CATHAY RED - AGM Information 2018

Stock Code ： 2501

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2018 Annual General Shareholders'

Meeting Agenda Handbook

Meeting Time ： June 8, 2018, at 9 ： 00 a.m.

Place ： B1, No. 296, Section 4, Renai Road, Taipei, Taiwan, R.O.C. International Conference Room http://www.cathay-red.com.tw/

I. Meeting Agenda ..........................................................................1 1. Matters to Report (1) 2017 Business Report................................................3 (2) Audit Committee’s Review Report...........................7 (3) 2017 Compensation Report for Employees and Directors..................................................................10 2. Matters for Acknowledgement (1) 2017 Business Report and Financial Statements.....11 (2) 2017 Profit Distribution...........................................32 3. Matters for Discussion (1) Proposal for the amendment of the Company's Rules of Procedure for Shareholder Meetings........34 (2) Proposal for the amendment of the Company's Articles of Incorporation.........................................38 (3) Proposal for the amendment of the Company's Procedures for Election of Directors and Supervisors..............................................................44 (4) Proposal for the amendment of the Company's procedures for Acquisition or Disposal of Assets......................................................................50 (5) Proposal for the amendment of the Company's Procedures for Lending of Capital and Endorsements..........................................................74

(6) Proposal for releasing the prohibition on the

Company’s board of directors from participation in competitive business...............................................80

4. Provisional Motion(s)

II. Appendix

Articles of Incorporation...................................................82 2. Rules of Procedure for Shareholder Meetings..................97 3. Election Procedures for Directors and Supervisors .......109 4. Procedures for Acquisition or Disposition of Assets......115 5. Procedures for Lending of Capital and Endorsements...145 6. Shareholdings of Directors.............................................163

Cathay Real Estate Development Co., Ltd.

2018 Shareholder Meeting Agenda

Commencement of Meeting
Chairman's Remarks
Matters to Report
(1) 2017 Business Report
(2) Audit Committee’s Review Report
(3) 2017 Compensation Report for Employees and Directors.
Matters for Acknowledgement
(1) Adoption of 2017 Business Report and Financial Statements
(2) Adoption of Proposal for 2017 Profit Distribution
Matters for Discussion
(1) Proposal for the amendment of the Company's Rules of Procedure for Shareholder Meetings.
(2) Proposal for the amendment of the Company's Articles of Incorporation.
(3) Proposal for the amendment of the Company's Procedures for Election of Directors and Supervisors.
(4) Proposal for the amendment of the Company's procedures for Acquisition or Disposition of Assets.

(5) Proposal for the amendment of the Company's Procedures for Lending of Capital and Endorsements.
(6) Proposal for releasing the prohibition on the Company’s board of directors from participation in competitive business.
Provisional Motion(s)
Adjournment

1. Matters to Report

(1) 2017 Business Report

Looking back at 2017, the world economy improved, mainly due to global trade recovery and a relaxed financial environment. With the price of oil and raw materials returning to stable levels, this helped speed up the recovery of advanced economies, and allowed emerging and developing economies to maintain strong growth. Domestically, the global recovery drove a strong external demand, and with the moderate growth of domestic consumption, the economy underwent a steady expansion. Statistics from the Directorate General of Budget, Accounting and Statistics (DGBAS) show that the year's economic growth was 2.86%, a significant increase from 1.41% in the previous year. In terms of the real estate market, with the significant recovery of domestic and global economies, friendly housing policies, and continued low interest rates, housing prices relaxed resulting in an evident market revival. This resulted in a rebound pattern of stable price and quantity increase throughout the year. Our Company grasped the rebound opportunity and adopted a steady attack strategy by launching four pre-sale units, including Taipei's "Cathay New Village" and Hsinchu's "The Seeds Of Happiness" in the first half of the year, and Taoyuan's "WATER PARK ONE" and Taichung's "Cathay PLUS" in the second half of the year. The well-planned products helped drive the prices to be higher than local standard, generating good sales performance, with the average sales rate reaching 65% at the end of the year. In

terms of revenue, the accrued revenue is from 8 construction projects which include Tainan's "landmark twin towers" and Kaohsiung's "Cathy R13", as well as the 6 projects completed in Hsinchu, Zhubei and Taichung in the previous year, generating a total revenue of more than NT$10,618,000,000 for the year.

Looking forward to 2018, the world economy is expected to continue to recover, mainly due to the spillover effects of the United States' tax reform. However, there are still variables, such as funding pressure as a result of monetary policy normalization. Domestically, as the market continues to be driven by foreign demand, domestic demand increases, and the government actively improving the investment environment, the economy is expected to continue to expand moderately. In terms of capital, though monetary policy normalization will lead to tightening, an increase in interest rates would not be huge due to the current mild economic growth. Funding pressure is thus not expected to be high. In terms of policies, with the upcoming local public officials election at the end of the year, the bustling election activities will disperse the market focus, which is unfavorable to the real estate market. In terms of the market, with the increased interest in buying, the pessimistic atmosphere will gradually decrease, increasing the confidence of construction companies in launching their projects. The market is expected to gradually return to a positive cycle. By tightly grasping the market pulse, the Company continues to readopt last year's steady attack strategy. It plans to launch three pre-sale projects,

Sanchong's "Park Beautiful Mansion", Xindian's "HYGGE" and Banqiao's "Tree River Cathay’s Hom", in the first half of the year. In the second half of the year, we will wait until the election is over to make decisions and will in the meantime prepare our land inventory and decide on the time to launch based on the market atmosphere.

In addition, facing the new mediocre era, only through innovative brand competitiveness can the Company unleash its existing advantages, and face business challenges flexibly. In order to achieve this goal, we need to strengthen our staff competency and synergize internal and external resources through integration. We believe that with a strong team and integrated resources, we will be able to raise our brand power. In terms of our main business, we put equal weightage on land development, acquisition and co-construction, steadily seeking higher profit. We actively stock up on mid and long-term lands (include urban renewal projects) so as to secure future project resources. We hope to face the industrial challenges with a flexible mindset and taking risk into consideration. In terms of reinvestment, we have established steady operations, and actively explore value-added products in the healthcare management business to expand our capacity. For hotel business, we continue to establish our brand value, and raise customer loyalty through diverse marketing integration. In regards to our business in China, our Shanghai departmental stores are in their initial stages of operations. Besides continuing to monitor and bring in good merchants, we are also actively marketing to the crowd and

establishing our name through various marketing measures. Furthermore, we are actively looking at and assessing other new businesses opportunities, so as to expand our revenue and generate stable profit.

I'd like to express my deepest appreciation for your presence today.

I wish you good health and good luck, thank you!

Chairman: Ching-kuei Chang

President: Hung-Ming Lee Chief Accountant: LI-CHI LIAO

(2) Audit Committee’s Review Report

The financial statements of Cathay Real Estate Development covering the period from January 1 to December 31, 2017, and the business report and earning distribution plan have been prepared and submitted by the Board of Directors of the Company. The financial statements were audited by Li-Huang Lin, CPA, and Chien-Che Huang, CPA, of Ernst & Young, who issued an auditors’ report.

The Auditing Committee has appointed Jung-Huang Hsu, CPA, of Ernst & Young to review the aforementioned financial statements and documents pursuant to Article 14-4 of the Securities & Exchange Act and Article 219 of the Company Act. In his opinion, the aforementioned financial statements and documents are fairly presented as stated.

2018 Annual Meeting of Shareholders

Cathay Real Estate Development Co., Ltd.

Auditing Committee: Shiou-Ling Lin

April 19, 2018

Auditor's Report on the Final Accounts of Cathay Real Estate Development Co., Ltd.

Cathay Real Estate Development Co., Ltd.'s 2017 final accounts, including 2017 business report, financial statement and surplus distribution, have been audited by our auditor using the required audit procedures. The compilation of the above-mentioned financial statements is the responsibility of the management, and the auditor's responsibility is to express an opinion on the above-mentioned final accounts based on the audit results.

The financial statements referred to above have, according to the requirements of "Declaration and Auditing Methods of Company's Final Accounts", been audited and attested by the auditor in accordance with “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and Generally Accepted Auditing Standards. In the opinion of the auditor, the financial statements referred to above present fairly, in all material respects, the financial position of Cathay Real Estate Development Co., Ltd. as of December 31, 2017, and its financial performance and cash flow from January 1 to December 31, 2017, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards, International Accounting Standards, IFRIC and SIC approved and published by the Financial Supervisory Commission. Information related to financial statement in its business report is in compliance with the financial statements referred to above, and its surplus distribution is in compliance with the regulations of the Articles of Incorporation.

Cathay Real Estate Development Co., Ltd.

Audit Committee

Ernst & Young CPA: Jung-Huang Hsu Firm phone number: 2757-8888

Unified Business Number: 04111302

FSC Approval Document Number

： FSC Securities Audit Letter

No.0930133943

April 19, 2018

(3) 2017 Compensation Report for Employees and Directors

Explanation:

Conducted in accordance with Article 31 of the Articles of Incorporation.
2017 Financial statements have been audited by Ernst & Young. The earnings before tax are NT$1,375,647,556 where 0.1% amounting to NT$1,375,648 is allotted as 2017 total employee compensation, and 0.1745% amounting to NT$2.4 million is allotted as 2017 total directors compensation. The above compensation is to be distributed in cash.

2. Matters for Acknowledgement

(1) Adoption of 2017 Business Report and Financial Statements.

[Proposed by the Board of Directors]

Explanation:

The Company's 2017 Financial Statements have been audited by Li-Huang Lin /CPA and Huang Chien-Che/CPA from Ernst & Young, and an unqualified audit report has been issued.
The above Financial Statements, together with the Business Report, have been reviewed by the Company's audit committee.
Please refer to pages 3 to 6, and 12 to 31 of this handbook.

Resolution:

Independent Auditor’s Report

To the Board of Directors and Stockholders of Cathay Real Estate Development Co., Ltd.

Opinion

We have audited the accompanying individual balance sheets of Cathay Real Estate Development Co., Ltd. (the “Company”) as of December 31, 2017 and 2016, and the related individual statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2017 and 2016, and notes to the individual financial statements, including the summary of significant accounting policies.

In our opinion, based on our audits, the individual financial statements referred to above present fairly, in all material respects, the individual financial position of the Company as of December 31, 2017 and 2016, and their individual financial performance and cash flows for the years ended December 31, 2017 and 2016, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Individual Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2017 individual financial statements. These matters were addressed in the context of our audit of the individual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Construction Income Recognition

The Company is primarily engaged in entrusting construction firms in development of public housing and commercial offices for sale and rental. Since the construction income is classified as operating revenue based on sale of goods, the relevant profit and loss are recognized when the ownership transferred. Due to the significance of the construction income in the individual financial statements, with respect to a significant proportion within operating revenue, the construction revenue is determined to be a key audit matter.

The audit procedures we performed regarding construction revenue recognition included but not limited to: evaluate the appropriateness of the construction revenue recognition policies; understand the transaction process and perform tests of control on the effectiveness of control points during internal control assessment; select samples to perform test of details on selected transactions and verify major terms and conditions in the construction contract; perform cut-off test and subsequent procedure on selected transactions.

We also consider the appropriateness of the above revenue disclosure in the note IV and VI in the individual financial statements.

Valuation of Construction Land

The construction land of the Company shall be measured at the lower of cost and net realizable value, and the net realizable value of the construction land is determined based on the management’s judgement and estimation. Due to the significance of construction land in the individual financial statements, the valuation of construction land is determined to be a key audit matter.

The audit procedures we performed regarding construction land valuation included but not limited to: evaluate the appropriateness of the construction land valuation policies; understand the transaction process and perform tests of control on the effectiveness of control points during internal control assessment; select samples to analyze the management valuation process and the key valuation parameters, and assess the reasonableness on the basis of working paper and relevant documentation corresponding to construction land valuation which included in inventories.

We also consider the appropriateness of construction land valuation disclosure under the subsection of the inventories included in the note sections of IV, V and VI in the individual financial statements.

Responsibilities of Management and Those Charged with Governance for the Individual Financial Statements

Management is responsible for the preparation and fair presentation of the individual financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of individual financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the individual financial statements, management is responsible for assessing the ability to continue as a going concern of the Company, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of the Company.

Auditor’s Responsibilities for the Audit of the Individual Financial Statements

Our objectives are to obtain reasonable assurance about whether the individual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these individual financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the individual financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Company. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the individual financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the individual financial statements, including the accompanying notes, and whether the individual financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the individual financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2017 individual financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

March 16, 2018 Ernst & Young Taipei, Taiwan Republic of China

Notice to Readers

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

English Translation of Financial Statements Originally Issued in Chinese

Cathay Real Estate Development Co., Ltd.

Individual Balance Sheets

December 31, 2017 and December 31, 2016

(Expressed in thousands of New Taiwan Dollars)

Assets	Notes	December 31,	2017	December 31,2016
		Amount	�	Amount � $1,280,799 3 2,687,803 6 26,394 - 18,839 - 6,680 - 29,808,683 61 147,626 - 72,852 - 34,049,676 70 1,790,852 4 211,885 - 1,756,241 4 84,896 - 9,477,221 19 786 - 295,869 1 1,050,670 2 14,668,420 30 $48,718,096 100
Current assets Cash and cash equivalents Available-for-sale financial assets, current Notes receivable, net Accounts receivable, net Other receivables Inventories Prepayments Other current assets Total current assets Non-current assets Available-for-sale financial assets, non-current Financial assets measured at cost, non-current Investments accounted for using equity method Property, plant and equipment Investment property, net Intangible assets Deferred tax assets Other non-current assets Total non-curent assets Total assets	IV, VI & VII IV & VI IV & VI IV & VI IV, VI & VII IV & VI IV & VI IV & VI IV & VI IV & VI IV & VI IV & VI VI & VII	$662,729 2,983,349 24,121 56,357 2,545 28,838,278 185,637 74,161	2 6 - - - 62 - -
		32,827,177	70
		1,525,265 211,885 1,505,488 65,471 9,026,310 1,124 578,403 946,622	3 1 3 - 20 - 1 2
		13,860,568	30
		$46,687,745	100

The accompanying notes are an integral part of the financial statements.

English Translation of Financial Statements Originally Issued in Chinese

Cathay Real Estate Development Co., Ltd.

Individual Balance Sheets (continued)

December 31, 2017 and December 31, 2016

(Expressed in thousands of New Taiwan Dollars)

Notes	December 31,	2017	December 31,2016
	Amount	�	Amount � $3,190,000 7 649,855 1 44,038 - 599,582 1 350,511 1 208,200 - 211,444 1 52,097 - 5,758,794 12 11,064,521 23 3,000,000 6 11,388,820 23 8,542 - 277,654 1 14,675,016 30 25,739,537 53 11,595,611 24 10,407 - 3,545,241 7 504,189 1 7,015,437 14 11,064,867 22 307,674 1 22,978,559 47 $48,718,096 100
IV & VI IV & VI IV IV IV & VII IV & VI IV IV & VI IV & VI IV & VI IV, VI & VII IV VI VI VI	$5,469,000 579,744 28,554 338,120 263,853 196,961 91,815 45,403 4,473,657	12 1 - 1 1 - - - 9
	11,487,107	24
	3,000,000 9,163,501 8,542 260,093	6 20 - 1
	12,432,136	27
	23,919,243	51
	11,595,611 18,063 3,847,032 504,189 6,418,942	25 - 8 1 14
	10,770,163	23
	384,665	1
	22,768,502	49
	$46,687,745	100

The accompanying notes are an integral part of the financial statements.

						�	100	(75)	25	-	25	(3)	22		1	-	-	(3)	(2)	20	(3)	17			-	-	-		(1)	(1)	(2)	15
					2016	Amount	$17,408,316	(12,941,175)	4,467,141	41	4,467,182	(587,103)	3,880,079		203,924	8,946	(13,804)	(539,412)	(340,346)	3,539,733	(521,826)	3,017,907			4,440	(682)	(755)		(157,781)	(178,013)	(332,791)	$2,685,116			$2.06
						�	100	(78)	22	-	22	(6)	16		2	-	-	(5)	(3)	13	1	14			-	-	-		-	-	-	14
English Translation of Financial Statements Originally Issued in Chinese	Cathay Real Estate Development Co., Ltd.	Individual Statements of Comprehensive Income	For the years ended 31 December 2017 and 2016	(Expressed in thousands of New Taiwan Dollars, except for share and earnings per share)	2017	Notes Amount Items	Operating revenues IV, VI & VII $10,610,084	Operating costs IV, VI & VII (8,255,507)	Operating profit 2,354,577	Realized on sales 41	Operating profit, net 2,354,618	Operating expenses IV, VI & VII (687,275)	Operating income 1,667,343	Non-operating income and expenses IV, VI & VII	Other income 227,821	Other gains and losses (7,799)	Financial cost (5,342)	Share of profit or loss of subsidiaries, associates and joint ventures IV & VI (510,151)	Total non-operating income and expenses (295,471)	Income before tax 1,371,872	Tax expense (income) IV & VI 72,766	Net Income 1,444,638	Other comprehensive income (loss) VI	Items that will not be reclassified to profit or loss	Remeasurements of defined benefit plans (5,004)	Share of other comprehensive income of subsidiaries, associates and joint ventures (613)	Income tax (benefit) expense relating to items that will not be reclassified 851	Items that may be reclassified subsequently to profit or loss	Unrealized gains or losses from available-for-sale financial assets 34,807	Share of other comprehensive income of subsidiaries, associates and joint ventures 46,950	Other comprehensive income (loss), net of tax 76,991	Total comprehensive income $1,521,629	Earnings per share (in NT dollars)	Basic earnings per share	Net income from continuing operations VI $1.25	The accompanying notes are an integral part of the financial statements.

