its property, plant and equipment, please refer to note 8 for details of the related assets pledged as collateral.

On November 26, 2013, the plan to invest in China was approved during the meeting of the Board of Directors of the Company. On March 25, 2014 and November 1, 2018, the Investment Commission, Ministry of Economic Affairs (MOEA) approved the investment of the Company in Jiangsu Weiming New Material Co., Ltd (original name: Jiangsu Weiming Petrochemical Corporation) in China in the amount of CNY2,388,000 thousand (equivalent to $11,100,000 thousand) mainly to establish a manufacturing operations for petrochemical products (including hydrorefining crude benzol, cyclohexanone, nylon 6, etc.). As of September 30, 2021, December 31 and September 30, 2020, accumulated investment remittance from Taiwan to Mainland China was CNY1,688,000 thousand, CNY1,618,000 thousand and CNY1,418,000 thousand, respectively. The amount invested in manufacturing plant and machinery was CNY1,667,992 thousand, CNY1,449,023 thousand and CNY1,411,887 thousand, respectively.

(i) Right-of-use assets

The Group leases assets including land, land use right, buildings, machinery and equipment and vehicles. Information about leases for which the Group as a lessee is presented below:

Land	Land-use right	Buildings	Machinery and equipment	Vehicles	Other facilities	Total
$ 228,407 18,965 (484) - $ 246,888 $ 204,551 24,144 (288) - $ 228,407	658,503 - - (1,986) 656,517 657,738 - - (9,308) 648,430	19,751 3,436 (576) - 22,611 19,554 10,232 (10,818) - 18,968	111,057 30,432 (30,940) - 110,549 63,906 56,115 (8,964) - 111,057	16,931 11,715 (8,948) - 19,698 19,456 5,112 (2,256) - 22,312	1,938 - - - 1,938 1,938 - - - 1,938	1,036,587 64,548 (40,948) (1,986)
						1,058,201
						967,143 95,603 (22,326) (9,308)
						1,031,112

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CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Land	Land-use right	Buildings	Machinery and equipment	Vehicles	Other facilities	Total
$ 16,613 7,256 (327) - $ 23,542 $ 8,012 6,407 (105) - $ 14,314 $ 211,794 $ 223,346 $ 196,539 $ 214,093	72,578 10,187 - (278) 82,487 58,963 10,064 - (893) 68,134 585,925 574,030 598,775 580,296	6,304 8,077 (576) - 13,805 8,901 7,405 (10,818) - 5,488 13,447 8,806 10,653 13,480	60,620 26,069 (30,940) - 55,749 33,708 25,402 (7,097) - 52,013 50,437 54,800 30,198 59,044	6,348 4,725 (2,375) - 8,698 8,475 7,109 (2,170) - 13,414 10,583 11,000 10,981 8,898	1,187 454 - - 1,641 580 454 - - 1,034 751 297 1,358 904	163,650 56,768 (34,218) (278)
						185,922
						118,639 56,841 (20,190) (893)
						154,397
						872,937
						872,279
						848,504
						876,715

(j) Investment property

The movement of investment property was as followed:

Cost or deemed cost: Balance as of January 1, 2021 Disposal Net gains and losses due to fair value adjustments Balance as of September 30, 2021 Balance as of January 1, 2020 Acquisition through business combination Net gains and losses due to fair value adjustments Balance as of September 30, 2020	Land $ 37,609,032 (1,668,271) 391,553 $ 36,332,314 $ 36,701,668 6,462 344,620 $ 37,052,750	Buildings 17,795 (5,264) - 12,531 18,038 3,014 - 21,052	Total 37,626,827 (1,673,535) 391,553 36,344,845 36,719,706 9,476 344,620 37,073,802

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Evaluation by income approach

The Group’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:

September 30, 2021

September 30, 2021
Subject	Qianjin Dist., Kaohsiung City	Qianzhen Dist., Kaohsiung City Others None None $450 $1,000~$1,270 None $1,030~$1,259 Leased Unused $0~ $0 $0~ $0 None 1.730% 4.655% 2.030% External independent appraiser External independent appraiser Colliers International Taiwan Taiwan Dawa Real Estate Appraiser & Associates Shiou-Ying, Jan Yu-Hua Lo September 30, 2021 September 30, 2021 $ 2,737,000 10,478
Contract terms Rental at local market rate Current market rent for comparable properties in similar locations and condition Current status Income generated Capitalization rate Discount rate Appraised by external independent appraiser or self-appraisal Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers	None $550~$700 $576~$617 Unused $0~ $0 5.555% 4.260% External independent appraiser Colliers International Taiwan Feng-Ru, Ke September 30, 2021 $ 10,780

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CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020

Subject	Qianjin Dist., Kaohsiung City	Qianjin Dist., Kaohsiung City Others None None $450 $1,000~$1,270 None $1,030~$1,259 Leased Unused $0~ $0 $0~ $0 None 1.730% 4.655% 2.030% External independent appraiser External independent appraiser Colliers International Taiwan Taiwan Dawa Real Estate Appraiser & Associates Shiou-Ying, Jan Yu-Hua Lo December 31, 2020 December 31, 2020 2,737,000 10,478
Contract terms Rental at local market rate Current market rent for comparable properties in similar locations and condition Current status Income generated Capitalization rate Discount rate Appraised by external independent appraiser or self-appraisal Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers	None $550~$700 $576~$617 Unused $0~ $0 5.555% 4.260% External independent appraiser Colliers International Taiwan Feng-Ru, Ke December 31, 2020 $ 10,780

September 30, 2020

Subject	Qianjin Dist., Kaohsiung City	Qianzhen Dist., Kaohsiung City Others None None $450 $1,000~$1,250 None $1,016~$1,216 Leased Unused $0~ $0 $0~ $0 None 1.800% 4.780% 2.040% External independent appraiser External independent appraiser Colliers International Taiwan Taiwan Dawa Real Estate Appraiser & Associates Shiou-Ying, Jan Yih-Chuan Chang September 30, 2020 September 30, 2020 2,514,000 9,476
Contract terms Rental at local market rate Current market rent for comparable properties in similar locations and condition Current status Income generated Capitalization rate Discount rate Appraised by external independent appraiser or self-appraisal Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers	None $550~$700 $563~$589 Unused $0~ $0 5.525% 4.380% External independent appraiser Colliers International Taiwan Feng-Ru, Ke September 30, 2020 $ 10,530

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 Group for the estimations above were data from the last three years 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 Group, 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.

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. As of September 30, 2021, December 31 and September 30, 2020, the discount rate was 2.030%~4.655%, 2.030%~4.655%, and 2.040%~4.780%, respectively. As of September 30, 2021, December 31 and September 30, 2020, the weighted average capitalization rate was 1.730%~5.555%, 1.730%~5.555%, and 1.800%~5.525%, respectively, derived as the ratio of annual net operating income of comparable properties divided by reasonable price.

(ii) Evaluation through land development analysis

The Group classified its undeveloped land as investment property. The Group 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:

September 30, 2021

Subject	Annan Dist., Tainan City	Qianzhen Dist., Kaohsiung City Others 108,767,048 (Note) 2,654,150 18%~22% 12%~18% 3.650%~5.8547% 0.92%~3.05% Colliers International Taiwan Hon Bun Real Estate Appraisers Firm, Colliers International Taiwan and China Real Estate Appraisers Firm Shiou-Ying, Jan and Jian-Hui,Gu Jian-Hui,Gu, Shiou-Ying,Jan, Ching-Tang,Li and Dian- Ching, Hsieh September 30, 2021 September 30, 2021 27,234,729 1,355,867
Estimated revenue Gross profit margin Rate of return Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers	7,971,360 17% 1.750% CCIS Real Estate Joint Appraisers Firm Chih-Hao Wu September 30, 2021 $ 4,995,991

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020

Subject	Annan Dist., Tainan City	Qianzhen Dist., Kaohsiung City Others 110,949,840 (Note) 2,614,812 19%~22% 12%~20% 3.650%~5.8547% 0.92%~3.05% Colliers International Taiwan Hon Bun Real Estate Appraisers Firm and Colliers International Taiwan and China Real Estate Appraisers Firm Shiou-Ying, Jan , Jian-Hui,Gu Yu-Xian, Houng , Jian-Hui,Gu , Shiou-Ying, Jan, Dian-Ching, Hsieh and Ching-Tang, Li December 31, 2020 December 31, 2020 28,519,000 1,353,578 Qianzhen Dist., Kaohsiung City Others 104,410,574 (Note) 2,718,175 18%~30% 12%~25% 3.750%~8.930% 1.06%~3.47% Colliers International Taiwan Hon Bun Real Estate Appraisers Firm, Colliers International Taiwan and China Real Estate Appraisers Firm Shiou-Ying, Jan and Jian-Hui, Gu Yu-Xian, Houng, Jian-Hui, Gu, and Shiou-Ying, Jan and Dian- Ching, Hsieh September 30, 2020 September 30, 2020 28,230,000 1,352,806
Estimated revenue Gross profit margin Rate of return Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers September 30, 2020 Subject	7,968,120 23% 1.770% CCIS Real Estate Joint Appraisers Firm Huo-Ming, Huang December 31, 2020 $ 4,995,991 Annan Dist., Tainan City
Estimated revenue Gross profit margin Rate of return Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers	7,968,120 23% 1.790% CCIS Real Estate Joint Appraisers Firm Huo-Ming, Huang September 30, 2020 $ 4,956,990

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

The Group’ 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(r) for the relevant information including rent revenue and the direct operating expenses incurred.

As of September 30, 2021, December 31 and September 30, 2020, the Group provided as collateral portion of its investment property. Please refer to note 8 for details of the related assets pledged as collateral.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 Group 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:

(i) History

1) The land where the TAIC Anshun plants located was originally established by Japanese company Kanegafuchi Soda “in 1938 under Japanese Colonial Rule.
2) The Government undertake the construction after the Retrocession of Taiwan, and established a state-owned company, TAIC and operated at the AnShun Site. In 1961, the competent authorities in charge of the relevant state-owned enterprises approved the investment plan and budget for producing Pentachlorophenol and sodium pentachlorophenol products used on herbicides and wood preservative fungicides.
3) Due to operational factors, the plant was ordered to be closed by Executive Yuan Department of Economic Affairs (MOEA) in early 1982.
4) 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.
5) Since the said merger, the Company takeover the Anshun land, the Company has never had any act of production, operations, development, use or pollution at the site. According to subsequent investigation and research, parts of the area had detected dioxin and mercury contamination in soil. The land was designated by the Tainan City Government (TCG) and the Environmental Protection Administration of the Executive Yuan (EPA) as a “Soil Pollution Control Site” and “Soil pollution remediation site” in April 2002 and March 2004, respectively, per the Soil and Groundwater Pollution Remediation Act (hereinafter referred to as the “SGPR Act” ).
6) 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. As the Company never used the land after being ordered to take charge by MOEA, the Company thus objected and carried out the following administrative and judicial remedies to identify the government conception of the “Polluters” and the condition of pollution:
a) The Company filed a plea of State Compensation claim to MOEA, but was refused.
b) In January 2006, the Company filed a complaint against MOEA in the Taiwan Taipei District Court in the amount of $10,077 thousand to reimbursement for compensation.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

c) The complaint was dismissed by the Supreme Court in February 2008. Upon the application of Constitution Interpretation by the Company, J.Y. No.714 Interpretation of the Grand Justice was issued in November, 2013, and considered that SGPR Act does not violate the principle of prohibition against retroactive law, or the principle of proportionality the retroactive rule; however, the holding did not mention whether the successor of the Polluter entity should be responsible for the treatment projects and remediation plan under SGPR Act was not in the scope of the regulation.
d) The Company has filed series of complaint on those issues according to this Constitutional Interpretation.
7) TCG issued the letter 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.
a) The Company proposed the “Tainan City, CPDC former TAIC Anshun site and 2nd class number nine road on the eastern side of the grass area of the site, soil pollution remediation pollution remediation plan” per the regulation at the end of June 2008 and the plan was submitted to TCG for review and formally approved in May 2009. In 2012, the remediation plan was put forward and approved on July 2, 2012. The 1st instance was completed in September 2014 and entered the second phase of the remediation, which will last 10 years. A second revision of the remediation plan was proposed and submitted to TCG for review, and the approval letter issued by TCG informed of the approval of the 2nd remediation plan, which shall be publicly displayed per regulations. Currently, the Tainan City Environmental Protection Bureau reviewed and adopted the plan on April 14, 2015 and the assessment was announced by TCG on May 4, 2015. According to the remediation technology and the actual implementation of the subsequence adjustment, the 3rd remediation change plan was proposed on March 2nd 2017, which remediation plan was focus on the remediation plan of 2nd phase and brought in the unfinished items in the 2nd change plan. Currently, the 3rd plan was reviewed and adopted on January 3, 2018.
b) The relating remediation expense for the first phase was estimated of $1,647,200 thousand. The remediation expense about $1,600,000 thousand has engaged as the 1st phase until September 2014. Simultaneously, the following 10-year remediation work needed to be started after the 2nd change plan was adopted at an estimated cost of $1,356,000 thousand in December 2014. Please refer to note 6(q).

