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Article 1 (Purpose)

The purpose of this regulation is to stipulate matters needed for the efficient operation of the audit committee (hereinafter referred to as “the committee”).

Matters regarding the committee shall be based on the stipulations of this regulation, except on those stipulated by laws, articles of incorporation, or regulations of the board of directors.

1. ① The term ‘internal control system’ in this regulation shall refer to a series of continuous processes implemented by the company’s board, executives, and other members to provide reasonable conviction regarding compliance to relevant laws and policies, and reliance of the financial information, and to ensure efficient and effective operations of the company
2. ② The term ‘internal accounting control system’ in this regulation as part of the internal control system, shall refer to a continuous process implemented by the members of the organization including the company’s board and executives, for the purpose of securing reliability of the financial statements.
3. ③ The term ‘internal accounting manager’ is a person designated under Article 8 (3) of the Act on External Audit of Stock Companies (hereinafter referred to as ‘Act on External Audit’). (Amended 12 Dec 2018)
4. ④ The term ‘internal audit department’ in this regulation shall refer to an internal department under the organizational structure that carry out overall audit related duties including preparation, implementation, and reporting of the results of the internal audit plan. (New 30 April 2012)

1. ① The committee shall audit the accounting and tasks of the company.
2. ② At any time may the committee request the director for a report on business or investigate the financial position of the company.
3. ③ The committee shall select the external auditors.
4. ④ The committee shall approve establishment of and amendments to the internal accounting control regulations and assess the operational status.
5. ⑤ The committee shall handle matters, in addition to articles 1 to 3, stipulated in laws or articles of incorporation as well as matters entrusted by the board of directors.

1. ① Committee members (hereinafter referred to as “the members”) are appointed at the general meeting of shareholders.
2. ② The committee consists of three or more directors.
3. ③ At least two-thirds of the members must be outside directors, and the members who are not outside directors must meet requirements provided in Paragraph 3 of Article 542-11 of the Commercial Act. Also at least one audit committee member must be an accounting or financial expert as prescribed in Paragraph 2 of Article 542-11 of the Commercial Act.
4. ④ If the number of committee members referred in Paragraph 3 falls short due to reasons including resignation or death of outsider directors, the requirements for the committee composition must be satisfied at the general meeting of shareholders first to be convened after the occurrence of the incident.

The members may be dismissed by the resolution at the general meeting of shareholders.

1. ① The committee shall select a chairperson to represent the committee by the resolution based on the regulation of Article 10. In this case, it may decide several members to co-represent the committee.
2. ② The chairperson shall oversee the work of the committee and can divide the work for each committee member for an efficient operation of the committee.
3. ③ In the event of an accident of the chairperson, a member determined by the committee will act on behalf.

The committee shall meet frequently as necessary.

1. ① The committee is convened by the chairperson.
2. ② Each member may request for a committee convocation by clarifying the agenda and its reason to the chairperson. If the chairperson does not convene the committee without justifiable reason, the member who requested the convocation of the committee may convene the committee.

1. ① For a committee convocation, a meeting date must be determined and a notice must be sent to each member one day prior to the date.
2. ② When all of the members agree, the committee may hold a meeting at any time without the procedure in Paragraph 1.

The resolution of the committee is made under the attendance of a majority of the enrolled members and a majority vote of the attending members. In this case, the committee may permit all members to participate in the resolution via means of communication that simultaneously transmits and receives voice without requiring physical attendance of all or some of its members, in which case the member will be deemed to have attended the meeting in-person. If an in-person meeting is required under the Act on External Audit, notwithstanding the main text of this regulation attendance shall only be permitted via remote video conferencing which provides connection between different locations by using transmission and reception equipment that support both video and voice communications.

