Management Regulations

Dongsung Chemical

1. GENERAL PROVISIONS

1.1 Purpose

The purpose of this regulation is to ensure that all of the company’s disclosure information is disclosed accurately, completely, fairly and in a timely manner in accordance with relevant laws and regulations, and to set force matters necessary for disclosure-related tasks and procedures, and management of disclosure information, to prevent unfair trade by executives and employees.

1.2 Scope of Application

Matters related to the performance of disclosure work and management of disclosure information shall be governed by the provisions of this regulation, except those provided for in laws, related regulations, or articles of incorporation.

1.3 Definitions of Terminologies

(1) “Disclosure information” means disclosure matters and related information that may influence on the investment decision of investors with respect to the company’s management and assets, etc. as provided under the Act on Capital Market and Financial Investment Business (hereinafter referred to as “Act”) and its Enforcement Decree (hereinafter referred to as “Decree”), the Regulations on Issuance, Disclosure and Others of Securities (“Regulations on Issuance Disclosure”) by the Financial Supervisory Commission (hereinafter referred to as “Commission”), the Regulations on Disclosure and Others of Marketable Securities Market(hereinafter referred to as “Disclosure Regulations”) of Korea Exchange (hereinafter referred to as “Korea Exchange”) and other disclosure matters and related information set forth under applicable laws and regulations.
(2) “Disclosure documents” refer to declaration and reporting documents (including electronic documents) submitted for disclosure of public information and documents attached thereto.
(3) “Disclosure control system” means relevant activities to manage in accordance with certain control procedure by a relevant internal organization of the company for disclosure information.
(4) “Disclosure control organization” means the representative director, disclosure officer, disclosure department, and a business departments relating to generation of disclosure information that undertake disclosure related works, such as generation of disclosure information, collection and review thereto, preparation and approval of disclosure documents and others in accordance with these regulations.
(5) “Disclosure officer” refers to a person who is designated by the CEO and is in charge of the company’s disclosure business, and is registered with the Korea Exchange as the person in charge of disclosure in accordance with Article 88 (1) of the Disclosure Regulations.
(6) “Disclosure department” means a department in charge of disclosure works of the company pursuant to the Work and Office Organization Regulations of the company. In this case, the disclosure department shall have two or more persons in charge of disclosure works, who are also registered with the Korea Exchange in accordance with Article 88 Section 2 of the Disclosure Regulations.
(7) “Business department” means an organization unit that generates disclosure information and performs related works thereto.
(8) “Regular disclosure” means submission of business reports, semi-annual reports, or quarterly reports to the FSC or the Korea Exchange for matters on overall corporate management, such as, business, financial situation, management records of the company and others in accordance with Articles 159, 160, and 165 of the Act, Articles 168 and 170 of the Decree, Article 4-3 of the Regulations on Issuance Disclosure, and Article 21 of the Disclosure Regulations.
(9) “Occasional disclosure” means reporting or disclosure of important facts, contents of decision and others that may influence on the investment decision related to the management activities of the company as a disclosure of important management matters to the Korea Exchange in accordance with Article 7 of the Disclosure Regulations.
(10) “Fair disclosure” means disclosure to the Korea Exchange in order for general investors to be informed of applicable information simultaneously (or up to the time of selective provisions to specific persons) in accordance with Articles 15 and 16 of the Disclosure Regulations and the Operation Standards of the Fair Disclosure of Korea Exchange where the company selectively provides any information that is neither subject to obligatory disclosure under applicable laws and regulations nor within the term of the disclosure period.
(11) “Inquired disclosure” means disclosure made at the request of the Korea Exchange for confirmation of fact on any rumor and press report relating to the company or presence of important information in accordance with Article 12 of the Disclosure Regulations.
(12) “Autonomous disclosure” means disclosure to the Korea Exchange in accordance with Article 28 of the Disclosure Regulations and Article 8 of the detailed rules for operation of the same, in the event that the Company determines that it may have a significant impact on the company’s management, property, and investor’s investment judgment other than the occasional disclosure in Paragraph 9, or if it is deemed necessary to disclose information that is not subject to disclosure.
(13) “Issuance disclosure and report on major issues” means submitting a report to the FSC on the matters related to the company’s organizational change, such as the solicitation and sales of securities, mergers, divisions, business transfers, etc., or the acquisition and disposal of treasury stocks, etc. in accordance with relevant laws, in accordance with Article 119, Article 121 to Article 123, Article 130, Article 161 of the Act, Decree Article 120 to Article 122, Article 137, Article 171, and Issuance and Disclosure Regulation Articles 2-4, Article 2- 6, 2-14, 2-17, 4-5, 5-8 to 5-10, and 5-15.
(14) “Subsidiary” means one defined under Article 2 Section 1 Paragraph 3 of the Monopoly Regulation and Fair Trade Act and Article 2 Section 1 Paragraph 2 of the Financial Holding Company Act, and “Subordinate company” means one in the dominant-subordinate relationship under Article 1-2 Paragraph 2 of the Act on External Audit of Stock Companies (Newly established on December. 27, 2013).
(15) The terms used in this regulation shall follow the examples of terms used in related laws and regulations, except as otherwise provided in this regulation.

