CPDC — Interim / Quarterly Report 2022

Nov 14, 2022

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Stock Code:1314

CHINA PETROCHEMICAL DEVELOPMENT CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 31, 2022 and 2021

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.

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Table of contents

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 10～15 16 16～77 78～80 81 82～86 86 86 86～87 88～91 91～92 92～93 94～95

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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 March 31, 2022 and 2021, and the related consolidated statements of comprehensive income changes in equity and cash flows for the three months ended March 31, 2022 and 2021, 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 $22,836,241 and $32,889,003 thousand, constituting 16.75% and 30.58% of consolidated total assets as of March 31, 2022 and 2021, respectively, total liabilities amounting to $5,764,124 and $5,209,955 thousand, constituting 10.41% and 14.40% of consolidated total liabilities as of March 31, 2022 and 2021, respectively, and total comprehensive income (loss) amounting to $34,963 thousand and $47,568 thousand, constituting 9.57% and 7.98% of consolidated total comprehensive income (loss) for the three months ended March 31, 2022 and 2021, 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 $1,174,250 thousand and $1,159,069 thousand as of March 31, 2022 and 2021, respectively, and its equity in net earnings on these investee companies of $50,802 thousand and $69,629 thousand for the three months ended March 31, 2022 and 2021, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

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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 March 31, 2022 and 2021, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2022 and 2021 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 Wu Cheng Yen and Chen Mei Fang.

KPMG

Taipei, Taiwan (Republic of China) May 11, 2022

Notes to Readers

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

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(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

March 31, 2022, December 31, 2021, March 31, 2021 and January 1, 2021

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1120 Current financial assets at fair value through other comprehensive income (note 6(c)) 1170 Notes and accounts receivable, net (note 6(d)) 1180 Accounts receivable related parties, net (notes 6(d) and 7) 1200 Other receivables (notes 6(d) and 7) 1220 Current tax assets 130X Inventories (note 6(e)) 1410 Prepayments 1470 Other current assets (note 6(f)) Total current assets Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1551 Investments accounted for using equity method (note 6(g)) 1600 Property, plant and equipment (note 6(h)) 1755 Right-of-use assets (note 6(i)) 1760 Investment property, net (note 6(j)) 1780 Intangible assets (note 6(k)) 1840 Deferred income tax assets (note 6(u)) 1900 Other non-current assets (note 8) Total non-current assets Total assets	March 31, 2022 Amount % $ 12,814,003 9 367,068 - 12,556 - 3,288,013 2 354,668 - 99,169 - 7,755 - 43,277,309 32 2,264,065 2 1,972,820 2 64,457,426 47 54,055 - 3,288,722 2 2,102,870 2 25,870,692 19 870,467 1 38,867,067 29 175,460 - 11,023 - 623,182 - 71,863,538 53 $ 136,320,964 100	Retrospective restatement December 31, 2021 Amount % 7,650,122 6 357,219 - 9,674 - 3,391,732 3 477,344 - 115,814 - 6,104 - 42,131,583 31 1,738,875 1 1,476,978 1 57,355,445 42 6,973,779 5 3,050,053 2 2,329,486 2 25,119,743 19 864,464 1 38,867,067 29 172,308 - 11,023 - 497,942 - 77,885,865 58 135,241,310 100	Retrospective restatement March 31, 2021 Amount % 6,522,650 6 876,202 1 9,412 - 3,471,297 3 64,564 - 235,454 - - - 12,920,034 12 1,645,894 2 3,606,676 3 29,352,183 27 10,746,855 10 2,678,933 3 2,072,262 2 23,658,469 22 891,546 1 37,626,827 35 170,100 - 11,023 - 327,003 - 78,183,018 73 107,535,201 100	Retrospective restatement January 1, 2021 Amount % 7,479,899 7 829,533 1 9,195 - 1,784,564 2 51,106 - 144,294 - - - 12,665,959 12 1,246,404 1 2,878,214 3 27,089,168 26 10,746,855 10 2,799,521 3 2,038,003 2 23,125,654 22 872,937 1 37,626,827 36 159,173 - 11,023 - 339,528 - 77,719,521 74 104,808,689 100 Liabilities and Equity Current liabilities: 2100 Short-term loans (note 6(l)) 2110 Short-term bills payable (note 6(o)) 2130 Current contract liabilities (note 6(x)) 2170 Accounts payable (note 7) 2180 Accounts payable to related parties (note 7) 2200 Other payables (note 4) 2230 Current tax liabilities 2250 Provisions-current (notes 6(r) and 6(t)) 2280 Lease liabilities-current (note 6(q)) 2320 Long-term liabilities-current portion (notes 6(m) and 6(n)) 2399 Other current liabilities, others Total current liabilities Non-Current liabilities: 2530 Bonds payable (note 6(n)) 2540 Long-term bank loans (note 6(m)) 2550 Provisions-non-current (notes 6(r) and 6(t)) 2570 Deferred income tax liabilities (note 6(u)) 2580 Lease liabilities-non-current (note 6(q)) 2611 Long-term bills payable (note 6(p)) 2670 Other non-current liabilities, others Total non-current liabilities Total liabilities Equity attributable to owners of parent: 3110 Common stock (note 6(v)) 3200 Capital surplus (note 6(v)) Retained earnings (note 6(v)): 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Other equity (note 6(v)): 3410 Exchange differences arising on translation of foreign operations 3420 Unrealized gains or loss on financial assets at fair value through other comprehensive income Total equity attributable to shareholders of the parent: 36XX Non-controlling interests Total equity Total liabilities and equity	March 31, 2022 Amount % $ 13,959,843 10 1,430,135 1 126,103 - 1,985,487 2 10,788 - 1,966,614 1 38,628 - 354,116 - 51,990 - 2,073,577 2 48,263 - 22,045,544 16 4,649,490 4 13,009,844 10 3,229,756 2 6,764,316 5 232,788 - 5,275,922 4 172,810 - 33,334,926 25 55,380,470 41 37,848,502 28 1,579,658 1 2,389,125 2 35,390,076 26 4,412,301 3 42,191,502 31 (499,459) (1) (335,395) - (834,854) (1) 80,784,808 59 155,686 - 80,940,494 59 $ 136,320,964 100	Retrospective restatement December 31, 2021 Amount % 12,737,689 10 1,429,955 1 20,612 - 1,759,025 1 11,333 - 2,564,997 2 39,477 - 478,734 1 56,324 - 1,511,515 1 127,720 - 20,737,381 16 4,684,096 4 13,905,589 10 3,200,532 2 6,764,316 5 240,124 - 5,254,518 4 140,232 - 34,189,407 25 54,926,788 41 37,848,502 28 1,454,301 1 2,389,125 2 35,390,076 26 4,738,292 3 42,517,493 31 (950,314) (1) (576,946) - (1,527,260) (1) 80,293,036 59 21,486 - 80,314,522 59 135,241,310 100	Retrospective restatement March 31, 2021 Amount % 4,023,360 4 - - 704 - 1,917,987 2 - - 1,527,929 1 10,988 - 244,236 - 56,764 - 764,563 1 103,354 - 8,649,885 8 3,500,000 3 9,271,357 9 1,735,243 2 6,497,650 6 255,309 - 6,146,945 6 116,169 - 27,522,673 26 36,172,558 34 32,848,502 31 583,815 1 2,311,174 2 35,601,629 33 1,788,124 1 39,700,927 36 (850,193) (1) (974,620) (1) (1,824,813) (2) 71,308,431 66 54,212 - 71,362,643 66 107,535,201 100	Retrospective restatement January 1, 2021 Amount % 3,615,000 4 - - 1,676 - 1,394,928 1 - - 1,429,867 1 5,637 - 282,291 - 43,251 - 1,914,833 2 60,911 - 8,748,394 8 3,500,000 4 7,489,650 7 1,772,811 2 6,497,650 6 249,741 - 5,656,112 5 127,601 - 25,293,565 24 34,041,959 32 32,848,502 32 583,815 1 2,311,174 2 35,601,629 34 1,187,113 1 39,099,916 37 (966,633) (1) (854,259) (1) (1,820,892) (2) 70,711,341 68 55,389 - 70,766,730 68 104,808,689 100

See accompanying notes to consolidated financial statements.

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(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 ended March 31, 2022 and 2021

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

4000 Operating revenues (notes 6(x) and 7) 5000 Operating costs (note 6(e)) Gross profit from operations Operating expenses (note 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment loss determined in accordance with IFRS9 Total operating expenses Net operating (loss) income Non-operating income and expenses: 7100 Interest income (note 6(z)) 7010 Other income (notes 6(z) and 7) 7020 Other gains and losses (note 6(z)) 7050 Finance costs (notes 6(q) and 6(z)) 7060 Shares of profit (loss) of associates and joint ventures accounted for using equity method, net (note 6(g)) Total non-operating income and expenses (Loss) profit before income tax 7950 Less: income tax expense (note 6(u)) (Loss) profit 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 (note 6(v)) 8320 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss (note 6(v)) 8349 Allocation of income tax to the above items Components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences arising on translation of foreign operations (note 6(v)) 8370 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that may be reclassified to profit or loss (note 6(v)) 8399 Allocation of income tax to the above items Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income (loss), net 8500 Total comprehensive income Profit attributable to: 8610 Shareholders of the parent 8620 Non-controlling interests Comprehensive income (loss) attributable to: 8710 Shareholders of the parent 8720 Non-controlling interests Earnings per share (note 6(w)) 9750 Basic earnings per share 9850 Diluted earnings per share	For the three month	s ended March 31 Retrospective restatement 2021 Amount % 7,436,525 100 6,385,594 86 1,050,931 14 203,922 3 257,216 4 100,446 1 - - 561,584 8 489,347 6 53,451 1 48,215 1 1,244 - (56,756) (1) 73,337 1 119,491 2 608,838 8 13,491 - 595,347 8 (120,371) (2) 4,338 - - - (116,033) (2) 119,305 2 (2,706) - - - 116,599 2 566 - 595,913 8 596,683 8 (1,336) - 595,347 8 597,090 8 (1,177) - 595,913 8 0.18 0.18
	2022 Amount % $ 7,382,270 100 7,343,526 99 38,744 1 265,104 4 201,200 3 77,148 1 - - 543,452 8 (504,708) (7) 34,202 - 28,499 - 153,773 2 (85,493) (1) 45,631 1 176,612 2 (328,096) (5) 4,492 - (332,588) (5) 241,551 4 5,349 - - - 246,900 4 455,088 6 (4,070) - - - 451,018 6 697,918 10 $ 365,330 5 $ (331,340) (5) (1,248) - $ (332,588) (5) $ 366,415 5 (1,085) - $ 365,330 5 $ (0.09) $ (0.09)

See accompanying notes to consolidated financial statements.

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(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 three months ended March 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2021 Effects of retrospective application Balance at January1, 2021 after adjustments Profit for the three months ended March 31, 2021 after adjustments Other comprehensive income for the three months ended March 31, 2021 after adjustments Total comprehensive income for the three months ended March 31, 2021 after adjustments Balance at March 31, 2021 after adjustments Balance at January 1,2022 after adjustments Profit for the three months ended March 31, 2022 Other comprehensive income for the three months ended March 31, 2022 Total comprehensive income Changes in ownership interests in subsidiaries Changes in non-controlling interests Balance at March 31, 2022							Equity attributable	Equity attributable	t	o owners of parent	o owners of parent							Non-controlling interests	Total equity
	Ordinary shares			Capital surplus				Retained earnings				Total other equity interest				Total equity attributable to owners of parent
												Exchange differences on translation of foreign financial statements		Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
						Legal reserve		Special reserve		Unappropriated retained earnings
	$ 32,848,502 - 32,848,502 - - - $ 32,848,502 $ 37,848,502 - - - - - $ 37,848,502			583,815 -		2,311,174 -		35,601,629 -		1,287,983 (100,870) 1,187,113 596,683 4,328 601,011 1,788,124 4,738,292 (331,340) 5,349 (325,991) - - 4,412,301		(966,202) (431) (966,633) - 116,440 116,440 (850,193) (950,314) - 450,855 450,855 - - (499,459)		(854,259) - (854,259) - (120,361) (120,361) (974,620) (576,946) - 241,551 241,551 - - (335,395)		70,812,642 (101,301) 70,711,341 596,683 407 597,090 71,308,431 80,293,036 (331,340) 697,755 366,415 125,357 - 80,784,808		55,389 - 55,389 (1,336) 159 (1,177) 54,212 21,486 (1,248) 163 (1,085) (125,357) 260,642 155,686	70,868,031 (101,301)
				583,815		2,311,174		35,601,629											70,766,730
				- -		- -		- -											595,347 566
				-		-		-											595,913
				583,815		2,311,174		35,601,629											71,362,643
				1,454,301 - -		2,389,125 - -		35,390,076 - -											80,314,522 (332,588) 697,918
		-		-		-		-											365,330
		- -		125,357 -		- -		- -											- 260,642
		$ 37,848,502		1,579,658		2,389,125		35,390,076											80,940,494

See accompanying notes to consolidated financial statements.

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(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 ended March 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: (Loss) profit before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net gain on financial assets at fair value through profit or loss Interest expense Interest income Share of profit of associates and joint ventures accounted for using equity method (Gain) loss on disposal of property, plant and equipment (Reversal of impairment loss) impairment loss on non-financial assets Gain on lease modification Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Increase in accounts receivable Decrease (increase) in accounts receivable due from related parties Decrease (increase) 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 Decrease in accounts payable to related parties (Decrease) increase in other payable Decrease in provisions (Decrease) increase in other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash outflow generated from operations Interest received Interest paid Income taxes paid Net cash flows used in operating activities	For the three month	s ended March 31 Retrospective restatement 2021 608,838 267,451 2,137 (59,030) 56,756 (53,451) (73,337) 10 209 (15) 140,730 (1,687,149) (13,458) (53,974) (254,285) (399,490) (11,878) (2,420,234) (972) 523,059 - 91,094 (75,623) 42,442 580,000 (1,840,234) (1,699,504) (1,090,666) 16,265 (52,066) (5,547) (1,132,014)
	2022 $ (328,096) 296,697 2,174 (50,056) 85,493 (34,202) (45,631) (3) (13,980) - 240,492 (302,043) 122,676 12,068 (1,131,758) (525,190) (129,543) (1,953,790) 105,491 226,462 (545) (599,447) (97,290) (79,457) (444,786) (2,398,576) (2,158,084) (2,486,180) 38,779 (78,649) (6,992) (2,533,042)

See accompanying notes to consolidated financial statements.