									Total equity	$25,262,990		-	3,017,907		(332,791)	2,685,116	(4,969,547)	$22,978,559	$22,978,559		-	(1,739,342)	7,656	1,444,638		76,991	1,521,629	$22,768,502
							Remeasurements	of defined benefit	plans	$22,084		-	-		3,003	3,003	-	$25,087	$25,087		-	-	-	-		(4,766)	(4,766)	$20,321
					Other equity	Unrealized gain	or loss from	available-for-sale	financial assets	$551,343		-	-		(157,781)	(157,781)	-	$393,562	$393,562		-	-	-	-		34,807	34,807	$428,369
							Foreign currency	translation	reserve	$67,038		-	-		(178,013)	(178,013)	-	$(110,975)	$(110,975)		-	-	-	-		46,950	46,950	$(64,025)
English Translation of Financial Statements Originally Issued in Chinese	Cathay Real Estate Development Co., Ltd.	Individual Statements of Changes in Equity	For the years ended December 31, 2017 and 2016	(Expressed in thousands of New Taiwan Dollars)	Retained earnings			Unappropriated Total retained	Description Common stock Capital surplus Legal reserve Special reserve earnings earnings	Balance as of January 1, 2016 $16,565,158 $10,407 $3,312,536 $504,189 $4,230,235 $8,046,960	Appropriation of 2015 earnings:	Legal Reserve - - 232,705 - (232,705) -	Net income for the year ended December 31, 2016 - - - - 3,017,907 3,017,907	Other comprehensive income for the year ended	December 31, 2016 - - - - - -	Total comprehensive income - - - - 3,017,907 3,017,907	Reduction of cash capital (4,969,547) - - - - -	Balance as of December 31, 2016 $11,595,611 $10,407 $3,545,241 $504,189 $7,015,437 $11,064,867	Balance as of January 1, 2017 $11,595,611 $10,407 $3,545,241 $504,189 $7,015,437 $11,064,867	Appropriation of 2016 earnings:	Legal Reserve - - 301,791 - (301,791) -	Cash Dividends - - - - (1,739,342) (1,739,342)	Other changes in capital surplus - 7,656 - - - -	Net income for the year ended December 31, 2017 - - - - 1,444,638 1,444,638	Other comprehensive income for the year ended	December 31, 2017 - - - - - -	Total comprehensive income - - - - 1,444,638 1,444,638	Balance as of December 31, 2017 $11,595,611 $18,063 $3,847,032 $504,189 $6,418,942 $10,770,163	Note 1: The employee compensation amounted to NTD $1,376 as of 2017 and $3,547 as of 2016 have been deducted from the statement of comprehensive income.	Note 2: The remuneration of directors amounted to NTD $2,400 as of 2017 and $4,200 as of 2016 has been deducted from the statement of comprehensive income.	The accompanying notes are an integral part of the financial statements.

English Translation of Financial Statements Originally Issued in Chinese

Cathay Real Estate Development Co., Ltd.

Individual Statements of Cash Flows For the years ended December 31, 2017 and 2016

(Expressed in thousands of New Taiwan Dollars)

Items	2017	2016
Cash flow from operating activities Net income before tax Adjustment Items: Depreciation Amoritization Interest expense Interest income Dividends received Share of other comprehensive income of subsidiaries, associates and joint ventures Loss (gain) on disposal of property, plant and equipment Loss (gain) on disposal of investments Cost from disposal of propery Changes in operating assets and liabilities: Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in other receivable Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in accounts payable to related parties Increase (decrease) in other payables Increase (decrease) in advances receipts Increase (decrease) in other current liabilities Cash inflow (outflow) generated from operations Interested received Income taxes paid Net cash flows from (used in) operating activities Cash flow from investing activities Proceeds from disposal of available-for-sale financial assets Acquisition of financial assets at cost Return of share capital from reduction in financial assets at cost Acquisition of investments accounted for using the equity method Acquisition of property, plant and equipment: Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other non-current assets Decrease in other non-current assets Dividends received Net cash flows from (used in) investing activities Cash flow from financing activities Increase in short-term loans Decrease in short-term loans Decrease in short-term notes and bills payable Increase in long-term loans Decrease in long-term loans Decrease in other non-current liabilities Payment of cash dividends Reduction of cash capital Interest paid Net cash flows from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period	$1,371,872 195,348 1,043 5,342 (1,557) (119,656) 510,151 (680) 847 275,552 2,273 (37,518) 4,133 1,200,476 (38,010) (1,309) (15,484) (261,462) (86,658) (4,002) (1,285,137) (6,694)	$3,539,733 193,708 1,725 13,804 (7,348) (126,393) 539,412 (4,050) (7,373) 74,345 5,524 (2,436) 375 5,242,450 (14,500) 30,560 33,236 395,729 126,936 31,483 (2,714,223) 19,459
	1,708,870	7,372,156
	1,559 (328,546)	8,826 (649,908)
	1,381,883	6,731,074
	4,001 - - (276,637) (5,237) 5,353 (1,381) - 104,048 183,231	- (156,861) 10,370 (455,630) (36,252) 22,069 - (338,841) - 152,143
	13,378	(803,002)
	2,279,000 - (70,111) - (2,225,319) (22,565) (1,739,342) - (234,994)	- (5,840,000) (2,298,470) 6,096,835 - (30,433) - (4,969,547) (278,845)
	(2,013,331)	(7,320,460)
	(618,070) 1,280,799	(1,392,388) 2,673,187
	$662,729	$1,280,799

The accompanying notes are an integral part of the financial statements.

Independent Auditor’s Report

To the Board of Directors and Stockholders of Cathay Real Estate Development Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Cathay Real Estate Development Corporation (the “Company”) and its subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2017 and 2016, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”).

In our opinion, based on our audits, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2017 and 2016, and their consolidated financial performance and cash flows for the years ended December 31, 2017 and 2016, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2017 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Construction Income Recognition

The Company and its subsidiaries are primarily engaged in entrusting construction firms in development of public housing and commercial offices for sale and rental. Since the construction income is classified as operating revenue based on sale of goods, the profit and loss are recognized when the ownership transferred. Due to the significance of the construction income in the consolidated financial statements, with respect to a significant proportion within operating revenue, the construction revenue is determined to be a key audit matter from our opinion.

We also consider the appropriateness of the above revenue disclosure in the note IV and VI in the consolidated financial statements.

Valuation of Construction Land

The construction land of the Company and its subsidiaries shall be measured at the lower of cost and net realizable value, and the net realizable value of the construction land is determined based on the management’s judgement and estimation. Due to the significance of construction land in the consolidated financial statements, the valuation of construction land is determined to be a key audit matter.

We also consider the appropriateness of construction land valuation disclosure under the subsection of the inventories included in the note sections of IV, V and VI in the consolidated financial statements.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the ability to continue as a going concern of the Company and its subsidiaries, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of the Company and its subsidiaries.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2017 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Information

We have audited and expressed an unqualified opinion on the parent company only financial statements of the Company as of and for the years ended December 31, 2017 and 2016.

March 16, 2018 Ernst & Young Taipei, Taiwan Republic of China

Notice to Readers

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

English Translation of Financial Statements Originally Issued in Chinese

Cathay Real Estate Development Co., Ltd.

Consolidated Balance Sheets

December 31, 2017 and December 31, 2016

(Expressed in thousands of New Taiwan Dollars)

Assets	Notes	December 31,	2017	December 31,	2016
		Amount	�	Amount	�
Current assets Cash and cash equivalents Available-for-sale financial assets, current Notes receivable, net Accounts receivable, net Other receivables Current tax assets Inventories Prepayments Other current assets Total current assets Non-current assets Available-for-sale financial assets, non-current Financial assets measured at cost, non-current �nvestments accounted for using equity method Property, plant and equipment Investment property, net Intangible assets Deferred tax assets Other non-current assets Total non-current assets Total assets	IV, VI & VII IV & VI IV & VI IV & VI IV & VI IV, VI & VII IV & VI IV & VI IV & VI IV & VI IV & VI IV & VI IV & VI VI & VII	$1,227,465 2,983,349 24,121 267,884 23,988 4 28,850,643 600,779 105,194	2 6 - - - - 54 1 -	$1,671,665 2,687,803 26,668 193,255 23,360 30 29,822,338 477,885 81,045	3 5 - - - - 54 1 -
		34,083,427	63	34,984,049	63
		1,525,265 212,200 11,088 1,136,419 12,983,381 33,008 687,765 3,088,635	3 - - 2 24 - 2 6	1,790,852 212,200 20,613 1,131,539 13,673,166 30,936 401,817 3,184,504	3 - - 2 25 - 1 6
		19,677,761	37	20,445,627	37
		$53,761,188	100	$55,429,676	100

The accompanying notes are an integral part of the financial statements.

English Translation of Financial Statements Originally Issued in Chinese

Cathay Real Estate Development Co., Ltd.

Consolidated Balance Sheets (continued)

December 31, 2017 and December 31, 2016

(Expressed in thousands of New Taiwan Dollars)

December 31,	2017	December 31,	2016
Amount	�	Amount	�
$5,779,000 879,529 28,554 604,318 265,555 444,793 108,513 54,360 4,504,886 59,566	11 2 - 1 - 1 - - 9 -	$3,816,000 969,441 44,038 1,100,546 352,694 364,695 226,551 58,322 5,783,848 -	7 2 - 2 1 1 - - 10 -
12,729,074	24	12,716,135	23
3,000,000 14,475,709 8,542 323,701	6 27 - -	3,000,000 15,781,666 8,542 343,806	5 28 - 1
17,807,952	33	19,134,014	34
30,537,026	57	31,850,149	57
11,595,611 18,063 3,847,032 504,189 6,418,942	21 - 7 1 12	11,595,611 10,407 3,545,241 504,189 7,015,437	21 - 6 1 13
10,770,163 384,665	20 1	11,064,867 307,674	20 1
22,768,502 455,660	42 1	22,978,559 600,968	42 1
23,224,162	43	23,579,527	43
$53,761,188	100	$55,429,676	100

The accompanying notes are an integral part of the financial statements.

						�	100	(76)	24	(6)	18		1	-	(1)	-	-	18	(3)	15			-	-		(1)	(1)	-	(2)	13		16	(1)	15		14	(1)	13
					2016	Amount	$18,695,526	(14,185,529)	4,509,997	(1,107,767)	3,402,230		212,596	(45,861)	(218,002)	(17,955)	(69,222)	3,333,008	(494,763)	2,838,245			3,358	(355)		(274,255)	(157,781)	5,604	(423,429)	$2,414,816		$3,017,907	(179,662)	$2,838,245		$2,685,116	(270,300)	$2,414,816			$2.06
						�	100	(79)	21	(10)	11		2	(1)	(2)	-	(1)	10	-	10			-	-		1	-	-	1	11		12	(2)	10		12	(1)	11
English Translation of Financial Statements Originally Issued in Chinese	Cathay Real Estate Development Co., Ltd.	Consolidated Statements of Comprehensive Income	For the years ended December 31, 2017 and 2016	(Expressed in thousands of New Taiwan Dollars, except for share and earnings per share)	2017	Items Notes Amount	Operating revenues IV, VI & VII $12,270,182	Operating costs IV, VI & VII (9,683,371)	Operating profit 2,586,811	Operating expenses IV, VI & VII (1,245,036)	Operating income 1,341,775	Non-operating income and expense IV, VI & VII	Other income 231,578	Other gains and losses (133,588)	Financial cost (245,368)	Share of profit or loss of subsidiaries, associates and joint ventures IV & VI (2,919)	Total non-operating income and expenses (150,297)	Income before tax 1,191,478	Tax expense (income) IV & VI 50,147	Net income 1,241,625	Other comprehensive income (loss) VI	Items that will not be reclassified to profit or loss	Remeasurements of defined benefit plans (5,717)	Income tax (benefit) expense relating to items that will not be reclassified 972	Items that may be reclassified subsequently to profit or loss	Exchange differences arising from translation of foreign operations 76,162	Unrealized gains or losses from available-for-sale financial assets 34,807	Share of other comprehensive income of subsidiaries, associates and joint ventures (2,504)	Other comprehensive income (loss), net of tax 103,720	Total comprehensive income $1,345,345	Profit (loss) attributable to:	Shareholders of the parent $1,444,638	Non-controlling Interests (203,013)	$1,241,625	Total comprehensive income (loss) attributable to�	Shareholders of the parent $1,521,629	Non-controlling Interests (176,284)	$1,345,345	Earnings per share (in NT dollars)	Basic earnings per share	Net income from continuing operations VI $1.25	The accompanying notes are an integral part of the financial statements.

										Total Equity	$26,059,107		-	-	2,838,245		(423,429)	2,414,816	(4,969,547)	75,151	$23,579,527	$23,579,527		-	(1,739,342)	7,656	1,241,625		103,720	1,345,345	30,976	$23,224,162
								Non-controlling	interests of	equity	$796,117		-	-	(179,662)		(90,638)	(270,300)	-	75,151	$600,968	$600,968		-	-	-	(203,013)		26,729	(176,284)	30,976	$455,660
										Total	$25,262,990		-	-	3,017,907		(332,791)	2,685,116	(4,969,547)	-	$22,978,559	$22,978,559		-	(1,739,342)	7,656	1,444,638		76,991	1,521,629	-	$22,768,502
								Remeasurements	of defined benefit	plans	$22,084		-	-	-		3,003	3,003	-	-	$25,087	$25,087		-	-	-	-		(4,766)	(4,766)	-	$20,321
						Other equity	Unrealized gain or	loss from	available-for-sale	financial assets	$551,343		-	-	-		(157,781)	(157,781)	-	-	$393,562	$393,562		-	-	-	-		34,807	34,807	-	$428,369
English Translation of Financial Statements Originally Issued in Chinese	Cathay Real Estate Development Co., Ltd.	Consolidated Statements of Change in Equity	For the years ended December 31, 2017 and 2016	(Expressed in thousands of New Taiwan Dollars)	Equity attributable to shareholders of the parent	Retained Earnings			Unappropriated Total retained Foreign currency	Legal Reserve Special Reserve earnings earnings translation eserve	$3,312,536 $504,189 $4,230,235 $8,046,960 $67,038		232,705 - (232,705) - -	- - - - -	- - 3,017,907 3,017,907 -		- - - - (178,013)	- - 3,017,907 3,017,907 (178,013)	- - - - -	- - - - -	$3,545,241 $504,189 $7,015,437 $11,064,867 $(110,975)	$3,545,241 $504,189 $7,015,437 $11,064,867 $(110,975)		301,791 - (301,791) - -	- - (1,739,342) (1,739,342) -	- - - - -	- - 1,444,638 1,444,638 -		- - - - 46,950	- - 1,444,638 1,444,638 46,950	- - - - -	$3,847,032 $504,189 $6,418,942 $10,770,163 $(64,025)	The accompanying notes are an integral part of the financial statements.
										Capital Surplus	$10,407		-	-	-		-	-	-	-	$10,407	$10,407		-	-	7,656	-		-	-	-	$18,063
										Common stock	$16,565,158		-	-	-		-	-	(4,969,547)	-	$11,595,611	$11,595,611		-	-	-	-		-	-	-	$11,595,611
										Description	Balance as of January 1, 2016	Appropriation of 2015 earnings:	Legal Reserve	Cash Dividends	Net income for the year ended December 31, 2016	Other comprehensive income for the year ended	December 31, 2016	Total comprehensive income	Reduction of cash capital	Change in non-controlling interests of equity	Balance as of December 31, 2016	Balance as of January 1, 2017	Appropriation of 2016 earnings:	Legal Reserve	Cash Dividends	Other changes in capital surplus	Net income for the year ended December 31, 2017	Other comprehensive income for the year ended	December 31, 2017	Total comprehensive income	Change in non-controlling interests of equity	Balance as of December 31, 2017
																						30

English Translation of Financial Statements Originally Issued in Chinese

Cathay Real Estate Development Co., Ltd. Consolidated Statements of Cash Flows

For the years ended December 31, 2017 and 2016

(Expressed in thousands of New Taiwan Dollars)

Items	2017	2016
Cash flow from operating activities Net income before tax Adjustment Items: Depreciation Amoritization Interest expense Interest income Dividends received Share of other comprehensive income of subsidiaries, associates and joint ventures Loss (gain) on disposal of property, plant and equipment Loss (gain) on disposal of intangible assets Loss (gain) on disposal of investments Cost on disposal of propery Changes in operating assets and liabilities: Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in accounts payable to related parties Increase (decrease) in other payables Increase (decrease) in advances receipts Increase (decrease) in other current liabilities Cash inflow (outflow) generated from operations Interested received Income taxes paid Net cash flows from (used in) operating activities Cash flow from investing activities Proceeds from disposal of available-for-sale financial assets Acquisition of financial assets at cost Return of share capital from reduction in financial assets at cost Acquisition of property, plant and equipment: Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of investment property Increase in other non-current assets Decrease in other non-current assets Dividends received Net cash flows from (used in) investing activities Cash flow from financing activities Increase in short-term loans Decrease in short-term loans Decrease in short-term notes and bills payable Increase in long-term loans Decrease in long-term loans Increase in other non-current liabilities Decrease in other non-current liabilities Payment of cash dividends Reduction of cash capital Interest paid Change in non-controlling interests of equity Net cash flows from (used in) financing activities Effect of currency exchange rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period	$1,191,478 520,851 17,503 245,368 (4,338) (119,656) 2,919 (449) - 847 275,552 2,547 (74,629) (651) 1,201,766 (122,887) (24,149) (15,484) (496,111) (87,139) 79,033 (1,278,962) (3,962)	$3,333,008 485,610 19,810 218,002 (12,823) (126,393) 17,955 73 1,320 (7,373) 74,345 5,866 (36,274) (2,411) 5,245,647 (39,818) 23,648 33,236 395,051 113,008 (88,775) (2,699,347) 24,609
	1,309,447	6,977,974
	4,363 (352,841)	14,252 (656,841)
	960,969	6,335,385
	4,001 - - (164,281) 5,356 (17,942) - - 95,869 119,656	- (157,175) 10,370 (152,323) 22,176 (12,205) (647,059) (156,477) - 126,393
	42,659	(966,300)
	1,963,000 - (89,912) - (1,246,391) - (25,823) (1,739,342) - (466,718) 30,976	- (5,787,000) (2,318,313) 6,198,245 - 331 - - (4,969,547) (483,922) 75,151
	(1,574,210)	(7,285,055)
	126,382	91,555
	(444,200) 1,671,665	(1,824,415) 3,496,080
	$1,227,465	$1,671,665

The accompanying notes are an integral part of the financial statements.

