CATHAY RED - AGM Information 2023

Stock Code ： 2501

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2023 Annual General Shareholders'

Meeting Agenda Handbook

Meeting Time ： June 9, 2023, at 9 ： 00 a.m.

Place ： 2F., No. 6, Section 3, Minsheng East Road, Taipei,

Taiwan R.O.C.

Courtyard by Marriott Taipei Downtown (Lily Conference Hall)

Shareholders meeting will be held by means of physical shareholders meeting

http://www.cathay-red.com.tw

I. Meeting Agenda ...........................................................................1 1. Matters to Report (1) 2022 Business Report ..................................................... 2 (2) Audit Committee’s Review Report ................................ 6 (3) 2022 Compensation Report for Employees and Directors ........................................................................ 7 2. Matters for Acknowledgement (1) 2022 Business Report and Financial Statements ............ 8 (2) 2022 Earnings Distribution............................................... 30 3. Matters for Election (1) Re-election of directors due to expiry of term in office ...……………………………..…………...............32 4. Matters for Discussion (1) Proposal for releasing the prohibition on the Company’s 20th board of directors from participation in competitive business ………………................................................ 37 5. Provisional Motion(s) II. Appendix 1. Articles of Incorporation....................................................... 39 2. Rules of Procedure for Shareholder Meetings...................... 53 3. Procedures for Election of Directors......................................69 4. Shareholdings of Directors.....................................................74

Cathay Real Estate Development Co., Ltd.

2023 Shareholder Meeting Agenda

Commencement of Meeting
Chairman's Remarks
Matters to Report
(1) 2022 Business Report
(2) Audit Committee’s Review Report
(3) 2022 Compensation Report for Employees and Directors
Matters for Acknowledgement
(1) Adoption of 2022 Business Report and Financial Statements
(2) Adoption of Proposal for 2022 Earnings Distribution
Matters for Election
(1) Re-election of directors due to expiry of term in office
Matters for Discussion
(1) Proposal for releasing the prohibition on the Company’s 20th board of directors from participation in competitive business
Provisional Motion(s)
Adjournment

1. Matters to Report

(1) 2022 Business Report

In the past year, thanks to the restructuring of the supply chain of various countries and repeated orders during the pandemic, the foreign trade performed well in the first half of the year; in the second half of the year, the export performance fell significantly in the fourth quarter due to the financial tightening of major economies in the world. In terms of domestic demand, due to the high popularity rate of vaccines, the domestic demand industry has gradually recovered, which was the main axis supporting the economy in the second half of the year. In terms of investment, in the second half of the year, manufacturers gradually reduced their capital expenditures due to the slowdown of the manufacturing industry. Overall, although the economic performance of the past year has expanded, it slowed down significantly in the fourth quarter. In terms of real estate, house prices have been somewhat supported by the high construction costs. However, the uncertainties of the global economic outlook, coupled with the interfering factors such as interest rate hikes, the governmental measures to curb investors from speculating real estate, the Russia-Ukraine War, and geopolitical risks, resulted in the gradual widening of the gap between buyers and sellers in terms of price recognition and caused the sales volume of the residential market to decline.In terms of newly launched projects, the

Company has set the target sales rate precisely, in 2022, the Company achieved stable sales of new projects and obtained the Hsinchu development project, which was the first time in cooperation with a Japanese company to participate in the bidding of public urban regeneration project.

In 2022, the Company launched several new projects including “Cathay Shihmei”, “Cathay The Essence Garden” and "Dunnan Lin-Yuan" in Taipei, "Cathay Panyun" in Tainan and “Cathay Yihe” in Kaohsiung. As the Company's products met up to the market demand, the sales performance was pretty good. In terms of revenue, the projects that are delivered are “Cathay Peng, Tian” in Banqiao, “Cathay Yue” in Sanchong and “Cathay Mega+” in Taichung, and projects that are completed but yet closed in the previous year, totaling a sales revenue of approximately NT$14,126,620,000.

Looking forward to 2023, the economy is expected to be supported by domestic demand and consumption and it will be affected by the weak export performance. However, with the opening of the border for tourists and consumers' consumption, etc., life will gradually return to normal, and the worry of the supply chain disruption will be reduced, boosting economic growth and showing a bottoming out rebound. In terms of the housing market, affected by the government’s roll-out policy to crack down on real estate speculation, although deferred rigid purchases still exist,

consumers are hesitating on investment in durable goods. Therefore ； In the second half of the year, there will be projects in a joint venture with the Japanese partner including Sanchong Sector in Sanchong. The Company will adjust the pace of project proposals depending on the economic situation, continue with diverse land development to increase its land reserves and steadily move toward to becoming a comprehensive developer.

In 2023, in order to respond to the rapid changes in the economy and policies, the Company’s business guidelines will focus on “Maintaining Profitability and Stability" and "Progress Steadily", and implement it through “Knowledge Management & Cost Optimization”. While developing the core business, the Company will focus on the strengthening of internal organization and talent cultivation. Through refined optimization of cost to increase competitiveness, deepening knowledge management, systematically passing on of knowledge, and resource integration, the Company is expected to maximize its synergy. The Company's future development goal is to become a comprehensive developer. For the core businesses, apart from land reservation, the Company will continue with diverse land development, such as commercial mixed-used development and participation in the government-owned urban renewal projects. For investments, the Company will continue to invest in the

health management and hospitality industry to take advantage of the business opportunities after the pandemic restrictions been lifted. It will also expand its service capacity and business scale through active efficiency optimization and plans for the increase of the number of operating sites. In addition, the Company is actively evaluating its investments in other new businesses, and plans to expand its business territory to create higher profit margin.

I would like to express my highest gratitude to the directors for their gracious presence and guidance today. Wish you

I wish you good health and good luck. Thank you!

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

(2) Audit Committee’s Review Report

The financial statements (including consolidated financial statements) of Cathay Real Estate Development covering the period from January 1 to December 31, 2022, and the business report and earning distribution plan have been prepared and submitted by the Board of Directors of the Company. The financial statements (including consolidated financial statements) were audited by Jung-Huang Hsu, CPA, and Ma, Chun Ting, CPA, of Ernst & Young, who issued an auditors’ report.

The above statements and reports have been examined by the Audit Committee and no irregularities were found. We hereby report as above in accordance with Article 14-4 of

the Securities and Exchange Act and Article 219 of the Company Act. Please kindly approve.

2023 Annual Meeting of Shareholders

Cathay Real Estate Development Co., Ltd.

Auditing Committee

Convener: Shiou-Ling Lin

April 27, 2023

(3) 2022 Compensation Report for Employees and Directors

Explanation:

Conducted in accordance with Article 27 of the Articles of Incorporation.
2022 Financial Statements have been audited by Ernst & Young. The earnings before tax are NT$1,330,420,758 where 0.1% amounting to NT$1,330,421 is allotted as 2022 total employee compensation, and 0.1804% amounting to NT$2.4 million is allotted as 2022 total directors compensation. The above compensation is to be distributed in cash.

2. Matters for Acknowledgement

(1) Adoption of 2022 Business Report and Financial Statements.

[Proposed by the Board of Directors]

Explanation:

The Company's 2022 Financial Statements have been audited -

by Jung-Huang Hsu /CPA and Chun Ting Ma /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 2 to 5, and 9 to 29 of this handbook.

