Stock code: 2511

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Prince Housing & Development Corporation

Agenda Handbook for Regular Shareholders Meeting 2018

Date scheduled for regular shareholders meeting: June 21, 2018 (Tuesday), at 9:00 a.m.

Venue to convene the regular shareholders meeting: No. 261 Nanmen Road, Tainan City (The Conference Hall on 1F of the Labor Recreational Center)

I. Meeting Procedure .................................................................................... 1 II. Meeting Agenda ....................................................................................... 2 1. Management Presentation ................................................................................. 3 2. Adoption ......................................................................................................... 5 3. Election .......................................................................................................... 6 4. Motions .......................................................................................................... 6 III. Annexes 1. 2017 Business Report .......................................................................................................................... 7 2. Audit Report of the Audit Committee.................................................................................................. 8 3. CPA Audit Report and 2017 Consolidated Financial Statement ....................................................... 9 4. CPA Audit Report and 2017 Individual Financial Statement ......................................................... 25 5. 2017 Profit Distribution Table ......................................................................................................... 42 6. Cross Reference of the Amendment to the Rules of Procedure for the Board Meeting .................... 43 7. List of Nominees for Independent Directors ................................................................................... 44 IV. Appendices 1. Rules of Procedure for the Board Meeting ........................................................................................ 45 2. Articles of Incorporation .................................................................................................................... 50 3. Procedures for Election of Director ................................................................................................. 57 4. Stake of Directors ............................................................................................................................... 60 5. Impact of Stock Dividend Issuance on Business Performance, EPS, and ROE ................................ 61

Prince Housing & Development Corporation

Procedure of the 2018 Annual General Meeting of Shareholders

Calling the Meeting to Order

Chairman Takes Chair

Chairman Remarks

Management Presentation

Adoption Election Motions

Adjournment

Prince Housing & Development Corporation

Procedure of the 2018 Annual General Meeting of Shareholders

Time: 9.00 am, Thursday, June 21, 2018
Place: Grand Conference Hall, 1F, Worker Recreational Center, No. 261, Nanmen Road, Tainan City.
Calling the Meeting to Order (report on the shares held by attending shareholders)
Chairman’s Remarks
Management Presentation
(1) 2017 Business Report
(2) Audit Report of the 2017 Final Report by the Audit Committee
(3) Total Endorsement and Guarantee Amount Report 2017
(4) Status Report on Capital Lending 2017
(5) Status Report on Corporate Bond Issuance
(6) Report on Compensation for Employees and Directors 2017
(7) Report on the Amendment to the Rules of Procedure for the Board Meeting
(8) Report on Other Matters
Adoption
(1) Adoption of 2017 Business Report and 2017 Financial Statements
(2) Adoption of 2017 Profit Distribution Proposal
Election
Motions
Adjournment

Management Presentations

1. 2017 Business Report. Submitted to the public.

Description: Please refer to Annex 1 for the 2017 Business Report (Handbook: 7).

2017 Final Report audited by the Audit Committee. Submitted to the public. Description: Please refer to Annex 2 for the Audit Report of the Audit Committee (Handbook: 8).
2017 Report on the Total Amount of Endorsements and Guarantees:

The details regarding the endorsements and guarantees for investees by December 31, 2017 are as follows.

are as follows.
		(expressed in thousand NT Dollars) The amount of endorsements and guarantees actually disbursed. 1,683,308 258,000
Endorsed/guaranteed investee	Total amount of endorsements and guarantees at the end of theperiod	The amount of endorsements and guarantees actually disbursed.
The Splendor Hospitality International Co.,Ltd.	2,000,000	1,683,308
Prince Housing & Development Corporation	2,500,000	258,000

4. Status Report on Capital Lending 2017

No capital lending was reported by December 31, 2017.

5. Status Report on Corporate Bond Issuance

(1) The total amount of the first-time issuance of secured common corporate bonds in 2013 was NT$2.5 billion, as approved by the Financial Supervisory Commission (FSC) in the Letter Jin-Guan-Zheng-Fa-Zi No. 1020040481 on October 15, 2013 for the record. The placement was completed on November 21, 2013.
(2) The total amount of the first-time issuance of secured common corporate bonds in 2017 was NT$2 billion, as approved by the Taipei Exchange (TPEX) in the Letter Zheng-Gui-Jai-Zi No. 10600150871 on June 12, 2017 for the record. The placement was completed on June 19, 2017.
(3) On March 20, 2018, the Board of Directors resolved to issue secure common corporate bonds with a total amount not exceeding NT$5 billion in either one time or several times over a term of five years to strengthen financial structure, enrich operating funds, and repay the previously issued common corporate bonds.

2017 Compensation for Employees and Directors
(1) Proceed in accordance with Article 32 of the Articles of Incorporation.
(2) Three percent of the profit amounting to NT$43,778,545 will be distributed in cash as compensation for directors as recommended by the 5[th] meeting of the 3[rd] Remuneration Committee and resolved by the 11[th] meeting of the 15[th] Board of Directors.
(3) No more than 10% of the net profit before tax in the profit distribution year amounting to NT$128,682,392 will be distributed in cash as performance bonus and bonuses for employees as recommended by the 11[th] meeting of the 15[th] Board of Directors based on the resolution made by the 6[th] meeting of the 14[th] Board of Directors.
Amendment to the Rules of Procedure of Board Meetings
Description: Please refer to Annex 6 for the cross reference of amendment to the Rules of Procedure for Board Meeting (Handbook: 33).

8. Other matters

Related information of shareholders holding over one percent of the total number of issued shares of the Group.
Description: Referring to Article 172-1 of the Company Act. Shareholder(s) holding more than one per cent (1%) of the total number of outstanding shares of a company may make a written proposal for discussion at a general meeting of shareholders. The time for acceptance of the shareholders' proposal was April 15, 2018 to April 25, 2018. No proposal was submitted by shareholders during the said period.

Adoption

Proposal 1: Adoption of the 2017 Business Report and 2017 Financial Statements (Proposed by the Board of Directors)

Description: Adoption of the 2017 Final Report has been approved at the 11[th] meeting of the 15[th] board of directors in 2018. The report has been submitted to the Audit Committee for audit.

(Please refer to Annex 3 and Annex 4 (Handbook: 7 & 9-31). Resolution:

Proposal 2: Adoption of the 2017 Profit Distribution Proposal (Proposed by the Board of Directors) Description 1. The 2017 Profit Distribution Proposal has been approved by the 11[th] meeting of the 15[th] Board of Directors in 2018 and submitted to the Audit Committee for audit.
Cash dividend will be NT$0.65 per share. The chairman shall be authorized to handle and adjusted changes in the dividend as a result of the impact on the number of shares circulated in the market due to share buyback; or transfer, conversion and cancellation of treasury shares, issuance of new shares for capitalization.
Please refer to the profit distribution table for details regarding the 2017 Profit Distribution Proposal.

(Please refer to Annex 5 (Handbook: 32). )

Resolution:

ElectionAffairs

Proposal 1: By-election of one independent director for the 15[th] Board of Directors. Description 1. The by-election of one independent director for the 15[th] Board of Directors is proceeded according to paragraph 5 of Article 14-2 of the Securities and Exchange Act and Article 17 of the Articles of Incorporation.
Shareholders shall elect one independent director from the list of independent director nominees. Please refer to Annex 7 for the education, experience and other related data of nominees (Handbook: 34).
The term of the new independent director commences on June 21, 2018 and ends on June 20, 2019.

Election results:

Motions

Adjournment

Annex 1

Business Report

1. 2017 Business Report

In 2017 the black swan effect persisted as witnessed by examples including Donald Trump’s US presidency, the UK’s Brexit procedure and so on. Each of them shocked the global financial market. Fortunately, as the worst scenario has gone, market pessimism gradually faded out, and market confidence recovered.

In the realty market, anxiety was gradually moderated as expedited by the dilution of the effect of combined property (land and building) taxes and emergence of deferred buying orders. Adhering to the “three goods and fair price” founding spirit and business philosophy inspired by former UK PM Churchill: “We shape our buildings, and afterwards our buildings shape us,” we continue to launch projects in northern, central and southern Taiwan and maintain housing quality control for residents. While air pollution has been deteriorating recently, we continuously develop and use new testing instruments for and in each construction projects, vowing to build smart and secure housing. In addition, as profits from re-investments over the past decade or so gradually emerged, equity comes in steadily every year.

Projects completed in 2017 included: Prince Shin-Yi in and Price Fu III in Taipei and Prince Cloud in Kaohsiung. In 2017, the annual revenue was NT$5.734 billion and the net profit of the period was NT$1.281 billion; the consolidated revenue was NT$10.988 billion and the consolidated net profit was NT$1.264 billion.

2. Summary of the Current Business Plan

Looking into 2018, we should not overlook black swans at all times. While the trend of interest rate is the biggest black swan and the change in the low interest environment, the pressure from interest rise will gradually come to keep pace with the foreign countries. Along with the restless cross-strait relations and the “nine-in-one election” which is considered as the probe of the 2020 presidential elections, tough challenges are standing in the way of overall economic development.

In the realty market, as the three intervening factors: new canopy (rain shade) policy, nine-in-one election at the end of the year, and the interest trends of the Central Bank, the V-shape reversion of the reality market is far from expectation. However, the effect of the Taichung railway elevation project, the trial operations of the Taichung Metro Green Line, and the new Taichung Metro Orange Line (Port of Taichung to Taichung Airport) can help boost domestic demands and spur regional benefits to energize peripheral realty markets. Furthermore, as many counties and cities reduce the assessed present value and government assessed land value, this can effectively alleviate housing purchase burdens and stimulate purchase. Projects to be completed in 2018 include: Prince Hua-Wei in Taipei; Prince Yu Ding, W Epoch, Prince County and Prince Hsin Fu in Taichung; Prince Jum Fon Huei and Prince Win2 Future in Tainan; and Prince Cloud Zone C in Kaohsiung. In the re-investment, apart from continuously optimizing suite and house operations, we will integrate the marketing channels of Prince hotels to create topics in the business to bolster business performance.

3. Future Development Strategy

In view of the rise of “smart housing and healthy housing,” we will follow this trend and engage in active branding to make innovation and keep pace with the time, courageously challenge changes in the macro environment, enforce smart and healthy housing, and continue technology development innovation with the academe, in order to keep our 45-year-old brand glowing and shining. As 2018 is the year of the dog in Chinese zodiac and earth in the five elements, this is the year for local dogs, and we are sure that it will be favorable to the overall realty market.

Chairman: Alex C. Lo President: Ming-fan Hsieh CAO: Da-chang Dai

Annex 2

Prince Housing & Development Corporation Audit Report by the Audit Committee

This is to approve that

The 2017 Business Report, 2017 Financial Statements and 2017 Proposal for Profit Distribution prepared by the Board of Directors. The 2017 Financial Statements have been approved by CPA Jian-zhi Wu and CPA Guo-hua Wang who have also issued an audit report. After auditing the 2017 Business Report, 2017 Financial Statements and 2017 Proposal for Profit Distribution, this Committee found no non-conformities and thus issued this report in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act .

To

The 2018 Annual General Meeting of Shareholders of Prince Housing & Development Corporation

Sheng-cai Hsu Audit Committee Chairman

Prince Housing & Development Corporation

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Annex 3

CPA Audit Report

(107) Cai-Sheng-Bao-Zi No. 17003777

Prince Housing & Development Corporation

Audit Opinion

We have audited the accompanying Consolidated Statement of Financial Position of Prince Housing & Development Corporation and subsidiaries (hereinafter referred to as the “Group”) for the years ended December 31, 2017 and December 31, 2016, and the related Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity, and Consolidated Statement of Cash Flow, and the note (including a summary of important accounting policies) of the Consolidated Financial Statements for the years ended December 31, 2017 and December 31, 2016.

In our opinion, with respect to our audit results and the reports (please refer to the Others section) of other independent accountants, the important issues in the said consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, interpretations, and interpretations approved by FSC, and such statements can fairly disclose the consolidated financial position of Prince Housing & Development Corporation as of December 31, 2017 and December 31, 2016, and its consolidated financial performance and cash flows of Prince Housing & Development Corporation for the years ended December 31, 2017 and December 31, 2016.

Basis of Audit

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Generally Accepted Accounting Principles (GAAP) of the Republic of China. Our role and responsibility under such regulations and principles will be elaborated in the Responsibility for CPA Audit of Consolidated Financial Statements. In accordance with the independent requirements of the firm, we have required staff to maintained independence from Prince Housing & Development Corporation and carried out their duties with respect to The Norm of Professional Ethics for Certified Public Accountant of the Republic of China. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinions.

Key Audit Items

Key audit items refer to the professional judgement of auditing the most important items in the 2017 Consolidated Financial Statement of Group. While such items have been addressed when auditing the overall consolidated financial statements and the formation opinions, we will not express opinions on any particular items.

The key audit items of the Group’s 2017 consolidated financial statements are as follows:

Recognition time point of realty sale revenue

Description

Please refer to item (30) in Note 4 of the Consolidated Financial Statements for the accounting policy of sales income and item (26) in Note 6 of the Consolidated Financial Statements for the description of accounting items. The 2017 revenue from realty sale of the Group was NT$5,741,984,000, commanding at 52.25% of the consolidated revenue.

Sales revenues of the Group were recognized after transferring into costs and recognizing as profit/loss after the ownership transfer and the actual handover of property. As properties are sold to individual buyers, the accounting workflow often involves various handbook operating procedures including the transfer of ownership transfer and handover data among departments. This results in the appropriate time point of recognition near the closing date of the financial report period. Hence, we have set the recognition time point of sales revenues as one of the important audit items.