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Extension legislation:

1) Remediation prepay
a) TCG on February 27, 2008 with the letter No. 09722004430 asked the Company to pay each expense: $88,786 thousand, coming from investigation assessments and strain necessary measures, which was prepaid by TCG and EPA on behalf of land polluters, within deadline. The expense would double and transfer to court for enforcement if overdue. This expense was adjusted to list in 2007 per Financial Accounting Standards and the Company prepaid on behalf of land relations based on the laws and regulations in July 2008. The Company objected to the prepaid expense and land polluter. Hence, the administrative remedy was proposed in July 2008, with Kaohsiung High Administrative court sentencing the Company to pay the expense $88,430 thousand in January 2008. The Company appealed in March 2008 and Supreme Administrative Court sent the case back to Kaohsiung High Administrative Court for further trial. Kaohsiung High Administrative court sentenced the original punishment and the petition decision beyond $76,066 thousand was withdrawn. In December 2013, both parties proposed the appeal for the unfavorable parts and Supreme Administrative Court sentenced the amount beyond $203 thousand and lawsuit expenses are all abandoned in April 2015 and sent back to Kaohsiung High Administrative court for continued trial. The determined withdrawn amount $356 thousand had all been returned back to the account by TCG. Kaohsiung High Administrative court rejected the appeal of the Company on December 2016. The Company proposed the appeal remedy for the unsatisfied sentenced contents on January 2017. Supreme Administrative Court sentenced on January 2018 that the expenses $1,135 thousand did not need to be undertaken by the Company.
b) TCG on May 22, 2009 with the letter No. 09822013680 asked the Company pay the expenses $17,962 thousand, which resulted from the relevant working plan of Anshun Land Site soil pollution remediation and was prepaid by TCG on behalf of the Company, and TCG in December 2009 with the letter No. 09822035440 asked the Company to pay the above fees prior to January 31, 2010. The Company estimated such expense at the end of 2009 and proposed the administrative remedy in January 2010 and prepaid the above fees within the deadline inquired by TCG based on the law regulations. The petition was rejected in March 2011, and therefore, the administrative lawsuit was proposed according to the law. Kaohsiung High Administrative court sentenced that the amount beyond $17,867 thousand was withdrawn. After the appeal, Supreme Administrative Court sentenced to return back to Kaohsiung High Administrative court for further trial in September 2013. Kaohsiung High Administrative court sentenced the amount beyond $7,068 thousand was withdrawn on October 7, 2015 and this case had been appealed for the remedy. The determined withdrawn amount $95 thousand had been returned back to the account by TCG. The verdict from Supreme Administrative Court had been received on February 18, 2017, the fact was again returned back to Kaohsiung High Administrative court for the trial. In July 2018, Kaohsiung High Administrative Court considered that the payment amount which is exceeding

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

$8,121 thousand shall be revoked. Both parties are dissatisfied and file an appeal. In January 2020, Supreme Administrative Court annulled the original judgment, remanding the case back to Kaohsiung High Administrative court. On November 24, 2020, The court’ s judgement is announced that the payment amount which exceeds $7,622 thousand shall be revoked. For the Company’s best interests and reasonable pollution remediation fee, the Company filed an appeal on December 18, 2020. The case is still under trial now.

c) TCG, in February 2014, passed that the Company was the polluters per judgment No. 1953 which was pass down in 2007 and asked the Company to pay the 2011 advanced payment of supervision and management on behalf of Anshun factory, in the amount of $27,444 thousand. The Company paid the fee in advance as previous mention within the requested deadline by TCG based on the law regulations and filed the petition for remedy in March 2014, which was rejected by the petition authorities. The Company was not satisfied with the result and filed the administrative legal appeal in September of same year. The Kaohsiung High Administrative Court sentenced the Company to pay $154 thousand. However, TCG was not satisfied with the verdict and filed the appeal for remedy, the Company also filed an appeal based on the Company’ s claims to Supreme Administrative High Court. The Supreme Administrative High Court reversed the original verdict in February 2018, and currently the case is under hearing by the Kaohsiung High Administrative Court. On December 19, 2019, a fine of $5,301 thousand was imposed by the court; in pursuit of the best interest of the Company, an appeal was filed with Supreme Administrative Court on January 16, 2020. And this case is still under trial.
d) TCG, in May 2016, issued the letter No. 10504498726, requesting the Company pay a fee for the “ supervision management and audit work plan of 2013 CPDC (TAIC) Anshun plant site remediation” and requesting the Company pay the fee of $63,271 thousand prior to July 20, 2016, per paragraph 4 of article 14, article 15 and paragraph 1 of article 43. The Company paid the fee within the requested deadline by TCG based on applicable regulations. After the rejection of the petition for the remedy in June 2016, the Company filed for administrative litigation in December 2016. The court’ s judgement is announced that the payment amount which exceeds $4,845 thousand shall be revoked. in July 2017. In order to maintain the Company’ s right and interest, the Company had proposed the appeal to Supreme Administrative Court for remedy of the unfavorable parts in August 2017. In the meanwhile, TCG filed for an appeal too. On October 31, 2018, Supreme Administrative Court dismissed the Company’ s appeal, revoked the rest of the verdicts and remanded the case back to Kaohsiung High Administrative. Except for the judgement is final and binding, The Court ruled that the amount exceeding $35,018 thousand was revoked, and the Company shall pay $39,863 thousand. Both parties appealed to Supreme Administrative Court base on their unprofitable part of verdict in October 2019. This case is still under trial now.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

e) TCG issued the letter No. 1080412260 in April 2019, requesting the Company to pay before June 30, 2019. TCG claimed to have performed "2016 China Petroleum & Chemical Corporation Anshun Plant Remediation Site Supervision, Management and Checking Work Plan" on behalf of the Company and request the Company to pay $59,624 thousand in accordance with Article 14 (4) and Article 15 of the SGPR Act. Based on the laws and regulations, the Company paid the aforementioned fees first within the time limit set by TCG and filed an administrative appeal in May of the same year. TCG dismissed the Company’ s petition on August 28, 2020. The Company initiate an action to Kaohsiung High Administrative court for the administrative remedy on October 28, 2020 and this case is still under trial now.
f) TCG issued the letter No. 1090092471 on August 31, 2020, requesting the Company to pay before October 20, 2020. TCG claimed to have performed “2018 China Petroleum & Chemical Corporation Anshun Plant Remediation Site Supervision, Management and Checking Work Plan” on behalf of the Company, and requested the Company to pay $32,718 thousand in accordance with Article 14 (4) and Article 15 and Article 43 (1) of the SGPR Act. Based on the laws and regulations, the Company paid the aforementioned fees first within the time limit set by TCG, and filed an administrative appeals in September of the same year. TCG dismissed the Company’ s petition on December 25, 2020. The Company initiates an action to Kaohsiung High Administrative court for the administrative remedy on February 26, 2021 and this case is still under trial now.
2) TCG claimed that the Company did not implement per the remediation process.
a) TCG, in June 2017, with the letter No. 1060630217 attached with sanction letter No. 106060012 determined the 3rd remediation change plan not proposed and took it as reason and imposed a penalty of $1,000 thousand. After the verification, there is no ‘take it as’ term in SGPR Act and Implementation rules, which violated the principle of administration. The petition remedy had been proposed in July 2017 and the rejection of petition was received in October of the same year. The Company proposed to Kaohsiung High Administrative court for the administrative remedy in December of the same year. Later, an against judgment is rendered against the Company. The Company filed an appeal to the Supreme Court. On July 7, 2020, the Supreme Court reversed and remended the original judgement and remand the case to the Kaohsiung High Administrative Court. On December 28, 2020, Kaohsiung High Administrative court give the judgement against the Company. Considering litigation risks and costs, and to lighten the relations between the Company and TCG arising from a number of litigations, the Company had decided not to file an appeal. The final judgement was made on January 19, 2021.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

b) TCG issued the punishment notification No. 108040003 in April 2019 as a result of the concentration of the dioxin in the exhaust pipe test results not being lower than the standard set by the third change plan (less than 0.1ng-TEQ/Nm3) and would result in a fine of $200 thousand. An administrative appeal was filed in May 2019 in accordance with the laws, and EPA dismissed in July of the same year. The Company filed an administrative lawsuit in September of the same year. The Tainan District Court ruled against the Company on May 21, 2021. Considering litigation risks, cost effectiveness, and the will of reconciliation, the Company decided not to file an appeal.

3) Others

a) The Company still has the objection on the adscription of pollution responsibility for Anhun land located in Tainan City Annan District and would continue to strive for the possible administrative and law remedy actively.

In view of the jurisdiction explanation No.714, which indicated whether the general successors of polluters bear the burden of remediation responsibilities, was not in the scope of the SGPR Act. Also, considering the previous TAIC was a stateowned enterprise, and the Anshun plant was controlled, supervised, and assigned operations and gained beneficially by MOEA, Taiwan Provincial Government and CPC, such actions should be part of national behavior, yet, the resulting pollution and remediation was asked to be borne by the private legal person. The Company applied to the TCG to determine the beginning of the actual pollution or potential perpetrators, and who should pay the relevant costs and penalties. The rejection was made by the TCG in November 2014. The Company filed a legal petition in December 2014 and the original disposal authorities revoked the original punishment in March 2015, hence, EPA made the decision not to proceed with the case. The original disposal authorities revoked the previous punishment but simultaneously imposed a new one, the Company also filed a petition to the new punishment. The Company’ s petition was decided not to proceed in August 2015 and the Company filed an administrative legal appeal instead, due to multiple errors, which was under hearing by the Kaohsiung High Administrative Court. Through the rejection of the Company’ s request by Kaohsiung High Administrative court, the Company proposed the appeal for remedy in November 2017. Supreme Administrative Court dismissed the Company’ s appeal. The company file a petition for constitutional interpretation, but it was dismissed by Grand Justices of the Constitutional Court.

The cumulative fee of invested and estimated control & management cost and remediation fee were $3,816,082 thousand until September 30, 2021. 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 AND SUBSIDIARIES Notes to the Consolidated Financial Statements

b) 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. 1031053448A 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 a legal petition for remedy in December 2014. The petition decision report from the Ministry of Culture revoked the designated land of the Company as a historical site including 4 area 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 Administration Court reversed the original judgement and remanded the case to the Kaohsiung High Administrative Court. And this case is still being heard in the Court.

Xincun Land of TAIC:

1) History

On the premise that the residents obeyed the agreement, the Company signed an agreement with the local communities that land within Feng Shan District, Kaohsiung City shall be granted free of charge for public use.

2) Extension legislation

Business inspector found that the land was occupied by residents that built illegal construction, which violated the agreement. After communicating with the residents’ multiple times, the situation still did not improve. To be responsible for asset management and reach the expectation of the Company’ s shareholders, the Company filed a legal appeal in February 2013 to require to the demolition of the illegal construction and return the land. Kaohsiung District Court rejected the Company’ s petition. Due to the previous judgment, the Company filed a legal appeal for remedy in September 2014, which was rejected by the Kaohsiung High Court in July 2016. The Company filed the appeal for remedy to Supreme Court in August of same year. In April 2019, the court remand the case to the Kaohsiung High Administrative Court. On September 22, 2021, the Kaohsiung High Administrative Court judged the Company partly winning and partly lost. The company filed the appeal for the losing parts to the Supreme Court on October 15, 2021. This case is still being heard in the Court.

Shulin Land of TAIC:

1) History:
a) No. 540, 541 and 543, Dongshan Section, Shulin District, New Taipei City and No. 489, Weiwang Section, Shulin Dist., New Taipei City 238, Taiwan including 4 area of lands originally belonged to Shulin plant of TAIC. TAIC established the plant in 1962 and closed the plant in 1975. MOEA in April 1983 ordered the governmentowned Company which at the time was also a subsidiary of CPC to merge with TAIC.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

b) Then the plant was subsequently sold to CPC. The New Taipei City Government Environmental Protection Bureau, on August 16, 2010, announced the land as “soil pollution control site”.
c) The New Taipei City Government Environmental Protection Bureau issued the letter No. 1000010000 in March 2011 declaring that the Company merging with TAIC was regarded as the surviving company and shall take the responsibility for the rights and obligations of TAIC for soil pollution remediation according to article 75 of Company Act and was deemed as the polluter and required to propose subsequent disposal and remediation.

Since the change of predetermined place of CPC’ s warehouse, the relocation schedule had to be extended to November 15, 2017, resulting in the remediation work schedule to be postponed as well, which led to the postponement of the initial phase of the soil pollution control plan of a partial site of Shulin Land of former the TAIC in April 2017. The New Taipei City Government sent a letter of approval for future reference on May 18, 2017. Thereafter, CPC complied with the government policy regarding the expansion project of Kuo Kuang power Co., Ltd., in which the relocation site had been changed, with the relocation process being extended to December 31, 2021, resulting in the remediation work schedule to also be postponed. Therefore, the 2nd phase of the soil pollution control plan of a partial site of Shulin Land of the former TAIC was proposed in August 2019, and the New Taipei City Government sent a letter of approval for future reference on August 16, 2019. Subsequently, CPC had to remove and relocate its automatic storage equipment, resulting in the relocation process to be extended to December 31, 2023, and the remediation work schedule to be postponed. Due to the above matter, the 3rd phase of the soil pollution control plan of a partial site of Shulin Land of the former TAIC was proposed in November 2021, and the New Taipei City Government sent a letter of approval for future reference on November 9, 2021. The Company is now performing this project according to the soil pollution control plan.

The relevant remediation expense $273,750 thousand was estimated and listed in 2011 according to Financial accounting standards related regulations. However, it will be assessed to adjust for changes due to internal and external factors in future, which may result in significant differences on the entire remediation expense.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Intangible assets

The cost, amortization and impairment of the intangible assets of the Group were as follows:

Costs： Balance as of January 1, 2021 Acquisition Effect of movement in exchange rates Balance as of September 30, 2021 Balance as of January 1, 2020 Acquisition Disposals Effect of movement in exchange rates Balance as of September 30, 2020 Accumulated amortization and Impairment Loss: Balance as of January 1, 2021 Amortization for the period Effect of movement in exchange rates Balance as of September 30, 2021 Balance as of January 1, 2020 Amortization for the period Disposals Effect of movement in exchange rates Balance as of September 30, 2020 Carrying value: Balance as of January 1, 2021 Balance as of September 30, 2021 Balance as of January 1, 2020 Balance as of September 30, 2020	Goodwill $ 135,871 - (1,174) $ 134,697 $ 144,862 - - (4,994) $ 139,868 $ - - - $ - $ - - - - $ - $ 135,871 $ 134,697 $ 144,862 $ 139,868	Computer software 11,546 1,917 (35) 13,428 8,422 1,099 (69) (131) 9,321 3,913 1,221 (18) 5,116 2,680 927 (69) (41) 3,497 7,633 8,312 5,742 5,824	Patents and trademark 100,361 15,275 (81) 115,555 100,247 - - (298) 99,949 84,692 5,115 (53) 89,754 73,387 8,892 - (172) 82,107 15,669 25,801 26,860 17,842	Total
				247,778 17,192 (1,290) 263,680 253,531 1,099 (69) (5,423) 249,138 88,605 6,336 (71) 94,870 76,067 9,819 (69) (213) 85,604 159,173 168,810 177,464 163,534

As of September 30, 2021, December 31 and September 30, 2020, the aforesaid intangible assets were not pledged as collateral.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Short-term loans

The short-term loans were summarized as follows:

Letters of credit Unsecured bank loans Secured bank loans Export bills loans Total Total short-term credit lines Unused short-term credit lines Range of interest rates	September 30, 2021 $ 1,723,749 1,432,280 359,601 780,259 $ 4,295,889 $ 10,065,637 $ 2,806,591 0.631%~4.5%	December 31, 2020 1,175,000 1,300,000 1,140,000 - 3,615,000 6,901,296 1,430,278 1.2799%~1.3857%	September 30, 2020
			1,633,000 1,830,000 1,433,182 -
			4,896,182
			6,948,121
			966,212
			1.2799%~5.8725%

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

(m) Long-term loans

The long-term loans were summarized as follows:

Secured bank loans Finance lease loans Less: current portion Total Total long-term credit lines Unused long-term credit lines Range of interest rates	September 30, 2021 $ 18,480,049 111,148 (1,910,815) $ 16,680,382 $ 19,216,991 $ 3,891,010 1.2999%~5.5%	December 31, 2020 9,274,260 130,223 (1,914,833) 7,489,650 17,636,400 5,601,475 1.3%~5.5%	September 30, 2020
			8,165,151 - (1,706,567
			6,458,584
			18,154,700
			7,434,025
			1.3%~5.488%

Secured bank loans from Mega International Commercial Bank

On February 2, 2016, the Company signed a syndicated loan agreement for 5 years with Mega International Commercial Bank, the lead bank of the syndicated loan, and 7 other banks in order to raise funds to build the plant and accessory equipment and meet the funding requirements. The agreement had been extended on June 17, 2021, with the aggregate amount of credit line of the syndicated loan increased to $4,470,000 thousand.