Resolution:

Independent Auditors’ Report Translated from Chinese

To Cathay Real Estate Development Co., Ltd.

Opinion

We have audited the accompanying parent company only balance sheets of Cathay Real Estate Development Co., Ltd. (the “Company”) as of December 31, 2022 and 2021, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2022 and 2021, and notes to the parent company only financial statements, including the summary of significant accounting policies (together “the parent company only financial statements”).

In our opinion, based on our audits and the report of the other auditors (please refer to Other Matter) the parent company only financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and cash flows for the years ended December 31, 2022 and 2021, 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 the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the parent company only 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 and the report of the other auditors, 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 2022 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue Recognition

The Company is primarily engaged in entrusting construction company in construction and planning of public housing and commercial offices for sale and rental. Since the company’s sales revenue 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 real estate sales revenue in the parent company only financial statements, with respect to a significant proportion within operating revenue, and need to judge and determine performance obligation and the timing of satisfaction, the real estate sales revenue is determined to be a key audit matter.

The audit procedures we performed regarding real estate sales revenue recognition included but not limited to: evaluate the appropriateness of the real estate sales revenue recognition policies; realize the transaction process and perform the tests of control on the effectiveness of control points during internal control audit; select samples to perform transaction test of details and verify major clauses and conditions in the construction contract; review the transaction conditions and confirm the appropriateness of the timing the performance obligation is recognized.

We also assess whether the Company properly disclosed information relating the real estate sales revenue in the financial statement. Please refer Note 4 and Note 6.

Valuation of Construction Land

The construction land of the Company shall be measured at the lower of cost and net realized 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 parent company only 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 accounting policies; realize the transaction process and perform tests of control on the effectiveness of control points during internal control audit; select samples to analyze the management valuation process and the key valuation parameters, and evaluate the reasonableness on the basis of working paper and relevant documentation corresponding to construction land valuation which included in inventories.

We also assess whether the company properly disclosed information relating the construction land valuation in the financial statement. Please refer Note 4, Note 5 and Note 6.

Other Matter Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the reports of other auditors. These associates and joint ventures under equity method amounted to NT$1,533,972 thousand, representing 2.38% of the total assets as of December 31, 2022. The related shares of profits from the associates and joint venture under the equity method amounted to NT$14,128 thousand, representing 1.06% of the income before tax for the year ended December 31, 2022.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only 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 Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only 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 parent company only financial statements.

As part of an audit in accordance with the Standards on Auditing of 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 parent company only 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 parent company only 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 parent company only financial statements, including the accompanying notes, and whether the parent company only 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 parent company only 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2022 parent company only 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.

Hsu, Jung Huang Ma, Chun Ting Ernst & Young, Taiwan March 14, 2023

Notice to Readers

The accompanying parent company only financial statements are intended only to present the financial position, 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 parent company only financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Parent Company Only Balance Sheets

December 31, 2022 and 2021

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(Expressed in thousands of New Taiwan Dollars)
Assets December 31, 2022 December 31, 2021
Code Items Notes Amount % Amount %
Current Assets
1100 Cash and cash equivalents 4, 6(1) & 7 $7,089,816 11 $1,897,739 3
1120 Financial assets at fair value through other comprehensive income-current 4 & 6(2) 2,558,725 4 3,605,083 6
1150 Notes receivable, net 4 & 6(3),(19) 37,966 - 20,890 -
1170 Accounts receivable, net 4, 6(4),(19) 4,071 - 152,719 -
1180 Accounts receivable-related parties, net 4, 6(4),(19) & 7 1,465 - 899 -
1200 Others receivables 7 11,163 - 2,148 -
130x Inventories 4, 6(5) & 7 33,776,123 52 34,085,213 60
1410 Prepayments 75,081 - 4,546 -
1470 Others current assets 27,401 - 50,743 -
1480 Incremental costs of obtaining contracts-current 4, 6(5),(18) 1,010,700 2 777,147 2
11xx Total current assets 44,592,511 69 40,597,127 71
Non-currents Assets
1517 Financial assets at fair value through other comprehensive income-non-current 4 & 6(2) 647,654 1 2,201,116 4
1550 Investment accounted for using equity method 4, 6(6),(26)&7 7,057,852 11 2,242,335 4
1600 Property, plant and equipment 4, 6(7) &7 103,550 - 59,501 -
1755 Right-of-use assets 4, 6(20) &7 22,650 - 36,585 -
1760 Investment properties, net 4 & 6(8) 10,539,484 16 10,527,724 18
1780 Intangible assets 4 & 6(9) 5,223 - 4,641 -
1840 Deferred tax assets 4 & 6(24) 373,209 1 330,412 1
1900 Other non-currents assets 6(10) & 7 1,168,825 2 1,319,076 2
15xx Total non-currents assets 19,918,447 31 16,721,390 29
1xxx Total Assets $64,510,958 100 $57,318,517 100
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(The accompanying notes are an integral part of these parent company only financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Parent Company Only Balance Sheets (continued)

December 31, 2022 and 2021

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(Expressed in thousands of New Taiwan Dollars)
Liabilities and Equity December 31, 2022 December 31, 2021
Code Items Notes Amount % Amount %
Current Liabilities
2100 Short-term loans 4, 6(11) & 7 $11,800,000 18 $10,770,000 19
2110 Short-term notes payable 4 & 6(12) 1,994,580 3 1,958,065 4
2130 Contract liabilities-current 4 & 6(18) 5,500,109 9 4,627,062 8
2150 Notes payable 41,609 - 153,346 -
2170 Accounts payable 731,476 1 703,799 1
2180 Accounts payable-related parties 7 659,476 1 170 -
2200 Other payables 465,984 1 175,334 -
2230 Current tax liabilities 4 42,032 - 9,208 -
2280 Lease liabilities-current 4, 6(20) & 7 15,247 - 25,474 -
2300 Other current liabilities 32,962 - 1,028,083 2
2320 Long-term loans-current portion 4 & 6(13) 4,150,000 7 1,500,000 3
21xx Total current liabilities 25,433,475 40 20,950,541 37
Non-Current Liabilities
2540 Long-term loans 4 & 6(13) 14,271,550 22 10,728,685 19
2570 Deferred tax liabilities 4 & 6(24) 10,049 - 10,049 -
2580 Lease liabilities-non-current 4, 6(20) & 7 6,546 - 10,481 -
2600 Other non-current liabilities 6(14) & 7 187,085 - 181,149 -
25xx Total non-current liabilities 14,475,230 22 10,930,364 19
2xxx Total Liabilities 39,908,705 62 31,880,905 56
Equity 4
3100 Capital stock
3110 Common stock 6(15) 11,595,611 18 11,595,611 20
3200 Capital surplus 6(16) 65,262 - 38,846 -
3300 Retained earnings 6(17)
3310 Legal capital reserve 4,723,658 7 4,638,904 8
3320 Special capital reserve 504,189 1 504,189 1
3350 Unappropriated retained earnings 7,491,441 12 7,191,237 12
Total retained earnings 12,719,288 20 12,334,330 21
3400 Other equity 222,092 - 1,468,825 3
3xxx Total Equity 24,602,253 38 25,437,612 44
Total Liabilities and Equity $64,510,958 100 $57,318,517 100
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(The accompanying notes are an integral part of these parent company only financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD.