Responsive Audit Procedures

In response to the said key audit items, we have implemented the following responsive procedures:

To discern and assess the internal control procedures for the management’s recognition of revenue from realty sale; and to test if the process of recognition time point of realty sale is effectively implemented, including cross-examining the dates of ownership transfer and handover and the accuracy of accounting time point.
A cut-off test was conducted on the realty sale conducted within a particular period before and after the closing date of near the end of the financial report period. The test included cross-examining evidence including the land and building registration transcripts, realty deeds, and handover agreements signed by customers to verify if the revenue from realty sale was registered at the appropriate time.

Recognition of revenues from construction projects—Assessment of completion schedule

Description

Please refer to items (13) and (30) in Note 4 of the Consolidated Financial Statements for the accounting policy for construction agreement and revenue recognition and items (26) in Note 6 of the Consolidated Financial Statements for the description of accounting items. The 2017 revenue from construction of the Group was NT$1,332,679,000, commanding at 12.13% of the consolidated revenue.

The revenues of the construction service offered by the Group are recognized according to the status of completion during the contract period. The status of completion has been calculated according to the percentage in the estimated total construction cost of the incurred cost by the closing date of financial report period of each project. The estimated total construction cost is based on the cost breakdown sheet produced according to the owner’s master design drawings and in consideration of increase or decrease of construction quantity resulted from an engineering change and the construction price and cost indices to estimate the costs invested in an outsourced contract, including labor and materials.

Due to the complexity of items for estimating the said total costs and frequent subjective judgments, high uncertainties are common, and the estimation of the total cost will affect the status of completion

and the recognition of revenue from construction. Hence, we have set the estimation of the status of completion as one of the important items for auditing the Group’s revenue from construction.

Responsive Audit Procedures

In response to the said key audit items, we have implemented the following responsive procedures:

To discern the nature of operations and industry of the Group; assess the fairness of the internal operating procedures for estimating the total construction cost, including the procedures for determining the labor and material costs of individual project items; and examine the consistency of the estimation method.
To assess and test the internal control procedures affecting the change in the estimation of the total cost, including cross-examining the evidence regarding the increase or decrease of project items and important project estimates.
To interview supervisors and other appropriate staff for projects still under progress during the interview.
To obtain the profit and loss statement to implement related empirical procedures, including spot check of costs incurred in the period with the appropriate receipts (vouchers), spot check of the increase or decrease of project items with related evidence, and re-check of the percentage of project completion.

Others: Audits of other accountants

The financial reports of some subsidiaries and investments accounted for under the equity method included in the Group’s Consolidated Financial Statement were audited by other accountants. Hence, the opinions we expressed in the said Consolidated Financial Statement for the amounts listed in the financial statements of such companies has been made in accordance with the audit reports of other accountants. The total amount of the said assets (including investments accounted for under the equity method) for years ended December 31, 2017 and December 31, 2016 was NT$580,967,000 and NT$1,497,276,000, commanding at 1.16% and 2.92% of the total amount of consolidated assets, respectively. The net revenues for years ended December 31, 2017 and December 31, 2016 were NT$418,000 and NT$599,445,000 representing 0% and 4.97% of the total amount of consolidated net revenues, respectively. The amount of the consolidated profit and loss recognized as investments accounted for under the equity method for years ended December 31, 2017 and December 31, 2016 was NT$21,888,000 and NT$44,904,000, representing 1.87% and 3.62% of the total amount of consolidated profit and loss, respectively.

Others: Individual Financial Statements

The Group has produced the individual financial statements for 2017 and 2016. We have audited and expressed an unqualified opinion for the financial statements of Prince Housing & Development Corporation for the years ended December 31, 2017 and December 31, 2016.

Responsibility for the Consolidated Financial Statements of the Management and Governance Units

It is management’s responsibility to produce fairly expressed consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the International Financial Reporting Standards, International Accounting Standards, interpretations, and interpretations approved by FSC and to maintain the necessary internal controls relating to the production of such consolidated financial statements in order to ensure that no significant, untrue expressions as a result of corruption or errors are found in the consolidated financial statements.

When producing consolidated financial statements, it is also the management’s responsibility to assess the Group’s capacity to maintain business continuity, disclosure of related information, and choice of accounting basis for business continuity, except when the Group intends to liquidate or shut down operations, or there is no other feasible alternative other than liquidation or closure.

It is the responsibility of the Group’s governance units (including the Audit Committee) to supervise the workflow of financial reporting.

Accountant’s responsibility for auditing consolidated financial statements

It is our responsibility to audit the Group’s consolidated financial statements to provide reasonable assurance in an audit report that no significant, untrue expression as a result of corruption or errors is found in such consolidated financial statements. Reasonable assurance refers to high assurance. However, the detection of significant, untrue expressions in the consolidated financial statements is not guaranteed when audits are implemented based on the GAAP of the Republic of China. Untrue expression as a result of corruption or errors Untrue expressions of individual amounts or sums are significant when they can reasonably affect the economic policy made by the users off consolidated financial statements.

When auditing based on the GAAP of the Republic of China, we have applied professional judgments and maintained professional doubts. Other tasks of accountants

To identify and assess significant, untrue expressions of risks as a result of corruption or errors in consolidated financial statements; to plan and implement appropriate countermeasures for the risks assessed; and obtain adequate and appropriate audit evidence as the basis for making audit expressions. While corruption may involve collusions, forgeries, willful omissions, untrue declarations, or overstep of internal controls, the risk caused by significant, untrue expressions as a result of corruption is higher than that of errors.
To understand internal controls required for audits in order to design audit procedures appropriate to the situation of audit, provided that such an understanding does not intend to express opinions on the effectiveness of the Group’s internal controls.
To assess the suitability of the accounting policy adopted by the management and the fairness of its accounting estimation and related disclosures.
To conclude if there are significant uncertainties regarding the suitability of the accounting basis adopted by the management to maintain business continuity and the potential significant doubtful incidents or situations within the Group’s capacity to maintain business continuity based on the obtained audit evidence. After determining that there are significant uncertainties in such incidents or situations, we shall remind in the audit report the users of such consolidated financial

statements to pay attention to related disclosures in such consolidated financial statements, or shall we express a modified opinion where such disclosures are inappropriate. We have made conclusions based on the audit basis obtained by the audit report date. However, future incidents or situations may incapacitate the Group from business continuity.

To assess the overall expression, structure and contents of consolidated financial statements (including related notes) and the fair expression of related transactions and incidents in such consolidated financial statements.
To gather adequate and suitable audit evidence of the financial information of individuals within the Group to express opinions on the consolidated financial statements. We are responsible to instruct, supervise and implement the audit of the Group and conclude the audit opinions on the Group.

We have communicated the government units on items including the scope and time planned for the audit and important audit findings (including the significant defects identified through internal control during the audit).

We have also provided the governance units with the statement of independence of our staff made in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China. We have also communicated with the governance units on the relations and other items (including related protective measures) that may affect the independence of accountants.

We have determined the key audit items of the Group’s 2017 Consolidated Financial Statements based on the communication items with the governance units. We have also specified in the audit report that we will not communicate specific items in the audit report when there are reasons to believe that such communication may cause negative impacts more than positive public interest, except for specific items not allowed for disclosures by law or under extremely rare circumstances.

P w C T a i w a n

Jian-zhi Wu

CPA

Guo-hua Wang

Financial Supervisory Commission

Approval document: Jin-Guan-Zheng-Zhen-Zi No. 1030027246 Former Securities Management Committee, Ministry of Finance Approval document: (87) Tai-Cai-Zheng-(VI)-Zi No. 68790

D a t e : M a r c h 2 0 , 2 0 1 8

	Prince Housing & Development Corporation and	Prince Housing & Development Corporation and	Prince Housing & Development Corporation and	Prince Housing & Development Corporation and	Prince Housing & Development Corporation and	Prince Housing & Development Corporation and	Subsidiaries
		Consolidated Statement of Financial Position
		December 31, 2017 and December 31, 2016
										(expressed		in	thousand NT Dollars)
			D e c e		m b e r		3 1 , 2	0 1 7	D	e c e	m b	e r	3 1 ,	2 0 1 6
	Assets	Note	A	m	o	u	n t	%	A	m	o	u	n t	%
	Current Assets
1100	Cash and cash equivalents	6(1)	$			4,221,849		8	$			4,648,915		9
1110	Financial assets at fair value through	6(2) and 8
	profit or loss, current						839,107	2					664,151	1
1150	Notes receivable net	6(3)					97,488	-					102,339	-
1170	Accounts receivable net	6(4)					694,776	1					822,457	2
1180	Accounts receivable net, related	7
	parties						14,190	-					22,660	-
1190	Construction contract accounts	6(5)
	receivable						370,577	1				1,058,750		2
1200	Other receivables						70,738	-					21,466	-
1220	Current tax assets						85,945	-					-	-
85,945	Inventories	6(6) and 8				22,062,479		44				22,270,854		44
1410	Pre-payments						255,599	1					222,435	-
1476	Other financial assets, current	8				1,354,298		3					925,921	2
1479	Other current assets, others	6(7)					230,645	-					299,327	1
11XX	Total current assets					30,297,691		60				31,059,275		61
	Non-current assets
1510	Financial assets at fair value through	6(2) and 8
	profit or loss, non-current						78,552	-					78,253	-
1523	Available-for-sale financial assets,	6(8) and 8
	non-current					1,133,158		2				1,212,673		2
1543	Financial assets measured at cost,	6(9) and 8
	non-current						855,030	2					877,800	2
1550	Investments accounted for under the	6(10) and 8
	equity method					1,830,246		4				2,029,496		4
1600	Property, plant and equipment	6(11) and 8				6,422,886		13				6,513,554		13
1760	Investment property amount net	6(12) and 8				5,867,885		12				5,957,293		12
1780	Intangible assets	6(13)				2,179,473		4				2,240,916		4
1840	Deferred tax assets	6(31)					123,531	-					104,535	-
1920	Refundable deposits	7 and 9					597,736	1					567,979	1
1980	Other current assets, non-current	8					811,057	2					564,213	1
1990	Other non-current assets, others						77,880	-					78,857	-
15XX	Total non-current assets					19,977,434		40				20,225,569		39

Prince Housing & Development Corporation and Subsidiaries Consolidated Statement of Financial Position Date: December 31, 2015 and December 31, 2014

100

(expressed in thousand NT Dollars)

1XXX Total assets $ 50,275,125 100 $ 51,284,844

(Cont’d)

Prince Housing and Development Corporation and Subsidiaries Consolidated Statement of Financial Position December 31, 2017 and December 31, 2016

(expressed in thousand NT Dollars)

Liabilities and Equity	D e c e m b e r 3 1 , 2 0 1 7 D e c e m b e r 3 1 , 2 0 1 6 Note A m o u n t % A m o u n t % 6(14) and 8 $ 860,000 2 $ 2,275,659 5 6(15) and 8 1,055,558 2 489,694 1 17,167 - 46,416 - 2,305,347 5 2,961,923 6 6(5) 10,202 - 223,082 - 1,008,891 2 1,155,972 2 7 64,651 - 112,663 - 18,396 - 185,206 - 6(16) 1,264,324 3 1,387,455 3 6(17), 6(18) and 8 8,688,322 17 3,322,904 7 52,402 - 50,716 - 15,345,260 31 12,211,690 24 6(17) 2,000,000 4 2,500,000 5 6(18) and 8 6,596,153 13 9,797,068 19 6(19) 99,539 - 75,207 - 6(31) 320,839 1 345,839 1 744,346 2 722,562 2 7 571,727 1 588,857 1 6(20) 92,774 - 91,109 - 136,198 - 135,350 - 6(10) 191,637 - 189,869 - 10,753,213 21 14,445,861 28 26,098,473 52 26,657,551 52 6(21) 16,233,261 32 16,233,261 31 6(22) 2,260,513 5 2,260,513 5 6(23) and 6(31) 1,805,495 3 1,644,576 3 2,589,627 5 3,101,014 6 6(24) 974,377 2 1,058,270 2 6(21) ( 1,003) - ( 1,003) - 23,862,270 47 24,296,631 47 314,382 1 330,662 1 24,176,652 48 24,627,293 48 9	D e c e m b e r 3 1 , 2 0 1 6	D e c e m b e r 3 1 , 2 0 1 6
			%
Current liabilities 2100 Short-term loans 2110 Short-term notes and bills payable 2150 Notes payable 2170 Accounts payable 2190 Construction contract accounts payable 2200 Other payables 2220 Other payables, related parties 2230 Current tax liabilities 2310 Unearned receipts 2320 Current portion of long-term liabilities 2399 Other current liabilities, others 21XX Total current liabilities Non-current liabilities 2530 Bonds payable 2540 Long-term loans 2550 Provisions, non-current 2570 Deferred tax liabilities 2610 Long-term notes and accounts payable 2620 Long-term notes and accounts payable, related parties 2640 Defined benefit liabilities net, non-current 2645 Deposit received 2670 Other non-current liabilities, other 25XX Total non-current liabilities 2XXX Total liabilities Equity attributed to the stockholders of the parent Share capital 3110 Common stock Additional paid-in capital 3200 Additional paid-in capital Retained earnings 3310 Legal reserve 3350 Unappropriated earnings Other components of equity 3400 Other components of equity 3500 Treasury stocks 31XX Total equity attributed to the stockholders of the parent company 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and			5 1 - 6 - 2 - - 3 7 -
			24
			5 19 - 1 2 1 - - -
			28
			52
			31 5 3 6 2 -
			47 1
			48

The Note to Consolidated Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

Chairman : Alex C. Lo

President: Ming-fan Hsieh

CAO: Da-chang Dai

Prince Housing and Development Corporation and Subsidiaries Consolidated Statement of Financial Position December 31, 2017 and December 31, 2016

