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Dear Shareholders,
As the shareholder of China Synthetic Rubber Corporation (CSRC), you are cordially invited to attend the Annual General Meeting (AGM) which will be held on June 24, 2016. The ROC Company Act requires at least 50% quorum to hold the AGM. Hence, your attendance or proxy submission is vital to the AGM. We appreciate your attendance and also take this as your recognition for us to continue to optimize shareholders’ value.
Financial Results
        The market continued to experience high volatility in 2015. Depreciation in emerging market currencies as well as weakness in commodity demand outlook both were risks to global economy recovery. While the United States was one of the few growth drivers in 2015, the concerns on domestic inflation target and employment situation together with external risk factors made an aggressive rate hike cycle unlikely. Meanwhile, as China moved its growth target toward a “new normal”, we expect further policies on both monetary and fiscal sides to be introduced going through this transition period. Yet we do not expect another round of significant depreciation in RMB as China needs to maintain currency stability after the inclusion of IMF reserve currency basket.
       Despite the market volatility, the management team continued to focus on accountability, teamwork and execution in 2015. Total consolidated net sales revenue decreased 23.6% to NT$16.8 billion in 2015, compared with NT$ 22.0 billion in the year 2014. Total comprehensive income of NT$ 727 million, for the year of 2015, was approximately 71.2% declined from NT$ 2,526 million in 2014. Profit attributable to stockholders' controlling interests was NT$ 851 million (EPS 1.45 NTD/share) in the year of 2015, compared to NT$ 2,565 million (EPS 4.37 NTD/share) in the year 2014. There was NT$ 2,043 million income before tax that generated from the disposal of the land under Synpac-Kingdom Pharmaceutical Co., (one of the key subsidiaries of CSRC) in 2014, if exclude this, the core business earnings in the year of 2015 actually was better than that of 2014.
        Net, the BOD proposed a cash dividend distribution of NT$ 1.15 per share for AGM approval.

Corporate Developments
Major developments of business operation in the year 2015 are summarized as below:
A. Sales: global carbon black shipment volume was 447,931 tons. ( 2.6% YoY decline)
B. Keep focusing at specialized carbon black, and leverage with better technology (i.e. more energy-saving facilities) to improve our cost competitiveness. Going forward, the Company will continue to focus at environmental friendly and higher value-added products.

Outlook/Strategy in year 2016
Look forward in 2016, we believe that our efforts at further cost rationalization and sales restructure will turn out to be better operational and financial results to our shareholders.
A. Carbon Black
    ●    Streamline China production process and identify specific niche products for each plant.

  ●    Consolidate group IT resources.

    ●    Continued procument efforts at various feedstocks.

    ●    Further expand export market and non-tire products.

    ●    More focus at Tier I customers, also gain their mind share.

    ●    Implement of Dynamic Control System with mobile devices.

B. Biotech and Pharmacy

    ●    New plant has completed and verified by PIC/S GMP. Continue to aim for the domestic market leader in ophthalmic products.leader in ophthalmic products.

    ●    Increase exports and toll manufacturing business, thus increase overall utilization rate.

C. Energy (Li-ion-battery)

    ●    Focus at products with key characteristics from low temp., discharge, to long cycle life, thus to improve overall competitiveness and explore new business opportunities.

    ●    For pack, its future development will focus at power tool, medical, ESS and LEV.

    ●    Work together with system customer to co-develop new cells, and to increase production and revenue.

          The year of 2016 will be another year full of opportunities and challenges. We expect to see organic growth from autos and tires related demands, driven by fundamental economy recovery in USA. Stricter environmental protection requirements from EPA in USA will also build up higher entry barriers. While CSRC has already signed a Consent Decree with EPA in 2015 and will begin to build up the CoGen system, we do not see this as a cost increase, on the other hand, we believe that the generated steam and electricity will help to offset the related costs, and even improve the bottom line earnings. The similar business model for environmental protection and resource recovery was applied to all CSRC carbon black plants, which all complied with CSR guidance. While China and India markets will remain challenging given its oversupply market status, we believe that operation efficiency improvement is our strength, thus, we will continue to focus at cost down, and maintain our market share. Besides, CSRC also restructure the team with more dedicated, experienced young managements, especially in China market. We are sure to maintain our flexibility and execution capability..

          Your supports in the resolution of the agenda are highly appreciated. The proposed resolutions are translated into English and attached here.

           We sincerely invite you to attend the AGM in person. But if you cannot participate in person given the time or geographic constraints, please grant the proxy to your custodian bank or to us directly in order for us to present at the meeting and to execute your rights. Thanks again for all your supports.

Sincerely Yours,


Chairman of the Board

China Synthetic Rubber Corporation