Parent Company Only Statements of Comprehensive Income

For the Years Ended December 31, 2022 and 2021

(Expressed in thousands of New Taiwan Dollars, except for earnings per share)

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(Expressed in thousands of New Taiwan Dollars)
2022 2021
Code Items Notes
Amount % Amount %
4000 Operating revenues 4, 6(8),(18),(20) & 7 $14,126,629 100 $9,833,582 100
5000 Operating costs 4, 6(5),(8),(9),(14),(20),(21) & 7 (11,538,284) (82) (7,438,327) (76)
5900 Gross margin 2,588,345 18 2,395,255 24
5910 Unrealized sales profit (56,202) - - -
5920 Realized sales profit 41 - 41 -
5950 Gross margin, net 2,532,184 18 2,395,296 24
6000 Operating expenses 4, 6(8),(9),(14),(20),(21) & 7
6200 Administrative expenses (1,272,805) (9) (950,286) (9)
6450 Expected credit profit (loss) 4 & 6(19) - - 9 -
Total operating expenses (1,272,805) (9) (950,277) (9)
6900 Operating income 1,259,379 9 1,445,019 15
7000 Non-operating income and expenses 4, 6(22) & 7
7100 Interest income 11,550 - 667 -
7010 Other income 619,119 5 215,093 2
7020 Other gains or losses 3,535 - 2,772 -
7050 Finance costs 7 (161,604) (1) (85,955) (1)
7070 Share of profit or loss of subsidiaries, associates and joint ventures 4 & 6(6) (405,289) (3) (653,728) (6)
Total non-operating income and expenses 67,311 1 (521,151) (5)
7900 Income before Income tax 1,326,690 10 923,868 10
7950 Income tax expense 4 & 6(24) (118,941) (1) (76,329) (1)
8200 Net income 1,207,749 9 847,539 9
8300 Other comprehensive income 6(23),(24)
8310 Not to be reclassified to profit or loss in subsequent periods
8311 Remeasurements of defined benefit plans (5,322) - (598) -
8316 Valuation gain (losses) on equity instruments at fair value through (1,355,894) (10) 1,295,092 13
other comprehensive income
8330 Share of the other comprehensive income of associates and joint (14,067) - 465 -
ventures accounted for using the equity method
– not to be reclassified to profit or loss in subsequent periods
8349 Income tax related to items not be reclassified to profit or loss in 1,064 - 120 -
subsequent periods
8360 To be reclassified to profit or loss in subsequent periods
8380 Share of the other comprehensive income of associates and joint 432 - - -
ventures accounted for using the equity method
– to be reclassified to profit or loss in subsequent periods
Other comprehensive (losses) income, net of tax (1,373,787) (10) 1,295,079 13
8500 Total comprehensive income $(166,038) (1) $2,142,618 22
Earnings Per Share (In dollars) 6(25)
9750 Basic earnings per share $1.04 $0.73
9850 Diluted earnings per share $1.04 $0.73
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(The accompanying notes are an integral part of these parent company only financial statements)

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English Translation of Financial Statements Originally Issued in Chinese CATHAY REAL ESTATE DEVELOPMENT CO., LTD. Parent Company Only Statements of Cash Flows For the Years Ended December 31, 2022 and 2021

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(Expressed in thousands of New Taiwan Dollars)
2022 2021
Code Items Amount Amount
AAAA Cash flows from operating activities
A10000 Net income before tax $1,326,690 $923,868
A20000 Adjustments:
A20100 Depreciation 206,290 232,000
A20200 Amortization 2,591 1,818
A20300 Expected credit loss (gain) - (9)
A20900 Interest expenses 161,604 85,955
A21200 Interest income (11,550) (667)
A21300 Dividend income (204,369) (146,949)
A22400 Share of profit or loss of associates and joint ventures 405,289 653,728
A22500 Loss (gain) on disposal of property, plant and equipment (4,279) (3,960)
A23900 Unrealized sales profit (loss) 56,202 -
A29900 Others (281,818) -
A30000 Changes in operating assets and liabilities:
A31130 Decrease (increase) in notes receivable (17,076) 10,637
A31150 Decrease (increase) in accounts receivable 148,648 88,167
A31160 Decrease (increase) in accounts receivable-related parties (566) (855)
A31180 Decrease (increase) in other receivables (9,016) 10,859
A31200 Decrease (increase) in inventories 417,262 (6,871,562)
A31230 Decrease (increase) in prepayments (70,535) (1,618)
A31240 Decrease (increase) in other current assets 23,342 49,101
A31270 Decrease (increase) in incremental costs of obtaining contracts (233,553) (144,118)
A31990 Decrease (increase) in other operating assets (49,947) 34,807
A32125 Increase (decrease) in contract liabilities 873,047 205,863
A32130 Increase (decrease) in notes payable (111,737) 92,544
A32150 Increase (decrease) in accounts payable 27,677 (152,958)
A32160 Increase (decrease) in accounts payable-related parties 659,306 (48,856)
A32180 Increase (decrease) in other payables 286,270 (150,028)
A32230 Increase (decrease) in other current liabilities (995,121) 961,029
A33000 Cash inflow generated from operations 2,604,651 (4,171,204)
A33100 Interests received 11,551 669
A33500 Income taxes paid (127,850) (88,575)
AAAA Net cash generated by (used in) operating activities 2,488,352 (4,259,110)
BBBB Cash flow from investing activities
B00010 Acquisition of financial assets at fair value through other comprehensive income (669,589) -
B00020 Disposal of financial assets at fair value through other comprehensive income 1,846,000 -
B01800 Acquisition of investment accounted for using equity method (4,997,840) (940,660)
B02700 Acquisition of property, plant and equipment (68,271) (25,642)
B02800 Disposal of property, plant and equipment 4,926 10,455
B04500 Acquisition of intangible assets (3,173) (3,479)
B06700 Increase in other non-current assets - (66,831)
B06800 Decrease in other non-current assets 150,251 -
B07600 Dividends received 277,613 285,712
BBBB Net cash generated by (used in) investing activities (3,460,083) (740,445)
CCCC Cash flow from financing activities
C00100 Increase in short-term loans 1,030,000 4,160,000
C00500 Increase in short-term notes payable 36,515 539,211
C01600 Proceeds from long-term loans 9,231,550 7,728,685
C01700 Repayment of long-term loans (3,038,685) (6,129,741)
C04020 Repayment of principal of lease liabilities (28,442) (24,934)
C04300 Increase in other non-current liabilities 614 5,510
C04500 Payment of cash dividends (695,737) (1,159,561)
C05600 Interests paid (371,285) (190,641)
C09900 Other financing activities (722) (669)
CCCC Net cash generated by (used in) financing activities 6,163,808 4,927,860
EEEE Net increase (decrease) in cash and cash equivalents 5,192,077 (71,695)
E00100 Cash and cash equivalents, beginning of period 1,897,739 1,969,434
E00200 Cash and cash equivalents, end of period $7,089,816 $1,897,739
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(The accompanying notes are an integral part of these parent company only financial statements)

Independent Auditors’ Report Translated from Chinese

To Cathay Real Estate Development Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Cathay Real Estate Development Co., Ltd. (the “Company”) and its subsidiaries as of December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2022 and 2021, 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 and the report of the other auditors (please refer to Other Matter) 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, 2022 and 2021, and their consolidated financial performance and cash flows for the years ended December 31, 2022 and 2021, 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 the Standards on Auditing of 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 and its subsidiaries 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 and the report of the other auditors, 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 2022 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.