1. ① Matters to be referred to the committee are as below.
   1. 1. Matters regarding the general meeting of shareholders
      1. (1) Request for convocation of extraordinary general meeting
      2. (2) Statement on agendas and documents of the general meeting of shareholders
   2. 2. Matters regarding directors and the board of directors
      1. (1) Obligation to report on the board of directors
      2. (2) Preparation and submission of audit reports
      3. (3) Injunction of illegal acts by directors
      4. (4) Request for business report to the director
      5. (5) Matters delegated by the board of directors
   3. 3. Matters regarding audit
      1. (1) Business and property investigation
      2. (2) Investigation of subsidiary companies
      3. (3) Receiving report from director
      4. (4) Small representative between the director and the company
      5. (5) Decision whether to file a suit when requesting to sue against a director of the minority shareholders
      6. (6) Selection and dismissal of external auditors
      7. (7) Establishment of and amendments to items that relate to external auditors’ fees, audit time, and manpower required for audit
      8. (8) Establishment of and amendments to standards and procedures for the selection of external auditors
      9. (9) Post evaluation of the selected external auditors
      10. (10) Receiving report on any misconduct concerning the performance of the director's duties or important facts of the violation of laws and articles of incorporation from external auditors
      11. (11) Receiving report on facts of the company violating accounting standards regarding accounting and others from external auditors
      12. (12) Evaluation on the internal control system (including internal accounting control system)
      13. (13) Consent to the appointment or dismissal of the head of the internal audit department
      14. (14) Laws and articles of incorporation, matters in which the board of directors require audit committee resolution and other matters in which the auditing committee is considered necessary.

1. ① The committee shall maintain a close relationship with the internal audit department (including compliance officer or compliance office system) and shall make efforts to achieve the goal of the audit by utilizing audit plans, procedures, and result of the external audit.
2. ② The committee may demand internal audit department to make a report on the result of the audit or request for examination of certain matters.
3. ③ Appointment or dismissal of the head of the internal audit department shall have the consent of the committee.

1. ① The committee shall convene in-person meetings to evaluate operational status of the internal accounting control system and make face-to-face report to the board of directors of the same by no later than one week prior to the general meeting of shareholders and keep the evaluation report in custody for five years at the head office of the company. If there is any recommendation for corrective measures regarding the management and operation of internal accounting control system, it shall be included in the report.
2. ② The evaluation report on the operational status of the internal accounting control system shall include the following:
   1. 1. Titled as evaluation report of the committee.
   2. 2. Shareholders and the board of directors stated as recipients.
   3. 3. The fact that there was evaluation on the effectiveness of design and operation of the internal accounting control system made for the period subject to such evaluation on the date of evaluation.
   4. 4. The fact that the representative director and the company’s executives including the internal accounting manager are responsible for design and operation of the internal accounting control system, under the internal control system chosen by the management, and that the committee is responsible for supervision and oversight.
   5. 5. The fact that the committee in conducting its evaluation referenced the evaluation report on the operational status of the internal accounting control system submitted by the internal accounting manager, and that there was an additional review process, if any.
   6. 6. Evaluation results that show internal accounting control system having practical impact on the preparation and disclosure of reliable accounting information, and recommendations on corrective measures.
   7. 7. The result of a check on whether there are any false information or representations in the operational status report of internal accounting control system, or whether there are any omissions, and measures taken.
   8. 8. The result of a review on whether the redress plan in the operational status report of internal accounting control system can bring practical improvements to the company’s internal accounting control system, and alternative recommendations.
   9. 9. The fact that model criteria for evaluation and reporting on internal accounting control system (if any other criteria were used, state as such) was used as criteria for evaluating design and operation of the internal accounting control system.
   10. 10. Evaluation results based on the model criteria for evaluation and reporting on internal accounting control system from the perspective of principle of materiality.
   11. 11. Description of material deficiencies in the design and operation of the internal accounting control system if such material deficiencies exist.
   12. 12. Plan for corrective measures on material deficiencies if any, and processes already underway.
   13. 13. Date of the report
   14. 14. Signature and seal by auditors
   15. 15. Others
       1. A. Summary of representative director’s report (evaluation results, significant deficiencies, corrective measures, future plans, etc.)
       2. B. Additional matters identified from the result of the evaluation
       3. C. Recommendations

1. The committee shall monitor and evaluate the operation of the company’s internal control system no less than once a year and make a request and recommendation to address such issues when they are identified and present its assessment of the internal control system including the following matters, to the board of directors.
   1. 1. Whether risk factors are properly understood, and associated risk control system is working.
   2. 2. Whether the business plan and processes for setting strategies satisfy compliance requirements, and whether they are aligned with the company’s business objectives
   3. 3. Whether the accounting policy or changes in estimates are valid, and whether the accounting treatment methods are adequate and in alignment with the company’s business objectives
   4. 4. Whether reporting, sharing and management system for information are adequate
   5. 5. Whether system for analyzing performance of each department is efficient and effective
   6. 6. Whether the training plan for employees regarding internal control is adequate
   7. 7. Whether the operation of compliance officer or compliance office system is adequate
   8. 8. Whether internal control system is adequate under the company’s organizational structure

1. ① The committee may request relevant executives and external auditors to attend the meeting if necessary for work performance
2. ② If considered necessary, the committee may request advice from experts and etc., the cost payed by the company.