( 2) Adoption of Proposal for 2017 Profit Distribution.

[Proposed by the Board of Directors]

Explanation:

The Company’s 2017 Profit Distribution, has according to Article 31 of the Articles of Incorporation, is scheduled to distribute NT$ 1.2 cash dividend per share, and the undistributed profit from the most recent years shall be distributed first. With regards to the above cash dividend distribution, the total dividend distributed to the individual shareholders shall be rounded up to the nearest "yuan," and the difference shall be treated as company expense.
Upon resolution at the annual meeting of the shareholders, the board of directors is authorized to set the ex-dividend date and adjust the dividend yield based on actual circumstances.
For table of profit distribution, please refer to page 33 of this manual.

Resolution:

Cathay Real Estate Development Co., Ltd. EARNINGS DISTRIBUTION TABLE OF THE 2017

Unit: NT$ Dollar

	Unit: NT$ Dollar
Item	Amount
Retained earnings at the beginning	4,974,304,089
Add: Net income of 2017	1,444,638,426
Less: Legal reserves	144,463,843
Distributable earnings	6,274,478,672
Distributable items:
Shareholders' dividends - Cash	1,391,473,271
Unappropriated retained earnings	4,883,005,401
Note: For the Earnings Distribution, NT$ 1.2 cash dividend is to be distributed per share, where undistributed earnings from the most recentyears shall be distributed first.

Chairman: Ching-kuei Chang President: Hung-Ming Lee Chief Accountant: Yo-Chi Lo

3. Matters for Discussion

(1) Proposal for the amendment of the Company's Rules of Procedure for Shareholder Meetings.

[Proposed by the Board of Directors]

Explanation:

In line with the setup of the audit committee, regulations related to the supervisors are deleted.
For the amendment comparison table, please refer to page 35 to 37 of this manual.

Resolution:

Cathay Real Estate Development Co., Ltd. Amendment Comparison Table for Rules of Procedure for Shareholder Meetings

Amended Articles		Current Articles	Explanation
Article 5 (Attendance of Annual Meeting of Shareholders) (Paragraphs 1, 2 and 3 omitted) The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slip, voting slip, and other meeting materials. Where there is an election of directors, a voting ballot shall also be furnished. When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders' meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.		Article 5 (Attendance of Annual Meeting of Shareholders) (Paragraphs 1, 2 and 3 omitted) The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slip, voting slip, and other meeting materials. Where there is an election of directors or supervisors, a voting ballot shall also be furnished. After appointing the audit committee, the rules of procedure with regards to supervisors shall apply mutatis mutandis to the audit committee. When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate onlyoneperson to	In line with the setup of the audit committee, regulations related to the supervisors are deleted.

Amended Articles	Current Articles	Explanation
	represent it in the meeting.
Article 9 (Agenda Discussions) (Paragraphs 1, 2 and 3 omitted) The Chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the Chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the Chair may announce the discussion closed and call for a vote,and decide on the voting pattern and sequence.	Article 9 (Agenda Discussions) (Paragraphs 1, 2 and 3 omitted) The Chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the Chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the Chair may announce the discussion closed and call for a vote.	Text to be added for agenda discussion for comprehensiveness.
Article 12: (Elections) The election of directors at a shareholders' meeting shall be held in accordance with the applicable election and appointment rules of the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes	Article 12: (Elections) The election of directors orsupervisorsat a shareholders' meeting shall be held in accordance with the applicable election and appointment rules of the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors	In line with the setup of the audit committee, regulations related to the supervisors are deleted.

	Amended Articles		Current Articles	Explanation
	with which they were elected. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. However, if a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.	andsupervisorsand the numbers of votes with which they were elected. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. However, if a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.
	Article 18: This Rule was established on 27 February 1965, and its 1st amendment was made on 23 May 1998, 2nd amendment on 16 May 2002, 3rd amendment on 14 June 2013, 4th amendment on 09 June 2015, 5th amendment on 08 June 2016, andthe 6th amendment on 08 June 2018.	Article 18: This Rule was established on 27 February 1965, and its 1st amendment was made on 23 May 1998, 2nd amendment on 16 May 2002, 3rd amendment on 14 June 2013, 4th amendment on 09 June 2015, and the 5th amendment on 08 June 2016.		Amendment date added.

(2) Proposal for the amendment of the Company's Articles of Incorporation.

[Proposed by the Board of Directors]

Explanation:

In line with the setup of the audit committee, regulations related to the supervisors are deleted, and the text is amended accordingly.
For the amendment comparison table, please refer to page 39 to 43 of this manual.

Resolution:

Cathay Real Estate Development Co., Ltd. Amendment Comparison Table for the Articles of Incorporation

	Incorporation
Amended Articles	Current Articles	Explanation
Article 18: (Paragraphs 1, 2 and 3 omitted) The Company may, by resolution of the board of directors, purchase liability insurance for its directors or important employees during their term of duty, for compensation they are liable to during their performance of duties, according to the law. The board of directors may authorize the Chairman of the Board to handle the amount and renewal of the liability insurance.	Article 18: (Paragraphs 1, 2 and 3 omitted) The Company may, by resolution of the board of directors, purchase liability insurance for its directorsand supervisors or important employees during their term of duty, for compensation they are liable to during their performance of duties, according to the law. The board of directors may authorize the Chairman of the Board to handle the amount and renewal of the liability insurance.	In line with the setup of the audit committee, regulations related to the supervisors are deleted.
Chapter 5 Supervisor Article 25 (Deleted)	Chapter 5 Supervisor Article 25 The Company shall have two supervisors elected in the shareholders meeting from among the persons with disposing capacity. The qualifications and election, and election methods of the Company's supervisors, shall be in accordance with the

	Amended Articles		Current Articles	Explanation
			provisions of the Company Act, relevant laws and regulations and competent authority. Regulations in the Articles of Incorporation with regards to supervisors, shall cease to apply upon establishment of the Audit Committee by the Company.
	Article 26 (Deleted)		Article 26 The term of office of a supervisor is three years, and he/she may be eligible for re-election. In case no election of new supervisors is effected after expiration of the term of office of the existing supervisor, the out-going supervisor may extend their period of duty until new supervisors have been elected and assumed office. In case all supervisors are discharged, the board of directors shall, within 60 days, convene a special shareholders meeting to elect new supervisors. The term of office of the supervisor elected through by-election, shall not be more than the remaining term of the former	In line with the setup of the audit committee, regulations related to the supervisors are deleted.

Amended Articles	Current Articles	Explanation
	supervisor. The board of directors is authorized to issue compensation to the Company's supervisors for their terms in office, by referencing the Company's business status and industry standards.
Article 27 (Deleted)	Article 27 The Company may appoint one standing supervisor, to be selected among the supervisors. Besides executing monitoring duties according to the laws, supervisors may attend the meetings of the board of directors, but have no voting rights.	In line with the setup of the audit committee, regulations related to the supervisors are deleted.
Article 28 (Deleted)	Article 28 The power and authority of the supervisors are as follows: 1. Investigation of the Company's financial status. 2. Examination of the Company's accounting books and documents. 3. Supervision of the Company's business activities. 4. Monitoring of the execution of work by employees, and reporting

Amended Articles	Current Articles	Explanation
	of any illegal conduct. 5. Other vested power and authority according to the law.
Chapter5Manager Article25 The Company may have managers, whose appointment, dismissal and remuneration shall be handled in accordance with the Company Act and relevant regulations.	Chapter6 Manager Article 29 The Company may have managers, whose appointment, dismissal and remuneration shall be handled in accordance with the Company Act and relevant regulations.	Adjustment of Chapter and Article
Chapter6Accounting Article26 The Company's fiscal year is from 1 January to 31 December for each year. When the fiscal year has closed, the board of directors shall prepare the following statements, and presentthese sataements at the shareholders meeting for approval according to the regulations. 1. Business report. 2. Financial statements. 3. Proposals of profit distribution or deficit compensation.	Chapter7Accounting Article30 The Company's fiscal year is from 1 January to 31 December for each year. When the fiscal year has closed, the board of directors shall prepare the following statements, and submit these sataements to the supervisors for audit 30 days before the shareholders'meeting, and then presentthese statements at the shareholders meeting for approval. 1. Business report. 2. Financial statements. 3. Proposals of profit distribution or deficit compensation.	1. Adjustment of Chapter and Article 2. In line with the setup of the audit committee, regulations related to the supervisors are deleted.

Amended Articles	Current Articles	Explanation
Article27 (Articles content omitted)	Article31 (Articles content omitted)	Adjustment of Article
Chapter7Supplementary Provisions Article28 (Articles content omitted)	Chapter8Supplementary Provisions Article32 (Articles content omitted)	Adjustment of Chapter and Article
Article29 The Articles of Incorporation were established on 14 September 1964, and the 1st amendment was made on 27 February 1965 (the following omitted), 43rd amendment on 08 June 2016, andthe 44th amendment on 08 June 2018.	Article33 The Articles of Incorporation were established on 14 September 1964, and the 1st amendment was made on 27 February 1965 (the following omitted) and the 43rd amendment on 08 June 2016.	In line with the amendment of the Articles of Incorporation, the Article is amended and the amendment date is added.

(3) Proposal for the amendment of the Company's Procedures for Election of Directors and Supervisors.

[Proposed by the Board of Directors]

Explanation:

In line with the setup of the audit committee, regulations related to the supervisors are deleted, and the text is amended accordingly.
For the amendment comparison table, please refer to page 45 to 49 of this manual.

Resolution:

Cathay Real Estate Development Co., Ltd. Amendment Comparison Table for Election of Directors and Supervisors

Amended Articles	Current Articles	Explanation
Cathay Real Estate Development Co., Ltd., Procedures for Election of Directors	Cathay Real Estate Development Co., Ltd., Procedures for Election of Directors andSupervisors	In line with the setup of the audit committee, regulations related to the supervisors are deleted.
Article 1 Except as otherwise provided by law or by the Articles of Incorporation, elections of the Company's directors shall be conducted in accordance with these Procedures.	Article 1 Except as otherwise provided by law or by the Articles of Incorporation, elections of the Company's directors andsupervisors shall be conducted in accordance with these Procedures.
Article 2 Election of the Company's directors will utilize the candidate nomination system, where directors are elected from the directors nomination list during the shareholders meeting. Elections of directors and supervisors will utilize a cumulative voting system, one share shall have the same voting rights as the number of directors to be elected, and the total number of votes per share may be consolidated for election of one candidate or it maybe split for	Article 2 Election of the Company's directors will utilize the candidate nomination system, where directors are elected from the directors nomination list during the shareholders meeting. Elections of directorsand supervisors will utilize a cumulative voting system, one share shall have the same voting rights as the number of directorsand supervisors to be elected, and the total number of votes per share may be consolidated for election of one candidate or it maybe

Amended Articles		Current Articles	Explanation
election of two or more candidates.		split for election of two or more candidates. Upon establishment of the Audit Committee by the Company, regulations applicable to supervisors in these Procedures shall apply to the Audit Committee.
Article 4 Elections of the Company's directors shall be conducted in accordance with the candidate nomination system and procedures established in Article 192-1 of the Company Act. If the dismissal of a director results in a board with fewer than five directors, the Company shall hold a by-election at the next shareholders meeting. When the number of directors falls short by one-third of the total number prescribed in the Company's Articles of Incorporation, a special shareholders meeting shall be held within 60 days from the date of this occurrence to hold a by-election. When the number of independent directors falls		Article 4 Elections of the Company's directors shall be conducted in accordance with the candidate nomination system and procedures established in Article 192-1 of the Company Act. The Company shall review the qualifications, education, work experience and the existence of any other matters set forth in Article 30 of the Company Act with respect to the nominee directors. Additional documents for proof of qualifications shall not be arbitrarily added. The review results shall be provided to the shareholders as a reference for electing competent directors. If the dismissal of a director results in a board with fewer than five	In accordance with the candidate nomination system and procedures for directors set out in Article 192-1 of the Company Act.

Amended Articles	Current Articles	Explanation
below that required by law, a by-election shall be held at the next shareholders meeting. When the independent directors are dismissed en masse, a special shareholders meeting shall be called within 60 days from the date of this occurrence to hold a by-election.	directors, the Company shall hold a by-election at the next shareholders meeting. When the number of directors falls short by one-third of the total number prescribed in the Company's Articles of Incorporation, a special shareholders meeting shall be held within 60 days from the date of this occurrence to hold a by-election. When the number of independent directors falls below that required by law, a by-election shall be held at the next shareholders meeting. When the independent directors are dismissed en masse, a special shareholders meeting shall be called within 60 days from the date of this occurrence to hold a by-election.
Article 5 The number of directors will be as specified in the Company's Articles of Incorporation, with voting rights separately calculated for independent and non-independent director positions. Those receiving ballots representingthe	Article 5 The number of directors andsupervisors will be as specified in the Company's Articles of Incorporation, with voting rights separately calculated for independent and non-independent director positions. Those receiving	In line with the setup of the audit committee, regulations related to the supervisors are deleted.

Amended Articles	Current Articles	Explanation
highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the Chair drawing lots on behalf of any person not in attendance.	ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the Chair drawing lots on behalf of any person not in attendance.
Article 10 The voting results shall be calculated on-site immediately after the voting, and the results of the calculation, including the list of elected directors and their respective votes shall be announced by the Chair on-site. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. However, if a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the	Article 10 The voting results shall be calculated on-site immediately after the voting, and the results of the calculation, including the list of elected directors andsupervisors and their respective votes shall be announced by the Chair on-site. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. However, if a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained	In line with the setup of the audit committee, regulations related to the supervisors are deleted.

Amended Articles	Current Articles	Explanation
litigation.	until the conclusion of the litigation.

(4) Proposal for the amendment of the Company's Procedures for Acquisition or Disposal of Assets.

[Proposed by the Board of Directors]

Explanation:

With the setting of the audit committee,As such, it is proposed that regulations related to supervisors be removed to be in line with the amendment of "Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
For the amendment comparison table, please refer to page 51 to 73 of this manual.

Resolution:

Cathay Real Estate Development Co., Ltd. Procedures for Acquisition or Disposal of Assets Articles amendment comparison table

Amended Articles	Current Articles	Explanation
Article 4 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the competent authority's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1. Acquisition or disposal of realproperty from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of the company's total assets, or NT$300 million or more. However, this shall not apply to trading of government bonds or bonds underrepurchase and resale agreements,of	Article 4 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the competent authority's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1. Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of the company's total assets, or NT$300 million or more. However, this shall not apply to trading of government bonds or bonds under repurchase	In accordance with the amendment of Article 30 of "Regul ations Governing the Acquisition and Disposal of Assets by Public Companies" on 09.02.2017, Subparagraphs 1, 4, 5, 6 and 7 of Paragraph 1 of Article 4 are amended, where the standard forpublic annou ncement and regulatory filing for business use equipment transaction with unrelated parties is relaxed.