Real Estate Sales Revenue Recognition

The Company and its subsidiaries are primarily engaged in entrusting construction company in construction and planning of public housing and commercial offices for sale. Since the Company and its subsidiaries’ sales revenue 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 real estate sales revenue in the financial statements, with respect to a significant proportion within operating revenue, and need to judge and determine performance obligation and the timing of satisfaction, the real estate sales revenue is determined to be a key audit matter.

We also assess whether the Company and its subsidiaries properly disclosed information relating the real estate sales revenue in the financial statement. Please refer to Note 4 and Note 6.

Valuation of Construction Land

The construction land of the Company and its subsidiaries shall be measured at the lower of cost and net realized 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 financial statements, the valuation of construction land is determined to be a key audit matter.

We also assess whether the Company and its subsidiaries properly disclose information relating the construction land valuation in the financial statement. Please refer Note 4, Note 5 and Note 6.

Construction Revenue Recognition

The Company and its subsidiaries are primarily engaged in performing construction contracts. The recognition of construction revenue is based on the percentage of completion method whereby the input method is used to measure the degree of completion. As the estimates of percentage of completion involves making judgement and estimation and the construction revenue accounted for a significant proportion of operating revenue, which was material to the consolidated financial statements, we therefore determined the construction revenue a key audit matter.

The audit procedures we performed regarding construction revenue recognition included but not limited to: evaluate the appropriateness of the estimated percentage of completed construction and construction revenue recognition policies; understand the transaction process of the construction revenue recognition and perform the tests of assessing the effectiveness of control points during internal control audit; select samples from construction contracts not yet completed by end of the period to perform test of details and recalculate construction revenue recognized based on percentage of completion.

We also assess whether the Company and its subsidiaries properly disclose information relating the construction revenue in the financial statement. Please refer Note 4, Note 5 and Note 6.

Other Matter Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method. Those financial statements were audited by other auditors, whose reports thereon had furnished to us, and our opinions expressed herein are based solely on the reports of other auditors. These associates and joint ventures under the equity method amounted to NT$1,533,972 thousand, representing 1.92% of the total assets as of December 31, 2022. The related shares of profits from the associates and joint venture under the equity method amounted to NT$14,128 thousand, representing 0.84% of the income before tax for the year ended December 31, 2022.

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 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 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 or supervisors, 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.

As part of an audit in accordance with the Standards on Auditing of 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 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 2022 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

We have audited and expressed an unqualified opinion including other matters and an unqualified opinion on the parent company only financial statements of the Company as of and for the years ended December 31, 2022 and 2021.

Hsu, Jung Huang Ma, Chun Ting Ernst & Young, Taiwan March 14, 2023

Notice to Readers

The accompanying consolidated financial statements are intended only to present the financial position, 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.

Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2022 and 2021

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(Expressed in thousands of New Taiwan Dollars)
Assets December 31, 2022 December 31, 2021
Code Items Notes Amounts % Amounts %
Current Assets
1100 Cash and cash equivalents 4, 6(1) & 7 $10,842,494 14 $3,937,378 6
1120 Financial assets at fair value through other comprehensive income-current 4 & 6(2) 2,558,725 3 3,605,083 5
1140 Contract assets-current 4 & 6(19) 379,481 - - -
1150 Notes receivable, net 4 & 6(3),(20) 38,739 - 20,905 -
1170 Accounts receivable, net 4, 6(4),(20) 458,016 1 465,124 1
1180 Accounts receivable-related parties, net 4, 6(4),(20) & 7 19,037 - 8,131 -
1200 Others receivables 80,109 - 33,663 -
1220 Current tax assets 4 219 - 15 -
130x Inventories 4, 6(5) & 8 41,309,699 52 35,979,820 53
1410 Prepayments 425,350 1 502,896 1
1470 Others current assets 7&8 123,793 - 146,713 -
1480 Incremental costs of obtaining contracts-current 4, 6(5),(19) 1,219,857 1 885,612 1
11xx Total current assets 57,455,519 72 45,585,340 67
Non-current Assets
1517 Financial assets at fair value through other comprehensive income-non-current 4 & 6(2) 665,726 1 2,201,412 3
1550 Investment accounted for using equity method 4 & 6(6) 1,815,568 2 - -
1600 Property, plant and equipment 4, 6(7) & 8 4,739,779 6 4,764,306 7
1755 Right-of-use assets 4, 6(21) & 7 4,433,151 5 5,180,713 8
1760 Investment properties, net 4, 6(8) & 8 8,808,563 11 8,225,203 12
1780 Intangible assets 4 & 6(9) 47,298 - 37,564 -
1840 Deferred tax assets 4 & 6(25) 412,363 1 494,848 1
1900 Other non-currents assets 6(10) & 7 1,711,130 2 1,746,760 2
15xx Total non-currents assets 22,633,578 28 22,650,806 33
1xxx Total Assets $80,089,097 100 $68,236,146 100
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(The accompanying notes are an integral part of these consolidated financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets (Continued)

December 31, 2022 and 2021

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(Expressed in thousands of New Taiwan Dollars)
Liabilities and Equity December 31, 2022 December 31, 2021
Code Items Notes Amounts % Amounts %
Current Liabilities
2100 Short-term loans 4, 6(11) & 7 $12,445,000 16 $11,460,000 17
2110 Short-term notes payable 4 & 6(12) 4,094,613 5 3,629,296 5
2130 Contract liabilities-current 4 & 6(19) 6,627,488 8 5,285,520 8
2150 Notes payable 55,974 - 173,866 -
2170 Accounts payable 1,270,878 2 934,058 1
2180 Accounts payable-related parties 7 48,467 - 14,957 -
2200 Other payables 1,124,670 1 633,983 1
2230 Current tax liabilities 4 235,359 - 23,400 -
2280 Lease liabilities-current 4, 6(21) & 7 348,171 1 424,081 1
2300 Other current liabilities 153,831 - 1,061,146 2
2320 Long-term loans-current portion 4 & 6(13) 4,150,000 5 1,500,000 2
21xx Total current liabilities 30,554,451 38 25,140,307 37
Non-Current Liabilities
2540 Long-term loans 4 & 6(13) 17,617,000 22 11,302,685 16
2570 Deferred tax liabilities 4 & 6(25) 40,756 - 10,049 -
2580 Lease liabilities-non-current 4, 6(21) & 7 4,887,661 6 5,196,199 8
2600 Other non-current liabilities 6(14) & 7 231,294 1 252,071 -
25xx Total non-current liabilities 22,776,711 29 16,761,004 24
2xxx Total Liabilities 53,331,162 67 41,901,311 61
Equity attributable to stockholders of the parent 4
3100 Capital stock
3110 Common stock 6(15) 11,595,611 14 11,595,611 17
3200 Capital surplus 6(16) 65,262 - 38,846 -
3300 Retained earnings 6(17)
3310 Legal capital reserve 4,723,658 6 4,638,904 7
3320 Special capital reserve 504,189 1 504,189 1
3350 Unappropriated retained earnings 7,491,441 9 7,191,237 10
Total retained earnings 12,719,288 16 12,334,330 18
3400 Other equity 222,092 - 1,468,825 2
31xx Total equity attributable to stockholders of the parent 24,602,253 30 25,437,612 37
36xx Non-controlling interests 6(18) 2,155,682 3 897,223 2
3xxx Total Equity 26,757,935 33 26,334,835 39
Total Liabilities and Equity $80,089,097 100 $68,236,146 100
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(The accompanying notes are an integral part of these consolidated financial statements)

