HYUNDAI DEPARTMENT STORE GROUP

Shareholder-Friendly Policies

1. 01 We operate policies that guarantee the fundamental rights of shareholders.
   1. 1. Diversification of the methods of exercising a voting interest at shareholder meetings: Proxy voting, electronic voting system
   2. 2. Avoidance of overlaps in shareholder meeting schedules: We avoid days on which shareholder meetings
      are concentrated for the scheduling of the meeting
   3. 3. Proposals: We guarantee minority shareholders can also make agenda proposals
2. 02We treat each shareholder with fairness.
   1. 1. Compliance with the one share, one vote principle
   2. 2. Provide information for the shareholder meetings in advance: Publish the audit and annual reports prior to the shareholder meetings
   3. 3. Provide sufficient time for a review before the shareholder meetings: Notice is provided 4 weeks prior to the meeting
   4. 4. Protect shareholders from unfair internal trading practices by the controlling shareholder : Operate an internal transaction committee with a majority of outside directors

• Shareholder Meetings
• Electronic Voting System
• Executive Board

Operation of the Executive Board

1. 01 We are enhancing the transparency of the Executive Board by strengthening the management and supervision functions of the outside directors.
   1. 1. Build a committee with a majority of outside directors within the Executive Board, regardless of the legal requirements
      1. ① Audit Committee: Evaluates and receives reports on auditory tasks in general, such as the verification of financial statements
      2. ② Outside Director Candidate Recommendation Committee: Verifies and recommends candidates for outside directors
      3. ③ Internal Transaction Committee: Examines and determines the appropriateness of the transactions between affiliates
      4. ④ Compensation Committee: Receives reports on the performance of the executives and determines the adequacy of their compensation
   2. 2. Limit on Consecutive Terms for Outside Directors: Establish the standards for the limit on consecutive terms to under 6 years within the Articles of Association and the regulations of the Executive Board
2. 02 We prevent those who may harm the enterprise values from rising to the executive level.
   1. 1. Evaluate the ethics and the compliance management of those who are candidates for executive positions, including in the assessment for promotions
   2. 2. Evaluate the ethics and the compliance management of outside directors in cases of the appointment or re-appointment in the Outside Director Candidate Recommendation Committee
3. 03 The Executive Board complies with the following items, in accordance with the regulations of the Executive Board, in its operations.
   1. 1. Regulations are established regarding the Executive Board and the committee within it, which should be published on the company’s website
   2. 2. The Executive Board conducts quarterly regular committee meetings and other temporary meetings
   3. 3. The Executive Board shall convene the Board members seven days prior to a meeting, at the latest, and shall hold a briefing session in advance if necessary
   4. 4. The Executive Board keeps meeting minutes, and supports methods of the meetings that will utilize means of remote communication in the case of possible absences due to business trips overseas or to other regions

Internal Audit System

1. 01All listed companies of the Group are obliged to introduce an Auditory Committee.
   1. 1. For the listed companies that are large in scale, it is required by law to introduce an audit committee
   2. 2. For the listed companies that are not large, the audit committee is introduced as well, even when it is not required by law
   3. 3. All members of the Audit Committee are outside directors
2. 02The Audit Committee performs the following tasks.
   1. 1. Verifies the legitimacy of the execution of tasks by the directors and the executive managers
   2. 2. Examines the soundness of the company’s financial activities and the adequacy and accuracy of the reporting process
   3. 3. Has access to key information, and receives auditory training provided by specialized institutions at least once every year
3. 03We reinforce the role of the auditor through exchanges and communication with outside auditors.
   1. 1. Separate meetings take place at least once every quarter without the company’s executive managers
   2. 2. The Audit Committee attends training sessions led by outside auditors, which take place at least once every quarter