	Amended Articles		Current Articles	Explanation
	money market fundsissued by securities investment trust enterprises. 2. Merger, demerger, acquisition, or transfer of shares. 3. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. 4. Where the type of asset acquired or disposed is equipment for business use, the trading counterparty is not a related party, and the transaction amount is more thanNT$1 billion. 5. Acquisition or disposal of real property by the Company for construction use, where the trading counterparty is not a related party, and the transaction amount reaches NT$500 million. 6. Where land is acquired under an arrangement to engage others to build on the Company's own land, engage others to build on rented land, joint construction and allocation of housingunits, joint		and resale agreements, or subscription orredemption ofdomestic money market funds. 2. Merger, demerger, acquisition, or transfer of shares. 3. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. 4.Where an asset transaction other than any of those referred to in the precedingthree subparagraphs, or an investment in the mainland China area reaches 20% or more of paid-in capital or NT$300 million. However, this shall not apply to the followingcircumstances`：` (1)Trading of government bonds. (2)Trading of bonds under repurchase/resale agreements, or subscription or redemptionof domestic money market funds. (3)Where the type of asset acquired or disposed is equipment for business use,the trading

	Amended Articles	Current Articles	Explanation
	construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction reaches NT$500 million. 7. Where an asset transaction other than any of those referred to in the preceding six subparagraphs, or an investment in the mainland China area reaches 20% or more of paid-in capital or NT$300 million. However, this shall not apply to the following circumstances: (1) Trading of government bonds. (2) Trading of bonds under repurchase/resale agreements, or subscription or redemption of money market funds issued by securities investment trust enterprises. Subsidiary's public announcement and reporting: 1. Acquisitions and disposals of assets by a subsidiaryshall comply	counterparty is not a related party, and the transaction amount isless thanNT$500 million. (4) Acquisition or disposal of real property by the Company for construction use, where the trading counterparty is not a related party, and the transaction amount isless than NT$500 million. (5)Where land is acquired under an arrangement to engage others to build on the company's own land, engage others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction islessthan NT$500 million. Subsidiary's public announcement and reporting: 1. Acquisitions and disposals of assets by a subsidiary shall comply with Article 6.

Amended Articles	Current Articles	Explanation
with Article 6. 2. If the subsidiary is not a local publicly listed company, and has information to be publicly announced as stated in the subparagraphs of the preceding paragraph, the Company shall be notified immediately on the date of occurrence, for it to make a public announcement and report the information in accordance to the regulations. 3. The paid-in capital or total assets of the Company shall be the standard for determining whether or not a subsidiary referred to in the preceding paragraph in the event the type of transaction specified therein reaches 20% of paid-in capital or 10% of the totalassets.	2. If the subsidiary is not a local publicly listed company, and has information to be publicly announced as stated in the subparagraphs of the preceding paragraph, the Company shall be notified immediately on the date of occurrence, for it to make a public announcement and report the information in accordance to the regulations. 3.The paid-in capital or total assets of the Company shall be the standard for determining whether or not a subsidiary referred to in the preceding paragraph in the event the type of transaction specified therein reaches 20% of paid-in capital or 10% of the total assets.
Article 5 For acquiring or disposing of assets, the Company shall keep all relevant contracts, meeting minutes, log books, appraisal reports and certified public accountant, attorney, and securities underwriter opinions at the Company,	Article 5 For acquiring or disposing of assets, the Company shall keep all relevant contracts, meeting minutes, log books, appraisal reportsand certified public accountant, attorney, and securities underwriter opinions at the	In accordance with the amendment of Article 30 of"Regulations Governing the Acquisition and

Amended Articles	Current Articles	Explanation
where they shall be retained for 5 years except where another Act provides otherwise. The transaction amounts above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to theyearprecedingthe	Company, where they shall be retained for 5 years except where another Act provides otherwise. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to theyearprecedingthe	Disposal of Assets by Public Companies" on 09.02.2017, Paragraph 6 of Article 5 is amended, stipulating the deadline for the Company in making public announcement for error or omission.

Amended Articles	Current Articles	Explanation
date of occurrence of the current transaction. Items duly announced in accordance with this Procedure need not be counted toward the transaction amount. "Date of occurrence" as used in the preceding paragraphs refers to date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier. However, for investments for which approval by the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by itself and any subsidiaries that are not domestic public companies and enter the information in theprescribed format	date of occurrence of the current transaction. Items duly announced in accordance with this Procedure need not be counted toward the transaction amount. "Date of occurrence" as used in the preceding paragraphs refers to date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier. However, for an investment for which approval by the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by itself and any subsidiaries that are not domestic public companies and enter the information in theprescribed format

	Amended Articles	Current Articles	Explanation
	into the information reporting website designated by the competent authority by the 10th day of each month. When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission. Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the regulation, a public report of relevant information shall be made on the information reporting website designated by the competent authority within 2 days counting inclusively from the date	into the information reporting website designated by the competent authority by the 10th day of each month. When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety. Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the regulation, a public report of relevant information shall be made on the information reporting website designated by the competent authority within 2 days counting inclusively from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the

	Amended Articles	Current Articles	Explanation
	of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction. 2. The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.	original transaction. 2. The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.
	Article 6 In acquiring or disposing of real property or equipment where the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:	Article 6 In acquiring or disposing of real property or equipment where the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with a governmentinstitution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:	In accordance with the amendment of "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" on 09.02.2017, an amendment to the text is made accordingly.

Amended Articles	Current Articles	Explanation
1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in	1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in

Amended Articles	Current Articles	Explanation
accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: ①The discrepancy between the appraisal result and the transaction amount is 20% or more of the transaction amount. ②The discrepancy between the appraisal results of two or more professional appraisers is 10% or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date. However, if the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional professional appraiser.	accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: ①The discrepancy between the appraisal result and the transaction amount is 20% or more of the transaction amount. ②The discrepancy between the appraisal results of two or more professional appraisers is 10% or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date. However, if the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional professional appraiser.

Amended Articles	Current Articles	Explanation
5. Except where a limited price, specified price, or special price is employed by the Company as the reference basis for the transaction price, if an appraisal report cannot be obtained in time and there is a legitimate reason for the delay, the report, and the certified public accountant's opinion under Subparagraph 3 of the preceding paragraph, shall be obtained within 2 weeks counting inclusively from the date of occurrence. The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the Company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price, and if the dollar amount of the transaction is 20% of the Company's paid-in capital or NT$300 million or more, except in transactions with a governmentagency, the Companyshall	5. Except where a limited price, specified price, or special price is employed by the Company as the reference basis for the transaction price, if an appraisal report cannot be obtained in time and there is a legitimate reason for the delay, the report, and the certified public accountant's opinion under Subparagraph 3 of the preceding paragraph, shall be obtained within 2 weeks counting inclusively from the date of occurrence. The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the Company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price, and if the dollar amount of the transaction is 20% of the Company's paid-in capital or NT$300 million or more, except in transactions with a governmentinstitution, the Companyshall

Amended Articles	Current Articles	Explanation
additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the certified public accountant needs to use the report of an expert as evidence, the certified public accountant shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the competent authority. Where the Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20% or more of paid-in capital or NT$300 million or more, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the	additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the certified public accountant needs to use the report of an expert as evidence, the certified public accountant shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the competent authority. Where the Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20% or more of paid-in capital or NT$300 million or more, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the

Amended Articles	Current Articles	Explanation
reasonableness of the transaction price; the certified public accountant shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or certified public accountant's opinion. When the Company engages in any acquisition or disposal of assets from or to a related party, if the transaction amount reaches 10% or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a certified public accountant's opinion in compliance with this provision. The calculation of the transaction amounts referred to in the Article shall be done in accordance with Article 5,	reasonableness of the transaction price; the certified public accountant shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or certified public accountant's opinion. When the Company engages in any acquisition or disposal of assets from or to a related party, if the transaction amount reaches 10% or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a certified public accountant's opinion in compliance with this provision. The calculation of the transaction amounts referred to in the Article shall be done in accordance with Article 5,

	Amended Articles		Current Articles	Explanation
	Paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a certified public accountant's opinion has been obtained need not be counted toward the transaction amount.		Paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a certified public accountant's opinion has been obtained need not be counted toward the transaction amount.
	Article 7 When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20% or more of paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription orrepurchase of money market funds issued by securities investment trust enterprises,the Company		Article 7 When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20% or more of paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscriptionorredemption of domestic money market funds, the Company may not proceed to enter into a transaction contract or	1.In accordance with the amendment of "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" on 09.02.2017, an amendment to the text is made accordingly. 2. In line with the setup of the audit committee, an amendment to the text is made accordingly.

	Amended Articles		Current Articles	Explanation
	may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by theaudit committee and passed by the board of directors: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a trading counterparty. 3. With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 8 and Article 9. 4. The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party. 5. Monthly cash flow forecasts for the year commencing from the anticipated month of signingof the contract,and		make a payment until the following matters have been approved bythe board of directors and recognized by the supervisors: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a trading counterparty. 3. With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 8 and Article 9. 4. The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party. 5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity

	Amended Articles		Current Articles	Explanation
	evaluation of the necessity of the transaction, and reasonableness of the funds utilization. 6. An appraisal report from a professional appraiser or a certified public accountant's opinion obtained in compliance with the preceding article. 7. Restrictive covenants and other important stipulations associated with the transaction. If approval by more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 5, Paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of		of the transaction, and reasonableness of the funds utilization. 6. An appraisal report from a professional appraiser or a certified public accountant's opinion obtained in compliance with the preceding article. 7. Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding Paragraph shall be made in accordance with Article 5, Paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directorsand recognized by the supervisors need not be counted toward the transaction amount. With respect to the acquisition or disposal of business use equipment between the Company and its parent or subsidiaries, the Company's board of directors may pursuant

Amended Articles		Current Articles	Explanation
occurrence of the current transaction. Items that have been approved by the board of directors need not be counted toward the transaction amount. With respect to the acquisition or disposal of business use equipment between the Company and its parent or subsidiaries, the Company's board of directors may pursuant to the Procedure, delegate the board chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting. When a matter is submitted for discussion by the board of directors pursuant to Paragraph 1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.		to the Procedure, delegate the board chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting. Where the position of independent director has been created,when a transaction is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Amended Articles	Current Articles	Explanation
Article 10 Where the Company acquires real property from a related party and the results of appraisals conducted in accordance with Article 8 and Article 9 are uniformly lower than the transaction price, the following steps shall be taken: 1. A special reserve shall be set aside in accordance with Article 41, Paragraph 1 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, Paragraph 1 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of the Company's equity stake in the other company.	Article 10 here the Company acquires real property from a related party and the results of appraisals conducted in accordance with Article 8 and Article 9 are uniformly lower than the transaction price, the following steps shall be taken: 1. 1. A special reserve shall be set aside in accordance with Article 41, Paragraph 1 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, Paragraph 1 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of the Company's equity stake in the other company.	In line with the setup of the audit committee, an amendment to the text is made accordingly.

	Amended Articles		Current Articles	Explanation
	2.Members of the audit committeeshall comply with Article 218 of the Company Act. 3.Actions taken pursuant to Subparagraph 1 and Subparagraph 2 shall be reported to a shareholders' meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company having set aside a special reserve under the preceding paragraph, may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the competent authority has given its consent. When the Company obtains real property from a relatedparty,it shall	2.Supervisorsshall comply with Article 218 of the Company Act. 3. Actions taken pursuant to Subparagraph 1 and Subparagraph 2 shall be reported to a shareholders' meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company having set aside a special reserve under the preceding paragraph, may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the competent authority has given its consent. When the Company obtains real property from a related party, it shall also comply with the precedingtwoparagraphs

Amended Articles	Current Articles	Explanation
also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm's length transaction.	if there is other evidence indicating that the acquisition was not an arm's length transaction.
Article 14 The Company engaging in derivatives trading shall establish a log book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates, and the matters required to be carefully evaluated under Subparagraph 4 of Article 12 and Subparagraph 2 of Paragraph 1, and Subparagraph 1 of Paragraph 2, of Article 13 shall be recorded in detail in the log book. The Company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If	Article 14 The Company engaging in derivatives trading shall establish a log book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates, and the matters required to be carefully evaluated under Subparagraph 4 of Article 12 and Subparagraph 2 of Paragraph 1, and Subparagraph 1 of Paragraph 2, of Article 13 shall be recorded in detail in the log book. The Company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading,`and`	In line with the setup of the audit committee, an amendment to the text is made accordingly.

	Amended Articles	Current Articles	Explanation
	any material violation is discovered,members of the audit committeeshall be notified in writing.	prepare an audit report. If any material violation is discovered,all supervisors shall be notified in writing.
	Article 15 The Company conducting a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a certified public accountant, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger of a subsidiary in which it directly or indirectly holds 100% of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100% of the respective	Article 15 The Company conducting a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a certified public accountant, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage.	In accordance with the amendment of "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" on 09.02.2017, the merger by a parent of a subsidiary in which it directly or indirectly holds 100% of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100% of the respective subsidiaries’ issued shares or authorized capital is an organizational restructuring,

Amended Articles	Current Articles	Explanation
subsidiaries`’`issued shares or authorized capital.		an expert opinion is not required for amendment to a merger.
capital.
Article 27 This procedureshall be enforced upon approval by more than half of all audit committee members and submitted to the board of directors for a resolution; the same applies when the procedures are amended. If approval of more than half of all audit committee members as required is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. When the procedures for the acquisition and disposal of assets are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or	Article 27 After theprocedures have been approved by the board of directors, they shall be submitted to each supervisor, and then to a shareholders'meeting for approval; the same applies when the procedures are amended. If any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to each supervisor. Where the position of independent directorhas been created, when the procedures for the acquisition and disposal of assets are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes	In line with the setup of the audit committee, an amendment to the text is made accordingly.

Amended Articles	Current Articles	Explanation
expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.	of the board of directors meeting.

(5) Proposal for the amendment of the Company's Procedures for Lending of Capital and Endorsements.

[Proposed by the Board of Directors]

Explanation:

In line with the setup of the audit committee, regulations related to the supervisors are deleted.
For the amendment comparison table, please refer to page 75 to 79 of this manual.

Resolution:

Cathay Real Estate Development Co., Ltd. Procedures for Lending of Capital and Endorsements. Articles amendment comparison table

	Amended Articles		Current Articles	`Explanation:`
	Article 11 The Operations Management Department shall prepare a memorandum book for the Company's fund-loaning activities, and truthfully record the following information: borrower, amount, date of approval by the board of directors, lending/borrowing date, loan duration, and interest calculation method, to be carefully evaluated and reported periodically. The Company's internal auditors shall audit the Operational Procedures for Loaning Funds to Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify the members of the audit committeein writing of any material violation found.		Article 11 The Operations Management Department shall prepare a memorandum book for the Company's fund-loaning activities, and truthfully record the following information: borrower, amount, date of approval by the board of directors, lending/borrowing date, loan duration, and interest calculation method, to be carefully evaluated and reported periodically. The Company's internal auditors shall audit the Operational Procedures for Loaning Funds to Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notifyall the supervisors in writing of any material violation found.	In line with the setup of the audit committee, an amendment to the text is made accordingly.
	Article 12		Article 12	In line with the

	Amended Articles	Current Articles	`Explanation:`
	If, as a result of a change in circumstances, an entity for which a loan is made does not meet the requirements of the "Operational Procedures on Loaning of Funds and Making of Endorsements/Guarantees" or the loan balance exceeds the limit, the management authority shall adopt rectification plans and submit the rectification plans tomembers of the audit committee,and shall complete the rectification according to the timeframe set out in theplan.	If, as a result of a change in circumstances, an entity for which a loan is made does not meet the requirements of the "Operational Procedures on Loaning of Funds and Making of Endorsements/Guarantees" or the loan balance exceeds the limit, the management authority shall adopt rectification plans and submit the rectification plans toall the supervisors, and shall complete the rectification according to the timeframe set out in the plan.	setup of the audit committee, an amendment to the text is made accordingly.
	Article 18 For endorsement/guarantee activities, besides applying for a chop according to the prescribed procedure, the Operations Management Department shall prepare a memorandum book and record in detail the following information: endorsement/guarantee matter, enterprise name for which the endorsement/guarantee is made, risk assessment results, endorsement/guarantee amount,date ofpassage by	Article 18 For endorsement/guarantee activities, besides applying for a chop according to the prescribed procedure, the Operations Management Department shall prepare a memorandum book and record in detail the following information: endorsement/guarantee matter, enterprise name for which the endorsement/guarantee is made, risk assessment results, endorsement/guarantee amount,date ofpassage by	In line with the setup of the audit committee, an amendment to the text is made accordingly.

	Amended Articles		Current Articles	`Explanation:`
	the board of directors or of authorization by the chairman of the board, endorsement/guarantee date, content of collateral, and conditions and date for discharging endorsement/guarantee responsibilities, to be carefully evaluated and reported periodically. Documents such as negotiable instruments and agreements shall be held for safekeeping by the management authority. The Company's internal auditors shall audit the Operational Procedures for Endorsements/Guarantees for Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notifymembers of the audit committeein writing of any material violation found.		the board of directors or of authorization by the chairman of the board, endorsement/guarantee date, content of collateral, and conditions and date for discharging endorsement/guarantee responsibilities, to be carefully evaluated and reported periodically. Documents such as negotiable instruments and agreements shall be held for safekeeping by the management authority. The Company's internal auditors shall audit the Operational Procedures for Endorsements/Guarantees for Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notifyall the supervisors in writing of any material violation found.
	Article 20 If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of		Article 20 If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of	In line with the setup of the audit committee, an amendment to the text is made accordingly.

