Mega Financial : Shareholders meeting Handbook in 2024

Stock Code：2886

Mega Financial Holding Co., Ltd.

Handbook for the 2024 Annual Shareholders' Meeting

Meeting Time: 9:00 a.m., June 21, 2024

Venue: 13th Floor, No. 100, Jilin Road, Taipei

(This document is prepared in accordance with the Chinese version and is for reference only. In the event of any discrepancy between the English version and the Chinese version, the Chinese version shall prevail.)

	Table of Contents
I. Meeting Procedure	1
II. Meeting Agenda	2
1.	Company Reports	3
2. Matters for Recognition	5
3. Matters for Discussion and Election	7
4.	Questions and Motions	13
III. Attachments
1. 2023 Business Report	14
2. Audit Committee's Review Report	24
3.	2023 Corporate Bonds Terms	25
4.	Principles for Ethical Management	26
5.	2023 Consolidated Financial Statements	35
6.	2023 Earnings Distribution Statement	51
7.	Comparison Table of Amended Articles of Incorporation	52
8.	Comparison Table of Amended Articles of Procedures for
	Acquisition or Disposal of Assets	65
9. Profiles of Director & Independent Director Candidates	86
IV. Appendices
1.	Articles of Incorporation	92
2.	Rules of Procedures for Shareholders' Meetings	103
3.	Procedures for Election of Directors	114
4.	Shareholding of Directors	118

Mega Financial Holding Co., Ltd.

Procedure for the 2024 Annual Meeting of Shareholders

1. Call the Meeting to Order
2. Chairperson Remarks
3. Company Reports
4. Matters for Recognition
5. Matters for Discussion and Election
6. Questions and Motions
7. Adjournment

1

Mega Financial Holding Co., Ltd.

Year 2024

Agenda of Annual Meeting of Shareholders

Time : 09:00 a.m. on Friday, June 21, 2024

Shareholders meeting will be held by means of: physical shareholders meeting

Venue: 13/F, Jilin Bldg. of Mega International Commercial Bank (the "Bank") No. 100, Jilin Road, Taipei, Taiwan

Attendants: Shareholders or their representatives

Chairperson: Chairman

1. Announce a quorum is present and call the meeting to order
2. Chairperson Remarks
3. Company Reports

1. 2023 Business Report
2. The Audit Committee's Review Report on 2023 Business Report, Consolidated Financial Statements and the Proposal for Distribution of 2023 Earnings
3. The Distribution of Directors' and Employees' Compensation for 2023
4. The Company's issuance of Corporate Bonds in 2023
5. Amendment to the "Principles for Ethical Management"

1. Matters for Recognition

1. 2023 Business Report and Consolidated Financial Statements
2. The Proposal for Distribution of 2023 Earnings

1. Matters for Discussion and Election

1. The Proposal for Issuing New Shares through Capitalization of 2023 Earnings
2. Amendment to the Company's Articles of Incorporation
3. Amendment to the Company's "Procedures for Acquisition or Disposal of Assets"
4. The Election of the 9th Term Board of Directors
5. Proposal of Releasing the Prohibition of the 9th Term Board of Directors from Participation in Competitive Business

1. Questions and Motions
2. Adjournment

2

Company Reports

Agenda 1: 2023 Business Report. (Proposed by the Board of Directors)

Explanation: The 2023 Business Report is attached as Attachment 1 (p.14).

Agenda 2: The Audit Committee's Review Report on 2023 Business Report, Consolidated Financial Statements and the Proposal for Distribution of 2023 Earnings. (Proposed by the Board of Directors)

Explanation: The Audit Committee's Review Report is attached as Attachment 2 (p.24).

Agenda 3: The Distribution of Directors' and Employees' Compensation for 2023. (Proposed by the Board of Directors)

Explanation:

1. This proposal is made in accordance with Article 31-1 of the Company's Articles of Incorporation.
2. The Company provided NT$166,759,926 (appropriation rate being 0.5％) and NT$25,347,508 (appropriation rate being 0.076％) as the remuneration to directors and employees respectively for 2023, paid in cash only.
3. This proposal has been approved by the 38th meeting of the 8th term of Board of Directors on March 12, 2024.

Agenda 4: The Company's issuance of Corporate Bonds in 2023. (Proposed by the Board of Directors)

Explanation:

1. The Company's Board approved the issuance of unsecured corporate bonds for an amount of up to NT$10 billion on June 27, 2023, and the Company raised NT$10 billion on August 24, 2023. All the raised funds were used to repay loans from financial institutions.
2. The key terms of the bonds are as follows, and the whole terms is attached as Attachment 3 (p.25).

Issue	Tranche	Terms	Issue Amount	Coupon Rate	Issue Date	Maturity Date
of Bond
112-1	A	3 years	NT$1.2 billion	Fixed Rate 1.50%	2023.8.24	2026.8.24
112-1	B	5 years	NT$6.6 billion	Fixed Rate 1.60%	2023.8.24	2028.8.24
112-1	C	7 years	NT$2.2 billion	Fixed Rate 1.64%	2023.8.24	2030.8.24

3

Agenda 5: Amendment to the "Principles for Ethical Management". (Proposed by the Board of

Directors)

Explanation：

1. The company's "Principles for Ethical Management" was made on March 25, 2014, and has been amended two times during the period.
2. In conjunction with the renaming of internal organization, the Board of Directors hereby approved the third amendment on April 23, 2024 as follows:
3. 1. Article 1-1: In conjunction with the renaming of departments, the Principles are amended to accommodate the current department names.
   2. Article 28: This is a new article to add the revision (amendment) process of the Principles.
4. The Company's "Principles for Ethical Management" is herewith attached as Attachment 4 ( See page 26 of this Handbook for details).