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(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 ended March 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other financial assets (Increase) decrease in other non-current assets Dividends received 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 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 Interest paid Change in non-controlling interests Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the three month	s ended March 31 Retrospective restatement 2021 (111,500) 123,861 (729,833) - (10,887) (716,584) 12,459 54,761 (1,377,723) 5,422,232 (5,023,396) 7,290,330 (6,694,540) 7,365,000 (6,873,100) (14,528) (11,432) (1,382) - 1,459,184 93,304 (957,249) 7,479,899 6,522,650
	2022 $ (33,304) 27,507 (695,525) 3 (196) (366,299) (125,280) 7,271,370 6,078,276 2,296,651 (731,000) 1,621,223 (2,112,537) 8,710,000 (8,690,000) (15,008) 32,578 (1,303) 260,642 1,371,246 247,401 5,163,881 7,650,122 $ 12,814,003

See accompanying notes to consolidated financial statements.

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(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

March 31, 2022 and 2021

(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 and nylon.

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

These consolidated financial statements for the three months ended March 31, 2022 and 2021 were authorized for issue by the Board of Directors on May 11, 2022.

(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 details of impact on the Group’s adoption of the new amendments beginning January 1, 2022 are as follows：

• －

• (i) Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”

The amendment prohibits an entity from deducting from the cost of an item of property, plant and equipment any proceeds received from selling items produced while the entity is preparing the asset for its intended use (for example, the proceeds from selling samples produced when testing a machine to ensure if it is functioning properly). The proceeds from selling such samples, together with the costs of producing them, shall be recognized in profit or loss.

The amendments also clarify that testing whether an item of PPE is functioning properly means assessing its technical and physical performance rather than assessing its financial performance – e.g. assessing whether the PPE has achieved a certain level of operating margin.

The amendments apply retrospectively, but only to items of property, plant and equipment made available for use on or after January 1, 2021. The application of the amendments resulting in the property, plant and equipment to decrease by $101,301 thousand, the exchange differences arising on translation of foreign operations to decrease by $431 thousand, and the unappropriated earnings to decrease by $100,870 thousand, respectively, on January 1, 2021; the property, plant and equipment to decrease by $162,864 thousand, the exchange differences arising on translation of foreign operations to decrease by $1,156 thousand, and the unappropriated earnings to decrease by $161,709 thousand, respectively, on March 31, 2021; as well as the property, plant and equipment to decrease by $213,898 thousand, the exchange differences arising on translation of foreign operations to decrease by $1,455 thousand, and the

(Continued)

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

unappropriated earnings to decrease by $212,442 thousand, respectively, on December 31, 2021; also, an increase of $60,837 thousand in operating costs, and both the basic and diluted earnings per share to decrease by 0.02 for the three month ended March 31, 2022. There is no impact on the cash flows in the said period.

In addition, if the Group had applied its previous accounting policy, the property, plant and equipment would be increased by $11,570 thousand, the exchange differences arising on translation of foreign operations to decrease by $247 thousand, and the retained earnings would be increased by $11,323 thousand, respectively, on March 31, 2022. The operating costs decreased by $11,323 thousand, and both the basic and diluted earnings per share increased by 0.01 for the three month periods ended March 31, 2022. There is no material impact on the cash flows in the said period.

(ii) Other amendments

The following new amendments, effective January 1, 2022, do not have a significant impact on the Group’s consolidated financial statements:

• －

• ●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”

• (b) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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”

(Continued)

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

(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, 2021. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2021.

(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 Water treatment works, plumbing works, apparatus and instrument installation work, refrigeration and air conditioning engineering and tank car repair and other services Holding company		Shareholding ratio	Shareholding ratio	January 1, 2021 Notes % 100.00 TSCIC was established on June 16, 1998. 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 March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to $760,000 thousand, $760,000 thousand, $960,000 thousand and $960,000 thousand, respectively. % 100.00 CPDC GT was established on May 31, 1999. As of March 31, 2022, December 31, March 31 and January 1, 2021, its 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. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to USD26,580 thousand.
			March 31, 2022 % 100.00 % 100.00 % 100.00	December 31, 2021 % 100.00 % 100.00 % 100.00	March 31, 2021 % 100.00 % 100.00 % 100.00
The Company The Company The Company	Tsou Seen Chemical Industries Corporation (TSCIC) CPDC Green Technology Corp. (CPDC GT) CPDC Investment (BVI) Co., Ltd. (CPDC (BVI))

(Continued)

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

Name of investors	Name of subsidiaries	Nature of business 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 Engaged in construction, real estate, building constructional consulting, lease equipment and wholesale of building materials		Shareholding ratio	Shareholding ratio	January 1, 2021 Notes % 100.00 BES Twin Towers was established on March 1, 2011. It increased its capital by retained earnings amounting to $112,043 thousand on May 26, 2021. On November 18, 2021, the Board of Directors decided to reduce its capital amounting to $1,000,000 thousand. The base date of the reduction was November 22, 2021, and the relevant legal registration procedures had been completed on December 7, 2021. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid- in capital amounted to $4,912,164 thousand, $4,912,164 thousand, $5,800,121 thousand and $5,800,121 thousand, respectively. % 100.00 UDL was established on May 20, 2008. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to USD329,855 thousand, USD324,684 thousand, USD313,851 thousand and USD313,851 thousand, respectively. % 0.37 Weiming was established on May 16, 2013, and changed its name to Jiangsu Weiming New Material Co., Ltd. on October 14, 2021. It increased its capital through UDL amounting to CNY 20,000 thousand, CNY 13,000 thousand, and CNY70,000 thousand on March 23, January 5, 2022 and June 28, 2021, respectively. The said amounts were verified on March 30, January 19, 2022 and June 29, 2021, respectively. As of March 31,2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to CNY1,721,000 thousand, CNY1,688,000 thousand, CNY1,618,000 thousand and CNY1,618,000 thousand, respectively. % 44.52 Weiqiang was established on May 9, 2013. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to CNY44,920 thousand. % 100.00 Thanh Phong was established on May 22, 2017. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to VND458,637,500 thousand.
			March 31, 2022 % 100.00 % 100.00 % 0.35 % 44.52 % 100.00	December 31, 2021 % 100.00 % 100.00 % 0.36 % 44.52 % 100.00	March 31, 2021 % 100.00 % 100.00 % 0.37 % 44.52 % 100.00
The Company The Company The Company The Company The Company	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) Thanh Phong Construction Investment Co., Ltd. (Thanh Phong)

(Continued)

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

Name of investors	Name of subsidiaries	Nature of business 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 Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub-fitted trading		Shareholding ratio	Shareholding ratio	January 1, 2021 Notes % 100.00 Ding-Yue was established on October 11, 1995. It increased its capital amounting to $2,420,000 thousand, $11,340,000 thousand and $4,200,000 thousand on March 14, 2022, November 1 and June 16, 2021, respectively. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid- in capital amounted to $28,000,000 thousand, $25,580,000 thousand, $10,040,000 thousand and $10,040,000 thousand, respectively. % 4.02 Weihua was established on December 10, 2012. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to CNY156,289 thousand. % 55.48 Weiqiang was established on May 9, 2013. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to CNY44,920 thousand. % 91.10 Taivex was established on February 11, 2010. TSCIC invested in Taivex on August 18, 2010. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to $707,399 thousand, $507,399 thousand, $507,399 thousand and $507,399 thousand, respectively. % 99.63 Weiming was established on May 16, 2013, and changed its name to Jiangsu Weiming New Material Co., Ltd. on October 14, 2021. It increased its capital through UDL amounting to CNY 20,000 thousand, CNY 13,000 thousand, and CNY70,000 thousand on March 23, January 5, 2022 and June 28, 2021, respectively. The said amounts were verified on March 30, January 19, 2022 and June 29, 2021, respectively. As of March 31,2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to CNY1,721,000 thousand, CNY1,688,000 thousand, CNY1,618,000 thousand and CNY1,618,000 thousand, respectively. % 95.98 Weihua was established on December 10, 2012. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to CNY156,289 thousand.
			March 31, 2022 % 100.00 % 4.02 % 55.48 % 65.34 % 99.65 % 95.98	December 31, 2021 % 100.00 % 4.02 % 55.48 % 91.10 % 99.64 % 95.98	March 31, 2021 % 100.00 % 4.02 % 55.48 % 91.10 % 99.63 % 95.98
The Company TSCIC TSCIC TSCIC UDL UDL	Ding-Yue Development Co., Ltd. (Ding-Yue) Weihua (Rudong) Trade Co., Ltd. (Weihua) Weiqiang Taivex Therapeutics Corporation (Taivex) Weiming Weihua

(Continued)

13

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, 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 Real estate, research of petroleum market and consultancy		Shareholding ratio	Shareholding ratio	January 1, 2021 Notes % 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 March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to CNY0 thousand, CNY0 thousand, CNY0 thousand and CNY6,000 thousand, respectively. % 100.00 Weicai was established on January 6, 2015 and acquired by UDL on November 5, 2018. On September 22, 2021, the Board of Directors decided to reduce its capital amounting to CNY100,000 thousand. The base date of the reduction and the relevant legal registration procedures had been completed on December 28, 2021. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid- in capital amounted to CNY314,955 thousand, CNY314,955 thousand, CNY414,955 thousand and CNY414,955 thousand, respectively. % 100.00 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 March 31,2022, December 31, March 31 and January 1, 2021, its actual paid- in capital amounted to CNY30,000 thousand, CNY30,000 thousand, CNY15,080 thousand and CNY1,000 thousand, respectively. % 100.00 Frontier Fortune was established on November 23, 2016. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to USD93,060 thousand. % 100.00 Core Pacific Twin Star (Myanmar) was established on February 16, 2017. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid- in capital amounted to USD5,500 thousand. % 99.99 Gemini Star (India) was established on January 8, 2019. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to INR21,000 thousand.
			March 31, 2022 % - % 100.00 % 100.00 % 100.00 % 100.00 % 99.99	December 31, 2021 % - % 100.00 % 100.00 % 100.00 % 100.00 % 99.99	March 31, 2021 % - % 100.00 % 100.00 % 100.00 % 100.00 % 99.99
UDL UDL Weiming BES Twin Towers Frontier Fortune Frontier Fortune	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)) Gemini Star (India) Private Limited. (Gemini Star (India))

(Continued)

14

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

Name of investors	Name of subsidiaries	Nature of business Engineering, real estate and consultancy of construction Building construction, real estate management, development and sale Engineering, construction contracting business		Shareholding ratio	Shareholding ratio	January 1, 2021 Notes % 99.01 Core Pacific Twin Star (Vietnam) was established on November 19, 2018. 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 March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to VND2,005,000,000 thousand, VND2,005,000,000 thousand, VND2,025,000,000 thousand and VND2,025,000,000 thousand, respectively. % 80.00 Core Pacific Pioneer (Myanmar) was established on May 24, 2018. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid- in capital amounted to MMK 1,512,540 thousand. % 100.00 Da Yin was established on November 24, 1972. It increased its capital through Ding-Yue amounting to $37,500 thousand on February 5, 2021. The base date was set on February 5, 2021, and the relevant legal registration procedures had been completed on March 4, 2021. As of March 31, 2022, December 31, March 31 and January 1, 2021, its actual paid-in capital amounted to $60,000 thousand, $60,000 thousand, $60,000 thousand and $22,500 thousand, respectively.
			March 31, 2022 % 100.00 % 80.00 % 100.00	December 31, 2021 % 100.00 % 80.00 % 100.00	March 31, 2021 % 99.01 % 80.00 % 100.00
Frontier Fortune Core Pacific Twin Star (Myanmar) Ding-Yue	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)

(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, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

(Continued)

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

(e) Changes in accounting policies

－ In accordance with IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”, the changes in accounting policy shall be applied retrospectively. The results are summarized as follows.

January 1, 2021 Consolidated balance sheets	As previously reported Impact of changes in accounting policies As restated $ 23,226,955 (101,301) 23,125,654 (966,202) (431) (966,633) 1,287,983 (100,870) 1,187,113 As previously reported Impact of changes in accounting policies As restated $ 23,821,333 (162,864) 23,658,469 (849,037) (1,156) (850,193) 1,949,833 (161,709) 1,788,124 As previously reported Impact of changes in accounting policies As restated $ 25,333,641 (213,898) 25,119,743 (948,859) (1,455) (950,314) 4,950,734 (212,442) 4,738,292 For the three months ended March 31, 2021 As previously reported Impact of changes in accounting policies As restated $ 6,324,757 60,837 6,385,594
Property, plant and equipment Exchange differences arising on translation of foreign operations Unappropriated earnings March 31, 2021 Consolidated balance sheets
Property, plant and equipment Exchange differences arising on translation of foreign operations Unappropriated earnings December 31, 2021 Consolidated balance sheets
Property, plant and equipment Exchange differences arising on translation of foreign operations Unappropriated earnings Consolidated statements of comprehensive income
Operating costs

(Continued)

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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 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, 2021. For related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2021.

(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	March 31, 2022 $ 1,467 5,907,367 6,905,169 - $ 12,814,003	December 31, 2021 1,726 2,923,423 4,724,973 - 7,650,122	March 31, 2021 9,714 3,404,658 3,108,253 25 6,522,650	January 1, 2021
				1,806 3,668,398 3,659,705 149,990
				7,479,899

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(aa) for the fair value sensitivity analysis and interest rate risk of the financial assets and liabilities of the Group.

(Continued)

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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	March 31, 2022 $ - 23,060 344,008 367,068 54,055 $ 421,123	December 31, 2021 - 22,226 334,993 357,219 6,973,779 7,330,998	March 31, 2021 - - 876,202 876,202 10,746,855 11,623,057	January 1, 2021
				11,791 - 817,742
				829,533
				10,746,855
				11,576,388

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

The Group held common and preferred stock of Core Pacific City Co., Ltd., wherein the preferred stocks which were converted into common stocks on October 22, 2021 were recognized as noncurrent financial assets at fair value through profit or loss. A resolution was made during the extraordinary shareholders’ meeting of Core Pacific City Co., Ltd. on November 8, 2021 to reduce its capital by buying back and cancelling its shares to eliminate the accumulated losses of $5,245,397 thousand and $9,998,925 thousand, respectively, with the effective date set on the same date. The Group received the payment of $3,794,637 thousand of the shares that were bought back on November 11, 2021. Core Pacific City Co., Ltd. approved the earning distribution during its shareholders’ meeting on February 23, 2022, which was also the base date. On February 25, 2022, the Group received the cash dividends amounting to $6,966,562 thousand, which were recognized as deduction from the asset before reappraising it.

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 March 31, 2022, December 31, March 31 and January 1, 2021.

(Continued)

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

(c) Financial assets at fair value through other comprehensive income

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	March 31, 2022 $ 12,556 2,509,648 779,074 3,288,722 $ 3,301,278	December 31, 2021 9,674 2,270,979 779,074 3,050,053 3,059,727	March 31, 2021 9,412 1,938,464 740,469 2,678,933 2,688,345	January 1, 2021
				9,195
				2,059,052 740,469
				2,799,521
				2,808,716

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(v) for the gain or loss on financial assets recognized 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

(Continued)

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

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 9, 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 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 2018 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. The Supreme Court dismissed the claim of the Company by the judgement on February 24, 2022.

