2017 2841 20170628fe2 20180711 151018 · 2018. 7. 11. · 2-4 implementation status report of the...

Stock Code:

2841

Taiwan Land Development

Corporation

2017 Annual General Meeting of

Shareholders

Meeting Manual

Date: June 28, 2017

Address: Armed Forces Officer’s Club (No.142, Yanping S. Rd., Zhongzheng Dist.,

Taipei City, Taiwan)

Table of Contents

1-1 Business operations report: 2017 ........................................................................ - 1 -

2-2 Supervisor’s review report on the 2016 financial statements ............................... - 9 -

2-2 Supervisor’s review report on the 2016 financial statements ............................... - 9 -

2-3 2016 Distribution of Employee Remuneration and Directors' and Supervisors'

Remunerations.................................................................................................. - 10 -

2-4 Implementation status report of the Company's treasury shares......................... - 11 -

2-5 Status report on loans to and endorsements/guarantees for others ..................... - 13 -

2-6 Report on the issuance of the Company's first, second and third secured common

corporate bonds in 2016.................................................................................... - 14 -

2-7 Report on the execution of the Company's private placement......................... - 16 -

2-1 Operational financial statements and reports: 2016 ........................................... - 17 -

2-2 Proposal for the distribution of 2015 earnings ................................................. - 35 -

3-1 Amendment to the Company's issuance of new bonus shares through capitalization

of its 2015 distributable earnings and capital reserves. ...................................... - 37 -

3-2 Amendment to the Company's Articles of Incorporation ................................... - 38 -

3-3 Amendment to the Company's Rules Governing the Election of Directors and

Supervisors....................................................................................................... - 51 -

3-4 Amendment to the Company's Rules of Procedure for Shareholders Meetings .. - 57 -

3-6 Amendment to the Company's Procedures for Extending Loans to Others and

Procedure for Endorsement and Guarantee Operations...................................... - 87 -

3-7 The Company's private placement for cash capital increase with the issuance of new

shares. .............................................................................................................. - 94 -

Taiwan Land Development Corporation

Agenda for the 2017 Annual General Meeting of

Shareholders

1. Time: 9.30 a.m., June 28, 2017

2. Place: Armed Forces Officer’s Club

(No.142, Yanping S. Rd., Zhongzheng Dist., Taipei City, Taiwan)

3. Chairman to call the meeting to order when the quorum is acknowledged

4. Chairman's opening remarks

5. Report items

5.1 To report the business of 2016.

5.2 Supervisor’s review report on the 2016 financial statements.

5.3 To report 2016 employees’ profit sharing bonus and directors’

compensation.

5.4 Implementation status report of the Company's treasury shares.

5.5 Status report on loans to and endorsements/guarantees for others.

5.6 To report the issuance of the Company's secured common corporate

bonds in 2016.

5.7 To report the execution of the Company's private placement.

6. Recognition Items

6.1 To accept 2016 Operational Financial Statements and Reports .

6.2 To approve the proposal for the distribution of 2016 earnings.

7. Discussion Items

7.1 Discussion to approve the Company's issuance of new bonus shares

through capitalization of its distributable earnings and capital surplus in

2015.

7.2 Discussion of amendments to the Company's “Articles of

Incorporation”.

7.3 Discussion of amendments to the Company's “Rules Governing the

Election of Directors and Supervisors”.

7.4 Discussion of amendments to the Company's “Rules of Procedure for

Shareholders Meetings”.

7.5 Discussion of amendments to the Company's “Procedures for

Acquisition or Disposal of Assets”.

7.6 Discussion of amendments to the Company's “Operating Procedures

for Loaning of Funds and Operational Procedure for Making of

Endorsements/Guarantees”.

7.7 Discussion to the Company's private placement for cash capital

increase with the issuance of new shares.

8. Election Item

Eletion of 18th term of the Company’s Directors(including Independent

Directors).

9. Extraordinary Motions

10. Adjournment

- 1 -

1. Report items:

1-1 Business operations report: 2017

Thanks to the concerted efforts of our employees, Taiwan Land Development Corporation

(TLDC) achieved exceptional performance as a group on many fronts in 2016, including the sale of

industrial park projects, the enhancing of asset value, the launch of new development projects, and

the operating results of the Kinmen Wind Lion Plaza. TLDC's consolidated operating revenue for

2016 reached NT$293 million, mainly attributable to labor-related revenue from agency development

of industrial parks as well as related revenue from retail/entertainment operations. Furthermore, due

to the adoption of the fair value approach for invested real estate, profit has been driven up as a result

of an increase in market value. Since 2007, TLDC has been booking profits for ten consecutive years.

Profits for 2016 continued to grow at a steady pace , with an after-tax net profit per share of NT$0.34.

The innovation that TLDC has been able to realize in branding and cultural creativity repeatedly

contributes to new diverse values in architecture. The Group is honored to be a recipient of the

FIABCI-Taiwan Real Estate Excellence Awards and continues to be a leader in Taiwan's architecture

and cultural creative LOHAS industry.

For the past (2016) year, the Group continues to count on sales from the Taichung City Precision

Machinery Innovation Technology Park and the Guanghua Lohas Creative Park as the major sources

of profits in terms of the development of industrial parks, followed by the revenues and profits

generated from the steady growth of the Kinmen Wind Lion Plaza. Based on the operating philosophy

of "shared economy," the Group continues to integrate "Green, Intelligent and Cultural Creation" with

local living environments to develop product characteristics. Meanwhile the cultural creative, leisure

sightseeing and medical aesthetics industries are introduced to drive investments, boost productivity

and increase job opportunities, so as to promote local development and achieve the benefit of asset

revitalization. The Group's business units will delve deep into the development of the leisure real

estate market and the deployment for related peripheral developments to echo the core philosophy of

sustainable management. The TLDC Group's tourism operation has gradually prospered, with

presence in locations such as Hualien and Kinmen, etc. Meanwhile, the Group has also formed an

alliance with Starwood Hotels; in addition to rolling out hotels under existing brands including the

Meridian Hotel, the Sheraton Hotel, the Aloft Hotel, the Westin Hotel and the Element by Westin, the

collaborating parties also plan to team up to customize brand new hotel brands that fulfill

international standards. Furthermore, TLDC will continue the development of IoT, O2O and the

management synergy of virtual and physical e-commerce. The Group will seek to grasp the

end-to-end process from source to sales with key IoT technologies to promote product sales, while

conducting business operations such as after-sales service and the O2O operation, etc.

Below we present our 2016 business report, including implementation results of the business

plan, budget implementation, financial highlights and profitability analysis, research and development

status, and an outline of our 2017 business plan, including business policies for the year, business

- 2 -

objectives and important production and marketing policies as described below:

1) 2016 Operation Report

(1) Operating results of plan implementation

1. Related revenue from the Taichung City Precision Machinery Innovation Technology

Park and the Hualien Guanghua Lohas Creative Park; In particular, the Taichung City

Precision Machinery Innovation Technology Park is a park laboriously co-developed by

the Taichung City Government and the Company. After ten years of meticulous planning

and implementation, the project has started to bear the fruit of our joint efforts. The Park

is the first to integrate the three aspects of lifestyle, production and ecology within a

premium international-caliber park zone. It is now the precision machinery settlement

with the highest production value per unit area and the highest density in the world. In

2016, NT$107.3 billion in production value and 21,150 job opportunities were generated

to propel the park to become a demonstration settlement of precision machinery

development for the promotion of the 5+2 Industries and Industry 4.0 policies.

2. The Kinmen Wind Lion Plaza introduced the LAOX Wind Lion Duty Free Shop,

sporting goods outlets (NIKE ADIDAS NEW BALANCE PUMA) and

Japanese-style yakiniku restaurants to complement existing stores such as the Golden

Palais Duty Free Shop, 86 Shop, Pu Hotpot, Studio A, Starbucks, Chii Lih Coral and the

Golden Lion Cinemax to create steady growth and profits.

3. The building permits for the Meridian Hotel, hotel-style apartments, hot spring clubhouse

and VILLA 3 have been obtained for the development plan of the Xinpu Ecological Park

in Hsinchu. Among them, an agreement has been signed with Starwood Hotels for the

Meridian Hotel for joint development and operation; Overall planning has been

completed for the leisure ranch in the northern part of the Park. The fifth edition of the

Xinpu Hot Spring Camellia Season was held in late-December 2016, and drew more than

130,000 visits during the Chinese New Year holidays of 2017.

4. The Huilanwan Cultural Plaza in Hualien is expected to be completed and operational in

2017. An IMAX movie theater and a shopping plaza complex will be introduced to the

Hualien/Taitung area for the first time; Construction has started after the building permit

for phase 1 of the Huilanwan Sunrise Village Housing Project was granted. Centaline

Property Agency Limited has been entrusted to seek buyers from Hong Kong interested

in taking residence or investment. Planning for phase 2 of the Huilanwan Sunrise Village

Housing Project has been completed. An application for a building permit is expected to

be submitted in Q2 of 2017; An Aloft hotel with 315 guest rooms has been planned for

the development project of the Huilanwan Tokaido Clubhouse.

5. The environmental impact appraisal and the submission of the water conservation plan

for the DaKeng Development Project in Taichung have been completed.

6. After resources have been committed to clean up the environment of self-owned assets,

new value has been created for the land and new elements have been infused, which

- 3 -

directly drive local development while improving asset value.

(2) Budget Implementation

In accordance with the Regulations Governing the Publication of Financial Forecasts

of Public Companies, TDLC is not required to make a financial forecast in 2016; this part is

thus omitted.

(3) Financial Status and Profitability

Unit: NT$1,000; %

Item 2016 2015

Operating revenue 292,831 592,069

Operating profit 147,696 461,653

Operating net loss -578,011 -376,842

Financial

Status

Net income after tax 247,810 2,039,605

ROA (%) 1.14 7.21

ROE (%) 1.40 12.29

Operating

income

-7.59 -5.19 Issued capital

ratio (%)

Income

before

income tax

5.29 30.29

Net profit ratio ( ) 84.62 344.48

Profitability

EPS (NT$) - Retroactive

adjustment

0.34 2.78

Sales revenue for the current period reached NT$292,831,000, consisting mainly of

recognition of NT$85,206,000 in related revenue from agency business of industrial park

development and NT$169,512,000 in related revenue from retail/entertainment operations.

After deducting cost of sales in the amount of NT$145,135,000 and operating expenses in

the amount of NT$725,707,000, and adding non-operating income of NT$980,708,000,

TDLC reports an after-tax net income of NT$247,810,000 for the current period.

(4) Research and Development

In line with the trends for the future, the Group adopts the development strategies of

"cultural creativity, technological innovation, international standards" and embraces the

teaching of Laozi "The best of men is like water" and the teaching of Sun Tzu "Just as water

retains no constant shape, there are no constant conditions in warfare" in the Art of War as

corporate core values to respond swiftly and effectively in the ever changing market and

fulfill its corporate social responsibility. We uphold the principles of "Green, Intelligent and

Cultural Creation" to construct the three major business axes and establish the "shared

economy" business model, and utilize the 4D planning concept (Design; Digital; Different;

Diverse) to offer a new way of life and new products. Our green business encompasses

- 4 -

business perimeters relating to ecological conservation, environmental protection,

sustainable living, organic LOHAS, energy conservation & carbon reduction, future medical

science and leisure & well-being. The intelligent business encompasses business perimeters

relating to advanced technologies and digitalization such as IoT, Big Data, IDC, long-term

healthcare and smart homes. The cultural creative business includes arts and cultural

exhibitions and performances, arts agency, cultural exchange, arts auction, and the operation

of arts villages, along with other related fields.

2) 2017 Operation Plan Outline

(1) Business Policy

1. Value-oriented development strategies: The Group adds value to the land through

cultural creativity and technological innovation by integrating art as part of life and

creating a sustainable healthy LOHAS park.

2. Sustainable development of IoT with future source of value in the cloud: Our next-step

development will focus on transforming IoT into an industry, applying it in the

learning aspect of lifestyle industries, and implementing it in all dimensions of

business innovation.

3. Consolidation of the development of Kinmen as the border trade center: Kinmen's

visa-on-arrival policy, increased duty-free shopping quota for visitors traveling to

Mainland China through Kinmen and the relaxation of Xiamen as a free trade zone

have contributed to a steady growth in bilateral trade with China. The Kinmen Wind

Lion Plaza exports large quantities of goods for sale in Xiamen and significantly

increases bilateral trade with Xiamen and the Economic Zone on the west side, which

helps solidify the development of Kinmen as a border trade center.

4. Core values of sustainable enterprise: Embracing "Green, Intelligent and Cultural

Creativity" as core beliefs, we infuse land with new value, shape a unique brand

image,create value for the shared economy, utilize the 4D planning concept flexibly,

communicate and integrate our corporate philosophy, and remain committed to

constructing high-quality LOHAS living spaces.

5. Implementing professional division of labor within the Group and talent recruitment:

We pursue the overall rationalization of the Group and further enhancement of

enterprise synergy through interaction and cooperation of all employees within the

Group by diversifying our talent pool to meet human resources needs at different

business locations and improving our asset management and Internet technology

knowhow.

(2) Operation (Sales) Goals

1. The land of Taichung City Precision Machinery Innovation Technology Park,

Kaohsiung Ganshan Benjhou Industrial Park, and Future Industry Division of the

Guanghua LOHAS Creative Park is to be sold to generate more business revenue.

- 5 -

2. Self-owned assets will continue to be used flexibly for integrating “Green, Intelligent,

and Cultural Creativity” into the local living environment and developing products for

the creation of greater benefits.

3. The shopping street and mall at the Kinmen Wind Lion Plaza have commenced

operations, and feature a hypermart, a cinema multiplex and duty-free shops as the

plaza’s anchor stores; these businesses are expected to generate more revenue and profit

for the plaza.

4. Building permits for the Meridian Hotel, hotel-style apartments, hot spring clubhouse

and VILLA 3 have been obtained for the development plan of the Xinpu Ecological

Park in Hsinchu. Sales of hotel-style apartments with property rights in the

sale-and-leaseback format will target the clientèle of retirees and those valuing leisure

and well-being as a priority. The development project of the leisure ranch in the

northern part of the Park is currently under review by the Council of Agriculture,

Executive Yuan. Planning and construction will be actively conducted after the

expected acquisition of the permission for establishment.

5. The Huilanwan Sunrise Village Housing Project in Hualien offers around 35,000 pings

in total available sales area for phase 1. Pre-sale of the project is currently under way

and Centaline Property Agency Limited has been entrusted to look for buyers in the

Hong Kong area. The building permit for phase 2 is expected to be acquired in Q2 of

2017. Construction of the Huilanwan Cultural Plaza is expected to be completed and the

use permit is expected to be acquired in 2017, as operation is slated to begin with effect

from 2018; An Aloft hotel with 315 guest rooms has been planned for the

development project of the Huilanwan Tokaido Clubhouse.

6. The building permit for the the Zen Clubhouse in the Nantou Caotun Eco-Complex

project has been acquired. Applications for the building permits of other blocks will be

submitted progressively, as the development of hot spring wells is still ongoing.

7. The environmental impact appraisal and the submission of the water conservation plan

for the DaKeng Development Project in Taichung have been completed; applications

for both the development plan and a miscellaneous permit will continue.

8. The Group will continue to seek new development projects, including industrial park

development and investment projects under the Act for Promotion of Private

Participation in Infrastructure Projects.

(3) Important Production and Marketing Policies

1. Leveraging the strategy of land revitalization to diversify the utilization of land.

2. Continuing to develop the three major horizontal business axes, namely Green,

Intelligent and Cultural Creativity;

3. Enhancing our corporate image and creating brand recognition;

4. Creating added value for our products and enhancing our competitiveness by

- 6 -

integrating cultural creativity, technological innovation, and international standards.

5. Embracing the core value of "The best of men is like water," manifesting the central

ideas and value consensus of "step beyond imagination, realize dreams."

6. Fulfilling the value of various development projects through the 4D planning

concept.

3) Future Development Strategies

Starting from the development goals of cultural creativity and technological innovation, the

TLDC Group continues to integrate the 4D planning concept in our approaches for building new

lifestyle models that are based on a shared economy as our role evolves from being a builder of

premium architectural spaces to being the provider and creator of a high quality lifestyle. As the

value of land and building assets increase simultaneously, the Group will make the most of

physical space to create virtual value and attract more members. Meanwhile, tailor-made

products will be offered in order to turn virtual cloud into new valuable space through the

systematic management and development of Big Data. The Group embraces the concept of

green building via "construction traceability," and drives online to offline operation and sales

through IoT to greatly enhance the value of digital marketing.

TLDC takes upon itself an important mission for the future, which is to increase the

"happiness level" of people in Taiwan. To achieve this aim, the Group plans to integrate leisure,

living, creation and survival (work) while endeavoring to preserve rich cultural and humanistic

elements in all of its works. The Group advocates greater emphasis on way of life than on

monetary value in its works, which has been the essence and core of the leisure industry and the

Group's development focus in recent years. In the future, all TLDC businesses will incorporate

the elements of interest and curiosity for we foresee that the learning of new knowledge will be

a major path leading to the creation of new business opportunities. The Group also takes it upon

itself to improve the living environment of mankind as its corporate social responsibility. As it

continues to adhere to the corporate culture of "Happiness, Sharing and Innovation," TLDC will

be inviting people who share the same ideas and beliefs to join the cause of pursuing a more

organic, minimalist, eco-friendly, and enjoyable lifestyle. We moreover believe that sustainable

operations are the only approach to establishing new values and forging a viable future path for

Taiwan.

4) Influence from External Competition, Regulations and Macro-operating Environment

External Competition

1. Industrial park agency business: There is a pressing demand for industrial land in Taiwan.

However, as land acquisition has to be conducted based on market value and involves

complex environmental feasibility study process, land acquisition and development

therefore involve difficult, arduous procedures. These circumstances have nevertheless

turned the Group's industrial land assets into valuable assets.

2. Diversification: The lifestyles of people in today’s society have evolved and a premium is

- 7 -

now placed on leisure activities and well-being. It has therefore become necessary for the

Group to transform itself and diversify its businesses to spread operational risks and

capitalize on business opportunities in order to develop land value more effectively. By

developing new markets through new products, the TLDC Group has shifted its focus to

two primary scopes of business -- leisure real estate development and e-commerce. This

change was adopted in an effort to generate more profit and to put our core corporate beliefs

of "Green, Intelligent and Cultural Creativity" into practice.