	Amended Articles		Current Articles	`Explanation:`
	"Operational Procedures on Loaning of Funds and Making of Endorsements/Guarantees" or the amount exceeds the limit, the management authority shall adopt rectification plans and submit the rectification plans tomembers of the committee,and shall complete the rectification according to the timeframe set out in theplan.		"Operational Procedures on Loaning of Funds and Making of Endorsements/Guarantees " or the amount exceeds the limit, the management authority shall adopt rectification plans and submit the rectification plans toall the supervisors, and shall complete the rectification according to the timeframe set out in theplan.
	Article 28 This procedure shall be approved with the consent of more than half of all audit committee members and submitted to the board of directors for a resolution; the same applies when the procedures are amended. If approval of more than half of all audit committee members as required is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. When the Operational		Article 28 After passage by the board of directors on the Procedures, submit the same to each supervisor and for approval by the shareholders'meeting. If any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinions to each supervisor and for discussion by the shareholders'meeting. The same shall apply to any amendments to the Procedures. When the Operational Procedures on Loaning of Funds and Making of Endorsements/Guarantees have been submitted for	In line with the setup of the audit committee, an amendment to the text is made accordingly.

Amended Articles	Current Articles	`Explanation:`
Procedures on Loaning of Funds and Making of Endorsements/Guarantees have been submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions; the independent directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting.	discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions; the independent directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting.

(6) Proposal for releasing the prohibition on the Company’s board of directors from participation in competitive business.

[Proposed by the Board of Directors]

Explanation:

In accordance with Article 209 of the Company Act, a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall obtain approval from the shareholders' meeting.
The director of the company, Tzi-Li Tung, and independent director Shiou-Ling Lin, are involved in other companies' operations which are the same or similar to the scope of our Company's business. It is proposed to release the prohibition from participation in competitive business (details as follows), and do not deem the previous earnings as earnings of the company.

Director	Company	Concurrent Post
Tzi-Li Tung	Hangzhou Kun-Ning Health Consulting Co.,Ltd	Director
	Lin Yuan Property Management Co.Ltd	Director
	Symphox Information Co.,Ltd.	Director

Independent Director	Company	Concurrent Post
Shiou-Ling Lin	KHL Investment I Limited (BVI)	Director
	Classic Wins Capital Limited (BVI)	Director

	Scope Star International Limited (BVI)	Director
	Gloss Victory International Limited (BVI)	Director

Resolution:

Provisional Motion(s)

Appendix 1 Cathay Real Estate Development Co., Ltd., Articles of Incorporation

Chapter 1 General Provisions

Article 1

The Company shall be named Cathay Real Estate Development Co., Ltd. ("Cathay Real Estate" in short) in accordance with the provisions of Company Limited by Shares in the Company Act.

Article 2

The Company's business scopes are as follows:

F208031 Retail Sale of Medical Equipment.
F301010 Department Stores.
G101041 Passenger Car Rental and Leasing.
G202010 Parking Garage Business.
H701010 Residence and Buildings Lease Construction and Development.
H701020 Industrial Factory Buildings Lease Construction and Development.
H701040 Specialized Field Construction and Development.
H701050 Public Works Construction and Investment.
H701060 New County and Community Construction and Investment.

H701070 Land Levy and Delimit.
H701080 Reconstruction within the renewal area.
H701090 Renovation, or maintenance within the renewal area.
H702010 Construction Management.
H703090 Real Estate Commerce.
H703100 Real Estate Rental and Leasing.
I103060 Management Consulting Services.
I199990 Other Consultancy.
ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

The operations of the above businesses shall be conducted in accordance with the relevant laws and regulations.

Article 3

The Company may provide endorsements and guarantees due to business requirements.

Article 4

The Company's total reinvestment amount is not restricted by the reinvestment ratio as stipulated in Article 13 of the Company Act.

Article 5

The main office (headquarters) of the Company shall be established in Taipei City, and branches may be established in other appropriate places where necessary, and its setup, closure or change shall be approved by the board of

directors.

Article 6

The Company's public notice shall be handled in accordance with the Company Act and other relevant laws and regulations.

Chapter 2 Shareholdings

Article 7

The registered capital of the Company is NT$20 billion, divided into 2 billion shares with a par value of NT$10. The board of directors is authorized to issue the shares in installments.

Article 8

The Company's shares are issued as registered share certificates, signed or sealed by three or more directors of the Company, affixed with the Company's stamp and serial number, and duly authenticated by the competent authority or certifying institution appointed by the competent authority.

For the above publicly issued registered shares, the Company may print consolidated share certificates or be exempted from printing any share certificates. However, share certificates shall be placed under the custody of a centralized securities custody enterprise. The same applies for other securities issued.

Article 9

The Company's stock affairs shall be handled in accordance with the Regulations Governing the Administration of Shareholder Services of Public Companies and other relevant laws and regulations, except as otherwise stated in the Articles of Incorporation.

Article 10

Transfer of the Company's shares is suspended within 60 days before the convening date of the annual shareholders meeting, within 30 days before the special shareholders meeting, and within five days before the date of allocation of dividends and bonuses or other benefits decided by the Company.

Chapter 3 Shareholders Meeting

Article 11

The Shareholders meetings are comprised of regular and special meetings, where a regular meeting is conducted annually, within six months upon the close of the fiscal year, and convened by the board of directors. Special meetings may be convened by the board of directors where necessary according to the law, except as otherwise provided by the Company Act. Shareholders shall be notified of the date, place and meeting agenda of regular shareholders meetings, no later than 30 days prior to the meeting date; and no later than 15 days prior to the date of special meetings.

Article 12

The Company's shareholders meeting shall be convened by

the board of directors, and chaired by the Chairman of the Board.

For a shareholders meeting convened by any other person having the convening right, he/she shall act as the Chair of that meeting. However, if there are two or more persons having the convening right, the Chair of the meeting shall be elected from among them.

Article 13

A shareholder of the Company shall have one voting right for each share in his/her/its possession.

Restrictions to the exercise of the above voting rights shall be in accordance with the Company Act and relevant laws and regulations.

Article 14

A shareholder who is unable to attend the shareholders meeting, may appoint a proxy to attend by executing a power of attorney printed by the company, five days before the shareholders meeting, stating the scope of power authorized by the proxy. A shareholder may only execute one power of attorney and appoint one proxy only, except for trust enterprises or stock agencies approved by the competent authority. When a person acts as proxy for two or more shareholders concurrently, the number of voting rights represented by him/her shall not exceed 3% of the total number of voting shares of the company, otherwise, the portion of excessive voting power shall not be counted. When the government or a juristic person is a shareholder,

its proxy shall not be limited to one person, provided that the voting right that may be exercised shall be calculated on the basis of the total number of voting shares it holds.

Article 15

Resolutions at a shareholders meeting shall, unless otherwise provided in the Company Act, be adopted by a majority vote of the attending shareholders, who represent more than one-half of the total number of voting shares.

Article 16

Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the Chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting.

The preparation and distribution of the minutes of shareholders meetings as required in the preceding Paragraph may be effectuated by electronic means or public notice.

Chapter 4 Board of Directors

Article 17

The Company's board of directors is to be formed by nine to 15 directors, comprised of at least three independent directors, and the number shall not be less than one-fifth of the board seats. The members shall be elected from among the shareholders with disposing capacity.

The election of the Company's directors utilizes a candidate

nomination system, where shareholders elect the directors from the nominees list during the shareholders meeting. The nomination and election methods shall be in accordance with the Company Act, Securities and Exchange Act and relevant laws and regulations. Assessment of independent directors' professional qualifications, shareholdings and sideline restrictions, independence and other compliance matters, shall be handled in accordance with the relevant laws and regulations.

The Company's Audit Committee shall be formed by all independent directors in accordance with Article 14-4 of the Securities and Exchange Act. Members of the Audit Committee, execution of power and authority, and other compliance matters, shall be conducted in accordance with the relevant laws and regulations or the Articles of Incorporation, and its Corporate Charter shall be established by the board of directors.

Article 18

The term of office of a director is three years, and he/she may be eligible for re-election. In case no election of new directors is effectuated after expiration of the term of office of existing directors, the out-going directors may extend their period of duty until new directors have been elected and assumed their office.

The eligibility and re-election of the Company's independent directors shall be handled in accordance with the relevant laws and regulations.

The board of directors is authorized to issue compensation to the Company's directors (including independent directors) for their terms in office, by referencing the Company's business status and industry standards.

The Company may, by resolution of the board of directors, purchase liability insurance for its directors and supervisors or important employees during their term of duty, to provide compensation for liabilities incurred by the Company during the performance of their duties, according to the law. The board of directors may authorize the Chairman of the Board to handle the amount and renewal of the liability insurance.

Article 19

Three managing directors may be elected by all directors, and the managing directors are to elect one person among themselves as the Chairman of the Board, and one person may be elected as Vice Chairman where necessary. In case no managing directors have been elected, a Chairman of the Board shall be elected by a majority vote among the attending directors at a meeting attended by over two-thirds of the directors, and a Vice Chairman may be elected where necessary.

In case the Company has managing directors, at least one managing director shall be an independent director, and the number shall not be less than one-fifth of the total number of managing directors.

Article 20

The Chairman of the Board shall internally preside over the shareholders meeting, meeting of the board of directors, and meeting of the managing directors, and shall externally represent the Company. In case the Chairman of the Board is on leave or unable to exercise his power and authority for any cause, the Vice Chairman shall act on his behalf. In case there is no Vice Chairman, or the Vice Chairman is on leave or unable to exercise his power and authority for any cause, the Chairman of the Board shall designate one of the managing directors to act on his behalf. Where there are no managing directors, one of the directors shall be designated to act on his behalf. In the absence of such a designation, the managing directors or the directors shall elect from among themselves an acting Chairman of the Board.

Article 21

The directors shall attend the meetings of the board in person. If he/she is unable to attend in person, unless otherwise provided in the Company Act, he/she may execute a power of attorney and state therein the scope of authority with reference to the subjects to be discussed at the meeting, by delegating other directors to attend on his/her behalf, but this is only limited to one director.

The convening notice for the above shall be given in writing, e-mail or fax.

If the meeting of the board of directors is conducted by video conference, the directors participating in the video conference shall be deemed to have attended the meeting in person.

Article 22

The power and authority of the Board of Directors are as follows:

Approval of the Corporate Charter.
Decisions regarding business policies.
Review of financial reports.
4.Preparation of profit distribution and deficit compensation.
5.Preparation of capital increases and reductions, and resolution of shares or corporate bonds issuances.
6.Purchase, sale, split, exchange, property rights settlements and all other disposals of immovable properties.
7.Establishment of functional committees and the establishment and amendment of the Corporate Charter.
8.Power and authority authorized by the law, Articles of Incorporation or resolutions of the shareholders meetings.

Article 23

Resolutions of the board of directors shall be recorded in the board meetings minutes, and signed or sealed by the Chair and kept at the Company.

Article 24

Unless otherwise provided in the Company Act, resolutions of the board of directors shall be adopted by a majority of the directors at a meeting attended by a majority of the

directors.

Chapter 5 Supervisor

Article 25

The Company shall have two supervisors elected in the shareholders meeting from among the persons with disposing capacity.

The qualifications and election, and the election methods of the Company's supervisors shall be in accordance with the provisions of the Company Act, relevant laws and regulations and competent authority.

Regulations in the Articles of Incorporation with regards to supervisors, shall cease to apply upon establishment of the Audit Committee by the Company.

Article 26

The term of office of a supervisor is three years, and he/she may be eligible for re-election. In case no election of new supervisors is effectuated after expiration of the term of office of an existing supervisor, the out-going supervisor may extend their period of duty until new supervisors have been elected and assumed their office.

In case all supervisors are discharged, the board of directors shall, within 60 days, convene a special shareholders meeting to elect new supervisors. The term of office of the supervisor elected through by-election, shall not be more than the remaining term of the former supervisor.

The board of directors is authorized to issue compensation to the Company's supervisors for their terms in office, by

referencing the Company's business status and industry standards.

Article 27

The Company may appoint one standing supervisor to be selected among the supervisors. Besides executing monitoring duties according to the laws, supervisors may attend the meetings of the board of directors, but have no voting rights.

Article 28

The power and authority of the supervisors are as follows:

Investigation of the Company's financial status.
2.Examination of the Company's accounting books and documents.
Supervision of the Company's business activities.
Monitoring of the execution of work by employees, and reporting any illegal conduct.
Other vested power and authority according to the law.

Chapter 6 Manager

Article 29

The Company may have managers, whose appointment, dismissal and remuneration shall be handled in accordance with the Company Act and relevant regulations.

Chapter 7 Accounting

Article 30

The Company's fiscal year is from 1 January to 31

December for each year. When the fiscal year has closed, the board of directors shall prepare the following statements, and submit these statements to the supervisors for audit 30 days before the shareholders meeting, and then present these statements at the shareholders meeting for approval:

Business report.
Financial statements.
Proposals of profit distribution or deficit compensation.

Article 31

If the Company earns profit for the year, 0.1% to 1% of it shall be distributed as employees compensation, and not more than 1% as directors and supervisors compensation. However, the company's accumulated losses shall first be covered.

If there are earnings after the fiscal year closes, besides paying taxes according to the law, the Company shall first offset its previous years' losses, and set aside a legal reserve, set aside or reverse special reserve according to the law, and then allocate 30% to 100% as shareholders dividends and bonuses. The remaining monies, together with the beginning undistributed earnings, shall be the distributable earnings. The board of directors shall prepare a earnings distribution proposal, and submit it at the shareholders meeting for approval. The distribution ratio of the above shareholders’ dividends and bonuses depends on the current year's major financial or working capital planning, and may be adjusted upon resolution of the shareholders meeting.

In response to economic and market environment changes, the Company adopts a diversified investment approach to increase profitability.In consideration of long-term financial planning and future funding requirements, a residual dividend policy is adopted for the dividend policy, so as to achieve steady growth and sustainable operations.

Based on the Company's operational planning and capital investment, as well as taking into account shareholders' cash inflow requirements, and to avoid over expansion of share capital, earnings are be first distributed in the form of a cash dividend, followed by a stock dividend. However, a cash dividend distribution shall not be less than 50% of total dividend.

Chapter 8 Supplementary Provisions

Article 32

Matters not covered in the Articles of Incorporation shall be handled in accordance with the Company Act and other relevant laws and regulations.

Article 33

The Articles of Incorporation were established on 14 September 1964, and the 1st amendment was made on 27 February 1965, 2nd amendment on 30 Mar 1966, 3rd amendment on 20 April 1967, 4th amendment on 6 June 1969, 5th amendment on 25 May 1970, 6th amendment on 6 May 1971, 7th amendment on 19 May 1972, 8th amendment on 7 May 1973, 9th amendment on 17 May 1974, 10th amendment on 30 May 1975, 11th amendment

on 14 May 1976, 12th amendment on 21 April 1978, 13th amendment on 16 May 1980, 14th amendment on 22 May 1981, 15th amendment on 27 May 1983, 16th amendment on 25 May 1984, 17th amendment on 24 May 1985, 18th amendment on 23 May 1986, 19th amendment on 2 May 1987, 20th amendment on 20 May 1988, 21st amendment on 26 May 1989, 22nd amendment on 25 May 1990, 23rd amendment on 17 May 1991, 24th amendment on 22 May 1992, 25th amendment on 14 May 1993, 26th amendment on 20 May 1994, 27th amendment on 26 May 1995, 28th amendment on 24 May 1996, 29th amendment on 23 May 1997, 30th amendment on 22 May 1998, 31st amendment on 19 May 1999, 32nd amendment on 19 May 2000, 33rd amendment on 24 May 2001, 34th amendment on 16 May 2002, 35th amendment on 22 May 2003, 36th amendment on 14 May 2004, 37th amendment on 10 June 2005, 38th amendment on 19 June 2009, 39th amendment on 10 June 2011, 40th amendment on 15 June 2012, 41st amendment on 14 June 2013, 42nd amendment on 6 June 2014, and 43rd amendment on 8 June 2016.

Appendix 2 Cathay Real Estate Development Co., Ltd., Rules of Procedure for Shareholder Meetings

Article 1 (Basis and Regulatory Compliance)

To establish good governing system of shareholder meetings, build solid supervision functions and enhance management functions, the Rules which are established according to Article 5 of Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, shall be followed. The rules of procedures for the Company's shareholder meetings, except when otherwise provided by laws and regulations or the Articles of Incorporation, shall be as provided in these Rules.

Article 2 (Summon and Notice of Annual Meeting of Shareholders)

The summon and notice of the company's shareholders meetings shall be in accordance with the provisions of Article 171, Article 172, Article 172-1 and Article 185 Paragraph 1 of the Company Act, and Article 26-1, Article 26-2 and Article 43-6 of the Securities and Exchange Act, Article 56-1, Article 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers, and Article 5 and Article 6 of Regulations Governing Content and Compliance Requirements for Shareholders Meeting Agenda Handbooks of Public Companies, or other relevant laws and regulations.

Article 3 (Entrusted to attend the Annual Meeting of Shareholders)

A shareholder may appoint a proxy to attend a shareholders meeting on his/her/its behalf by executing a power of attorney notice printed by the Company stating the scope of power authorized by the proxy.

A shareholder may only execute one power of attorney notice and appoint one proxy only, and shall serve such written proxy to the company no later than five days prior to the date of the shareholders’ meeting. In case two or more written proxies are received from one shareholder, the first one received by the Company shall prevail, unless an explicit statement to revoke the previous written proxy is made in the proxy which comes later.

If the shareholder wishes to attend the shareholder meeting or wishes to exercise the right to vote in writing or electronic form, after the power of attorney notice has been delivered to the Company, the shareholder shall notify the Company in writing, two days before the shareholders meeting, of his/her/its intention to cancel the power of attorney. If the shareholder fails to cancel within the stipulated date, the proxy vote shall prevail.