Please refer to note 8 for details of the financial assets at fair value through other comprehensive income of the Group pledged as collateral as of March 31, 2022, December 31, March 31 and January 1, 2021.

(d) Notes, accounts and other receivables

Notes receivable Accounts receivable (including related parties) Other receivables Less: allowance for doubtful receivables Net amount	March 31, 2022 $ 495,135 3,481,626 99,169 (334,080) $ 3,741,850	December 31, 2021 628,485 3,574,627 115,814 (334,036) 3,984,890	March 31, 2021 641,159 3,227,559 235,454 (332,857) 3,771,315	January 1, 2021
				375,689 1,906,374 149,618 (451,717) 1,979,964

(Continued)

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

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:

Not past due Over 0~30 days Over 31~120 days Over 121~365 days Past due more than 1 year Not past due Over 0~30 days Over 31~120 days Over 121~365 days Past due more than 1 year Not past due Over 0~30 days Over 31~120 days Past due more than 1 year		March 31, 2022
	Carrying amount of account receivables Weighted average expected credit loss $ 3,519,050 0%~2.49% 241,865 0%~1.77% 66,411 0%~3.48% 11,014 0%~19.61% 237,590 0%~100% $ 4,075,930 December 31, 2021		Allowance for expected credit loss
			87,744 4,278 2,308 2,160 237,590
			334,080
		Weighted average expected credit loss 0%~2.35% 0%~1.25% 0%~3.06% 0%~18.74% 100% March 31, 2021	Allowance for expected credit loss
			93,413 800 1,109 1,124 237,590
			334,036
		Weighted average expected credit loss 0%~2.49% 0%~0.87% 0%~2.94% 100%	Allowance for expected credit loss
			93,836 560 871 237,590
			332,857

(Continued)

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

Not past due Over 0~30 days Over 31~120 days Over 121~365 days Past due more than 1 year	January 1, 2021	January 1, 2021
	Carrying amount of account receivables $ 2,054,328 9,103 9,422 2,378 356,450 $ 2,431,681	Weighted average expected credit loss 0%~4.60% 0%~0.94 0%~3.18% 0%~16.67% 100%	Allowance for expected credit loss
			94,485 86 300 396 356,450
			451,717

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

Balance at January 1 Amounts written off Foreign exchange gains Balance at March 31	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 334,036 - 44 $ 334,080	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(k).

As of March 31, 2022, December 31, March 31 and January 1, 2021, the aforesaid receivables were not pledged as collateral.

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

(Continued)

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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	March 31, 2022 $ 1,131,187 662,148 2,368,666 19,932 772,703 4,954,636 - 37,584,818 9,423 13,535 714,897 38,322,673 $ 43,277,309	December 31, 2021 1,011,642 464,297 1,956,928 19,907 474,530 3,927,304 - 37,584,818 9,423 13,535 596,503 38,204,279 42,131,583	March 31, 2021 752,785 350,292 1,567,149 14,429 320,149 3,004,804 9,401,159 415,441 9,423 13,535 75,672 9,915,230 12,920,034	January 1, 2021
				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

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 March 31, 2022, December 31, March 31 and January 1, 2021, the accumulated payments were $37,200,010 thousand, $37,200,010 thousand, $9,340,010 thousand and $9,340,010 thousand, and the unpaid amounts were $0 thousand, $0 thousand, $27,860,000 thousand and $27,860,000 thousand, respectively.

For the three months ended March 31, 2022 and 2021, the capitalized interest on construction in progress amounting to $89,451 thousand and $0 thousand, respectively, were calculated using the capitalization rate of 2.6%~2.88% and 0%.

(Continued)

23

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

The details of the cost of sales were as follows:

Cost of goods sold (Reversal of) write-down of inventories Net inventory loss (profit) Unallocated fixed production overheads from idle facilities Revenue from sale of scraps Net amount	For the three months	ended March 31,
	2022 $ 7,030,289 (13,980) 509 329,807 (3,099) $ 7,343,526	2021
		6,182,295 209 (268) 206,333 (2,975)
		6,385,594

Please refer to note 8 for details of the inventories of the Group pledged as collateral as of March 31, 2022, December 31, March 31 and January 1, 2021.

• (f) Other current assets

Other financial assets Others	March 31, 2022 $ 1,353,201 619,619 $ 1,972,820	December 31, 2021 986,902 490,076 1,476,978	March 31, 2021 3,191,798 414,878 3,606,676	January 1, 2021
				2,475,214 403,000
				2,878,214

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	March 31, 2022 $ 2,102,870	December 31, 2021 2,329,486	March 31, 2021 2,072,262	January 1, 2021
				2,038,003

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

Carrying value of insignificant associates	March 31, 2022 $ 2,102,870	December 31, 2021 2,329,486	March 31, 2021 2,072,262	January 1, 2021
				2,038,003

(Continued)

24

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 month	s ended March 31,
	2022 $ 45,631 1,279 $ 46,910	2021 73,337 1,632 74,969

• (iii) The dividends income from the Group’s investments accounted for using the equity method for the three months ended March 31, 2022 and 2021, amounted to $304,808 thousand and $54,761 thousand, respectively.

• (iv) Please refer to note 8 for details of the investments accounted for using equity method of the Group pledged as collateral as of March 31, 2022, December 31, March 31 and January 1, 2021.

• (v) As of March 31, 2022 and 2021, 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 by independent auditors.

(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, 2022 after adjustments Additions Disposal Adjustment Effect of movements in exchange rate Balance as of March 31, 2022 Balance as of January 1, 2021 after adjustments Additions Disposal Adjustment Effect of movements in exchange rate Balance as of March 31, 2021 Depreciation and impairment loss: Balance as of January 1, 2022 Depreciation for the period Disposal Adjustment Effect of movements in exchange rate Balance as of March 31, 2022 Balance as of January 1, 2021 Depreciation for the period Disposal Effect of movements in exchange rate Balance as of March 31, 2021	Land $ 5,730,777 - - - - $ 5,730,777 $ 5,730,777 - - - - $ 5,730,777 $ - - - - - $ - $ - - - - $ -	Land improvements 293,841 - - - - 293,841 293,880 - - - - 293,880 232,839 1,302 - - - 234,141 227,439 1,383 - - 228,822	Buildings 5,023,945 - - 4,161 69,110 5,097,216 4,560,436 - - - 10,218 4,570,654 1,654,818 34,955 - 22 10,791 1,700,586 1,514,351 34,892 - 1,510 1,550,753	Machinery and equipment 46,877,568 4,961 (10,924) 30,815 89,769 46,992,189 44,020,701 5,670 (2,221) 194,512 6,717 44,225,379 35,349,025 232,363 (10,924) (22) 22,478 35,592,920 34,641,268 204,333 (2,211) 3,170 34,846,560	Vehicles 97,104 954 - (231) 1,192 99,019 86,911 2,229 - 69 149 89,358 64,282 2,309 - - 539 67,130 57,052 1,717 - 60 58,829	Other facilities 329,750 1,665 (400) 461 3,053 334,529 278,762 1,177 - 20,826 360 301,125 212,723 6,889 (400) - 1,771 220,983 188,315 6,322 - 247 194,884	Construction in progress 10,234,692 687,945 - (35,206) 205,697 11,093,128 9,821,190 720,757 - (215,407) 39,182 10,365,722 - - - - - - - - - - -	Accumulated impairment - - - - - - - - - - - - 5,954,247 - - - - 5,954,247 5,038,578 - - - 5,038,578	Total
									68,587,677 695,525 (11,324) - 368,821
									69,640,699
									64,792,657 729,833 (2,221) - 56,626
									65,576,895
									43,467,934 277,818 (11,324) - 35,579
									43,770,007
									41,667,003 248,647 (2,211) 4,987
									41,918,426

(Continued)

25

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

Balance as of January 1, 2022 after adjustments Balance as of March 31, 2022 Balance as of January 1, 2021 after adjustments Balance as of March 31, 2021 after adjustments	Land $ 5,730,777 $ 5,730,777 $ 5,730,777 $ 5,730,777	Land improvements 61,002 59,700 66,441 65,058	Buildings 3,369,127 3,396,630 3,046,085 3,019,901	Machinery and equipment 11,528,543 11,399,269 9,379,433 9,378,819	Vehicles 32,822 31,889 29,859 30,529	Other facilities 117,027 113,546 90,447 106,241	Construction in progress 10,234,692 11,093,128 9,821,190 10,365,722	Accumulated impairment (5,954,247) (5,954,247) (5,038,578) (5,038,578)	Total
									25,119,743
									25,870,692
									23,125,654
									23,658,469

(i) Collateral

Please refer to note 8 for details of the property, plant and equipment of the Group pledged as collateral as of March 31, 2022, December 31, March 31 and January 1, 2021.

(ii) Property, plant and equipment under construction

For the three months ended 2022 and 2021, the capitalized interests related to the property, plant and equipment under construction were $36,382 thousand and $48,097 thousand, respectively, which were calculated based on the capitalized interest rates ranging from 1.6007%~5.4702% and 1.5960%~5.4702%, respectively.

• (iii) 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 March 31, 2022, December 31, March 31 and January 1, 2021, accumulated investment remittance from Taiwan to Mainland China was CNY1,721,000 thousand, CNY1,688,000 thousand, CNY1,618,000 thousand and CNY1,618,000 thousand, respectively. The amount invested in manufacturing plant and machinery was CNY1,721,000 thousand, CNY1,688,000 thousand, CNY1,537,462 thousand and CNY1,449,023 thousand, respectively.

• (i) Right-of-use assets

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

Cost: Balance as of January 1, 2022 Additions Disposal Effect of movements in exchange rate Balance as of March 31, 2022	Land	Land and sea area using rights	Buildings	Machinery and equipment	Vehicles	Other facilities	Total
	$ 248,414 - - - $ 248,414	662,772 - - 24,873 687,645	26,236 - (7,185) - 19,051	110,549 2,843 - - 113,392	18,094 495 (1,470) - 17,119	490 - - - 490	1,066,555 3,338 (8,655) 24,873 1,086,111

(Continued)

26

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

Balance as of January 1, 2021 Additions Disposal Effect of movements in exchange rate Balance as of March 31, 2021 Accumulated depreciation and impairment losses: Balance as of January 1, 2022 Depreciation for the period Disposal Effect of movements in exchange rate Balance as of March 31, 2022 Balance as of January 1, 2021 Depreciation for the period Disposal Effect of movements in exchange rate Balance as of March 31, 2021 Carrying amounts: Balance as of January 1, 2022 Balance as of March 31, 2022 Balance as of January 1, 2021 Balance as of March 31, 2021	Land	Land and sea area using rights	Buildings	Machinery and equipment	Vehicles	Other facilities	Total
	$ 228,407 - (484) - $ 227,923 $ 26,019 2,482 - - $ 28,501 $ 16,613 2,416 (484) - $ 18,545 $ 222,395 $ 219,913 $ 211,794 $ 209,378	658,503 - - 4,270 662,773 86,682 3,461 - 3,329 93,472 72,578 3,397 - 481 76,456 576,090 594,173 585,925 586,317	19,751 2,705 - - 22,456 16,467 2,671 (7,185) - 11,953 6,304 2,715 - - 9,019 9,769 7,098 13,447 13,437	111,057 30,432 - - 141,489 64,448 8,699 - - 73,147 60,620 8,670 - - 69,290 46,101 40,245 50,437 72,199	16,931 2,162 (3,761) - 15,332 8,172 1,539 (1,470) - 8,241 6,348 1,455 (2,086) - 5,717 9,922 8,878 10,583 9,615	1,938 - - - 1,938 303 27 - - 330 1,187 151 - - 1,338 187 160 751 600	1,036,587 35,299 (4,245) 4,270 1,071,911 202,091 18,879 (8,655) 3,329 215,644 163,650 18,804 (2,570) 481 180,365 864,464 870,467 872,937 891,546

(j) Investment property

The movement of investment property was as followed:

Cost or deemed cost: Balance as of March 31, 2022 (equal to January 1) Balance as of March 31, 2021 (equal to January 1) Carrying amounts: Balance as of January 1, 2022 Balance as of March 31, 2022 Balance as of January 1, 2021 Balance as of March 31, 2021	Land $ 38,853,888 $ 37,609,032 $ 38,853,888 $ 38,853,888 $ 37,609,032 $ 37,609,032	Buildings 13,179 17,795 13,179 13,179 17,795 17,795	Total
			38,867,067
			37,626,827
			38,867,067
			38,867,067
			37,626,827
			37,626,827

(Continued)

27

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:

March 31, 2022

Subject	Qianjin Dist., Kaohsiung City	Qianzhen Dist., Kaohsiung City Others None None $450 $1,000~$1,300 None $1,129~$1,268 Leased Unused house, parking lot $0~ $0 $0~ $0 None 1.130% 4.345% 2.845% External independent appraiser External independent appraiser Colliers International Taiwan China Real Estate Appraisers Firm Shiou-Ying, Jan Dian-Ching, Hsieh March 31, 2022 March 31, 2022 $ 2,903,000 12,900
Contract terms Rental at local market rate (per py per month) Current market rent for comparable properties in similar locations and condition (per py per month) 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 $604~$632 Unused $0~ $0 5.335% 4.445% External independent appraiser Colliers International Taiwan Feng-Ru, Ke March 31, 2022 $ 10,890

(Continued)

28

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

December 31, 2021

Subject	Qianjin Dist., Kaohsiung City	Qianjin Dist., Kaohsiung City Others None None $450 $1,000~$1,300 None $1,129~$1,268 Leased Unused $0~ $0 $0~ $0 None 1.130% 4.345% 2.845% External independent appraiser External independent appraiser Colliers International Taiwan China Real Estate Appraisers Firm Shiou-Ying, Jan Dian-Ching, Hsieh December 31, 2021 December 31, 2021 2,903,000 12,900
Contract terms Rental at local market rate (per py per month) Current market rent for comparable properties in similar locations and condition (per py per month) 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 $604~$632 Unused $0~ $0 5.335% 4.445% External independent appraiser Colliers International Taiwan Feng-Ru, Ke December 31, 2021 $ 10,890

(Continued)

29

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

March 31, 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, Lu March 31, 2021 March 31, 2021 2,737,000 10,478
Contract terms Rental at local market rate (per py per month) Current market rent for comparable properties in similar locations and condition (per py per month) 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 March 31, 2021 $ 10,780

January 1, 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, Lu March 31, 2021 March 31, 2021 2,737,000 10,478
Contract terms Rental at local market rate (per py per month) Current market rent for comparable properties in similar locations and condition (per py per month) 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 March 31, 2021 $ 10,780

(Continued)