Regulatory Environment

The amendment to the Labor Standards Act promulgated on December 21, 2016 is

predominately intended to ensure that laborers can take more days off and enjoy more special

vacations, in addition to implementing the five-day workweek and ensuring universal national

holidays. In the meantime, the goal of the five-day workweek can be further enforced via the

methods of “regulating work hours through labor costs and "utilizing labor costs to manage

labor capacity." This directly impacts the operation of the Group's subsidiary startup business

units. For business units operating malls such as the Kinmen Wind Lion Plaza, a direct

increase in labor cost is expected. Moving forward, the Group will address the impact from the

Labor Standards Act via diverse channels and measures such as manpower planning,

adjustments in off-duty days or store opening hours.

Macro-operating Environment

Taiwan recorded an economic growth rate of 1.50% for 2016, mainly due to the gradual

recovery of the global economy, the continuous rebound of oil and raw material prices, as well

as the low baseline effect. Recently, the U.S. economy has continued to turn around as

economies in the eurozone gradually improve. Meanwhile, China's economy remains stable.

Therefore, the Directorate General of Budget, Accounting and Statistics of Executive Yuan

predicts that Taiwan's economy will exhibit a 1.92% growth in 2017. After the government

rolled out multiple housing & land policies and measures, the volume of turnover in the

housing market in Taiwan managed to rise in December 2015 due to factors such as it being

the year-end peak season for home purchase and sellers' strategy of lowering prices to drive

volume. However, due to the increasing scarcity of available land, the consistently high cost of

raw materials, plus the Central Bank's recent relaxation of restrictions on real estate loans, the

real estate markets in different areas will continue to fluctuate within very narrow margins in

the short run. In the long term, however, room for downward adjustment in housing prices is

expected to be limited. In particular, as the land prices in regions other than the metropolitan

areas along the west corridor such as Hsinchu, Hualien and Kinmen have been steadily

increasing with each passing year, those market trends are particularly favorable to TLDC,

which holds a considerable amount of land assets and is embarking on several hotel and resort

development projects in those areas. In the future, through sharing strategy, the Group will be

offering the opportunity for long-term holding of real estate for investment purposes, an

approach that is poised to lead to greater profits.

- 8 -

5) Conclusion

The Group's future lies in "innovation.” The building of architectural spaces and landscapes

is our character and value as exemplified in our achievements of transforming outdated industrial

zones into LOHAS parks. Our efforts in the next phase will focus on water, including both rivers

and oceans. The Huilan Bay project is our defining work in the current stage. As cultural

creation cannot rely on imagination alone, success largely relies on going beyond imagination.

Trends for the future reside in sharing, combining the physical with the virtual, and creating

cultural value through technology. TLDC will continue to observe the "law of nature" in

transforming the environment and creating carefree spaces for people; we are committed to

forging an environment that is in total harmony with Nature and the other creatures of our earth.

The Group has turned in many concrete achievements in the past nine years. By leveraging our

experiences and traceability data, we aspire to build cultural and creative spaces and capitalize

on our professional advantages to offer all-round, quality living services that better meet the

needs of the today’s society. To this end, we ask for continued support and encouragement from

our shareholders.

Chairman: Chiu, Fu-Sheng President: Chiu, Fu-Sheng Accounting Manager: Chen, Wen-Ling

- 9 -

2-2 Supervisor’s review report on the 2016 financial statements

- 10 -

2-3 2016 Distribution of Employee Remuneration and Directors' and Supervisors'

Remunerations

Agenda: The Company's employee, director, and supervisor remuneration distribution

plan for 2016. Please review.

Description:

The Company's 2016 after-tax net profit amounted to NT$ 251,988,930. It is

expected that the amount of remuneration distributed to employees and

directors/supervisors at 1% in cash shall be NT$ 2,850,056 and NT$ 2,850,056,

respectively, after the revision of Article 35 of the Company's Articles of

Incorporation.

- 11 -

2-4 Implementation status report of the Company's treasury shares

Agenda: Implementation of the treasury stock buyback plan

Description: Treasury stock repurchased by the Company in 2016:

Treasury stocks in

batches 16th Batch 17th Batch 18th Batch 19th Batch

Date of board

resolution May 30, 2016 July 29, 2016 December 22, 2016 February 21, 2017

Purpose of

buy-back

Transfer ownership of

shares to employees


shares to employees


shares to employees


shares to employees

Scheduled

buy-back

period

2016/7/17~2016/7/29 2016/8/2~2016/9/30 2017/1/10~2017/2/21 2017/2/23~2017/4/14

Price range NT$10.00 to

NT$12.50

NT$10.00 to

NT$14.00 NT$9.00 to NT$12.00

NT$11.00 to

NT$13.00

Scheduled

buy-back

quantity

(as a

percentage of

total

12,000,000 shares

(1.65%)

10,000,000 shares

(1.38%)

10,000,000 shares

(1.31%)

10,000,000 shares

(1.31%)

Sch

eduled

bu

yback

plan

Spending

limits for NT$ 1,001,318,541 NT$ 1,008,439,821 NT$ 1,151,333,588 NT$ 1,151,333,588

Actual

buy-back

period

2016/7/19~2016/7/29 2016/8/2~2016/9/30 2017/1/10~2017/2/21 2017/2/23~2017/4/14

Actual

buy-back

shares

(as a

percentage of

1,497,000 shares

(0.2%)

6,700,000shares

(1.13%)

4,000,000 shares

(1.60%)

3,236,000shares

(0.43%)

Actual

amount spent NT$ 15,983,488 NT$ 70,996,411 NT$41,736,145 NT$ 35,654,372

Execu

tion o

f the b

uyback

plan

Average price NT$10.68 NT$ 10.60 NT$10.43 NT$ 11.02

- 12 -

Reasons for

Incompletion

The stock price of the

Company was stable

throughout the year.

Therefore, in order to

balance the stock

market and effectively

use funds, it was

decided not to

complete all scheduled

buybacks.


Company was stable



balance the stock


use funds, it was

decided not to


buybacks.


Company was stable



balance the stock


use funds, it was

decided not to


buybacks


Company was stable



balance the stock


use funds, it was

decided not to


buybacks

Status Nullified Nullified Nullified Nullified

Note 1: Calculated based upon the total outstanding shares of the Company at the time announcement of buyback was made.

Note 2: Calculated based upon the total outstanding shares of the Company after expiration of the announcement or completion of the

re-acquisition.

- 13 -

2-5 Status report on loans to and endorsements/guarantees for others

Agenda: Implementation of the status report on loans to and endorsements/guarantees

for others.

Description:

1. Loans to others conducted by the Company as of February 28, 2017

Name of company Relationship with the

Company Amount of loans

Amount of loans as a

percentage of the

Company's net value as

stated in the latest

financial report (Sep.

30, 2016)

Taiwan Envirotech

Development

Corporation

Affiliated companies 100,000,000 0.57%

2. Details of the Company's endorsements/guarantees for others as of February 28,

2017:

Name of company Relationship with the

Company Endorsed amount

The endorsed amount

as a percentage of the

net value in the most

recent financial

statement (Sep 30

2016)

Taiwan Commerce

Development

Corporation

Affiliated companies 1,706,000,000 9.56

Taiwan Innovation

Development

Corporation

Affiliated companies 1,132,000,000 6.34

Wind Lion Plaza

Corporation Affiliated companies 50,000,000 0.28

- 14 -

2-6 Report on the issuance of the Company's first, second and third secured

common corporate bonds in 2016

Agenda: The report on the execution of the Company's issuance of secured common

corporate bonds in 2016 is hereby submitted for review.

Description:

1.The first secured common corporate bonds in 2016

(1) To facilitate the Company's reinvestment in domestic enterprises, the

Board meeting held on March 30, 2016 adopted by resolution the

issuance of secured common corporate bonds of a five-year term in

Taiwan totaling NT$1.5 billion.

(2) Conditions and matters related to such issuance have been published in the

Market Observation Post System (MOPS).

(3) Such issuance came into force following approval by TPEx in the

Zheng-Gui-Zhai-Zi No. 10500130221 Letter dated April 22, 2016; raising

of capital was completed on April 29, 2016 and bonds were traded

over-the-counter on the same day.

(4) Funds raised as stated in the previous paragraph were fully executed in

April 2016 as per the proposed capital use plan.

2. The second secured common corporate bonds in 2016

(1) To repay bank loans (NT$680 million) and fulfill funding requirements for

related industrial land development (NT$120 million), the Board meeting

on October 12, 2016 adopted by resolution the issuance of secured

common corporate bonds of a five-year term in Taiwan totaling NT$800

million.




Zheng-Gui-Zhai-Zi No. 10500321421 Letter dated November 9, 2016;

raising of capital was completed on November 15, 2016 and bonds were

traded over-the-counter on the same day.

(4) Funds raised as stated in the previous paragraph (NT$680 million) were

fully executed in November 2016 as per the proposed capital use plan;

execution of NT$120 million is in progress as per the proposed capital

use plan.

3.The third secured common corporate bonds in 2016

- 15 -

(1) To facilitate the Company's reinvestment in Taiwan Innovation

Development Corporation (TIDC), the Board meeting held on November

14, 2016 adopted by resolution the issuance of secured common corporate

bonds of a five-year term in Taiwan totaling NT$530 million.




Zheng-Gui-Zhai-Zi No. 10500344051 Letter dated November 29, 2016;

raising of capital was completed on December 5, 2016 and bonds were

traded over-the-counter on the same day.

(4) Funds raised as stated in the previous paragraph were fully executed in

December 2016 as per the proposed capital use plan.

- 16 -

2-7 Report on the execution of the Company's private placement

Agenda: The report on the execution of the issuance of common stock via private

placement as approved by the 2016 Annual Shareholders Meeting is hereby

submitted for review.

Description:

1. In accordance with the provisions of the Securities and Exchange Act, such

private placement shall be conducted in installments by the Company before

the expiry of one year from the date of the resolution of the 2016

Shareholders Meeting.

2. With such resolution dated June 29, 2016, the expiry date is June 30, 2017. Due

to the short timespan for execution of private placement and low willingness

of investment caused by unfavorable conditions in politics and economy at

home and abroad during that period, it was difficult to find strategic investors

(namely, specific persons) as stipulated by the law. Thus, the case will

automatically fall null and void due to the Company's inability to complete

such private placement within the time limit.

- 17 -

2. Items for Approval

2-1 Operational financial statements and reports: 2016

Agenda: Approval of the Company's 2016 Operational financial statements and reports

Description:

1. The Company's 2016 financial statements (including consolidated financial

statements), were audited by accountants and have been approved during the

35th meeting of the 17th-term Board of Directors on March 23, 2017. The

aforementioned statements, along with the business report, which have been

reviewed by the supervisory committee, are being presented by the

supervisors and the General Manager.

2. Please refer to pages 18 to 34 within this document for the 2016 annual

business report, the auditor's report and financial statements.

- 18 -

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- 35 -

2-2 Proposal for the distribution of 2015 earnings

Agenda: Approval of the Company's 2015 earnings distribution proposal

Description:

1. The Company's 2016 audited after-tax profit amounted to NT$251,988,930.

The amount of NT$23,656,331 has been set aside for legal reserve and

NT$212,906,977 has been set aside for special reserve (including

turnaround). With the addition of undistributed earnings of NT$4,211,965

and the deduction of treasury stock transactions of NT$19,637,587 carried

forward from previous fiscal year, a total of NT$0 is available for

distribution. There will be no dividend distribution. Please refer to page 44

in the manual for the distribution statement.

2. The proposal was approved at the 36th meeting of the 17th-term Board of

Directors on April 20, 2017.

- 36 -

Taiwan Land Development Corporation

Earnings distribution statement

2016

Unit: NT$

Item Amount Notes

Opening undistributed earnings 4,211,965

Less: Company's treasury shares trading (19,637,587)

Adjusted cumulative losses at the

beginning of the period

(15,425,622)

Add: Net Income 251,988,930

Less:10% legal reserve (23,656,331)

Add: Special surplus reserve turnaround

numbers

1,480,463

Add: Special reserve (214,387,463) Note 2

Closing undistributed earnings -

Chairman: Chiu, Fu-Sheng President: Chiu, Fu-Sheng Accounting Manager: Chen, Wen-Ling

Note 1: The Company's undistributed surplus at the end of 2016 is NT$0. There will be no

distribution.

Note 2: According to Jin-Guan-Zheng-Fa-Zi No. 1030006415, public companies with investment

properties adapting fair value measurement shall set aside special reserve equivalent to the same

amount of the increase resulting from the adaptation in accordance with Article 41 of the Securities

and Exchange Act.

- 37 -

3. Items for Discussion:

3-1 Amendment to the Company's issuance of new bonus shares through

capitalization of its 2015 distributable earnings and capital reserves.

Agenda: The amendment to the Company's proposal for the issuance of new bonus

shares through capitalization of its 2015 distributable earnings and capital

reserves is hereby submitted for resolution.

Description:

1. The Company was originally scheduled to appropriate NT$42,727,660 from its

2015 distributable earnings and NT$313,336,150 from its 2015 capital

reserves to altogether increase its capital by issuing 35,606,381 common

shares and distribute stock dividends to shareholders at 50 shares free-gratis

for each 1,000 shares held (six shares through capitalized earnings and 44

shares through capital reserves).

2. In accordance with regulatory requirements and objective circumstances, the

capital reserves related to the convertible corporate bonds is not yet deemed

"income derived from the issuance of new shares at a premium" as stipulated

in Article 241, Paragraph 1 of the Company Act; therefore, the allocation of

capital reserves was adjusted to NT$306,214,870 as stipulated by the law.

3. In accordance with the proportion of shares held by shareholders in the

shareholders register on the record date for share distribution due to capital

increase, after amendment, shareholders are distributed 49 shares free-gratis

for each 1,000 shares held (6 shares from earnings and 43 shares from capital

reserves). Stock dividends were also adjusted in accordance with the

execution of treasury shares.

4. The amendment proposal was submitted to and approved at the 27th meeting

of the 17th-term Board of Directors on July 29, 2016.

Resolution:

- 38 -

3-2 Amendment to the Company's Articles of Incorporation

Agenda: The amendment to the Company's Articles of Incorporation is hereby

submitted for resolution.

Description:

1. Conducted in accordance with the Financial Supervisory Commission

(hereinafter FSC) Jin-Guan-Zheng-Fa-Zi No. 10200531121 Order dated

December 31, 2013 and Article 14-4 of the Securities and Exchange Act.

2. As per the first decree specified in the forgoing FSC Order: "In accordance with

provisions of Article 14-2 of the Securities and Exchange Act, a financial

holding company, bank, securities company, insurance company, securities

investment trust enterprise, integrated securities firm, or TWSE- or

TPEx-listed futures firm, or any non-banking TWSE- or TPEx-listed company

that has issued stock in accordance with this Act shall, as provided by its

articles of incorporation, appoint independent directors not less than two in

number and not less than one-fifth of the total number of its directors."

Furthermore, as per Article 14-4 of the Securities and Exchange Act: "A

company that has issued stock in accordance with this Act shall establish

either an Audit Committee or supervisors. The Competent Authority may,

however, in view of the company's scale, type of operations, or other essential

considerations, order it to establish an Audit Committee in lieu of supervisors;

the relevant regulations shall be prescribed by the Competent Authority. The

Audit Committee shall be composed of the entire number of independent

directors. It shall not be fewer than three persons in number, one of whom

shall be convener, and at least one of whom shall have accounting or financial

expertise." The proposal to amend the Company's Articles of Incorporation is

as follows:

(1) To cancel positions of supervisors and establish positions of independent

directors by amending Articles 11, 15, 19, 21, 22, 27, 28, 29, 34, and 35.

(2) To establish an Audit Committee by amending Articles 15 and 19.

(3) To add amendment dates by amending Article 40.

3. For the comparison table of existing and amended articles, see pp. 48-54 of this

handbook.

- 39 -

4. The amendment proposal was submitted to and approved at the 35th meeting of

the 17th-term Board of Directors on March 23, 2017.

Resolution:

- 40 -

Comparison chart of the existing and amended articles in the Articles of

Incorporation of Taiwan Land Development Corporation

Amended articles Existing articles Description

Article 11

The Company's shareholder

meetings are divided into two

different types: general and

special shareholders meetings. A

general shareholders meeting is

to be held once annually, called

by the Board of Directors within

six months after the end of each

fiscal year. Unless stated

otherwise in the Company Act,

special meetings are called by

the Board of Directors or other

person(s) vested with the right

to convene meetings;

Shareholders holding more than

3% of the total number of

outstanding shares for a

continuous year may request the

Board of Directors to call for a

special meeting by submitting a

written proposal setting forth

therein the subjects for

discussion and the reasons.

Article 11

The Company's shareholder

meetings are divided into two

different types: general and

special shareholders meetings. A

general shareholders meeting is

to be held once annually, called

by the Board of Directors within

six months after the end of each

fiscal year. Unless stated

otherwise in the Company Act,

special meetings are called by

the Board of Directors or

Supervisory Board when

deemed necessary. Shareholders

holding more than 3% of the

total number of outstanding

shares for a continuous year

may request the Board of

Directors to call for a special

meeting by submitting a written

proposal setting forth therein the

subjects for discussion and the

reasons.

(I) This article has been

amended.

(II) In line with the

establishment of an Audit

Committee in place of

supervisors, regulations relevant

to supervisors shall be canceled

and provisions stating "other

person(s) vested with the right

to convene meetings" shall be

added so as to maintain textual

flexibility under the premise of

legal compliance.

Article 15

Matters to be resolved by the

shareholders meeting:

1. Establishment and

amendment of the Articles of

Incorporation for the Company.

2.Election and discharge of

directors.

3. Examination of the financial

statements and books of

accounts prepared and submitted

by the Board and the Audit

Article 15

Matters to be resolved by the

shareholders meeting:

1. Establishment and

amendment of the Articles of

Incorporation for the Company.

2. Election and discharge of

directors and supervisors.

3. Examination of the financial

statements and books of

accounts prepared and submitted

by the Board of Directors and


amended.





to supervisors shall be deleted

and provisions pertaining to the

Audit Committee shall be

added; incomplete wording (i.e.

"report" in the term "audit

report") shall be amended.�

- 41 -

Committee's audit reports. To

conduct the examination of such

statements, books and reports,

the Shareholders Meeting may

select and appoint inspectors as

required.

4. Resolutions regarding

issuance of new shares through

capitalization of earnings and

capital reserve.

5. Resolutions regarding capital

reduction.

6. Resolutions regarding the

distribution of earnings and

make-up of deficits.

7. Transfer of all or any

essential part of the Company's

business or assets; or

acceptance of the transfer of

another’s complete business or

assets that has great bearing on

the business operation of the

Company.

8. Merger and divestment of the

Company.

9. Resolutions regarding other

important matters

commissioned.

supervisors' report. An inspector

may be appointed for the

purpose of examination.