(i) Syndicated loan A: The credit line is $3,000,000 thousand consisting of medium-term secured loans and non-revolving credit facility, which was used to finance the purchase of machinery and accessory equipment.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Syndicated loan B: The credit line is $1,470,000 thousand consisting of medium-term loans and revolving credit facility, which was used to meet the funding requirements.
(iii) The financial covenants under the loan agreement include the requirement to maintain certain financial ratios based on the reviewed semi-annual consolidated financial statements and audited annual consolidated financial statements. If the Company breaches these financial covenants, the syndicated banks may declare the unpaid principal, interest, fees and other sums payable by the Company under the loan agreement to be immediately due and payable. These financial ratios are as follows:
1) Current ratio (total current assets divided by total current liabilities): not lower than 100%.
2) Leverage ratio (total liabilities plus contingent liabilities to tangible net worth): not higher than 150%.
3) Times interest earned (income before tax plus depreciation expense plus amortization expense divided by interest expenses): not lower than 2 times.
(iv) In the event that there is a times interest earned violation in any of the fiscal years, the borrower has to set pledge with bank deposits for the managing bank, or provide bank deposits to the reserve account appointed by the bank. In the event that there is a financial ratio violation in any of the fiscal years, the period from the announcement of the consolidated financial statements that does not comply with the financial commitments to the announcement date of the next consolidated financial statements shall be the improvement period. If the borrower improves the completion during the improvement period, it is not considered a breach of financial commitment. However, the borrower shall, from the date of the announcement of the consolidated financial statements that does not comply with the financial commitment, to the date of interest payable after the expiration of the improvement period, the credit balance of credit cases, in accordance with Article 7 (1) of this contract, the applicable interest rate plus the annual interest rate of 0.05% is charged to interest. If the improvement is not completed within the time limit, from the expiration date of the improvement period, the next interest payable date after the date on which the borrower has filed a consolidated financial statements meeting the financial commitments, for the credit balance of this credit, the interest rate shall be calculated based on the contract interest rate plus the annual interest rate of 0.05%, and may be handled in accordance with the breach of contract.
(v) The term of the repayment of the category A credit is stipulated as: The first period will be paid off from the date of the first use of the credit application to the expiration of three years. After that, it will be a period of six months for once. Settlement of the liability divided into five phases. The first period to the fourth period, each period shall be settled separately for 12.5% of the outstanding principal balance of the expiration date of the credit period, and the fifth period shall be settled for 50% of the outstanding principal balance of the expiration date of the credit period.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vi) The term of payment of the category B credit is stipulated as: Every period of loan must be not over 180 days. The borrower shall fully repay on the due date as set out in each application for use.

Secured bank loans from Shin Kong Commercial Bank

On March 9, 2020, the Company signed a syndicated loan agreement for 3 years, plus a 2-year extension option, with Shin Kong Commercial Bank, the lead bank of the syndicated loan, and 7 other banks in order to meet the funding requirements. The aggregate amount of credit line of the syndicated loan was $3,900,000 thousand.

(i) Syndicated loan A: The credit line is $2,815,000 thousand consisting of medium-term secured loans and revolving credit facility, which was used to meet the funding requirements. The loan period lasts 3 years upon first disbursement. With the premise that the Company does not violate any restrictions, the loan period may be extended upon expiration for 2 years, and limited to once, through written application.
(ii) Syndicated loan B: The credit line is $1,085,000 thousand consisting of commercial promissory note agreements and revolving credit facility, which was used to meet the funding requirements. The loan period lasts 1 year upon first disbursement. With the premise that the Company does not violate any restrictions, the loan period may be extended 12 months before expiration, and limited to twice, through written application.
(iii) 24 months after the first disbursement and every 6 months ever since, the credit line of the syndicated loan is diminished by 10% of the total credit line, applicable to the extension period. In advance of each credit line diminished date, for loan A, the Company shall settle any exceeding principal, interests, and other relating liabilities, free of prepayment terms included in the contract. For loan B, the Company shall make deposit to the designated account to make up for the amount of note principal exceeding the credit line, free of prepayment terms included in the contract. The Company may withdraw the deposit after the aforementioned note is settled.
(iv) The financial covenants under the loan agreement include the requirement to maintain certain financial ratios based on the reviewed semi-annual consolidated financial statements and audited annual consolidated financial statements. These financial ratios are as follows:
1) Current ratio (total current assets divided by total current liabilities): not lower than 100%.
2) Leverage ratio (total liabilities plus contingent liabilities to tangible net worth): not higher than 100%.
3) Times interest earned (income before tax plus depreciation expense plus amortization expense divided by interest expenses): not lower than 2 times.
4) Tangible net worth (total equity excluding intangible assets): not lower than $60,000,000 thousand.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) In the event that there is a financial ratio violation in any of the fiscal years, the period from the announcement of the consolidated financial statements that does not comply with the financial commitments to the announcement date of the next consolidated financial statements shall be the improvement period. If the borrower resolves the violation during the improvement period, it is not considered a breach of financial commitment. However, the borrower shall, from the date of the announcement of the consolidated financial statements that does not comply with the financial commitment, to the date of interest payable after the expiration of the improvement period, the credit balance of credit cases, in accordance with Article 8 of this contract, the applicable interest rate plus the annual interest rate of 0.05% is charged to interest, plus guarantee fee. If the improvement is not completed within the time limit, from the expiration date of the improvement period, the next interest payable date after the date on which the borrower has filed a consolidated financial statements meeting the financial commitments, for the credit balance of this credit, the interest rate shall be calculated based on the contract interest rate plus the annual interest rate of 0.05%, and may be handled in accordance with the breach of contract.
(vi) The term of the repayment of the category A credit is stipulated as: the repayment shall be completed on the expiration date stated in the application form for each disbursement.
(vii) The term of the repayment of the category B credit is stipulated as: The repayment shall be completed on the due date stated on the note.

Secured bank loans from CTBC Bank

On July 13, 2020, the Company signed a medium-term loan agreement for 3 years with CTBC Bank in order to meet the funding requirements. The aggregate amount of credit line of the loan was $2,000,000 thousand.

(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, the CTBC Bank is entitled to reduce credit line, shorten the loan period, and have all principals and interests repaid immediately.
1) Current ratio (total current assets divided by total current liabilities): not lower than 120%.
2) Leverage ratio (total liabilities plus contingent liabilities to tangible net worth): not higher than 100%.
3) Times interest earned (income before tax plus depreciation expense plus amortization expense divided by interest expenses): not lower than 2 times.
4) Tangible net worth (total equity excluding intangible assets): not lower than $67,000,000 thousand.
(ii) According to the loan agreement, 15%, 15% and 70% of the principal will be paid on the 24th, 30th and 36th month, respectively, after the first active date.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

On April 29, 2021, the Company signed a medium-term loan agreement for 58 months with Taiwan Life Insurance Co., Ltd. in order to meet the funding requirements. The Company and Ding-Yue Development Co., Ltd. share a credit line of $4,100,000 thousand, while Ding-Yue Development Co., Ltd. has the upper limit of 1,000,000 thousand.

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

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

Domestic secured non-convertible bonds Less: current portion Balance of bonds payable Maturity year	September 30, 2021 $ 3,500,000 - $ 3,500,000 114	December 31, 2020 3,500,000 - 3,500,000 114	September 30, 2020
			3,500,000 -
			3,500,000
			114

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

Issue amount
Issue date
Issue period
Coupon rate
Interest payment date
Repayment and interest payment
Collateral

The first domestic secured non-convertible bond in
2020
Bond A
Bond B
Bond C
$ 1,500,000
1,000,000
1,000,000
109.9.21
109.9.21
109.9.21
5 years
5 years
5 years
%
0.64
%
0.64
%
0.64
September 21
September 21
September 21
Repayment on
maturity, interest
payment annually
Repayment on
maturity, interest
payment annually
Repayment on
maturity, interest
payment annually
Bank Guarantee
(Mega
International
Commercial Bank
Co., Ltd.)
Bank Guarantee
(Bank of Taiwan
Co., Ltd.)
Bank Guarantee
(Land Bank of
Taiwan Co., Ltd.)

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

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Long-term bills payable

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

Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Less: Discount on long- term bills payable Total	September 30, 2021 Acceptance institution Period Amount Taiwan Finance Corporation 2021.09.28~2021.10.08 $ 60,300 Taching Bills Finance Corporation 2021.09.28~2021.10.08 69,200 Taiwan Cooperative Bills Finance Corporation 2021.09.28~2021.10.08 148,700 International Bills Finance Corporation 2021.08.18~2021.11.16 200,000 Taching Bills Finance Corporation 2021.09.22~2021.10.22 400,000 China Bills Finance Corporation 2021.08.02~2021.10.29 100,000 China Bills Finance Corporation 2021.08.06~2021.10.29 60,000 China Bills Finance Corporation 2021.09.10~2021.11.09 400,000 China Bills Finance Corporation 2021.09.10~2021.10.14 450,000 China Bills Finance Corporation 2021.09.17~2021.11.17 660,000 China Bills Finance Corporation 2021.09.24~2021.11.23 830,000 Mega Bills Finance Corporation 2021.08.13~2021.11.11 370,000 Mega Bills Finance Corporation 2021.08.13~2021.11.11 450,000 Mega Bills Finance Corporation 2021.09.11~2021.12.10 200,000 Mega Bills Finance Corporation 2021.09.23~2021.11.18 870,000 Mega Bills Finance Corporation 2021.08.02~2021.10.29 130,000 Mega Bills Finance Corporation 2021.08.02~2021.10.29 100,000 Mega Bills Finance Corporation 2021.09.17~2021.12.16 200,000 Mega Bills Finance Corporation 2021.09.27~2021.11.25 1,150,000 6,848,200 (5,985) $ 6,842,215
	Acceptance institution
	Taiwan Finance Corporation Taching Bills Finance Corporation Taiwan Cooperative Bills Finance Corporation International Bills Finance Corporation Taching Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation

Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Bills payable
Less: Discount on long-
term bills payable
Total

September 30, 2021
Acceptance institution
Period
Amount
Taiwan Finance Corporation
2021.09.28~2021.10.08 $ 60,300
Taching Bills Finance
Corporation
2021.09.28~2021.10.08
69,200
Taiwan Cooperative Bills
Finance Corporation
2021.09.28~2021.10.08
148,700
International Bills Finance
Corporation
2021.08.18~2021.11.16
200,000
Taching Bills Finance
Corporation
2021.09.22~2021.10.22
400,000
China Bills Finance Corporation 2021.08.02~2021.10.29
100,000
China Bills Finance Corporation 2021.08.06~2021.10.29
60,000
China Bills Finance Corporation 2021.09.10~2021.11.09
400,000
China Bills Finance Corporation 2021.09.10~2021.10.14
450,000
China Bills Finance Corporation 2021.09.17~2021.11.17
660,000
China Bills Finance Corporation 2021.09.24~2021.11.23
830,000
Mega Bills Finance Corporation
2021.08.13~2021.11.11
370,000
Mega Bills Finance Corporation
2021.08.13~2021.11.11
450,000
Mega Bills Finance Corporation
2021.09.11~2021.12.10
200,000
Mega Bills Finance Corporation
2021.09.23~2021.11.18
870,000
Mega Bills Finance Corporation
2021.08.02~2021.10.29
130,000
Mega Bills Finance Corporation
2021.08.02~2021.10.29
100,000
Mega Bills Finance Corporation
2021.09.17~2021.12.16
200,000
Mega Bills Finance Corporation
2021.09.27~2021.11.25
1,150,000
6,848,200
(5,985)
$
6,842,215

Acceptance institution

Taiwan Finance Corporation
Taching Bills Finance
Corporation
Taiwan Cooperative Bills
Finance Corporation
International Bills Finance
Corporation
Taching Bills Finance
Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Less: Discount on long- term bills payable Total	December 31, 2020 Acceptance institution Period Amount International Bills Finance Corporation 2020.12.07~2021.02.22 $ 200,000 International Bills Finance Corporation 2020.12.31~2021.01.05 150,000 Taching Bills Finance Corporation 2020.11.12~2021.01.07 300,000 Taching Bills Finance Corporation 2020.10.12~2021.01.07 100,000 China Bills Finance Corporation 2020.11.09~2021.01.27 800,000 China Bills Finance Corporation 2020.12.22~2021.03.22 500,000 China Bills Finance Corporation 2020.10.12~2021.01.08 500,000 China Bills Finance Corporation 2020.12.11~2021.03.11 720,000 China Bills Finance Corporation 2020.11.10~2021.01.27 30,000 Mega Bills Finance Corporation 2020.10.30~2021.01.26 550,000 Mega Bills Finance Corporation 2020.12.25~2021.02.25 670,000 Mega Bills Finance Corporation 2020.11.17~2021.01.18 200,000 Mega Bills Finance Corporation 2020.11.06~2021.01.18 80,000 Mega Bills Finance Corporation 2020.11.20~2021.01.18 140,000 Mega Bills Finance Corporation 2020.11.25~2021.01.18 270,000 Mega Bills Finance Corporation 2020.11.30~2021.01.26 85,000 Mega Bills Finance Corporation 2020.11.30~2021.01.26 15,000 Mega Bills Finance Corporation 2020.12.04~2021.01.26 150,000 Mega Bills Finance Corporation 2020.12.07~2021.02.25 200,000 5,660,000 (3,888) $ 5,656,112
	Acceptance institution
	International Bills Finance Corporation International Bills Finance Corporation Taching Bills Finance Corporation Taching Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation

December 31, 2020
Acceptance institution
Period
Amount
International Bills Finance
Corporation
2020.12.07~2021.02.22 $ 200,000
International Bills Finance
Corporation
2020.12.31~2021.01.05
150,000
Taching Bills Finance
Corporation
2020.11.12~2021.01.07
300,000
Taching Bills Finance
Corporation
2020.10.12~2021.01.07
100,000
China Bills Finance Corporation 2020.11.09~2021.01.27
800,000
China Bills Finance Corporation 2020.12.22~2021.03.22
500,000
China Bills Finance Corporation 2020.10.12~2021.01.08
500,000
China Bills Finance Corporation 2020.12.11~2021.03.11
720,000
China Bills Finance Corporation 2020.11.10~2021.01.27
30,000
Mega Bills Finance Corporation
2020.10.30~2021.01.26
550,000
Mega Bills Finance Corporation
2020.12.25~2021.02.25
670,000
Mega Bills Finance Corporation
2020.11.17~2021.01.18
200,000
Mega Bills Finance Corporation
2020.11.06~2021.01.18
80,000
Mega Bills Finance Corporation
2020.11.20~2021.01.18
140,000
Mega Bills Finance Corporation
2020.11.25~2021.01.18
270,000
Mega Bills Finance Corporation
2020.11.30~2021.01.26
85,000
Mega Bills Finance Corporation
2020.11.30~2021.01.26
15,000
Mega Bills Finance Corporation
2020.12.04~2021.01.26
150,000
Mega Bills Finance Corporation
2020.12.07~2021.02.25
200,000
5,660,000
(3,888)
$
5,656,112