30

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 March 31, 2022, December 31, March 31 and January 1, 2021, the discount rate was 2.845%~4.445%, 2.845%~4.445%, 2.030%~4.655% and 2.030%~4.655%, respectively. As of March 31, 2022, December 31, March 31 and January 1, 2021, the weighted average capitalization rate was 1.130%~5.335%, 1.130%~5.335%, 1.730%~5.555% and 1.730%~5.555%, 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:

March 31, 2022

Subject	Annan Dist., Tainan City	Qianzhen Dist., Kaohsiung City Others 122,550,002 (Note) 2,782,072 20%~22% 12%~18% 4.150%~4.9900% 0.92%~3.03% Colliers International Taiwan Hon Bun Real Estate Appraisers Firm, Colliers International Taiwan and Baoyuan Real Estate Appraisers Firm Shiou-Ying, Jan and Jian-Hui, Gu Jian-Hui, Gu, Shiou-Ying, Jan, Ching-Tang, Li and Tzu- Kuang, Yeh March 31, 2022 March 31, 2022 29,516,000 1,381,141 (Continued)
Estimated revenue Gross profit margin Rate of return Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers	9,391,820 17% 1.850% CCIS Real Estate Joint Appraisers Firm Chih-Hao, Wu March 31, 2022 $ 5,043,136

31

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

December 31, 2021

Subject	Annan Dist., Tainan City	Qianzhen Dist., Kaohsiung City Others 122,550,002 (Note) 2,782,072 20%~22% 12%~18% 4.150%~4.9900% 0.92%~3.03% Colliers International Taiwan Hon Bun Real Estate Appraisers Firm and 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 Tzu- Kuang, Yeh December 31, 2021 December 31, 2021 29,516,000 1,381,141
Estimated revenue Gross profit margin Rate of return Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers	9,391,820 17% 1.850% CCIS Real Estate Joint Appraisers Firm Chih-Hao, Wu December 31, 2021 $ 5,043,136

March 31, 2021

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, Colliers International Taiwan and China Real Estate Appraisers Firm Shiou-Ying, Jan and Jian-Hui, Gu Jui-Ming Lin, Jian-Hui, Gu, Shiou-Ying, Jan, Dian-Ching, Hsieh and Ching-Tang, Li March 31, 2021 March 31, 2021 28,519,000 1,353,578 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, Colliers International Taiwan and China Real Estate Appraisers Firm Shiou-Ying, Jan and Jian-Hui, Gu Jui-Ming Lin, Jian-Hui, Gu, Shiou-Ying, Jan, Dian-Ching, Hsieh and Ching-Tang, Li January 1, 2021 January 1, 2021 28,519,000 1,352,806
Estimated revenue Gross profit margin Rate of return Appraiser offices Appraiser names Appraisal date Fair value by external independent appraisers January 1, 2021 Subject	7,971,360 17% 1.750% CCIS Real Estate Joint Appraisers Firm Huo-Ming, Huang March 31, 2021 $ 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% 1.770% CCIS Real Estate Joint Appraisers Firm Huo-Ming, Huang January 1, 2021 $ 4,995,991

January 1, 2021

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

(Continued)

32

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

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(s) for the relevant information including rent revenue and the direct operating expenses incurred.

Please refer to note 8 for details of the investment property of the Group pledged as collateral as of March 31, 2022, December 31, March 31 and January 1, 2021.

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.

(Continued)

33

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

• 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.

• 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.

(Continued)

34

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

• 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 2, 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 Company had estimated the remediation expense according to the remediation plan. Please refer to note 6(r) for relevant remediation expenses and provisions.

(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 (KHAC) 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 KHAC for further trial. KHAC 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 KHAC for continued trial. The determined withdrawn amount $356 thousand had all been returned back to the account by TCG. KHAC 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.

(Continued)

35

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

• 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. KHAC sentenced that the amount beyond $17,867 thousand was withdrawn. After the appeal, Supreme Administrative Court sentenced to return back to KHAC for further trial in September 2013. KHAC 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 KHAC for the trial. In July 2018, KHAC considered that the payment amount which is exceeding $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 KHAC. 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. KHAC 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 KHAC. 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. The Supreme Administrative Court made the judgement that the Company should only pay $538 thousand on October 28, 2021, and the judgment was final and binding. The Company received the complaint for a rehearing action from TCG on December 23, 2021, and currently the Company has submitted the answer and the case is pending in the Supreme Administrative Court.

(Continued)

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

• 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. The Company received the judgment from the Supreme Administrative Court on January 22, 2022 as follows: except the final and binding portion of the judgment, the portion over $7,276 thousand that TCG ordered the Company to pay should be reversed (also known as the Company should pay $12,121 thousand in total including the final and binding portion of the judgment). This judgment was final and binding. TCG now has filed a petition for rehearing and the Company would continuously submit the answer. The case for rehearing currently is pending in the Supreme Administrative Court.

• 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 KHAC 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 KHAC for the administrative remedy on February 26, 2021, and KHAC made the judgement on December 29, 2021 that the Company shall

(Continued)

37

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

only pay $493 thousand, and the remainder shall be reversed. The Company decided not to file an appeal against the losing portion as a favor to TCG. TCG now has filed an appeal and the Company would submit the answer to the instance of appeal for the Company's interests.

• 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 KHAC 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 KHAC. On December 28, 2020, KHAC 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.

• 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

(Continued)

38

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

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. Through the rejection of the Company’ s request by KHAC, 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 $5,553,540 thousand until March 31, 2022. 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.

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 KHAC. And this case is still being heard in the Court.

(Continued)

39

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

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 KHAC. On September 22, 2021, KHAC 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.

• 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.

(Continued)

40

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

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.

(k) Intangible assets

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

Costs： Balance as of January 1, 2022 Acquisition Effect of movement in exchange rates Balance as of March 31, 2022 Balance as of January 1, 2021 Acquisition Effect of movement in exchange rates Balance as of March 31, 2021 Accumulated amortization and Impairment Loss: Balance as of January 1, 2022 Amortization for the period Effect of movement in exchange rates Balance as of March 31, 2022	Goodwill $ 133,912 - 4,405 $ 138,317 $ 135,871 - 2,001 $ 137,872 $ - - - $ -	Computer software 17,796 94 633 18,523 11,546 887 73 12,506 5,897 703 232 6,832	Patents and trademark 118,314 102 1,029 119,445 100,361 10,000 175 110,536 91,817 1,431 745 93,993	Total
				270,022 196 6,067
				276,285
				247,778 10,887 2,249
				260,914
				97,714 2,134 977
				100,825

(Continued)

41

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

Balance as of January 1, 2021 Amortization for the period Effect of movement in exchange rates Balance as of March 31, 2021 Carrying value: Balance as of January 1, 2022 Balance as of March 31, 2022 Balance as of January 1, 2021 Balance as of March 31, 2021	Goodwill $ - - - $ - $ 133,912 $ 138,317 $ 135,871 $ 137,872	Computer software 3,913 393 25 4,331 11,899 11,691 7,633 8,175	Patents and trademark 84,692 1,678 113 86,483 26,497 25,452 15,669 24,053	Total
				88,605 2,071 138
				90,814
				172,308
				175,460
				159,173
				170,100

As of March 31, 2022, December 31, March 31 and January 1, 2021, the aforesaid intangible assets were not pledged as collateral.

(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	March 31, 2022 $ 826,000 1,346,016 10,904,000 883,827 $ 13,959,843 $ 23,831,817 $ 7,160,289 0.845%~4.5%	December 31, 2021 377,000 1,108,018 10,893,032 359,639 12,737,689 23,581,513 8,174,224 0.669%~4.5%	March 31, 2021 291,000 2,017,150 1,182,696 532,514 4,023,360 8,765,256 2,131,147 0.73%~4.35%	January 1, 2021
				1,175,000 1,300,000 1,140,000 - 3,615,000 6,901,296 1,430,278 1.2799%~1.3857%

Secured bank loans from Shin Kong Commercial Bank

On October 21, 2021, Ding-Yue signed a 4-year syndicated loan agreement with 9 financial institutions, including Shin Kong Commercial Bank (the lead bank), for the development of its land, with the Company as the joint guarantor. According to the contract, $3,020,000 thousand of the total amount of credit line of $14,900,000 thousand can only be used after the construction license has been obtained and the forward sale rate has reached the terms of the loan agreement.

(i) Syndicated loan A:

The credit line of $13,100,000 thousand consists of secured loans and non-revolving credit facility.

(Continued)

42

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

• (ii) Syndicated loan B:

The credit line of $1,800,000 thousand consists of commercial promissory note agreements and revolving credit facility.

• (iii) The commitments made by Ding-Yue and the joint guarantor (the Company), in accordance with the syndicated loan agreement, were as follows:

• 1) Ding-Yue should complete the issuance of ordinary shares for cash and collect the full amount upon issuance, which should be completed within 150 days after obtaining the property right of the land. Thereafter, the ordinary shares shall have a total minimum value of $28,000,000 thousand.

• 2) Ding-Yue shall obtain the construction license and start the construction within the agreed period. The loan interest will be accrued if any of the above time schedules are violated. The interest will be charged starting from the date of the violation to the date of obtaining the construction license or the date of commencement of construction.

• 3) The transaction, wherein the Company should complete the issuance of ordinary shares for cash and collect the full amount before March 31, 2022, with the issuance of ordinary shares at a minimum value of $4,000,000 thousand, had been completed in December 2021.

• 4) If the accumulated amount received from the pre-sale in the trust account is lower than the terms of the loan agreement, the Company should make up the difference by loaning funds. The Company should execute on the abovementioned examination at three particular dates during the term of the loan agreement.

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	March 31, 2022 $ 14,926,572 94,349 (2,011,077) $ 13,009,844 $ 25,976,690 $ 8,924,263 1.3%~5.8725%	December 31, 2021 15,302,394 89,710 (1,486,515) 13,905,589 25,905,067 7,935,100 1.3%~5.8725%	March 31, 2021 9,903,063 132,857 (764,563) 9,271,357 18,204,272 7,248,000 1.3%~5.5%	January 1, 2021 9,274,260 130,223 (1,914,833) 7,489,650 17,636,400 5,601,475 1.3%~5.5%

(Continued)

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

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.

• (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.

(Continued)

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

• (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.

• (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%.

(Continued)

45

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

• 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.

• (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.

(Continued)

46

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

• 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.

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 share a credit line of $4,100,000 thousand, while Ding-Yue has the upper limit of 1,000,000 thousand.

On October 21, 2021, Ding-Yue signed a 4-year syndicated loan agreement with 9 financial institutions, with Shin Kong Commercial Bank as the lead bank. The syndicated loan agreement included a credit line of NT$1,200,000 thousand from Taiwan Life Insurance Co., Ltd. On October 7, 2021, Taiwan Life Insurance Co., Ltd. issued a notice of change in its credit limit. The notice stipulated that the total amount of Ding Yue’s syndicated loan agreement and the interim guarantee credit contract mentioned in the preceding paragraph will be a maximum amount of NT$4,100,000 thousand. Therefore, starting from October 21, 2021, the total credit limit for the medium-term guarantee contract mentioned in the preceding paragraph was reduced to NT$2,900,000 thousand.

Secured bank loans from Farglory Life Insurance Inc.

On September 30, 2021, the Company signed a medium-term loan agreement for 5 years with Farglory Life Insurance Inc. in order to meet the funding requirements. The aggregate amount of credit line of the loan was $2,000,000 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:

Secured non-convertible bonds Unamortized balance of discounted bonds payable Less: current portion Balance of bonds payable Maturity year	March 31, 2022 $ 4,750,000 (38,010) (62,500) $ 4,649,490 114	December 31, 2021 4,750,000 (40,904) (25,000) 4,684,096 114	March 31, 2021 3,500,000 - - 3,500,000 114	January 1, 2021
				3,500,000 - -
				3,500,000
				114

(Continued)

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

(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	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

• (iii) The Group issued domestic secured non-convertible bonds at the amount of $1,250,000 thousand in 2021, the terms were as follows:

Issue amount Issue date Issue period Coupon rate Interest payment date Repayment and interest payment	Domestic secured non-convertible bond in 2021
	Bond A Bond B $ 625,000 625,000 110.10.21 110.10.22 4 years 4 years % 2.75 % 2.75 21st of every month 22nd of every month From the 1st to the 12th month, only the interest is paid monthly. From the 13th to the 47th month, the principal and interest are repaid by $6,250 thousand on a monthly basis. The remaining principal is repaid once on maturity.

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

(Continued)

48

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

(o) Short-term bills payable

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

		March 31, 2022
	Acceptance institution	Period		Amount
Bills payable	International Bills Finance	2021.11.03~2022.11.02	$	797,000
	Corporation
Bills payable	Taching Bills Finance	2021.11.03~2022.11.02		637,000
	Corporation
				1,434,000
Less: Discount	on short-term bills payable			(3,865)
Total			$	1,430,135

		December	31, 2021
	Acceptance institution		Period		Amount
Bills payable	International Bills Finance	2021.11.03~2022.11.02		$	797,000
	Corporation
Bills payable	Taching Bills Finance	2021.11.03~2022.11.02			637,000
	Corporation
					1,434,000
Less: Discount	on short-term bills payable				(4,045)
Total				$	1,429,955

The Group had revolving commercial promissory note agreements with bills finance companies in order to finance its operating requirement. As of December 31, 2021, the bills payable bear interest rates ranging from 0.65%~1.74%。

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

(Continued)

49

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

(p) Long-term bills payable

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

The components of long-term bills payable were as follows:	The components of long-term bills payable were as follows:
March 31, 2022
Acceptance institution	Period		Amount
Bills payable International Bills Finance	2022.02.14~2022.05.13	$	350,000
Corporation
Bills payable Taching Bills Finance	2022.02.22~2022.05.23		400,000
Corporation
Bills payable Taching Bills Finance	2022.03.11~2022.06.09		160,000
Corporation
Bills payable China Bills Finance Corporation	2022.01.26~2022.04.26		270,000
Bills payable China Bills Finance Corporation	2022.02.07~2022.04.26		130,000
Bills payable China Bills Finance Corporation	2022.03.01~2022.05.30		160,000
Bills payable China Bills Finance Corporation	2022.03.01~2022.05.30		230,000
Bills payable China Bills Finance Corporation	2022.03.08~2022.06.08		400,000
Bills payable China Bills Finance Corporation	2022.03.17~2022.06.15		350,000
Bills payable China Bills Finance Corporation	2022.03.22~2022.06.20		270,000
Bills payable China Bills Finance Corporation	2022.03.25~2022.06.23		890,000
Bills payable Mega Bills Finance Corporation	2022.03.16~2022.04.15		200,000
Bills payable Mega Bills Finance Corporation	2022.03.18~2022.04.18		870,000
Bills payable Mega Bills Finance Corporation	2022.03.22~2022.04.21		600,000
			5,280,000
Less: Discount on long-term bills payable			(4,078)
Total		$	5,275,922