4. Resolutions regarding

issuance of new shares through

capitalization of earnings and

capital reserve.

5. Resolutions regarding capital

reduction.

6. Resolutions regarding the

distribution of earnings and

make-up of deficits.

7. Transfer of all or any

essential part of the Company's

business or assets; or acceptance

of the transfer of another’s

complete business or assets that

has great bearing on the

business operation of the

Company.

8. Merger and divestment of the

Company.

9. Resolutions regarding other

important matters

commissioned.

Chapter 5 The Board and the

Audit Committee

Chapter 5 The Board (I) This chapter has been

amended.




supervisors, provisions

pertaining to the Audit

Committee shall be added to this

chapter.

Article 19

The Company shall appoint

seven to nine directors (with at

Article 19

The Company shall appoint

seven to nine directors (with at


amended.

(II) In order to replace

- 42 -

least three being independent

directors) who shall comprise

the Board of Directors. The

Board of Directors is authorized

to determine the number of

directors. Directors shall serve a

term of three years and may be

eligible for re-election.

The Company adopts a

candidate nomination system

for the election of directors, and

the shareholders shall elect the

directors from among the

nominees listed on the roster of

director candidates. The

professional qualifications,

restrictions on both

shareholding and concurrent

positions held, determination of

independence, method of

nomination and election, and

other requirements with regard

to the independent directors

shall be set forth in accordance

with relevant laws and

regulations. Independent and

non-independent directors shall

be elected at the same time, but

the number of elected

candidates shall be separately

calculated. A director who is

from or represents a

government agency or an

institutional shareholder may,

owing to the change of the

director's functional duties, be

replaced by another person.

When one-third of the positions

on the Board of Directors

become vacant, or when all

least three being independent

directors) who shall comprise

the Board of Directors. The

Board of Directors is authorized

to determine the number of

directors. Directors shall serve a

term of three years and may be


The Company adopts a

candidate nomination system for

the election of directors, and the

shareholders shall elect the

directors from among the

nominees listed on the roster of

director candidates. The

professional qualifications,

restrictions on both shareholding

and concurrent positions held,

determination of independence,

method of nomination and

election, and other requirements

with regard to the independent

directors shall be set forth in

accordance with relevant laws

and regulations. Independent

and non-independent directors

shall be elected at the same

time, but the number of elected

candidates shall be separately

calculated. A director who is

from or represents a government

agency or an institutional

shareholder may, owing to the

change of the director's

functional duties, be replaced by

another person. When one-third

of the positions on the Board of

Directors become vacant, or

when all supervisors have been

discharged, a special meeting of

supervisors with independent

directors, the Company will set

up positions of independent

directors.

(III) Paragraph 4 is an addition

as per Article 14-4, Paragraph 5

of the Securities and Exchange

Act; regulations governing the

exercise of functional duties by

members of the Audit

Committee and independent

directors and other relevant

matters shall be prescribed by

the competent authority.

Therefore, after the

establishment of the Audit

Committee, the Company shall,

in compliance with the

Regulations Governing the

Exercise of Powers by Audit

Committees of Public

Companies, and the "Sample

Template for XXX Co., Ltd.

Audit Committee Charter"

published by the TWSE, set up

the "Sample Template for

Taiwan Land Development

Corporation Audit Committee

Charter" for the Company to

follow in the establishment and

operation of the Audit

Committee as defined in

Paragraph 4 of this Article.

- 43 -

independent directors have

been discharged, a special

meeting of shareholders shall

be called within sixty days to

elect succeeding directors. A

replacement or succeeding

director elected after a

by-election is to fulfill the

unexposed term of office of the

predecessor.

In accordance with Article 14-4

of the Securities and Exchange

Act, the Company establishes an

Audit Committee which is

composed of all the independent

directors. The Audit

Committee's number of

members, term of office,

functional duties, rules of

procedure for meetings, and

other matters to be complied

with have all been established as

regulated by the securities

competent authority.

shareholders shall be called

within sixty days to elect

succeeding directors. A

replacement or succeeding

director elected after a

by-election is to fulfill the

unexposed term of office of the

predecessor.

Article 21

Powers of the Board of

Directors:

1. Approval of various

provisions of the Articles of

Incorporation.

2. Approval of major business

and its plans.

3. Promulgation of capital

increase or decrease.

4. Approval of new addition,

closure, or alteration of a

branch office.

5. Approval of a various major

contracts.

6. Approval of the budget and

Article 21

Powers of the Board of

Directors:

1. Approval of various

provisions of the Articles of

Incorporation.

2. Approval of major business

and its plans.

3. Promulgation of capital

increase or decrease.

4. Approval of new addition,

closure, or alteration of a

branch office.

5. Approval of a various major

contracts.

6. Approval of the budget and


amended.





to supervisors in this Article

shall be deleted.

- 44 -

final accounts.

7. Approval of real estate

transactions.

8. Approval of investment in

other companies.

9. Formulation of proposals

regarding earnings

distribution or deficit make

up.

10. Approval of remuneration of

directors, supervisors, and

other employees.

11. Approval of the appointment

and discharge of the president,

vice presidents, assistant Vice

presidents, managers, assistant

managers, and branch

managers.

12. Matters submitted by the

Chairman for approval.

13. Other authority granted by

law, by the Articles of

Incorporation, or by the meeting

of shareholders.

Directors' remuneration as

prescribed in clause 10 in the

preceding paragraph shall be in

accordance with industry

standards. If profit is reported in

the final accounts, it shall be

handled in accordance with

Article 35.

final accounts.

7. Approval of real estate

transactions.

8. Approval of investment in

other companies.

9. Formulation of proposals

regarding earnings

distribution or deficit make

up.

10. Approval of remuneration of

directors, supervisors, and

other employees.

11. Approval of the appointment

and discharge of the president,

vice presidents, assistant Vice

presidents, managers, assistant

managers, and branch

managers.

12. Matters submitted by the

Chairman for approval.

13. Other authority granted by

law, by the Articles of

Incorporation, or by the

meeting of shareholders.

Directors' and supervisors'

remuneration as prescribed in

clause 10 in the preceding

paragraph shall be in

accordance with industry

standards. If profit is reported

in the final accounts, it shall

be handled in accordance with

Article 35.

Article 22

Board of Directors shall

establish an audit office to

oversee the Company's audit

practice. The appointment or

discharge of the head of the

audit office shall be determined

Article 22


establish an audit office to

oversee the Company's audit

practice. The appointment or

discharge of the head of the

audit office shall be determined


amended.






- 45 -

by the Chairman of the Board

with a majority consensus from

all the directors. The head of the

audit office shall oversee the

audit practice in accordance

with the resolutions of the board

meetings and shall provide

periodic reports to the Board of

Directors.

by the Chairman of the Board

with a majority consensus from

all the directors. The head of the

audit office shall oversee the

audit practice in accordance

with the resolutions of the board

meetings and shall provide

periodic reports to the Board of

Directors and supervisors.

shall be deleted.

Article 27

Board meetings shall be

announced seven days in

advance to all directors.

President, vice presidents,

managers from all departments

may be invited to attend.

However, they are not eligible to

vote.

Article 27

Board meetings shall be

announced seven days in

advance to all directors and

supervisors. President, vice

presidents, managers from all

departments may be invited to

attend. However, they are not

eligible to vote.


amended.






shall be deleted.

Chapter 6 (deleted) Chapter 6 Supervisors (I) This chapter has been

amended.






shall be deleted.

Article 28 (deleted) Article 28 The Company shall have three supervisors, elected from among the shareholders with disposal capacity at the shareholders meeting to serve a term of three years and may be eligible for re-election. A candidate nomination system is adopted for election of the supervisors, the shareholders shall elect the supervisors from among the nominees listed on the roster of supervisor candidates. A supervisor who is from or represents a government agency or an institutional shareholder may,

(I) This chapter has been

amended.






shall be deleted.

- 46 -

owing to the change of the supervisor's functional duties, be replaced by another person to fulfill the unexposed term of office of the predecessor. The number of shareholdings of all supervisors elected in accordance with the preceding paragraph shall comply with regulations specified by relevant competent authority.

Article 29 (deleted) Article 29 Powers of the

supervisors:

1. Investigation and reviewing

of the business and property

status of the Company.

2. Reviewing of books of

accounts and reports for final

accounts.

3. Inventory review reports.

4. Monitoring of the

performance of the

employees and censure for

any violation of laws or their

duties.

5. Any other powers authorized

by law.


amended.






shall be deleted.

Article 34

At the end of each fiscal year,

the Board of Directors shall

prepare the following statements

and reports, as regulated by the

central authority, for

verification. The verified

statements and reports shall be

according to the legal procedure,

prepare and present such

statements and reports to the

general Shareholders Meeting

for ratification:

1. Business Report.

2. Financial Statements.

Article 34

At the end of each fiscal year,

the Board of Directors shall

prepare the following statements

and reports, as regulated by the

central authority, for

verification. The verified

statements and reports shall be

submitted to supervisors for

review no later than 30 days

prior to the shareholders

meeting.

1. Business Report.


3. Distribution of earnings or


amended.




supervisors, provisions

pertaining to supervisors in

Paragraph 1 of this Article shall

be duly amended and wording

specifying "according to the

legal procedure" shall be added;

wording in Paragraph 2

specifying that "the Board shall

prepare and present such

statements and reports to the

- 47 -

3. Distribution of earnings or

loss offsetting proposals.

The Board of Directors shall

distribute the approved financial

statements and resolutions

regarding earnings distribution

or loss offsetting to all

shareholders.

Delivery of the approved

financial statements and

resolutions regarding earnings

distribution or loss offsetting to

all shareholders may be made in

the form of public notice.

loss offsetting proposals.

The Board of Directors shall

submit the above statements and

reports for approval at the

shareholders meeting. The


distribute the approved financial

statements and resolutions

regarding earnings distribution

or loss offsetting to all

shareholders.

Delivery of the approved

financial statements and

resolutions regarding earnings

distribution or loss offsetting to

all shareholders may be made in

the form of public notice.

annual Shareholders Meeting for

ratification" shall also be added

so as to maintain textual

flexibility under the premise of

legal compliance.

Article 35

In the event of profit after

closing of annual accounts

(profit refers to pre-tax earnings

before deduction of

compensation and remuneration

distributed to employees as

well as directors), between one

to eight percent shall be

allocated as compensation to

employees and no more than

two percent shall be allocated

as remuneration to directors.

However, in the event the

Company has sustained

accumulative losses, a

proportion of profit shall be

reserved in advance for

compensation purposes.

The preceding employee

compensation may be paid in

cash or stock shares, and shall

be payable to employees of

Article 35

In the event of profit after

closing of annual accounts

(profit refers to pre-tax earnings

before deduction of


distributed to employees as well

as directors and supervisors),

between one to eight percent

shall be allocated as

compensation to employees and

no more than two percent shall

be allocated as remuneration to

directors and supervisors.


Company has sustained

accumulative losses, a

proportion of profit shall be

reserved in advance for

compensation purposes.

The preceding employee

compensation may be paid in

cash or stock shares, and shall


amended.






shall be deleted.

- 48 -

subsidiary companies who meet

the requirements stipulated by

the board of directors. The

preceding remuneration to

directors shall be paid in cash

only.

Proposals for employee


to directors and supervisors

shall be approved by board

meeting and shall be briefed in

the shareholders' meeting.

be payable to employees of

subsidiary companies who meet

the requirements stipulated by

the board of directors. The

preceding remuneration to

directors and supervisors shall

be paid in cash only.

Proposals for employee


to directors and supervisors

shall be approved by board

meeting and shall be briefed in

the shareholders' meeting.

Article 36

In the event of surplus earnings

after closing of annual accounts,

due taxes shall be paid in

accordance with the law, and

losses incurred in previous years

shall be compensated. Upon

completion of the preceding

actions, 10% of the remainder

surplus shall be allocated as

legal reserve. However, in the

event the accumulated legal

reserve is equivalent to or

exceeds the Company's total

paid-in capital, such limitations

do not apply. In addition, in

accordance with the law or

regulatory requirements, special

reserve shall be allocated or

reversed. The board of directors

shall draft a surplus distribution

proposal regarding the

remainder of the surplus as well

as initial undistributed surplus

for approval at the shareholders'

meeting, at which the allocation

Article 36

In the event of surplus earnings

after closing of annual

accounts, due taxes shall be

paid in accordance with the law,

and losses incurred in previous

years shall be compensated.

Upon completion of the

preceding actions, 10% of the

remainder surplus shall be

allocated as legal reserve.


accumulated legal reserve is

equivalent to or exceeds the

Company's total paid-in capital,

such limitations do not apply. In

addition, in accordance with the

law or regulatory requirements,

special reserve shall be

allocated or reversed. The board

of directors shall draft a surplus

distribution proposal regarding

the remainder of the surplus as

well as initial undistributed

surplus for approval at the

shareholders' meeting, at which

(I) In this Article, additions were

made only to provisions

with incomplete wording.

- 49 -

of shareholders' dividends shall

be decided.

Per the Company's dividend

policy, consistent with current

and future development plans,

considerations for the

investment environment, capital

needs, domestic and

international competition, as

well as the interest of

shareholders, surplus may be

unappropriated or no less than

50 percent of surplus available

for distribution may be allocated

as dividends to shareholders.

Dividends may be paid in either

cash or stock shares. Cash

dividends shall account for no

more than 30 percent, while the

remainder shall be paid through

stock dividend to shareholders.

the allocation of shareholders'

dividends shall be decided.

Per the Company's dividend

policy, consistent with current

and future development plans,

considerations for the

investment environment, capital

needs, domestic and

international competition, as

well as the interest of

shareholders, surplus may be

unappropriated or no less than

50 percent of surplus available

for distribution may be

allocated as dividends to

shareholders. Dividends may be

paid in either cash or stock

shares. Cash dividends shall

account for no more than 30

percent, while the remainder

shall be paid through stock

dividend to shareholders.

Article 40

The Articles of Incorporation

were established on February

25, 1972 1st Revision:

December 6, 1975; 2nd

Revision: May 29, 1979; 3rd

Revision: September 27, 1980;

4th Revision: January 13, 1984;

5th Revision: December 23,

1986; 6th Revision: December

23, 1989; 7th Revision:

December 28, 1990; 8th

Revision: July 29, 1994; 9th

Revision: December 26, 1997;

10th Revision: February 26,

1999; 11th Revision: October

16, 1999; 12th Revision: May

16, 2000; 13th Revision: June

Article 40

The Articles of Incorporation

were established on February

25, 1972 1st Revision:

December 6, 1975; 2nd

Revision: May 29, 1979; 3rd

Revision: September 27, 1980;

4th Revision: January 13, 1984;

5th Revision: December 23,

1986; 6th Revision: December



Revision: July 29, 1994; 9th


10th Revision: February 26,

1999; 11th Revision: October

16, 1999; 12th Revision: May

16, 2000; 13th Revision: June


amended.

(II) Amendment date.

- 50 -




16th Revision: June 28, 2006;

17th Revision: May 27, 2009;


19th revision: June 28, 2011;

20th revision: June 8, 2012; 21st

Revision: June 17, 2013; 22nd




Revision: June 28, 2017.





17th Revision: May 27, 2009;




21st Revision: June 17, 2013;

22nd Revision: June 24, 2014;

23nd Revision: June 30, 2015.

24nd Revision: June 29, 2016;

- 51 -

3-3 Amendment to the Company's Rules Governing the Election of Directors and

Supervisors

Agenda: The Amendment to the Company's Rules Governing the Election of Directors

and Supervisors is hereby submitted for resolution.

Description:

1. Conducted in accordance with the Financial Supervisory Commission

(hereinafter FSC) Jin-Guan-Zheng-Fa-Zi No. 10200531121 Order dated

December 31, 2013.

2. As per the first decree specified in the forgoing FSC Order: "In accordance

with the provisions of Article 14-4 of the Securities and Exchange Act, a

financial holding company, bank, securities company, insurance company,

securities investment trust enterprise, integrated securities firm, or TWSE- or

TPEx-listed futures firm, or any non-banking TWSE- or TPEx-listed company

with paid-in capital reaching NT$10 billion or more that has issued stock in

accordance with this Act shall, effective from the date of promulgation of this

decree, establish an Audit Committee in lieu of supervisors; any company not

listed on TWSE or TPEx with paid-in capital of more than NT$2 billion but

less than NT$10 billion shall, effective from January 1, 2017, establish an

Audit Committee in lieu of supervisors. (Remaining text omitted) Regulations

pertaining to supervisors have been deleted from the Company's Rules

Governing the Election of Directors, and Articles 1, 2, and 3 have been

amended.

3. For the comparison table of existing and amended articles, see pp. 56-59 of

this handbook.

4. The amendment proposal was submitted to and approved at the 35th meeting

of the 17th-term Board of Directors on March 23, 2017.

Resolution:

- 52 -

Comparison Table of Amendments to the Rules for Election of Directors and

Supervisors of Taiwan Land Development Corporation


1. The Company conducts the

election of directors in

accordance with the Rules.

1. The Company conducts the

election of directors and

supervisors in accordance with

the Rules.

2. The Company shall conduct

the election of directors by

adopting the candidates

nomination system pursuant to

Article 192-1 of the Company

Act and the single-name-bearing

cumulative voting method;

attendance card numbers printed

on the ballots may be used

instead of recording the names

of voting shareholders. In the

process of electing the

Company's directors, the

number of votes exercisable in

respect of one share shall be the

same as the number of directors

to be elected, and the total

number of votes per share may

be concentrated to one candidate

or allocated among several

candidates.

2. In the election of the

directors and supervisors, the

Company adopts the

single-name-bearing voting

method; attendance card

numbers printed on the ballots

may be used instead of

recording the names of voting

shareholders. In the election of

the Company's directors and

supervisors, the number of

votes exercisable in respect of

one share shall be the same as

the number of directors to be

elected, and the total number

of votes per share may be

concentrated to one candidate

or allocated among several

candidates.

3. The number of the Company's

directors will be specified

according to the Articles of

Incorporation and relevant

announcements, and the voting

rights will be separately

calculated for independent and

non-independent directors.

Those who receive ballots

representing the highest

numbers of voting rights will be

3. The number of the

Company's directors and

supervisors will be specified

according to the Articles of

Incorporation; those who

receive ballots representing the

highest numbers of voting

rights will be elected

sequentially according to their

respective numbers of votes.

When two or more persons

1. In accordance with the

FSC

Jin-Guan-Zheng-Fa-Zi

No. 10200531121 Order

dated December 31, 2013

and the Company's

Articles of Incorporation,

the following is proposed:

1. To cancel the election

of supervisors;

2. To add the election of

independent directors.