English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2022 and 2021

(Expressed in thousands of New Taiwan Dollars, except for earnings per share)

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(Expressed in thousands of New Taiwan Dollars)
2022 2021
Code Items Notes
Amount % Amount %
4000 Operating revenues 4, 5, 6(8),(19),(21) & 7 $16,791,732 100 $12,476,018 100
5000 Operating costs 4, 6(5),(8),(9),(14),(21),(22) & 7 (13,012,678) (77) (9,755,584) (78)
5900 Gross margin 3,779,054 23 2,720,434 22
6000 Operating expenses 4, 6(8),(9),(14),(21),(22) & 7
6200 Administrative expenses (2,303,238) (14) (1,844,704) (15)
6450 Expected credit profit (loss) 4 & 6(20) (16) - (40) -
Total operating expenses (2,303,254) (14) (1,844,744) (15)
6900 Operating income 1,475,800 9 875,690 7
7000 Non-operating income and expenses 4, 6(23) & 7
7100 Interest income 17,367 - 2,923 -
7010 Other income 635,216 3 307,908 3
7020 Other gains or losses (16,357) - (6,661) -
7050 Finance costs (403,446) (2) (250,969) (2)
7060 Share of profit or loss of associates and joint ventures (20,930) - - -
Total non-operating income and expenses 211,850 1 53,201 1
7900 Income before Income tax 1,687,650 10 928,891 8
7950 Income tax (expense) benefit 4 & 6(25) (387,308) (2) (85,391) (1)
8200 Net income 1,300,342 8 843,500 7
8300 Other Comprehensive Income 6(24)
8310 Not to be reclassified to profit or loss in subsequent periods
8311 Remeasurements of defined benefit plans (24,378) - (856) -
8316 comprehensive incomeValuation gain (losses) on equity instruments at fair value through other (1,353,867) (8) 1,295,089 10
8349 Income tax related to items not be reclassified to profit or loss in subsequent periods 4,876 - 172 -
8320 [ Share of the other comprehensive income of associates and joint ventures accounted for] using the equity method – not to be reclassified to profit or loss in subsequent periods 869 - - -
8360 To be reclassified to profit or loss in subsequent periods
8370 Share of the other comprehensive income of associates and joint ventures accounted for using the equity method – to be reclassified to profit or loss in subsequent periods 432 - - -
Other comprehensive (losses) income, net of tax (1,372,068) (8) 1,294,405 10
8500 Total comprehensive (losses) income $(71,726) - $2,137,905 17
8600 Net income (losses) attributable to:
8610 Shareholders of the parent $1,207,749 7 $847,539 7
8620 Non-controlling interests 92,593 1 (4,039) -
$1,300,342 8 $843,500 7
8700 Total comprehensive income (losses) attributable to:
8710 Shareholders of the parent $(166,038) (1) $2,142,618 17
8720 Non-controlling interests 94,312 1 (4,713) -
$(71,726) - $2,137,905 17
Earnings Per Share (In dollars) 6(26)
9750 Basic earnings per share $1.04 $0.73
9850 Diluted earnings per share $1.04 $0.73
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(The accompanying notes are an integral part of these consolidated financial statements)

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English Translation of Financial Statements Originally Issued in Chinese

CATHAY REAL ESTATE DEVELOPMENT CO., LTD. AND SUBSIDIARIES Consolidated Statements of Cash Flows

For the Years Ended December 31, 2022 and 2021

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(Expressed in thousands of New Taiwan Dollars)
2022 2021
Code Items Amount Amount
AAAA Cash flows from operating activities
A10000 Net income before tax $1,687,650 $928,891
A20000 Adjustments:
A20100 Depreciation 1,192,158 998,863
A20200 Amortization 20,778 19,135
A20300 Expected credit loss (gain) 16 40
A20900 Interest expenses 403,446 250,969
A21200 Interest income (17,367) (2,923)
A21300 Dividend income (204,369) (146,949)
A22300 Share of profit or loss of associates and joint ventures 20,930 -
A22500 Loss (gain) on disposal of property, plant and equipment 18,454 2,816
A22800 Loss (gain) on disposal of intangible assets 242 -
A23100 Loss (gain) on disposal of investments (21,455) -
A29900 Others (281,971) -
A30000 Changes in operating assets and liabilities:
A31125 Decrease (increase) in contract assets (274,263) -
A31130 Decrease (increase) in notes receivable (17,834) 11,501
A31150 Decrease (increase) in accounts receivable 43,908 894
A31160 Decrease (increase) in accounts receivable-related parties 48,639 (2,711)
A31180 Decrease (increase) in other receivables (79,663) (2,991)
A31200 Decrease (increase) in inventories (3,315,970) (6,966,390)
A31230 Decrease (increase) in prepayments 49,311 (70,481)
A31240 Decrease (increase) in other current assets 45,137 (34,517)
A31270 Decrease (increase) in incremental costs of obtaining contracts (334,245) (252,583)
A31990 Decrease (increase) in other operating assets (44,634) 34,806
A32125 Increase (decrease) in contract liabilities 1,214,326 778,898
A32130 Increase (decrease) in notes payable (121,369) 113,064
A32150 Increase (decrease) in accounts payable 106,621 (94,264)
A32160 Increase (decrease) in accounts payable-related parties 35,255 (35,759)
A32180 Increase (decrease) in other payables 404,857 (45,329)
A32230 Increase (decrease) in other current liabilities (907,244) 960,188
A33000 Cash inflow generated from operations (328,656) (3,554,832)
A33100 Interests received 17,222 2,841
A33500 Income taxes paid (227,910) (133,529)
AAAA Net cash generated by (used in) operating activities (539,344) (3,685,520)
BBBB Cash flow from investing activities
B00010 Acquisition of financial assets at fair value through other comprehensive income (670,038) -
B00020 Disposal of financial assets at fair value through other comprehensive income 1,846,000 -
B01800 Acquisition of investment accounted for using equity method (150,000) -
B01900 Disposal of investments accounted for using the equity method 8,535 -
B02200 Net cash flow from acquisition of subsidiaries (998,057) -
B02300 Disposal of subsidiaries 361,024 -
B02700 Acquisition of property, plant and equipment (1,381,436) (408,301)
B02800 Disposal of property, plant and equipment 5,049 11,211
B04500 Acquisition of intangible assets (31,404) (23,099)
B06700 Increase in other non-current assets (194,399) (90,891)
B07600 Dividends received 204,369 146,949
BBBB Net cash generated by (used in) investing activities (1,000,357) (364,131)
CCCC Cash flow from financing activities
C00100 Increase in short-term loans 783,768 4,109,000
C00500 Increase in short-term notes payable - 538,795
C00600 Decrease in short-term notes payable (805,058) -
C01600 Proceeds from long-term debt 12,451,977 8,302,685
C01700 Repayment of long-term loans (3,339,787) (6,409,741)
C04020 Repayment of principal of lease liabilities (441,327) (368,526)
C04400 Decrease in other non-current liabilities (100,804) (8,056)
C04500 Payment of cash dividends (695,737) (1,159,561)
C05600 Interests paid (649,924) (370,554)
C05800 Change in non-controlling interests 1,241,709 (41,968)
C09900 Other financing activities - (669)
CCCC Net cash generated by (used in) financing activities 8,444,817 4,591,405
EEEE Net increase (decrease) in cash and cash equivalents 6,905,116 541,754
E00100 Cash and cash equivalents, beginning of period 3,937,378 3,395,624
E00200 Cash and cash equivalents, end of period $10,842,494 $3,937,378
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(The accompanying notes are an integral part of these consolidated financial statements)