(Continued)

50

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

December 31, 2021	December 31, 2021
Acceptance institution	Period		Amount
Bills payable International Bills Finance	2021.12.16~2022.02.14	$	350,000
Corporation
Bills payable Taching Bills Finance	2021.12.13~2022.03.11		160,000
Corporation
Bills payable China Bills Finance Corporation	2021.11.09~2022.01.07		400,000
Bills payable China Bills Finance Corporation	2021.11.22~2022.01.21		270,000
Bills payable China Bills Finance Corporation	2021.12.21~2022.03.17		660,000
Bills payable China Bills Finance Corporation	2021.12.01~2022.03.01		230,000
Bills payable China Bills Finance Corporation	2021.12.01~2022.03.01		160,000
Bills payable Mega Bills Finance Corporation	2021.12.10~2022.02.17		600,000
Bills payable Mega Bills Finance Corporation	2021.11.18~2022.02.16		870,000
Bills payable Mega Bills Finance Corporation	2021.11.25~2022.02.23		500,000
Bills payable Mega Bills Finance Corporation	2021.12.14~2022.02.24		630,000
Bills payable Mega Bills Finance Corporation	2021.11.26~2022.02.23		230,000
Bills payable Mega Bills Finance Corporation	2021.12.16~2022.03.16		200,000
			5,260,000
Less: Discount on long-term bills payable			(5,482)
Total		$	5,254,518

(Continued)

51

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

	March 31, 2021	March 31, 2021
	Acceptance institution	Period		Amount
Bills payable	Taiwan Cooperative Bills	2021.03.10~2021.05.14	$	611,900
	Finance Corporation and
	others
Bills payable	International Bills Finance	2021.02.22~2021.05.21		200,000
	Corporation
Bills payable	Taching Bills Finance	2021.01.07~2021.04.01		400,000
	Corporation
Bills payable	China Bills Finance Corporation	2021.01.08~2021.04.08		500,000
Bills payable	China Bills Finance Corporation	2021.01.27~2021.04.27		830,000
Bills payable	China Bills Finance Corporation	2021.03.11~2021.06.09		720,000
Bills payable	Mega Bills Finance Corporation	2021.02.25~2021.05.26		870,000
Bills payable	Mega Bills Finance Corporation	2021.01.26~2021.04.20		210,000
Bills payable	Mega Bills Finance Corporation	2021.01.26~2021.04.20		590,000
Bills payable	Mega Bills Finance Corporation	2021.01.25~2021.04.20		180,000
Bills payable	Mega Bills Finance Corporation	2021.01.28~2021.04.28		80,000
Bills payable	Mega Bills Finance Corporation	2021.03.22~2021.06.18		50,000
Bills payable	Mega Bills Finance Corporation	2021.03.24~2021.05.14		740,000
Bills payable	Mega Bills Finance Corporation	2021.03.25~2021.06.23		170,000
				6,151,900
Less: Discount	on long-term bills payable			(4,955)
Total			$	6,146,945

(Continued)

52

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

January 1, 2021	January 1, 2021
Acceptance institution	Period		Amount
Bills payable International Bills Finance	2020.12.07~2021.02.22	$	200,000
Corporation
Bills payable International Bills Finance	2020.12.31~2021.01.05		150,000
Corporation
Bills payable Taching Bills Finance	2020.11.12~2021.01.07		300,000
Corporation
Bills payable Taching Bills Finance	2020.10.12~2021.01.07		100,000
Corporation
Bills payable China Bills Finance Corporation	2020.11.09~2021.01.27		800,000
Bills payable China Bills Finance Corporation	2020.12.22~2021.03.22		500,000
Bills payable China Bills Finance Corporation	2020.10.12~2021.01.08		500,000
Bills payable China Bills Finance Corporation	2020.12.11~2021.03.11		720,000
Bills payable China Bills Finance Corporation	2020.11.10~2021.01.27		30,000
Bills payable Mega Bills Finance Corporation	2020.10.30~2021.01.26		550,000
Bills payable Mega Bills Finance Corporation	2020.12.25~2021.02.25		670,000
Bills payable Mega Bills Finance Corporation	2020.11.17~2021.01.18		200,000
Bills payable Mega Bills Finance Corporation	2020.11.06~2021.01.18		80,000
Bills payable Mega Bills Finance Corporation	2020.11.20~2021.01.18		140,000
Bills payable Mega Bills Finance Corporation	2020.11.25~2021.01.18		270,000
Bills payable Mega Bills Finance Corporation	2020.11.30~2021.01.26		85,000
Bills payable Mega Bills Finance Corporation	2020.11.30~2021.01.26		15,000
Bills payable Mega Bills Finance Corporation	2020.12.04~2021.01.26		150,000
Bills payable Mega Bills Finance Corporation	2020.12.07~2021.02.25		200,000
			5,660,000
Less: Discount on long-term bills payable			(3,888)
Total		$	5,656,112

The Group had revolving commercial promissory note agreements with bills finance companies in order to finance its operating requirement. As of March 31, 2022, December 31, March 31 and January 1, 2021, the bills payable bear interest rates ranging from 0.33%~0.9600%, 0.30%~0.9700%, 0.28%~1.3618% and 0.28%~1.2620%, respectively.

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

(Continued)

53

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

(q) Lease liabilities

The lease liabilities of the Group were as follows:

Current $ Non-current $	March 31, 2022 51,990 232,788	December 31, 2021 56,324 240,124	March 31, 2021 56,764 255,309	January 1, 2021
				43,251 249,741

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

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 1,303 $ 13,853	2021
		1,382
		15,579

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

Total cash outflow for leases (r) Provisions	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 30,164	2021
		31,489

Balance as of January 1, 2022 Provisions made during the year Provisions used during the year Effect of movements in exchange rate Balance as of March 31, 2022 Current Non-current 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 March 31, 2021 Current Non-current	Decommissioning $ 1,265,399 - - 1,897 $ 1,267,296 $ - 1,267,296 $ 1,267,296 $ 1,264,564 - - 322 $ 1,264,886 $ - 1,264,886 $ 1,264,886	Remediation project 2,097,478 - (86,655) - 2,010,823 348,475 1,662,348 2,010,823 514,613 - (38,055) - 476,558 238,595 237,963 476,558	Employee benefits 316,389 4,110 (14,746) - 305,753 5,641 300,112 305,753 275,925 4,719 (42,609) - 238,035 5,641 232,394 238,035	Total
				3,679,266 4,110 (101,401 1,897
				3,583,872
				354,116 3,229,756
				3,583,872
				2,055,102 4,719 (80,664 322
				1,979,479
				244,236 1,735,243
				1,979,479

(Continued)

54

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. In order to accelerate the remediation work and enhance the processing capacity, the Company set up a budget plan in accordance with the above-mentioned relevant remediation plan.

• (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.

(Continued)

55

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

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.

(s) Operating lease

There were no significant changes in operating lease for the three months ended March 31, 2022 and 2021. Please refer to note 6(s) of the consolidated financial statements for the year ended December 31, 2021 for other related information.

(t) 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, 2021 and 2020.

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 March 31,
	2022 $ 2,468 52 262 44 $ 2,826	2021
		2,260 46 401 48 2,755

(ii) Defined contribution plans

The Group’s expenses under the pension plan cost to the Bureau of Labor Insurance for the three months ended March 31, 2022 and 2021 were as follows:

Operating cost Selling expenses Administration expenses Research and development expenses Total	For the three months	ended March 31,
	2022 $ 8,715 368 2,369 1,069 $ 12,521	2021
		7,877 359 2,110 1,103 11,449

(iii) The pension recognized consists of pension expenses and pensions for professional management. The pension expenses for professional management amounted to $1,662 thousand and $1,473 thousand for the three months ended March 31, 2022 and 2021.

(Continued)

56

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

(iv) Short-term compensated absences liabilities

As of March 31, 2022, December 31, March 31 and January 1, 2021, the Group’s short-term compensated absences liabilities amounted to $5,641 thousand.

(u) Income Tax

The components of income tax expense were as follows:

Current tax expense (benefit) Current period Adjustment for prior periods Deferred tax expense (benefit) Change in unrecognized deductible temporary differences Income tax expense (benefit)	For the three months	ended March 31,
	2022 $ - 4,492 4,492 - - $ 4,492	2021
		119,581 4,596
		124,177
		(110,686)
		(110,686)
		13,491

The Company’ s income tax return for the years through 2019 were assessed by the National Taxation Bureau of Kaohsiung.

(v) Capital and other equity

• (i) The issuance of common stock

As of March 31, 2022, December 31, March 31 and January 1, 2021, the authorized, issued and outstanding capital of the Company amounted to $37,848,502 thousand, $37,848,502 thousand, $32,848,502 thousand and $32,848,502 thousand, respectively, divided into 3,784,850 thousand shares, 3,784,850 thousand shares, 3,284,850 thousand shares and 3,284,850 thousand shares, respectively, with par value of $10 per share.

Reconciliation of shares outstanding for the three months ended March 31, 2022 and 2021 was as follows:

(In thousands of shares)

Balance, March 31 (equal to January 1)	Common Stock	Common Stock
	For the three months ended March 31,
	2022 3,784,850	2021
		3,284,850

(Continued)

57

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 issue price $11.75 per share, with the base date set on December 21, 2021. 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	March 31, 2022 $ 1,408,088 26,314 127,115 18,141 $ 1,579,658	December 31, 2021 1,408,088 26,314 1,758 18,141 1,454,301	March 31, 2021 538,726 26,314 634 18,141 583,815	January 1, 2021
				538,726 26,314 634 18,141
				583,815

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)

58

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 both amounted to $4,194,973 thousand as of March 31, 2022, December 31, March 31 and January 1, 2021.

By adopting the exemptions allowed under IFRS 1 First-time Adoption of International Financial Reporting Standards during the Company’ s first-time adoption of the International Financial Reporting Standards approved by the Financial Supervisory Commission (IFRSs), unrealized asset revaluation gains in shareholders’ equity of $5,281,790 thousand was reclassified to retained earnings. The net increase in retained earnings due to the first-time adoption of IFRSs amounted to $4,235,076 thousand. In accordance with Rule issued by the Financial Supervisory Commission, a special reserve is appropriated from the distribution of retained earnings as a result of an increase in retained earnings due to the first-time adoption of IFRSs. When the related assets are used, disposed of, or reclassified, this special reserve is reversed as distributable earnings proportionately. The Company disposed of the relevant assets on August 18, 2021, and the amount reversed in proportion to the original special reserve was $90,638 thousand. The carrying amount of such special reserve amounted to $4,144,438 thousand, $4,144,438 thousand, $4,235,076 thousand and $4,235,076 thousand as of March 31, 2022, December 31, March 31 and January 1, 2021, respectively.

(Continued)

59

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

The Company changed the subsequent measurement of investment properties from cost model to fair value model. In accordance with Rule issued by the Financial Supervisory Commission, on the first-time adoption of fair value model for the subsequent measurement of investment properties, the Company set aside an equal amount of special reserve when the fair value increment of investment properties is transferred to retained earnings. The Company appropriated to the special reserve an amount of $21,224,233 thousand as of December 31, 2013. The Company disposed of the relevant assets on August 18, 2021, and the amount reversed in proportion to the original special reserve was $964,044 thousand. The carrying amount of such special reserve amounted to $20,260,189 thousand, $20,260,189 thousand, $21,224,233 thousand and $21,224,233 thousand as of March 31, 2022, December 31, March 31 and January 1, 2021, respectively.

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. The Company disposed of the relevant assets on August 18, 2021, and the amount reversed in proportion to the original special reserve was $366,904 thousand. As of March 31, 2022, December 31, March 31 and January 1, 2021, the Company appropriated to the special reserve amounting to $6,790,476 thousand, $6,790,476 thousand, $5,947,347 thousand and $5,947,347 thousand, respectively.

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

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

(Continued)

60

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

• 3) Earnings Distribution

Earnings distribution for 2021 and 2020 was proposed in the Board of Directors’ meeting held on March 14, 2022 and resolved in the meeting of shareholders held on July 2, 2021, respectively. The relevant dividend distributions to shareholders were as follows:

		2022	2022		2021
	Allotment		Allotment
		rate (NT		rate (NT
		dollars)	Amount	dollars)	Amount
Dividends distributed to
ordinary shareholders:
Cash	$	0.40 $	1,513,940	-	-
Other equity accounts
				Unrealized gains
					(losses) from
				financial assets
			Exchange	measured at fair
			differences on	value through
			translation of		other
			foreign financial	comprehensive
			statements		income
Balance, January 1, 2022		$	(948,859)		(576,946)
Retrospective adjustments			(1,455)		-
Exchange differences on foreign operations			454,925		-
Exchange difference on associates accounted for using			(4,070)		-
equity method
Unrealized gains (losses) from financial assets			-		241,551
measured at fair value through other comprehensive
income
Balance, March 31, 2022		$	(499,459)		(335,395)

(iv) Other equity accounts

(Continued)