(II) The TWSE

Tai-Zheng-Governance-Z

i

No. 1040001716

Letter dated January 28,

2015 which promulgated

the revised version of the

"Sample Template for

XXX Co., Ltd. Procedure

for Election of Directors

and Supervisors" was

duly referenced.

- 53 -

elected sequentially according to

their respective numbers of

votes as independent directors or

non-independent directors.

When two or more persons

receive the same number of

votes, thus exceeding the

specified number of positions,

they shall draw lots to determine

the winner, with the Chairman

drawing lots on behalf of any

person not in attendance.

receive the same number of

votes, thus exceeding the

specified number of positions,

they shall draw lots to

determine the winner, with the

Chairman drawing lots on

behalf of any person not in

attendance.

With reference to the

preceding paragraph, when a

shareholder is elected as both

director and supervisor, he/she

shall decide to be either a

director or a supervisor; if

he/she does not make such

decision on the spot, the

Chairman shall draw lots on

his/her behalf according to the

number of persons to be

elected. In the drawing of lots,

the small serial number shall

represent directors and the

larger shall represent

supervisors. Any vacancy shall

be filled by the candidate with

the second highest number of

votes originally cast.

5. The election ballot box,

produced by the Company,

needs to be publicly inspected

by the ballot examiner before

voting commences.

5. The ballot examiner's duties

are as follows:

(1) To publicly inspect the

ballot box and seal the lid

before voting commences.

(2) To maintain order and

monitor if there is any

negligence or violation during

the voting process.

(3) To open the ballot box seal,

take out the ballots, and

examine the number of the

ballots after voting is

- 54 -

completed.

(4) To check if there are any

invalid ballots and pass valid

votes on to the ballot counter.

(5) To monitor the ballot

counter in recording the voting

rights obtained by each

candidate, and co-sign with the

counter on the report of ballot

counting results.

(6) To sign on the sealed bag

containing the voting results

and bear witness to the sealing

of the bag.

7. If a candidate is a shareholder,

the voter must indicate in the

"candidate" column of the ballot

the candidate's account name,

shareholder account number,

and the number of voting rights

cast; if the candidate is not a

shareholder, the voter shall

indicate the candidate's name,

personal ID number, and the

number of voting rights cast. If

the candidate is a government

agency or an institutional

shareholder, the name of the

government agency or

institution shall be provided in

the candidate's column on the

ballot; the name of the

government agency or

institution along with that of its

representative may also be

provided. In cases of several

representatives, names of all the

additional representatives shall

be provided.

7. The voter must indicate in

the "candidate" column of the

ballot the candidate's name

and shareholder's account

number; if there is a

discrepancy between the name

and account number, the name

shall prevail. However, if the

candidate happens to be an

institutional shareholder, the

voter shall indicate the

institution's name or may

indicate both the institution's

name with its representative's

name in the "candidate"

column of the ballot. But if

there is a discrepancy between

the two names, the institution's

name shall prevail.

- 55 -

8. A ballot is invalid under any

of the following circumstances:

(1) The ballot has not been

prepared by the Company.

(2) The ballot has been cast into

the ballot box as a blank ballot.

(3) The ballot has been marked

with illegible writing.

(4) Both the account name and

shareholder account number

provided on the ballot are at

variance with those shown in the

shareholders register if the

candidate is a shareholder; both

the name and ID card number

provided on the ballot are

verified to be invalid if the

candidate is not a shareholder.

(5) There is information written

on the ballot other than the

candidate's account name

(personal name), shareholder's

account number (ID card

number) and the assigned voting

rights.

(6) The candidate's name written

on the ballot coincides with

other shareholders, but no other

information such as

shareholder's account number

(ID card number) has been

provided for identification.

(7) The number of candidates

provided exceeds that of persons

to be elected.

(8) The writing on the ballot has

been altered.

8. A ballot is invalid under any

of the following

circumstances:

(1) It is not a ballot specified

under these Rules.

(2) The ballot has been cast

into the ballot box as a blank

ballot.

(3) The ballot has been marked

with illegible writing.

(4) The candidate's name

provided is at variance with

that shown in the shareholders

register.

(5) The ballot contains

information other than the

candidate's name and

shareholder's account number.

(6) The candidate's name

written on the ballot coincides

with other shareholders, but no

shareholder's account number

has been provided for

identification.

(7) The number of candidates

provided exceeds that of

persons to be elected.

(8) The writing on the ballot

has been altered.

9. The voting rights shall be

calculated on-site immediately

9. Following the expiry of the

voting period, the Chairman

- 56 -

after voting is completed, and

the results shall be announced

by the Chairman on-site.

shall announce the

commencement of ballot

counting and the ballot

examiner shall open the ballot

box on-site.

In case of a questionable

ballot, the ballot examiner

shall verify and decide if it is

invalid. Invalid ballots shall be

placed separately. After vote

counting is completed, the

number of ballots is verified

against the number of voting

rights. Then, all the invalid

ballots shall be signed and

voided by the ballot examiner.

10. The directors-elect shall

each be given a "Notice of

Appointment" by the Company.

10. After the counting of

ballots, the ballot examiner

shall check if the total number

of valid and invalid ballots is

correct, and the ballot counter

shall enter into the record table

the number of valid ballots

with their corresponding

voting rights and the number

of invalid ballots with their

corresponding voting rights,

respectively. The record table

shall be signed by the ballot

examiner and provided for the

Chairman to announce on-site

the names and shareholders'

account numbers of the

directors-elect, each of whom

will be given a "Notice of

Appointment" by the

Company.

- 57 -

3-4 Amendment to the Company's Rules of Procedure for Shareholders Meetings

Agenda: The amendment to the Company's Rules of Procedure for Shareholders

Meetings is hereby submitted for resolution.

Description:

1. Conducted in accordance with the provisions of Article 14-4 of the Securities

and Exchange Act: "A company that has issued stock in accordance with this

Act shall establish either an Audit Committee or supervisors. The Competent

Authority may, however, in view of the company's scale, type of operations,

or other essential considerations, order it to establish an Audit Committee in

lieu of supervisors; the relevant regulations shall be prescribed by the

Competent Authority. The Audit Committee shall be composed of the entire

number of independent directors. It shall not be fewer than three persons in

number, one of whom shall be convener, and at least one of whom shall have

accounting or financial expertise."

2. In compliance with the foregoing laws and provisions, the establishment of an

Audit Committee and cancellation of the supervisor system have been

proposed by amending Article 19 of the Company's Rules of Procedure for

Shareholders Meetings.

3.For the comparison table of existing and amended articles, see p. 61 of this

handbook.


the 17th-term Board of Directors on March 23, 2017.

Resolution:

- 58 -

Comparison table of existing and amended articles in the Rules of Procedure for Shareholders

Meetings of Taiwan Land Development Corporation


19. Where the Meeting

involves re-election of

directors, the election must

proceed in accordance with

relevant regulations of the

Company. Results of the

election shall be announced

on-site at the Meeting,

including the names of

elected directors.

The election ballots referred

to in the preceding paragraph

shall be signed and sealed by

the ballot examiner and

adequately retained for at

least one year. However, if a

shareholder makes a litigious

claim against the Company

according to Article 189 of

the Company Act, the

above-mentioned documents

must be retained until the

litigation is concluded.

19. Where the Meeting

involves re-election of

directors and supervisors, the

election must proceed in

accordance with relevant

regulations of the Company.

Results of the election shall

be announced on-site,

including the names of

elected directors and

supervisors.

The election ballots referred

to in the preceding paragraph

shall be signed and sealed by

the ballot examiner and

adequately retained for at

least one year. However, if a

shareholder makes a litigious

claim against the Company

according to Article 189 of

the Company Act, the

above-mentioned documents

must be retained until the

litigation is concluded.


provisions of Article 14-4 of

the Securities and Exchange

Act: "A company that has

issued stock in accordance

with this Act shall establish

either an Audit Committee or

supervisors. The Competent

Authority may, however, in

view of the company's scale,

type of operations, or other

essential considerations,

order it to establish an Audit

Committee in lieu of

supervisors; the relevant

regulations shall be

prescribed by the Competent

Authority. The Audit

Committee shall be

composed of the entire

number of independent

directors. It shall not be fewer

than three persons in number,

one of whom shall be

convener, and at least one of

whom shall have accounting

or financial expertise."

2. To cancel regulations

pertaining to supervisors.

- 59 -

3-5 Amendment to the Company's Handling Procedure for the Acquisition and Disposal

of Assets

Agenda: The amendment to the Company's Handling Procedure for the Acquisition and

Disposal of Assets is hereby submitted for resolution.

Description:

1. The Company's "Handling Procedure for the Acquisition and Disposal of Assets"

(hereinafter referred to as the "Handling Procedure") was amended and approved

by the general Shareholders Meeting on June 24, 2014. In order to comply with

the amendment to partial articles of the "Regulations Governing the Acquisition

and Disposal of Assets" as shown in FSC Jin-Guan-Zheng-Fa-Zi No. 1060001296

Order dated February 9, 2017, the 35th meeting of the 17th-term Board of

Directors agreed to amend Articles 5, 6, 11, and 18 of the Procedure.

2. Moreover, in compliance with appointment of independent directors in the 2017

election of directors, which requires that partial articles be amended, proposals

were made to amend Articles 2, 4, 5, 6, 8, 11, 13, 16, 18, 26, and 27 of the

Procedure and address matters to be amended as stated in the preceding

paragraph.


handbook.

4. The amendment proposal was submitted to and approved at the 37th meeting of the

17th-term Board of Directors on May 3, 2017.

Resolution:

- 60 -

Comparison table of existing and amended articles in the Handling Procedure for the Acquisition and

Disposal of Assets of Taiwan Land Development Corporation


Article 2 Applicable Scope of

Assets:

1 Investments in shares,

government bonds,

corporate bonds, financial

bonds, securities

representing interest in a

fund, depository receipts,

call (put) warrants,

beneficial interest securities,

and asset-backed securities,

etc.

2 Real property (including land,

houses and buildings,

investment property, rights

to use land, development of

assets/construction

enterprise inventory) and

equipment.

3 Memberships.

4 Patents, copyrights,

trademarks, franchise rights,

and other intangible assets.

5 Derivatives: Refers to forward

contracts, options contracts,

futures contracts, leverage

contracts, swap contracts,

and compound contracts

combining the above

products, whose value is

derived from assets, interest

rates, exchange rates,

indexes, or other interests.

The term "forward

contracts" does not include

insurance contracts,

Article 2 Applicable Scope of

Assets:

1 Investments in shares,

government bonds,

corporate bonds, financial

bonds, securities

representing interest in a

fund, depository receipts,

call (put) warrants,

beneficial interest securities,

and asset-backed securities,

etc.

2 Real property (including

land, houses and buildings,

investment property, rights

to use land, development of

assets/construction

enterprise inventory) and

equipment.

3 Memberships.

4 Patents, copyrights,

trademarks, franchise rights,

and other intangible assets.

5 Derivatives: Refers to

forward contracts, options

contracts, futures contracts,

leverage contracts, swap

contracts, and compound

contracts combining the

above products, whose value

is derived from assets,

interest rates, exchange

rates, indexes, or other

interests. The term "forward

contracts" does not include

insurance contracts,

The business nature of the

Company was transformed

from a financial institution to a

professional land development

enterprise on September 13,

2005, therefore the Financial

Holding Company Act and

Financial Institution Merger

Act as mentioned in Paragraph

6 of the existing Article 2 was

no more applicable to the

Company in its acquisition and

disposal of assets through

mergers, demergers,

acquisition or transfer of

shares. Provisions associated

with the two abovementioned

acts shall be deleted from

Article 2.

- 61 -


performance contracts,

after-sales service contracts,

long-term leasing contracts,

or long-term purchase

(sales) agreements.

6 Assets acquired or disposed of

in connection with mergers,

demergers, acquisitions, or

transfer of shares in

accordance with law: Refers

to assets acquired or

disposed of through

mergers, demergers, or

acquisitions conducted

under the Business Mergers

and Acquisitions Act or

other acts, or to transfer of

shares from another

company through issuance

of new shares of its own as

the consideration therefor

(hereinafter "transfer of

shares") under Article 156,

Paragraph 6 of the Company

Act.

7 Other major assets.

performance contracts,

after-sales service contracts,

long-term leasing contracts,

or long-term purchase

(sales) agreements.

6 Assets acquired or disposed of

in connection with mergers,

demergers, acquisitions, or

transfer of shares in

accordance with law: Refers

to assets acquired or

disposed of through

mergers, demergers, or

acquisitions conducted

under the Business Mergers

and Acquisitions Act,

Financial Holding Company

Act, Financial Institution

Merger Act, or other acts, or

to transfer of shares from

another company through

issuance of new shares of its

own as the consideration

therefor (hereinafter

"transfer of shares") under

Article 156, Paragraph 6 of

the Company Act.

7 Other major assets.

Article 4 Operational

procedure:

1 Degree and levels of authority

delegated

(1) Securities: The acquisition or

disposal of securities shall

be assessed by the

performing unit and shall

be approved by the

competent authority

Article 4 Operational

procedure:

1 Degree and levels of authority

delegated

(1) Securities: The acquisition or

disposal of securities

shall be assessed by the

performing unit and shall

be approved by the

competent authority

In accordance with the

provisions of Chapter 2,

Section 1 Establishment of

Handling Procedure in the


Acquisition and Disposal of

Assets by Public Companies,

Article 6: "Where an Audit

Committee has been

established in accordance with

- 62 -


within its level of

authority; if the standard

requiring declaration and

public announcement as

stipulated in Article 5 is

fulfilled, the case must be

reported to the Chairman

for approval the following

day and presented to the

next Board meeting for

retroactive ratification.

However, if the

acquisition or disposal of

the shares, corporate

bonds, and private

placement securities is not

conducted in the

centralized trading market

or over the counter, and

the transaction amount

reaches the standard for

declaration and public

announcement, it shall not

be conducted without

prior resolution in a

Board meeting. Moreover,

Mainland China area

investments shall be

approved by the

Shareholders Meeting or

the Board as authorized

by the Shareholders

Meeting, and submitted to

the Investment

Commission of the

Ministry of Economic

Affairs (MOEAIC) for

approval before

within its level of

authority; if the standard

requiring declaration and

public announcement as

stipulated in Article 5 is

fulfilled, the case must be

reported to the Chairman

for approval the

following day and

presented to the next

Board meeting for

retroactive ratification.

However, if the


the shares, corporate

bonds, and private

placement securities is

not conducted in the

centralized trading

market or over the

counter, and the

transaction amount



announcement, it shall

not be conducted without

prior resolution in a

Board meeting.

Moreover, Mainland

China area investments

shall be approved by the

Shareholders Meeting or

the Board as authorized

by the Shareholders

Meeting, and submitted

to the Investment

Commission of the

Ministry of Economic

the provisions of the Act, when

the procedures for the

acquisition and disposal of

assets are adopted or amended,

they shall be approved by more

than half of all Audit

Committee members and

submitted to the board of

directors for a resolution," the

existing Article 4, Paragraph 1,

Subparagraph 3 of the

Handling Procedure regarding

the degree and levels of

authority delegated for

acquiring real property from a

related party: In accordance

with the provisions in Chapter

2 of the Handling Procedure,

the relevant information shall

be prepared and reported to the

Audit Committee for approval,

and submitted to the Board for

adoption by resolution in

advance.

- 63 -


proceeding.

(2) Derivative trading

1. Hedging

transaction: In

accordance with the

changes in the

Company's sales

volume and risk

position, the Chairman

shall designate a staff

member to proceed with

single or cumulative

transaction(s) of

amounts under US$1

million (or other

currencies of equivalent

value). Transactions

exceeding US$1 million

or more shall not be

conducted without the

Chairman's prior

approval.

2. To ensure the

Company's level of

authority fulfills the

bank's relative

supervision and

management, the name

of the authorized trader

must be known to the

bank.

3. Derivatives

trading as described in

the foregoing shall be

reported to the Board

upon its completion.

(3) Acquisition of real property

from a related party: In

Affairs (MOEAIC) for

approval before

proceeding.

(2) Derivative trading

1. Hedging transaction: In

accordance with the

changes in the

Company's sales

volume and risk

position, the Chairman

shall designate a staff

member to proceed with

single or cumulative

transaction(s) of

amounts under US$1

million (or other

currencies of equivalent

value). Transactions

exceeding US$1 million

or more shall not be


Chairman's prior

approval.

2. To ensure the

Company's level of

authority fulfills the

bank's relative

supervision and

management, the name

of the authorized trader

must be known to the

bank.

3. Derivatives trading as

described in the

foregoing shall be

reported to the Board

upon its completion.

(3) Acquisition of real property

- 64 -


accordance with the

provisions in Chapter 2

of the Procedure, the

relevant information shall

be prepared and reported

to the Audit Committee

for approval, and

submitted to the Board

for adoption by

resolution in advance.

(4) Merger, demerger, acquisition

or transfer of shares: In

accordance with the



relevant procedures shall

be followed, and relevant

information shall be

prepared, wherein the

merger, demerger,

acquisition shall be

approved by the

Shareholders Meeting in

advance; however, this

requirement does not

apply where approval by

shareholders meetings is

exempted by the law. In

addition, the transfer of

shares shall be approved

by the Board in advance.

(5) Other: The operational

procedures for the

internal control system

and level of authority

shall be complied with. If



from a related party: In

accordance with the



relevant information shall

be prepared and

submitted to the Board

for approval and

supervisors for

ratification in advance.

(4) Merger, demerger, acquisition

or transfer of shares: In

accordance with the



relevant procedures shall

be followed, and relevant

information shall be

prepared, wherein the

merger, demerger,

acquisition shall be

approved by the

Shareholders Meeting in

advance; however, this

requirement does not

apply where approval by

shareholders meetings is

exempted by the law. In

addition, the transfer of

shares shall be approved

by the Board in advance.

(5) Other: The operational

procedures for the

internal control system

and level of authority

shall be complied with. If



- 65 -



announcement as

stipulated in Article 5,

the transaction shall not

be conducted without the

Board's prior approval.

This requirement does

not apply to the


business-use equipment,

which can be

retroactively ratified by

the Board after the

transaction is completed.

In the event of

circumstances as

specified in Article 185

of the Company Act,

prior approval shall be

obtained in the


2 Performing unit and

transaction process

The Company has performing

units for long- and short-term

securities investment and

derivatives trading; strategic

investments shall be handled by

the department designated by the

Chairman and fund management

shall be handled by the

finance/accounting department;

the performing units for real

property and other assets are the

departments that will use such

property or assets and the related

units of authority; mergers,

demergers, acquisitions or


announcement as

stipulated in Article 5, the

transaction shall not be


Board's prior approval.