Acceptance institution

International Bills Finance
Corporation
International Bills Finance
Corporation
Taching Bills Finance
Corporation
Taching Bills Finance
Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Bills payable Less: Discount on long- term bills payable Total	September 30, 2020 Acceptance institution Period Amount China Bills Finance Corporation 2020.08.11~2020.11.09 $ 550,000 China Bills Finance Corporation 2020.09.29~2020.11.13 500,000 China Bills Finance Corporation 2020.08.12~2020.11.12 500,000 China Bills Finance Corporation 2020.09.29~2020.12.11 300,000 China Bills Finance Corporation 2020.09.25~2020.12.11 270,000 China Bills Finance Corporation 2020.09.14~2020.12.11 50,000 China Bills Finance Corporation 2020.09.14~2020.11.09 250,000 China Bills Finance Corporation 2020.09.21~2020.12.11 100,000 International Bills Finance Corporation 2020.09.08~2020.12.07 200,000 Taching Bills Finance Corporation 2020.08.14~2020.11.12 300,000 Taching Bills Finance Corporation 2020.07.14~2020.11.12 100,000 Mega Bills Finance Corporation 2020.08.06~2020.10.30 250,000 Mega Bills Finance Corporation 2020.08.06~2020.10.30 400,000 Mega Bills Finance Corporation 2020.08.10~2020.10.08 900,000 Mega Bills Finance Corporation 2020.09.26~2020.10.14 600,000 Mega Bills Finance Corporation 2020.09.30~2020.10.30 280,000 5,550,000 (3,275) $ 5,546,725
	Acceptance institution
	China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation China Bills Finance Corporation International Bills Finance Corporation Taching Bills Finance Corporation Taching Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation Mega Bills Finance Corporation

September 30, 2020
Acceptance institution
Period
Amount
China Bills Finance Corporation 2020.08.11~2020.11.09 $ 550,000
China Bills Finance Corporation 2020.09.29~2020.11.13
500,000
China Bills Finance Corporation 2020.08.12~2020.11.12
500,000
China Bills Finance Corporation 2020.09.29~2020.12.11
300,000
China Bills Finance Corporation 2020.09.25~2020.12.11
270,000
China Bills Finance Corporation 2020.09.14~2020.12.11
50,000
China Bills Finance Corporation 2020.09.14~2020.11.09
250,000
China Bills Finance Corporation 2020.09.21~2020.12.11
100,000
International Bills Finance
Corporation
2020.09.08~2020.12.07
200,000
Taching Bills Finance
Corporation
2020.08.14~2020.11.12
300,000
Taching Bills Finance
Corporation
2020.07.14~2020.11.12
100,000
Mega Bills Finance Corporation
2020.08.06~2020.10.30
250,000
Mega Bills Finance Corporation
2020.08.06~2020.10.30
400,000
Mega Bills Finance Corporation
2020.08.10~2020.10.08
900,000
Mega Bills Finance Corporation
2020.09.26~2020.10.14
600,000
Mega Bills Finance Corporation
2020.09.30~2020.10.30
280,000
5,550,000
(3,275)
$
5,546,725

Acceptance institution

China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
China Bills Finance Corporation
International Bills Finance
Corporation
Taching Bills Finance
Corporation
Taching Bills Finance
Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation
Mega Bills Finance Corporation

The Group had revolving commercial promissory note agreements with bills finance companies in order to finance its operating requirement. As of September 30, 2021, December 31 and September 30, 2020, the bills payable bear interest rates ranging from 0.24%~1.6020%, 0.28%~1.2620%, and 0.36%~1.3618%, respectively.

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

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Lease liabilities

The lease liabilities of the Group were as follows:

Current Non-current	September 30, 2021 $ 55,082 $ 250,767	December 31, 2020 43,251 249,741	September 30, 2020
			45,485
			256,057

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

The amounts recognized in profit or loss were as follows:

For the three months ended September 30, 2021 2020 $ 1,401 1,440 $ 10,278 12,367	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 1,401 $ 10,278	2021 4,263 37,413	2020
		3,517
		39,006

The amounts recognized in the statement of cash flows for the Group was as follows:

Total cash outflow for leases (q) Provisions Balance as of January 1, 2021 Provisions made during the year Provisions used during the year Effect of movements in exchange rate Balance as of September 30, 2021 Current Non-current Balance as of January 1, 2020 Provisions made during the year Provisions used during the year Effect of movements in exchange rate Balance as of September 30, 2020 Current Non-current	Decommissioning $ 1,264,564 - - (150) $ 1,264,414 $ - 1,264,414 $ 1,264,414 $ 1,264,002 - - (695) $ 1,263,307 $ - 1,263,307 $ 1,263,307	For the nine months ended September 30, 2021 2020 $ 86,603 87,661 Remediation project Employee benefits Total 514,613 275,925 2,055,102 - 12,114 12,114 (50,384) (53,919) (104,303 - - (150 464,229 234,120 1,962,763 226,266 5,641 231,907 237,963 228,479 1,730,856 464,229 234,120 1,962,763 603,972 256,818 2,124,792 - 14,147 14,147 (265,678) (29,362) (295,040 - - (695 338,294 241,603 1,843,204 134,909 5,642 140,551 203,385 235,961 1,702,653 338,294 241,603 1,843,204	For the nine months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
				2021 86,603 Employee benefits		2020
						87,661
						Total
						2,055,102 12,114 (104,303 (150
						1,962,763
						231,907 1,730,856
						1,962,763
						2,124,792 14,147 (295,040 (695
						1,843,204
						140,551 1,702,653
						1,843,204

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) To comply with the Order of TCG, the Company submitted a remediation plan proposal and accrued relevant remediation plan for approval before June 30, 2008 and evaluated the relating remediation expense of $1,647,200 thousand. In May 2009 and on July 2, 2012, the Company was granted official approval of its remediation proposal and amended remediation proposal, respectively. In September 2014, the Company completed the first phase of the implementation of its plan. It is expected to launch the second phase of the implementation of its remediation plan during the next. The Company has submitted the second phase of its amended remediation plan to TCG for approval. On December 24, 2014, TCG notified the Company of its approval and now is under public tender review. The aforementioned remediation costs of the Company were recognized in the total amount of $1,600,000 thousand for the first stage before September 2014. With the launch of the second remediation stage, the Company estimated the cost based on the situation on December 2014 at $1,356,000 thousand. Currently, the Tainan City Environmental Protection Bureau reviewed and adopted the plan on April 14, 2015 and the assessment was announced by TCG on May 4, 2015. According to the remediation technology and the actual implementation of the subsequence adjustment, the 3rd remediation change plan was proposed on March 2, 2017, which was reviewed and adopted on January 3, 2018. Please refer to note 6(j).
(ii) 1) The Company’ s four parcels of land at Dongshan section, Shulin district, New Taipei City were the original location of TAIC’ s Shulin plants, but then sold to CPC. On August 16, 2010, the Environmental Protection Department of New Taipei City Government has declared that such land as "Soil Pollution Control Site”. In March 2011, the Environmental Protection Department of New Taipei City Government issued letter No. 1000010000. In that letter, the Company was deemed to be the surviving entity, which assumed the rights and obligations of TAIC following its merger with TAIC and TAIC ceased to exist. As the surviving entity from this merger, the Company was therefore declared as the polluter and was required to submit a remedial plan.
2) Since the change of predetermined place of CPC’ s warehouse, the relocation schedule had to be extended to November 15, 2017, resulting in the remediation work schedule to be postponed as well, which led to the postponement of the initial phase of the soil pollution control plan of a partial site of Shulin Land of former the TAIC in April 2017. The New Taipei City Government sent a letter of approval for future reference on May 18, 2017. Thereafter, CPC complied with the government policy regarding the expansion project of Kuo Kuang power Co., Ltd., in which the relocation site had been changed, with the relocation process being extended to December 31, 2021, resulting in the remediation work schedule to also be postponed. Therefore, the 2nd phase of the soil pollution control plan of a partial site of Shulin Land of the former TAIC was proposed in August 2019, and the New Taipei City Government sent a letter of approval for future reference on August 16, 2019. Subsequently, CPC had to remove and relocate its automatic storage equipment, resulting in the relocation process to be extended to December 31, 2023, and the remediation work schedule to be postponed. Due to the above matter, the 3rd phase of the soil pollution control plan of a partial site of Shulin Land of the former TAIC was proposed in November 2021, and the New Taipei City Government sent a letter of approval for future reference on November 9, 2021. The Company is now performing this project according to the soil pollution control plan. However, it will be assessed to adjust for changes due to internal and external factors in future, which may result in significant differences on the entire remediation expenses.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Operating lease

There were no significant changes in operating lease for the nine months ended September 30, 2021 and 2020. Please refer to note 6(r) of the consolidated financial statements for the year ended December 31, 2020 for other related information.

(s) Employee benefits

(i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2020 and 2019.

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

Operating cost Selling expenses Administration expenses Research and development expenses Total	For the three months ended September 30, 2021 2020 $ 2,307 2,728 46 51 374 409 55 57 $ 2,782 3,245	For the nine months ended September 30,	For the nine months ended September 30,
	2021 $ 2,307 46 374 55 $ 2,782	2021 6,812 137 1,198 155 8,302	2020
			8,295 151 1,014 160 9,620

(ii) Defined contribution plans

The Group’s expenses under the pension plan cost to the Bureau of Labor Insurance for the three months ended September 30, 2021 and 2020 and the nine months ended September 30, 2021 and 2020 were as follows:

Operating cost Selling expenses Administration expenses Research and development expenses Total	For the three months ended September 30, 2021 2020 $ 8,001 7,428 354 177 2,116 2,292 1,046 1,446 $ 11,517 11,343	For the nine months ended September 30,	For the nine months ended September 30,
	2021 $ 8,001 354 2,116 1,046 $ 11,517	2021 23,766 1,034 6,365 3,233 34,398	2020
			23,308 532 6,514 4,262 34,616

(iii) The pension recognized consists of pension expenses and pensions for professional management. The pension expenses for professional management amounted to $1,323 thousand, $1,609 thousand, $4,241 thousand and $6,000 thousand for the three months ended September 30, 2021 and 2020 and the nine months ended September 30, 2021 and 2020.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Short-term compensated absences liabilities

As of September 30, 2021, December 31 and September 30, 2020, the Consolidated Company’ s short-term compensated absences liabilities amounted to $5,641 thousand, $5,641 thousand and $5,642 thousand, respectively.

(t) Income Tax

The components of income tax expense were as follows:

For the three months ended September 30, 2021 2020 $ 19,652 4,007 - - 19,652 4,007 (40,215) - (40,215) - $ (20,563) 4,007	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 19,652 - 19,652 (40,215) (40,215) $ (20,563)	2021 45,471 (1,814) 43,657 178,186 178,186 221,843	2020
		13,947 (73,208)
		(59,261)
		(521,168)
		(521,168)
		(580,429)

The Company’s income tax return for the year 2019 had been examined by the tax authorities.

(u) Capital and other equity
(i) The issuance of common stock

As of September 30, 2021, December 31 and September 30, 2020, the authorized, issued and outstanding capital of the Company amounted to $32,848,502 thousand, divided into 3,284,850 thousand shares, with par value of $10 per share.

Reconciliation of shares outstanding for the nine months ended September 30, 2021 and 2020 was as follows:

(In thousands of shares)

Balance, January 1 Capital increased by cash Balance, September 30		Common Stock	Common Stock
		For the nine months ended September 30,
		2021 3,284,850 - 3,284,850	2020
			2,834,850 450,000
			3,284,850

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

A resolution was made during the general meeting of the shareholders held on July 2, 2021 for the issuance of common stock for cash, with a maximum limit of 600,000 thousand shares. Thereafter, the Company issued 500,000 thousand shares, with par value of $10 per share, amounting to $5,000,000 thousand based on a resolution approved during the Board of Director’s meeting held on September 29, 2021. The above capital increase had been approved by the Securities and Futures Bureau of Financial Supervisory Commission on November 5, 2021, with the base date set on December 3, 2021 according to the resolution approved during the Board of Director’s meeting held on November 10, 2021.

In order to invest in the overseas subsidiary for the purpose of plant construction, a resolution was made during the Board of Director’ s meeting held on September 23, 2019 for the issuance of common stock in term of Global Depositary Receipts (GDR), with a maximum limit of 500,000 thousand shares, amounting to USD160,317 thousand, which was approved by Rule No. 1080335763 Financial Supervisory Commission on November 20, 2019. The share price was determined and completed on January 6, 2020 and issued on January 10, 2020. The total units of issued GDR was 18,000 thousand units, which represented the right of common stock for 450,000 thousand shares; for every 25 shares of common stock per unit of GDR, the unit price of GDR was USD7.18, which was equivalent to $8.64 per share, resulting to a total issuance price amounting to USD129,240 thousand. The total amount of the issuance, deducting the costs necessary for the issuance, was $3,796,481 thousand. The capital increase base date was January 10, 2020, and the relevant legal registration procedures had been completed.

(ii) Capital Surplus

The balances of capital surplus were as follows:

Premium of common stock Difference arising from subsidiary's share price and its carrying value Recognize changes in ownership interests in subsidiaries Other Total	September 30, 2021 $ 538,726 26,314 1,812 18,141 $ 584,993	December 31, 2020 538,726 26,314 634 18,141 583,815	September 30, 2020
			538,726 26,314 - 18,141
			583,181

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.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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.

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 amounted to $4,194,973 thousand as of September 30, 2021, December 31 and September 30, 2020.

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 No. 1010012865 issued by the Financial Supervisory Commission on April 6, 2012, 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 amounted to $4,235,076 thousand as of September 30, 2021, December 31 and September 30, 2020.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

In 2014, the Company changed the subsequent measurement of investment properties from cost model to fair value model. In accordance with Rule No. 1030006415 issued by the Financial Supervisory Commission on March 18, 2014, 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 as of December 31, 2013. The carrying amount of such special reserve amounted to $21,224,233 thousand as of September 30, 2021, December 31 and September 30, 2020.

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 September 30, 2021, December 31 and September 30, 2020, the Company appropriated to the special reserve amounting to $7,157,380 thousands, $5,947,347 thousands and $5,947,347 thousand, respectively.
b) In accordance with Rule No. 1010047490 issued by the Financial Supervisory Commission on November 21, 2012, 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) In accordance with Rule No. 1010012865 issued by the Financial Supervisory Commission on April 6, 2012, 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.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Earnings Distribution

Earnings distribution for 2020 and 2019 was decided by the resolution adopted, at the general meeting of shareholders held on July 2, 2021 and May 28, 2020, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary shareholders: Cash	2020 $ -	2019
		985,455

(iv) Treasury shares

In accordance with the requirements under section 28(2) of the Securities and Exchange Act, the Company plans to buy 50,000 thousand ordinary shares from March 30 to May 29, 2020, in order to protect the Company’s credit and shareholders’ equity. The price range is between $5.03 and $7.50 per share. On May 29, 2020, the market prices were higher than the upper limit of the execution price range for the repurchase of treasury shares, and the stock of the Company was not oversold compared with the market during the original scheduled repurchase period. The repurchase was not executed in order to protect shareholders' equity and take into market mechanisms.