61

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

Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance, January 1, 2021 $ (966,202) (854,259) Retrospective adjustments (431) - Exchange differences on foreign operations 119,146 - Exchange difference on associates accounted for using equity method (2,706) - Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income - (120,371) Unrealized (losses) gains from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method - 10 Balance, March 31, 2021 $ (850,193) (974,620) (w) Earnings per share The Group’s earnings per share were calculated as follows: For the three months ended March 31, 2022 2021 Basic earnings per share (NT dollars) Profit attributable to ordinary shareholders of the Company $ (331,340) 596,683 Weighted average number of ordinary shares (thousand shares) 3,784,850 3,284,850 Basic earnings per share $ (0.09) 0.18 Diluted earnings per share (NT dollars) Profit attributable to ordinary shareholders of the Company (diluted) $ (331,340) 596,683 Weighted average number of ordinary shares (thousand shares) 3,784,850 3,284,850 Effect of dilutive potential ordinary shares of employee stock bonus (thousand shares) 10,246 2,140 Weighted average number of ordinary shares (diluted) (thousand shares) 3,795,096 3,286,990 Diluted earnings per share $ (0.09) 0.18 Diluted earnings per share-retrospective -	Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance, January 1, 2021 $ (966,202) (854,259) Retrospective adjustments (431) - Exchange differences on foreign operations 119,146 - Exchange difference on associates accounted for using equity method (2,706) - Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income - (120,371) Unrealized (losses) gains from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method - 10 Balance, March 31, 2021 $ (850,193) (974,620) (w) Earnings per share The Group’s earnings per share were calculated as follows: For the three months ended March 31, 2022 2021 Basic earnings per share (NT dollars) Profit attributable to ordinary shareholders of the Company $ (331,340) 596,683 Weighted average number of ordinary shares (thousand shares) 3,784,850 3,284,850 Basic earnings per share $ (0.09) 0.18 Diluted earnings per share (NT dollars) Profit attributable to ordinary shareholders of the Company (diluted) $ (331,340) 596,683 Weighted average number of ordinary shares (thousand shares) 3,784,850 3,284,850 Effect of dilutive potential ordinary shares of employee stock bonus (thousand shares) 10,246 2,140 Weighted average number of ordinary shares (diluted) (thousand shares) 3,795,096 3,286,990 Diluted earnings per share $ (0.09) 0.18 Diluted earnings per share-retrospective -	Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance, January 1, 2021 $ (966,202) (854,259) Retrospective adjustments (431) - Exchange differences on foreign operations 119,146 - Exchange difference on associates accounted for using equity method (2,706) - Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income - (120,371) Unrealized (losses) gains from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method - 10 Balance, March 31, 2021 $ (850,193) (974,620) (w) Earnings per share The Group’s earnings per share were calculated as follows: For the three months ended March 31, 2022 2021 Basic earnings per share (NT dollars) Profit attributable to ordinary shareholders of the Company $ (331,340) 596,683 Weighted average number of ordinary shares (thousand shares) 3,784,850 3,284,850 Basic earnings per share $ (0.09) 0.18 Diluted earnings per share (NT dollars) Profit attributable to ordinary shareholders of the Company (diluted) $ (331,340) 596,683 Weighted average number of ordinary shares (thousand shares) 3,784,850 3,284,850 Effect of dilutive potential ordinary shares of employee stock bonus (thousand shares) 10,246 2,140 Weighted average number of ordinary shares (diluted) (thousand shares) 3,795,096 3,286,990 Diluted earnings per share $ (0.09) 0.18 Diluted earnings per share-retrospective -
	2022 $ (331,340) 3,784,850 $ (0.09) $ (331,340) 3,784,850 10,246 3,795,096 $ (0.09)	2021
		596,683 3,284,850 0.18 596,683 3,284,850 2,140 3,286,990 0.18 -

(Continued)

62

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

(x) Revenue from contracts with customers

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

(ii) Contract balances

Notes receivable Accounts receivable (including related parties) Less: allowance for doubtful account Contract liabilities	March 31, 2022 $ 495,135 3,481,626 (334,080) $ 3,642,681 $ 126,103	December 31, 2021 628,485 3,574,627 (334,036) 3,869,076 20,612	March 31, 2021 641,159 3,227,559 (332,857) 3,535,861 704	January 1, 2021 375,689 1,906,374 (446,393) 1,835,670 1,676

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

The amounts of revenue recognized for the three months ended March 31, 2022 and 2021 that were included in the contract liability balance at the beginning of the periods were $20,612 thousand and $1,676 thousand, respectively.

(y) 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 March 31, 2022 and 2021, the remuneration to employees amounted to $0 thousand and $20,764 thousand, respectively, and the remuneration to directors amounted to $0 thousand and $13,843 thousand, respectively. These amounts were calculated using the Company’s net income before tax before remuneration to employees and directors for the three months ended March 31, 2022 and 2021. These benefits were charged to profit or loss under operating costs or operating expenses for the three months ended March 31, 2022 and 2021. 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 three months ended March 31, 2022, the actual distribution of the employee remuneration was $0 thousand; while the amount for directors is identical to those stated on financial statements. Related information would be available at the Market Observation Post System website.

(Continued)

63

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

(z) Non-operating income and expense

• (i) Interest income

The details of interest income were as follows:

Interest income from bank deposits Other interest income Total	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 34,113 89 $ 34,202	2021
		53,335 116
		53,451

• (ii) Other income

The details of other income were as follows:

Rent income Other income, others Total	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 4,880 23,619 $ 28,499	2021
		4,795 43,420
		48,215

• (iii) Other gains and losses

The details of other gains and losses were as follows:

Gains (losses) on disposals of property, plant, and equipment Gains on lease modification Foreign exchange gains (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 March 31, 2022 2021 $ 3 (10) - 15 138,403 24,752 50,056 59,030 (26,944) (39,769) (2,599) (39,189) (5,146) (3,585) $ 153,773 1,244
	2022 $ 3 - 138,403 50,056 (26,944) (2,599) (5,146) $ 153,773

(Continued)

64

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

(iv) Finance costs

The details of finance costs were as follows:

Interest expense Finance costs, net	For the three months ended March 31, 2022 2021 $ (85,493) (56,756) $ (85,493) (56,756)
	2022 $ (85,493) $ (85,493)

(aa) 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(aa) of the consolidated financial statements for the year ended December 31, 2021.

(i) Credit risk

• 1) The concentration of credit risk

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.

As of March 31, 2022, December 31, and March 31, 2021, 80%, 81%, and 80% of the total amount of accounts receivable was composed of 26, 28 and 25 customers, respectively. The sales of the Group were not significantly concentrated in a small number of customers.

As of January 1, 2021, 82% of the total amount of accounts receivable was composed of 12 customers. The sales of the Group were significantly concentrated in a small number of customers.

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 March 31, 2022, December 31, March 31, and January 1, 2021, the loss allowance provision both amounted to $0 thousand.

(Continued)

65

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.

March 31, 2022 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) Short-term bills payable Long-term bills payable Bonds payable December 31, 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) Short-term bills payable Long-term bills payable Bonds payable March 31, 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 Bonds payable	Carrying amount $ 1,996,275 1,099,999 12,140 168,532 284,778 5,490,119 23,490,645 1,430,135 5,275,922 4,711,990 $ 43,960,535 $ 1,770,358 1,409,576 10,910 135,955 296,448 2,501,336 25,628,457 1,429,955 5,254,518 4,709,096 $ 43,146,609 $ 1,917,987 872,169 9,588 111,892 312,073 2,553,766 11,505,514 6,146,945 3,500,000 $ 26,929,934	Contractual cash flows 1,996,275 1,099,999 12,140 168,532 334,504 5,763,783 25,112,764 1,434,000 5,280,000 4,944,910 46,146,907 1,770,358 1,409,576 10,910 135,955 344,268 2,574,060 27,692,363 1,434,000 5,660,000 4,953,386 45,984,876 1,917,987 872,169 9,588 111,892 362,833 2,649,019 11,929,361 6,151,900 3,612,000 27,616,749	Within 6 months 1,966,046 1,071,434 12,140 109,000 31,075 331,880 4,889,732 1,434,000 - 39,729 9,885,036 1,770,358 1,403,316 10,910 80,506 33,318 29,315 4,728,742 1,434,000 - 17,140 9,507,605 1,911,290 848,712 9,588 74,947 31,366 550,112 7,531,835 - 22,400 10,980,250	6-12 months 22,413 28,565 - 14,215 25,985 334,972 1,119,552 - - 79,267 1,624,969 - 6,260 - 8,905 26,607 332,606 587,215 - - 64,606 1,026,199 - 23,457 - 15,932 29,540 29,966 734,996 - - 833,891	1-2 years 7,816 - - 19,912 24,079 1,461,036 1,160,320 - 5,280,000 203,256 8,156,419 - - - 18,752 28,405 1,786,019 1,136,587 - 5,260,000 204,195 8,433,958 6,697 - - 19,440 51,041 61,865 1,404,687 6,151,900 22,400 7,718,030	2-5 years - - - 385 38,684 3,635,895 17,263,110 - - 4,622,658 25,560,732 - - - 26,292 38,140 426,120 20,385,632 - - 4,667,445 25,543,629 - - - 73 42,644 2,007,076 2,163,568 - 3,567,200 7,780,561	More than 5 years
							- - - 25,020 214,681 - 680,050 - - -
							919,751
							- - - 1,500 217,798 - 854,187 - - -
							1,073,485
							- - - 1,500 208,242 - 94,275 - -
							304,017

(Continued)

66

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

January 1, 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 Bonds payable	Carrying amount $ 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	Contractual cash flows 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	Within 6 months 1,394,928 818,647 8,384 110,763 24,828 1,495,088 6,631,637 - - 10,484,275	6-12 months - - - 8,668 23,269 29,768 363,886 - 22,400 447,991	1-2 years - - - 2,146 37,065 61,457 1,110,184 5,660,000 22,400 6,893,252	2-5 years - - - 247 48,375 1,584,003 2,174,633 - 3,567,200 7,374,458	More than 5 years
							- - - 1,500 211,023 - 94,562 - -
							307,085

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.

(Continued)

67

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

(iii) Currency risk

1) Currency risk exposure

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

Financial assets Monetary items USD EUR VND MMK CNY Non-Monetary items HKD Financial liabilities Monetary items USD	March 31, 2022 Foreign Currency Exchange rate NTD $ 67,218 28.626 1,924,191 212 31.930 6,755 - - - 6,431 0.0161 104 557,757 4.506 2,513,252 253,777 3.6592 928,619 $ 51,781 28.626 1,482,284	March 31, 2022 Foreign Currency Exchange rate NTD $ 67,218 28.626 1,924,191 212 31.930 6,755 - - - 6,431 0.0161 104 557,757 4.506 2,513,252 253,777 3.6592 928,619 $ 51,781 28.626 1,482,284	December 31, 2021 Foreign Currency Exchange rate NTD 66,935 27.677 1,852,567 - - - - - - 6,935 0.0160 108 459,208 4.343 1,994,339 255,216 3.5522 906,578 10,452 27.677 289,287	December 31, 2021 Foreign Currency Exchange rate NTD 66,935 27.677 1,852,567 - - - - - - 6,935 0.0160 108 459,208 4.343 1,994,339 255,216 3.5522 906,578 10,452 27.677 289,287	March 31, 2021 Foreign Currency Exchange rate NTD 62,428 28.530 1,781,076 - - - 8,828,149 0.0012 10,916 7,464 0.0204 152 521,572 4.343 2,265,185 248,609 3.6732 913,192 23,175 28.530 661,184	March 31, 2021 Foreign Currency Exchange rate NTD 62,428 28.530 1,781,076 - - - 8,828,149 0.0012 10,916 7,464 0.0204 152 521,572 4.343 2,265,185 248,609 3.6732 913,192 23,175 28.530 661,184	January 1, 2021	January 1, 2021
	Foreign Currency $ 67,218 212 - 6,431 557,757 253,777 $ 51,781	Exchange rate 28.626 31.930 - 0.0161 4.506 3.6592 28.626	Foreign Currency 66,935 - - 6,935 459,208 255,216 10,452	Exchange rate 27.677 - - 0.0160 4.343 3.5522 27.677	Foreign Currency 62,428 - 8,828,149 7,464 521,572 248,609 23,175	Exchange rate 28.530 - 0.0012 0.0204 4.343 3.6732 28.530	Foreign Currency 31,069 - 8,823,747 7,464 559,115 247,578 -	Exchange rate NTD 28.0990 873,000 - - 0.0012 10,748 0.0211 158 4.3150 2,412,580 3.6277 898,139 - -

(Continued)

68

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

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 weakening of 1% of USD, EUR, VND, MMK and CNY would have increased net income by $23,696 thousand and $27,169 thousand for the three months ended March 31, 2022 and 2021, respectively; other comprehensive income would have increased $9,286 thousand and $9,132 thousand for the three months ended March 31, 2022 and 2021, respectively. The analysis is performed on the same basis for both periods.

• 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 March 31, 2022 and 2021, foreign exchange gains (losses) (including realized and unrealized portions) amounted to $138,403 thousand and $24,752 thousand, respectively.

(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 $54,901 thousand and $25,538 thousand for the three months ended March 31, 2022 and 2021, 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 three months ended March 31,	For the three months ended March 31,	For the three months ended March 31,
	2022 After-tax other comprehensive income Net income $ 33,013 4,211 $ (33,013) (4,211)	2021
	After-tax other comprehensive income $ 33,013 $ (33,013)	After-tax other comprehensive income 26,883 (26,883)	Net income
Increasing 1% Decreasing 1%			116,231 (116,231)

(Continued)

69

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:

Financial assets at fair value through profit or loss Designated at fair value through profit or loss Financial assets at fair value through other comprehensive income Stocks listed on domestic markets Stocks unlisted on domestic markets Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes, accounts and other receivables Other financial assets Subtotal Total Non-financial assets Investment property Financial liabilities measured at amortized cost Short-term loans Short-term bills payable Accounts and other payable Long-term bank loans-current portion Bonds payable Long-term bank loans Long-term bills payable Other financial liabilities Lease liabilities Total		March 31, 2022	March 31, 2022	March 31, 2022
	Book value $ 421,123 2,522,204 779,074 3,301,278 12,814,003 3,741,850 1,843,124 18,398,977 $ 22,121,378 $ 38,867,067 13,959,843 1,430,135 3,096,274 2,073,577 4,649,490 13,009,844 5,275,922 180,672 284,778 $ 43,960,535		Fair value
		Level 1 344,008 2,522,204 - 2,522,204 - - - - 2,866,212 - - - - - - - - - - -	Level 2 23,060 - - - - - - - 23,060 - - - - - - - - - - -	Level 3 54,055 - 779,074 779,074 - - - - 833,129 38,867,067 - - - - - - - - - -	Total
					421,123
					2,522,204 779,074
					3,301,278
					- - -
					-
					3,722,401
					38,867,067
					- - - - - - - - -
					-

(Continued)

70

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

Financial assets at fair value through profit or loss Designated at fair value through profit or loss Financial assets at fair value through other comprehensive income Stocks listed on domestic markets Stocks unlisted on domestic markets Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes, accounts and other receivables Other financial assets Subtotal Total Non-financial assets Investment property Financial liabilities measured at amortized cost Short-term loans Short-term bills payable Accounts and other payable Long-term bank loans-current portion Bonds payable Long-term bank loans Long-term bills payable Other financial liabilities Lease liabilities Total		December 31, 2021	December 31, 2021	December 31, 2021
	Book value $ 7,330,998 2,280,653 779,074 3,059,727 7,650,122 3,984,890 1,238,873 12,873,885 $ 23,264,610 $ 38,867,067 12,737,689 1,429,955 3,179,934 1,511,515 4,684,096 13,905,589 5,254,518 146,865 296,448 $ 43,146,609		Fair value
		Level 1 334,993 2,280,653 - 2,280,653 - - - - 2,615,646 - - - - - - - - - - -	Level 2 22,226 - - - - - - - 22,226 - - - - - - - - - - -	Level 3 6,973,779 - 779,074 779,074 - - - - 7,752,853 38,867,067 - - - - - - - - - -	Total
					7,330,998
					2,280,653 779,074
					3,059,727
					- - -
					-
					10,390,725
					38,867,067
					- - - - - - - - -
					-

(Continued)

71

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

Financial assets at fair value through profit or loss Designated at fair value through profit or loss Financial assets at fair value through other comprehensive income Stocks listed on domestic markets Stocks unlisted on domestic markets Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes, accounts and other receivables Other financial assets Subtotal Total Non-financial assets Investment property Financial liabilities measured at amortized cost Short-term loans Accounts and other payable Long-term bank loans-current portion Bonds payable Long-term bank loans Long-term bills payable Other financial liabilities Lease liabilities Total		March 31, 2021	March 31, 2021	March 31, 2021
	Book value $ 11,623,057 1,947,876 740,469 2,688,345 6,522,650 3,771,315 3,361,252 13,655,217 $ 27,966,619 $ 37,626,827 4,023,360 2,799,744 764,563 3,500,000 9,271,357 6,146,945 111,892 312,073 $ 26,929,934		Fair value
		Level 1 876,202 1,947,876 - 1,947,876 - - - - 2,824,078 - - - - - - - - - -	Level 2 - - - - - - - - - - - - - - - - - - -	Level 3 10,746,855 - 740,469 740,469 - - - - 11,487,324 37,626,827 - - - - - - - - -	Total
					11,623,057
					1,947,876 740,469
					2,688,345
					- - -
					-
					14,311,402
					37,626,827
					- - - - - - - -
					-

(Continued)

72

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

Financial assets at fair value through profit or loss Designated at fair value through profit or loss Financial assets at fair value through other comprehensive income Stocks listed on domestic markets Stocks unlisted on domestic markets Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes, accounts and other receivables Other financial assets Subtotal Total Non-financial assets Investment property Financial liabilities measured at amortized cost Short-term loans Accounts and other payable Long-term bank loans-current portion Bonds payable Long-term bank loans Long-term bills payable Other financial liabilities Lease liabilities Total		January 1, 2021	January 1, 2021	January 1, 2021
	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)

73

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.