This requirement does

not apply to the


business-use equipment,

which can be

retroactively ratified by

the Board after the

transaction is completed.

In the event of

circumstances as

specified in Article 185

of the Company Act,

prior approval shall be

obtained in the


2 Performing unit and

transaction process

The Company has performing

units for long- and short-term

securities investment and

derivatives trading; strategic

investments shall be handled by

the department designated by the

Chairman and fund management

shall be handled by the

finance/accounting department;

the performing units for real

property and other assets are the

departments that will use such

property or assets and the related

units of authority; mergers,

demergers, acquisitions or

- 66 -


transfer of shares shall be

handled by the performing unit

designated by the Chairman. The


assets, after evaluation and

approval as regulated, shall be


through the transaction process

of contract signing,

collection/payment, delivery, and

inspection/acceptance. Based on

the nature of assets, the relevant

operational process of the

internal control system shall be

complied with. In addition, real

property acquisition, derivatives,

mergers, demergers, acquisitions

or transfer of shares conducted

with a related party shall also be

conducted in compliance with

the provisions of Chapters 2-4 of

this Procedure.

transfer of shares shall be


designated by the Chairman. The


assets, after evaluation and

approval as regulated, shall be


through the transaction process

of contract signing,

collection/payment, delivery, and

inspection/acceptance. Based on

the nature of assets, the relevant

operational process of the

internal control system shall be

complied with. In addition, real

property acquisition, derivatives,

mergers, demergers, acquisitions

or transfer of shares conducted

with a related party shall also be

conducted in compliance with

the provisions of Chapters 2-4 of

this Procedure.

Article 5: Procedures for

Public Announcement and

Declaration:

1 Under any of the following

circumstances, the Company

shall, within 2 days from the

date of occurrence of the

event, publicly announce and

report the relevant

information about the


assets on the website

designated by the Competent

Authority using the specified

format and content according

to the nature of such event.

Article 5: Procedures for

Public Announcement and

Declaration:

1 Under any of the following

circumstances, the Company

shall, within 2 days from the


event, publicly announce

and report the relevant

information about the


assets on the website

designated by the

Competent Authority.

(1) Acquisition or disposal of

real property from or to a

(I) Reasons for amendment to

Subparagraph 1 of Paragraph 1

are the same as those for

Article 11.

(II) Where the equipment

acquired or disposed of for

business use is essential to the

Company's day-to-day

business, and too high of

reporting frequency caused by

too low of standards for public

announcement and declaration

will reduce the reference of

significance in the Company's

information disclosure if that

company is a big one, the

- 67 -


(1) Acquisition or disposal of

real property from or to a

related party, or


assets other than real

property from or to a

related party where the

transaction amount

reaches 20% of the

Company's paid-in

capital, 10% of the

Company's total assets, or

NT$300 million or more.

This excludes trading of

government bonds, bond

repurchases/resales, and

subscription or

redemption of domestic

money market funds

issued by securities

investment trust

enterprises.

(2) Mergers, demergers,

acquisitions, or transfer of

shares.

(3) Losses from derivatives

trading reaching the limits

on aggregate losses or

losses on individual

contracts set out in

Chapter 3 herein.

(4) Where the type of asset

acquired or disposed of is

equipment for business

use, the trading

counterparty is not a

related party, and the

transaction amount

related party, or


assets other than real

property from or to a

related party where the

transaction amount

reaches 20% of the

Company's paid-in

capital, 10% of the

Company's total assets, or


This excludes trading of

government bonds, bond


subscription or


money market funds.

(2) Mergers, demergers,

acquisitions, or transfer of

shares.

(3) Losses from derivatives

trading reaching the limits

on aggregate losses or

losses on individual

contracts set out in

Chapter 3 herein.

(4) In asset transactions other

than those provided in the

foregoing three

Subparagraphs or

investments in Mainland

China, the amount of each

transaction, the

cumulative transaction

amount within one year

dealing with the same

counterparty for targets of

the same nature by

existing Subparagraph 4 of

Paragraph 1 shall be amended

by heightening the standards

for public announcement up to

NT$1 billion for a public

company with paid-in capital

reaching NT$10 billion or

more so as to acquire or

dispose of equipment for

business use from or to a party

not related to the Company.

The amended provisions shall

be moved to Subparagraph 4

of Paragraph 1.

(III) The existing Items 4 and 5

of Subparagraph 4 under

Paragraph 1 will be moved to

Subparagraphs 5 and 6 of

Paragraph 1, respectively; the

existing Subparagraph 4 of

Paragraph 1 will be moved to

Subparagraph 7 of Paragraph

1.

(IV) Reasons for amendment

to the existing Item 2 of

Subparagraph 4 under

Paragraph 1 are the same with

those for Article 11. The

amended provisions shall be

moved to Item 3 of

Subparagraph 7 under

Paragraph 1.

(VI) In consideration of Article

31 specifying that any

alteration in the content of the

public announcement and

declaration which have been

publicly made shall be publicly

- 68 -


reaches one of the

following criteria:

1. A company with

paid-in capital of less

than NT$10 billion,

and the transaction

amount reaches

NT$500 million or

more.

2. A company with

paid-in capital of

NT$10 billion or more,

and the transaction

amount reaches NT$1

billion or more.

(5) Where the type of asset

acquired or disposed of is

real property for

construction use, the

trading counterparty is not

a related party, and the

transaction amount is


(6) Where land is acquired under

an arrangement engaging

others to build on the

company's own land,

engaging others to build

on rented land, joint

construction and

allocation of housing

units, joint construction

and allocation of

ownership percentages, or

joint construction and

separate sale, and the

amount the Company

expects to invest in the

acquisition or disposal,

the cumulative amount

within one year of the real

property acquisition or

disposal (acquisitions and

disposals shall be

separately calculated)

under the same

development plan, or the

cumulative amount within

one year of the

acquisition or disposal

(acquisitions and

disposals shall be

separately calculated) of

the same securities

reaching 20% of the

Company's paid-in capital

or NT$300 million or

more. "Within one year"

means the year preceding

the date of occurrence of

the current transaction.

Items duly announced in

accordance with the

provisions of the

"Regulations Governing

the Acquisition and

Disposal of Assets by

Public Companies" need

not be counted toward the

transaction amount.

However, the following

transactions are excluded:

1. Trading of government

bonds.

2. Trading of bond


announced within 2 days from

the alteration, Paragraph 3

shall be amended to clearly

specify that if the Company

makes an error or omission in

an item required by regulations

to be publicly announced and

is therefore required to correct

it, all the items shall be again

publicly announced and

reported in their entirety within

two days commencing

immediately from the date

when such error or omission

was known to the Company.

- 69 -


transaction is less than

NT$500 million.

(7) In asset transactions other

than those provided in the

foregoing six

Subparagraphs or

investments in Mainland

China, the amount of each

transaction, the

cumulative transaction

amount within one year

dealing with the same

counterparty for targets of

the same nature by

acquisition or disposal,

the cumulative amount

within one year of the real

property acquisition or

disposal (with separate

calculation by acquisition

and disposal) under the

same development plan,

or the cumulative amount

within one year of the

acquisition or disposal

(with separate calculation

by acquisition and

disposal) of the same

securities reaches 20% of

the Company's paid-in

capital or NT$300 million

or more. "Within one

year" means the year

preceding the date of

occurrence of the current

transaction. Items duly

announced in accordance

with the provisions of the

subscription or


money market funds.

3. Where the type of asset

acquired or disposed of

is equipment for

business use, the trading

counterparty is not a

related party, and the


less than NT$500

million.

4. Where land is acquired

under an arrangement

engaging others to

build on the company's

own land, engaging

others to build on

rented land, joint

construction and

allocation of housing

units, joint construction

and allocation of

ownership percentages,

or joint construction

and separate sale, and

the amount the

Company expects to

invest in the transaction

is less than NT$500

million.

5. Where the type of asset

acquired or disposed of

is real property for

construction use, the

trading counterparty is

not a related party, and


- 70 -


"Regulations Governing

the Acquisition and

Disposal of Assets by

Public Companies" need

not be counted toward the

transaction amount.

However, the following

transactions are excluded:

1. Trading of government

bonds.

2. Bond

repurchases/resales,

subscription or repurchase

of domestic money

market funds issued by

securities investment trust

enterprises.

2 The Company shall compile

monthly reports on the

status of derivatives

transactions conducted up

to the end of the preceding

month by itself and any of

its subsidiaries that are not

publicly-listed companies

in Taiwan. The information

shall be transmitted to the

information reporting

website specified by the

Competent Authority

before the 10th of each

month using the required

format.

3 At the time of public

announcement, if the

Company makes an error or

omission in an item

required by regulations to

is less than NT$500

million.

2 The Company shall compile

monthly reports on the

status of derivatives

transactions conducted up to

the end of the preceding

month by itself and any of

its subsidiaries that are not

publicly-listed companies in

Taiwan. The information

shall be transmitted to the

information reporting

website specified by the

Competent Authority before

the 10th of each month

using the required format.

3 At the time of public

announcement, if the

Company makes an error or

omission in an item required

by regulations to be publicly

announced and is therefore

required to correct it, all the

items shall be again publicly

announced and reported in

their entirety.

4 Where any of the following

circumstances occurs with

respect to a transaction that

the Company has already


reported in accordance with

Paragraph 1 herein, a public

announcement and

declaration of relevant

information shall be made

on the website designated by

- 71 -


be publicly announced and

is therefore required to

correct it, all the items

shall, within two days of

such error or omission

becoming known to the

Company, be again


reported in their entirety.

4 Where any of the following

circumstances occurs with

respect to a transaction that

the Company has already


declared in accordance with

Paragraph 1 herein, a


declaration of relevant

information shall be made

on the website designated

by the Competent Authority

within two days

commencing immediately

from the date of occurrence

of the event:

(1) Change, termination or

rescission of a contract

signed in regard to the

original transaction.

(2) The merger, demerger,


shares is not completed by

the scheduled date set

forth in the contract.

(3) Change to the originally


declared information.

the Competent Authority

within two days

commencing immediately

from the date of occurrence

of the event:

(1) Change, termination or

rescission of a contract

signed in regard to the

original transaction.

(2) The merger, demerger,


shares is not completed

by the scheduled date set

forth in the contract.

(3) Change to the originally


declared information.

- 72 -


Article 6 Procedures for Asset

Evaluation:

In acquiring or disposing of real

property or equipment where the

transaction amount reaches 20

percent of the Company's paid-in

capital or NT$300 million or

more, the Company, unless

transacting with a government

agency, engaging others to build

on its own land, engaging others

to build on rented land, acquiring

or disposing of equipment for

business use, or assets acquired

or disposed of through court

auction procedure in which the

court certificate may replace the

appraisal report or the CPA's

comment, unless dealing with a

government agency shall obtain

an appraisal report prior to the

date of occurrence of the event

from a professional appraiser and

shall further comply with the

following provisions.

1 Where due to special

circumstances it is necessary

to give a limited price,

specified price, or special

price as a reference basis for

the transaction price, the

transaction shall be

submitted for approval in

advance by the board of

directors, and the same

procedure shall be followed

for any future changes to the

terms and conditions of the

Article 6 Procedures for Asset

Evaluation:

In acquiring or disposing of real

property or equipment where the

transaction amount reaches 20

percent of the Company's paid-in

capital or NT$300 million or

more, the Company, unless

transacting with a government

institution, engaging others to

build on its own land, engaging

others to build on rented land,

acquiring or disposing of

equipment for business use, or

assets acquired or disposed of

through court auction procedure

in which the court certificate may

replace the appraisal report or the

CPA's comment, unless dealing

with a government institution

shall obtain an appraisal report

prior to the date of occurrence of

the event from a professional

appraiser and shall further

comply with the following

provisions.

1 Where due to special

circumstances it is necessary

to give a limited price,


price as a reference basis for

the transaction price, the


submitted for approval in

advance by the board of

directors, and the same

procedure shall be followed

for any future changes to the

In consideration that the

existing article actually means

the government agency only,

and that the transaction price

of the asset acquired or

disposed of from or to the

central and local government

agencies is less likely to be

manipulated, the acquisition of

expert advice is thereby

waived, and wording of

Paragraph 1 slightly revised.

- 73 -


transaction.

2 Where the transaction amount

is NT$1 billion or more,

appraisals from two or more

professional appraisers shall

be obtained.

3 If one of the following

situations occurs with regard

to the professional appraisal

report, the Company shall,

except that the price in such

report is higher than the

transaction price for the

asset acquisition or that the

price in such report is lower

than the transaction price for

the asset disposal, engage a

CPA to handle the case in

accordance with the

provisions of the Statement

of Auditing Standards No.

20 published by ARDF and

render a specific opinion

regarding the reason for the

discrepancy and the

appropriateness of the

transaction price:

(1) The discrepancy between the

appraisal result and the


20% or more of the

transaction amount.


appraisal results of two or

more professional

appraisers is 10 percent or

more of the transaction

amount.

terms and conditions of the

transaction.

2 Where the transaction

amount is NT$1 billion or

more, appraisals from two or

more professional appraisers

shall be obtained.

3 If one of the following

situations occurs with regard

to the professional appraisal

report, the Company shall,

except that the price in such

report is higher than the

transaction price for the

asset acquisition or that the

price in such report is lower

than the transaction price for

the asset disposal, engage a

CPA to handle the case in

accordance with the

provisions of the Statement

of Auditing Standards No.

20 published by ARDF and

render a specific opinion

regarding the reason for the

discrepancy and the

appropriateness of the

transaction price:


appraisal result and the


20% or more of the

transaction amount.


appraisal results of two or

more professional

appraisers is 10 percent

or more of the transaction

- 74 -


4 Not more than 3 months may

elapse between the date of

the appraisal report issued

by a professional appraiser

and the contract execution

date. Provided that where

the publicly announced

current value for the same

period is used and not more

than 6 months have elapsed,

an opinion may still be

issued by the original

professional appraiser.

5 Except that a limited price,


price is used as a reference

basis for the transaction

price, an appraisal report

and a CPA's opinion as

provided in Subparagraph 3

herein shall be obtained

within 2 weeks from the


event if an appraisal report

cannot be obtained in time

with proper reason.

amount.

4 Not more than 3 months may

elapse between the date of

the appraisal report issued

by a professional appraiser

and the contract execution

date. Provided that where

the publicly announced

current value for the same

period is used and not more

than 6 months have elapsed,

an opinion may still be

issued by the original

professional appraiser.

5 Except that a limited price,


price is used as a reference

basis for the transaction

price, an appraisal report

and a CPA's opinion as

provided in Subparagraph 3

herein shall be obtained

within 2 weeks from the


event if an appraisal report

cannot be obtained in time

with proper reason.

Article 8 Control Procedure for

the Acquisition and Disposal of

Assets by Subsidiaries:

1 The Company's subsidiaries

shall also formulate and

comply with their respective

"Handling Procedure for

Assets Acquisition and

Disposal." The Procedure

Article 8 Control Procedure for

the Acquisition and Disposal of

Assets by Subsidiaries:

1 The Company's subsidiaries

shall also formulate and

comply with their respective

"Handling Procedure for

Assets Acquisition and

Disposal." The Procedure

1. In accordance with Articles

14-2 and 181-2 of the

"Securities And Exchange

Act", the Company will set up

the positions for independent

directors in 2017 election of

directors, so the "results of the

audit" will be changed to the

"auditing report" which shall

be submitted to each

- 75 -


shall be adopted by the

Board and sent to each

supervisor and the

Shareholders Meeting for

approval. The same applies

to any subsequent

amendments.

2 The acquisition and disposal

of assets by the Company's

subsidiaries shall be

governed by their respective

"internal control system"

and "Handling Procedure

for the Acquisition or

Disposal of Assets". And

each subsidiary shall

compile a written report on

the transactions of

derivatives during the

preceding month (up to the

end of that month) and

submit it to the Company in

the beginning of each

month. The Company's

auditing unit shall list the

subsidiaries' operation of

assets acquisition and

disposal and the "Records of

derivatives transactions", as

one of the items for monthly

auditing. And its auditing

report shall be submitted to

each independent director,

and listed as an essential

item in its auditing report to

the Board.

3 Any of the Company's

subsidiaries, which is not a

shall be adopted by the

Board and sent to each

supervisor and the

Shareholders Meeting for

approval. The same applies

to any subsequent

amendments.

2 The acquisition and disposal

of assets by the Company's

subsidiaries shall be

governed by their respective

"internal control system"

and "Handling Procedure for

the Acquisition or Disposal

of Assets". And by the 5th

day of each month, each

subsidiary shall compile a

written report on assets

acquired or disposed of at

the price of NT$10 million

or more, singly or

cumulatively for

transactions of the same

nature during the preceding

month (up to the end of that

month), make a record of

the transactions in

derivatives during the

preceding month (up to the

end of that month), and

submit such report and

record to the Company. The

Company's auditing unit

shall include the asset

acquisition and disposal

operations of its subsidiaries

as one of its monthly audit

items, and the results of the

independent director instead of

supervisors. And such report

will be listed as an essential

item in the auditing report to

the Board.

2. In consideration that the

Company's subsidiaries have

formulated the "Handling

Procedure for the Acquisition

and Disposal of Assets" and

that they have reported each


assets to the Company's Board,

wording specifying "by the 5th

day of each month, each

subsidiary shall compile a

written report on assets

acquired or disposed of at the

price of NT$10 million or

more, singly or cumulatively

for transactions of the same

nature during the preceding

month" shall be deleted from

the regulation.

- 76 -


public company, shall, on

the same date of occurrence

of the event, report to the

Company on the acquisition

or disposal of assets that

meets the standards for


declaration, so that the

Company can make public

announcement and

declaration on the

designated website as

provided for by the

regulations.

audit shall then be included

as an essential item in the

auditing report to the Board

and supervisors.

3 Any of the Company's

subsidiaries, which is not a

public company, shall, on

the same date of occurrence

of the event, report to the

Company on the acquisition

or disposal of assets that

meets the standards for


declaration, so that the

Company can make public

announcement and

declaration on the

designated website as

provided for by the

regulations.