Article 4 (Place and Time of Annual Meeting of Shareholders)

The place for convening a shareholders meeting shall be inside the premises of the Company, or any other place convenient for the shareholders, and suitable for holding of the said meeting. The time for commencing the said meeting

shall not be earlier than 9 a.m. or later than 3 p.m.

Article 5 (Attendance of Annual Meeting of Shareholders)

The Company shall clearly state the shareholders reporting time, venue and any other matters to be noted. Shareholders shall attend a shareholders meeting by presenting an attendance card, sign-in card or other identity document. The Company shall not request additional supporting documents from the shareholders to attend the meeting.

The proxy shall bring his/her identification document for verification. The Company shall prepare an attendance book for shareholders to sign in, or the shareholder present may hand in an attendance card in lieu of signing the attendance book.

The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slip, voting slip, and other meeting materials. When there is an election of directors or supervisors, voting ballots shall also be furnished.

After appointing the Audit Committee, the rules of procedure with regards to supervisors shall apply mutatis mutandis to the Audit Committee.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

Article 6 (Chair and Attendees of the Annual Meeting of

Shareholders)

Convening of shareholders meeting shall be conducted by the Chair in accordance with Article 182-1, Article 208 of the Company Act or other relevant laws and regulations.

The Company may designate its lawyer, certified public accountant or other relevant persons to attend the shareholders meeting.

Shareholders meeting convened by the board of directors, shall be attended by majority of the board of directors and at least one representative from the functional committee required by the Securities and Exchange Act, and the attendance shall be recorded in the shareholders meeting minutes.

Article 7 (Evidence of Process of Annual Meeting of

Shareholders)

The Company shall document the shareholders meeting by audio or video, and the recorded materials shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recordings shall be retained until the conclusion of the litigation.

Article 8 (Calculation of number of shares representing shareholders present in the Annual Meeting of Shareholders and commencement of meeting) Attendance at a shareholders meeting shall be calculated based on the numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the

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attendance book and sign-in cards handed in, plus the number of shares whose voting rights are exercised by written or electronic form.

The Chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the Chair may announce a postponement. The postponement of the said meeting shall be limited to two times, and the total time postponed shall not exceed one hour. If a quorum is not met after two postponements and the attending shareholders still represent less than one-third of the total number of issued shares, the Chair shall declare the meeting adjourned.

If a quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one-third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, Paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within one month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the Chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

Article 9 (Agenda Discussions)

If a shareholders meeting is convened by the board of

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directors, the meeting agenda shall be set by the board of directors. The meeting shall proceed in the order set in the agenda, which may not be changed without a resolution of the shareholders meeting.

The provisions of the preceding paragraph apply to a shareholders meeting convened by a party with the power to convene, other than the board of directors.

The Chair shall not declare the meeting adjourned without resolution by shareholders if the proposals arranged in the above two paragraphs have not been resolved. If the Chair declares the meeting adjourned in violation of the rules of procedures, other members of the board of directors shall promptly assist the attending shareholders in electing a new Chair according to statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and continue the meeting.

The Chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the Chair is of the opinion that a proposal has been discussed sufficiently to be put to a vote, the Chair may announce the discussion is closed and call for a vote.

Article 10 (Shareholders' Speech)

A shareholder wishing to speak in a shareholders meeting shall first fill out a slip, specifying therein the major points of his speech, his/her shareholder account number (or attendance card number) and his/her name, and the Chair

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shall determine the order for speaking.

A shareholder who submits his/her slip for a speech but does not actually speak shall be considered as not having given a speech. If the content of that speech differs from that specified on the slip, the content of the speech shall prevail.

A shareholder shall not speak more than two times for one proposal, unless he/she has obtained prior consent from the Chair, and each speech shall not exceed five minutes. If a shareholder violates the above provisions or his speech exceeds the scope of the motion, the Chair may terminate the speech.

When a shareholder is giving a speech, the other shareholders shall not interrupt unless they have obtained prior consent from the Chair and the said shareholder, and the Chair shall prevent such violations.

If a juristic person shareholder designates two or more representatives at the shareholders meeting, only one representative may speak on the same proposal.

After an attending shareholder has spoken, the Chair may respond in person or designate relevant personnel to respond.

Article 11 (Calculation of Voting Shares and Recusal System)

Voting and resolution at the Company's shareholders meetings shall be in accordance with Article 177, Article 178, and Article 180 of the Company Act or other relevant laws and regulations.

Article 11-1 (Voting, monitoring and calculation method) A shareholder shall be entitled to one vote for each share

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held, except when the shares are deemed non-voting shares under Article 179, Paragraph 2 of the Company Act.

When the Company holds a shareholders meeting, it shall list electronic means as one of the ways to exercise voting rights, and may adopt written means to exercise its voting rights. When voting rights are exercised by written or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by written or electronic means will be deemed to have attended the meeting in person. However, his/her rights with respect to extraordinary motions and amendments to original proposals of that meeting are deemed to have been waived.

A shareholder intending to exercise voting rights by written or electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company two days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the earliest received declaration shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by written or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made, by the same means which the voting rights were exercised, 2 days before the date of the shareholders meeting. If the notice of retraction is submitted after the stipulated time, the voting rights already exercised by written or electronic means shall prevail. When a shareholder has exercised

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voting rights both by written or electronic means, and appointed a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.

Except when otherwise provided in the Company Act and in the Company's Articles of Incorporation, resolutions shall require a majority of the voting rights from the attending shareholders to pass. At the time of a vote, the Chair or designated person shall first announce the total number of voting rights represented by the attending shareholders for each proposal, followed by a poll of the shareholders. The voting results shall be entered into the Market Observation Post System (MOPS).

When there is an amendment or an alternative to a proposal, the Chair shall present the amended or alternative proposal together with the original proposal, and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected and no further voting shall be required.

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the Chair and the monitoring personnel shall be shareholders of the Company.

Vote counting for proposals or elections in a shareholders meeting shall be conducted in public at the place of the shareholders meeting. Immediately after the vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

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Article 12 (Elections)

The election of directors or supervisors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules of the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and supervisors and the numbers of votes with which they were elected.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 13 (Minutes of Meeting)

Matters relating to the resolutions of a shareholders meeting shall be in accordance with Article 183, Paragraph 1 to 4 of the Company Act, compiled and distributed as meeting minutes, and kept permanently during the existence of the Company.

Article 14 (Public Disclosure)

On the day of a shareholders meeting, the Company shall compile in the prescribed format, a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders meeting.

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If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation regulations, the Company shall upload the content of such resolutions to the MOPS within the prescribed time period.

Article 15 (Maintaining order at the meeting place)

Staff handling administrative affairs of a shareholders meeting shall wear identification cards or armbands.

The Chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor".

When a public address (PA) system is available at the place of a shareholders meeting, and a shareholder attempts to speak through any devices other than the device provided by the Company, the Chair may prevent the shareholder from so doing.

When a shareholder violates the rules of procedure and defies the Chair's correction, obstructs the proceedings and refuses to heed calls to stop, the Chair may direct the proctors or security personnel to escort the shareholder from the meeting.

Article 16 (Recess and resumption of shareholders meeting)

The Chair may call for breaks during the meeting when appropriate. In an event of force majeure , the Chair may rule the meeting temporarily suspended, and based on the

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circumstances, announce the time of a resumption of the meeting. A resolution may be adopted at a shareholders meeting to defer or resume the meeting within five days in accordance with Article 182 of the Company Act.

If the meeting venue is no longer available for continued use and not all of the items on the meeting agenda have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.

Article 17

The Rules, and any amendments hereto, shall be implemented upon approval by the shareholders meetings.

Article 18

The Rules were established on 27 February 1965, and its 1st amendment was made on 23 May 1998, 2nd amendment on 16 May 2002, 3rd amendment on 14 June 2013, 4th amendment on 9 June 2015, and 5th amendment on 8 June 2016.

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Appendix 3 Cathay Real Estate Development Co., Ltd. Procedures for Election of Directors and Supervisors

Amendment made at shareholders meeting on 20 April1967 Amendment made at shareholders meeting on 22 May 1981 Amendment made at shareholders meeting on 25 May 1984 Amendment made at shareholders meeting on 16 May 2002 Amendment made at shareholders meeting on 22 June 2007 Amendment made at shareholders meeting on 14 June 2013 Amendment made at shareholders meeting on 8 June 2016

Article 1

Except as otherwise provided by law or by the Articles of Incorporation, elections of the Company's directors and supervisors shall be conducted in accordance with these Procedures.

Article 2

Election of the Company's directors will utilize the candidate nomination system, where directors are elected from the directors nomination list during the shareholders meeting.

Elections of directors and supervisors will utilize a cumulative voting system, one share shall have the same voting rights as the number of directors and supervisors to be elected, and the total number of votes per share may be consolidated for election of one candidate or it may be

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split for election of two or more candidates.

Upon establishment of the Audit Committee by the Company, regulations applicable to supervisors in these Procedures shall apply to the Audit Committee.

Article 3

For appointment of independent directors in accordance with the Articles of Incorporation, independent directors and non-independent director shall be elected at the same time, and the number of directors will be separately calculated. The qualifications and elections of independent directors shall be in accordance with Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies and relevant laws and regulations.

Article 4

Elections of the Company's directors shall be conducted in accordance with the candidate nomination system and procedures established in Article 192-1 of the Company Act. The Company shall review the qualifications, education, work experience and the existence of any other matters set forth in Article 30 of the Company Act with respect to the nominee directors. Additional documents for proof of qualifications shall not be arbitrarily added. The review results shall be provided to the shareholders as a reference for electing competent directors.

If the dismissal of a director results in a board with fewer than five directors, the Company shall hold a by-election

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at the next shareholders meeting. When the number of directors falls short by one-third of the total number prescribed in the Company's Articles of Incorporation, a special shareholders meeting shall be held within 60 days from the date of this occurrence to hold a by-election.

When the number of independent directors falls below that required by law, a by-election shall be held at the next shareholders meeting. When the independent directors are dismissed en masse, a special shareholders meeting shall be called within 60 days from the date of this occurrence to hold a by-election.

Article 5

The number of directors and supervisors will be as specified in the Company's Articles of Incorporation, with voting rights separately calculated for independent and non-independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the Chair drawing lots on behalf of any person not in attendance.

Article 6

Before the election begins, the Chair shall appoint a number of persons to perform the duties of vote monitoring and counting. Monitoring personnel shall be

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shareholders. The ballot boxes shall be prepared by the board of directors and publicly checked by the vote monitoring personnel before the voting commences.

Article 7

The board of directors shall prepare the ballots, with the number of voting rights associated with each ballot specified, and then distribute these ballots to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of the voting shareholders.

Article 8

If a candidate is a shareholder, the voter shall enter the candidate's account name and shareholder account number in the "candidate" column of the ballot; for a non-shareholder, the voter shall enter the candidate's full name and identity card number. However, when the candidate is a government organization or corporate shareholder, the name of the government organization or corporate shareholder shall be entered in the column for the candidate's account name on the paper ballot, or both the name of the government organization or corporate shareholder and the name of its representative may be entered. When there are multiple representatives, the names of each representative shall be entered.

Article 9

A ballot is invalid under any of the following

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circumstances:

The ballot was not prepared by the board of directors.
A blank ballot is placed in the ballot box.
The writing is unclear and indecipherable or has been altered.
The candidate, whose name is entered on the ballot, is a shareholder, but the candidate's account name and shareholder account number do not conform with the names and numbers in the shareholder register; or the candidate whose name is entered on the ballot is a non-shareholder, but upon review, shows the candidate's name and identity card number do not match.
Other words or marks are entered in addition to the candidate's account name or shareholder account number (or identity card number) and the number of voting rights allotted.
The name of the candidate entered on the ballot is identical to that of another shareholder, but no shareholder account number or identity card number is provided on the ballot to identify such individual.
The number of voting rights allotted to the candidate entered exceeds the total number of voting rights.
Other violations of the laws, Articles of Incorporation or relevant regulations.

Article 10

The voting results shall be calculated on-site immediately after the voting, and the results of the calculation,

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including the list of elected directors and supervisors and their respective votes shall be announced by the Chair on-site.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. However, if a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 11

The Procedures, and any amendments hereto, shall be implemented upon approval by the shareholders meetings.

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Appendix 4 Cathay Real Estate Development Co., Ltd. Procedures for Acquisition or Disposal of Assets

Amendment made at shareholders meeting on 24 May 1996 Amendment made at shareholders meeting on19 May 2000 Amendment made at shareholders meeting on 22 May 2003 Amendment made at shareholders meeting on 14 May 2004 Amendment made at shareholders meeting on 22 June 2007 Amendment made at shareholders meeting on 10 June 2011 Amendment made at shareholders meeting on 15 June 2012 Amendment made at shareholders meeting on 9 June 2015

Article 1

The procedures are formulated in accordance with “Guidelines for Acquisition or Disposal of Assets by Public Entities” issued by the Financial Supervisory Commission.

Article 2

The scope of application of the assets mentioned in the procedures is as follows:

Stocks, treasury bonds, corporate bonds, financial bonds, marketable securities representing interest in a fund, depository receipts, call (put) warrants, beneficial securities, and asset-backed securities
Stocks, treasury bonds, corporate bonds, financial bonds, marketable securities representing interest in a

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fund, depository receipts, call (put) warrants, beneficial securities, and asset-backed securities.

Membership.
Patent rights, copyrights, ownership of trademark, franchises and other intangible assets.
Derivatives.
Assets acquired or disposed of by merger, division, acquisition or transfer of shares in accordance with the law.
Other major assets.

Article 3

The procedures for acquisition or disposal of assets:

When The Company and its subsidiaries acquire or dispose of assets, the undertaker shall submit the market survey data as a reference to understand the feasibility and necessity of the plan and then petition the general manager and the chairman of the board in written form for approval of the investment scope and quota.
Except for marketable securities traded in the centralized trading market or over-the-counter trading centers at money-of-the-day price, other assets shall be processed by invitation for bids, price comparison or negotiation, and the payment terms of which shall be subject to the general commercial market conditions.

Article 4

Under any of the following circumstances, the Company

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acquiring or disposing of assets shall publicly announce and report the relevant information on the competent authority's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event:

Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of the company's total assets, or NT$300 million or more. However, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds.
Merger, demerger, acquisition, or transfer of shares.
Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company.
Where an asset transaction other than any of those referred to in the preceding three subparagraphs, or an investment in the mainland China area reaches 20% or more of paid-in capital or NT$300 million. However, this shall not apply to the following circumstances:
(1) Trading of government bonds.
(2) Trading of bonds under repurchase/resale agreements, or subscription or redemption of domestic money market funds.
(3) Where the type of asset acquired or disposed is equipment for business use, the trading

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counterparty is not a related party, and the transaction amount is less than NT$500 million.

(4) Acquisition or disposal of real property by the Company for construction use, where the trading counterparty is not a related party, and the transaction amount is less than NT$500 million.
(5) Where land is acquired under an arrangement to engage others to build on the company's own land, engage others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction is less than NT$500 million.

Subsidiary's public announcement and reporting:

Acquisitions and disposals of assets by a subsidiary shall comply with Article 6.
If the subsidiary is not a local publicly listed company, and has information to be publicly announced as stated in the subparagraphs of the preceding paragraph, the Company shall be notified immediately on the date of occurrence, for it to make a public announcement and report the information in accordance to the regulations.
The paid-in capital or total assets of the Company shall be the standard for determining whether or not a subsidiary referred to in the preceding paragraph in the event the type of transaction specified therein reaches 20% of paid-in capital or 10% of the total assets.

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Article 5

For acquiring or disposing of assets, the Company shall keep all relevant contracts, meeting minutes, log books, appraisal reports and certified public accountant, attorney, and securities underwriter opinions at the Company, where they shall be retained for 5 years except where another Act provides otherwise.

The amount of transactions above shall be calculated as follows:

The amount of any individual transaction.
The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year.
The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year.
The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

"Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with this Procedure need not be counted toward the transaction amount.

"Date of occurrence" as used in the preceding paragraphs refers to date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of

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directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier. However, for an investment for which approval by the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.

The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by itself and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the competent authority by the 10th day of each month.

When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety.

Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the regulation, a public report of relevant information shall be made on the information reporting website designated by the competent authority within 2 days counting inclusively from the date of occurrence of the event:

Change, termination, or rescission of a contract signed in regard to the original transaction.
The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth

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in the contract.

Change to the originally publicly announced and reported information.

Article6

In acquiring or disposing of real property or equipment where the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions.

Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction.
Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or

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all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

(1) The discrepancy between the appraisal result and the transaction amount is 20% or more of the transaction amount.
(2) The discrepancy between the appraisal results of two or more professional appraisers is 10% or more of the transaction amount.
No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date. However, if the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
Except where a limited price, specified price, or special price is employed by the Company as the reference basis for the transaction price, if an appraisal report cannot be obtained in time and there is a legitimate reason for the delay, the report, and the certified public accountant's opinion under Subparagraph 3 of the preceding paragraph, shall be

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obtained within 2 weeks counting inclusively from the date of occurrence.

The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price, and if the dollar amount of the transaction is 20% of the Company's paid-in capital or NT$300 million or more, except in transactions with a government institution, the Company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the certified public accountant needs to use the report of an expert as evidence, the certified public accountant shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the competent authority.