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 three months ended March 31, 2022 and 2021.

(Continued)

74

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, 2022 Total gain and losses recognized in profit or loss March 31, 2022 March 31, 2021 (equal to January 1)	Investment Property $ 38,867,067 - $ 38,867,067 Investment Property $ 37,626,827	Financial assets reported at fair value through profit or loss Designated at initial recognition Derivative financial assets 6,973,779 - (6,919,724) - 54,055 - Financial assets reported at fair value through profit or loss Designated at initial recognition Derivative financial assets 9,942,994 -	Financial assets reported at fair value through other comprehensive income
			Non-public quoted equity instruments
			779,074 -
			779,074
			Financial assets reported at fair value through other comprehensive income
		Designated at initial recognition 9,942,994	Non-public quoted equity instruments
			442,497

(Continued)

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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 March 31, 2022, December 31, March 31 and January 1, 2021 was $38,867,067 thousand, $38,867,067 thousand, $37,626,827 thousand, and 37,626,827 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 •P/E ratio 9.66~10.69 as multiply on all reporting dates •Lack of market liquidity, discount rate 20% on all reporting dates •The higher the P/E ratio, the higher the fair value •Lack of market liquidity, the more the discount, the lower the fair value
Financial assets at fair value through other comprehensive income - equity investments without an active market	Public company comparable method

(Continued)

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

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% on all reporting dates •Not applicable •Lack of market liquidity, the more the discount, the lower the fair value • Net asset value • Not applicable
Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss	Net asset value method Net asset value method

• 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.

(ab) Financial risk management

There were no significant changes in the Company's financial risk management and policies as disclosed in note 6(ab) of the consolidated financial statements for the year ended December 31, 2021.

• (ac) 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, 2021. Also, management believes that there were no significant changes in the Group's capital management information as disclosed for the year ended December 31, 2021. Please refer to note 6(ac) of the consolidated financial statements for the year ended December 31, 2021 for further details.

(Continued)

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

• (ad) 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 March 31, 2022 and 2021, were as follows:

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

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

Long-term bank loans Short-term loans (note) Short-term bills payable Long-term bills payable Lease liabilities Long-term bank loans Short-term loans Long-term bills payable Lease liabilities	January 1, 2022 $ 15,392,104 12,737,689 1,429,955 5,254,518 296,448 $ 35,110,714 January 1, 2021 $ 9,404,483 3,615,000 5,656,112 292,992 $ 18,968,587	Cash flows (491,314) 1,565,651 - 20,000 (16,311) 1,078,026 Cash flows 595,790 398,836 491,900 (15,910) 1,470,616	Non-cash changes Foreign exchange movement Bills payable transferred to long- term bank loans Other 120,131 - - 62,221 - (405,718) - - 180 - - 1,404 - - 4,641 182,352 - (399,493) Non-cash changes Foreign exchange movement Bills payable transferred to long- term bank loans Other 35,647 - - 9,524 - - - - (1,067) - - 34,991 45,171 - 33,924	Non-cash changes Foreign exchange movement Bills payable transferred to long- term bank loans Other 120,131 - - 62,221 - (405,718) - - 180 - - 1,404 - - 4,641 182,352 - (399,493) Non-cash changes Foreign exchange movement Bills payable transferred to long- term bank loans Other 35,647 - - 9,524 - - - - (1,067) - - 34,991 45,171 - 33,924	March 31, 2022
					15,020,921 13,959,843 1,430,135 5,275,922 284,778
					35,971,599
					March 31, 2021
			Foreign exchange movement 35,647 9,524 - - 45,171	Bills payable transferred to long- term bank loans - - - - -
					10,035,920 4,023,360 6,146,945 312,073
					20,518,298

Note: The "other" included in non-cash changes are the reimbursement regarding letters of credit.

(Continued)

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

(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 Jean Pacific Development Co., Ltd. Investee as accounted for using equity method Zhong Gong Baoquan Ltd. (Zhong Gong Investee as accounted for using equity method

Zhong Gong Baoquan Ltd. (Zhong Gong Baoquan)

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

Investee as accounted for using equity method of Zhong Gong Baoquan The Company is the director of the entity The Company is the director of the entity

Chain Yarn Co., Ltd. (Note) BES Engineering Corporation (BES Engineering)

Chung Kung Management Consultant Co., Ltd. Subsidiary of Zhong Gong Baoquan Coreasia Human Resources Management Co., Subsidiary of BES Engineering Ltd.

BES Machinery Co., Ltd. The entity is a director of the Company Core Pacific City Co., Ltd. Substantive Related Party Cheng Yao Enterprise Co., Ltd. Substantive Related Party All board of directors, general manager and The main managements of the Company

All board of directors, general manager and deputy general manager

Note: Chain Yarn Co., Ltd. re-elected directors at the general meeting of shareholders on July 15, 2021, and the Company was elected for the director.

• (c) Significant Transactions with related parties

• (i) Sales

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

Other related parties Associates	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 410,458 208,043 $ 618,501	2021
		- 159,433
		159,433

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

(Continued)

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

(ii) Purchases

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

Other related parties	For the three months ended March 31,	For the three months ended March 31,
	2022 $ 31,665	2021
		-

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	March 31, 2022 $ 292,202 62,466 91 8,926 $ 363,685	December 31, 2021 385,366 91,978 731 8,972 487,047	March 31, 2021 - 64,564 - 9,507 74,071	January 1, 2021
Accounts receivable Accounts receivable Other receivables Other receivables	Other related parties Associates Other related parties Associates				- 51,106 - 9,447
					60,553

(iv) Payables to Related Parties

The payables to related parties were as follows:

Accounts	Types of related parties	March 31, 2022 $ 10,788 155,712 6,213 $ 172,713	December 31, 2021 11,333 167,715 4,553 183,601	March 31, 2021 - 22,897 5,093 27,990	January 1, 2021 - 5,951 5,380
Accounts payable Other payables Other payables	Other related parties Other related parties Associates
					11,331

(v) Other

Associates Rent income Other revenues Security service fees Other related parties Other revenues Other expenses	For the three months ended March 31,
	2022 2021 $ 1,434 1,344 2,735 3,122 (5,633) (4,560) 210 - (6,117) (50)

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

(Continued)

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

• (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 expense for the three months ended March 31, 2022 and 2021, both amounted to $1,183 thousand. The interest expense for the three months ended March 31, 2022 and 2021 were $7 thousand and $29 thousand, respectively. The amounts of lease liability as of March 31, 2022 and 2021, were $1,202 thousand and $5,955 thousand, respectively.

• (vii) The Company had a two year contract with BES Engineering Corporation for the lease of office space in January 2021, with the total value represented $2,762 thousand. This rental transaction was recognized as right-of-use asset and lease liability both amounting to $2,705 thousand on January 1, 2021. The depreciation expense for the years ended March 31, 2022 and 2021, both amounted to $280 thousand. The interest expense for the years ended December 31, 2021, were $6 thousand and $11 thousand, respectively. The amounts of lease liability as of December 31, 2022 and 2021, were $1,320 thousand and $2,430 thousand, respectively.

• (viii) The Group had contracts with BES Engineering Corporation, for mechanical engineering services projects and paid commission on the basis of actual construction. As of March 31, 2022 and 2021, the construction project in-progress both amounted to $1,451,000 thousand. As of March 31, 2022 and 2021, the unpaid fees amounted to $582,256 thousand and $631,184 thousand, respectively. The refundable deposit at March 31, 2022 and 2021 were $415,536 thousand and $420,660 thousand, respectively.

• (ix) The Group had contracts with other related parties, for mechanical engineering services projects and paid commission on the basis of actual construction. As of March 31, 2022 and 2021, the construction project in-progress amounted to $1,640 thousand and $23,030 thousand, respectively. As of March 31, 2022 and 2021, the unpaid fee amounted to $1,366 thousand and $23,030 thousand, respectively. The security deposit were both $0 thousand as of March 31, 2022 and 2021.

• (x) 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

Short-term employee benefit Post-employment benefits	For the three months	ended March 31,
	2022 $ 70,892 957 $ 71,849	2021
		32,849 1,276 34,125

(Continued)

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

(8) Pledged assets:

The carrying amounts of pledged assets were as follows:

Pledged assets	Purpose of pledge	March 31, 2022 $ 106,072 38,115,669 7,765,296 31,435,973 537,314 1,846,127 195,360 228,508 108,969 477,321 $ 80,816,609	December 31, 2021 20,650 38,007,167 7,871,848 31,435,973 785,917 1,147,498 187,220 - 204,904 576,089 80,237,266	March 31, 2021 12,000 - 6,996,869 20,068,181 520,522 1,376,112 695,250 - 108,969 586,317 30,364,220	January 1, 2021 24,614 - 7,031,472 15,346,334 502,002 1,430,230 634,995 - 108,969 585,925
Time deposits Inventory – Land for construction 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 Restricted assets Refundable deposit Right-of-use of Land and Sea Areas	Guarantee for priority right-of- use of harbor, purchases and collateral for short-term bank loan Short-term bills payable, short- term syndicated loan (Shin Kong) Collateral for long-term and short-term financial credit, syndicated loan (Mega & Shin Kong) Collateral for short-term, medium-term and long-term financial credit, syndicated loan (Mega), bonds payable and long-term bills payable Long-term bills payable Long-term bills payable Long-term bills payable Short-term syndicated loan (Shin Kong) Deposit for lawsuit, issuance of letter of credit Collateral for long-term financial credit
					25,664,541

As of March 31, 2022, December 31, March 31 and January 1, 2021, 0 thousand shares, 0 thousand shares, 4,000 thousand shares and 4,000 thousand shares of a subsidiary of the Group were pledged as collateral for long-term bills payable.

(Continued)

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

(9) Commitments and contingencies:

• (a) As of March 31, 2022, December 31, March 31 and January 1, 2021, the Group had the following unused letters of credit:

USD EUR JPY NTD CNY	March 31, 2022 $ 41,353 293 - 1,373,000 32,300	December 31, 2021 49,408 457 6,400 1,146,000 32,300	March 31, 2021 January 1, 2021 33,527 20,824 3,770 246 38,360 - 1,217,000 1,020,000 - -

• (b) As of March 31, 2022, December 31, March 31 and January 1, 2021, the Group had issued guarantee notes for bank loans, sales and purchases, and development plan aggregating to $26,597,400 thousand and USD30,000 thousand, $26,197,400 thousand and USD30,000 thousand, $24,417,400 thousand and USD30,000 thousand, $24,117,400 thousand and USD30,000, respectively.

• (c) As of March 31, 2022, December 31, March 31 and January 1, 2021, the Group had contracts for various construction projects in-progress amounting to $27,751,110 thousand, $24,019,792 thousand, $14,905,482 thousand, and $12,225,823 thousand, respectively. As of March 31, 2022, December 31, March 31 and January 1, 2021, the remaining future obligations under these contracts amounted to $13,224,969 thousand, $11,349,881 thousand, $4,793,226 thousand, and $2,547,453 thousand, respectively.

• (d) As of March 31, 2022, December 31, March 31 and January 1, 2021, the agreement on the acquisition of material property amounting to $1,379,861 thousand, $1,379,861 thousand, $39,045,010 thousand, and $39,045,010 thousand, respectively, the unpaid portion amounting to $138,000 thousand, $138,000 thousand, $28,885,000 thousand, and $28,885,000 thousand, respectively. Please refer to note 6(e).

• (e) As of March 31, 2022, December 31, March 31 and January 1, 2021, the Company signed an agreement to purchase raw materials such as benzene, hydrogen and methylbenzene from CPC. Under this contract, the Company may purchase specified monthly volume of these raw materials at current month prices announced by the CPC with prepayment or domestic letter of credit.

• (f) As of March 31, 2022, December 31, March 31 and January 1, 2021, the Group signed an agreement of preclinical drug research amounting to USD3,467 thousand and $164,308 thousand, USD4,266 thousand and $164,522 thousand, USD3,099 thousand and $140,852 thousand, USD3,063 thousand and $92,070 thousand, respectively. The paid portion amounted to USD2,050 thousand and $38,058 thousand, USD2,916 thousand and $34,911 thousand, USD2,844 thousand and $41,302 thousand, USD2,466 thousand and $31,565 thousand, respectively. The unpaid portion amounted to USD1,417 thousand and $126,250 thousand, USD1,350 thousand and $129,611 thousand, USD255 thousand and $99,550 thousand, USD597 thousand and $60,506 thousand, respectively.

(Continued)

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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 March 31, 2022, December 31, March 31 and January 1, 2021, the paid portion amounted to $20,000 thousand, $20,000 thousand, $20,000 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 March 31, 2022, December 31, March 31 and January 1, 2021, the paid portion amounted to $10,000 thousand, $10,000 thousand, $5,000 thousand and $5,000 thousand, respectively.

• (i) The Group signed a license agreement of antineoplastic candidate drug with National Health Research Institutes on September 13, 2021. The license fee amounted to $125,000 thousand and the payment would be made by progress. As of March 31, 2022 and December 31, 2021, the paid portion both amounted to $2,500 thousand.