Article 11 Procedure for

resolution:

When the Company intends to

acquire or dispose of real

property from or to a related

party, or when it intends to

acquire or dispose of assets other

than real property from or to a

related party and the transaction

amount reaches 20% or more of

paid-in capital, 10% or more of

the company's total assets, or

NT$300 million or more, except

in the trading of government

bonds, bond repurchases/resales,

or subscription or redemption of

the domestic securities

investment trust

Article 11 Procedure for

resolution:

When the Company intends to

acquire or dispose of real

property from or to a related

party, or when it intends to

acquire or dispose of assets other

than real property from or to a

related party and the transaction

amount reaches 20% or more of

paid-in capital, 10 percent or

more of the Company's total

assets, or NT$300 million or

more, except in the trading of

government bonds or bond

repurchases/resales, or

subscription or redemption of

domestic money market funds,

1. The domestic money market

funds referred to in Paragraph

1 mean money market funds

issued by securities investment

trust institutions pursuant to

the Securities Investment Trust

and Consulting Act and with

permission from the Financial

Supervisory Commission, and

has been duly amended.


provisions of Chapter 2,

Section 1 Establishment of

Handling Procedure in the



Assets by Public Companies,

Article 6: "Where an Audit

- 77 -


enterprises-issued money market

funds, the performing unit shall

submit the following data to the

Audit Committee for approval

and to the Board for adoption by

resolution before entering into a

transaction contract and making

a payment:

1 The purpose, necessity, and

anticipated benefits for acquiring

or disposing of the asset.

2 The reason for choosing the

related party as a trading

counterparty.

3 With respect to the acquisition

of real property from a

related party, information

regarding appraisal of the

reasonableness of the

preliminary transaction

terms in accordance with the

exclusion clause of Article

12 or Article 13.

4 The date and price at which the

related party originally

acquired the real property,

the original trading

counterparty, and that

trading counterparty's

relationship to the Company

and the related party.

5 Monthly cash flow forecasts

for the year commencing

from the anticipated month

of signing of the contract,

and evaluation of the

necessity of the transaction,

and reasonableness of fund

the performing unit shall submit

the following information to the

Board for approval and to

supervisors for ratification before

entering into a transaction

contract and making a payment:

1 The purpose, necessity, and

anticipated benefits for acquiring

or disposing of the asset.

2 The reason for choosing the

related party as a trading

counterparty.

3 With respect to the acquisition

of real property from a

related party, information

regarding appraisal of the

reasonableness of the

preliminary transaction

terms in accordance with the

exclusion clause of Article

12 or Article 13.

4 The date and price at which

the related party originally

acquired the real property,

the original trading

counterparty, and that

trading counterparty's

relationship to the Company

and the related party.

5 Monthly cash flow forecasts

for the year commencing

from the anticipated month

of signing of the contract,

and evaluation of the

necessity of the transaction,

and reasonableness of fund

utilization.

Committee has been

established in accordance with

the provisions of the Act, when

the procedures for the


assets are adopted or amended

they shall be approved by

more than half of all Audit

Committee members and

submitted to the board of

directors for resolution."

- 78 -


utilization.

6 An appraisal report from a

professional appraiser or a

CPA's opinion obtained in

compliance with the

preceding article.

7 Restrictions and other

important stipulations

associated with the

transaction.

The calculation of the

transaction amounts referred

to in the preceding

paragraph shall be made in

accordance with Article 5,

Paragraph 1, Subparagraph 4

herein, and "within the

preceding year" as used

herein refers to the year



transaction. Items that have

been submitted in

accordance with the

"Regulations Governing the


Assets by Public

Companies" to the Audit

Committee for approval and

to the Board for adoption by

resolution--they need not be

counted toward the

transaction amount.

With respect to the acquisition or

disposal of business-use

equipment between the Company

and its subsidiaries, the

Company's Board may pursuant

6 An appraisal report from a

professional appraiser or a

CPA's opinion obtained in

compliance with the

preceding article.

7 Restrictions and other

important stipulations

associated with the

transaction.

The calculation of the

transaction amounts referred

to in the preceding

paragraph shall be made in

accordance with Article 5,

Paragraph 1, Subparagraph 4

herein, and "within the

preceding year" as used

herein refers to the year



transaction. Items that have

been submitted in

accordance with the

"Regulations Governing the


Assets by Public

Companies" to the Board for

approval and to the

supervisors for ratification

and are not required to be

counted toward the

transaction amount.

With respect to the acquisition or

disposal of business-use

equipment between the Company

and its subsidiaries, the

Company's Board may pursuant

to Article 4 delegate the

- 79 -


to Article 4 delegate the

Chairman to decide such matters

when the transaction is within a

certain amount and have the

decisions subsequently submitted

to the next Board meeting for

ratification.

Chairman to decide such matters

when the transaction is within a

certain amount and have the

decisions subsequently submitted

to the next Board meeting for

ratification.

Article 13: Response Procedure

When Estimated Transaction

Cost Is Lower Than

Transaction Price:

If the transaction cost evaluated

pursuant to the provisions in the

preceding Article is lower than

the transaction price, except for

the following circumstances in

Subparagraphs 1 and 2 where

objective evidence can be

presented with the reasonable,

specific opinions of a

professional real property

appraiser and a CPA, the

provisions of Subparagraph 3

shall be followed.

1 Where the related party

acquired undeveloped or leased

land for construction, it may

submit proof in compliance with

one of the following conditions:

(1) Where undeveloped land is

appraised in accordance

with the means in the

preceding Article, and

structures according to

the related party's

construction cost plus

reasonable construction

profit are valued in

Article 13: Response Procedure

When Estimated Transaction

Cost Is Lower Than

Transaction Price:

If the transaction cost evaluated

pursuant to the provisions in the

preceding Article is lower than

the transaction price, except for

the following circumstances in

Subparagraphs 1 and 2 where

objective evidence can be

presented with the reasonable,

specific opinions of a

professional real property

appraiser and a CPA, the

provisions of Subparagraph 3

shall be followed.

1 Where the related party

acquired undeveloped or leased

land for construction, it may

submit proof in compliance with

one of the following conditions:

(1) Where undeveloped land is

appraised in accordance

with the means in the

preceding Article, and

structures according to

the related party's

construction cost plus

reasonable construction

profit are valued in excess

According to Article 33-1,

Paragraph 1 of the "Regulations

Governing the Acquisition and

Disposal of Assets by Public

Companies", where an Audit

Committee has been established

in accordance with the

provisions of the Act, the

provisions regarding supervisors

shall apply mutatis mutandis to

the Audit Committee, and "The

supervisors " in "The

supervisors shall comply with

Article 218 of the Company

Act" will be corrected to read

"All independent directors".

- 80 -


excess of the actual

transaction price. The

"reasonable construction

profit" shall be deemed

the average gross

operating profit margin of

the related party's

construction division over

the most recent 3 years or

the gross profit margin

for the construction

industry for the most

recent period as

announced by the

Ministry of Finance,

whichever is lower.

(2) Completed transactions by

unrelated parties within

the preceding year

involving other floors of

the same property or

neighboring parcels of

land, where the land area

and transaction terms are

similar after calculation

of reasonable price

discrepancies in floor or

area land prices in

accordance with standard

property market practices.

(3) Completed leasing

transactions by unrelated

parties for other floors of

the same property within

the preceding year, where

the transaction terms are


of reasonable price

of the actual transaction

price. The "reasonable

construction profit" shall

be deemed the average

gross operating profit

margin of the related

party's construction

division over the most

recent 3 years or the gross

profit margin for the

construction industry for

the most recent period as

announced by the

Ministry of Finance,

whichever is lower.

(2) Completed transactions by

unrelated parties within

the preceding year

involving other floors of

the same property or

neighboring parcels of

land, where the land area

and transaction terms are


of reasonable price

discrepancies in floor or

area land prices in

accordance with standard

property market practices.

(3) Completed leasing

transactions by unrelated

parties for other floors of

the same property within

the preceding year, where

the transaction terms are


of reasonable price

discrepancies among

- 81 -


discrepancies among

floors in accordance with

standard property leasing

market practices.

2 Where the Company


related party provides evidence

that the transaction terms are

similar to those completed for

the acquisition of neighboring or

closely valued parcels of land of

a similar size by unrelated parties

within the preceding year.

Completed transactions for

neighboring or closely valued

parcels of land in the preceding

paragraph in principle refers to

parcels on the same or an

adjacent block and within a

distance of not more than 500

meters or parcels close in

publicly announced current

value; completed transactions in

land of similar size in principle

refers to transactions completed

by unrelated parties for parcels

with a land area of not less than

50% of the property in the

planned transaction; "within the

preceding year" refers to the year

preceding the date of occurrence

of the acquisition of the real

property.

3 Where the Company acquires

real property from a related party

and the results of appraisals

conducted in accordance with the

provisions in the preceding

floors in accordance with

standard property leasing

market practices.

2 Where the Company


related party provides evidence

that the transaction terms are

similar to those completed for the

acquisition of neighboring or

closely valued parcels of land of

a similar size by unrelated parties

within the preceding year.

Completed transactions for

neighboring or closely valued

parcels of land in the preceding

paragraph in principle refers to

parcels on the same or an

adjacent block and within a

distance of not more than 500

meters or parcels close in

publicly announced current

value; completed transactions in

land of similar size in principle

refers to transactions completed

by unrelated parties for parcels

with a land area of not less than

50% of the property in the

planned transaction; "within the

preceding year" refers to the year

preceding the date of occurrence

of the acquisition of the real

property.

3 Where the Company acquires

real property from a related party

and the results of appraisals

conducted in accordance with the

provisions in the preceding

Article are uniformly lower than

- 82 -


Article are uniformly lower than

the transaction price, and under

no circumstances described in

Subparagraphs 1 and 2 of this

Article, the following steps shall

be taken:

(1) A special reserve shall be set

aside in accordance with


the Securities and

Exchange Act against the

difference between the

property transaction price

and the appraised cost,

and may not be

distributed or used for

capital increase or

issuance of bonus shares.

Such reserve shall not be

used until the Company

has recognized a loss on

decline in market value of

the assets it purchased at

a premium, or they have

been disposed of, or

adequate compensation

has been made, or the

status quo ante has been

restored, or there is other

evidence confirming that

there was nothing

unreasonable about the

transaction, and the

Competent Authority has

given its consent.

(2) The independent directors

shall comply with Article

218 of the Company Act.

the transaction price, and under

no circumstances described in

Subparagraphs 1 and 2 of this

Article, the following steps shall

be taken:

(1) A special reserve shall be set

aside in accordance with


the Securities and

Exchange Act against the

difference between the

property transaction price

and the appraised cost,

and may not be

distributed or used for

capital increase or

issuance of bonus shares.

Such reserve shall not be

used until the Company

has recognized a loss on

decline in market value of

the assets it purchased at

a premium, or they have

been disposed of, or

adequate compensation

has been made, or the

status quo ante has been

restored, or there is other

evidence confirming that

there was nothing

unreasonable about the

transaction, and the

Competent Authority has

given its consent.

(2) The supervisors shall comply

with Article 218 of the

Company Act.

(3) Actions taken pursuant to

- 83 -


(3) Actions taken pursuant to

Items 1 and 2 shall be

reported to the

Shareholders Meeting,

and the details of the


disclosed in the annual

report and any investment

prospectus.

Items 1 and 2 shall be

reported to the

Shareholders Meeting,

and the details of the


disclosed in the annual

report and any investment

prospectus.

Article 16 Internal Audit

System:

1 The Company's internal

auditors shall periodically

make a determination of the

suitability of internal

controls on derivatives and

conduct a monthly audit of

how faithfully derivatives

trading by the trading

department adheres to the

procedures for engaging in

derivatives trading, and

prepare an audit report. If

any material violation is

discovered, such auditors

shall immediately report to

the Chairman or the

high-level manager

designated by the Chairman

and also notify in writing all

independent directors.


auditors shall include derivatives

trading into the audit plan.

Annually before end of February,

they shall file a report to the

Competent Authority on the

execution of their audit plan in

Article 16 Internal Audit

System:


auditors shall periodically

make a determination of the

suitability of internal

controls on derivative

trading and conduct

monthly audits of how

faithfully derivatives

trading by the trading

department adheres to the

procedures for engaging in

derivatives trading, and

prepare audit reports. If any

material violation is



the Chairman or the

high-level manager

designated by the Chairman

and also notify all

supervisors in writing.


auditors shall include derivatives

trading into the audit plan.

Annually before end of February,

they shall file a report to the

Competent Authority on the


provisions of Articles 14-2 and

181-2 of the Securities and

Exchange Act, the Company

will establish the positions of

independent directors in 2017

election of directors, so "notify

in writing all supervisors" will

be corrected to read "notify in

writing all independent

directors".

- 84 -


the previous year. And latest

before end of May, they shall file

a report to the Competent

Authority for perusal on the

improvements of irregularities in

the audit.

execution of their audit plan in

the previous year. And latest

before end of May, they shall file

a report to the Competent

Authority for perusal on the

improvements of irregularities in

the audit.

Article 18

When engaged in mergers,

demergers, acquisitions or share

transfers, the Company shall,

before convening a Board

meeting to approve such actions,

engage a CPA, attorney or

securities underwriter to provide

opinions on the reasonableness

of the share exchange ratio,

acquisition price, the cash or

other property to be distributed

to shareholders, etc. The

proposal shall be submitted to

the Board for deliberation and

passage. The requirement for an

opinion of the aforesaid experts

is waived if the Company merges

with a subsidiary in which it

holds 100% of its shares or total

capital whether directly or

indirectly, or if a merger takes

place between subsidiaries in

which the Company holds 100%

of their shares or total capital,

whether directly or indirectly.

Article 18

When engaged in mergers,

demergers, acquisitions or share

transfers, the Company shall,

before convening a Board

meeting to approve such actions,

engage a CPA, attorney or

securities underwriter to provide

opinions on the reasonableness

of the share exchange ratio,

acquisition price, the cash or

other property to be distributed to

shareholders, etc. The proposal

shall be submitted to the Board

for deliberation and passage.

Considering that the

Company's merger of its

100%-invested subsidiary or

the merger of its

100%-invested subsidiaries

pursuant to the Business

Mergers and Acquisitions Act

is, in spirit, regarded as an

organizational reorganization

within a group, hence

involving no such actions as

share exchange ratio

agreement or distribution of

cash or other property to

shareholders, regulations for

such mergers shall be relaxed

by exempting the requirement

for expert opinions on the

reasonableness of the share

exchange ratio.

- 85 -


Article 26

Where the Company's

acquisition and disposal of assets

needs the Board's approval as

provided for in this Handling

Procedure or other laws and

regulations, the Board shall take

into full consideration each

independent director's opinions

and shall have such opinions and

reasons for agreement or

objection be recorded in the

meeting minutes.

Article 26

Where the Company's matter

needs the Board's approval as

provided for in this Handling

Procedure or other laws and

regulations, if a director

expresses dissent and it is

contained in the minutes or a

written statement, the Company

shall submit the director's

dissenting opinion to each

supervisor. The Board shall

additionally take into full

consideration each independent

director's opinions and record

such opinions and reasons for

agreement or objection in the

meeting minutes.

This Article has stipulated that

where there is any dissent in the

Board from the Company's

acquisition or disposal of assets,

the Board shall, as provided by

this Handling Procedure, take


independent director's opinions

and shall have such opinions and

reasons for agreement or

objection be recorded in the

meeting minutes. To simplify this

Procedure, wording specifying

"if a director expresses dissent

which is recorded in the minutes

or a written statement, the

Company shall submit the

director's dissenting opinion to

each supervisor, and" shall be

deleted therefrom.

Article 27

This Handling Procedure shall be

submitted to the Audit

Committee and the Board for

approval, and then to the

Shareholders Meeting for final

approval and implementation.

The same applies to any

subsequent amendments.

Article 27

These Handling Procedures, after

resolution in the board of

directors' meeting, shall be

submitted to each supervisor and

subsequently to the shareholders'

meeting for approval. They shall

take effect after approval in the

shareholders' meeting. If a

director expresses dissent which

is recorded in the minutes or a


shall submit the director's

dissenting opinion to each

supervisor. The Board shall




provisions of Articles 14-2 and

181-2 of the Securities and

Exchange Act, the Company

shall establish the positions of

independent directors in the

2017 election of directors; "to

each supervisor" shall be

amended to read "to the Audit

Committee".

In addition, to simplify this

Procedure, wording specifying

"If a director expresses dissent

which is recorded in the minutes

or a written statement, the


director's dissenting opinion to

- 86 -





meeting minutes.

each supervisor. The Board shall






meeting minutes." shall be

deleted therefrom.

- 87 -

3-6 Amendment to the Company's Procedures for Extending Loans to Others and

Procedure for Endorsement and Guarantee Operations

Agenda: The amendment to the "Taiwan Land Development Corporation Procedures

for Extending Loans to Others" and "Taiwan Land Development Corporation

Procedure for Endorsement and Guarantee Operations" are hereby submitted for

resolution.

Description:

1. In accordance with the "Regulations Governing the Exercise of Powers by Audit

Committees of Public Companies" and in line with the needs of the

Company's land development, building business development, and providing

mutual endorsements/guarantees among companies in same type of business

within the group for pre-sales and sales operation, amendments to partial

articles in "Taiwan Land Development Corporation Procedures for Extending

Loans to Others" and "Taiwan Land Development Corporation Procedure for

Endorsement and Guarantee Operations" are hereby proposed pursuant to the

"Regulations Governing Loaning of Funds and Making of

Endorsements/Guarantees by Public Companies."


handbook.

3. The amendment proposal was approved at the 37th meeting of the 17th-term

Board of Directors on May 3, 2017.

Resolution:

- 88 -

Comparison table of existing and amended articles in the "Procedures for

Extending Loans to Others" of Taiwan Land Development Corporation


Article 10 Other matters to be noted

1. The Company's internal auditors shall

audit the Procedures for Extending

Loans to Others and its execution at

least once every quarter and

maintain written records. If any

material violation is discovered, such

auditors shall immediately report to

each independent director in writing.

2. Where as a result of changes of

condition in the Company, the

entity for which a loan is made no

longer meets the regulations, or the

loan amount exceeds the limit, the

handling unit shall adopt

improvement plans and submit

such plans to the Chairman for

approval, and then to all

independent directors, and shall

complete the improvement

according to the time frame set out

in the plan. The results of

execution shall be reported to the

Board.

Article 10 Other matters to be noted

1. The Company's internal auditors

shall audit the Procedures for

Extending Loans to Others and its

execution at least once every

quarter and maintain written

records. If any material violation is

discovered, such auditors shall

immediately report to each

supervisor in writing.


condition in the Company, the

entity for which a loan is made no

longer meets the regulations, or

the loan amount exceeds the limit,

the handling unit shall adopt

improvement plans and submit

such plans to the Chairman for

approval, and then to all

supervisors, and shall complete the

improvement according to the time

frame set out in the plan. The

results of execution shall be

reported to the Board.

In keeping with the

establishment of an

Audit Committee,

relevant


amended.

