SK Square

Project Background

SK Square believes that ethical management constitutes the company's competitive edge and pursues sustainable happiness for all its stakeholders, including employees.

Code of Ethics

SK Square has enacted the “Code of Ethics” to implement and promote ethical management, and has used it as a criterion for decision-making and behaviors in all business activities.

Code of Ethics

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Scope of Application

SK Square employees - It refers to all employees (including non-regular workers) as the subject of management activities. Subsidiaries - All subsidiaries that can effectively exercise management rights Business partners - Business partners, consulting firms, investment partners, etc. Other applicable stakeholders

Status of Pledge to Practice Ethical Management

Percentage of employees who signed the pledge
Unit	%
2021	-
2022	98
2023	99

Category	Unit	2021	2022	2023
Percentage of employees who signed the pledge	%	-	98	99

Ethical Management System

SK Square is committed to building trusted relationships with stakeholders and creating a desirable corporate culture. For this, we have developed an ethical management system to ‘practice corporate ethical management that all stakeholders can trust.’ We systematically implement ethical management and internalize transparent, ethical awareness within the company. Major ethical management plans and the results of the plans are managed by the Ethical Management Officer under the Audit Committee, and the Audit Committee under the BOD is in charge of the final review and approval.

Goal

Practicing Corporate Ethical Management That All Stakeholders Can Trust

Implementation System

Code of Ethics
Specify the duties, responsibilities, and roles for employees, the company, customers, business partners, shareholders, and society based on SKMS (SK Management System), which is SK management philosophy and principle of conduct Implement the regulations of the “Code of Ethics Implementation Guide” to promote a correct understanding of the Code of Ethics and specific directions Encourage the application of social responsibility, including SK Square’s business ethics and anti-bribery and corruption policies, to business partners in contractual relationships(Implementing the BP Pledge of Ethics Practice)

Code of Ethics

Specify the duties, responsibilities, and roles for employees, the company, customers, business partners, shareholders, and society based on SKMS (SK Management System), which is SK management philosophy and principle of conduct
Implement the regulations of the “Code of Ethics Implementation Guide” to promote a correct understanding of the Code of Ethics and specific directions
Encourage the application of social responsibility, including SK Square’s business ethics and anti-bribery and corruption policies, to business partners in contractual relationships(Implementing the BP Pledge of Ethics Practice)

Code of Ethics Implementation Guide
ISO37001(Anti-bribery Management System Certification)
BP Pledge of Ethical Practice Anti-corruption activities, such as providing money, hospitalities, and other non-financial benefits, are strictly prohibited, and sanctions are implemented when they occur BP Pledge of Ethics Practice is mandatory when registering with Partner Portal(Open4U) The document is attached to each contract to strengthen compliance for all business partners
Anti-Bribery and Corruption Policy Anti-Bribery and Corruption Policy

Implementation Organization
The Audit Committee under the BOD serves as the highest decision-making body to review and approve accounting and management oversight, risk management, ethical management plans, and implementation results. SK Square also operates “Ethical Management” organization directly under the Audit Committee in charge of supporting internal audit and ethical practices. (Revised the Audit Committee Regulations in June 2023) The “Ethical Management” organization conducts regular and ad hoc audits, investigates unethical issues, and operates consultation groups with audit organizations of subsidiaries. It also regularly reports to the Audit Committee(twice a year) on major business implementation plans, internal audit results, and measures taken on corporate ethics issues, and other resolutions and reports as needed. {Board of Directors} > {(Audit Committee - Ethical Management) - 4 Subcommittees(Including the Governance Committee)}

Implementation Organization

The Audit Committee under the BOD serves as the highest decision-making body to review and approve accounting and management oversight, risk management, ethical management plans, and implementation results. SK Square also operates “Ethical Management” organization directly under the Audit Committee in charge of supporting internal audit and ethical practices. (Revised the Audit Committee Regulations in June 2023)
The “Ethical Management” organization conducts regular and ad hoc audits, investigates unethical issues, and operates consultation groups with audit organizations of subsidiaries. It also regularly reports to the Audit Committee(twice a year) on major business implementation plans, internal audit results, and measures taken on corporate ethics issues, and other resolutions and reports as needed.

