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
2024
SK Square	Anti-Corruption Audits for Expenses	Audit for personal use of company budgets and violations of regulations on handling company expenses	Explanation of missing evidence of usage and recommendations for improvement, and company-wide communication of findings
	Audits for Consolidated Accounting	Account closing for previous fiscal year & internal accounting control	Satisfactory; no issues were found
	Anti-Corruption Management System	Internal audit of anti-corruption risk assessment results across all departments	Recommendations for improvement, including incorporating new climate-related requirements
	HR, Finance, Investment Management Systems	Audit for violations of ethical standards and anti-bribery and corruption policies based on the group self-correcting system checklists	In progress
	Investment Management	Investment management process	In progress
Subsidiaries (All Subsidiaries under Management including Tmap Mobility)		Audit for violations of ethical standards and anti-bribery and corruption policies including expenses, purchasing, assets, accounts receivable management, employee benefits, etc	Recommendations for revising regulations and improving processes in the areas of cost, purchasing, and property (for six subsidiaries)
2023
SK Square	Anti-Corruption Audits for Expenses	Audit for personal use of company budgets and violations of regulations on handling company expenses	447 recommendations for improvement, such as requiring evidence attachment of usage for certain industries, and company-wide communication of findings
	Audits for Consolidated Accounting	Account closing for previous fiscal year & internal accounting control	Satisfactory; the internal accounting management system is operating properly
	HR, Finance, Investment Management Systems	Audit for violations of ethical standards and anti-bribery and corruption policies based on the group self-correcting system checklists	No issues were found, and completed updating the audit manual
	Anti-Corruption Management System	Internal audit of anti-corruption risk assessment results across all departments	3 recommendations for improvement, including continuous identification of quantitative goal metrics
	Audits for Ethical Management Practices - Conflicts of Interests	Audit for concurrent employment	Satisfactory; no issues were found
SKSQ Americas		Business at large	Recommendations to enhance controls over budgets, funds, asset contracts, and investment management
Subsidiary (FSK L&S)		Purchasing procedures	Recommendation to enhance supplier pool management, arbitrary decision regulation management
Subsidiary (Incross)		Purchasing procedures	Recommendation to enhance purchasing inspection management
Subsidiary (Dreamus Company)		Purchasing procedures, Implementation of iRiver business and receivables management	Recommendation to enhance supplier pool management, purchasing inspection and inventory asset management
2022
SK Square	Anti-Corruption Audits for Expenses	Audit for personal use of company budgets and violations of regulations on handling company expenses	137 recommendations for improvements, including strengthening the attachment of evidence of usage and account processing errors, and company-wide communication of findings
	Audits for Consolidated Accounting	Account closing for previous fiscal year & internal accounting control	Satisfactory; no issues were found
	HR, Finance, Investment Management Systems	Audit for violations of ethical standards and anti-bribery and corruption policies based on the group self-correcting system checklists	No issues were found, and completed updating the audit manual
	Anti-Corruption Management System	Internal audit of anti-corruption risk assessment results across all departments	3 recommendations for improvement, including demonstrating a public commitment to combating corruption
Subsidiary (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
Subsidiary (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 enhance group self-correcting system inspection.
Subsidiary (SK Shieldus)		Purchasing and internal accounting control	Recommendation to enhance purchasing and accounting system
Subsidiary (Dreamus Company)		iRiver business and receivables management	Recommendations to secure business soundness and strengthen receivables management
Subsidiary (11 Street)		Business management system	Recommendation to strengthen standards for evaluating and managing business performance

Company	Unit	2022	2023	2024 Target
FSK L&S	%	93	100	100
TMAP mobility	%	100	100	100
Incross	%	97	96	100
Dreamus Com- pany	%	98	98	100
ONE store	%	100	100	100
11 STREET	%	100	100	100
SK planet	%	100	100	100

Company	Unit	2022	2023	2024 Target
FSK L&S	%	93	100	100
TMAP mobility	%	100	100	100
Incross	%	97	96	100
Dreamus Company	%	98	98	100
ONE store	%	100	100	100
11STREET	%	100	100	100
SK planet	%	100	100	100

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