(v) Other equity accounts

Balance, January 1, 2021 Exchange differences on foreign operations Exchange difference on associates accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Disposal of investments in equity instruments designated at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method Balance, September 30, 2021	Exchange differences on translation of foreign financial statements $ (966,202) (27,971) (3,923) - - - $ (998,096)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (854,259) - - 29,912 (1,384) 85 (825,646)

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance, January 1, 2020 Exchange differences on foreign operations Exchange difference on subsidiaries accounted for using equity method Exchange difference on associates accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Disposal of investments in equity instruments designated at fair value through other comprehensive income Unrealized (losses) gains from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method Balance, September 30, 2020	Exchange differences on translation of foreign financial statements $ (804,515) (191,659) 573 1,457 - - - $ (994,144)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (1,120,657) - - - (77,501) (126,299) 5 (1,324,452)

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Earnings per share

The Group’s earnings per share were calculated as follows:

Basic earnings per share (NT dollars) Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (thousand shares) Basic earnings per share Diluted earnings per share (NT dollars) Profit attributable to ordinary shareholders of the Company (diluted) Weighted average number of ordinary shares (thousand shares) Effect of dilutive potential ordinary shares of employee stock bonus (thousand shares) Weighted average number of ordinary shares (diluted) (thousand shares) Diluted earnings per share	For the three months ended September 30,	For the three months ended September 30,		For the nine months ended September 30,	For the nine months ended September 30,
	2021 $ 1,184,593 3,284,850 $ 0.36 $ 1,184,593 3,284,850 8,723 3,293,573 $ 0.36	2020 (416,230) 3,284,850 (0.13) (416,230) 3,284,850 - 3,284,850 (0.13)		2021 3,382,005 3,284,850 1.03 3,382,005 3,284,850 8,837 3,293,687 1.03	2020
					49,937 3,270,069 0.02 49,937 3,270,069 3,754 3,273,823 0.02

(w) Revenue from contracts with customers

(i) The Group primarily engages 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. For the details of products and sales area, please refer to note 14(b) and (c) of the consolidated financial statements.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Contract balances

Notes receivable Accounts receivable (including related parties) Less: allowance for doubtful account Contract liabilities	September 30, 2021 $ 1,103,201 3,512,409 (332,857) $ 4,282,753 $ 91,722	December 31, 2020 375,689 1,906,374 (446,393) 1,835,670 1,676	September 30, 2020 341,046 1,577,360 (444,606) 1,473,800 3,421

Please refer to note 6(d) for disclosure of accounts receivable and allowance for doubtful accounts.

The amounts of revenue recognized for the nine months ended September 30, 2021 and 2020 that were included in the contract liability balance at the beginning of the periods were $954 thousand and $88,263 thousand, respectively.

(x) Remunerations to employees and directors

In accordance with the articles of incorporation, the Company should contribute 3% of the profit as employee compensation and less than 2% as directors' remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The remuneration of employees shall be in the form of cash or shares, whose recipients may include the employees of the Company's affiliated companies who meet certain conditions. The remuneration of directors may solely be cash. The aforesaid profit represents the income before income tax and remuneration for the period.

For the three months ended September 30, 2021 and 2020 and the nine months ended September 30, 2021 and 2020, the remuneration to employees amounted to $36,415 thousand, $0 thousand, $112,500 thousand and $0 thousand, respectively, and the remuneration to directors amounted to $24,276 thousand, $0 thousand, $75,000 thousand and $0 thousand, respectively. These amounts were calculated using the Company’s net income before tax before remuneration of employees and directors for the nine months ended September 30, 2021 and 2020. These benefits were charged to profit or loss under operating costs or operating expenses for the nine months ended September 30, 2021 and 2020. When the board of directors decided to distribute stock dividends, the number of which shall be calculated based on the closing price of the Company’ s ordinary shares one day before the date of the meeting of Board of Directors.

For the years ended December 31, 2020 and 2019, the remunerations to employees amounted to $2,670 thousand and $57,759 thousand, respectively, which were not paid as of September 30, 2021. For the years ended December 31, 2020 and 2019, the remunerations to directors amounted to $1,780 thousand and $38,506 thousand, respectively, which were identical to those of the actual distributions for 2020 and 2019. Related information would be available at the Market Observation Post System website.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(y) Non-operating income and expense

(i) Interest income

The details of interest income were as follows:

For the three months ended September 30, 2021 2020 $ 44,831 39,049 194 10 $ 45,025 39,059	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 44,831 194 $ 45,025	2021 140,148 373 140,521	2020
		122,180 2,089
		124,269

(ii) Other income

The components of other income were as follows:

For the three months ended September 30, 2021 2020 $ 4,771 4,563 63,948 49,014 23,779 24,226 $ 92,498 77,803	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 4,771 63,948 23,779 $ 92,498	2021 14,355 66,029 97,702 178,086	2020
		13,576 49,014 235,852
		298,442

(iii) Other gains and losses

The components of other gains and losses were as follows:

Gains (or losses) on disposals of property, plant, and equipment Gains on disposals of investment property Losses on disposals of investments Gains on lease modification Foreign exchange gains (or losses) Gains (or losses) on financial assets at fair value through profit or loss Fee expense Losses on work stoppages Other gains and losses Other gains and losses, net	For the three months ended September 30, 2021 2020 $ (25) 180 711,729 - - - 7 27 9,692 29,549 (72,963) 220,295 (28,601) (18,219) (62,897) (4,654) (4,322) (5,172) $ 552,620 222,006	For the nine months ended September 30, 2021 2020 (117) 180 706,465 - - (580) 34 30 (5,719) (43,469) 165,791 514,937 (132,597) (69,902) (166,673) (10,401) (10,517) (14,178) 556,667 376,617
	2021 $ (25) 711,729 - 7 9,692 (72,963) (28,601) (62,897) (4,322) $ 552,620	2021 (117) 706,465 - 34 (5,719) 165,791 (132,597) (166,673) (10,517) 556,667

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Finance costs

The components of finance costs were as follows:

Interest expense Finance costs, net	For the three months ended September 30, 2021 2020 $ (78,755) (55,099) $ (78,755) (55,099)	For the nine months ended September 30, 2021 2020 (196,027) (165,618) (196,027) (165,618)
	2021 $ (78,755) $ (78,755)	2021 (196,027) (196,027)

(z) Financial Instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For related information, please refer to note 6(z) of the consolidated financial statements for the year ended December 31, 2020.

(i) Credit risk

1) The concentration of credit risk

The sales of the Group are significantly concentrated in a small number of customers. As of September 30, 2021, December 31 and September 30, 2020, 80%, 82% and 83%, respectively, of the total amount of accounts receivable was composed of 29, 12, and 8 customers, respectively. Under the Group’ s credit policy, customers are requested to provide the Group certain financial information like audited financial report, or other related documents for purposes of evaluating their credit worthiness. Credits are granted to these customers according to the result of the Group’ s credit evaluation. Those customers who do not satisfy the requirement shall not be offered credit.

2) Receivables

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

Other financial assets at amortized cost includes time deposits and guarantee deposit 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 September 30, 2021 and 2020, the loss allowance provision both amounted to $0 thousand.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated 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.

September 30, 2021 Non-derivative financial liabilities Accounts payable Other payables Other current liabilities－ other Other non-current liabilities －other Lease liabilities Floating-rate loans (note) Fixed-rate loans (note) Long-term bills payable (note) Bonds payable December 31, 2020 Non-derivative financial liabilities Accounts payable Other payables Other current liabilities－ other Other non-current liabilities －other Lease liabilities Floating-rate loans (note) Fixed-rate loans (note) Long-term bills payable (note) Bonds payable September 30, 2020 Non-derivative financial liabilities Accounts payable Other payables Other current liabilities－ other Other non-current liabilities －other Lease liabilities Floating-rate loans (note) Fixed-rate loans (note) Long-term bills payable (Note) Bonds payable	Carrying amount $ 2,224,586 860,240 10,575 139,814 305,849 2,514,720 20,372,366 6,842,215 3,500,000 $ 36,770,365 $ 1,394,928 818,647 8,384 123,324 292,992 3,078,217 9,941,266 5,656,112 3,500,000 $ 24,813,870 $ 1,447,479 604,210 5,736 114,826 301,542 2,190,898 10,870,435 5,546,725 3,500,000 $ 24,581,851	Contractual cash flows 2,224,586 860,240 10,575 139,814 355,948 2,605,498 21,528,389 6,842,215 3,589,600 38,156,865 1,394,928 818,647 8,384 123,324 344,560 3,170,316 10,374,902 5,660,000 3,612,000 25,507,061 1,447,479 604,210 5,736 114,826 354,151 2,234,172 11,347,175 5,550,000 3,612,000 25,269,749	Within 6 months 2,219,992 859,626 10,575 75,520 31,010 29,043 9,301,851 6,842,215 - 19,369,832 1,394,928 818,647 8,384 110,763 24,828 1,495,088 6,631,637 - - 10,484,275 1,447,479 596,179 5,736 106,456 28,609 1,515,049 7,410,803 5,550,000 - 16,660,311	6-12 months - 614 - 6,658 27,884 29,680 815,015 - 22,400 902,251 - - - 8,668 23,269 29,768 363,886 - 22,400 447,991 - 8,031 - 3,671 22,386 14,656 333,427 - 22,400 404,571	1-2 years 4,594 - - 25,877 38,670 2,111,079 1,133,140 - 22,400 3,335,760 - - - 2,146 37,065 61,457 1,110,184 5,660,000 22,400 6,893,252 - - - 3,023 37,876 30,181 866,875 - 22,400 960,355	2-5 years - - - 229 38,862 435,696 9,375,592 - 3,544,800 13,395,179 - - - 247 48,375 1,584,003 2,174,633 - 3,567,200 7,374,458 - - - 174 51,465 674,286 2,544,273 - 3,567,200 6,837,398	More than 5 years
							- - - 31,530 219,522 - 902,791 - -
							1,153,843
							- - - 1,500 211,023 - 94,562 - -
							307,085
							- - - 1,502 213,815 - 191,797 - -
							407,114

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group 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 bank loans and long-term bills payable.

(iii) Currency risk
1) Currency risk exposure

The Group’s significant exposure to foreign currency risk was as follows:

September 30, 2021	September 30, 2021	NTD 1,380,325 - 100 1,957,052 880,460 1,109,214	Dec	ember 31, 2020	NTD 873,000 10,748 158 2,412,580 898,139 -	September 30, 2020	September 30, 2020
Foreign Currency $ 49,570 - 6,953 454,917 246,042 $ 39,834	Exchange rate 27.846 - 0.0144 4.302 3.5785 27.846		Foreign Currency 31,069 8,823,747 7,464 559,115 247,578 -	Exchange rate 28.099 0.0012 0.0211 4.315 3.6277 -		Foreign Currency 33,946 8,819,398 5,814 760,518 236,140 270	Exchange rate NTD 28.960 983,085 0.0012 11,018 0.0221 129 4.249 3,231,440 3.7398 883,117 28.960 7,830

2) Sensitivity analysis

The Group’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 1% of depreciation of NTD against USD, EUR, VND, MMK and CNY would have increased net income by $17,826 thousand and $33,743 thousand for the nine months ended September 30, 2021 and 2020, respectively; other comprehensive income would have increased $8,805 thousand and $8,831 thousand for the nine months ended September 30, 2021 and 2020, respectively. The analysis is performed on the same basis for 2020.

3) Foreign exchange gains (losses) on monetary items

Due to the Group's diversity of functional currency, the information on foreign exchange gains or losses on monetary items is disclosed by total amount. For the three months ended September 30, 2021 and 2020 and the nine months ended September 30, 2021 and 2020, foreign exchange gains (losses) (including realized and unrealized portions) amounted to $9,692 thousand, $29,549 thousand, $(5,719) thousand and $(43,469) thousand, respectively.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group'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 Group’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 Group’s net income will decrease by $25,147 thousand and $21,909 thousand for the nine months ended September 30, 2021 and 2020, respectively, assuming all other variable factors remain constant. This is due mainly to the fact that the Group’s borrowings bear floating interest rate.

(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:

Prices of securities at the reporting date	For the nine months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
	2021 After-tax other comprehensive income Net income $ 28,372 114,352 $ (28,372) (114,352)	2020
	After-tax other comprehensive income $ 28,372 $ (28,372)	After-tax other comprehensive income 23,710 (23,710)	Net income
Increasing 1% Decreasing 1%			112,429 (112,429)

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vi) Fair value information

1) Fair value hierarchy

The carrying amount and fair value of the Group’ 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:

	September 30, 2021	September 30, 2021	September 30, 2021
Book value $ 11,435,229 2,071,745 765,445 2,837,190 11,271,906 4,492,926 2,267,973 18,032,805 $ 32,305,224 $ 36,344,845 4,295,889 3,095,401 1,910,815 3,500,000 16,680,382 6,842,215 139,814 305,849 $ 36,770,365		Fair value
	Level 1 666,864 2,071,745 - 2,071,745 - - - - 2,738,609 - - - - - - - - - -	Level 2 21,510 - - - - - - - 21,510 - - - - - - - - - -	Level 3 10,746,855 - 765,445 765,445 - - - - 11,512,300 36,344,845 - - - - - - - - -	Total
				11,435,229
				2,071,745 765,445
				2,837,190
				- - -
				-
				14,272,419
				36,344,845
				- - - - - - - -
				-

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
Book value $ 11,576,388 2,068,247 740,469 2,808,716 7,479,899 1,979,964 2,660,453 12,120,316 $ 26,505,420 $ 37,626,827 3,615,000 2,221,959 1,914,833 3,500,000 7,489,650 5,656,112 123,324 292,992 $ 24,813,870		Fair value
	Level 1 829,533 2,068,247 - 2,068,247 - - - - 2,897,780 - - - - - - - - - -	Level 2 - - - - - - - - - - - - - - - - - - -	Level 3 10,746,855 - 740,469 740,469 - - - - 11,487,324 37,626,827 - - - - - - - - -	Total
				11,576,388
				2,068,247 740,469
				2,808,716
				- - -
				-
				14,385,104
				37,626,827
				- - - - - - - -
				-

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	September 30, 2020	September 30, 2020	September 30, 2020
Book value $ 738,900 1,628,469 742,497 2,370,966 8,071,086 1,637,947 2,903,630 12,612,663 $ 15,722,529 $ 37,073,802 4,896,182 1,706,567 3,500,000 6,458,584 5,546,725 114,826 2,057,425 301,542 $ 24,581,851		Fair value
	Level 1 738,900 1,628,469 - 1,628,469 - - - - 2,367,369 - - - - - - - - - -	Level 2 - - - - - - - - - - - - - - - - - - -	Level 3 10,503,964 - 742,497 742,497 - - - - 11,246,461 37,073,802 - - - - - - - - -	Total
				11,242,864
				1,628,469 742,497
				2,370,966
				- - -
				-
				13,613,830
				37,073,802
				- - - - - - - -
				-

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Group’ 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 Group 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.

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 and open-end fund beneficiary certification.

The fair value of the financial instruments held by the Group in the case of a nonactive 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: Use the net asset value method, the main assumptions are based on the net per share of the investor.

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 nine months ended September 30, 2021 and 2020.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

January 1, 2021 Acquisition from business combination Acquisition Disposal Total gain and losses recognized in profit or loss Total gain and losses recognized in other comprehensive income September 30, 2021 January 1, 2020 Acquisition from business combination Acquisition Total gain and losses recognized in profit or loss September 30, 2020	Investment Property $ 37,626,827 - - (1,673,535) 391,553 - $ 36,344,845 Investment Property $ 36,719,706 9,476 - 344,620 $ 37,073,802	Financial assets reported at fair value through profit or loss Designated at initial recognition Derivative financial assets 10,746,855 - 63 - 21,540 - (21,603) - - - - - 10,746,855 - Financial assets reported at fair value through profit or loss Designated at initial recognition Derivative financial assets 9,942,994 - - - - - 560,970 - 10,503,964 -	Financial assets reported at fair value through other comprehensive income Non-public quoted equity instruments 740,469 - - (1,438) - 26,414 765,445 Financial assets reported at fair value through other comprehensive income Non-public quoted equity instruments 442,497 - 300,000 - 742,497
		Designated at initial recognition 9,942,994 - - 560,970 10,503,964

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated 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 Group's investment in nonactive market equity and debt instruments. The fair value of the Group'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 September 30, 2021, December 31 and September 30, 2020 was $36,344,845 thousand, $37,626,827 thousand and $37,073,802 thousand, respectively.