1. ① Regarding the committees’ proceedings, minutes shall be written.
2. ② In the minutes, the agenda of the proceedings, the progress, the results, the objectors, and their reasons for objection shall be specified, and the attending members shall seal or sign the minutes.

The committee shall maintain a close relationship with external auditors and shall make effort to achieve the goal of the audit by utilizing audit plans, procedures, and results of external auditors.

1. ① The committee shall select external auditors, and if the company either replaced or dismissed the external auditor, after identifying whether he or she has any opinion, the external auditor from the preceding term or the auditor who has been dismissed shall be given an opportunity to provide his or her opinion orally or in written form.
2. ② The committee shall document matters related to audit time, audit fees, and manpower input. When determining the audit time etc., factors that affect the audit, including mergers and acquisitions, material changes to accounting, changes in the number of consolidated subsidiaries etc., shall be adequately considered.
3. ③ The committee shall prepare in advance standards and procedures which include the following items which are necessary for selecting external auditors.
   1. 1. Adequacy of audit time, audit manpower, audit fees and the audit plan
   2. 2. Independence and expertise of external auditors
   3. 3. Stated opinion of the former external auditor from the preceding term, and the following items:
      1. A. Evaluation results on whether the former external auditor faithfully implemented what was agreed at the time of the appointment of the external auditor including audit time, audit manpower, audit fees, the audit plan, etc.;
      2. B. If the former auditor, in regard to the audit, made a request that the company receive advice from an external agency on interpretation of accounting treatment, asset valuation, etc., the content of consultation between the committee and the former auditor regarding such a request and the result of the advisory and the details of its usage;
      3. C. Number of in-person meetings between the committee and the former external auditor during the relevant business year, information on the identity of participants and important remarks made; and
      4. D. Any other items required to ensure objective and reliable selection of auditors under the standards set forth by the Financial Services Commission.
4. ④ The committee shall hold in-person meetings to select external auditors, and keep and manage records of the following items:
   1. 1. Result of review of items under paragraph 3
   2. 2. Number of in-person meetings, information on the identity of participants, important remarks made, etc.
5. ⑤ The committee shall evaluate the audit report each business year after the external auditor submits the report and keep and manage records of the evaluation.

The committee, after reviewing matters that can affect the independence of the external auditor including those that are key matters between the external auditor and the company, and other duties that are likely to entail conflict of interest may submit its relevant opinion to the board of directors.

The committee, after reviewing matters that can affect the independence of the external auditor including those that are key matters between the external auditor and the company, and other duties that are likely to entail conflict of interest may submit its relevant opinion to the board of directors.

1. After the auditor submits the audit report, each of the following matters shall be examined, and the results shall be written and managed in document.
   1. ① Whether the matters determined in Paragraph 1 of Article 14-2 have been complied
   2. ② Whether the agreements agreed according to Paragraph 1 of Article 14-2 have been duly implemented
   3. ③ If the auditor, in regards to the audit, requests the company to receive advice from an external agency on interpretation of accounting estimate, asset valuation, etc., the contents of the consultation between the committee and the auditor regarding such request, the results of the corresponding consultation, and the details on its usage.

1. ① The committee, for an efficient work performance, may install and operate a department in charge of assisting the committee or utilize the internal audit department of the company.
2. ② The committee may set separate standards for other necessary matters including the installation and operation of the department in charge, the appointment of professional manpower and operation expense, and etc.

1. ① The committee must write an audit report.
2. ② In the audit report, the conduction of the audit and its results should be specified, and the member who conducted the audit must seal or sign.

This regulation shall take effect from May 4, 2018.

This regulation shall take effect from February 14, 2019.

This regulation shall take effect from November 27, 2020.

This regulation shall take effect from July 8, 2021.

This regulation shall take effect from December 28, 2022.