Where the Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20% or more of paid-in capital or NT$300 million or more, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the certified public accountant shall comply with the provisions of Statement of Auditing Standards No. 20

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published by the ARDF.

Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or certified public accountant's opinion.

When the Company engages in any acquisition or disposal of assets from or to a related party, if the transaction amount reaches 10% or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a certified public accountant's opinion in compliance with this provision.

The calculation of the transaction amounts referred to in the Article shall be done in accordance with Article 5, Paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a certified public accountant's opinion has been obtained need not be counted toward the transaction amount.

Article 7

When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20% or more of paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under

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repurchase and resale agreements, or subscription or redemption of domestic money market funds, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the board of directors and recognized by the supervisors:

The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.
The reason for choosing the related party as a trading counterparty.
With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 8 and Article 9.
The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party.
Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.
An appraisal report from a professional appraiser or a certified public accountant's opinion obtained in compliance with the preceding article.
Restrictive covenants and other important stipulations associated with the transaction.

The calculation of the transaction amounts referred to in the preceding Paragraph shall be made in accordance with

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Article 5, Paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the supervisors need not be counted toward the transaction amount.

With respect to the acquisition or disposal of business use equipment between the Company and its parent or subsidiaries, the Company's board of directors may pursuant to the Procedure, delegate the board chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting.

Where the position of independent director has been created, when a transaction is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Article 8

The Company shall evaluate the rationality of the transaction costs by the following means in acquiring real estate from related parties:

Based on the related party's transaction price plus necessary interest of funds and the cost of the

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obligation assumed by the buyer in accordance with the law Necessary interest of funds is imputed as the weighted average interest rate on borrowing in the year that the company purchases assets. It may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.

Total of loan appraisal from a financial institution where the related party has previously collateralized on the property, the actual cumulative amount loaned by the financial institution shall be 70% or more of the total of loan appraisal and the period of the loan shall have been one year or more. However, this shall not apply if the financial institution and the counterparty have a relationship as related parties.

For mergers and acquisitions of land and premises with the same property, the transaction cost may be respectively assessed on the basis of any of the means listed in the preceding paragraph in respect of land and premises.

The Company shall assess the cost of real estate based on the provisions of 1st paragraph and 2nd paragraph and consult CPA for review and specific comments in acquiring real estate from related parties.

When the Company acquires assets from related parties in any of the following circumstances, it shall be subject to the provisions of Article 7 and shall not apply to the provisions of the preceding three paragraphs:

The related party acquired the real estate through inheritance or bestowal.

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It has been more than five years since the date on which the related party signed the contract to acquire the real estate for the transaction.
The real estate is acquired through the signing of a joint development contract with the related party, or through engaging others to build on the company's own land, engaging others to build on rented land, etc.

Article 9

When the results of the Company's appraisal conducted in accordance with the preceding 1st paragraph and 2nd paragraph are lower than the transaction price, ,it shall be subject to the provisions of Article 10. However, if the following circumstances exist, and objective evidence and specific rational comments from professional real estate appraisers and CPA have been presented, they do not apply:

The real estate is acquired through the signing of a joint development contract with the related party, or through engaging others to build on the company's own land, engaging others to build on rented land, etc.
(1) In the case of an assessment of undeveloped land is conducted with the method specified in the preceding provisions, the house shall be added rational operating profits according to the related parties’ operating cost, and the total shall exceed the actual transaction price. Rational operating profits refer to the lower gross margins based on the average operating gross margins of the related

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parties’ operating department for the last three years or the latest construction industry’ s gross margins issued by the Ministry of Finance.

(2) Accomplished transactions of other floors of the same property or neighboring regions of unrelated parties within a year, where the area and conditions are similar with the trading terms including rational floors or regions’ spread based on real estate dealing practice after assessment.
(3) Rental cases of other floors of the same property from unrelated parties within a year with estimation of equivalent dealing conditions that cover rational floors spread based on real estate lease practices.
The Company provides evidence that the real estate acquired by a related party has similar terms of transaction as the traded case of neighboring regions of other non-related parties within a year, and the area is similar, too.

Completed transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transaction for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the

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real property.

Article 10

Where the Company acquires real property from a related party and the results of appraisals conducted in accordance with Article 8 and Article 9 are uniformly lower than the transaction price, the following steps shall be taken:

A special reserve shall be set aside in accordance with Article 41, Paragraph 1 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, Paragraph 1 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of the Company's equity stake in the other company.
Supervisors shall comply with Article 218 of the Company Act.
Actions taken pursuant to Subparagraph 1 and Subparagraph 2 shall be reported to a shareholders' meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

The Company having set aside a special reserve under the preceding paragraph, may not utilize the special reserve

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until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the competent authority has given its consent.

When the Company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm's length transaction.

Article 11

The procedures for the Company’s engaging in derivatives’ trading are as follows:

Derivatives mentioned in the procedures refer to forward contracts, options contracts, futures contracts, leveraged deposit contracts, swap contracts whose value is derived from commodities such as assets, interest rates, exchange rates, indices, or other benefits, and the above-mentioned commodity combinations, and other commodities approved by the regulator for investment. Forward contracts do not cover insurance contracts, performance contracts, after-sales service contracts, long-term lease contracts, and long-term purchase (sales) contracts. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase

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(sales) agreements.

The Company’s hedging strategies in derivatives’ trading are as follows:
(1) Setting the total of the contract for transaction and the maximum amount of total contracts and individual contracts’ loss (i.e., stop-loss point).
(2) Evaluating the profit and loss and performance of derivatives periodically.
(3) Evaluating the credit status and professional ability of the trading object strictly.
(4) All transactions and related operations shall be handled in accordance with the provisions of the law.
I. The rights and liabilities of the Company for derivatives shall be divided as follows, and the personnel of each department shall not concurrently hold office with each other.
(1) Auditing Department: supervising transaction process, transaction record audits, and risk tracking assessment.
(2) Accounting Department: accounting processing, announcement and declaration.
(3) Trading Department: transaction execution, transaction control, trading object evaluation and performance evaluation.
(4) Delivery Department: transaction confirmation and delivery operations.
(5) Depository Department: the custody of transaction contracts and trading evidence.

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The Company’s derivatives-related guidelines, authorized quotas, levels of decision-making, and methods of performance evaluation shall be formulated by each dealing department based on the nature of commodities, and then be submitted to the chairman of the board for approval before implementation.
I. The total of the derivatives transaction contract the Company engages in is limited to 20% of the paid-in capital of the Company; the upper limit of loss (stop-loss point) is 30% of traded total and individual contract amount.
I. The Board of Directors shall delegate the chairman of the board functional authority to engage in derivatives as follows:
(1) A list of the transaction targets and commodity categories.
(2) The verification of the list of counterparties and their upper limits of quotas.
(3) Determination of respective transaction.

Article 12

When the Company engages in derivatives trading, the following risk management measures should be adopted:

The scope of risk management should cover credit, market price, liquidity, cash flow, operation and legal risk management.
The functions of dealing, confirmation and settlement of derivatives trading shall be performed by different personnel.

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Risk assessment, monitoring and control shall be performed by personnel from division other than the above, and report to the Board or senior management not in a position of trading or decision-making.
Positions held in derivatives trading shall be assessed at least once weekly. For hedging trades held for business needs, assessment shall be undertaken at least twice monthly. The evaluation report shall be remitted to senior managers authorized by the Board of Directors.
If the Company is involved with legal matters arising from the transaction of derivatives, consultation with legal personnel or external legal adviser.

Article 13

The Board of Directors shall supervise and manage in accordance with the following principles when the Company engages in derivatives trading:

The designated senior supervisors shall pay attention to the supervision and control of the transaction risk of derivatives at any time.
The Board shall periodically conduct evaluation over whether performance of derivative trading is in compliance with established operational strategies and whether risk-taking are within a permitted scope.

Senior management personnel authorized by the board of directors shall manage derivatives trading in accordance with the following principles:

Regularly assessing whether the current risk

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management measures in use are appropriate and comply with the procedures of the company’s derivatives trading.

While supervising transaction and profit and loss, in case of any abnormal situation, necessary measures shall be taken and the Board of Directors shall be notified immediately. If there is Independent Director, Independent Director shall attend the Board of Directors and express opinions.

The Company shall submit a report to the Board of Directors after delegating relevant personnel to handle derivatives transaction in accordance with the provisions of the procedures governing the derivatives trading.

Article 14

The Company engaging in derivatives trading shall establish a log book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates, and the matters required to be carefully evaluated under Subparagraph 4 of Article 12 and Subparagraph 2 of Paragraph 1, and Subparagraph 1 of Paragraph 2, of Article 13 shall be recorded in detail in the log book.

The Company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material

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violation is discovered, all supervisors shall be notified in writing.

Article 15

The Company conducting a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a certified public accountant, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage.

Article 16

When the Company participates in merger, demerger, or acquisition, it shall prepare a public report to shareholders covering important contract content and relevant matters prior to the shareholders' meeting, along with the experts' opinions of the preceding 1st paragraph as well as the notification of the shareholders' meeting to shareholders altogether as a reference for determination of whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts the Company from convening a shareholders' meeting to approve the merger, demerger, or acquisition, this restriction shall not apply.

Where the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to

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lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the companies participating in the merger, demerger or acquisition shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.

Article 17

Companies participating in merger, demerger or acquisition, unless otherwise stipulated in other laws or there is special factors which must be reported to the regulator for approval, shall convene the Board of Directors and shareholders’ meeting on the same day to decide the merger, demerger or acquisition-related matters.

A company participating in a transfer of another company's shares shall call a board meeting on the day of the transaction, unless another act provides otherwise or the competent authority grants consent for special circumstances in advance.

When participating in a merger, demerger, acquisition, or transfer of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC market shall prepare a full written record of the following information and retain it for 5 years for reference:

Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or

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implementation of any merger, demerger, acquisition, or transfer of another company's shares prior to disclosure of the information.

Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract, and the convening of a Board of Directors meeting.
Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans; any letter of intent or memorandum of understanding, material contracts, and minutes of the Board of Directors meetings.

When participating in a merger, demerger, acquisition, or transfer of another company's shares that is traded on the Taipei Exchange, the Company shall report the information set out in the aforementioned Item 1 and 2 according to regulated format on the Internet information system designated by competent authorities within 2 days commencing immediately from the date of passage of a resolution by the Board of Directors.

Where any of the companies participating in a merger, demerger, acquisition, or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company(s) so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the provisions of paragraphs 3 and 4.

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Article 18

People who participate in or know the merger , demerger, acquisition, or transfer of shares shall issue a written letter of confidentiality commitment and shall not disclose the contents of the plans before public disclosure of the information, nor shall they use their own names or under the names of other people to trade and merge, demerge, acquire, or transfer of shares of all the company’s shares and other marketable securities with equity property.

Article 19

When the Company participates in merger, demerger, acquisition, or transfer of shares, the share exchange ratio or acquisition price cannot be arbitrarily altered unless under the following circumstances. Besides, it shall stipulate the circumstances permitting alteration in the contract for merger, demerger, acquisition, or transfer of shares:

Cash capital increase, issuance of convertible corporate bonds, issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.
An action, such as a disposal of major assets, which affects the Company's financial operations.
An event, such as a major disaster or major change in technology, that affects the Company’s shareholder equity or share price.
An adjustment where any of the companies

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participating in the merger, demerger, acquisition, or transfer of shares from another company, buys back treasury stocks.

An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.
Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.

Article 20

When the Company participates in merger, demerger, acquisition, or transfer of shares, the contracts shall specify rights and obligations of the company’s merger, demerger, acquisition, or transfer of shares as well as the following items:

Handling of breach of contract.
Principles for the handling of equity-type securities previously issued or treasury stocks previously bought back by any company that is extinguished in a merger or that is demerged.
The amount of treasury stocks participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.
The manner of handling changes in the number of participating entities or companies.
Preliminary progress schedule for plan execution, and anticipated completion date.
Scheduled date for convening the legally mandated

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shareholders' meeting if the plan exceeds the deadline without completion, and relevant procedures.

Article 21

As far as the companies participating in merger, demerger, acquisition, or transfer of shares are concerned, if any of the parties intends further to carry out merger, demerger, acquisition, or transfer of shares with another company after public disclosure of the information, and the number of participating companies decreases and the shareholders’ meeting has adopted a resolution authorizing the Board of Directors to alter the limits of authority, such participating companies may exempt from calling another shareholders’ meeting for resolution anew. All of the participating companies shall carry out anew the procedures or legal actions that had been completed on the original merger, demerger, acquisition, or transfer of shares.

Article 22

Provided that companies participating in merger, demerger, acquisition, or transfer of shares are not public entities, the Company shall sign an agreement with them in accordance with the provisions of Articles 17, 18 and 21.

Article 23

The total of the real estate or marketable securities for non-operating purpose as well as the quotas for individual marketable securities that the Company and its respective subsidiaries acquire:

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The total of real estate for non-operating purpose the Company acquires shall not be higher than 50% of stockholders' equity; The total of real estate for non-operating purpose the Company and its respective subsidiaries acquire shall not be higher than 10% of our stockholders' equity.
I. The amount of individual marketable securities the Company invests in shall not be higher than 50% of our stockholders' equity; The amount of individual marketable securities the Company and its respective subsidiaries invest in shall not be higher than 10% of our stockholders' equity.
The net investment of consolidated shareholders' equity of the total of marketable securities that the Company and its subsidiaries purchase shall not be higher than 150% of our parent company shareholders' equity of the latest consolidated financial statements unless otherwise specified by laws.

Article 24

When the Company and its subsidiaries acquire or dispose of assets, they shall formulate the procedures for the company based on the Company's “Procedures for Acquisition or Disposal of Assets”.

Article 25

Relevant personnel of the the Company shall be dealt with in accordance with our regulations if they violate the procedures.

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Article 26

The matters not stipulated in the procedures shall be handled in accordance with “Guidelines for Acquisition or Disposal of Assets by Public Entities” and its relevant provisions issued by the Financial Supervisory Commission of Executive Yuan.

Article 27

After the procedures have been approved by the board of directors, they shall be submitted to each supervisor, and then to a shareholders' meeting for approval; the same applies when the procedures are amended. If any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to each supervisor.

Where the position of independent director has been created, when the procedures for the acquisition and disposal of assets are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Article 28

The provisions of these guidelines relating to 10% of the total assets shall be calculated on the basis of the total

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assets in the latest individual or respective financial statements as stipulated in the guidelines for financial reports made by securities issuers.

In the case of a company’s stock has no nominal amount or the nominal amount is not NT$10 per share, according to the guidelines of transaction amount of 20% paid-in capital, it shall be calculated by 10% of the parent company proprietary equity.

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Appendix 5 Cathay Real Estate Development Co., Ltd. Procedures for Lending of Capital and Endorsements

Amendment made at shareholders meeting on 14 June 2013 Amendment made at shareholders meeting on 8 June 2016

Chapter 1 General Provisions

Article 1

The procedures are formulated in accordance with Article 36-1 of the Securities Exchange Act and the relevant provisions of the “Guidelines for Lending of Capital and Endorsements by Public Entities”. Except as otherwise provided, the Company’s relevant lending of capital to others and endorsements shall comply with the procedures.

Article 2

If a subsidiary of the Company plans to lend capital to others and endorse or provide guarantees for others, it shall formulate the procedures of the company based on the “Guidelines for Lending of Capital and Endorsements by Public Entities” and these procedures.

Article 3

The terms used in the procedures are defined as follows:

Net Value: referring to the equity of the Company’s latest balance sheet of financial statements audited and certified by CPA is attributable to the owner of the

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parent company.

Date of Occurrence: referring to the formerest date among the date of contract signing, the date of payment, the date of the board of directors’ resolution, or other dates when the object and the amount of the transaction can be confirmed.

Chapter 2 Lending of Capital

Article 4

The objects that the Company can lend capital:

Corporations or companies with which the Company does business.
Corporations or companies necessary for short-term financing with the Company.

The term "short-term" as mentioned in the preceding paragraph refers to the longer period based on one year or the Company’s operating cycle.

Article 5

The evaluation criteria forthe Company’s lending capital to others:

If the Company and other corporations or companies are engaged in lending of capital because of business, the provisions of paragraph 1 (2) of Article 6 shall be applied.
If there is a need for short-term financing to lend capital, it shall be subject to the following circumstances:
(1) Subsidiaries of the Company that hold more than

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50% shares of voting rights directly or indirectly.
(2) A corporation or a company makes short-term financing due to the need of purchasing materials or operating turnover.
(3) Others that have obtained the approval from the Board of Directors of the Company to lend capital.

Article 6

The total of capital lent by the Company and the quota permitted to an individual object:

The total of the Company’s lending of capital shall not exceed 40% of the Company’s net value.
For corporations or companies that do business with the Company, individual lending of capital shall not exceed the amount of transactions between the two parties. The amount of transaction refers to the higher amount based on the amount of purchase or sales between the two parties.
For corporations or companies having a need of making short-term financing, individual lending of capital shall not exceed 20% of the Company’s net value.

For corporations or companies having a need of making short-term financing, individual lending of capital shall not exceed 20% of the Company’s net value.