$ 50,275,125 100 $ 51,284,844 100

(expressed in thousand NT Dollars)

unrecognized commitments 3X2X Total liabilities and equity

The Note to Consolidated Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

Chairman : Alex C. Lo

President: Ming-fan Hsieh

CAO: Da-chang Dai

	Prince	Housing and Development Corporation and	Housing and Development Corporation and	Housing and Development Corporation and	Housing and Development Corporation and	Housing and Development Corporation and	Housing and Development Corporation and	Subsidiaries	Subsidiaries	Subsidiaries	Subsidiaries	Subsidiaries
		Consolidated Statement			of	Comprehensive		Income
	for the year ended December 31,					2017 and December 31, 2016
								(expressed in					thousand NT Dollars)
								(except for					EPS expressed			in	NTD)
				2			0 1		6	2				0	1		7
	Item		Note	A	m	o	u n t	%		A		m	o	u	n t	%
	Revenues		6(26) and 7	$			10,988,980	100			$			12,060,302		100
5000	Operating costs		6(6), 6(13) and
			6(30)	(			7,722,731 ) (		70)	(				8,124,458) (			67)
5900	Gross margin						3,266,249		30					3,935,844			33
	Operating expenses		6(13), 6(30) and 7
6100	Marketing expenses			(			325,523 ) (		3)	(					466,748) (		4)
6200	Administrative expenses			(			1,862,621 ) (		17)	(				1,955,363) (			16)
6000	Total operating expenses			(			2,188,144 ) (		20)	(				2,422,111) (			20)
6900	Income from operations						1,078,105		10					1,513,733			13
	Non-operating income and
	expenses
7010	Others		6(27)				219,358		2						301,136		2
7020	Other gains and losses		6(2) and 6(28)				157,467		1						214,776		2
7050	Financial costs		6(6) and 6(29)	(			171,106 ) (		2)	(					243,079) (		2)
7060	Share of profit of associates		6(10)
	and joint ventures accounted
	for under the equity method						56,018		1						119,118		1
	Total non-operating income
	and expenses						261,737		2						391,951		3
7900	Net income before tax						1,339,842		12					1,905,684			16
7950	Income tax expenses		6(31)	(			75,021 )		-	(					306,469) (		3)
8200	Net income			$			1,264,821		12		$			1,599,215			13

(Cont’d)

	Prince Housing and Development Corporation and	Prince Housing and Development Corporation and	Prince Housing and Development Corporation and	Prince Housing and Development Corporation and	Prince Housing and Development Corporation and	Prince Housing and Development Corporation and	Prince Housing and Development Corporation and	Prince Housing and Development Corporation and	Subsidiaries	Subsidiaries	Subsidiaries	Subsidiaries	Subsidiaries
	Consolidated Statement			of	Comprehensive				Income
	for the year ended December 31,				2017		and	December 31, 2016
									(expressed in					thousand NT Dollars)
									(except for					EPS expressed				in NTD)
			2			0		1		6	2				0		1	7
	Item	Note	A	m	o	u	n	t	%		A		m	o	u	n	t	%
	Other comprehensive income
	Items that will not be
	re-classified into profit and loss
8311	Re-measurement of defined	6(20)
	benefit plans	($					13,869 )			-	($					8,112)		-
8320	Share of other comprehensive
	income of affiliates and joint
	ventures accounted for under
	the equity method-Items that
	will not be re-classified into
	income						5,748			-							416	-
8349	Income tax relating to Items	6(31)
	that will not be re-classified	(					122 )			-							560	-
8310	Items that will not be
	reclassified into profit or
	loss	(					8,243 )			-	(					7,136)		-
	Items that will be reclassified
	into profit or loss
8361	Exchange differences on
	translation of foreign
	operations financial statements							-		-	(					1,754)		-
8362	Unrealized gains/(losses) on	6(8)
	available-for-sale financial
	assets	(					83,893 ) (			1)	(					349,085)(		3)
	Total amount of items that
	will be reclassified into
	profit or loss	(					83,893 ) (			1)	(					350,839)(		3)
8300	Other comprehensive income
	(net)	($					92,136 ) (			1)	($					357,975)(		3)
8500	Total comprehensive income		$			1,172,685				11		$			1,241,240			10
	Net profit (loss) attributed to:
8610	Stockholders of the parent
	company		$			1,281,101				12		$			1,609,189			13
8620	Non-controlling interest	(					16,280 )			-	(					9,974)		-
			$			1,264,821				12		$			1,599,215			13
	Total comprehensive income
	attributed to:

The Note to Consolidated Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

Chairman : Alex C. Lo

President: Ming-fan Hsieh

CAO: Da-chang Dai

	Prince	Housing and Development Corporation and	Housing and Development Corporation and	Subsidiaries	Subsidiaries
		Consolidated Statement of Comprehensive		Income
	for the year ended December 31, 2017 and December 31, 2016
				(expressed in thousand NT Dollars)
				(except for EPS expressed			in NTD)
8710	Stockholders of the parent
	company	$	1,188,965	11	$	1,251,214	10
8720	Non-controlling interest	(	16,280 )	- (		9,974)	-
		$	1,172,685	11	$	1,241,240	10
	EPS	6(32)
9750	Basic	$		0.79	$		0.99
9850	Diluted	$		0.78	$		0.98

The Note to Consolidated Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

President: Ming-fan Hsieh

Chairman : Alex C. Lo

CAO: Da-chang Dai

Year Ended December 31,2016	N o t e		E q u i t y		a t t r	Princ	e Housing & Development Corporation and Subsi	e Housing & Development Corporation and Subsi	e Housing & Development Corporation and Subsi	e Housing & Development Corporation and Subsi	e Housing & Development Corporation and Subsi	diaries 1, 2016 t o c k h o	l	d e r s o	t h e	p a r e n t		(expressed in thousand NT Dollars) Non-controlling i n t e r e s t T o t a l equ i t y $ 343,495 $ 25,174,571 - - - ( 1,785,659 ) ( 9,974 ) 1,599,215 - ( 357,975 ) ( 2,859 ) ( 2,859 ) $ 330,662 $ 24,627,293 $ 330,662 $ 24,627,293 - - - ( 1,623,326 ) ( 16,280 ) 1,264,821 - ( 92,136 ) $ 314,382 $ 24,176,652	(expressed in thousand NT Dollars) Non-controlling i n t e r e s t T o t a l equ i t y $ 343,495 $ 25,174,571 - - - ( 1,785,659 ) ( 9,974 ) 1,599,215 - ( 357,975 ) ( 2,859 ) ( 2,859 ) $ 330,662 $ 24,627,293 $ 330,662 $ 24,627,293 - - - ( 1,623,326 ) ( 16,280 ) 1,264,821 - ( 92,136 ) $ 314,382 $ 24,176,652
						for th	e y	Consolidated Statem	en	t of Changes in Equity , 2017 and December 3
								ear ended December	31	, 2017 and December
						i b	u	t e d t	o	t h e s
			Common stock		Additional paid-in c a p i t a l			R e t a i n e d		e a r n i n g s		O t h e r	e	q u i t y	Treasurystocks	T o t a l
								Le g a l r e se r ve Additional paid-in c a p i t a l		Unappropriated e a r n i n g s		E x c h a n g e d if fe r e n c e s o n t r a n s l a t i o n o f foreign operations financial statements		Unrealized gain or l o s s o n available-for-sale financial assets
	6(23) 6(32) 6(8), 6(20) and 6(24) 6(23) 6(32) 6(8), 6(20) and 6(24)	T	$ 16,233,261 - - - - - $ 16,233,261 $ 16,233,261 - - - - $ 16,233,261 he Note to Consolida	ted					nts t:	$ 3,508,400 ( 223,780 ) ( 1,785,659 ) 1,609,189 ( 7,136 ) - $ 3,101,014 $ 3,101,014 ( 160,919 ) ( 1,623,326 ) 1,281,101 ( 8,243 ) $ 2,589,627 form part of the Con Ming-fan Hsieh	so	$ 1,706 - - - ( 1,754 ) - ($ 48 ) ($ 48 ) - - - - ($ 48 ) lidated Financial State	me			$ 24,831,076 - ( 1,785,659 ) 1,609,189 ( 357,975 ) - $ 24,296,631 $ 24,296,631 - ( 1,623,326 ) 1,281,101 ( 92,136 ) $ 23,862,270 CAO:Da-chang D	ai	$ 343,495 - - ( 9,974 ) - ( 2,859 ) $ 330,662 $ 330,662 - - ( 16,280 ) - $ 314,382	$ 25,174,571 - ( 1,785,659 ) 1,599,215 ( 357,975 ) ( 2,859 ) $ 24,627,293 $ 24,627,293 - ( 1,623,326 ) 1,264,821 ( 92,136 ) $ 24,176,652
Balance, beginning of year Appropriation and distribution of retained earnings 2015 Legal reserve Cash dividends Net income 2016 Other comprehensive income 2016 Changes in non-controlling interest Balance, end of year Year Ended December 31,2017
Balance, beginning of year Appropriation and distribution of retained earnings 2016 Legal reserve Cash dividends Net income 2017 Other comprehensive income 2017 Balance, end of year hairman:Alex C. Lo

(expressed in thousand NT Dollars)

President: Ming-fan Hsieh CAO: Da-chang Dai

Prince Housing & Development Corporation and Subsidiaries

Consolidated Statement of Cash Flows

for the year ended December 31, 2017 and December 31, 2016

								(expressed	(expressed	in	thousand	thousand	NT Dollars)
				Year		ended	December		Year		ended	December
	Note			3	1	,	2	0 1 7	3	1	,	2	0 1 6
Cash flows from operating activities
Profit before tax			$				1,339,842		$				1,905,684
Adjustments
Income charges (credits)
Financial assets at fair value through profit or loss, net (income)	6(2) and 6(28)
loss		(						34,635 )					15,349
Allowance for doubtful accounts	6(4)							649					194
Offset of irrecoverable accounts	6(3) and 6(4)	(						326 ) (					344 )
Share of profit of associates and joint ventures accounted for	6(10)
under the equity method		(						56,018 ) (					119,118 )
Loss from disposal or scrap of property, plant and equipment								4,891					2,438
Loss (gain) from disposal of investment property								997 (					909 )
Disposition expenses of property, plant and equipment								1,545					323
Depreciation expense	6(30)							351,901					373,196
Amortization expense	6(13) and 6(30)							62,307					62,123
Interest expense	6(29)							169,906					241,879
Interest revenue	6(27)	(						8,161 ) (					10,033 )
Dividend revenue	6(27)	(						103,288 ) (					118,461 )
Unrealized loss from foreign exchange								36,866					7,185
Changes in assets/liabilities related to operating activities
Changes in assets relating to operating activities net
Financial assets at fair value through profit or loss, current		(						140,620 ) (					200,000 )
Notes receivable								4,851					33,235
Accounts receivable								127,358					1,038,969
Accounts receivable-related parties								8,470					405,986
Construction contract accounts receivable								688,173					289,208
Other receivables		(						49,272 )					47,844
Inventories								208,375 (					60,964 )
Pre-payments		(						33,081 )					88,216
Other current assets, others								68,682					42,545
Other non-current assets, others								977					1,357
Changes in liabilities relating to operating activities net
Notes payable		(						29,249 )					19,717
Accounts payable		(						656,576 ) (					1,236,994 )
Construction contract accounts payable		(						212,880 ) (					282,355 )
Other payables		(						144,306 ) (					194,117 )
Other payables, related parties		(						48,012 ) (					56,342 )
Unearned receipts		(						123,131 ) (					488,007 )
Other current liabilities, others								1,686					30,069
Provisions, non-current								24,332 (					9,310 )
Long-term notes and accounts payable								- (					10,907 )
Long-term notes and accounts payable, related parties		(						17,130 ) (					30,023 )
Defined benefit liabilities net, non-current		(						12,326 ) (					57,518 )
Other non-current liabilities, other								1,768 (					17,986 )
Operating cash flow							1,434,565						1,712,129
Interest receivable								8,161					10,033
Dividends receivable								326,541					356,881
Interest payable		(						172,681 ) (					249,419 )
Income tax payable		(						371,772 ) (					285,535 )
Operating cash flow net							1,224,814						1,544,089
	(Cont’d)

Prince Housing & Development Corporation and Subsidiaries Consolidated Statement of Cash Flows

for the year ended December 31, 2017 and December 31, 2016

(expressed in thousand NT Dollars)

Note
Year ended December
3
1
,
2
0
1
7

Operating Cash Flow
(Increase)/Reduction in other financial assets, current,
( $ 428,377 )
Available-for-sale financial assets, non-current, capital reduction,
re-fund of subscription
509
Available-for-sale financial assets, non-current, capital reduction
-
Financial assets measured at cost, non-current, capital reduction,
refund of subscription
22,770
Investments accounted for under the equity method, capital
reduction refund of subscription
-
Acquisition of property, plant and equipment
6(11)
(
183,387 ) (
Disposal proceeds of property, plant and equipment
629
Disposal proceeds of investment property
3,417
Increase in intangible assets
6(13)
(
864 ) (
(Increase)/Reduction in refundable deposits
(
29,757 )
(Increase)/Reduction in other financial assets, noncurrent
(
246,844 )
(Outward)/Inward investment cash flow net
(
861,904 )
Fundraiser Cash Flow
Short-term loans reduction
(
1,415,659 ) (
Increase (reduction) in short-term notes and bills payable
565,864 (
Bond repayment
(
2,000,000 )
Issuance of bonds
2,000,000
Repayment of long-term loans
(
13,924,136 ) (
Raising long-term loans
15,588,639
Increase (reduction) in long-term bills and accounts payable
(
Increase (reduction) in deposit received
848 (
Release of cash dividend
6(23)
(
1,623,326 ) (
Changes in non-controlling interest
- (
Outward fundraising cash flow net
(
785,986 ) (
Consolidated exchange rate effects
(
3,990 ) (
Increase/(Reduction) in cash and cash equivalents
(
427,066 )
Balance of cash and cash equivalents, beginning of year
4,648,915
Balance of cash and cash equivalents, end of year
$ 4,221,849

Year ended December
3
1
,
2
0
1
6
$ 1,047,784
1,577
1,607
9,729
90,022

61,479 )
789
1,554

516 )
59,605
273,817
1,424,489

350,714 )

570,117 )
-
-

10,875,088 )
11,500,557

)

369 )

1,785,659 )

2,859 )

2,117,884 )

2,530 )
848,164
3,800,751
$ 4,648,915

The Note to Consolidated Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

Chairman : Alex C. Lo

President: Ming-fan Hsieh

CAO: Da-chang Dai

Annex 4

CPA Audit Report

(107) Cai-Sheng-Bao-Zi No. 17002998

Prince Housing & Development Corporation

Audit Opinion

We have audited the accompanying Individual Statement of Financial Position of Prince Housing & Development Corporation for the years ended December 31, 2017 and December 31, 2016, and the related Individual Statement of Comprehensive Income, Individual Statement of Changes in Equity, and Individual Statement of Cash Flow, and the note (including a summary of important accounting policies) of the Individual Financial Statements for the years ended December 31, 2017 and December 31, 2016.