{Board of Directors} > {(Audit Committee - Ethical Management) - 4 Subcommittees(Including the Governance Committee)}

Results of Audits conducted by Audit Committee

Spreading Awareness
Conducting the online ethical management practice training and company-wide ethical management practice workshop Pledge to practice ethical management for employees, including leaders (once a year) Operating the SK Group’s integrated reporting channel and in-house ethical management portal

Code of Ethics	Specify the duties, responsibilities, and roles for employees, the company, customers, business partners, shareholders, and society based on SKMS (SK Management System), which is SK management philosophy and principle of conduct Implement the regulations of the “Code of Ethics Implementation Guide” to promote a correct understanding of the Code of Ethics and specific directions Encourage the application of social responsibility, including SK Square’s business ethics and anti-bribery and corruption policies, to business partners in contractual relationships(Implementing the BP Pledge of Ethics Practice)
	Code of Ethics Implementation Guide
	ISO37001(Anti-bribery Management System Certification)
	BP Pledge of Ethics Practice Anti-corruption activities, such as providing money, hospitalities, and other non-financial benefits, are strictly prohibited, and sanctions are implemented when they occur BP Pledge of Ethics Practice is mandatory when registering with Partner Portal(Open4U) The document is attached to each contract to strengthen compliance for all business partners
	Anti-Bribery and Corruption Policy Anti-Bribery and Corruption Policy

Implementation Organization	The Audit Committee under the BOD serves as the highest decision-making body to review and approve accounting and management oversight, risk management, ethical management plans, and implementation results. SK Square also operates “Ethical Management” organization directly under the Audit Committee in charge of supporting internal audit and ethical practices. (Revised the Audit Committee Regulations in June 2023) The “Ethical Management” organization conducts regular and ad hoc audits, investigates unethical issues, and operates consultation groups with audit organizations of subsidiaries. It also regularly reports to the Audit Committee(twice a year) on major business implementation plans, internal audit results, and measures taken on corporate ethics issues, and other resolutions and reports as needed. {Board of Directors} > {(Audit Committee - Ethical Management) - 4 Subcommittees(Including the Governance Committee)}
	Results of Audits conducted by Audit Committee

Spreading Awareness	Conducting the online ethical management practice training and company-wide ethical management practice workshop Pledge to practice ethical management for employees, including leaders (once a year) Operating the SK Group’s integrated reporting channel and in-house ethical management portal

Counseling and Reporting System

SK Square operates various channels that enable stakeholders to freely consult and report on ethical management in order to establish transparency and trust in ethical management. Reports received through the ethical management consultation and reporting system are handled promptly and fairly. In the event of reporting(real name reporting is also possible), the confidentiality of whistleblower is protected, and identification of whistleblower is prohibited based on the Code of Ethics Implementation Guide

Ethics Violations Reporting and Handling Process

Receiving reports Ethics Consultation Report Center (Online)
Investigation and Verification Review of details followed by investigation and verification
Notification of results Notification of results to the whistleblower
Actions Internal actions to prevent repetition

Go to SK Ethical Management Counseling / Reporting

Status of Reporting and Handling of Corruptions

Number of violations of anti-corruption regulations
Unit	Case
2021	0
2022	0
2023	0

Number of ethical management issues reported
Unit	Case
2021	0
2022	7
2023	4

Percentage of valid reports (investigated cases)
Unit	%
2021	0
2022	0
2023	0

Number of disciplinary actions due to unethical behavior
Unit	Case
2021	0
2022	0
2023	0

Category	Unit	2022	2023
Number of violations of anti-corruption regulations	Case	0	0
Number of ethical management issues reported	Case	7	4
Percentage of valid reports (investigated cases)	%	0	0
Number of disciplinary actions due to unethical behavior	Case	0	0

Number of Corruption Issues
Unit	Case
2022~2023.5	0
2023~2024 Target	0
Assessment Methodology	Number of cases detected

Completion Rate of Ethical Management Online Training
Unit	%
2022~2023.5	97
2023~2024 Target	Over 95
Assessment Methodology	Including part-time and contractors

Completion Rate of Ethical Practice Workshops
Unit	%
2022~2023.5	100
2023~2024 Target	100
Assessment Methodology	Implementation rate of executive-level organizations

Implementation Rate of Ethical Pledges with Anti-Corruption Guidelines
Unit	%
2022~2023.5	98
2023~2024 Target	Over 98
Assessment Methodology	Including part-time and contractors

Completion Rate of Compliance Training
Unit	%
2022~2023.5	67
2023~2024 Target	Over 70
Assessment Methodology	Including part-time and contractors

Anti-Bribery and Corruption Management System Implementation Regulations (Summary)
Anti-Bribery and Corruption Policy
ISO 37001 Certification

Metrics	Unit	2022~2023.5	2023~2024 Target	Assessment Methodology
Number of Corruption Issues	Case	0	0	Number of cases detected
Completion Rate of Ethical Management Online Training	%	97	Over 95	Including part-time and contractors
Completion Rate of Ethical Practice Workshops	%	100	100	Implementation rate of executive-level organizations
Implementation Rate of Ethical Pledges with Anti- Corruption Guidelines	%	98	Over 98	Including part-time and contractors
Completion Rate of Compliance Training	%	67	Over 70	Including part-time and contractors