Article 12 Amendment and

implementation

1. This Procedure shall be submitted to

the Audit Committee for approval,

then to the Board for adoption by

resolution, and finally to the

Shareholders Meeting for approval

and implementation. The same

applies to any subsequent

amendments. If a director expresses

dissent which is recorded in the

minutes or a written statement, the


implementation

1. This Procedure, after adoption by the

Board, shall be submitted to all

supervisors and then to the

Shareholders Meeting for approval

and implementation. The same


amendments. If a director

expresses dissent which is

recorded in the minutes or a


In keeping with the

establishment of an

Audit Committee,

relevant


amended.

- 89 -

Company shall submit the director's

dissent to each supervisor and then

to the Shareholders Meetings for

discussion.

2. If there are independent directors on

the Board, the Board shall take into

full consideration each independent

director's opinions, and clearly

record each independent director's

agreement or objection and reasons

for objection in the Board's meeting

minutes.

shall submit the director's dissent

to each supervisor and then to the

Shareholders Meetings for

discussion.

2. If there are independent directors on

the Board, the Board shall take


independent director's opinions,

and clearly record each

independent director's agreement

or objection and reasons for

objection in the Board's meeting

minutes.

- 90 -

Comparison table of existing and amended articles in the "Procedure for

Endorsement and Guarantee Operations" of Taiwan Land Development

Corporation


Article 4 Endorsement/guarantee

amount limits

The total amount of

endorsements/guarantees the

Company makes for others shall

not exceed the Company's net

worth of the current period by

two times; therein, the total

amount of


Company makes for a single firm

shall not exceed the Company's

net worth of the current period by

one time.

The total amount of

endorsements/guarantee the

Company and its subsidiaries

altogether make shall not exceed

the Company's net worth of the

current period by two times.

If the total amount of



altogether make reaches 50% or

more of the net worth of the

Company, an explanation of the

necessity and reasonableness

thereof shall be given at the


Article 4 Endorsement/guarantee

amount limits

The total amount of


Company makes for others shall

not exceed 50% of the Company's

net worth in the current period;

the total amount of


Company makes for a single firm

shall not exceed 30% of the

Company's net worth in the

current period.

The total amount of

endorsements/guarantee the


altogether make shall not exceed

50% of the Company's net worth

in the current period.

In line with the Company's

requirements in land

development, building

business development, and

providing mutual

endorsements/guarantees

among companies in same

type of business within the

group for pre-sales and sales

operation, amendments to the

relevant regulations have

been proposed pursuant to

the "Regulations Governing

Loaning of Funds and

Making of

Endorsements/Guarantees by

Public Companies."

Article 7 Other matters to be

noted

1. The Company's internal

auditors shall audit the

Procedure for Endorsement

and Guarantee Operations

Article 7 Other matters to be

noted

1. The Company's internal

auditors shall audit the



In keeping with the


Committee, relevant


amended.

- 91 -

and its execution at least

once every quarter and

formulate written records.

If any material violation is



each independent director

in writing.

2. Where it is necessary for the

Company to exceed the

limits set out in the


and Guarantee Operations to

satisfy its business

requirements, and where the

conditions set out in the



are complied with, it shall

obtain approval from the

Board and half or more of

the directors shall act as joint

guarantors for any loss that

may be caused to the

Company by the excess

endorsement/guarantee. It

shall also amend the



accordingly and submit the

same to the Shareholders

Meeting for ratification. If

the shareholders' meeting

does not give consent, the

Company shall adopt a plan

to discharge the amount in

excess within a given time

limit.


condition in the Company,

and its execution at least

once every quarter and

maintain written records. If

any material violation is



each supervisor in writing.

2. Where it is necessary for the

Company to exceed the

limits set out in the


and Guarantee Operations to

satisfy its business

requirements, and where the

conditions set out in the



are complied with, it shall

obtain approval from the

Board and half or more of

the directors shall act as joint

guarantors for any loss that

may be caused to the

Company by the excess

endorsement/guarantee. It

shall also amend the



accordingly and submit the

same to the Shareholders

Meeting for ratification. If

the shareholders' meeting

does not give consent, the

Company shall adopt a plan

to discharge the amount in

excess within a given time

limit.


condition in the Company,

the entity for which an

- 92 -

the entity for which an

endorsement/guarantee is

made no longer meets the

regulations of the Procedure

or the amount exceeds the

limit, the handling unit shall

adopt improvement plans,

submit such plans to each

independent director, and


according to the time frame

set out in the plan.

endorsement/guarantee is

made no longer meets the

regulations, or the amount

exceeds the limit, the

handling unit shall adopt

improvement plans and

submit such plans to each

supervisor, and shall


according to the time frame

set out in the plan.


implementation

1. This Procedure shall be

submitted to the Audit

Committee for approval,

then to the Board for

adoption by resolution, and

finally to the Shareholders

Meeting for approval and

implementation. The same


amendments. If a director



written statement, the


director's dissent to each

supervisor and then to the


discussion.

2. If there are independent

directors on the Board, the

Board shall take into full

consideration each

independent director's

opinions, and shall clearly

record each independent

director's agreement or


implementation

1. This Procedure, after adoption

by the Board, shall be

submitted to all supervisors

and then to the Shareholders

Meeting for approval and

implementation. The same


amendments.If a director



written statement, the


director's dissent to each

supervisor and then to the


discussion.

2. If there are independent

directors on the Board, the

Board shall take into full

consideration each

independent director's

opinions, and shall clearly

record each independent

director's agreement or

objection and reasons for

objection in the Board's

In keeping with the


Committee, relevant


amended.

- 93 -

objection and reasons for

objection in the Board's

meeting minutes.

3. If any of the Company's

subsidiaries intends to make

endorsements/guarantees for

others, the Company shall

urge the subsidiary to

establish an operational

procedure for lending,

endorsements and guarantees

and submit such procedure to

its Board and Shareholders

Meeting for resolution and

implementation.

4. When one of the Company's



others, it shall fill in the

credit report and opinions,

formulate the relevant

conditions and submit all

information to its Board for

adoption by resolution.


subsidiaries has made


others, it shall periodically

provide relevant information

to the Company for the

purposes of public

announcement, declaration,

and review.

meeting minutes.




others, the Company shall

urge the subsidiary to

establish an operational

procedure for lending,

endorsements and guarantees

and submit such procedure to

its Board and Shareholders

Meeting for resolution and

implementation.

4. When one of the Company's



others, it shall fill in the

credit report and opinions,

formulate the relevant

conditions and submit all

information to its Board for

adoption by resolution.


subsidiaries has made


others, it shall periodically

provide relevant information

to the Company for the

purposes of public

announcement, declaration,

and review.

- 94 -

3-7 The Company's private placement for cash capital increase with the issuance

of new shares.

Agenda: The Company's proposal to conduct private placement for cash capital increase

with the issuance of new shares is hereby submitted for resolution.

Description:

1. To facilitate the Company's future development, the Company will issue not

more than 100,000,000 common shares for cash capital increase through

private placement in accordance with Article 43-6 of the Securities and

Exchange Act. The private placement proposal is submitted to the general

Shareholders Meeting so that the Board may be authorized to execute the

proposal depending on actual requirements and in accordance with the

following principles in not more than three installments within one year of the

date of resolution by the general Shareholders Meeting.

2. Basis and reasonability for pricing of private placements:

(1) Basis for pricing of private placement: The reference price for privately

placed shares shall be the higher of the following two calculations: the

simple average closing price of the common shares for either 1, 3, or 5

business days before the price determination date, after adjustment for

any distribution of stock dividends, cash dividends or capital reduction;

the simple average closing price of the common shares for the 30 business

days before the price determination date, after adjustment for any

distribution of stock dividends, cash dividends, or capital reduction.

(2) The price of the private placement per share shall be not less than 80% of

the reference price and also not less than NT$12. The price for the current

private placement is temporarily set at NT$12 per share. The actual price

shall be proposed to the general Shareholders Meeting which shall

authorize the Board to determine a price, provided that it remains within

the range as resolved by the shareholders' meeting, depending on the

situation of specific persons and market conditions.

(3) The price of the private placement of common shares shall be based on the

Company's future prospect and share prices. The privately placed shares

may not be sold within three years following the delivery date unless

otherwise stated in Article 43-8 of the Securities and Exchange Act.

Privately placed shares are subject to such limitations and the eligibility

of placees is strictly regulated. Therefore, such basis for pricing of private

placement shall be deemed as reasonable.

- 95 -

3. Method and purpose for selecting the specific persons, necessity, and anticipated

benefits:

(1) The placees shall be strategic investors who conform to the relevant

regulations in Article 43-6 of the Securities and Exchange Act.

(2) Method and purpose for selecting the specific persons, necessity, and

anticipated benefits:

1. The main objective of selecting strategic investors is to increase the

Company's market share through the technologies, brand awareness,

and global market channels of strategic investors.

2. Incorporating strategic investors can increase the Company's benefits in

all aspects; therefore, selecting strategic investors is necessary.

3. However, to date, the Company has not decided on any placee.

4. Necessary reason for private placement:

(1) Reason for not adopting public offering:

In response to the strategic investment partnership plan proposed for the

Company's long-term development, the proposal for private placement

will be submitted to the Shareholders Meeting for approval. It is

expected that such proposal can effectively reduce funding costs and

ensure efficiency in capital acquisition. The rule that shares cannot be

transferred within three years of private placement of securities will

further ensure the long-term cooperation between the Company and its

strategic partners; in addition, the authorized Board will conduct the

private placement depending on the actual requirements of the

Company's operation, which will also effectively enhance the mobility

and flexibility of the Company's capital acquisition. The implementation

of the plan shall involve investment in the use of cloud technology in

industries such as film and television, entertainment, new media, health

care, and Internet of things, which will be conducive to shareholders

equity, therefore the Company will not adopt public offering and will, in

accordance with the provisions of the Securities and Exchange Act and

other relevant regulations, conduct the private replacement of common

shares.

(2) Use of funds raised through private placement and anticipated benefits:

1. Use of funds: In addition to enhancing the Company's competitiveness

through collaboration with strategic investors, the funds acquired

through private placement will be used to develop and activate the

Company's assets and develop its overseas markets.

2. Anticipated benefits: Private placement is anticipated to increase

flexibility and mobility of capital acquisition, activate the Company's

assets, extend the Company's global presence, and improve future

- 96 -

operational performance.

5. The rights and obligations to the issuance of common shares through private

placement are, in principle, identical to those of common shares already

issued by the Company. However, according to the Securities and Exchange

Act, common shares issued through private placement may not be transferred

within three years following the delivery date, unless as otherwise specified in

Article 43-8 of the Securities and Exchange Act. Three years after the

delivery date, the Board shall be authorized to file with the FSC for

retroactive handling of public issuance procedures, after obtaining a letter

issued by the TWSE acknowledging that the securities meet the standards for

listing.

6. If criteria, project items, progress of use of funds, anticipated benefits, and other

unresolved matters concerning the issuance of common shares through private

placement are subject to changes by the Competent Authority or changes in

the objective environments, such changes shall be proposed for the

Shareholders Meeting to authorize the Board to redress them according to

related regulations.

7. The Chairman shall be authorized to determine methods for selecting placees by

prioritizing the consideration that such method can directly or indirectly

benefit the Company's future operations. It is expected that the number of

private placement shares will be only 11.62% of the total shares after private

placement. Therefore, the proposed private placement will not exert material

influence on the Company's management rights.

8. The proposal was approved at the 35th session of the 17th Board of Directors on

March 23, 2017.

Resolution:

- 97 -

4. Elections

Agenda: Election of the Company's 18th-term directors (including 3 independent

directors).

Description:

1. The directors and supervisors of the current term will remain in office until June

30, 2017. However, in accordance with the provisions in Article 14-4,

Paragraph 1 of the Securities and Exchange Act, Article 181-2 of the same Act,

and the FSC Jin-Guan-Zhen-Fa-Zi No. 10200531121 Letter dated December 31,

2013, the Company shall establish an Audit Committee in lieu of supervisors

when the current term of office of directors and supervisors expires. A

comprehensive election of directors for the new term shall be held in the

Shareholders Meeting scheduled for June 28, 2017.


the 17th-term Board of Directors on March 23, 2017. Pursuant to the

regulations in Article 19 of the Company's Articles of Incorporation, nine

directors, including three independent directors, shall be elected in the

upcoming Shareholders Meeting.

3. The new directors will take office immediately after the Shareholders Meeting

for a term of three years from June 28, 2017 to June 27, 2020; directors shall be


- 98 -

5. Questions and Motions

- 99 -

Appendix 1

Articles of Incorporation for Taiwan Land Development Corporation

2016.06.29 Revision approved at AGM 2016

Chapter 1 General Provisions

Article 1 The Company is engaged in the provision of land development services that facilitate

economic development.

Article 2 The full name of the Company is Taiwan Land Development Corporation, organized in

accordance with the Company Act.

Article 3 The headquarters of the Company is registered in Taipei City, Taiwan. The Company may

establish branch offices in Taiwan or abroad according to business requirements.

Article 4 The announcements made by the Company shall be published in accordance with the law

or regulations set by the competent authority.

Article 5 The Company's investment shall be exempt from the 40 percent restriction specified in

Article 13 of the Company Act in relation to the percentage of total investment amount that

can be made with a company's paid-up capital. However, all investment related matters are

subject to approval by the Board of Directors.

The Company shall provide guarantee on its affiliated companies as required for business

operations.

Chapter 2 Shares

Article 6 The Company's total capital is set at NT$9,900,000,000, divided into 990,000,000 shares at

NT$10 par value. The Board of Directors is authorized to issue the unissued shares.

Article 7 The Company’s shares shall be registered and signed or sealed by at least three directors.

The shares shall be issued in accordance with the law.

When issuing the shares, the Company may opt to not print any share certificates or to print

the separately-issued shares on a combined basis. The Company should however engage a

centralized securities depository institute to register or safeguard the shares.

The above rules also apply to corporate bonds.

Article 8 Shareholders of the Company shall complete signature and seal cards to be retained by the

Company for records. The signature and seal cards are used for the purpose of verification

when the shareholders collect dividends, bonuses, or exercise other shareholder rights in

writing.

Article 9 All stock-related matters shall be governed by the Regulations Governing the

Administration of Shareholder Services of Public Companies and other relevant laws.

Chapter 3 Scope of Business

Article 10 The Company's business scope includes:

1. D501010 Hot Spring Providers

2. F401010 International Trade

3. H701010 Residence and Buildings Lease Construction and Development

- 100 -

4. H701020 Industrial Factory Buildings Lease Construction and Development

5. H701030 Funeral Facility Lease Construction and Development

6. H701040 Specialized Field Construction and Development

7. H701050 Public Works Construction and Investment

8. H701060 New County and Community Construction and Investment

9. H701070 Land Levy and Delimit

10. H701080 Reconstruction within the renewal area

11. H702010 Construction Management

12. H703090 Real Estate Commerce

13. H703100 Real Estate Rental and Leasing

14. H703110 Senior Citizen's Development

15. H705010 National Private Property Management

16. HZ02010 Financial Institution Creditor's Right (Money) Purchase

17. I102010 Investment Consulting

18. JB01010 Exhibition Services

19. J601010 Arts and Literature Service

20. A101020 Food Crops

21. A101030 Special Crops

22. A101050 Flower Gardening

23. A102020 Agricultural Product Preparations

24. A102060 Grain Commerce

25. A102080 Horticulture

26. A199990 Other Agriculture

27. A401010 Cattle

28. A401020 Animal Husbandry

29. A401040 Livestock Farming

30. A401990 Other Livestock Farming

31. F203010 Retail sale of Food and Groceries

32. F203020 Retail Sale of Tobacco and Alcoholic Drinks

33. F501030 Coffee/Tea Shops and Bars

34. F501050 Public Houses and Beer Halls

35. F501060 Restaurants

36. J603010 Live Venues

37. ZZ99999 In addition to the approved business items, the Company is also allowed to

operate other business not prohibited or restricted by law.

Chapter 4 Meeting of Shareholders

Article 11 The Company's shareholder meetings are divided into two different types: general and

special shareholders meetings. A general shareholders meeting is to be held once annually,

called by the Board of Directors within six months after the end of each fiscal year. Unless

stated otherwise in the Company Act, special meetings are called by the Board of Directors

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or Supervisory Board when deemed necessary. Shareholders holding more than 3% of the

total number of outstanding shares for a continuous year may request the Board of

Directors to call for a special meeting by submitting a written proposal setting forth therein

the subjects for discussion and the reasons.

Article 12 All shareholders shall be informed of the date, location, and agenda 30 days before a

general meeting or 15 days before a special meeting is convened.

Article 13 A shareholder, if unable to attend the shareholders' meeting, may appoint a proxy to attend

on the shareholder's behalf by executing power of attorney, stating therein the scope of

power authorized to the proxy. Regulations for proxy attendance, except those governed by

Article 177 of the Company Act, shall be conducted in accordance with the Regulations

Governing the Use of Proxies for Attendance at Shareholder Meetings of Public.

Article 14 The Chairman shall chair all shareholders meetings. If the Chairman is unable to attend, the

Chairman may appoint one of the directors to act on the Chairman's behalf. If no delegate is

appointed by the Chairman, one shall be elected from among the directors.

Article 15 Matters to be resolved by the shareholders meeting:

1. Establishment and amendment of the Articles of Incorporation for the Company.

2. Election and discharge of directors and supervisors.

3. Examination of the financial statements and books of accounts prepared and submitted by

the Board of Directors and supervisors' report. An inspector may be appointed for the

purpose of examination.

4. Resolutions regarding issuance of new shares through capitalization of earnings and

capital reserve.

5. Resolutions regarding capital reduction.

6. Resolutions regarding the distribution of earnings and make-up of deficits.

7. Transfer of all or any essential part of the Company's business or assets; or acceptance of

the transfer of another’s complete business or assets that has great bearing on the business

operation of the Company.

8. Merger and divestment of the Company.

9. Resolutions regarding other important matters commissioned.

Article 16 Resolutions at shareholders meetings shall, unless otherwise provided for under the

Company Act, be adopted by a majority vote of the shareholders present who represent

more than one-half of the total number of voting shares. When the number of shareholders

present does not constitute the quorum prescribed in the preceding article, but those present

represent one-third or more of the total number of issued shares, a tentative resolution may

be passed by a majority of those present. A notice of such tentative resolution shall be given

to each of the shareholders, and a Shareholders meeting reconvened within one month. If

bearer share certificates have been issued, such tentative resolutions shall also be publicly

announced.

In the aforesaid meeting of shareholders, if the tentative resolution is again adopted by a

majority of those present who represent one-third or more of the total number of issued

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shares, such tentative resolutions shall be deemed to be a resolution under the preceding

paragraph (1).