In our opinion, with respect to our audit results and the reports (please refer to the Others section) of other independent accountants, the important issues in the said individual financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers can fairly disclose the individual financial position of Prince Housing & Development Corporation for the years ended December 31, 2017 and December 31, 2016, and its individual financial performance and cash flows of Prince Housing & Development Corporation for the years ended December 31, 2017 and December 31, 2016.

Basis of Audit

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Generally Accepted Accounting Principles (GAAP) of the Republic of China. Our role and responsibility under such regulations and principles will be elaborated in the Responsibility for CPA Audit of Consolidated Financial Statements. In accordance with the independence requirements of the firm, we have required staff to maintained independence from Prince Housing & Development Corporation and carried out their duties with respect to The Norm of Professional Ethics for Certified Public Accountant of the Republic of China. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinions.

Key Audit Items

Key audit items refer to the professional judgement of auditing the most important items in the 2017 Individual Financial Statement of Prince Housing & Development Corporation. While such items have been addressed when auditing the overall individual financial statements and the formation opinions, we will not express opinions on any particular items.

The key audit items of the individual financial statements of Prince Housing & Development Corporation are as follows:

Recognition time point of realty sale revenue

Description

Please refer to item (29) in Note 4 of the Individual Financial Statements for the accounting policy of sales income and item (25) in Note 6 of the Individual Financial Statements for the

description of accounting items. The 2017 revenue from realty sale of Prince Housing & Development Corporation was NT$4,994,154,000, commanding at 87% of the revenues.

Sales revenue of Prince Housing & Development Corporation was recognized after transferring into costs and recognizing as profit/loss after the ownership transfer and the actual handover of property. As property of Prince Housing & Development Corporation are sold to individual buyers, the accounting workflow often involves various handbook operating procedures including the transfer of ownership transfer and handover data among departments. This results in the appropriate time point of recognition near the closing date of the financial report period. Hence, we have set the recognition time point of sales revenues as one of the important audit items.

Responsive Audit Procedures

In response to the said key audit items, we have implemented the following responsive procedures:

To discern and assess the internal control procedures for the management’s recognition of revenue from realty sale; and to test if the process of recognition time point of realty sale is effectively implemented, including cross-examining the dates of ownership transfer and handover and the accuracy of accounting time point.
A cut-off test was conducted on the realty sale conducted within a particular period before and after the closing date of near the end of the financial report period. The test included cross-examining evidence including the land and building registration transcripts, realty deeds, and handover agreements signed by customers to verify if the revenue from realty sale was registered at the appropriate time.

Investments accounted for under the equity method: The income from construction projects is recognized by assessing the percentage of completion of projects undertaken by Ta Cheng Construction and Engineering Corporation, a subsidiary in possession of subsidiary Honesty Investment Holdings Co., Ltd.

Description

Please refer to item 13 of Note 4 of the Individual Financial Statements for the accounting policy of investments accounted for under the equity method and item 9 of Note 6 for the description off accounting items.

While Ta Cheng Construction and Engineering Corporation is an important subsidiary of Prince Housing & Development Corporation invested via subsidiary Honesty Investment Holdings Co., Ltd., the financial performance of Ta Cheng Construction and Engineering has important influence on the financial statements of Prince Housing & Development Corporation.

The revenue of the construction service offered by Ta Cheng Construction and Engineering is recognized according to the status of completion during the contract period. The status of completion has been calculated according to the percentage in the estimated total construction cost of the incurred cost by the closing date of financial report period of each project. The estimated total construction cost is based on the cost breakdown sheet produced according to the owner’s master design drawings and in consideration of increase or decrease of construction quantity resulted from an engineering change and the construction price and cost indices to estimate the costs invested in an outsourced contract, including labor and materials.

and the recognition of revenue from construction. Hence, we have set the estimation of the status of completion as one of the important items for auditing the revenue from construction of Ta Cheng Construction and Engineering.

Responsive Audit Procedures

In response to the said key audit items, we have implemented the following responsive procedures:

To discern the nature of operations and industry of Ta Cheng Construction and Engineering; assess the fairness of the internal operating procedures for estimating the total construction cost, including the procedures for determining the labor and material costs of individual project items; and examine the consistency of the estimation method.
To assess and test the internal control procedures affecting the change in the estimation of the total cost of Ta Cheng Construction and Engineering, including cross-examining the evidence regarding the increase or decrease of project items and important project estimates.
To interview supervisors and other appropriate staff of Ta Cheng Construction and Engineering for projects still under progress during the interview.
To obtain the profit and loss statement of Ta Cheng Construction and Engineering to implement related empirical procedures, including spot check of costs incurred in the period with the appropriate receipts (vouchers), spot check of the increase or decrease of project items with related evidence, and re-check of the percentage of project completion.

Others: Audits of other accountants

The financial reports of investments accounted for under the equity method included in the Individual Financial Statement of Prince Housing & Development Corporation not audited by this firm were audited by other accountants. Hence, the opinion we express in the said Individual Financial Statement for the amounts listed in the financial statements of such companies has been made in accordance with the audit reports of other accountants. The total amount of the said investments accounted for under the equity method for years ended December 31, 2017 and December 31, 2016 was NT$147,765,000 and NT$897,432,000, commanding at 0.34% and 2.06% of the total amount of individual assets, respectively. The comprehensive income recognized by the same company for years ended December 31, 2017 and December 31, 2016 was NT$650,000 and NT$82,591,000, representing 0% and 6.60% of the total amount of comprehensive income, respectively.

Responsibility for the Individual Financial Statements of the Management and Governance Units

It is the management’s responsibility to produce fairly expressed individual financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and to maintain the necessary internal controls relating to the production of such individual financial statements in order to ensure that no significant, untrue expression as a result of corruption or errors is found in individual financial statements.

When producing individual financial statements, it is also the management’s responsibility to assess the capacity to maintain business continuity, disclosure of related information, and choice of accounting basis for business continuity of Prince Housing & Development Corporation, except when Prince Housing & Development Corporation intends to liquidate or shut down operations, or there is no other feasible alternative other than liquidation or closure.

It is the responsibility of the governance units (including the Audit Committee) of Prince Housing & Development Corporation to supervise the workflow of financial reporting.

Accountant’s responsibility for auditing individual financial statements

It is our responsibility to audit the individual financial statements of Prince Housing & Development Corporation to provide reasonable assurance in an audit report that no significant, untrue expression as a result of corruption or errors is found in such individual financial statements.

Reasonable assurance refers to high assurance. However, the detection of significant, untrue expressions in the individual financial statements is not guaranteed when audits are implemented based on the GAAP of the Republic of China. Untrue expression as a result of corruption or errors Untrue expressions of individual amounts or sums are significant when they can reasonably affect the economic policy made by the users off consolidated financial statements.

When auditing based on the GAAP of the Republic of China, we have applied professional judgments and maintained professional

doubts. Other tasks of accountants

To identify and assess significant, untrue expressions of risks as a result of corruption or errors in individual financial statements; to plan and implement appropriate countermeasures for the risks assessed; and obtain adequate and appropriate audit evidence as the basis for making audit expressions. While corruption may involve collusions, forgeries, willful omissions, untrue declarations, or overstep of internal controls, the risk caused by significant, untrue expressions as a result of corruption is higher than that of errors.
To understand internal controls required for audits in order to design audit procedures appropriate to the situation of audit, provided that such an understanding does not intend to express opinions on the effectiveness of the internal controls of Prince Housing & Development Corporation.
To assess the suitability of the accounting policy adopted by the management and the fairness of its accounting estimation and related disclosures.
To conclude if there are significant uncertainties regarding the suitability of the accounting basis adopted by the management to maintain business continuity and the potential significant doubtful incidents or situations within the capacity to maintain business continuity of Prince Housing & Development Corporation based on the obtained audit evidence. After determining that there are significant uncertainties in such incidents or situations, we shall remind in the audit report the users of such individual financial statements to pay attention to related disclosures in such individual financial statements, or shall we express a modified opinion where such disclosures are inappropriate. We have made conclusions based on the audit basis obtained by the audit report date. However, future incidents or situations may incapacitate Prince Housing & Development Corporation from business continuity.
To assess the overall expression, structure and contents of individual financial statements (including related note) and the fair expression of related transactions and incidents in such individual financial statements.
To gather adequate and suitable audit evidence of the financial information of individuals within Prince Housing & Development Corporation to express opinions on the individual financial statements. We are responsible to instruct, supervise and implement the audit of Prince Housing &

Development Corporation and conclude the audit opinions on the company

We have determined the key audit items of the 2017 Individual Financial Statements of Prince Housing & Development Corporation based on the communication items with the governance units. We have also specified in the audit report that we will not communicate specific items in the audit report when there are reasons to believe that such communication may cause negative impacts more than positive public interest, except for specific items not allowed for disclosures by law or under extremely rare circumstances.

P w C T a i w a n

Jian-zhi Wu

CPA

Guo-hua Wang

Financial Supervisory Commission

Approval document: Jin-Guan-Zheng-Zhen-Zi No. 1030027246 Formerly Securities and Futures Management Committee of the Ministry of Finance

Approval document: (87) Tai-Cai-Zheng-(VI)-Zi No. 68790

D a t e : M a r c h 2 0 , 2 0 1 8

Prince Housing & Development Corporation Individual Statement of Financial Position December 31, 2017 and December 31, 2016

Assets	Note 6(1) 6(2) 6(3) 6(4) 6(5), 7 and 8 8 6(6) 6(2) and 8 6(7) and 8 6(8) and 8 6(9) and 8 6(10) and 8 6(11) and 8 6(12) 6(30) 9 8 7	D e c e m b e r 3 1 , 2 0 1 7 A m o u n t 4000 $ 2,426,891 6 100,620 - 85,762 - 84,876 - 47,267 - 84,095 - 21,244,527 49 220,905 1 474,846 1 213,558 1 24,983,347 58 78,552 - 1,095,108 3 855,030 2 5,748,873 13 552,780 1 5,880,560 14 2,177,934 5 21,515 - 421,048 1 670,546 2 636,640 1 18,138,586 42 $ 43,121,933 100	(expressed in thousand NT Dollars) D e c e m b e r 3 1 , 2 0 1 6 A m o u n t 4000 $ 2,856,845 7 300,000 1 88,801 - 86,249 - 4,564 - - - 21,378,653 49 164,216 - 588,572 1 246,014 1 25,713,914 59 78,253 - 1,182,023 3 877,800 2 5,373,556 12 572,089 1 5,970,428 14 2,239,187 5 - - 431,932 1 444,629 1 636,640 2 17,806,537 41 $ 43,520,451 100
		A m o u n t $ 2,426,891 100,620 85,762 84,876 47,267 84,095 21,244,527 220,905 474,846 213,558 24,983,347 78,552 1,095,108 855,030 5,748,873 552,780 5,880,560 2,177,934 21,515 421,048 670,546 636,640 18,138,586 $ 43,121,933	A m o u n t $ 2,856,845 300,000 88,801 86,249 4,564 - 21,378,653 164,216 588,572 246,014 25,713,914 78,253 1,182,023 877,800 5,373,556 572,089 5,970,428 2,239,187 - 431,932 444,629 636,640 17,806,537 $ 43,520,451
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss, current 1150 Notes receivable net 1170 Accounts receivable net 1200 Other receivables 1220 Current tax assets 85,945 Inventories 1410 Pre-payments 1476 Other financial assets, current 1479 Other current assets, others 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss, non-current 1523 Available-for-sale financial assets, non-current 1543 Financial assets measured at cost, non-current 1550 Investments accounted for under the equity method 1600 Property, plant and equipment 1760 Investment property amount net 1780 Intangible assets 1840 Deferred tax assets 1920 Refundable deposits 1980 Other current assets, non-current 1990 Other non-current assets, others 15XX Total non-current assets 1XXX Total assets

(Cont’d)

Prince Housing & Development Corporation Individual Statement of Financial Position December 31, 2017 and December 31, 2016

(expressed in thousand NT Dollars)