(2) Adoption of Proposal for 2022 Earnings Distribution.

[Proposed by the Board of Directors]

Explanation:

The Company’s 2022 Earnings Distribution, has according to Article 27 of the Articles of Incorporation, is scheduled to distribute NT$ 0.5 cash dividend per share, and the undistributed profit from the most recent years shall be distributed first.
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 Earnings Distribution please refer to page 31 of this manual.

Resolution:

Cathay Real Estate Development Co., Ltd. Earnings Distrbibution Table of the 2022

Unit: NT$ Dollar

Earnings Distrbibution Table of	the 2022 Unit: NT$ Dolla
Item	Amount
Retained earnings at the beginning	6,410,745,950
Add: Net income of 2022	1,207,748,804
Less:Disposal of equity instruments investments measured at fair value through other comprehensive income	(127,053,800)
Less: Legal reserves	(108,069,500)
Distributable earnings	7,383,371,454
Distributable items:
Shareholders' dividends - Cash	579,780,530
Unappropriated retained earnings	6,803,590,924
Note: For the Earnings Distribution, NT$ 0.5 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 Election

(1) Re-election of directors due to expiry of term in office.

[Proposed by the Board of Directors]

Explanation:

The current directors of the Company shall end their terms of office on 11 June 2023, and an election shall be held during the Annual Meeting of Shareholders on 9 June of this year.
According to the provisions of Article 17 of the Articles of Incorporation, the board shall consist 9 to 15 directors (including at least three independent directors), and an Audit Committee shall be formed by independent directors. According to actual requirements, nine directors (including three independent directors) shall be elected to form the 20th Board of Directors.
Directors elected for the 20th Board of Directors shall immediately take office upon election for a term of three years. The term shall begin on 9 June 2023 and end on 8 June 2026.
We would like to call for the 20th election of Board of Directors. The list of candidates has been reviewed by current Board of Directors and documented. For candidate’s information, please refer to pages 33-36. We hereby propose for election.

Election Results:

Candidates of the Directors and the Independent Directors Profile for the 20th term

Title	Name	Education / Experience
Director	He Hsin Capital Co., Ltd. Representative: Ching-Kuei Chang	Feng Chia University (Bachelor of Architecture) Chairman： Cathay Real Estate Development Co., Ltd.、 Cathay Real Estate Management Co., Ltd.、 Cathay Healthcare Inc.、Cymbal Medical Network Co., Ltd.、Cymder Co., Ltd.、Cymlin Co., Ltd.、Cathay Real Estate Foundation. Director： Cathay General Hospital Supervisor： Taiwan Real Estate Management Co.,Ltd.
		Number of shares held：22,000,000
Director	He Hsin Capital Co., Ltd. Representative: Hung-Ming Lee	Chinese Culture University (Bachelor of law) Director and President： Cathay Real Estate Development Co., Ltd.、 Cathay Real Estate Management Co., Ltd. Chairman： Cathay Hospitality Management Co., Ltd.、 Cathay Hospitality Management Consulting Co., Ltd.、Cathay Food & Beverage Group Co., Ltd.、CMG International One Co., Ltd.、CMG International Two Co., Ltd. Director： Cathay Securities Investment Trust Co., Ltd.、 Cathay Real Estate Foundation、Cathay Life CharityFoundation
		Number of shares held：22,000,000

Title	Name	Education / Experience
Director	He Hsin Capital Co., Ltd. Representative: Chung-Yan Tsai	San Francisco State University（Master of Public Administration，MPA） Director and Senior Vice President： Cathay Real Estate Development Co., Ltd. Vice Chairman： Cathay Healthcare Inc. Director： Cathay Life Insurance Co., Ltd.、Cymbal Medical Network Co., Ltd.、Cymder Co., Ltd.、 Cymlin Co., Ltd.、Cathay Real Estate Foundation Vice President： LiangTingEnterprise Co., Ltd.
		Number of shares held：22,000,000
Director	Cathay Real Estate Foundation Representative: Chung-Chang Chu	York University(Master of Business Administration，MBA) Chairman： May Foong Woolen & Worsted Textile Mill Ltd.、May Foong development Co., Ltd. Director： Cathay Real Estate Development Co., Ltd.、 CathayLife Insurance Co., Ltd.
		Number of shares held：2,353,690

Title	Name	Education / Experience
Director	Cathay Real Estate Employees’ welfare Committee Representative: Chin-Liang Lin	National Cheng Kung University(Bachelor of Architecture) Director and Vice President： Cathay Real Estate Development Co., Ltd. Director： Cathay Real Estate Management Co., Ltd.、 Cathay Hospitality Management Co., Ltd.、 Cathay Hospitality Management Consulting Co., Ltd.、Cathay Food & Beverage Group Co., Ltd.、CMG International One Co., Ltd. CMG International Two Co., Ltd.、Symphox Information Co., Ltd.、Cathay Real Estate Foundation Chairman and President： Jinhua Realty Co., Ltd.、Bannan Realty Co., Ltd.、Sanchong Realty Co., Ltd.、Zhulun Realty CO.,Ltd.
		Number of shares held：2,754,800
Director	Cathay Life Charity Foundation Representative: Wan-Hu Chuang	University Of Surrey(International College of Hotel Management.) Director and Vice President： Cathay Hospitality Management Co., Ltd.、 Cathay Hospitality Management Consulting Co., Ltd.、Cathay Food & Beverage Group Co., Ltd. Director： CathayReal Estate Foundation
		Number of shares held：5,941,332

Title	Name	Education / Experience
Independent Director	Yuan-Hsiao Chang	Southern Methodist University (J.D.) Independent Directors： Cathay Real Estate Development Co., Ltd. Chang & Associates, Attorneys-at-Law Presiding Lawyer
		Number of shares held：0
Independent Director	Tsu-Kang Yu	Chinese Culture University(Department of Business Administration) Chairman： Union Group Corp.、Union Electric Corp.、Tzu Feng Cultural and Educational Foundation Director： Lunghwa University of Science and Technology、HannsTouch Solution Incorporated、Fengyuan Foundation、Teco Technology Foundation
		Number of shares held：0
Independent Director	Li-Kun Lee	Chinese Culture University (Bachelor of law) Director： Republic of China Health Care Foundation、 Republic of China Parasite Control Association
		Number of shares held：0

4. Matters for Discussion

(1)Proposal for releasing the prohibition on the Company’s 20th 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/herself or on behalf of another person that is within the scope of the company's business, shall obtain approval from the shareholders' meeting.
The Company’s directors who are involved in other companies' operations which are the same or similar to the scope of our company's business, shall according to Article 209 of the Company Act, obtain approval from the shareholders' meeting. It is proposed that if the Company director is elected, his/her prohibition from participation in competitive business (details as follows) be released, and the earnings prior to the release will not be deemed to be earnings of the company.