Article 17 Unless otherwise stipulated by law, a shareholder shall have one vote per each share in

possession.

Article 18 Resolutions adopted at shareholders' meetings shall be recorded in the meeting minutes and

signed or sealed by the chairman of the meeting. The signed minutes shall be delivered to

all shareholders within 20 days after each meeting.

The preparation and delivery of meeting minutes can be made in electronic form.

The meeting minutes prescribed in the preceding paragraph may be delivered via public

announcement.

The minutes must note the date and venue of the meeting, the Chairman's name, the method

of resolution, and the proceedings and results of various meeting agenda items. Meeting

minutes must be preserved for as long as the company exists. The attendance list bearing the

signatures of shareholders present at the meeting and the powers of attorney of proxies shall

be retained for at least a year.

Chapter 5 Board of Directors

Article 19 The Company shall appoint seven to nine directors (with at least three being independent

directors) who shall comprise the Board of Directors. The Board of Directors is authorized

to determine the number of directors. Directors shall serve a term of three years and may be


The Company adopts a candidate nomination system for the election of directors, and the

shareholders shall elect the directors from among the nominees listed on the roster of

director candidates. The professional qualifications, restrictions on both shareholding and

concurrent positions held, determination of independence, method of nomination and

election, and other requirements with regard to the independent directors shall be set forth

in accordance with relevant laws and regulations. Independent and non-independent

directors shall be elected at the same time, but the number of elected candidates shall be

separately calculated. A director who is from or represents a government agency or an

institutional shareholder may, owing to the change of the director's functional duties, be

replaced by another person. When one-third of the positions on the Board of Directors

become vacant, or when all supervisors have been discharged, a special meeting of

shareholders shall be called within sixty days to elect succeeding directors. A replacement

or succeeding director elected after a by-election is to fulfill the unexposed term of office of

the predecessor.

The percentage of shareholdings of all the directors elected in accordance with the

preceding paragraph is subject to the minimum percentage prescribed by the relevant

competent authority.

The Company shall purchase liability insurance for its directors and supervisors. The Board

of Directors is authorized to decide on the coverage of such insurance.

Article 20 The Chairman of the Board shall be elected by a majority vote at a board meeting with

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more than two-thirds of the directors present. The Vice Chairman shall be elected in the

same way.

The Chairman shall represent the company externally and shall internally chair the

shareholders and the board of directors meetings.

If the Chairman is unable to perform such duties due to leave of absence or any other reason,

the Vice Chairman shall act on the Chairman's behalf. If the Vice Chairman is also

unavailable or unable to perform duties, the Chairman may appoint one of the directors to act

on the Chairman's behalf. If no delegate is appointed by the Chairman, one shall be elected

from among the directors to act on the Chairman's behalf.

Article 21 Powers of the Board of Directors:

1. Approval of various provisions of the Articles of Incorporation.

2. Approval of major business and its plans.

3. Promulgation of capital increase or decrease.

4. Approval of new addition, closure, or alteration of a branch office.

5. Approval of a various major contracts.

6. Approval of the budget and final accounts.

7. Approval of real estate transactions.

8. Approval of investment in other companies.

9. Formulation of proposals regarding earnings distribution or deficit make up.

10. Approval of remuneration of directors, supervisors, and other employees.

11. Approval of the appointment and discharge of the president, vice presidents, assistant

Vice presidents, managers, assistant managers, and branch managers.

12. Matters submitted by the Chairman for approval.

13. Other authority granted by law, by the Articles of Incorporation, or by the meeting of

shareholders.

Directors' and supervisors' remuneration as prescribed in clause 10 in the preceding

paragraph shall be in accordance with industry standards. If profit is reported in the final

accounts, it shall be handled in accordance with Article 35.

Article 22 Board of Directors shall establish an audit office to oversee the Company's audit practice.

The appointment or discharge of the head of the audit office shall be determined by the

Chairman of the Board with a majority consensus from all the directors. The head of the

audit office shall oversee the audit practice in accordance with the resolutions of the board

meetings and shall provide periodic reports to the Board of Directors and supervisors.

Article 23 The Board of Directors shall meet once a month. In the event of urgent matters or at the

request of a majority of the directors, the Chairman may convene a special meeting via mail,

e-mail, or fax, unless otherwise specified by the Company Act.

Article 24 A director may delegate another director to attend the Board meeting on the director's

behalf, and a power of attorney must be issued and state therein the scope of authority with

reference to the subject matter to be discussed at the meeting.

A director may accept the appointment to act as the proxy referred to in the preceding

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paragraph of only one other director.

Article 25 Unless otherwise provided for under the Company Act, resolutions of the board of directors

shall be adopted by a majority of the directors at a meeting attended by a majority of the

directors.

Article 26 Proceedings of a board meeting must be recorded in the minutes.

The meeting minutes shall comply with Article 18 in the preceding paragraph.

Article 27 Board meetings shall be announced seven days in advance to all directors and supervisors.

President, vice presidents, managers from all departments may be invited to attend.

However, they are not eligible to vote.

Chapter 6 Supervisors

Article 28 The Company shall have three supervisors, elected from among the shareholders with disposal capacity at the shareholders meeting to serve a term of three years and may be eligible for re-election. A candidate nomination system is adopted for election of the supervisors, the shareholders shall elect the supervisors from among the nominees listed on the roster of supervisor candidates. A supervisor who is from or represents a government agency or an institutional shareholder may, owing to the change of the supervisor's functional duties, be replaced by another person to fulfill the unexposed term of office of the predecessor. The number of shareholdings of all supervisors elected in accordance with the preceding paragraph shall comply with regulations specified by relevant competent authority.

Article 29 Powers of the supervisors:

1. Investigation and reviewing of the business and property status of the Company.

2. Reviewing of books of accounts and reports for final accounts.

3. Inventory review reports.

4. Monitoring of the performance of the employees and censure for any violation of laws or

their duties.

5. Any other powers authorized by law.

Article 30 Supervisors may be invited to attend the Board of Directors meetings for expression of

opinions. However, they are not eligible to vote in the meeting.

Chapter 7 Managerial Personnel

Article 31 The Company shall have one President who oversees the operations of the Company in

accordance with the resolutions of the board meetings. The Company shall have a number

of vice presidents and managers to support and assist the President. The appointment,

discharge, and remuneration of the above personnel shall be governed by Article 29 of the

Company Act.

Article 32 If, for any reason, the president is unable to perform one's duties, the Chairman shall

appoint one of the vice presidents, subject to the board of directors' approval, to act on the

president's behalf.

Chapter 8 Accounting

Article 33 The Company's fiscal year begins on January 1 and ends on December 31. A final

accounting shall be conducted at the end of the year and shall use the ROC year for the

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title.

Article 34 At the end of each fiscal year, the Board of Directors shall prepare the following statements

and reports, as regulated by the central authority, for verification. The verified statements

and reports shall be submitted to supervisors for review no later than 30 days prior to the

shareholders meeting.

1. Business Report.


3. Distribution of earnings or loss offsetting proposals.

The Board of Directors shall submit the above statements and reports for approval at the

shareholders meeting. The Board of Directors shall distribute the approved financial

statements and resolutions regarding earnings distribution or loss offsetting to all

shareholders.

Delivery of the approved financial statements and resolutions regarding earnings distribution

or loss offsetting to all shareholders may be made in the form of public notice.

Article 35 In the event of profit after closing of annual accounts (profit refers to pre-tax earnings

before deduction of compensation and remuneration distributed to employees as well as

directors and supervisors), between one to eight percent shall be allocated as compensation

to employees and no more than two percent shall be allocated as remuneration to directors

and supervisors. However, in the event the Company has sustained accumulative losses, a

proportion of profit shall be reserved in advance for compensation purposes.

The preceding employee compensation may be paid in cash or stock shares, and shall be

payable to employees of subsidiary companies who meet the requirements stipulated by the

board of directors. The preceding remuneration to directors and supervisors shall be paid in

cash only.

Proposals for employee compensation and remuneration to directors and supervisors shall

be approved by board meeting and shall be briefed in the shareholders' meeting.

The board of directors shall be authorized to determine employee bonus and directors and

supervisors' remuneration within the ranges specified above on an annual basis.

Article 36 In the event of surplus earnings after closing of annual accounts, due taxes shall be paid in

accordance with the law, and losses incurred in previous years shall be compensated. Upon

completion of the preceding actions, 10% of the remainder surplus shall be allocated as

legal reserve. However, in the event the accumulated legal reserve is equivalent to or

exceeds the Company's total paid-in capital, such limitations do not apply. In addition, in

accordance with the law or regulatory requirements, special reserve shall be allocated or

reversed. The board of directors shall draft a surplus distribution proposal regarding the

remainder of the surplus as well as initial undistributed surplus for approval at the

shareholders' meeting, at which the allocation of shareholders' dividends shall be decided.

Per the Company's dividend policy, consistent with current and future development plans,

considerations for the investment environment, capital needs, domestic and international

competition, as well as the interest of shareholders, surplus may be unappropriated or no

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less than 50 percent of surplus available for distribution may be allocated as dividends to

shareholders. Dividends may be paid in either cash or stock shares. Cash dividends shall

account for no more than 30 percent, while the remainder shall be paid through stock

dividend to shareholders.

Chapter 9 Supplementary Provisions

Article 37 Organizational regulations, detailed charts of responsibilities, and other provisions of the

Articles of Incorporation of the Company shall be promulgated in separate documents.

Article 38 Any unstated matters herein shall be conducted based on the Company Act and any other

relevant laws.

Article 39 The Articles of Incorporation shall be implemented after being approved at the shareholders

meeting, and any future amendments shall follow the same procedure.

Article 40 The Articles of Incorporation were established on February 25, 1972 1st Revision:

December 6, 1975; 2nd Revision: May 29, 1979; 3rd Revision: September 27, 1980; 4th

Revision: January 13, 1984; 5th Revision: December 23, 1986; 6th Revision: December 23,

1989; 7th Revision: December 28, 1990; 8th Revision: July 29, 1994; 9th Revision:

December 26, 1997; 10th Revision: February 26, 1999; 11th Revision: October 16, 1999;

12th Revision: May 16, 2000; 13th Revision: June 24, 2004; 14th Revision: December 31,

2004; 15th Revision: December 14, 2005; 16th Revision: June 28, 2006; 17th Revision:

May 27, 2009; 18th Revision: June 9, 2010; 19th revision: June 28, 2011; 20th revision:

June 8, 2012; 21st Revision: June 17, 2013; 22nd Revision: June 24, 2014; 23nd Revision:

June 30, 2015; 24nd Revision: June 29, 2016.

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Appendix 2

Taiwan Land Development Corporation Rules and Procedures for

Shareholders Meetings

2012.06.08.Revision approved at AGM 2012

2013.06.17.Revision approved at AGM 2013

2014.06.24 Revision approved at AGM 2014

1. Company Shareholders Meetings (hereinafter the "Meeting") shall be conducted in accordance with

these Rules and Procedures, unless otherwise specified by law or the Articles of Incorporation.

2. The number of shares represented during the meeting is calculated based on the total amount

registered in the attendance log or the attendance cards collected, plus the number of shares where

voting rights are exercised in writing or through electronic means.

3. Shareholder attendance and votes are calculated by the number of shares represented during the

Meeting.

4. The Meeting shall be held at locations that are suitable and convenient for shareholders to attend.

The Meeting shall not begin earlier than 9 a.m. or later than 3 p.m.

5. Shareholders meetings that are convened by the Chairman shall be chaired by the Chairman. If the

Chairman is unable to perform such duties due to leave of absence or any other reason, the Vice

Chairman shall act on the Chairman's behalf. If the Vice Chairman is also unavailable or is

non-existent, the Chairman may appoint one of the directors to act on the Chairman's behalf. If the

Chairman does not appoint a delegate, one shall be elected from among the directors.

If the Meeting is chaired by a director other than the Chairman, it shall be one who is familiar with

the Company's business and financial status and that had been appointed more than six months

prior. Institutional directors shall comply with the same rule.

If the Meeting is convened by an authorized party other than the Board of Directors, the Meeting

shall be chaired by the authorized convener.

6. The lawyers, certified public accountants, and any relevant personnel hired by the Company shall be

present at the shareholders meeting. Organizers of the Meeting must wear proper identification or

arm badges.

7. The audio or video of the process of the Meeting shall be recorded and shall be retained for at least

one year.

However, if a shareholder makes a litigious claim against the Company according to Article 189 of

the Company Act, the abovementioned documents must be retained until the end of the litigation.

8. The Chairman shall call the Meeting to order at the time scheduled for the Meeting. If the number of

shares represented by the shareholders present at the Meeting has not yet constituted the quorum at

the time scheduled for the Meeting, the chairman may postpone the time for the Meeting. The

postponements shall be limited to two times and the Meeting shall not be postponed for longer

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than one hour in aggregate. If after two postponements no quorum can yet be constituted, but the

shareholders present at the Meeting represent more than one-third of the total outstanding shares,

tentative resolutions may be made in accordance with Article 175, Item 1 of the Company Act.

If the number of shares represented during the meeting accumulates to more than half of all

outstanding shares before the meeting ends, the Chairman may re-propose any tentative resolution

for final voting, according to Article 174 of the Company Act.

9. The agenda of the Meeting shall be set by the Board of Directors if the Meeting is convened by the

Board of Directors. Unless otherwise resolved at the Meeting, the Meeting shall proceed in

accordance with the agenda.

The above rule also applies if the shareholders' meeting is convened by any authorized party other

than the board of directors.

Unless otherwise resolved at the Meeting, the chairman cannot announce adjournment of the

Meeting before all the discussion items (including extempore motions) listed in the agenda are

resolved.

The shareholders cannot designate any other person as chairman and continue the Meeting in the

same or another place after the Meeting is adjourned.

10. When a shareholder present at the Meeting wishes to speak, a speech note should be filled out with

a summary of the speech, the shareholder's number (or the number of Attendance Card), and the

name of the shareholder. The sequence of speeches by shareholders shall be decided by the

chairman.

Shareholders who submit an opinion slip without actually speaking are considered to have

remained silent. If the shareholder's actual comments differ from those stated on the opinion slip,

only the actual comments expressed shall be recorded.

While a shareholder is speaking, other shareholders shall not speak simultaneously or interfere in

any way, unless agreed upon by the Chairman and the person speaking. Any violators shall be

restrained by the Chairman.

11. Unless otherwise permitted by the chairman, each shareholder shall not speak more than two times

for each discussion item (each time cannot exceed 5 minutes).

In case the speech of any shareholder violates the above provision or exceeds the scope of the

discussion item, the chairman may stop the speech.

12. More than one representative may attend the shareholders' meetings if the shareholder is a

government agency or corporate entity. If the corporate shareholder is attending as proxy, only one

representative shall be appointed to attend the Meeting.

Where a corporate shareholder has appointed two or more representatives to attend the

shareholders' meeting, only one representative may speak per agenda item.

13. After the speech of a shareholder, the chairman may respond on one's own or appoint an

appropriate person to respond.

14. The chairman may announce the end of the discussion of any resolution and go into voting if the

chairman deems it appropriate.

15. The ballot examiner and ballot counter during polls shall be designated by the chairman. The ballot

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examiner must be a shareholder of the Company.

The outcome of the vote must be documented and announced onsite.

16. During the Meeting, the chairman may set time for intermission. In the event of force majeure, the

chairman may decide to temporarily suspend the Meeting and shall announce, depending on the

situation, when the Meeting will resume.

If the Meeting is unable to conclude all scheduled agenda items (including extempore motions)

before the venue is due to be returned, shareholders may resolve to continue the meeting at an

alternative venue.

Shareholders may also resolve to postpone or resume the meeting within the next five days in

accordance with Article 182 of the Company Act.

17. Unless otherwise regulated by the Company Act or the Articles of Incorporation, an agenda item is

passed when supported by shareholders who represent more than half of the total voting rights.

An agenda is considered passed if the chairman receives no objections from shareholders. This

voting method is as effective as the conventional ballot method.

18. If there is amendment to or substitution for a discussion item, the chairman shall decide the

sequence of voting for the discussion item, the amendment, or the substitute. If any resolution is

passed, all other proposals shall be deemed rejected, and no further voting is necessary.

19. Where the Meeting involves re-election of directors or supervisors, the election must proceed in

accordance with relevant regulations of the Company. Results of the election shall be announced at

the Meeting, including the names of elected directors and supervisors.

Ballot examiners shall seal and sign the ballot papers indicated under election information in the

preceding paragraph and keep them properly for at least one year. However, if a shareholder makes

a litigious claim against the Company according to Article 189 of the Company Act, the

abovementioned documents must be retained until the end of the litigation.

20. The Chairman may instruct security staff to help maintain order in the meeting. The chairman may

direct the disciplinary officers or the security guard to assist in keeping order in the Meeting place.

While maintaining order in the meeting, all marshals or security staff must wear arm bands which

identify their roles.

21. These Rules and Procedures shall be effective from the date they are approved by the Shareholders Meeting. The same applies in cases of revision.

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Appendix 3

Current shareholding of directors and supervisors

The minimum shareholding requirement of the Company's directors and

supervisors and their actual shareholding positions as of the book closure date for this

shareholders meeting (2017.04.30):

1. The number of the Company's outstanding shares stands at 760,884,077. As specified

in Article 2 of the Rules and Review Procedures for Director and Supervisor Share

Ownership Ratios at Public Companies, the total registered shares owned by all

directors shall be 30,435,363 shares (4%) and the total registered shares owned by all

supervisors shall be 3,043,536 shares (0.4%).

2. Number of shares held by individuals and all directors and supervisors:

Title Name Registered shares as of the book closure date

Shareholding percentage

Chairman Hongsheng Investment Co., Ltd. Representative: Chiu, Fu-Sheng

6,497,687 0.85%

Vice Chairman

Lian, Tai-Sheng 26,958,432 3.54%

Director Hongsheng Investment Co., Ltd. Representative: Kow Fu-Ling

6,497,687 0.85%

Director Hongsheng Investment Co., Ltd. Representative: Cheng, Chi-Li

6,497,687 0.85%

Director Shihtuo Investment Co., Ltd. 4,972,838 0.65%

Director Cheng, Ming-Chieh 0 0

Supervisors Nienshin Investment Co., Ltd. Representative: Yeh, Hui-Ling

5,506,040 0.72%

Supervisors Lin, Hung-Min 0 0

Supervisors Da He Multimedia Co., Ltd. 5,137,147 0.68%

Total directors' shareholdings 38,428,957 5.05%

Total supervisors' shareholdings 10,643,187 1.40%

2017 2841 20170628fe2 20180711 151018 · 2018. 7. 11. · 2-4 implementation status report of the...

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