Liabilities and Equity	D e c e m b e r 3 1 , 2 0 1 7 D e c e m b e r 3 1 , 2 0 1 6 Note A m o u n t 4000 A m o u n t 4000 6(13) and 8 $ 690,000 2 $ 2,215,659 5 6(14) and 8 855,558 2 339,694 1 5,793 - 15,052 - 1,083,789 3 1,489,408 4 7 16,391 - 5,948 - 525,715 1 672,161 2 - - 168,930 - 6(15) 942,365 2 1,013,366 2 6(16), 6(17) and 8 5,702,613 13 3,176,015 7 31,684 - 31,324 - 9,853,908 23 9,127,557 21 6(16) 2,000,000 5 2,500,000 6 6(17) and 8 6,596,153 16 6,811,359 16 6(18) 99,539 - 75,207 - 6(19) 76,873 - 68,853 - 129,696 - 127,819 - 6(9) 503,494 1 513,025 1 9,405,755 22 10,096,263 23 19,259,663 45 19,223,820 44 6(20) 16,233,261 38 16,233,261 37 6(21) 2,260,513 5 2,260,513 5 6(22) and 6(30) 1,805,495 4 1,644,576 4 2,589,627 6 3,101,014 7 6(23) 974,377 2 1,058,270 3 6(20) ( 1,003) - ( 1,003) - 23,862,270 55 24,296,631 56 9 $ 43,121,933 100 $ 43,520,451 100	D e c e m b e r 3 1 , 2 0 1 6	D e c e m b e r 3 1 , 2 0 1 6
			4000
Current liabilities 2100 Short-term loans 2110 Short-term notes and bills payable 2150 Notes payable 2170 Accounts payable 2180 Accounts payable-Related parties 2200 Other payables 2230 Current tax liabilities 2310 Unearned receipts 2320 Current portion of long-term liabilities 2399 Other current liabilities, others 21XX Total current liabilities Non-current liabilities 2530 Bonds payable 2540 Long-term loans 2550 Provisions, non-current 2640 Defined benefit liabilities net, non-current 2645 Deposit received 2670 Other non-current liabilities, other 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock Additional paid-in capital 3200 Additional paid-in capital Retained earnings 3310 Legal reserve 3350 Unappropriated earnings Other components of equity 3400 Other components of equity 3500 Treasury stocks 3XXX Total equity Significant contingent liabilities and unrecognized commitments 3X2X Total liabilities and equity			5 1 - 4 - 2 - 2 7 -
			21
			6 16 - - - 1
			23
			44
			37 5 4 7 3 -
			56
			100

The Notes to Individual Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

President: Ming-fan Hsieh

Chairman : Alex C. Lo

CAO: Da-chang Dai

Prince Housing & Development Corporation Individual Statement of Comprehensive Income for the year ended December 31, 2017 and December 31, 2016

													(expressed	(expressed	(expressed	in thousand	in thousand	NT Dollars)	NT Dollars)
													(except for			EPS expressed in NTD)
			2				0	1		6	2				0	1			7
	Item	Note	A		m	o	u	n t		4000	A		m	o	u	n t		4000
	Revenues	6(25) and 7		$			5,734,056			100		$			6,004,370			100
5000	Operating costs	6(5), 6(12, 6(29), and
		7	(				4,420,648)		(	77)	(				3,739,186)		(	62)
5900	Gross margin						1,313,408			23					2,265,184			38
	Operating expenses	6(29) and 7
6100	Marketing expenses		(					171,832)	(	3)	(					336,693)	(		6)
6200	Administrative expenses		(					840,629)	(	15)	(					907,006)	(	15)
6000	Total operating expenses		(				1,012,461)		(	18)	(				1,243,699)		(	21)
6900	Income from operations							300,947		5					1,021,485			17
	Non-operating income and expenses
7010	Others	6(26)						188,712		3						232,977			4
7020	Other gains and losses	6(2) and 6(27)						140,530		2						246,736			4
7050	Financial costs	6(5) and 6(28)	(					132,318)	(	2)	(					202,374)	(		3)
7070	Share of profit of subsidiaries,	6(9)
	associates and joint ventures
	accounted for under the equity
	method							788,953		14						559,388			9
	Total non-operating income
	and expenses							985,877		17						836,727		14
7900	Net income before tax						1,286,824			22					1,858,212			31
7950	Income tax expenses	6(30)	(					5,723)		-	(					249,023)	(		4)
8200	Net income			$			1,281,101			22		$			1,609,189			27
	Other comprehensive income (net)
	Items that will not be re-classified
	into profit and loss
8311	Re-measurement of defined benefit	6(19)
	plans		($					7,201)		-	($					9,292)			-
8330	Share of other comprehensive
	income of subsidiaries, associates
	and joint ventures accounted for
	under the equity method- Items that
	will not be re-classified into
	income		(					1,042)		-						2,156			-
8310	Items that will not be
	reclassified into profit or loss		(					8,243)		-	(					7,136)			-
	Items that will be reclassified into
	profit or loss
8362	Unrealized gains/(losses) on	6(7)
	available-for-sale financial assets		(					86,405)	(	1)	(					355,139)	(		6)
8380	Share of other comprehensive
	income of subsidiaries, associates
	and joint ventures accounted for
	under the equity method-Items that
	will be re-classified into income							2,512		-						4,300			-
	Total amount of items that will
	be reclassified into profit or
	loss		(					83,893)	(	1)	(					350,839)	(		6)
8300	Other comprehensive income (net)		($					92,136)	(	1)	($					357,975)	(		6)
8500	Total comprehensive income			$			1,188,965			21		$			1,251,214			21
	EPS	6(31)
9750	Basic			$						0.79		$						0.99
9850	Diluted			$						0.78		$						0.98
	Data to be prepared when the investment of subsidiaries in		the		stocks	of	this	company	is	not considered			as treasury stocks.
	Net income			$					1,281,101			$					1,609,189
	EPS
	Basic			$						0.79		$						0.99

The Notes to Individual Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

Chairman : Alex C. Lo

President: Ming-fan Hsieh

CAO: Da-chang Dai

Prince Housing & Development Corporation Individual Statement of Changes in Equity for the year ended December 31, 2017 and December 31, 2016

(expressed in thousand NT Dollars)

Year Ended December 31, 2016 Balance, beginning of year Appropriation and distribution of retained earnings 2015 (Note 1) Legal reserve Cash dividends Net income 2016 Other comprehensive income 2016 Balance, end of year Year Ended December 31, 2017 Balance, beginning of year Appropriation and distribution of retained earnings 2016 (Note 2) Legal reserve Cash dividends Net income 2017 Other comprehensive income 2017 Balance, end of year	N o t e		Commo n stock		Additional paid-in c a p i t a l		R e t a i n e d	e a r n i n g s	O t h e r	e q u i t y	Treasurystocks	T o t a l equ i ty
							L e g a l r e s e r v e Additional paid-in c a p i t a l	U n a p p r o p r i a t e d e a r n i n g s	E x c h a n g e d iffe re nc es o n t r a n s l a t i o n o f foreign operations f i n a n c i a l s t a t e m e n t s	Unrealized gain or l o s s o n available-for-sale financial assets
	6(22) 6(31) 6(7), 6(19), and 6(23) 6(22) 6(31) 6(7), 6(19), and 6(23)		$ 16,233,261 - - - - $ 16,233,261 $ 16,233,261 - - - - $ 16,233,261		$ 2,260,513 - - - - $ 2,260,513 $ 2,260,513 - - - - $ 2,260,513		$ 1,420,796 223,780 - - - $ 1,644,576 $ 1,644,576 160,919 - - - $ 1,805,495	$ 3,508,400 ( 223,780 ) ( 1,785,659 ) 1,609,189 ( 7,136 ) $ 3,101,014 $ 3,101,014 ( 160,919 ) ( 1,623,326 ) 1,281,101 ( 8,243 ) $ 2,589,627	$ 1,706 - - - ( 1,754 ) ($ 48 ) ($ 48 ) - - - - ($ 48 )	$ 1,407,403 - - - ( 349,085 ) $ 1,058,318 $ 1,058,318 - - - ( 83,893 ) $ 974,425	($ 1,003 ) - - - - ($ 1,003 ) ($ 1,003 ) - - - - ($ 1,003 )	$ 24,831,076 - ( 1,785,659 ) 1,609,189 ( 357,975 ) $ 24,296,631 $ 24,296,631 - ( 1,623,326 ) 1,281,101 ( 92,136 ) $ 23,862,270

Note 1: The compensation for employees and directors amounting to $244,705 and $83,250 has been deducted from the statement of comprehensive income, and the sum is identical to the distribution account resolved by the board of directors. Note 2: The compensation for employees and directors amounting to $185,821 and $63,218 has been deducted from the statement of comprehensive income, and the sum is identical to the distribution account resolved by the board of directors.

Chairman : Alex C. Lo

CAO: Da-chang Dai

The Notes to Individual Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

President: Ming-fan Hsieh

Prince Housing & Development Corporation Individual Statement of Cash Flows

for the year ended December 31, 2017 and December 31, 2016

Cash flows from operating activities
Profit before tax
Adjustments
Income charges (credits)
Financial assets at fair value through profit or loss, net
income

Offset of irrecoverable accounts

Share of other profit of subsidiaries, associates and joint
ventures accounted for under the equity method

Loss from disposal or scrap of property, plant and
equipment, and investment property.

Depreciation expense

Amortization expense

Interest expense

Interest revenue

Dividend revenue

Unrealized loss from foreign exchange

Changes in assets/liabilities related to operating activities
Changes in assets relating to operating activities net
Financial assets at fair value through profit or loss,
current
Notes receivable
Accounts receivable
Other receivables
Inventories
Pre-payments
Other current assets, others
Changes in liabilities relating to operating activities net
Notes payable
Accounts payable
Accounts payable-Related parties
Other payables
Unearned receipts
Other current liabilities, others
Provisions, non-current
Defined benefit liabilities net, non-current
Operating cash flow
Interest receivable
Dividends receivable
Interest payable
Income tax payable
Operating cash flow net

(expressed in thousand NT Dollars)
Note
Year Ended
December 31,2017
Year Ended
December 31,2016
$ 1,286,824 $ 1,858,212
6(2) and 6(27)
(
2,242 ) (
384 )
6(3)
- (
344 )
6(9)
(
788,953 ) (
559,388 )
6(27)
1,640
1,473
6(29)
112,269
113,177
6(12) and 6(29)
61,253
61,252
6(28)
132,318
202,374
6(26)
(
6,787 ) (
7,287 )
6(26)
(
90,329 ) (
93,755 )
6(27)
36,866
7,185

201,323 (
299,877 )
3,039
23,131
1,373
740,535
(
42,528 )
59,422
134,126 (
65,727 )
(
56,689 )
60,611
32,456
51,537

(
9,259 )
3,958
(
405,619 ) (
859,315 )
10,443 (
328,445 )
(
143,671 ) (
196,369 )
(
71,001 ) (
620,889 )
360
26,656
24,332 (
9,310 )
819 (
47,154 )
422,363
121,279
6,612
6,757
459,038
818,393
(
135,093 ) (
206,899 )
(
280,263 ) (
153,267 )
472,657
586,263

(Cont’d)

Prince Housing & Development Corporation Individual Statement of Cash Flows

for the year ended December 31, 2017 and December 31, 2016

Operating Cash Flow Reduction of other financial assets, current Available-for-sale financial assets, non-current, capital reduction, re-fund of subscription Available-for-sale financial assets, non-current, capital reduction Financial assets measured at cost, non-current, capital reduction, refund of subscription Investments accounted for under the equity method, liquidation/capital reduction, refund of subscription Disposal proceeds of investments accounted for under the equity method Acquisition of property, plant and equipment Disposal proceeds of property, plant, and equipment and investment property Refundable deposits reduction (Increase)/Reduction in other financial assets, noncurrent (Outward)/Inward investment cash flow net Fundraiser Cash Flow Short-term loans reduction Increase/(Reduction) in short-term notes and bills payable Bond repayment Issuance of bonds Repayment of long-term loans Raising long-term loans Increase in deposit received Release of cash dividend Outward fundraising cash flow net	(expressed Note Y e a r e n d e d December 31,2017 $ 113,726 510 - 22,770 - - 6(10) ( 8,760 ) ( 4,028 10,884 ( 225,917 ) ( 82,759 ) ( 1,525,659 ) ( 515,864 ( ( 2,000,000 ) 2,000,000 ( 13,777,247 ) ( 15,588,639 1,877 6(22) ( 1,623,326 ) ( ( 819,852 ) (	in thousand NT Dollars) Y e a r e n d e d December 31,2016 $ 1,166,418 1,577 3,653 9,729 3,101 ) 2,343 61,567 288,009 1,751,207 49,215 ) 540,180 ) - - 10,763,366 ) 11,500,557 348 1,785,659 ) 1,637,515 )

Increase/(Reduction) in cash and cash equivalents ( 429,954 ) Balance of cash and cash equivalents, beginning of year 2,856,845 Balance of cash and cash equivalents, end of year $ 2,426,891	699,955 2,156,890 $ 2,856,845

The Notes to Individual Financial Statements appended to the statements form part of the Consolidated Financial Statements. Please read together.

Chairman : Alex C. Lo

President: Ming-fan Hsieh

CAO: Da-chang Dai

A n n e x 5

Prince Housing & Development Corporation Profit Distribution Table

January 1, 2017 to 2>December 31, 2017

(expressed in

一、 Distributable amount
Beginning unappropriated earnings 1,316,767,977
Add: 2017 net profit after tax 1,281,100,609
Less: Legal reserve (128,110,061)
4.Less: Actuarial loss from the defined benefit plan (8,243,344)
Distributable net profit 2,461,515,181
二、 Distribution items

Cash dividend (NT$0.65 per share) (1,055,161,996)

Accumulated unappropriated earnings 1,406,353,185

Note:

Unappropriated earnings at the end of 2017 will first be distributed.
The fractional shares held by shareholders after profit distribution will be transferred to the employee welfare committee of this company.