4

Matters for Recognition

Agenda 1: 2023 Business Report and Consolidated Financial Statements. (Proposed by the Board of Directors)

Explanation: The Company's 2023 consolidated financial statements have been audited by CPA Kuo, Puo-Ju and Lai, Chung-Hsi of PricewaterhouseCoopers, Taiwan. The above-mentioned 2023 business report and consolidated financial statements have been approved by the Board and reviewed by the Audit Committee. The 2023 business report and consolidated financial statements are attached as Attachment 1 (p.14) and Attachment 5 (p.35).

RESOLUTION:

5

Agenda 2: The Proposal for Distribution of 2023 Earnings. (Proposed by the Board of Directors)

Explanation:

1. The 2023 financial statements have been audited by PricewaterhouseCoopers, Taiwan. The net profit after income tax of the Company in 2023 is NT$33,246,977,273, after plusing Gain on disposal of investments in equity instruments measured at fair value through other comprehensive income amounted to be NT$867,399,602, Reversal of special reserve for first-time adoption of TIFRS amounted to be NT$2,586,853 and deducting Remeasurements of defined benefit plans amounted to be NT$995,445,434, the 2023 distributable earnings is NT$33,121,518,294, of which needs to deduct the provision for 10% legal reserve NT$3,312,151,829, plus Reversal of special reserve for other equity reduction NT$13,625,011,623 and the previous retained earnings of 2023 NT$25,307,930,504; therefore, the total distributable earnings is NT$68,742,308,592 and the 2023 distributable earnings shall be distributed as a priority as follows:
2. 1. NT$21,602,007,207 as cash dividends (NT$1.5 per share)
   2. NT$4,320,401,440 as stock dividends (NT$0.3 per share)
   3. The balance of unappropriated retained earnings after distribution is NT$42,819,899,945.
3. In order to execute this proposal, the annual general shareholders' meeting is proposed to authorize the Board to do the following:
4. 1. To set the ex-dividend date.
   2. To set the ex-right date after the stock dividends approved by the competent authority.
   3. To deal with relevant changes if the number of the outstanding shares is changed due to share buyback, transfer, conversion, cancellation of treasury shares or other circumstances that affect dividend payout ratio.
5. 2023 Earnings Distribution Statement is attached as Attachment 6 (p.51).
6. This proposal has been approved by the 39th meeting of the 8th term of Board of Directors held on April 23, 2024.

RESOLUTION:

6

Matters for Discussion and Election

Agenda 1: The Proposal for Issuing New Shares through Capitalization of 2023 Earnings. (Proposed by the Board of Directors)

Explanation:

1. To raise capital adequacy ratio and strengthen financial structure, the Company, in accordance with Article 240 of the Company Act, proposes to appropriate NT$4,320,401,440 from 2023 distributable earnings for issuance of new 432,040,144 shares, with par value of NT$10 per share.
2. The Company's authorized capital is NT$220,000,000,000, and paid-in capital is NT$144,013,381,380. After capitalization of retained earnings of NT$4,320,401,440, the Company's paid-in capital will be NT$148,333,782,820.
3. In order to execute this proposal, the annual general shareholders' meeting is proposed to authorize the following:
4. 1. After this proposal is approved by the competent authority, the Board is authorized to set the ex-right date. 30 free shares will be distributed per one thousand shares based on the shareholding percentage recorded in the shareholders register on the ex-right date. If the stock dividends include any fractional shares which are less than one full share, the shareholders may go to the Company's stock agent to form one full share by pooling together of their fractional shares within 5 days after the ex-right date, otherwise the distribution will be made in the form of cash in a dollar amount. The Chairman is authorized to contact specific persons to subscribe remainder fractional shares at par value.
   2. If the number of the outstanding shares is changed due to share buyback, transfer, conversion, cancellation of treasury shares or other circumstances that affect dividend payout ratio, the Board is authorized to deal with relevant changes.
   3. If this proposal requires adjustment due to changes in regulations, amendments approved by the competent authority, or amendments from changes in objective circumstances, the Board is authorized to make the necessary adjustments.
5. Rights and obligations of the newly issued shares are the same as the existing shares.
6. This proposal has been approved by the 39th meeting of the 8th term of

Board of Directors held on April 23, 2024.

RESOLUTION:

7

Agenda 2: Amendment to the Company's Articles of Incorporation. (Proposed by the Board of Directors)

Explanation:

1. The company's Articles of Incorporation were established on December 19, 2001, and have been revised 15 times during this period. The latest amendment was approved by the shareholders' regular meeting on June 16, 2023.
2. In order to conform to our operational needs, it is proposed to amend Article 22 of the Company's Articles of Incorporation regarding audit system. The main points of the amendments are as follows：
3. 1. In consideration of the fact that the audit units of other governmental financial holding companies do not have an official position as Deputy Chief Auditor, and that the board of directors of Mega Bank also approved the amendment of the organization rules in October, 2016, and canceled the position of Deputy Chief Auditor.
   2. Considering the consistency of the audit system across this financial holding group, the company hereby proposes to adopt the audit regime of Mega Bank, whereby one Chief Auditor is appointed as the head of the head quarter's audit function, the title and its corresponding grade description of Deputy Chief Auditor are concurrently abolished.
   3. Please refer to Attachment 7 for the comparison table and amended Articles of Incorporation. (see page 52 of this Handbook for details)
   4. This proposal has been approved by the 39th meeting of the 8th term of

Board of Directors held on April 23, 2024.

RESOLUTION:

8