Category	Description
Key checklists	Check for violations of ethical standards and anti-corruption policies Check whether the company has internal control functions and continuously upgrade their level Check compliance with company rules and regulations during business operations Support decision-making on the direction of business strategies Check any business or activities that are against the customer value Improve the efficiency and effectiveness of business processes and corporate resources Check the validity of accounting records, financial statements, and reports and their compliance with corporate accounting standards
Frequency	At least once every three years for all operation
Internal monitoring system	Check once a year in six areas, including HR, purchasing, and expenses (including checking subsidiaries and managing their implementation)

Company	Scope of Audit	Results of Audit
2022
SK Square Accounting	Account closing & internal accounting control	Satisfactory; no issues were found
SK Square Financial	Group self-correcting system expenses	137 recommendations for improvement, including the need to strengthen evidence of usage when processing expenses
11 Street	Business management system	Recommendation to strengthen standards for evaluating and managing business performance
Dreamus Company	iRiver business and receivables management	Recommendations to secure business soundness and strengthen receivables management
FSK L&S	Effectiveness of ethical management system and internal control	Recommendation to enhance internal rules and regulations, operation of grievance reporting channels and hotlines, and control of ethical standards for its global businesses
SK Shieldus	Purchasing and internal accounting control	Recommendation to enhance purchasing and accounting system
Tmap Mobility	Effectiveness of ethical management system and internal control	Recommendation to enhance internal rules and regulations, operation of grievance reporting channels and hotlines, and control of ethical standards for its global businesses
2023
SK Square Financial	Group self-correcting system expenses	447 recommendations for improvement, including the need to strengthen evidence of usage when processing expenses
SK Square Accounting	Account closing & internal accounting control	Satisfactory; the internal accounting management system is operating properly
SK Square Self- correcting system	Purchasing and supplier management	Satisfactory; no violations of employees’ dual/occupational activities
Dreamus Company	Purchasing procedures, Implementation of iRiver business and receivables management	Recommendation to enhance supplier pool management, purchasing inspection and inventory asset management
FSK L&S	Purchasing procedures	Recommendation to enhance supplier pool management, arbitrary decision regulation management
Incross	Purchasing procedures	Recommendation to enhance purchasing inspection management
SK Square Americas	Business at large	Recommendations to enhance controls over budgets, funds, asset contracts, and investment management
2024
SK Square Financial	Group self-correcting system expenses	in progress
SK Square Accounting	Account closing & internal accounting control	in progress
SK Square Investment manage- ment	Investment management process	in progress
Dreamus Company, FSK L&S, Incross	Implementation of purchasing procedures	in progress
Incross	Purchasing procedures	in progress
SK Square Americas	Implementation of business at large	in progress
Tmap Mobility	Business at large and investment management	in progress

Year	Company		Scope of Audit	Results of Audit
2022	SK Square	Accounting	Account closing & internal accounting control	Satisfactory; no issues were found
	SK Square	Financial	Group self-correcting system expenses	137 recommendations for improvement, including the need to strengthen evidence of usage when processing expenses
	11 Street		Business management system	Recommendation to strengthen standards for evaluating and managing business performance
	Dreamus Company		iRiver business and receivables management	Recommendations to secure business soundness and strengthen receivables management
	FSK L&S		Effectiveness of ethical management system and internal control	Recommendation to enhance internal rules and regulations, operation of grievance reporting channels and hotlines, and control of ethical standards for its global businesses
	SK Shieldus		Purchasing and internal accounting control	Recommendation to enhance purchasing and accounting system
	Tmap Mobility		Effectiveness of ethical management system and internal control	Recommendation to enhance internal rules and regulations, operation of grievance reporting channels and hotlines, and control of ethical standards for its global businesses
2023	SK Square	Financial	Group self-correcting system expenses	447 recommendations for improvement, including the need to strengthen evidence of usage when processing expenses
		Accounting	Account closing & internal accounting control	Satisfactory; the internal accounting management system is operating properly
		Self-correcting system	Purchasing and supplier management	Satisfactory; no violations of employees’ dual/occupational activities
	Dreamus Company		Purchasing procedures, Implementation of iRiver business and receivables management	Recommendation to enhance supplier pool management, purchasing inspection and inventory asset management
	FSK L&S		Purchasing procedures	Recommendation to enhance supplier pool management, arbitrary decision regulation management
	Incross		Purchasing procedures	Recommendation to enhance purchasing inspection management
	SK Square Americas		Business at large	Recommendations to enhance controls over budgets, funds, asset contracts, and investment management
2024	SK Square	Financial	Group self-correcting system expenses	in progress
		Accounting	Account closing & internal accounting control	in progress
		Investment management	Investment management process	in progress
	Dreamus Company, FSK L&S, Incross		Implementation of purchasing procedures	in progress
	Incross		Purchasing procedures	in progress
	SK Square Americas		Implementation of business at large	in progress
	Tmap Mobility		Business at large and investment management	in progress

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