Chairman: Alex C. Lo President: Ming-fan Hsieh CAO: Da-chang Dai

Annex 6

Prince Housing & Development Corporation

Cross Reference of the Rules of Procedure for the Board Meeting Before and After Amendment

B	e f o r e A m e n d m e n t	A f t e r A m e n d m e n t	A f t e r A m e n d m e n t	Descripti o n
Ar tic le 7	The Company shall submit following items to the board of directors for discussion: 1. Corporate business plan. 2. Annual and biannual financial statements. except for biannual financial statements required no accountant audit by law. 3. Establishment or amendment of an internal control system in pursuant to Article 14-1 of the Securities and Exchange Act. 4. Establishment or amendment of the procedures for handling significant financial activities, such as acquisition or disposal of assets, engagement in derivatives transaction, capital lending, and provide endorsements or guarantee for others. 5. Offering, issuance, or private placement of any securities in the nature of equity. 6. Appointment or discharge of a financial, accounting, or internal audit officers. 7. Major donations to related parties or non-related parties. Donations in the nature of charity given as emergency assistance and relief of major disasters may be recognized in the next board of directors meeting. 8. Any matters required by Article 14-3 of the Securitas and Exchange Act or any other laws, regulations, or by-lawsthat shall be approved by resolution at a meeting of shareholders or a board meeting, or any such significant matter as may be prescribed by the competent authority The term "related party" in subparagraph 7 of the preceding paragraph means a related party as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The term "major donation to a non-related party" means any individual donation, or cumulative donations within a 1-year period to a single recipient, at an amount of NTD100 million or more, or at an amount equal to or greater than 1 percent of net operating revenue or 5 percent of paid-in capital as stated in the CPA-attested financial report for the most recent year. The term "within a 1-year period" in the preceding paragraph means a period of 1 year calculated retroactively from the date on which the current board of directors meeting is convened. Amounts already submitted to and passed by a resolution of the board are exempted from inclusion in the calculation.	Art icl e 7	The Company shall submit following items to the board of directors for discussion: 1. Corporate business plan. 2. Annual and biannual financial statements. except for biannual financial statements required no accountant audit by law. 3. Establishment or amendment of an internal control system in pursuant to Article 14-1 of the Securities and Exchange Act,and evaluation of the effectiveness of the internal control system. 4. Establishment or amendment of the procedures for handling significant financial activities, such as acquisition or disposal of assets, engagement in derivatives transaction, capital lending, and provide endorsements or guarantee for others. 5. Offering, issuance, or private placement of any securities in the nature of equity. 6. Appointment or discharge of a financial, accounting, or internal audit officers. 7. Major donations to related parties or non-related parties. Donations in the nature of charity given as emergency assistance and relief of major disasters may be recognized in the next board of directors meeting. 8. Any matters required by Article 14-3 of the Securitas and Exchange Act or any other laws, regulations, or by-laws to be approved by resolution at a meeting of shareholders or a board meeting, or any such significant matter as may be prescribed by the competent authority The “related party” stated in sub-paragraph 7 of the preceding paragraph refers to the “related party” defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. “Major donations to non-related parties refers to a single lump sum of donation to a single or donations to a single party accumulated in a year exceeding NT$ 100 billion or 1% of the net revenue stated in the CPA certified annual financial statement or 5% of the Company’s paid-in capital. The period “within a year” stated in the preceding paragraph refers to the retrospective period from the date of this board of directors meeting. Portions approved in previous board of directors’ meetings shall be discounted from the sumto be discussedinthismeeting.	Amendme nts made in accordanc e with the Order Guan-Zhe ng-Zhi No. 10600271 12 promulgat ed by the Financial Superviso ry Commissi on.

Prince Housing & Development Corporation

Cross Reference of the Rules of Procedure for the Board Meeting Before and After Amendment

B	e f o r e A m e n d m e n t	e f o r e A m e n d m e n t	e f o r e A m e n d m e n t	A f t e r A m e n d m e n t	A f t e r A m e n d m e n t	A f t e r A m e n d m e n t
	Independent directors shall be present in person or appoint another independent director as a proxyfor matters to be resolved by a board meeting required by Article 14-3 of the Securities				At least one independent director shall attend each meeting in person. In case of a meeting concerning any matters required to be submitted for a resolution by the board of directors under paragraph 1, each independent director shall attend in person; if an independent director is unable to attend in person,he or she shallappoint another independent director to attend as his or her proxy. Objections or reservations expressed by independent directors shall be clearly recorded in the board meeting minutes. Should independent directors be unable to attend a board meeting to express their objections or reservations in person, unless a good cause is otherwise presented, such opinions shall be presented in writing in advance and clearly recorded in the board meeting minutes.
	and Exchange Act.Objections or reservations expressed by independent directors shall be clearly recorded in the board meeting minutes. Should independent directors be unable to attend a board meeting to express their objections or reservations in person, unless a good cause is otherwise presented, such opinions shall be presented in writing in advance and clearly recorded in the board meeting minutes.
List of Candidates for Independent Directors						Annex 7 Major Education/Experience PhD inTESL, National Kaohsiung Normal University Director, Tainan City Wu Jun Jie Charity Foundation Member, Compensation Committee, Tainan Spinning Co., Ltd. Independent Director, Tainan SpinningCo.,Ltd.
Name		Account No.	Name	Stake		Major Education/Experience
Independent Director		209263	Peng-ling Nie	16,954		PhD inTESL, National Kaohsiung Normal University Director, Tainan City Wu Jun Jie Charity Foundation Member, Compensation Committee, Tainan Spinning Co., Ltd. Independent Director, Tainan SpinningCo.,Ltd.

Appendix 1

Prince Housing & Development Corporation Rules of Procedure for Shareholders Meetings.

Article 1. To establish a strong governance system and sound supervisory capabilities for the meeting of shareholders of this Corporation, and to strengthen management capabilities, these Rules are adopted pursuant to Article 5 of the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies.
Article 2. The rules of procedures for the meeting of shareholders of this Corporation, except as otherwise provided by law, regulation, or the articles of incorporation, shall be as provided in these Rules.
Article 3. Unless the laws and regulations otherwise require, the meeting of shareholders of this Corporation shall be convened by the board of directors.
This Corporation shall prepare an electronic version of the notice of meeting of shareholders and the proxy form, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors, and upload them to the Market Observation Post System (MOPS) 30 days before the date of an annual general meeting of shareholders (AGM) or 15 days before the date of a provisional meeting of shareholders. This Corporation shall prepare an electronic version of the handbook of meeting of shareholders and supplemental meeting materials and upload them to MOPS 21 days before the date of the AGM or 15 days before the date of a provisional meeting of shareholders. In addition, 15 days before the date of the shareholders meeting, this Corporation shall prepare the handbook of a meeting of shareholders and supplemental meeting materials and made them available for review by shareholders at any time. The meeting handbook and supplemental materials shall also be displayed at this Corporation and the professional shareholder services agent designated thereby as well as being distributed on-site at the meeting place.

The reasons for convening a meeting of shareholders shall be specified in the meeting notice and public announcement. With the consent of the addressee, such can be made electronically Elections or dismissal of directors, amendments to the articles of incorporation, the dissolution, merger, or spin-off of the corporation or any matter under paragraph 1, Article 185, of the Company Act, Articles 26-1 and 43-6 of the Securities and Exchange Act, or Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be listed in the reasons for convening column of the notice of meeting of shareholders. None of the above matters may be raised by an extraordinary motion.

A shareholder holding 1 percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at an AGM. The principle of one proposal for one topic shall apply, and a proposal containing more than one item will not be discussed. In addition, the board of directors may not list in the handbook for discussion a proposal under any one of the circumstances specified in paragraph 4 of Article 172-1, of the Company Act. Prior to the final date of stock transfer before an AGM is held, this Corporation shall announce the place and period of proposal acceptance for a minimum of 10 days.

Each proposal submitted by shareholders shall not exceed 300 words. Proposals longer than 300 words will not be listed in the handbook for discussion.

Shareholders making proposals shall be present in person or represented by a proxy at the general meeting of shareholders and take part in proposal discussion.

Prior to the date of issuance of a meeting notice, this Corporation shall inform shareholders who have submitted proposals of the results of proposal processing and shall list in the meeting notice proposals conforming with the provisions of this article. At the meeting of shareholders, the board of directors shall explain the exclusion of any shareholder proposals in the handbook.

Article 4. Shareholders may appoint a proxy to represent them in a meeting by submitting the proxy form issued by this Corporation and by stating the scope of authorization for the proxy.

Each shareholder shall deliver to this Corporation one proxy form for one proxy only five days prior to a meeting of shareholders. When more than one proxy forms are received, only the earliest one will be accepted, except with a declaration to relieve the previous proxy. After a proxy form is delivered to this Corporation, should a shareholder intend to attend the meeting in person or to exercise its voting rights by correspondence or electronically, a written notice of proxy cancellation shall be submitted to this Corporation 2 business days before the meeting date. Should the cancellation notice be delivered after that time, votes cast at the meeting by the proxy shall prevail.

Article 5. A meeting of shareholders shall be held in the region where this Corporation is located or a venue that can be easily accessed by shareholders and suitable for a meeting of shareholders. The meeting shall be held between 9.00 a.m. and 3.00 p.m. Full consideration shall be given to the opinions expressed by independent directors with respect to the place and time of the meeting.
Article 6. This Corporation shall specify in meeting notice the check in time, registration location and related notices to inform shareholders.

The said shareholder check in time shall begin at least 30 minutes before the meeting

commences. The registration shall be readily identified, and sufficient competent staff shall be assigned to process shareholder registration.

Shareholders or their proxies (collectively called "shareholders") shall attend the meeting of shareholders with an admission pass, check-in pass, or other admission documents. Under no circumstances shall this Corporation arbitrarily add requirements for other documents grating admission to a meeting of shareholders. Those recruiting proxy forms shall also bring their identity cards for verification.

This Corporation shall furnish a registry for shareholders check in or shareholders the meeting may hand in a check-in card to substitute check-in procedure.

This Corporation shall provide a AGM handbook, annual report, admission pass, speech note, vote, and other meeting materials for shareholders attending AGM, and a ballot for election, if any.

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

Article 7. If a meeting of shareholders is convened by the board of directors, the meeting shall be chaired by the chairperson of the board. Should the chairperson of the board be on leave or unable to exercise the powers of a chairperson for whatever reasons, the vice chairperson shall take its place to chair the meeting. Should there be no vice chairperson or the vice chairperson be on leave or unable to exercise the powers of a chairperson for whatever reasons, the chairperson shall appoint a managing director represent him/her or a director shall be when there is no managing director. Should no representative is appointed by the chairperson, managing directors or directors may elect one of them chair the meeting.

When a managing director or director is assigned to chair a meeting of shareholders, this managing director or director must have worked at this Corporation for a minimum of six months and must understand the financial status of this Corporation. The same shall apply to an institutional representative.

It is advisable that a meeting of shareholders convened by the board of directors shall be chaired by the chairperson of the board in person and attended by majority directors and at least one member of each functional committee. Their attendances shall be recorded in the meeting minutes.

If a meeting of shareholders is convened by a party with convening power other than the board of directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall select a chair from among themselves.

This Corporation may appoint its attorneys at law, certified public accountants, or related staff to attend a meeting of shareholders.

Article 8. This Corporation shall maintain a full video and audio recordings of the meeting starting from the check-in and registration, during the meeting and the election.
The said audiovisual data shall be retained for at least one year. Should a law suit be filed according to Article 189 of the Company Act, the said audiovisual data shall be retained until the end of the suit.
Article 9. Attendance of the meeting of shareholders shall be calculated based on numbers of shares. The number of shares for voting in writing or electronically shall be calculated based on shares shown in the check-in register or the check-in pass.

The chair shall call the meeting to order at the scheduled meeting time. However, when the shareholders in attendance do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, and the total length of postponements shall not exceed one hour. If the quorum does is not met after two postponements and the shareholders in attendance still represent less than one third of the total number of issued shares, the chair shall adjourn the meeting.

If the quorum is not met after two postponements mentioned in the preceding paragraph, but the number of shares represented by shareholders in attendance commands at a third or more of the total number of issued shares, a tentative resolution may be adopted in accordance with paragraph 1, Article 175, of the Company Act. All shareholders shall be notified of the tentative resolution and another meeting of shareholders shall be convened within one month. Should the number of shareholders in attendance represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for voting at the meeting of shareholders according to Article 174 of the Company Act. Article 1 0 The board of directors shall plan the agenda for meetings of shareholders it convenes and shall proceed such meetings as planned. Under no circumstances shall the board of directors alter the agenda without the resolution of the meeting of shareholders.

The provisions in the preceding paragraph shall apply mutatis mutandis to meetings of shareholders convened by parties other than the board of directors. Unless a resolution is otherwise made, under no circumstances shall the chairperson adjourn a meeting of shareholders without going through the entire agenda (including extraordinary motions). Should the chairperson violate this rule, other board members shall assist shareholders in attendance to immediately elect a new chairperson with their majority consent according to the statutory procedures.

A chairperson shall grant ample opportunities for the full explanation and discussion of proposals and amendments or extraordinary motions put forward by the shareholders. A chairperson may end the discussion and call for a vote of sufficiently discusses proposals. Article 1 1 Before speaking, a shareholder in attendance of shareholders must specify on a speaker's slip the subject matter of the speech, his/her shareholder account number (or admission pass number), and account name. The order in which shareholders speak will be set by the chairperson. A shareholder in attendance who does not speak after submitting a speaker’s slip is considered as silent. Should the content of a speech does not correspond to the subject matter in the speaker's slip, the speech content shall prevail. Except with the consent of the chairperson, a shareholder shall speak more than twice in the same proposal, and each speech shall not exceed five minutes. Should a shareholder make a speech in violation of related rules or irrelevant to the subject matter, the chairperson may request such a shareholder to terminate the speech Except with the approval of the chairperson or the speaking shareholder, under no circumstances shall other shareholders interrupt the speech of a shareholder at the meeting. When an institutional shareholder appoints two or more representatives to attend a meeting of shareholders, only one of such representatives may speak for the same proposal. After a shareholder finishes a speech, the chairperson may personally or direct relevant staff to respond to such a speech. Article 1 2 Voting at a meeting of shareholders shall be calculated based the number of shares.