The Group 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 • Net Asset Value • Lack of market liquidity, discount rate 30% • Not applicable • Lack of market liquidity, the more the discount, the lower the fair value
Financial assets at fair value through profits or losses and financial assets at fair value through other comprehensive income	Net Asset Value Method

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Group'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 of 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.

(aa) Financial risk management

There were no significant changes in the Company's financial risk management and policies as disclosed in note 6(aa) of the consolidated financial statements for the year ended December 31, 2020.

(ab) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2020. Also, management believes that there were no significant changes in the Group's capital management information as disclosed for the year ended December 31, 2020. Please refer to note 6(ab) of the consolidated financial statements for the year ended December 31, 2020 for further details.

(ac) Investing and financing activities not affecting the current cash flow

The Group’s investing and financing activities which did not affect the current cash flow in the nine months ended September 30, 2021 and 2020, were as follows:

(i) For the acquisition of right-of-use assets based on lease term, please refer to note 6(i).

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Long-term bank loans Short-term loans Long-term bills payable Lease liabilities Total liabilities from financing activities	January 1, 2021 $ 9,404,483 3,615,000 5,656,112 292,992 $18,968,587	Cash flows 7,232,049 2,142,003 3,157,200 (49,190) 12,482,062	Non-cash	changes Other 1,969,000 (1,454,479) (1,971,097) 62,047 (1,394,529)	September 30, 2021
			Foreign exchange movement (14,335) (6,635) - - (20,970)
					18,591,197 4,295,889 6,842,215 305,849
					30,035,150

Long-term bank loans Short-term loans Long-term bills payable Lease liabilities Total liabilities from financing activities	January 1, 2020 $ 8,483,913 3,484,148 4,494,177 253,243 $16,715,481	Cash flows (263,650) 1,417,394 1,050,000 (48,655) 2,155,089	Non-cash	changes Other - - 2,548 96,954 99,502	September 30, 2020
			Foreign exchange movement (55,112) (5,360) - - (60,472)
					8,165,151 4,896,182 5,546,725 301,542
					18,909,600

(7) Related-party transactions:

(a) The ultimate parent 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 consolidated financial statements.

Names of related party Relationships with the Group Kaohsiung Monomer Company Limited Investee as accounted for using equity method Zhong Gong Baoquan Ltd. Investee as accounted for using equity method Jean Pacific Development Co., Ltd. Investee as accounted for using equity method BES Engineering Corporation The Company is the director of the entity Chain Yarn Co., Ltd. The Company is the director of the entity Core Pacific City Co., Ltd. Same director with the Company

Same director with the Company (The individual was no longer the director of the entity after a new director was elected at the shareholders' meeting of Core Pacific City Co., Ltd. on April 23, 2021.)

Chung Kung Management and Maintenance of Apartments Co., Ltd.

Investee as accounted for using equity method of Zhong Gong Baoquan Ltd.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Names of related party	Relationships with the Group
Coreasia Human Resources management Co.,	Subsidiary of BES Engineering Corporation
Ltd.
Chung Kung Management Consultant Co.,Ltd.	Subsidiary of Zhong Gong Baoquan Ltd.
Capital Machinery Co., Ltd.	The entity is a director of the Company
All board of directors, general manager and	The main managements of the Company
deputy general manager

(c) Significant Transactions with related parties

(i) Sales

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

For the three months ended September 30, 2021 2020 $ 234,599 119,563 492,560 - $ 727,159 119,563	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 234,599 492,560 $ 727,159	2021 601,442 492,560 1,094,002	2020
		361,101 -
		361,101

The terms for related party sale transactions were the same as ordinary sales.

(ii) Purchase

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

Other related parties	For the three months ended September 30, 2021 2020 $ 31,934 -	For the nine months ended September 30,	For the nine months ended September 30,
	2021 $ 31,934	2021 31,934	2020
			-

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

(iii) Receivables from Related Parties

The receivables from related parties were as follows:

Accounts	Types of related parties	September 30, 2021 $ 80,554 311,507 12,015 57 $ 404,133	December 31, 2020 51,106 - 9,447 - 60,553	September 30, 2020
Accounts receivable Accounts receivable Other receivables Other receivables	Associates Other related parties Associates Other related parties			42,815 - 12,030 12
				54,857

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Payables to Related Parties

The payables to related parties were as follows:

	Types of related	Types of related		September 30,	December 31,	September 30,
Accounts		parties		2021	2020	2020
Accounts payable	Other	related parties	$	10,432	-	-
Other payables	Associates			5,293	5,380	4,824
Other payables	Other	related parties		147,238	5,951	866
			$	162,963	11,331	5,690
Other
		For the three months ended			For the nine months ended
		September 30,			September 30,
		2021		2020	2021	2020
Associates
Rent income	$	1,345		1,345	4,034	4,034
Other revenues		3,363		6,421	10,563	13,451
Security service fees		(5,259)		(5,176)	(15,859)	(15,161)
Other related parties
Rent income		-		3	-	3
Other revenues		250		-	250	-
Other expenses		(1,033)		(53)	(5,706)	(377)

(v) Other

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

(vi) The Group had a two-year contract with BES Engineering Corporation for the lease of office space in July 2018, which had been extended in July 2020, with the total value both represented $9,629 thousand. This rental transaction was recognized as right-of-use asset and lease liability both amounting to $9,465 thousand and $7,130 thousand on July 1, 2020 and January 1, 2019, respectively. The depreciation expenses for the nine months ended September 30, 2021 and 2020, were $3,549 thousand and $3,560 thousand, respectively. The interest expense for the nine months ended September 30, 2021 and 2020, amounted to $70 thousand and $48 thousand. The amounts of lease liability as of September 30, 2021 and 2020, were $3,589 thousand and $8,300 thousand, respectively.
(vii) The Group had contracts with BES Engineering Corporation, for mechanical engineering services projects and paid commission on the basis of actual construction. As of September 30, 2021 and 2020, the construction project in-progress both amounted to $1,451,000 thousand. As of September 30, 2021 and 2020, the unpaid fees amounted to $554,431 thousand and $704,896 thousand, respectively. The refundable deposit at September 30, 2021 and 2020 both amounted to $420,660 thousand.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(viii) The Group had contracts with other related parties, for mechanical engineering services projects and paid commission on the basis of actual construction. As of September 30, 2021 and 2020, the construction project in-progress amounted to $1,559 thousand and $18,439 thousand, respectively. As of September 30, 2021 and 2020, the unpaid fee amounted to $779 thousand and $0 thousand, respectively. The security deposit was $0 thousand and $0 thousand as of September 30, 2021 and 2020, respectively.
(ix) The Group acquired land from Core Pacific City Co., Ltd., which the contract of property transaction was signed on October 30, 2019. Please refer to note 6(e).
(d) Key management personnel compensation

For the three months ended September 30, 2021 2020 $ 119,926 24,069 750 1,266 $ 120,676 25,335	For the nine months ended September 30,	For the nine months ended September 30,
2021 $ 119,926 750 $ 120,676	2021 178,501 3,281 181,782	2020
		87,055 3,663
		90,718

(8) Pledged assets:

The carrying amounts of pledged assets were as follows:

Pledged assets	Purpose of pledge Guarantee for priority right-of- use of harbor and purchases Collateral for long-term and short-term financial credit, syndicated loan (Mega & Shin Kong) Syndicated loan (Mega), collateral for long-term financial credit and long- term bills payable, bonds payable. Long-term bills payable Long-term bills payable Long-term bills payable Deposit for lawsuit Collateral for long-term financial credit	September 30, 2021 $ 111,761 7,783,843 20,928,634 733,293 1,515,746 182,780 108,969 574,030 $ 31,939,056	December 31, 2020 24,614 7,031,472 15,346,334 502,002 1,430,230 634,995 108,969 585,925 25,664,541	September 30, 2020
Time deposits Property, plant and equipment Investment property Investments accounted for using equity method Financial assets reported at fair value through other comprehensive income Financial assets reported at fair value through profit or loss Refundable deposit Right-of-use of Sea Areas				45,635 7,475,115 15,148,181 484,525 1,145,195 550,020 104,397 580,297
				25,533,365

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of September 30, 2021, December 31 and September 30, 2020, 4,000 thousand shares of a subsidiary of the Group were pledged as collateral for long-term bills payable.

(9) Commitments and contingencies:

(a) As of September 30, 2021, December 31 and September 30, 2020, the Group had the following unused letters of credit:

USD EUR NTD CNY JPY	September 30, 2021 $ 42,778 2,484 930,000 27,700 8,820	December 31, 2020 September 30, 2020 20,824 8,908 246 223 1,020,000 771,000 - 11,572 - -

(b) As of September 30, 2021, December 31 and September 30, 2020, the Group had issued guarantee notes for bank loans, sales and purchases, and development plan aggregating to $24,637,400 thousand, USD30,000 thousand and $24,117,400 thousand, USD30,000 thousand and $24,117,400 thousand, USD30,000 thousand, respectively.
(c) As of September 30, 2021, December 31 and September 30, 2020, the Group had contracts for various construction projects in-progress amounting to $24,410,218 thousand, $12,225,823 thousand and $11,484,488 thousand, respectively. As of September 30, 2021, December 31 and September 30, 2020, the remaining future obligations under these contracts amounted to $20,133,716 thousand, $2,547,453 thousand and $2,259,427 thousand, respectively.
(d) As of September 30, 2021, December 31 and September 30, 2020, the agreement on the acquisition of material property amounting to $38,579,871 thousand, $39,045,010 thousand and $39,045,010 thousand, and the unpaid portion amounting to $21,998,000 thousand, $28,885,000 thousand and $29,519,000 thousand, respectively. Please refer to note 6(e).
(e) As of September 30, 2021, December 31 and September 30, 2020, the Company signed an agreement to purchase raw materials such as benzene, hydrogen and methylbenzene from Chinese Petroleum Corporation. Under this contract, the Company may purchase specified monthly volume of these raw materials at current month prices announced by the Chinese Petroleum Corporation with prepayment or domestic letter of credit.
(f) As of September 30, 2021, December 31 and September 30, 2020, the Group signed an agreement of preclinical drug research amounting to USD3,296 thousand and $201,185 thousand, USD3,063 thousand and $92,070 thousand, and USD3,601 thousand and $94,959 thousand, respectively. The paid portion amounted to USD2,957 thousand and $55,727 thousand, USD2,466 thousand and $31,565 thousand, and USD2,874 thousand and $32,104 thousand, respectively. The unpaid portion amounted to USD339 thousand and $145,458 thousand, USD597 thousand and $60,506 thousand, and USD726 thousand and $62,855 thousand, respectively.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) The Group signed a license agreement of new type of tumor identification and drug delivery system with National Health Research Institutes on August 18, 2016. The license fee amounted to $270,000 thousand and the payment would be made by progress. As of September 30, 2021, December 31 and September 30, 2020, the paid portion amounted to $20,000 thousand, $10,000 thousand and $10,000 thousand, respectively.
(h) The Group signed a license agreement of antineoplastic candidate drug with National Health Research Institutes on April 3, 2019. The license fee amounted to $135,000 thousand and the payment would be made by progress. As of September 30, 2021, December 31 and September 30, 2020, the paid portion amounted to $10,000 thousands, $5,000 thousands and $5,000 thousand, respectively.
(i) Important matters
(i) Case of Kaohsiung gas explosion forced disconnected pipeline
- On July 31, 2014, there was an underground pipeline explosion in Kaohsiung city. Due to the post-disaster reconstruction project, Kaohsiung City Government issued a penalty letter No. 10335137100 on August 18, 2014, to order the Company to stop operations and prohibited the use of all petrochemical pipelines in the disaster area. The Company was not satisfied with the preceding penalty and filed a legal petition to the Administrative court for revoking the original claims for petition remedy in September 2014. The case was rejected by the Kaohsiung High Administrative Court, which the Company was not satisfied with. Hence, the Company submitted an appeal in February 2018. In December 2019, an against judgment is rendered against the Company. The Company filed an appeal to the Supreme Court in January 2020. Then, the Supreme Court reversed and remanded it to Kaohsiung High Administrative Court. This case is still being heard in the Court.

(j) Contingent liabilities

(i) The Company signed total three areas of land lease contracts with Kaohsiung branch of Taiwan International Ports Corporation, Ltd. In December 2013 and February 2014. The Kaohsiung Port Intercontinental Container Center 2nd Phase Project Petrochemical Oil Storage and Transportation Center S12-S15 Pier Post line Land was leased and the Company invested to build the construction of petrochemical oil storage and transportation facilities for the purpose of import and export and transport of petrochemical oil handling, storage and transportation etc. Kaohsiung branch of Taiwan International Ports Corporation, Ltd. delivered the land to the Company prior to the end of December 2017. The term of the lease was 25 years from the date of delivery and the Company had the right to renew the lease at the end of the period. Per the contract, the Company had to pay rent of $1,650 thousand, $2,565 thousand, and $1,493 thousand respectively since the land was delivered. 3 years and 6 months from the land delivery date, the Company paid management fees of $10,654 thousand, $24,605 thousand, and $12,329 thousand respectively. The Company also placed Certificate of Deposits of $5,000 thousand and $13,000 thousand as performance bonds in December 2013 and February 2014 respectively. The Company, in August 2015, shortened the operating scale based on the adjustment of investment plan, which resulted in one of the performance bonds of $8,000 thousand, to not being able to be returned. Taiwan International Ports Corporation, Ltd. completed the transaction procedure prior to November 2017. The Company started to implement land drilling and geological improvement project and started paying the land rent of those projects, which was $1,675 thousand and $1,497 thousand respectively each year.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Dispute from the senior manager

1) Labor Dispute

The previous senior manager Mr. Zhang, who left the Company without transferring the duties and authorization, did not perform the duties since July 1, 2013 and the Company issued the letter to request to fulfill the agreement without any response from manager. Hence, the board of the Company dismissed the manager in October 2013. The manager asked the Company to pay pensions pursuant to Labor Standards Act as a labor worker, which was not reconciled through mediation. Kaohsiung District Court considered that the assigned relationship did not end in January 2014, which means that the Expired Employee Retirement Policies of the Company does not apply. Mr. Zhang request for pension is without any basis, but according to the contract of both sides, the Company shall pay salaries of $35 thousand, to Mr. Zhang, which was not satisfied by Mr. Zhang and this case was appealed to the 2nd sentence court. In July 2016, the 2nd sentence court rejected the request from Mr. Zhang but he re-appealed to the 3rd sentence in August of the same year. Upon finding the appeal meritorious, the Supreme Court reversed and remanded the judgement. The preparatory proceeding of the first repeated appeal was conducted in Taiwan Court Kaohsiung Branch Court in April 2019. The court’ s judgement is announced that the compony shall pay $3,785 thousand and legal rate to Mr. Zhang in July of same year. The Company is dissatisfied and filed an appeal to Supreme Court on August 2019, and the part of original judgment that was unfavorable to the Company was remanded to the Taiwan High Court Kaohsiung Branch Court on April 22, 2021.

