The Company and its subsidiaries announced the Board’s resolution of the indirect investment in China
1. Date of occurrence of the event: 2020/08/06~2020/08/13
2. Method of the current increase (decrease) in investment: The Company adjusted its existing indirect investment due to the merger of subsidiaries in China, Oriental Petrochemical (Yangzhou) Corporation (hereinafter referred to as “OPYC”) of 100% shareholding, Far Eastern Union Petrochemical (Yangzhou) Ltd. (hereinafter referred to as “FUPY”) of 50% shareholding, and Tong Da Gas Industries (Yangzhou) Ltd. (hereinafter referred to as “TDIY”) of 50% shareholding. Far Eastern Union Petrochemical (Yangzhou) Ltd. remains as surviving company, while the other two are dissolved.
3. Amount, unit price, and total monetary amount of the transaction: N/A
4. Company name of the mainland Chinese investee:
    (1) OPYC (Dissolved company)
    (2) FUPY (Surviving company)
    (3) TDIY (Dissolved company)
5. Paid-in capital of aforementioned mainland Chinese investee:
    (1) OPYC : US$ 80,000 thousand
    (2) FUPY : US$ 132,000 thousand
    (3) TDIY : US$ 67,000 thousand
6. Amount of capital increase currently planned for the aforementioned mainland Chinese investee: (1) FUPY will increase investment of USD165,500 thousand (US$80,000 thousand decreased from OPYC, US$67,000 thousand decreased from TDIY, and a capital investment of US$18,500 thousand)
7. Main businesses of the aforementioned mainland Chinese investee:
    (1) OPYC : Production and sale of EA/BCS, EC and EOD
    (2) FUPY : Production and sale of EG and EO
    (3) TDIY : Production and sale of various liquid gas products, and logistics operation of ethylene
8. Type of CPA opinion in the latest annual financial statements of the aforementioned mainland Chinese investee:
    (1) OPYC : Unqualified Opinion
    (2) FUPY : Unqualified Opinion
    (3) TDIY : Unqualified Opinion
9. Total equity of the aforementioned mainland Chinese investee in the latest annual financial statements:
    (1) OPYC : RMB200,952 thousand
    (2) FUPY : RMB1,002,781 thousand
    (3) TDIY : RMB543,097 thousand
10. Amount of profit/loss of the aforementioned mainland Chinese investee in the latest annual financial statements:
     (1) OPYC : RMB -11,236 thousand
     (2) FUPY : RMB -160,269 thousand
     (3) TDIY : RMB28,089 thousand
11. Amount of actual investment in the aforementioned mainland Chinese investee, up to the present moment:
    (1) OPYC : USD 80,000 thousand
    (2) FUPY : USD66,000 thousand
    (3) TDIY : USD33,500 thousand
12. Trading counterparty and its relationship with the Company: (1) Trading counterparty: OPYC, FUPY and TDIY (2) Relationship with the Company: All are subsidiaries of the Company
13. Where the trading counterparty is a related party, announcement shall also be made of the reason for choosing the related party as trading counterparty and the identity of the previous owner, its relationship with the Company and the trading counterparty, and the previous date and monetary amount of transfer: As for the merger, it is planned to enhance the overall competency for the three companies. Due to the change of operating dynamic, the consolidation will achieve the cost-saving benefits and tax incentives by reducing the operational duplication in environment, energy, and quality perspectives. The previous date and monetary amount of transfer: NIL
14. Where an owner of the underlying assets within the past five years has been a related party of the Company, the announcement shall also include the date and price of acquisition and disposal by the related party, and its relationship with the Company at the time of the transaction: NIL
15. Profit (or loss) upon disposal: N/A
16. Terms of delivery or payment (including payment period and monetary amount), restrictive covenants in the contract, and other important terms and conditions: (1) Terms of delivery or payment: NIL (2) Restrictive covenants in the contract: The record date of the merger is set on 31 December 2020. (3) Other important terms and conditions: NIL
17. The manner in which the current transaction was decided, the reference basis for the decision on price, and the decision-making unit: (1) The merger will be enforced after approval of BOD and Shareholders’ meetings of OPYC, FUPY, and TDIY. (2) The opinion on the unreasonableness of the merger’s stock exchange issued by the CPA
18. Broker: N/A
19. Concrete purpose of the acquisition or disposal: As for the merger, it is planned to enhance the overall competency for the three companies. Due to the change of operating dynamic, the consolidation will achieve the cost-saving benefits and tax incentives by reducing the operational duplication in environment, energy, and quality perspectives.
20. Any dissenting opinions of directors to the present transaction: NIL
21. Whether the counterparty of the current transaction is a related party: Yes
22. Date of the board of directors resolution: 2020/08/06~2020/08/11
23. Date of ratification by supervisors or approval by the Audit Committee: 2020/08/12
24. Total amount of investment in mainland China (including the current investment) approved by the Investment Commission, up to the present moment: USD 281,636 thousand
25. Ratio of the total amount of investment in mainland China (including the current investment) approved by the Investment Commission, up to the present moment, to the paid-in capital on the latest financial statements: 96.11%
26. Ratio of the total amount of investment in mainland China (including the current investment) approved by the Investment Commission, up to the present moment, to the total assets on the latest financial statements: 34.68%
27. Ratio of the total amount of investment in mainland China (including the current investment) approved by the Investment Commission, up to the present moment, to equity attributable to owners of the parent on the latest financial statements: 66.58%
28. Total amount of actual investment in mainland China, up to the present moment: USD272,386 thousand
29. Ratio of the total amount of actual investment in mainland China, up to the present moment, to the paid-in capital on the latest financial statements: 92.95%
30. Ratio of the total amount of actual investment in mainland China, up to the present moment, to the total assets on the latest financial statements: 33.54%
31. Ratio of the total amount of actual investment in mainland China, up to the present moment, to equity attributable to owners of the parent on the latest financial statements: 64.40%
32. Amount of recognized profit (loss) on investment in mainland China for the last three years:             
      2017: NTD206,948 thousand
      2018: NTD624,123 thousand
      2019: NTD -59,850 thousand
33. Amount of profit remitted back to Taiwan for the last three years:
      2017: NTD0
      2018: NTD0
      2019: NTD0
34. Whether the CPA issued an unreasonable opinion regarding the current transaction: No
35. Name of the CPA firm: Nanjing Tianyuan Accounting Firm Co. Ltd.
36. Name of the CPA: Xue-Hai Zhang
37. Practice certificate number of the CPA: 320000410001
38. Any other matters that need to be specified:
(1) According to the holding of Pacific Petrochemical (Holding) Ltd. (hereinafter referred to as “PPL”) and Pet Far Eastern (Holding) Ltd. (hereinafter referred to as ”PETH”) to reinvest FUPY utilizing the accumulated surplus of USD18,500 thousand of TDIY (PPL subscribed half of the capital in USD9,250 thousand).
(2) FUPY, TDIY, and OPYC will consolidate through the merger. FUPY will be the surviving company, while TDIY and OPYC will be dissolved.
(3) Based on the estimated book value of the three companies prior to the merger, the Company's indirect holding in FUPY through PPL will be changed from 50% to 55.8%. The record date of the merger is set on 31 December, 2020.