With respect to the resolutions made by the meeting of shareholders, the stake of a shareholder with no voting rights shall not be calculated as part of the total number of issued shares. Should a shareholder be a stakeholder of a handbook item and should such a relationship prejudice the interest of this Corporation, that shareholder shall neither vote on that item nor exercise the voting rights as proxy for any other shareholders.

The number of shares not allowed for excising the voting rights according to the preceding paragraph will not be considered in the voting shares of shareholders in attendance. Except for a trust enterprise or a shareholder services agent approved by the securities competent authority, when a person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by such a proxy shall not exceed 3 percent of the voting rights represented by the total number of issued shares, and the percentage of voting rights exceeding such a limit will not be considered.

Article 1 3 Each shareholder is entitled to one vote for each share held, except for restricted shares or non-voting shares under paragraph 2, Article 179, of the Company Act.

When holding a meeting of shareholders, this Corporation may allow shareholders to exercise voting rights by correspondence or electronically, provided that the methods of voting shall be specified in the meeting notice. When exercising voting rights by correspondence or electronically, a shareholder shall be deemed as present in the meeting personally. However, such a shareholder shall be considered as a waiver when voting for extraordinary motions and amendments to original proposals. It is therefore advisable that this Corporation shall avoid extraordinary motions and amendments to original proposals at the meeting.

A shareholder intending to exercise voting rights by correspondence or electronically under the preceding paragraph shall deliver a written declaration of intent to this Corporation two days before the date of the meeting of shareholders. When repeat declarations of intent are delivered, the one received earliest shall prevail, except for a declaration made to revoke the previous declaration of intent.

A shareholder wishing to attend a meeting of shareholders after exercising voting rights by correspondence or electronically shall delivered a notice to retract the said voting rights made with the same method as exercising the voting rights in writing two business days before the date of the meeting of shareholders. The voting rights exercised by correspondence or electronically shall prevail for failure to make retraction by the said deadline. When a shareholder exercises voting rights both by correspondence or electronically and by appointing a proxy to attend a meeting of shareholders, the voting rights exercised by the proxy in the meeting shall prevail.

Except the Company Act and the articles of incorporation of this Corporation otherwise require, a proposal shall be passed by an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, the chairperson or staff the chairperson designates shall first announce the total number of voting rights represented by the attending shareholders of each proposal before allowing for shareholders to vote. The outcomes of voting, including the number of votes in favor and against, and the number of abstentions shall be posted on MOPS on the same day after the meeting is adjourned.

When there is an amendment or an alternative to a proposal, the chairperson 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.

The chairperson shall appoint staff to scrutinize and count the votes if a proposal, provided that scrutineers shall be shareholders of this Corporation.

Vote counting for proposals or elections in a meeting of shareholders shall be conducted in a common area of the meeting venue. The outcomes, including the statistical tallies of the numbers of votes shall be announced immediately after counting is completed, and records shall be maintained.

Article 1 4 Directorial elections shall be implemented in accordance with related election and appointment rules established by this Corporation, and the voting results shall be announced

on-site immediately, including the list of directors elect and the numbers of votes with which they were elected.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the scrutineer and retained properly for at least one year. Should a law suit be filed according to Article 189 of the Company Act, the said audiovisual data shall be retained until the end of the suit.

Article 1 5 Resolutions made by the meeting of shareholders shall be maintained in the meeting minutes. The meeting minutes shall be signed or sealed by the chairperson of the meeting and a copy distributed to each shareholder within 20 days after meeting adjournment. The meeting minutes may be produced and distributed electronically.

This Corporation may distribute the meeting minutes mentioned in the preceding paragraph positing it on MOPS.

The meeting minutes shall contain the accurate year, month, day, and place of the meeting, the full name off the chairperson, the methods by which resolutions were made, and a summary of the deliberations and their results, and shall be retained permanently during the existence of this Corporation.

Article 1 6 On the day of a meeting of shareholders, this Corporation 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 meeting of shareholders.

If matters put to a resolution at a meeting of shareholders constitute material information under applicable laws or regulations or under the regulations specified by Taiwan Stock Exchange Corporation, this Corporation shall upload the content of such resolution to MOPS by the deadline.

Article 1 7 Staff handling the administrative affairs of a meeting of shareholders shall wear an identification card or an armband.

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

Should a shareholder attempt to speak through devices other than the public-address equipment prepared by this Company in a meeting, the chairperson may stop such a shareholder. When a shareholder violates the rules of procedure and defies the chairperson's correction, obstructs the proceedings and refuses to heed calls to stop, the chairperson may direct proctors or security guards to escort that shareholder to leave the meeting.

Article 1 8 The chairperson may announce a break, where appropriate, in the middle of the meeting. They chairperson may also temporarily hold the meeting for force majeure or an act of God and resume the meeting wherever the situation allows.

Should the meeting venue be no longer available for continued use and not all items (including extraordinary motions) in the meeting handbook are addressed, the meeting of shareholders may adopt a resolution to continue the meeting at another venue. Shareholders may postpone or continue the meeting within five days through resolution in accordance with Article 182 of the Company Act.

Article 1 9 Matters not provided for in these Rules shall be handled in accordance with the Company Act or the articles of incorporation of this Corporation. Article 2 0 These Rules, and any amendments hereto, shall be implemented after adoption by meeting of shareholders.

Appendix 2

Articles of Incorporation of Prince Housing & Development

Corporation

Chapter 1. General Provisions

Article 1. This Company is incorporated as a company limited by shares in accordance with the Company Act in the name of Prince Housing & Development Corporation in Chinese or Prince Housing & Development Corp. in English.
Article 2. The scope of business of this Company is as follows:
The development, operation, lease, and sale of farms, forests, and animal and aquaculture farms.
Commissioned construction, management, lease, and sale of public housing and commercial buildings, tourisms hostels, tourism and recreational industries (children’s theme parks and water parks), indoor and outdoor sports facilities, car parks and multistory car parks, supermarkets, harbor and inland bag or bulk warehouses.
Development, operations, lease and sale of industrial parks and residential areas.
Manufacture and trading of construction materials, and agency and promotion of construction technologies.
Estate lease and sale agent.
Distribution, import, manufacture, and trading to sports equipment.
Commissioned zoning.
E201010 Landscape Engineering
I503010 Landscape and Interior Designing
ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Article 3. This Company may invest in other industries for business needs regardless of the total investment limit of not more than 40 percent of the company’s paid-up capital set forth in Article 13 of the Company Act.
Article 4. This Company is headquartered in Tainan City, Republic of China. With the resolution made by the board of directors, this Company may establish branches and factories anywhere inside and outside the territory of the Republic of China. The shall apply to the withdrawal or relocation of such.
Article 5. This Company shall disclose information in accordance with Article 28 of the Company Act.

Chapter 2 Shares

Article 6. The total authorized capital of this Company is New Taiwan Dollar Twenty Billion (NTD20 billion) divided into two billion (2,000,000,000) shares with a par value at New Taiwan Dollar Ten (NTD10) each. The board of directors is authorized to issue such shares serially.
Article 7. After being approved for establishment or registration change, shares of this Company are issued in registered stocks signed or stamped by a minimum of three directors and certified by competent authorities or the organizations for stock issuance and registration designated by such authorities. When issuing shares publicly, this Company may exempt from printing the stocks for such shares or print stocks combining with the total number of shares issued, provided registration to the centralized securities depository enterprises shall be made.
Article 8. This Company shall handle stock affairs in accordance with the regulations of competent authorities and related laws and regulations.
Article 9. No name change or share transfer is allowed within 60 days prior to an annual general meeting of shareholders, within 30 days prior to a provision meeting of shareholders, or within 5 days prior to the base date for distributing dividends, bonuses, or other benefits.
Article 10. This Company may charge the printing fee and pay the stamp tax for renewal or reissuance of new stocks.
Chapter 3. Meeting of Shareholders
Article 11. Meetings of shareholders include the general meeting of shareholders and the provisional meeting of shareholders. The former shall be held at least once a year within six (6) months after the end of each accounting year; and the latter shall be held by law where necessary.
Article 12. A shareholder unable to attend a meeting of shareholders may appoint a proxy to attend the meeting in accordance with Article 177 of the Company Act. Unless the Company Act otherwise requires, proxy appointments shall be made in accordance with the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies promulgated by competent authorities.
Article 13. Unless the Company Act otherwise requires, the chairperson of this Company shall chair a meeting of shareholders. The chairperson who is absent with apologies or unable to carry out his duties for some reason shall appoint a proxy in accordance with Article 208 of the Company Act.

Article 14 Unless the law otherwise requires, resolutions of a meeting of shareholders shall be made with the approval of over half of shareholders in a meeting attended by shareholders representing over half of the total number of shares issued.
This Company shall include electronic voting as a way to exercise voting rights in a meeting of shareholders, and exercising voting rights by correspondence may also be accepted.
Article 15. Each shareholder of this Company is entitled to one vote for each share held, except for restricted shares or non-voting shares under the Company Act.
Article 16. Resolutions made in a meeting of shareholders shall be taken in the meeting minutes that contain the year, month, day, and place of the meeting, the full name off the chairperson, the methods by which resolutions are made, and a summary of the deliberations and their results. The meeting minutes shall be signed or sealed by the chairperson and a copy distributed to each shareholder within 20 days after meeting adjournment. The meeting minutes may be distributed by means of an announcement. The meeting minutes, the shareholder attendance list, and the power of attorney shall all be retained by this Company for reference and recording.

Chapter 4. Board of Directors and Audit Committee

Article 17. The board of directors of this company consists of 15 directors, including three independent directors. Candidates are nominated from among competent shareholders. A director can hold a term of three years and is valid for re-election. The total number of shares held by all directors shall be handled in accordance with the regulations of the securities management authority. In a directorial election, each share is entitled to voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. Those candidates receiving more voting rights shall be elected as directors. The professional qualifications, stake, concurrent job limitation, nomination, election, and other matters relating to independent shareholders shall be subject to the related regulations of the securities competent authority.
The board of directors is authorized to determine the compensation, honorarium, and administrative expense of directors with respect to their involvement in organizational operations and contributions and the standard in the business. However, Article 32 of the Company Act shall also apply to the compensation for directors.
Article 18. The board of directors shall be formed by directors. The chairperson is elected with the approval of over half of directors in a board meeting attended by over two thirds of all director. The same method shall apply to elect a

vice president. The chairperson represents this Company externally and administer the Company in the assistance of the vice chairperson in accordance with related laws and regulations and the resolutions made by the meeting of shareholders. Should the chairperson be absent or unable to carry out his/her duties for some reasons, the proxy shall be appointed in accordance with the Company Act.

Article 19. The chairperson shall chair a board meeting. The chairperson who is absent with apologies or unable to carry out his duties for some reason shall appoint a proxy in accordance with Article 208 of the Company Act.
Article 20. Directors shall attend a board meeting in person. A director who is absent with apologies may assign another director to represent him in a board meeting by issuing a power of attorney specifying the scope of authorization.. One on one representation shall apply.
A board meeting may be implemented by a conference call. Directors attending a board meeting by conference call is considered as present.
Article 21. The roles and responsibilities of a board are as follows: 1. Review and determine various rules for business operations. 2.Determine business orientation. 3.Review annual budgets. 4.Draw up profit distribution and profit compensation plans. 5.Draw up capital increase and reduction plans. 6.Determine the appointment and dismissal of important staff. 7.Implement resolutions made by the meeting of shareholders. 8.Discuss and determine external investments. 9.Assume other responsibilities under the law and assigned by the meeting of shareholders. Except for the above matters and matters to be resolved by the meeting of shareholders as specified by the Company Act, all matters shall be implemented with the board resolutions.
Article 22. A board meeting shall be held at least once year. Unless the law otherwise requires, the chairperson shall convene a board meeting, specify the purpose of meeting, and notify all directors seven days in advance. Provisional board meetings may be convened at any time in case of an emergency.

The meeting notice of the said meetings may be made by correspondence, by fax or electronically.

Article 23 The chairperson shall carry out the resolutions on all business affairs made by the board meeting. Unless the Company Act otherwise requires, resolutions shall be made by over half of directors in a board meeting attended by over half of the directors. The minutes, the sign-in list and power of attorney of a board meeting shall all be retained by this Company for reference and recording.
Article 24. This Company establishes an audit committee with all independent directors in accordance with the Securities and Exchange Act.

The organization, roles and responsibilities, rules of procedures and other duties of the audit committee shall be subject to the regulations

promulgated by the securities competent authority.

Article 25. The roles and responsibilities of supervisors under the Company Act, Securities and Exchange Act and other related laws and regulations shall apply mutatis mutandis to the audit committee as of the day of committee establishment.
Article 26. This Company may establish other functional committees with articles of organization established by the board of director according to related laws and regulations.
Article 27. This Company may purchase liability insurance for directors and other important staff during their term through the board of directors.
Chapter 5. Managers and Employees
Article 28. The appointment, dismissal and compensation of managers shall be subject to Article 29 of the Company Act. The board of directors shall resolve the responsibility and authority and their scope of managers subject to the functions and duties of individual departments.
Chapter 6. Accounting
Article 29. The accounting year of this Company commences on January 1 and ends on December 31 each year. This Company shall prepare a final account report at the end of each accounting year.
Article 30. At the end of each accounting year, the board of directors shall prepare the following reports and submit them to the meeting of shareholders for recognition.
1. Business report.
2. Financial statements.
3. Profit distribution and deficit compensation proposals.
Article 31 The industry in which this Company operates have enter the mature period with keep competitions. When drawing up profit distribution proposals, the board of directors shall consider the capital expenditure and budget and capital needs in the future and measure the need to fulfill the capital needs with earnings before determining the percentage of capital reserve and profit distribution and the amount of dividends or bonuses distributed in cash.