Article 7

The lending of capital and procedures the Company deals with:

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Review of Credit Investigation When it comes to the Company’s lending of capital, the objects that need capital lending should submit required documents and the latest financial statements and then apply for the amount of capital lending in written form to the department in charge of this matter. Upon receiving the application, the department in charge of this matter will turn it over to our Operation Management Dept. for evaluation investigation into the objects of capital lending, including the description of relevant capital-lending content, necessity and rationality, risk assessment results, and the impact of capital lending on the Company’s operational risk, financial conditions, and shareholders' equity. Collateral should be obtained, if necessary.
Approval of Credit

When it comes to the Company’s lending of capital, it shall be approved by the chairman of the board after our Operation Management Dept.’s evaluation based on the procedures. The department in charge of this matter shall report to the board of directors for resolution and approval and shall not delegate others to decide.

Preservation of Claims

When it comes to the Company’s lending of capital, except the subsidiaries that directly and indirectly hold more than 50% shares of voting rights, the same amount of guaranteed promissory note shall be required and, if necessary, mortgage of movable

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property or real estate shall be set. However, if the objects of capital lending provide personal or company’s adequate financial resources and credit as a guarantee instead of providing collateral, the Board of Directors may take Operation Management Dept.’s evaluation report into account; if a company is the guarantor, attention should be paid to whether the constitution of the company is set as an external guarantee clause.

When reporting the procedures of lending of capital to the Board of Directors based on the preceding regulations, opinions from each Independent Director shall be taken into full consideration, and their specific ideas and reasons for consent or opposition shall also be included in the minutes of the Board of Directors' meeting.

Article 8

The Company’s deadlines of capital lending and method of interest calculation:

Deadlines of Capital Lending

Each deadline of capital lending is limited to the longer period based on one year or the Company’s operating cycle.

Method of Interest Calculation

The interest rate of capital lending shall not be less than the average interest rate of our short-term financing from financial institutions. The Company’s interest of lending accrues on a monthly basis and is subject to the principle of monthly interest payment.

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In case of special circumstances, adjustment is made according to the actual needs after the approval of the Board of Directors.

Article 9

Subsequent measures for control and management of the lending of capital and procedures for handling overdue claims:

Measures for Control and Management
(1) After the loan has been allocated, the department in charge of this matter shall pay constant attention to the financial, business and related credit status of the capital-lending object and the guarantor. If there is any provision of collateral, it should be in the custody of the department in charge of this matter. Attention should also be paid to any change in the value of the guarantee. If there is a material change, it should be immediately reported to the chairman of the board and be appropriately handled as directed.
(2) When the loan is due or the loan is settled before maturity, the Operation Management Dept. shall first calculate the interest payable and collect it together with the principal before cancelling the loan of promissory note and returning to the capital-lending object or applying for mortgages cancellation.
Handling of Overdue Claims
(1) The capital-lending object should pay off the

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principal and interest before the maturity of the loan. If the repayment cannot be made in the due time and the deferment is required, a claim shall be made in advance. The deferment of the deadline of settlement shall be reported to the Board of Directors for approval. However, the extension of the repayment agreed by the Board of Directors shall not violate deadlines of capital lending of Article 8.

(2) If the loan is due or the overdue extension of the loan expires, the Company can execute punishment and claim for recovery in accordance with the law in terms of the provided collateral, guarantor, and capital-lending object.

Article 10

The lending of capital between the Company and a subsidiary, or between subsidiaries, the department in charge of this matter should propose the resolution of the Board of Directors in accordance with the provisions of the procedures of respective capital-lending company. The chairman of the board may also be authorized to allocate loans in installments or make a revolving credit line available for drawing down with a certain quota and within a period no more than one year resolved by the Board of Directors to the same capital-lending object.

In terms of a certain quota mentioned in the preceding paragraph, except the conformity to the provisions of paragraph 2 of Article 6, the Company or its subsidiaries’

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granted quota of capital lending to a single enterprise shall not exceed 10% of the net value of each lending company’s latest financial statements.

Article 11

The Operations Management Department shall prepare a memorandum book for the Company's fund-loaning activities, and truthfully record the following information: borrower, amount, date of approval by the board of directors, lending/borrowing date, loan duration, and interest calculation method, to be carefully evaluated and reported periodically.

The Company's internal auditors shall audit the Operational Procedures for Loaning Funds to Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the supervisors in writing of any material violation found.

Article 12

If, as a result of a change in circumstances, an entity for which a loan is made does not meet the requirements of the "Operational Procedures on Loaning of Funds and Making of Endorsements/Guarantees" or the loan balance exceeds the limit, the management authority shall adopt rectification plans and submit the rectification plans to all the supervisors, and shall complete the rectification according to the timeframe set out in the plan..

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Chapter 3 Lending of Capital

Article 13

The endorsements mentioned in the procedures includes:

Financing Endorsements
(1) Discount financing for bills.
(2) Endorsements or guarantee for the purpose of financing other companies.
(3) Issuing a separate bill to a non-financial enterprise as a guarantee for the purpose of the Company’s financing.
Endorsements for Tariffs
Endorsements or guarantee for the Company or other companies in relation to tariffs.
Other Endorsements

Any endorsements or guarantee that cannot be classified as the preceding two subparagraphs.

The Company provides movable or immovable property for other companies to set pledges and mortgages for the guarantee of the loan in accordance with the procedures.

Article 14

The Company may endorse the following companies:

Companies that do business with us.
Subsidiaries that directly and indirectly hold more than 50% shares of voting rights.
Direct and indirect holding more than 50% shares of the voting rights of the company.

Those foreign companies that directly and indirectly hold more than 90% shares of voting rights may be endorsed. It

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is subject to the resolution of our board of directors for approval and the amount shall not exceed 10% of the net value of the Company. However, those foreign companies that directly and indirectly hold 100% shares of the voting rights for endorsements do not apply.

Those counterparts or co-creators have mutual guarantee according to contract regulations due to the needs of undertaking projects or endorse investees by all shareholders’ contribution of capital based on their share holding ratio as a result of the joint investment relationship, or the counterparts assume joint responsibilities for the performance bond of pre-sale house sale contract subject to Consumers Protection Act may conduct endorsements free of the restriction of the preceding two paragraphs.

Contribution of capital mentioned in the preceding paragraph refers to the Company’s direct contribution or contribution made by companies that hold 100% shares of the voting rights.

Article 15

The evaluation criteria and quotas of the Company’s endorsements:

The total endorsements of the Company and its subsidiaries shall not exceed 60% of our net value.
The Company’s endorsements towards a single company shall not exceed 30% of our net value. The total of the Company and its subsidiaries’ endorsements towards a single company shall not

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exceed 30% of our net value.

The Company’s endorsements towards a single company for business are subject to the foregoing regulations and shall not exceed the amount of mutual transaction. The amount of transaction refers to the higher amount based on the amount of purchase or sales between the two parties.

In case of our endorsement object is a subsidiary whose net value is less than 1/2 of the paid-in capital, the Operation Management Dept. should regularly review the subsidiary’s financial statements to control the risks that may arise from the endorsements.

If a subsidiary’s stock has no nominal amount or the nominal amount is not NT$10 per share, the paid-in capital calculated in accordance with the provisions in the preceding paragraph shall be the sum of the capital stock plus the capital surplus-issued premium.

Article 16

The procedures for endorsements that the Company handles:

Review of Credit Investigation
When it comes to the Company’s endorsements, the companies that need endorsements should submit required company documents and the latest financial statements, and then apply for endorsements in written form to the department in charge of this matter.

Upon receiving the application, the department in charge of this matter will turn it over to our Operation

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Management Dept. for evaluation investigation into the objects of endorsements, including the description of relevant endorsements content, necessity and rationality, risk assessment results, and the impact of endorsements on the Company’s operational risk, financial conditions, and shareholders' equity. Collateral should be obtained, if necessary.

Approval and Delegation of Authority

When it comes to the Company’s endorsements, it shall be approved by the chairman of the board after our Operation Management Dept.’s evaluation based on the procedures; the department in charge of this matter shall report to the board of directors for resolution, but the Board of Directors may delegate the chairman to determine the object and below NT$1 billion for resolution, and then report the matter to the Board of Directors for ratification.

When reporting the procedures of endorsements to the Board of Directors based on the preceding regulations, opinions from each Independent Director shall be taken into full consideration, and their specific ideas and reasons for consent or opposition shall also be included in the minutes of the Board of Directors' meeting.

Article 17

The Company’s exclusive seal for endorsements is a company seal registered with the Ministry of Economic Affairs and is in the custody of someone in charge. The depository of endorsement-related seals shall be reported

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to the Board of Directors for consent; the same shall apply in the event of change.

While the Company issues guarantee to foreign companies, the letter of guarantee shall be signed by the person authorized by the Board of Directors.

Article 18

For endorsement/guarantee activities, besides applying for a chop according to the prescribed procedure, the Operations Management Department shall prepare a memorandum book and record in detail the following information: endorsement/guarantee matter, enterprise name for which the endorsement/guarantee is made, risk assessment results, endorsement/guarantee amount, date of passage by the board of directors or of authorization by the chairman of the board, endorsement/guarantee date, content of collateral, and conditions and date for discharging endorsement/guarantee responsibilities, to be carefully evaluated and reported periodically. Documents such as negotiable instruments and agreements shall be held for safekeeping by the management authority.

The Company's internal auditors shall audit the Operational Procedures for Endorsements/Guarantees for Others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the supervisors in writing of any material violation found.

Article 19

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If an endorsement is required for business purposes and it is necessary to exceed the amount set in the procedures and meets the requirements of the procedures, it shall be agreed by the Board of Directors and there must be a joint guarantee of more than half of the directors affixing their signatures for the possible loss exceeding the limit. The procedure shall be also amended to be ratified by the shareholders’ meeting; if the shareholders’ meeting disagrees, a plan shall be made to eliminate the excess part within a certain period of time.

Article 20

If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of "Operational Procedures on Loaning of Funds and Making of Endorsements/Guarantees" or the amount exceeds the limit, the management authority shall adopt rectification plans and submit the rectification plans to all supervisors, and shall complete the rectification according to the timeframe set out in the plan.

Chapter 4 Declaration and Information Disclosure Article 21

A subsidiary shall inform our Operation Management

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Dept. of the situation of its capital lending and endorsements of the last month before 5th of each month. The Company shall declare its and its subsidiaries’ last-month balance of capital lending and endorsements before 10th of each month.

Article 22

If the Company’s capital lending meets one of the following standards, it shall announce the declaration within two days from the date of occurrence:

The balance of the Company and its subsidiaries’ lending capital to others is more than 20% of our net value.
The balance of the Company and its subsidiaries’ lending capital to a single enterprise is more than 10% of our net value.
The increased capital-lending amount of the Company or its subsidiaries is more than NT $10 million and more than 2% of our net value.

If a subsidiary is not a domestic public entity, it has to declare according to the third subparagraph of the preceding paragraph. It shall notify the Company immediately upon the date of occurrence and the Company shall announce the declaration in accordance with regulations.

Article 23

If the Company’s endorsements meet one of the following standards, it shall announce the declaration within two

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days from the date of occurrence:

The balance of the Company and its subsidiaries’ endorsements is more than 50% of our latest financial statements’ net value.
The balance of the Company and its subsidiaries’ endorsements to a single enterprise is more than 20% of our net value.
The balance of the Company and its subsidiaries’ endorsements to a single enterprise is more than NT$10 million, and the sum of the balance of endorsement, long-term investment, and capital-lending is more than 30% of our net value.
The increased endorsement amount of the Company or its subsidiaries is more than NT$30 million and more than 5% of our net value.

If a subsidiary is not a domestic public entity, it has to declare according to the fourth subparagraph of the preceding paragraph. It shall notify the Company immediately upon the date of occurrence and the Company shall announce the declaration in accordance with regulations.

Article 24

Our Operation Management Dept. shall assess the conditions of capital lending and provide sufficient allowances for bad debts. It shall also evaluate or recognize the contingent losses of endorsements, disclose capital-lending and endorsements information properly in financial reports, and provide relevant information to CPA

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to carry out the necessary verification procedures.

Chapter 5 Supplementary Provisions

Article 25

The procedure shall be incorporated into the Company’s internal control system after adoption.

Article 26

Managers and organizers who violate the procedures shall be dealt with in accordance with the Company’s regulations.

Article 27

The matters not stipulated in the procedures shall be handled in accordance with “Guidelines for Lending of Capital and Endorsements by Public Entities” and its relevant provisions issued by the Financial Supervisory Commission.

Article 28

After passage by the board of directors on the Procedures, submit the same to each supervisor and for approval by the shareholders' meeting. If any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinions to each supervisor and for discussion by the shareholders' meeting. The same shall apply to any amendments to the Procedures.

When the Operational Procedures on Loaning of Funds

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and Making of Endorsements/Guarantees have been submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions; the independent directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the board of directors' meeting.

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Appendix 6 Shareholdings of Directors

As of 10 April 2018, the Company's paid-up capital is NT$ 11,595,610,590, the number of shares issued is 1,159,561,059.
Details of the minimum required combined shareholdings of all directors and supervisors by

law, and shareholdings as per the shareholders' register:

Position	Shareholdings required by law	Shares recorded in shareholders'
Director	32,000,000 shares	33,049,822 shares

Note: Book closure date: 10 April 2018.

Shareholding details of directors and supervisors:

Position	Name	Shares held as at book closure date	Remarks
Chairman	Ching-Kuei Chang	22,000,000	He Hsin Capital.CO.,LTD. representative
Director	Hung-Ming Lee	22,000,000	He Hsin Capital.CO.,LTD. representative
Director	Chung-Yan Tsai	22,000,000	He Hsin Capital.CO.,LTD. representative
Director	Tzi-Li Tung	5,941,332	Cathay Charity Foundation representative
Director	Chung-Chang Chu	2,353,690	Cathay Real Estate Foundation representative
Director	Chin-Liang Lin	2,754,800	Cathay Real Estate Employees’ welfare Committee representative
Independent Director	Shiou-Ling Lin	0
Independent Director	Chih-Wei Wu	0
Independent Director	James Y. Chang	0
Total shares held		33,049,822

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CATHAY RED — AGM Information 2018

52129_rns_2018-06-20_a4c454d9-8024-4f26-ac45-d11e62d7066d.pdf

2018 Annual General Shareholders'

Meeting Agenda Handbook

Table of Contents

4. Provisional Motion(s)

II. Appendix

Cathay Real Estate Development Co., Ltd.

2018 Shareholder Meeting Agenda

1. Matters to Report

(1) 2017 Business Report

(2) Audit Committee’s Review Report

Auditor's Report on the Final Accounts of Cathay Real Estate Development Co., Ltd.

Audit Committee

(3) 2017 Compensation Report for Employees and Directors

2. Matters for Acknowledgement

(1) Adoption of 2017 Business Report and Financial Statements.

Independent Auditor’s Report

Opinion

Basis for Opinion

Key Audit Matters

Construction Income Recognition

Valuation of Construction Land

Responsibilities of Management and Those Charged with Governance for the Individual Financial Statements

Auditor’s Responsibilities for the Audit of the Individual Financial Statements

Notice to Readers

English Translation of Financial Statements Originally Issued in Chinese

December 31, 2017 and December 31, 2016

English Translation of Financial Statements Originally Issued in Chinese

English Translation of Financial Statements Originally Issued in Chinese

Cathay Real Estate Development Co., Ltd.

Independent Auditor’s Report

Opinion

Basis for Opinion

Key Audit Matters

Construction Income Recognition

Valuation of Construction Land

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Other Information

Notice to Readers

English Translation of Financial Statements Originally Issued in Chinese

English Translation of Financial Statements Originally Issued in Chinese

English Translation of Financial Statements Originally Issued in Chinese

Cathay Real Estate Development Co., Ltd. Consolidated Statements of Cash Flows

( 2) Adoption of Proposal for 2017 Profit Distribution.

Cathay Real Estate Development Co., Ltd. EARNINGS DISTRIBUTION TABLE OF THE 2017

3. Matters for Discussion

(1) Proposal for the amendment of the Company's Rules of Procedure for Shareholder Meetings.

Cathay Real Estate Development Co., Ltd. Amendment Comparison Table for Rules of Procedure for Shareholder Meetings

(2) Proposal for the amendment of the Company's Articles of Incorporation.

Cathay Real Estate Development Co., Ltd. Amendment Comparison Table for the Articles of Incorporation

Cathay Real Estate Development Co., Ltd. Amendment Comparison Table for Election of Directors and Supervisors

Cathay Real Estate Development Co., Ltd. Procedures for Acquisition or Disposal of Assets Articles amendment comparison table

(5) Proposal for the amendment of the Company's Procedures for Lending of Capital and Endorsements.

Cathay Real Estate Development Co., Ltd. Procedures for Lending of Capital and Endorsements. Articles amendment comparison table

(6) Proposal for releasing the prohibition on the Company’s board of directors from participation in competitive business.

Resolution:

Provisional Motion(s)

Appendix 1

Cathay Real Estate Development Co., Ltd., Articles of Incorporation

Chapter 1 General Provisions

Article 3

directors.

Article 6

Chapter 2 Shareholdings

Article 8

Article 10

Chapter 3 Shareholders Meeting

Article 13

Article 14

Chapter 4 Board of Directors

Article 18

Article 19

Article 21

directors.

Chapter 5 Supervisor

Article 25

Article 26

CATHAY RED AGM Information 2018