2) Disclosure Secret Case

Managers who left the office without authorization was suspected to be involve in business encroachment, theft of business secrets. To protect Company interests, the Company filed criminal appeal. The case was concluded by the Taiwan Miaoli Local Court in January 2017 and the relevant defendants were prosecuted. The civil litigation derived from the case is waiting for hearing by the Taipei District Court and Miaoli District Court. Please refer to note 8 for details of deposit for lawsuit.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Accusation of business failures

A Gas explosion happened in Heng Yi chemical plant next to the Toufen plant and caused workers to be burned on January 28, 2013, which evolved into accusations of business failures. Since the incident happened in the public discharged area of the industrial site, it was suspected to contain excessive value of the company's emissions with the sampling identification and the Company’ s manager was prosecuted as defendant per the victim’ s request. This case was not prosecuted after the judgment decision from Miaoli District Attorney; hence, the victims filed the reconsideration and Taichung High Prosecutor's Office remanded the case back to the Miaoli District Attorney for review. The victims of Heng Yi chemical plant prosecuted the Company and managers in February 2015 and asked for the joint damaged compensation $6,920 thousand, which awaits hearing by Miaoli local court. In September of the same year, both sides agreed to withdraw the litigations. Trial procedure was recovered in February 2016 and criminal litigation was determined not to be prosecuted in March 2016. The verdict of civil litigation was won in March 2017, but plaintiff is dissatisfied and filed an appeal to Taiwan High Court Taichung Branch Court. On November 16, 2020, the court sentenced company win with final and binding judgment.

(iv) Contract Fraud of Shanghai industry

On August 6, 2014, the reinvestment company, Weihua and Weiqiang, filed the civil appeal to Yangpu District Court to ask Shanghai Tongye Coal and Chemical Industry Group Co., Ltd. to pay all overdrafts of the contract. However, Shanghai Tongye Coal and Chemical Industry Group Co., Ltd. did not perform the first phase of repayment according to Court’s mediation report, Weihua and Weiqiang, on September 2, 2014, applied to Yangpu District Court for the enforcement and sealed all coal tar of Shanghai Tongye Coal and Chemical Industry Group Co., Ltd., the total coal tar sealed was 5,216 tons and 4,777 tons were sold. Subsequently, Weihua and Weijiang Company and Shanghai Tongye Coal and Chemical Industry Group Co., Ltd. would continue negotiations on unrealized creditors and requested Shanghai Tongye Coal and Chemical Industry Group Co., Ltd. to propose the more specific repayment plan. Weihua and Weiqiang estimated allowance of the accounts receivable respectively. Weihua and Weijiang Company reported to the police the relevant persons of Shanghai Tongye Coal and Chemical Industry Group Co., Ltd. that were suspected to be involve with the contract fraud and other criminal matters. The police rejected the report due to insufficient evidence, therefore Weihua hired a local lawyer in May 2018, to assist with Shanghai police and Shanghai economics investigation group. In February 2021, the ruling had been made due to the lack of assets for liquidation, the bankruptcy procedure was concluded and the case was closed. The unrecoverable allowance had been written off separately, please refer to note 6(d).

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Civil compensation for Residents living in An shun

1) The 1st case

In 2008 and 2009, Mr. Wu and others filed civil and national compensation lawsuit against MOEA, TCG, Tainan City Environmental Protection Bureau and the Company (hereinafter referred to as 1st case of Tainan AnShun plant civil compensation) and they claimed that during 1942 and 1983, the previous TAIC AnShun plant, produced mercury and dioxins in its production operations and polluted the environment, which resulted in the population consuming contaminated fish and shellfish over time, which resulted in long term health issues. MOEA had control and management responsibility of the previous TAIC, and whether due to illegal actions, or a lack of attention in performing their duties, MOEA was the ultimate owner of CPDC, should take responsibility. Hence, the prosecutors claim that MOEA shall take the responsibility for the compensation. Mr. Wu and others also claimed that TCG and Tainan City Environmental Protection Bureau were the competent authorities and executive authorities of the waste disposal law but the authorities did not supervise and require the AnShun plant to implement pollution prevention and control acts, thus should be jointly responsible for any compensation. Mr. Wu and others claim that the Company did not perform any removal and remediation of pollutants after being ordered to merge with the previous TAIC AnShun plant, so they claimed the Company shall also take joint responsibility for the compensation. Mr. Wu and others asked MOEA, TCG, Tainan City Environmental Protection Bureau and the Company to jointly bear the cost of medical expenses and mental compensation for $370,800 thousand and the interest was calculated by an annual interest rate 5% from the date when the litigation was initiated by the defendants until the final payment of compensation. Due to unpaid referee fees, due from the plaintiff, the Tainan District Court rejected the litigation claims from these 17 persons in January 2010.

Mr. Chen appealed to the Tainan District Court asking the Company for medication, health examination fee and reparations, to the amount of $2,300 thousand, which was incorporated into this case, the total compensation amount was $351,750 thousand. This case was tried by the Tainan District Court in December 2015 and judged that the Company and MOEA to be jointly responsible for $160,000 thousand payable to the plaintiff. The Company was not satisfied with the result and filed an appeal. In August of 2017, the High court sentenced the Company to compensate the plaintiff for $190,000 thousand by self, which the Company was not satisfied with and had proposed the appeal for remedy in Sept. of the same year. The supreme court held oral argument on September 28, 2018, and judgment was sentenced on November 11, 2018, the supreme court sentenced to order the Company to compensate the plaintiff for $190,000 thousand. The Company made a payment of compensation and related interests to 143 plaintiffs before the end of June 2019. The part related to medical remedy of the case was abandoned for secondary trial. Plaintiff filed an appeal to Supreme Court in same year. In March 3, 2020, the court dismissed the plaintiff appeal by a ruling. This case is ended.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

1) The 2nd case

Mr. Chen and others filed civil and national compensation lawsuit to the Company and MOEA on March 14, 2017 (Hereinafter referred to as 1st case of the Tainan Anshun plant civil compensation), they claimed the Company and MOEA had to jointly compensate the plaintiff $80,915 thousand. The verdict of the 3rd national compensation in 2008 of the Tainan Anshun plant civil compensation 1st case was cited as the reason to be litigated. However, the Company claimed that there was a misunderstanding of the theoretical and practical nature of epidemiology causality versus the verdict. There were disputable factors on both factual and legal matters. During the 1st and 2nd instance of the AnShun plant Civil Compensation litigation under hearing, the Company once again put forward the relevant academic articles to prove that there was no causality between pollution from Tainan AnShun plant and diabetes. Moreover, the plaintiffs in this case, despite the reasonableness of their claims, did not put forth any litigation before the expiry of the statutes of limitations. Thus, in this 2nd case of the Tainan AnShun plant civil compensation, the Company continued to seek for the jurisdiction remedies to protect the Company and shareholder interests. In November 6, 2020, Tainan District Court considered that 39 Plaintiffs’ s claim is meritorious and dismissed rest of Plaintiffs’ s claim. Due to the controversial issue of extinctive prescription, the Company considered this case worth an appeal based on our unprofitable part of verdict. Therefore, the Company filed an appeal to the High Court on December 15, 2020, and this case is still under trial now.

(10) Losses Due to Major Disasters:None

(11) Subsequent Events:

The land transfer according to the purchase agreement between the Group and Core Pacific City Co., Ltd. was completed on November 5, 2021, and all related payments has been paid.

(12) Other:

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

		For the three months	For the three months	For the three months	ended September 30	ended September 30	ended September 30	ended September 30
By function By item		2021			2020
	Operating cost	Operating expense	Non-Operating expense	Total	Operating cost	Operating Expense	Non-Operating expense	Total
Employee benefits
Salary	267,020	281,309	-	548,329	192,173	150,299	-	342,472
Labor and health insurance	20,573	25,113	-	45,686	19,482	12,394	-	31,876
Pension	10,307	5,315	-	15,622	10,458	5,739	-	16,197
Others	11,398	6,352	-	17,750	14,099	3,830	-	17,929
Depreciation	215,465	63,151	1,102	279,718	205,127	41,254	937	247,318
Amortization	156	2,028	-	2,184	-	3,088	-	3,088

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30
By function By item	2021				2020
	Operating cost	Operating expense	Non-Operating expense	Total	Operating cost	Operating Expense	Non-Operating expense	Total
Employee benefits
Salary	837,460	732,720	-	1,570,180	529,427	404,432	-	933,859
Labor and health insurance	60,889	55,567	-	116,456	64,004	39,008	-	103,012
Pension	30,577	16,364	-	46,941	32,552	17,684	-	50,236
Others	35,062	18,670	-	53,732	29,354	13,187	-	42,541
Depreciation	650,604	167,388	3,146	821,138	591,839	114,440	3,031	709,310
Amortization	469	6,052	-	6,521	-	10,437	-	10,437

(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 11, 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. On July 21, 2021, the Bureau of Industry, MOEA held a task force to deal with the effect on petrochemical industry in case of DIP is categorized to Zone B, in which a discussion on both issues, including the legality of urban planning and the regulation of land reusing, will be appropriately conducted together with the urban planning task force of KUPC. As of September 30, 2021, KCG had yet to proceed on the procedures of statement changing.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated 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 Group:

(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	Collateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1	Jiangsu Weiming New Material Co., Ltd.(original name: Jiangsu Weiming Petrochemic al Corporatio n)	Changzhou Weicai New Material Science & Technology Co., Ltd.	Other Receivable	Yes	258,120	258,120	43,020	6.5%	2	-	Operating	-		-	685,824	1,028,736
2	Weihua (Rudong) Trade Co., Ltd	Changzhou Weicai New Material Science & Technology Co., Ltd.	Other Receivable	Yes	86,040	86,040	-	6.5%	2	-	Operating	-		-	103,961	103,961

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. (original name: Jiangsu Weiming Petrochemical Corporation)

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

Note 4: The amounts of the transaction and the ending balance had been offset in the consolidated financial statements.

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No.	Name of guarantor	Counter-party of guarantee and endorsement	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 reporting 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	CPDC	Ding-Yue Developme nt Co., Ltd.	2	44,518,954	22,380,000	22,380,000	10,000	2,880,000	% 30.16	74,198,257	Y	N	N
0	CPDC	Weihua (Rudong) Trade Co., Ltd.	2	44,518,954	217,150	215,100	215,100	-	% 0.29	74,198,257	Y	N	Y
0	CPDC	Changzhou Weicai New Material Science & Technology Co., Ltd.	2	44,518,954	1,220,590	925,680	677,895	174,000	% 1.25	74,198,257	Y	N	Y
0	CPDC	Shiny Chemical Industrial Co., Ltd.	5	44,518,954	78,086	78,086	78,086	-	% 0.11	74,198,257	N	N	N
0	CPDC	Lushun Warehouse Co., Ltd.	5	44,518,954	55,366	55,366	55,366	-	% 0.07	74,198,257	N	N	N

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

No.	Name of guarantor	Counter-party of guarantee and endorsement	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 reporting 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	CPDC	China General Terminal & Distributio n Corporati on	5	44,518,954	14,903	14,903	14,903	-	% 0.02	74,198,257	N	N	N
1	Ding-Yue Developmen t Co., Ltd.	CPDC	3	8,084,308	4,920,000	4,920,000	3,190,000	-	% 6.63	16,168,615	N	Y	N

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: 1. Transactions between the companies. 2. The Company directly or indirectly holds more than 50% voting right. 3. 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. 7. 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: Ding-Yue Development Co., Ltd 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.

(iii) Securities held as of September 30, 2021 (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	Ending balance	Ending balance	Ending balance	Note
				Shares/Units	Carrying value	Percentage of ownership (%)	Fair value
The Company	Yuanta Financial Holding Co., Ltd. BES Engineering Co. China Development Financial Holding Corp. Handy Chemical Corporation Ltd. Overseas Investment & Development Corp. Core Pacific City Co., Ltd.	None The Company is a director of an investee company None The Company is a supervisor of the investee company None 〞	Current financial assets designated at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income 〞〞〞 Non-current financial assets designated at fair value through profit or loss	20,839,371 164,348,449 44,684,712 386,000 2,600,000 422,250,872	514,733 1,428,188 634,523 26,437 26,000 7,832,673	0.27 10.74 0.30 4.51 2.89 27.52	514,733 1,428,188 634,523 26,437 26,000 7,832,673

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Note
				Shares/Units	Carrying value	Percentage of ownership (%)	Fair value
The Company BES Twin Towers Co., Ltd Tsou Seen Chemical Industries Corporation Tsou Seen Chemical Industries Corporation Changzhou Weicai New Material Science & Technology Co., Ltd.	Praxair Chemax Semiconductor Materials ZOWIE Technology Corporation Aetas Technology Inc. Chain Yarn Co., Ltd. Taiwan Business Bank Core Pacific City Co., Ltd. Praxair Chemax Semiconductor Materials Taiwan Tea Corporation Good Company TaiRx, Inc. Agricultural Bank of China-HSBC Structured Deposit	None 〞〞 The Company is a director of an investee company None 〞〞〞〞〞〞	Non-current financial assets at fair value through other comprehensive income 〞〞〞 Current financial assets at fair value through other comprehensive income Current financial assets designated at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income Financial assets designated at fair value through profit or loss－ current Non-current financial assets at fair value through other comprehensive income 〞 Financial assets designated at fair value through profit or loss－ current	2,701,651 8,815 287,961 30,000,000 945,000 160,111,000 6,754,127 7,279,000 750,000 722,500 -	113,714 358 - 300,000 9,034 2,914,182 284,284 152,131 - 14,652 21,510 14,272,419	14.00 0.04 0.58 13.41 0.01 10.43 35.00 0.92 2.08 0.81 -	113,714 358 - 300,000 9,034 2,914,182 284,284 152,131 - 14,652 21,510 14,272,419

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of $300 million or 20% of the capital stock:None
(v) Acquisition of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:None
(vi) Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:

Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:
(In Thousands of New Taiwan Dollars)
Name of company	Type of property	Transaction date	Acquisition date	Book value	Transaction amount	Amount actually receivable	Gain from disposal	Counter- party	Nature of relationship	Purpose of disposal	Price reference	Other terms
CPDC	land no.7,no.7-1, subsection 5, Jingmao section,Kaoh siung	August 18, 2021	October 1, 1982	1,668,271	2,380,000	Fully received	711,729	Chingwon Structure Corporation	Non related parties	Replenishing operating capital	Appraisal reports & Market value	None

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vii) 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	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/Sale	Amount	Percentage of total purchases/ (sales)	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivables (payables)
The Company The Company The Company CPDC GT Weiming Weiqiang Weiqiang Weiqiang Weiqiang	Tsou Seen Chemical Industries Corporation Kaohsiung Monomer Company Limited Chain Yarn Co., Ltd. The Company Weiqiang International Trade (Shanghai) Co., Ltd. Weihua (Rudong) Trade Co., Ltd. Changzhou Weicai New Material Science & Technology Co., Ltd. The Company Jiangsu Weiming New Material Co., Ltd.(original name: Jiangsu Weiming Petrochemical Corporation)	Subsidiary Affiliated company accounted for using equity method Other related parties Subsidiary Same parent company Same parent company Same parent company Subsidiary Same parent company	Sales Sales Sales Sales Sales Sales Sales Sales Sales	(844,431) (601,442) (492,560) (228,066) (107,708) (191,810) (187,463) (752,224) (278,966)	% (3.76) % (2.68) % (2.19) % (97.98) % (8.93) % (8.32) % (8.14) % (32.65) % (12.11)	3 Month 1 Month 1 Month Base on contract Base on contract Base on contract Base on contract Base on contract Base on contract	- - - - - - - - -	OA 90 days - - Base on contract Base on contract Base on contract Base on contract Base on contract Base on contract	132,408 80,554 311,507 66,661 7,346 8,567 - - 1,373	4.07% 2.48% 9.57% 99.22% 1.13% 4.33% -% -% 0.69%	Note Note 〞〞〞〞〞

Note: The amounts of the transaction and the ending balance had been offset in the consolidated financial statements.

