Mega Holdings

I. Internal Audit Organization of the Company

For the internal audit, the Company establishes the chief auditor system in accordance with “the Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries” promulgated by the Financial Supervisory Commission. The chief auditor has the power as a general co-manager.
The Company has the Auditing Office that is directly subsidiary to the Board of Directors. Currently, the Auditing Office staffs 11 competent persons as full-time internal auditors (including the chief auditor) to conduct the related internal audit task on the Company and its subsidiaries.

II. Internal Audit Operations of the Company

1. Based on the audit plans, the auditing office shall conduct a routine audit and a special audit on its finance, risk management, and compliance with applicable acts and regulations at least annually; a special audit on its finance, risk management, and compliance with applicable acts and regulations at least semiannually. The auditing office shall allocate the required auditing manpower and number of days to conduct each audit, based on subsidiary’s comprehensive risk level, business profile, and implementation of the internal control system. For those subsidiaries with higher comprehensive risk level, more complicate business profile, and poor implementation of the internal control system, the auditing office shall allocate more auditing manpower and number of days accordingly.
2. The chief auditor should manage all audit business with performing independently and honestly, who is required to report its audit business to the Board of Directors and Audit Committee at a minimum period of every six months.
3. The chief auditor is empowered to, if required by business, dispatch the internal auditors of its subsidiaries to conduct the internal audit task on the Company or its subsidiaries. 
4. The chief auditor takes charge in monitoring the implementation of periodic self-inspection and self- evaluation of internal control systems for each unit of the Company and its subsidiaries.
5. The chief auditor shall periodically evaluate the efficacy of the internal control activities of a subsidiary and, after having reported to the board of directors, send the evaluation results to the relevant subsidiary’s board of directors for their reference in personnel evaluations.
6. The internal auditors of the Company shall take part in the stipulation, revision or abolition of the Company’s articles of association and respective operational regulations, if required.
7. The Company will follow up on the improvements made according to the examination comments or faults listed by the financial examination agency, accountants, internal audit unit, and self-inspection people, and the improvement status of items that enlisted as ‘need further improvement’ by the internal control statement.
8. Other project inspection task assigned.