• (j) Important matters

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

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

• (k) Contingent liabilities

• (i) 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

(Continued)

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

reversed and remanded the judgement. The preparatory proceeding of the first repeated appeal was conducted in Taiwan High Court Kaohsiung Branch Court (THCKBC) in April 2019. The court’ s judgement is announced that the compony shall pay $3,785 thousand, with bearing interest, to Mr. Zhang in July 2019. The Company was dissatisfied and filed an appeal to Supreme Court in August 2019, and the part of original judgment that was unfavorable to the Company was remanded to the THCKBC on April 22, 2021. The Company received the judgment in December 2021 from THCKBC who awarded Mr. Zhang $3,764 thousand and the statutory interest by the Company after the case was remanded for the second time by the Supreme Court. The Company was not satisfied with such judgment of second instance and filed an appeal with the court of third instance in December in the same year.

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 December 2016 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.

(ii) 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)

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

• (iii) 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 28, 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)

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

• 2) 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 being heard by the Taiwan High Court Tainan Branch Court.

(10) Losses Due to Major Disasters:None

(11) Subsequent Events:

• (a) On May 11, 2022, a resolution was made during the board meeting of the Company to raise the capital of Ding-Yue amounting to $1,000,000 thousand for its business operation.

(12) Other:

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

		For the three month	For the three month	For the three month	s ended March 31	s ended March 31	s ended March 31	s ended March 31
By function By item		2022			2021
	Operating cost	Operating expense	Non-Operating expense	Total	Operating cost	Operating Expense	Non-Operating expense	Total
Employee benefits
Salary	217,348	151,599	-	368,947	275,437	210,319	-	485,756
Labor and health insurance	25,988	19,843	-	45,831	21,057	16,871	-	37,928
Pension	11,183	5,826	-	17,009	10,137	5,540	-	15,677
Others	12,673	10,948	-	23,621	12,001	6,387	-	18,388
Depreciation	245,393	50,201	1,103	296,697	223,961	42,606	884	267,451
Amortization	234	1,940	-	2,174	157	1,980	-	2,137

(Continued)

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

• (b) On March 22, 2019, Kaohsiung Urban Planning Commission (KUPC) announced that Dashe Industrial Park (DIP), where the Company’s plant is located, will be categorized from Special Zone to Zone B. In light of the above matter, all the companies involved in this case are making their best effort to negotiate and compromise with KUPC, requesting KUPC to change DIP’s status to Zone A instead of Zone B. On November 10, 2020, the Company had received the minutes of the meeting with regards to the changes on the urban planning case of DIP concerning its execution, which prompted KUPC to suggest to the Bureau of Industry, MOEA to invite the Kaohsiung City Government (KCG) and all relevant parties to clarify the appeals and suggestions made by the companies involved. Thereafter, KCG will explicitly indicate the details in the urban planning documentation to all concerned parties in order to preclude the disputes. 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. On February 11, 2022, the final decision had been made, wherein the KCG will mediate between both sides to seek for feasible resolutions. As of March 31, 2022, KCG had yet to proceed on the procedures of statement changing.

(Continued)

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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)	(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)	(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)	(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)
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 f t	Purposes of fund inancing for he borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1	Weiming	Weiming Construction	Other Receivable	Yes	9,012	9,012	9,012	5.5%	2	-	Operating	-		-	713,709	1,070,563
1	Weiming	Weicai	Other Receivable	Yes	270,360	270,360	45,060	5.5%	2	-	Operating	-		-	713,709	1,070,563
2	Weihua	Weicai	Other Receivable	Yes	90,120	90,120	90,120	5.5%	2	-	Operating	-		-	110,058	110,058

Note 1: Numbering nature of borrowing as follows:

Transaction for business between two parties－1

==> picture [56 x 6] intentionally omitted <==

----- Start of picture text -----

Short-term financing－2
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Note 2: The financing limit for total and individual were 15% and 10% of net value of Weiming.

Note 3: The financing limit was 20% of net value of Weihua.

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)	(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 guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of 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	The Company	Ding-Yue	2	48,470,885	17,780,000	17,780,000	13,280,000	2,880,000	% 22.01	80,784,808	Y	N	N
0	The Company	Weihua	2	48,470,885	225,300	225,300	225,300	-	% 0.28	80,784,808	Y	N	Y
0	The Company	Weicai	2	48,470,885	1,299,432	1,299,432	691,358	174,000	% 1.61	80,784,808	Y	N	Y
0	The Company	Weiming	2	48,470,885	1,667,220	1,667,220	1,667,220	-	% 2.06	80,784,808	Y	N	Y
0	The Company	Shiny Chemical Industrial Co., Ltd.	5	48,470,885	78,086	78,086	78,086	-	% 0.10	80,784,808	N	N	N
0	The Company	Lushun Warehouse Co., Ltd.	5	48,470,885	55,366	55,366	55,366	-	% 0.07	80,784,808	N	N	N
0	The Company	China General Terminal & Distributio n Corporati on	5	48,470,885	14,903	14,903	14,903	-	% 0.02	80,784,808	N	N	N
1	Ding-Yue	The Company	3	13,923,915	4,920,000	4,920,000	2,200,000	-	% 6.09	27,847,829	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

(Continued)

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

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.

  4. The Company directly or indirectly holds more than 90% voting right.

  5. A company that is mutually protected under contractual requirements based on the needs of the contractor.

  6. 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:

  1. 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.

  2. 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 endorsed the operation method for the total amount of guarantees and the limit for endorsement of a single enterprise:

  1. 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.

  2. 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 March 31, 2022 (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 BES Twin Towers	Yuanta Financial Holding Co., Ltd. Taiwan Semiconductor Manufacturing Co., Ltd. BES Engineering Co. China Development Financial Holding Corp. Handy Chemical Corporation Ltd. Overseas Investment & Development Corp. Core Pacific City Co., Ltd. Praxair Chemax Semiconductor Materials ZOWIE Technology Corporation Aetas Technology Inc. Chain Yarn Co., Ltd. Taiwan Business Bank Core Pacific City Co., Ltd.	None 〞 The Company is a director of the investee company None The Company is a supervisor of the investee company None Substantive related party None 〞 〞 The Company is a director of the investee company None Substantive related party	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 Non-current financial assets at fair value through other comprehensive income 〞 〞 〞 Current financial assets at fair value through other comprehensive income Non-current financial assets designated at fair value through profit or loss	7,400,371 10,000 164,348,449 44,684,712 386,000 2,600,000 2,779,154 2,701,651 8,815 287,961 30,000,000 977,130 1,053,812	195,370 5,970 1,651,702 857,946 26,437 26,000 39,193 117,608 358 - 300,000 12,556 14,862	0.06 0.00 10.74 0.23 4.51 2.89 27.71 14.00 0.03 0.58 13.41 0.01 10.51	195,370 5,970 1,651,702 857,946 26,437 26,000 39,193 117,608 358 - 300,000 12,556 14,862

(Continued)

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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
BES Twin Towers TSCIC Weicai	Praxair Chemax Semiconductor Materials Taiwan Tea Corporation Good Company TaiRx, Inc. Agricultural Bank of China-HSBC Structured Deposit	None 〞 〞 〞 〞	Non-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 〞 Current financial assets designated at fair value through profit or loss	6,754,127 7,279,000 750,000 722,500 -	294,019 142,668 - 14,652 23,060 3,722,401	35.00 0.92 2.08 0.80 -	294,019 142,668 - 14,652 23,060 3,722,401

• (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:None

• (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 wit from	h terms different 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 Weiqiang	TSCIC Kaohsiung Monomer Company Limited Chain Yarn Co., Ltd. The Company	Subsidiary Affiliated company accounted for using equity method Other related parties Subsidiary	Sales Sales Sales Sales	(343,797) (208,044) (410,458) (267,820)	% (5.17) % (3.13) % (6.18) % (63.64)	3 Month 1 Month 1 Month Base on contract	- - - -	OA 90 days - - Base on contract	125,948 62,466 292,202 -	4.07% 2.02% 9.44% -%	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	TSCIC Chain Yarn Co., Ltd.	Subsidiary (Note) Other related parties	125,948 292,202	10.47 4.85	- -		125,948 154,835	- -

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)

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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 1	The Company Weiqiang	TSCIC The Company	1 2	Sales revenue Sales revenue	343,797 267,820	OA 90 days Base on contract	4.66% 3.63%

Note 1: Company numbering as follows:

Parent company－0 Subsidiary starts from 1

Note 2: The numbering of the relationship between transaction parties as follows:

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

Note 3: The amounts of the transaction and the ending balance had been offset in the consolidated interim financial statement

(b) Information on investees:

The following is the information on investees for the three months ended March 31, 2022 (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 March 31, 2022	Balance as of March 31, 2022	Balance as of March 31, 2022	Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2022	December 31, 2021	Shares	Percentage of wnership	Carrying value
The Company CPDC BVI Ding-Yue TSCIC	Kaohsiung Monomer Company Limited Zhong Gong Baoquan Ltd. Ding-Yue CPDC BVI TSCIC CPDC GT UDL BES Twin Towers Thanh Phong Jean Pacific Development Co., Ltd. Core Pacific Overseas Holdings Ltd Da Ying Taivex	Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Hong Kong Taiwan Vietnam Taiwan British Virgin Islands Taiwan Taiwan	Production and sales of Methyl Methacrylate Monomer Security consultants Entrusting construction companies to build state houses, commercial buildings, land development and other related operations and investment Holding company Fertilizer storage, transportation, purchase and sales Mechanical engineering Holding company Real estate investment consultancy, land development and general investment Construction engineering, real estate management, construction-related technical consultants, leasing machinery and equipment, wholesale of building materials, etc. Real estate construction and development and urban renewal, etc. Holding company Engineering, construction contracting business Engaged in biotechnology, pharmaceutical research and development and marketing	- 14,400 28,000,000 904,946 560,000 100,000 10,022,547 3,791,383 609,347 620,000 808,564 60,000 696,720	- 14,400 25,580,000 904,946 560,000 100,000 9,876,023 3,791,383 609,347 620,000 808,564 60,000 696,720	20,000,000 1,440,000 2,800,000,000 26,580,000 76,000,000 15,000,000 329,855,173 491,216,357 - 62,000,000 26,580,000 - 46,224,551	% 40.00 % 24.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 40.00 % 45.19 % 100.00 % 65.34	537,314 19,002 27,824,323 933,872 1,293,573 175,673 8,396,278 5,195,118 610,031 617,934 928,619 59,312 284,309	127,143 1,193 (20,346) (5,171) (8,678) 9,237 (133,044) 16,356 3,568 (854) (11,442) (894) (12,212)	50,857 286 (20,346) (5,171) (8,678) 9,237 (133,044) 16,356 3,568 (342) - - -	Note 1 Note 1 Note 2&5 Note 2&4&5 Note 2&5 Note 2&5 Note 2&4&5 Note 2&5 Note 2&3&4 &5 Note 1 Note 2&4&6 Note 2&3&5 &6 Note 2&5&6

(Continued)

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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 March 31, 2022	Balance as of March 31, 2022	Balance as of March 31, 2022	Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2022	December 31, 2021	Shares	Percentage of wnership	Carrying value
BES Twin Towers Frontier Fortune Core Pacific Twin Star (Myanmar)	Frontier Fortune Core Pacific Twin Star (Myanmar) Gemini Star (India) Core Pacific Twin Star (Vietnam) Core Pacific Pioneer (Myanmar)	Singapore Myanmar India Vietnam Myanmar	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	2,761,596 169,921 9,274 2,566,176 24,804	2,761,596 169,921 9,274 2,566,176 24,804	93,060,000 5,500,001 2,099,993 - 800,000	% 100.00 % 100.00 % 99.99 % 100.00 % 80.00	2,807,402 153,383 4,310 2,642,474 19,489	3,493 (1,087) (1) 4,729 (810)	- - - - -	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.

(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, 2022	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of March 31, 2022	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Weihua	Engaged in trading of petroleum chemical products, electronic chemicals variety of industrial gases, gas mixtures and other manufacturing sub- fitted trading	763,460	( 2 )、 ( 3 )	763,460	-	-	763,460	4,777	100.00%	4,777	523,281	-
Weiqiang	Wholesale of chemical raw materials, plastic raw materials, rubber raw materials and their products (except dangerous goods), commission agency (except auction), import and export and related supporting business	211,560	( 1 )、 ( 3 )	211,560	-	-	211,560	8,254	100.00%	8,254	186,310	-
Weiming	Production and sales of nylon6, cyclohexanone, electricity, steam and its by-products; construction of supporting facilities for petrochemical projects	7,871,777	( 1 )、 ( 2 )	7,725,253	146,524	-	7,871,777	(84,619)	100.00%	(84,619)	6,884,229	-
Weicai	Engaged in engineering plastic and high valued petroleum chemical products	1,411,845	( 2 )	1,324,893	-	-	1,324,893	(53,611)	100.00%	(53,611)	843,452	-
Weiming Construction (Invested through Weiming)	Engaged in engineering consultant services、engineering construction、 engineering management、trading of petroleum chemical product	129,665	( 3 )	-	-	-	-	(294)	100.00%	(294)	134,321	-

(Continued)

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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 March 31, 2022	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
11,065,631	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.

(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)

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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 March 31, 2022 Revenue Revenues from external customers Revenues from transactions with other operating segments of the same entity Total segment revenue Reported segment profit or loss Segment assets	Acrylonitrile & Acetic Acid $ 2,819,231 - $ 2,819,231 $ 88,246 $ 4,160,845	Caprolactam 3,363,101 - 3,363,101 (192,272) 16,133,093	Other 1,199,938 46,493 1,246,431 (224,070) 116,027,026	Adjustment and eliminations - (46,493) (46,493) - -	Total 7,382,270 - 7,382,270 (328,096) 136,320,964

(Continued)

95

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

For the three months ended March 31, 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 Segment assets	Acrylonitrile & Acetic Acid $ 3,137,078 - $ 3,137,078 $ 595,536 $ 6,085,452	Caprolactam 3,079,493 - 3,079,493 281,579 12,497,015	Other 1,219,954 72,463 1,292,417 (268,277) 88,952,734	Adjustment and eliminations - (72,463) (72,463) - -	Total 7,436,525 -
					7,436,525
					608,838
					107,535,201

(c) Geographical Areas

The Group’ s non-current assets located overseas are immaterial. Revenues from domestic and overseas customers for the three months ended March 31, 2022 and 2021 were as follows:

Region	For the years ended March 31,	For the years ended March 31,
	2022 $ 4,616,656 2,656,139 109,475 $ 7,382,270	2021
Operating revenue from domestic sales Asia Other (individual area under 10%) Total operating revenue		4,717,536 2,708,310 10,679
		7,436,525

• (d) Major Customers

Customers generating over 10% of total revenue for the three months ended March 31, 2022 and 2021 were as follows:

Customers	For the years ended March 31,
	2022 2021 $ 841,260 908,927
1001