HYOSUNG TNC

Hyosung TNC conducts regular ethics and anti-corruption training for all employees at our domestic and international business sites to foster a strong ethical mindset and ensure the practice of ethical management. We also produce and distribute various promotional materials, such as posters and magazines, to enhance awareness and reinforce our commitment to ethics and compliance. New employees are required to sign an "Ethics Pledge" and an "Anti-Graft and Bribery Pledge," affirming their commitment to our ethical principles and the importance of compliance from the moment they join. For our partners, we provide education on handling contract-related risks, such as dealing with difficult clients. Furthermore, we offer specialized training for our sales departments on topics including the protection of trade and business secrets, handling of bribes, compliance with fair trade laws, and regulations concerning corporate credit cards, providing them with clear guidelines based on legal standards. To extend our ethical practices throughout the supply chain, we survey our suppliers' perception of our ethics program and provide comprehensive ESG consulting services, which include our "Supplier Code of Conduct."

Hyosung TNC performs various investigations into compliance risks based on reports received from internal and external whistleblowers. In accordance with our internal audit regulations, the Audit Team conducts regular annual audits of our domestic subsidiaries and select business sites. In response to specific issues, special audits are conducted to assess compliance with regulations and procedures, as well as operational efficiency, and to identify and take action against unethical behavior. We are committed to preventing any form of retaliation by protecting the anonymity of both the informant and the individual under investigation. The results of all investigations, including any disciplinary actions taken, are reported to the CEO. Upon receiving audit findings, the relevant personnel are required to implement immediate corrective actions to address the issue and prevent any recurrence of similar risks.

To foster a culture of fair trade with our partners, Hyosung TNC has adopted the "Four Major Practice Guidelines," established and recommended by the Korea Fair Trade Commission (KFTC), into our corporate regulations. Additionally, we have issued guidelines prohibiting retaliatory actions against our partners, such as unilateral transaction proposals or suspensions. This lays the foundation for fair partnerships and helps build rational, transparent business relationships.

The Fair Trade Compliance Program (CP) is an internal system that Hyosung TNC voluntarily operates to ensure adherence to fair trade laws. This comprehensive framework encompasses our monitoring, training, and supervision systems. Through the CP, we aim to proactively prevent losses that could arise from legal violations and foster a desirable corporate culture of fair competition, thereby realizing our commitment to responsible management. Hyosung TNC has continuously operated the CP since inheriting it in June 2018 upon our demerger from Hyosung Corporation, which originally introduced the program in September 2006. To help employees adhere to fair trade compliance standards in their daily work, we provide a "Fair Trade Compliance Manual" which is updated and distributed annually. The Compliance Support Team is responsible for overseeing the CP and strives to minimize fair trade risks through various activities, including company-wide training on CP operating guidelines and continuous monitoring. The Compliance Officer, appointed by the Board of Directors, manages the CP and is empowered to report directly to the Board and top management on important issues, which they do on a regular basis.

Hyosung TNC conducts annual fair trade training for all employees to enhance their awareness of and commitment to compliance. This training covers essential fair trade laws and regulations, such as the Fair Transactions in Subcontracting Act, the Anti-Graft Act, and the Trade Secret Protection Act, as well as the standards and procedures of our internal Compliance Program (CP). To prevent violations within each department, we also share legal case studies and pre-litigation precedents to provide practical risk management strategies. Furthermore, from the pre-contract stage, Hyosung TNC strictly adheres to our contract review regulations and utilizes standard contract templates to proactively prevent legal risks. All contracts undergo a systematic internal review, and by using standardized forms, we eliminate unfair or ambiguous clauses to minimize the potential for legal disputes.

To help establish a fair subcontracting ecosystem and build rational, transparent business relationships, Hyosung TNC operates an Internal Deliberation Committee for Subcontracting Transactions. This committee deliberates on the fairness and legality of all subcontracting dealings and serves as a self-monitoring body to prevent any illegal, improper, or unfair practices. The Committee is composed of at least three members, including the executive in charge of subcontracting affairs. It is responsible for pre-deliberating on matters such as: the appropriateness of partner registration and cancellation criteria; appeals regarding non-selection or registration cancellation; the fairness of the contracting and pricing process for contracts valued at over 2 billion KRW; and overall compliance with the Subcontracting Act. When necessary, the Committee also gathers opinions from relevant partner companies, with their anonymity guaranteed. Using a comprehensive compliance checklist, we confirm key legal points before proceeding with any transaction, including the issuance of a written contract, the prohibition of unfair price setting, and the prohibition of forced purchases or demands for economic benefits. After a transaction is complete, we conduct a follow-up review to check for any issues such as delayed payments, violations of technical data protection laws, or unfair reductions in subcontracting payments.