Should there be net profit after the account is closed of every accounting year, apart from paying the business income tax and compensating for the deficits in previous years, the Company shall first appropriate ten per

cent (10%) as the legal reserve, except when the accumulated amount of legal reserve equals the amount of the paid-up capital. Then, after appropriating or reversing the special reserve by law, the remaining amount will be the distributed earnings. By adding up the cumulative unappropriated earnings of the previous years, the sum will be the cumulative distributable earnings. The dividend and bonuses of shareholders can be appropriated with the cumulative distributable earnings, with a minimum of 20% of distributable earnings of the year and the minimum cash dividend of 30% of the total amount appropriated for dividends and bonuses for the shareholders of the year. In addition to dividends, the board of directors shall draw up a proposal for profit distribution and submit it to the meeting of shareholders for resolution before distribution.

Article 32. This Company shall distribute a minimum of 2% of the profits in a year as compensation for employees and a minimum of 3% as compensation for directors. However, cumulative deficits, if any, shall be compensated for first.

Compensation for employees can be distributed in the form of stocks or in cash and such employees may include employees of subsidiaries complying with the related requirements.

The status of annual profit in paragraph 1 refers to the profit after deducting the compensation for employees and directors from the profit before tax in the year.

The distribution of compensation for employees and directors shall be resolved by over half of directors in a board meeting attended by over two thirds of all directors and reported to the meeting of shareholders.

Chapter 7. Addendum

Article 33. The charter of organization and rules for business operations of this Company shall be determined by the board of directors separately.
Article 34. This Company may provide endorsements and guarantees for third parties for business purposes.
Article 35. Matters not provided for in these Articles of Incorporation shall be handled in accordance with the Company Act and other laws and regulations.
Article 36. These Articles of Incorporation were established on August 23, 1973; 1st amendment was made on November 20, 1974; 2nd amendment was made on February 10, 1976; 3rd amendment was made on March 8, 1977; 4th amendment was made on April 28, 1980; 5th

amendment was made on May 2, 1981; 6th amendment was made on November 4, 1982; 7th amendment was made on May 16, 1984; 8th amendment was made on April 26, 1986; 9th amendment was made on April 3, 1989; 10th amendment was made on December 27, 1990; 11th amendment was made on June 18, 1991; 12th amendment was made on April 23, 1992; 13th amendment was made on May 7, 1993; 14th amendment was made on May 10, 1994; 15th amendment was made on June 5, 1995; 16th amendment was made on May 24, 1996; 17th amendment was made on June 17, 1997; 18th amendment was made on May 19, 1998; 19th amendment was made on June 9, 1999; 20th amendment was made on June 9, 2000; 21st amendment was made on June 20, 2002; 22nd amendment was made on June 26, 2003; 23rd amendment was made on June 15, 2004; 24th amendment was made on June 27, 2005; 25th amendment was made on June 14; 2006; 26th amendment was made on June 15, 2007; 27th amendment was made on June 13, 2008; 28th amendment was made on June 19, 2009; 29th amendment was made on June 24, 2010; 30th amendment was made on June 17, 2011; 31st amendment was made on June 20, 2012; 32nd amendment was made on June 18, 2013; 33rd amendment was made on June 20, 2014; 34th amendment was made on June 17, 2015; 35th amendment was made on June 21, 2016; 36th amendment was made on June 22, 2017. All amendments are implemented with the resolution of the meeting of shareholders.

Prince Housing & Development Corporation

Chairman: Alex C. Lo

Annex 3

Prince Housing & Development Corporation Procedures for Election of Directors

Article 1 : To ensure a just, fair and open election of directors and supervisors, these Procedures are adopted pursuant to Articles 21 and 41 of the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies.
Article 2 : Unless the law of the articles of incorporation of this Corporation otherwise requires, directors shall be elected in accordance with these Procedures.
Article 3 : The overall composition of the board of directors shall be taken into consideration in the selection of directors. A board shall be formed with members of comprehensive specialties and a comprehensive policy shall be established appropriate to the operation, operating style, and development requirements. The following two standards shall be considered:
Basic requirements and value: Gender, age, nationality, and culture.
Professional knowledge and skills: Professional background (e.g. law, accounting, industry, finance, marketing, and technology), professional skills and business experience.
A board member shall be equipped with the knowledge, skills and competencies required

for performing its duties, the overall competencies required for the position are as follows:

The ability to make judgments about operations.
Accounting and financial analysis ability.
Business management ability.
Crisis management ability.
Knowledge of the industry.
An international market perspective.
Leadership ability.
Decision-making ability.
More than half of the directors shall be persons who have neither a spousal relationship nor a relationship within the second degree of kinship with any other director. The board of directors may adjust the board members according to the results of a performance evaluation.
Article 4 : The qualifications for the independent directors of this Corporation shall comply with Articles 2, 3, and 4 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
The election of independent directors of this Corporation shall comply with Articles 5, 6, 7, 8, and 9 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies and shall be conducted in accordance with Article 24 of the Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies.
Article 5 : Elections of directors of this Corporation shall be conducted in accordance with the candidate nomination system and procedures set out in Article 192-1 of the Company Act. To review the qualifications, education, experience, and compliance with Article 30 of the Company Act of director candidates, no other proof of qualifications shall be assed, and the review results shall be disclosed to the shareholders for the reference to elect the qualified directors.

When the number of directors falls below five after the dismissal of a director for any reason, this Corporation shall hold a by-election to fill the vacancy at the next meeting of shareholders. When the number of directors falls short by one third of the total number prescribed in articles of incorporation of this Corporation, this Corporation shall call a provision meeting of shareholders within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

When the number of independent directors falls below that required by the proviso of paragraph 1, Article 14-2, of the Securities and Exchange Act, or the related provisions of the rules for listing review of the Taiwan Stock Exchange, a by-election shall be held at the next meeting of shareholders to fill the vacancy. When the independent directors are dismissed en masse , a provisional meeting of shareholders shall be called within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

Article 6 : The open-ballot, cumulative voting method will be used for director elections at this Corporation. Each share will have voting rights in the number equal to the directors or supervisors to be elected and may be cast for a single candidate or split among multiple candidates.
Article 7 : The board of directors shall prepare separate ballots for directors in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Admission pass numbers printed on the ballots may be used in place of the names of voters.
Article 8 : The number of directors is specified in the 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 candidates receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.
Article 9 : Before an election begins, the chairperson shall appoint a number of shareholders as scrutineers and counters to scrutinize and count votes in an election. The ballot box shall be prepared by the board of directors and publicly checked by scrutineers before the voting commences.
Article 10 : If a candidate is a shareholder, a voter must enter the candidate's account name and shareholder account number in the "candidate" column of the ballot; for a non-shareholder, the voter shall enter the candidate's full name and identity card number. However, when the candidate is a governmental organization or institutional investor, the name of the governmental organization or institutional investor shall be entered in the column for the candidate's account name in the ballot paper, or both the name of the governmental organization or institutional investor and the name of its representative may be entered. When there are multiple representatives, the names of each respective representative shall be entered.
Article 11 :A ballot is invalid under any one of the following circumstances:
The ballot was not prepared by the board of directors.
A blank ballot is placed in the ballot box.
The writing is unclear and illegible or has been altered.
The candidate whose name is entered in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholders’ registry or the candidate whose name is entered in the ballot is a non-shareholder and a cross-check shows that the candidate's name and identity card number do not match.
Other words or marks are entered in addition to the candidate's account name or shareholder account number (or identity card number) and the number of voting rights allotted.
The name of the candidate entered in the ballot is identical to that of another shareholder, but no shareholder account number or identity card number is provided in the ballot to identify such individual.
Article 12 :The voting rights shall be calculated on site immediately after the end of the poll, and the chairperson shall announce on the site the list of directors elect and the number votes. The ballots for the election referred to in the preceding paragraph shall be sealed with the

signatures of the scrutineer and retained properly for at least one year. Should a law suit be filed according to Article 189 of the Company Act, the said audiovisual data shall be retained until the end of the suit.

Article 13. The board of directors of this Corporation shall issue notifications to the directors elect. Article 14. These Procedures, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

Annex 4

Stake of Directors of Prince Housing & Development Corporation

Title	Name	Stake by the Book Closing Date of this AGM	Remarks
Chairperson	Alex C. Lo	162,743,264	Representative of Uni-President Enterprises Corporation
Director	Zhong-bin Wu
Director	Li-ling Zheng	28,136,024	Representative of Jiu Fu Investment Co., Ltd.
Director	Jao-mei Wu-Zheng	39,023,030
Director	Shi-hong Zhuang	2,346,491	Representative of Hong Yao Investment Co.,Ltd.
Director	Xiu-ling Gao	52,457,308	Representative of Kao Chuan Investment Co.,Ltd.
Director	Bo-ming Hou	669,975	Representative of Yu Peng Investment Co.,Ltd.
Director	Bo-yi Hou	13,701,215
Director	Zhong-he Wu	14,969,463	Representative of Yong Yuan Investment Co.,Ltd.
Director	Ying-zhi Zhuang	25,882,643	Representative of Cheng Long Investment Co.,Ltd.
Director	Jian-de Wu	91,250,587	Representative of Tai Bo Investment Co., Ltd.
Director	Ping-zi Wu
Independent Director	Sheng-cai Hsu	0
Independent Director	He-yi Hong	0
Total of Directors		431,180,000

Wi t h r e s p e c t t o A r t i c l e 2 6 o f t h e S e c u r i t i e s a n d E x c h a n g e A c t T h e m i n i m u m s t a k e o f a l l d i r e c t o r s i s 3 8 , 9 5 9 , 8 2 7 s h a r e s .

Annex 5

The Impact of Stock Dividend Issuance on Business Performance, EPS, and ROE There will be no impact on business performance, EPS, and ROE as no stock dividend was issued in 2018.

Handbook for the 2018 Annual Meeting of Shareholders Date: 9.00 am, Thursday, June 21, 2018 Place: Grand Conference Hall, 1F, Labor Recreation Center, No. 261, Nanmen Road, Tainan City

We shape our buildings and afterwards our buildings shape us.

Taipei Office 21F, No. 11, Xinyi District, Taipei City Tel: (02) 2758-9599

Taichung Office 14F, No. 416, Section 2, Zhongde Road, Beitun District, Taichung City. Tel: (04)2242-7376

Tainan Office 8F, No. 398, Section 1, Zhonghua East Road, East District, Tainan City Tel: (06)282-1155

AI assistant

PHD — AGM Information 2018

52134_rns_2018-06-29_89368208-37f6-4fa9-8a7b-a59bfba6d1f4.pdf

Prince Housing & Development Corporation

Table of Contents

Prince Housing & Development Corporation

Procedure of the 2018 Annual General Meeting of Shareholders

Management Presentations

1. 2017 Business Report. Submitted to the public.

4. Status Report on Capital Lending 2017

5. Status Report on Corporate Bond Issuance

8. Other matters

Adoption

ElectionAffairs

Motions

Adjournment

Business Report

1. 2017 Business Report

2. Summary of the Current Business Plan

3. Future Development Strategy

Chairman: Alex C. Lo President: Ming-fan Hsieh CAO: Da-chang Dai

Prince Housing & Development Corporation Audit Report by the Audit Committee

To

Audit Opinion

Basis of Audit

Key Audit Items

Recognition time point of realty sale revenue

Description

Responsive Audit Procedures

Recognition of revenues from construction projects—Assessment of completion schedule

Description

Responsive Audit Procedures

Others: Audits of other accountants

Others: Individual Financial Statements

Responsibility for the Consolidated Financial Statements of the Management and Governance Units

Accountant’s responsibility for auditing consolidated financial statements

Prince Housing and Development Corporation and Subsidiaries Consolidated Statement of Financial Position December 31, 2017 and December 31, 2016

Prince Housing & Development Corporation and Subsidiaries

Consolidated Statement of Cash Flows

for the year ended December 31, 2017 and December 31, 2016

Prince Housing & Development Corporation and Subsidiaries Consolidated Statement of Cash Flows

CPA Audit Report

Audit Opinion

Basis of Audit

Key Audit Items

Recognition time point of realty sale revenue

Description

Responsive Audit Procedures

Description

Responsive Audit Procedures

Others: Audits of other accountants

Responsibility for the Individual Financial Statements of the Management and Governance Units

Accountant’s responsibility for auditing individual financial statements

Prince Housing & Development Corporation Individual Statement of Financial Position December 31, 2017 and December 31, 2016

Prince Housing & Development Corporation Individual Statement of Financial Position December 31, 2017 and December 31, 2016

Prince Housing & Development Corporation Individual Statement of Comprehensive Income for the year ended December 31, 2017 and December 31, 2016

Prince Housing & Development Corporation Individual Statement of Changes in Equity for the year ended December 31, 2017 and December 31, 2016

Prince Housing & Development Corporation Individual Statement of Cash Flows

for the year ended December 31, 2017 and December 31, 2016

Prince Housing & Development Corporation Individual Statement of Cash Flows

for the year ended December 31, 2017 and December 31, 2016

Prince Housing & Development Corporation Profit Distribution Table

Prince Housing & Development Corporation

Cross Reference of the Rules of Procedure for the Board Meeting Before and After Amendment

Prince Housing & Development Corporation

Cross Reference of the Rules of Procedure for the Board Meeting Before and After Amendment

Prince Housing & Development Corporation Rules of Procedure for Shareholders Meetings.

Articles of Incorporation of Prince Housing & Development

Corporation

Chapter 4. Board of Directors and Audit Committee

Prince Housing & Development Corporation Procedures for Election of Directors

Stake of Directors of Prince Housing & Development Corporation

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