Director	Company where position is held concurrently	Positions
Ching-Kuei Chang	Cathay Healthcare Inc. Cymder Co., Ltd. Cymlin Co.,Ltd.	Chairman
	Taiwan Real Estate Management Co.,Ltd.	Supervisor
Hung Ming Lee	CMG International One Co., Ltd. CMG International Two Co.,Ltd.	Chairman
Chung-Yan Tsai	Cathay Life Insurance Co., Ltd. Cymder Co., Ltd. Cymlin Co.,Ltd.	Directors
	CathayHealthcare Inc.	Vice President
	LiangTingEnterprise Co.,Ltd.	Vice General Manager
Chin-Liang Lin	Symphox Information CO., Ltd. CMG International One Co., Ltd. CMG International Two Co.,Ltd.	Directors
	Jinhua Realty Co., Ltd. Bannan Realty Co., Ltd. Sanchong Realty Co., Ltd. Zhulun RealtyCO.,Ltd.	Chairman and General Manager
Chung-Chang Chu	May Foong Woolen & Worsted Textile Mill Ltd. MayFoongdevelopment Co.,Ltd	Chairman
	CathayLife Insurance Co.,Ltd.	Directors

Independent Director	Company where position is held concurrently	Positions
Tsu-Kang Yu	Union Group Corp. Union Electric Corp.	Chairman
	HannsTouch Solution Incorporated	Directors

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.
H704041 Real Estate Agency Brokerage.
I103060 Management Consulting Services.
I199990 Other Consultancy.
ZZ99999 All business items that are not prohibited or restricted by operation acts, except those that are subject to 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 the directors of the company represented, affixed with the Company's stamp, 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

Shareholders' meetings of the Company are divided into regular and ad hoc meetings, both of which are convened by the Board of Directors according to law, except as otherwise provided by law. Regular meetings are convened within six months after each fiscal year ends. Ad hoc meetings are convened according to law when necessary.

The Company may hold a shareholders' meeting by video or other means announced by the central authority.

If a shareholders' meeting is held by video, shareholders attending by video shall be deemed to attend the meeting in person.

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 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 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, including the meeting information, shall be given in the written and/or electronic form.

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 Manager Article 25

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

Chapter 6 Accounting

Article 26

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 present these sataements at the shareholders meeting for approval according to the regulations.

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

Article 27

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 compensation. However, the Company’s accumulated losses, if any, shall first be covered.

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

In accounting special surplus reserves mentioned above, an amount equal to the sum of current net profit after tax and

other items shall be accounted as current undistributeId earnings in respect of the net decrease in other equity of the current period. If the special surplus reserves are still insufficient for distribution, the prior undistributed earnings shall be accounted for such difference. Only when the special surplus reserves are still insufficient for distribution after an amount of prior undistributed earnings equal to the net prior cumulative decrease in other equity is accounted as special surplus reserves will the sum of the current net profit after tax and other items be included in the undistributed earnings.

In response to the 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, the residual dividend policy is adopted for dividend policy, so as to achieve steady growth and sustainable operation.

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

Chapter 7 Supplementary Provisions Article 28

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

Article 29

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, 43rd amendment on 8 June 2016,

and 44th amendment on 8 June 2018, and the 45th amendment on 11 June 2021, and the 46th amendment on June 17, 2022.

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 (Convening and Meeting Notices of Shareholders' Meetings)

The Company's shareholders' meetings are convened by the Board of Directors, except as otherwise provided by law.

The change of the means to hold the Company's shareholders' meetings shall be resolved by the Board of Directors and made at the latest before the meeting notice of the shareholders' meeting is sent.

Where the Company holds a video shareholders' meeting, the following matters shall be recorded in the convening notice of the shareholders' meeting:

1.Methods for Shareholders to participate in the video meeting and exercise rights.
2.Methods to treat obstacles on the video meeting platform or

for participation by video conferencing due to natural disasters, incidents or other force majeure events.

Article 3 (Entrusted to Attend Shareholders' Meetings)

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.

After the Power of Attorney is delivered to the Company, where a shareholder intends to attend the shareholders' meeting in person or by video conferencing or intends to exercise the voting right in written or electronic form, a written notice of revoking entrustment shall be made to the Company two days before the shareholders' meeting is held; in the event of delayed revocation, the voting right exercised by the proxy shall prevail.

Article 4 (Place and Time of Shareholders' Meetings)

The place for convening a shareholders meeting shall be held 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 am or later than 3 pm.

The Company convenes video shareholders' meetings without limitation by the place for convening referred to in the foregoing paragraph.

Article 5 (Attending Shareholders' Meetings)

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 holding substantive shareholders' meetings. Where there is an election of Directors, a voting ballot shall also be furnished. The meeting agenda book and meeting supplementary data shall be transmitted to the video meeting platform by electronic archives where a video assisted shareholders' meeting or video shareholders' meeting is held.

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.

Shareholders shall register with the Company two days before the shareholders' meeting is held where the shareholders' meeting is held by video and shareholders tends to attend it by video conferencing.

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 Shareholders' Meeting)

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.

Where the Company's shareholders meeting is held by video, the registration, check-in, report for duty, questioning, voting and company vote counting results of shareholders shall be recorded and kept, and the video meeting shall be continuously recorded and video recorded, and shall be properly stored during the existence of the Company.

Article 8 (Calculation of the Number of Shares Representing

Shareholders Present at the Shareholders' Meeting 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 signature book or sign-in cards handed in and the number of shares reported on the video meeting platform, plus the number of shares whose voting rights are exercised by written or electronic form.

The Chair shall immediate announce the commencement of the meeting at the meeting time.

and at the same time, the number of shares in attendance shall be announced. 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 the attending shareholders still represent not more than one-third of the total number of issued shares after two postponements, the Chair shall declare the meeting adjourned; if the shareholders'

meeting is held by video, the Company shall announce the meeting adjourned on the video meeting platform for the shareholders' meeting.

If a quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent more than one-third of the total number of issued shares, a tentative resolution may be adopted pursuant to Item I, Article 175 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be held within 1 month; shareholders shall register with the Company again where the shareholders' meeting is held by video and shareholders tend to attend by video conferencing.

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 directors, the meeting agenda shall be set by the board of directors. The relevant proposals (including extempore motions and alteration of the original proposals) shall be voted case by case.

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.

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 with proper amount of time for voting.

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 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.