(viii) 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	Overdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
The Company The Company	Tsou Seen Chemical Industries Corporation Chain Yarn Co., Ltd.	Subsidiary (Note) Other related parties	132,408 311,507	3.33 1.58	- -		132,408 173,363	- -

Note: The amounts of the transaction and the ending balance had been offset in the consolidated financial statements.

(ix) Trading in derivative instruments:None

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

				(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of company	Name of counter-party	Nature of relationship	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0 0 1 2 2 2 2	The Company The Company Weiming Weiqiang Weiqiang Weiqiang Weiqiang	TSCIC CPDC GT Weiqiang Weihua Weicai The Company Weiming	1 1 5 5 5 2 5	Sales revenue Repair expense Sales revenue Sales revenue Sales revenue Sales revenue Sales revenue	844,431 228,066 107,708 191,810 187,463 752,224 278,966	OA 90 days Base on contract Base on contract Base on contract Base on contract Base on contract Base on contract	3.24% 0.87% 0.41% 0.74% 0.72% 2.89% 1.07%
Note 1: Company numbering as follows: Parent company－0 Subsidiary starts from 1 Note 2: The numbering of the relationship between transaction parties as follo Parent company to subsidiary－1 Subsidiary to parent company－2 Subsidiary to subsidiary－3 Subsidiary to sub-subsidiary－4 Sub-subsidiary to sub-subsidiary－5				ws:

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Note 3: The amounts of the transaction and the ending balance had been offset in the consolidated interim financial statement
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(b) Information on investees:

The following is the information on investees for the nine months ended September 30, 2021 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of September 30, 2021	Balance as of September 30, 2021	Balance as of September 30, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				September 30, 2021	December 31, 2020	Shares	Percentage of wnership	Carrying value
The Company 〞〞〞〞〞〞〞	Kaohsiung Monomer Company Limited Zhong Gong Baoquan Ltd. Ding-Yue Development Co., Ltd. CPDC Investment (BVI) Co Ltd. Tsou Seen Chemical Industries Corporation CPDC Green Technology Corp. Unichem Development Limited BES Twin Tower Development Co., Ltd.	1, Hsing Kung Road,Ta She P O Box 6-25 Nantze,Kaohsiung (815), Taiwan 2F., No.12, Dongxing Rd., Taipei City 105, Taiwan 8F., No.12, Dongxing Rd., Taipei City 105, Taiwan Citco Building, Wickhams Cay, P.O. Box662 No.1, Jingjin Rd., Fangliao Township, Pingtung County 940, Taiwan 14F.-16, No.61, Wufu 3rd Rd., Qianjin Dist., Kaohsiung City 801, Taiwan Unit 06, G/F, The Lodge, 535 Canton Road, Kowloon, Hong Kong 16F., No.12, Dongxing Rd., Taipei City 105, Taiwan	Methyl Methacrylate Monomer Security consultants Commissioned to create a vendor to build the housing, commercial buildings and plant rental business, management of land development and playgrounds and other related business investment Holding company Dicalcium phosphate Mechanical engineering Holding company Real estate investment and development	- 14,400 16,240,000 904,946 560,000 100,000 9,876,023 4,791,383	- 14,400 10,040,000 904,946 760,000 100,000 9,572,433 4,791,383	20,000,000 1,440,000 1,624,000,000 26,580,000 76,000,000 15,000,000 324,684,262 591,216,357	% 40.00 % 24.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00	733,293 18,466 16,145,656 885,638 1,181,683 148,079 8,367,563 5,957,120	704,308 290 (33,710) (5,586) 113,059 28,349 (221,341) 52,533	281,723 70 (33,710) (5,586) 113,059 28,349 (221,341) 52,533	Note 1 Note 1 Note 2&5&7 Note 2&4&5 Note 2&5 Note 2&5 Note 2&4&5 Note 2&5

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of September 30, 2021	Balance as of September 30, 2021	Balance as of September 30, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				September 30, 2021	December 31, 2020	Shares	Percentage of wnership	Carrying value
The Company 〞 CPDC Investment (BVI) Co Ltd. Ding-Yue Development Co., Ltd. Tsou Seen Chemical Industries Corporation BES Twin Towers Development Co., Ltd. Frontier Fortune Investment Pte. Ltd. 〞〞 Core Pacific Twin Star (Myanmar) Investment Company Ltd.	Thanh Phong Construction Investment Co., Ltd. Jean Pacific Development Co., Ltd. Core Pacific Overseas Holdings Ltd Da-Ying Construction Ltd. Taivex Therapeutics Corporation Frontier Fortune Investment Pte. Ltd. Core Pacific Twin Star (Myanmar) Investment Company Ltd. Gemini Star (India) Private Limited Core Pacific Twin Star (Vietnam) Investment Co., Ltd. Core Pacific Pioneer (Myanmar) Company Ltd.	B2-19, Golden King Tower Building, No. 15 Nguyen Luong Bang, Tan Phu Ward, District 7, Ho Chi Minh City 7F.-2, No.300, Yangguang St., Neihu Dist., Taipei City 11491, Taiwan (R.O.C.) Akra Bldg., 24 De Castro Street, Wickhams Cay I, Road Town,Tortola,British Virgin Islands 8F., No.12, Dongxing Rd., Taipei City 105, Taiwan 8F., No.12, Dongxing Rd., Taipei City 105, Taiwan 112 ROBINSON ROAD#05-01 ROBINSON 112SINGAPORE (068902) NO.153/Ka,Kyun ShweMmyaing Lane (2) ,23 ward,Thingangyun Townshin Yangon Level7, The Capital, Plot No.C-70, G Block, Bandra Kurla Complex, Bandra MUMBAI Mumbai City MH 400051 IN B2-19, Golden King Tower Building, No. 15 Nguyen Luong Bang, Tan Phu Ward, District 7, Ho Chi Minh City NO.153/Ka,Kyun ShweMmyaing Lane(2) ,23 ward,Thingangyun Townshin Yangon	Engaged in construction, real estate, building constructional consulting, lease equipment and wholesale of building materials Renting and selling real estate Holding company Engineering, construction contracting business Engaged in biotechnology, pharmaceutical research and development and marketing Holding company Holding company and consultancy Real estate and petrochemical products research and consultancy Engineering, real estate and consultancy of construction Building construction, real estate management, development and sale	609,347 620,000 808,564 60,000 696,720 2,761,596 169,921 9,274 2,566,176 24,804	609,347 620,000 808,564 22,500 696,720 2,761,596 169,921 9,274 2,566,176 24,804	- 62,000,000 26,580,000 - 46,224,551 93,060,000 5,500,001 2,099,993 - 800,000	% 100.00 % 40.00 % 45.19 % 100.00 % 91.10 % 100.00 % 100.00 % 99.99 % 100.00 % 80.00	587,183 620,365 880,460 57,944 201,418 2,718,826 145,961 4,315 2,561,293 19,669	6,251 2,035 (12,317) (2,458) (58,894) 53,441 2,301 (167) 52,106 4,263	6,251 814 - - - - - - - -	Note 2&3&4 &5 Note 1 Note 2&4&6 Note 2&3&5 &6 Note 2&5&6 Note 2&4&5 &6 Note 2&4&5 &6 Note 2&4&5 &6 Note 2&3&4 &5&6 Note 2&4&5 &6

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 verification date was October 21, 2021. As of November 10, 2021, the related registration procedures were still in progress.

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Information on investment in mainland China:

(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, 2021	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of September 30, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Weihua (Rudong) Trade Co., Ltd.	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	15,264	100.00%	15,264	496,702	-
Weiqiang International Trade (Shanghai) Co., Ltd.	Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub- fitted trading.	211,560	( 1 )、 ( 3 )	211,560	-	-	211,560	39,939	100.00%	39,939	167,787	-
Jiangsu Weiming New Material Co., Ltd.(original name:Jiangsu Weiming Petrochemical Corporation	Petrochemical supporting facility construction	7,725,253	( 1 )、 ( 2 )	7,421,663	303,590	-	7,725,253	(117,802)	100.00%	(117,802)	6,840,811	-
Zhangzhou Weida Petrochemical Co., Ltd.	Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub- fitted trading	-	( 2 )	30,648	-	(30,648)	-	2	100.00%	2	-	-
Changzhou Weicai New Material Science & Technology Co., Ltd.	Engaged in engineering plastic and high valued petroleum chemical products	1,860,113	( 2 )	1,324,893	-	-	1,324,893	(117,650)	100.00%	(117,650)	890,721	-
Weiming (Rudong) Construction Co., Ltd. (Invested through Jiansu Weiming New Material Co., Ltd.)	Engaged in engineering consultant services、engineering construction、 engineering management、trading of petroleum chemical product	129,665	( 3 )	-	-	-	-	(330)	100.00%	(330)	128,709	-

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of September 30, 2021	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
10,919,107	14,362,341	Note 4

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.
(c) Others. (The Company through subsidiary investment to China.)

Note2: The amount of net income (losses) was recognized based on the unaudited financial statements of the investee companies.

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

Note4: The cumulative investment amount or investment proportion to China cannot over the Company’ s net value of 60%. The Company got certified documents of operating headquarters issued by Industrial Development Bureau, MOEA on October 18, 2018, so not subject to the above regulations. Valid period to October 14, 2021. On October 19, 2021, the company acquired the above documents and extend the valid period to October 12, 2024.
Note5: Zhangzhou Weida Petrochemical Co., Ltd. was dissolved and the liquidation process had been completed in January 2021.

(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”.

(d) Major shareholders:None

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information:

(a) General Information

The Group identifies arylonitrile & acetic acid department and caprolactam department as reportable segments based on factors such as product types, manufacturing procedure, customer types, and operating activities.

The reportable segments of the Group are independent business units which offer different products and services. Each business unit needs different technologies, resources and marketing strategies, thus should administer separately. The operating segment has a segment manager who is directly accountable to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment.

(b) Information for each segment’ s revenue / expense, asset, liability, measurement basis , and adjustment

Non-operating income and loss, income tax expense (revenue) and non-recurring gain or loss is not allocated to reportable segments. In addition, not all of the profit or loss of the reportable segments include significant non-cash items other than depreciation and amortization. Total reportable segments’ profit or loss is reconciled with the continuing operations’ profit or loss before tax.

There was no material inconsistency between the accounting policies adopted for the operating segment and the accounting policies described in note 4. The Group use the operating profit as the measurement for segment profit and the basis of performance assessment. Operating segments’ profit and loss and total assets exclude operating expenses and assets of the corporate management.

For the three months ended September 30, 2021 Revenue Revenues from external customers Revenues from transactions with other operating segments of the same entity Total segment revenue Reported segment profit or loss	Acrylonitrile & Acetic Acid $ 3,468,357 - $ 3,468,357 $ 938,427	Caprolactam 3,838,403 - 3,838,403 343,095	Other 2,086,500 68,835 2,155,335 (118,738)	Adjustment and eliminations - (68,835) (68,835) -	Total 9,393,260 -
					9,393,260
					1,162,784

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months ended September 30, 2020 Revenue Revenues from external customers $ 1,660,940 Revenues from transactions with other operating segments of the same entity - Total segment revenue $ 1,660,940 Reported segment profit or loss $ (132,892) For the nine months ended September 30, 2021 Revenue Revenues from external customers $ 10,865,972 Revenues from transactions with other operating segments of the same entity - Total segment revenue $ 10,865,972 Reported segment profit or loss $ 2,827,952 Segment assets $ 4,580,651 For the nine months ended September 30, 2020 Revenue Revenues from external customers $ 5,599,102 Revenues from transactions with other operating segments of the same entity - Total segment revenue $ 5,599,102 Reported segment profit or loss $ 223,763 Segment assets $ 6,020,444	1,401,712 - 1,401,712 (213,899) 10,441,133 - 10,441,133 969,029 18,399,027 4,627,059 - 4,627,059 (998,222) 10,615,912	570,537 43,094 613,631 (66,999) 4,764,537 228,066 4,992,603 (197,144) 97,801,292 2,792,174 116,524 2,908,698 240,178 86,700,469	- (43,094) (43,094) - - (228,066) (228,066) - - - (116,524) (116,524) - -	3,633,189 - 3,633,189 (413,790) 26,071,642 - 26,071,642 3,599,837 120,780,970 13,018,335 - 13,018,335 (534,281) 103,336,825

(Continued)

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Geographical Areas

The Group’ s non-current assets located overseas are immaterial. Revenues from domestic and overseas customers for the three months ended September 30, 2021 and 2020 and the nine months ended September 30, 2021 and 2020 were as follows:

Region	For the three months ended September 30,	For the three months ended September 30,
	2021 2020 $ 5,820,739 2,451,125 3,530,541 1,169,680 41,980 12,384 $ 9,393,260 3,633,189 For the nine months ended September 30,
Operating revenue from domestic sales Asia Other (individual area under 10%) Total operating revenue Region
	2021 $ 16,146,940 9,837,855 86,847 $ 26,071,642	2020 8,091,697 4,889,303 37,335 13,018,335
Operating revenue from domestic sales Asia Other (individual area under 10%) Total operating revenue

(d) Major Customers

Customers generating over 10% of total revenue for the three months ended September 30, 2021 and 2020 were as follows:

Customers	For the three months ended September 30,
	2021 2020 $ 1,054,841 534,939
1001

Customers generating over 10% of total revenue for the nine months ended September 30, 2021 and 2020 were as follows:

Customers	For the nine months ended September 30,
	2021 2020 $ 3,026,922 1,693,692
1001

AI assistant

CPDC — Interim / Quarterly Report 2021

51772_rns_2021-11-12_befa2af3-dfc3-42c6-8abd-687bdd9102b0.pdf

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Emphasis of Matter

KPMG

Notes to Readers

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2021 and 2020

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Equity attributable to owners of parent

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months and nine months ended September 30, 2021 and 2020

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2021 and 2020

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

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Income taxes

(d) Employee benefits

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

(6) Explanation of significant accounts:

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Inventories

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Collateral

(h) Property, plant and equipment

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Right-of-use assets

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Evaluation by income approach

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Evaluation through land development analysis

September 30, 2021

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

AnShun Land Located in Tainan City Annan District:

(i) History

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Extension legislation:

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Others

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Xincun Land of TAIC:

1) History

2) Extension legislation

Shulin Land of TAIC:

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CPDC Interim / Quarterly Report 2021