Where a shareholders' meeting is held by video, shareholders attending by video conferencing may raise questions by words on the video meeting platform for the shareholders' meeting after the Chair declares the meeting commencing and before the Chair declares the meeting closed. The number of questions for each proposal shall not exceed twice, each limited by two hundred characters, which does not apply the provisions of Items I - V.

Where the questions mentioned in the preceding paragraph do not violate or exceed the scope of proposal, the Company may disclose the questions on the video meeting platform for shareholders' meetings.

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 Vote Calculation Method for Proposals)

A shareholder shall be entitled to one vote for each share 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, amendments to the provisional topic and original proposal at this shareholders' meeting shall be deemed waiver. Therefore, amendments to the provisional topic and original proposal shall be better avoided.

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 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.

When the Company holds a shareholders' meeting by video, shareholders participating by video conferencing shall vote on various proposals and election proposals through the video meeting platform before the Chair announces the close of voting, and shall be deemed as waiver if overdue.

Where a shareholders' meeting is held by video, the votes shall be counted at one time after the Chair announces the close of voting, and the voting and election results shall be announced.

When the Company holds a video assisted shareholders' meeting, shareholders who have registered to attend shareholders' meeting by video conferencing and intend to attend the substantive shareholders' meeting in person shall revoke registration in the way same as registration two days before the shareholders' meeting is held; in the event of delayed revocation, they can only attend the shareholders' meeting by video conferencing.

Those who exercise the voting right in written or electronic form, have not revoked their declaration of will and participate in the shareholders' meeting by video conferencing shall not exercise the voting right to the original proposal, amend the original proposal or exercise the voting right to amendments to the original proposal.

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 then names of those elected as directors and the numbers of votes with which they were elected as well as the names and the number of votes of unelected candidates.

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 13 (Minutes of Meeting)

Meeting minutes shall be recorded in accordance with the year, month, day, venue, name of the Chair, method of resolution, essentials of the proceedings and voting results (including statistical number of votes). Where there is an election of Directors, the number of votes for each candidate shall be disclosed.

It shall be kept during the existence of the Company.

Where a shareholders' meeting is held by video, in addition to the matters mentioned in the preceding paragraph, the starting and ending time of the meeting, the method of holding the meeting, the name of the Chair and the recorder, and the handling method when the video meeting platform or participation by video conferencing is blocked due to natural disasters, incidents or other force majeure events shall be recorded.

When the Company holds a shareholders' meeting by video,

the Chair and the recorder shall be located in the same place in China. The Chair shall declare the address of this place when holding the meeting.

Article 14 (External Announcement)

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; where the shareholders' meeting is held by video, the Company shall upload the aforesaid data to the video meeting platform for shareholders' meeting at least thirty minutes before the meeting begins, and continuously disclose the same till the end of the meeting.

Where a shareholders' meeting is held by video, at declaration of the beginning of the meeting, the total number of shares of present shareholders shall be disclosed on the video meeting platform. If the total number of shares and the number of votes of present shareholders are counted at the meeting, the same shall apply. Besides, the Company shall disclose the voting results of various proposals and election results in real time on the video meeting platform for the shareholders' meeting in accordance with regulations, and shall continue to disclose for at least fifteen minutes after the Chair declares the meeting adjourned.

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 resolution 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 circumstances, announce the time of resuming the meeting. A resolution may be adopted at a shareholders meeting to defer or resume the meeting within 5 days in accordance with Article 182 of the Company Act.

Where a shareholders' meeting is held by video, when the video meeting platform or participation by video conferencing is blocked for more than thirty minutes due to natural disasters, incidents or other force majeure events before the Chair declares the meeting adjourned, except for the cases in which there is no need to postpone or continue the meeting as stipulated in Item IV, Article 44-20 of the Standards for the Handling of Shares of Public Offering Companies, the meeting date shall be postponed or renewed within five days, which is not applicable to the provision of Article 182 of the Company Act.

In the event of the aforementioned postpone or renewal of the meeting, the calculation of the total number of shares, votes and election rights and other matters shall be handled pursuant to Article 44-20 and other relevant decrees.

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, 5th amendment on 8 June 2016, 6th amendment on 08 June 2018, 7th amendment on Jul. 23, 2021, and 8th amendment on Jun. 17,2022

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

Amendment made at shareholders meeting on 20 April 1967 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 Amendment made at shareholders meeting on 8 June 2018 Amendment made at shareholders meeting on 17 June 2022

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 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 may be split for election of two or more candidates.

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. 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 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 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.

Article6

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 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

The ballot paper shall be null and void in the event of one of the matters listed in the left:

The ballot prepared by the person with convening authority is not used.
A blank ballot is put into the ballot box.
The handwriting is illegible or has been altered.
The candidate entered is inconsistent with the list of candidates for Directors after check.
Other words are entered in addition to the number of votes allotted.
The number of votes allotted to the candidate entered exceeds the total number of votes.
Other violations of the laws, Articles of Incorporation or relevant regulations.

Article 9

The votes shall be tallied on site immediately after the end of the poll, and the results of the election, 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 litigation.

Article 10

These procedures shall be implemented after approval at the shareholders' meeting, and the same shall apply to amendments.

Appendix 4 Shareholdings of Directors

As of 11 April 2023, 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: 11 April 2023

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	Yuan-Hsiao Chang	0
Total shares held		33,049,822

AI assistant

CATHAY RED — AGM Information 2023

52129_rns_2023-06-19_39ba2209-90ec-484f-adcb-27bf2a652378.pdf

2023 Annual General Shareholders'

Meeting Agenda Handbook

Table of Contents

Cathay Real Estate Development Co., Ltd.

2023 Shareholder Meeting Agenda

1. Matters to Report

(1) 2022 Business Report

(2) Audit Committee’s Review Report

(3) 2022 Compensation Report for Employees and Directors

2. Matters for Acknowledgement

(1) Adoption of 2022 Business Report and Financial Statements.

Independent Auditors’ Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition

Valuation of Construction Land

Other Matter Making Reference to the Audits of Component Auditors

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

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

Independent Auditors’ Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

Real Estate Sales Revenue Recognition

Valuation of Construction Land

Construction Revenue Recognition

Other Matter Making Reference to the Audits of Component Auditors

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

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

English Translation of Financial Statements Originally Issued in Chinese

(2) Adoption of Proposal for 2022 Earnings Distribution.

Cathay Real Estate Development Co., Ltd. Earnings Distrbibution Table of the 2022

3. Matters for Election

(1) Re-election of directors due to expiry of term in office.

Candidates of the Directors and the Independent Directors Profile for the 20th term

4. Matters for Discussion

(1)Proposal for releasing the prohibition on the Company’s 20th board of directors from participation in competitive business.

Appendix 1

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

Chapter 1 General Provisions

Article 1

Article 2

Article 3

Article 4

Chapter 2 Shareholdings

Article 8

Article 9

Article 10

Chapter 3 Shareholders Meeting

Article 14

Chapter 4 Board of Directors

Article 18

Article 19

Article 20

Article 21

Article 22

Article 29

Appendix 2

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

Article 17

Article 18

Appendix 3

Cathay Real Estate Development Co., Ltd. Procedures for Election of Directors

Article 1

Article 3

Article 4

Article 5

CATHAY RED AGM Information 2023