2. BASIC AUTHORITY AND RESPONSIBILITY OF DISCLOSURE CONTROL ORGANIZATION

2.1 Representative Director

(1) The representative director shall oversee relevant works with respect to the disclosure control system.
(2) The representative director shall carry out the following works to ensure efficient operation of the disclosure control system.
① To build disclosure system and establish operational policy.
② To establish authorities, responsibilities and reporting systems for the disclosure control system.
③ To conduct final inspection of the operational state of the disclosure control system, and conduct final evaluation of the operational performance
④ To approve regulations for disclosure control system.
⑤ Other matters as required.

2.2 Disclosure Officer

(1) The disclosure Officer shall be designated by the representative director.
(2) The disclosure officer shall overseas the affairs relating to design and operation of the disclosure control system and carry out the following works.
① Affairs on review, approval and implementation on disclosure information and disclosure documents (including related documents. The same will apply to all the other provisions.)
② Actions required to comply with applicable laws and regulations relating to disclosure by executives and employees (implementation of relevant training, preparation of instructions, etc.)
③ Identification on risk factors in disclosure information and establishment and implementation of countermeasure
④ Continuous monitoring of the disclosure control system, regular checking of operational state, and evaluation of operational performance
⑤ Determination of whether to disclose and the scope of matters not explicitly specified to be disclosed in related laws
⑥ Command and supervision of the disclosure department
⑦ Establishment and implementation of training plans on executives and employees with respect to disclosure works
⑧ Approval of detailed instructions, etc. for implementation of applicable regulations relating to design and operation of the disclosure control system
⑨ Other matters recognized by the representative director to be required for the disclosure control system
(3) The disclosure officer shall have the following authorities if necessary when performing duties.
① Right to request submission of various books and records with respect to disclosure matters and to peruse them
② Right to listen to opinions on executives and employees in a relevant accounting or audit department, and other departments related to generation of disclosure information and preparation of disclosure documents
(4) When required for performance of duties, the disclosure officer may consult a relevant executive or an auditor (an audit member), or hear opinions of external professionals.

2.3 Disclosure Department

(1) The representative director shall organize a department(s) in charge of disclosure works including those having professional knowledge on disclosure works. Two of them shall be designated as disclosure officers in accordance with Article 88 Section 2 of the Disclosure Regulations.
(2) The disclosure department shall be under the command of the disclosure officer with respect to disclosure matters and carry out the following works:
① Collecting and reviewing various disclosure information
② Preparing disclosure documents and implementing disclosure
③ Establishing annual disclosure work plans and checking progress status
④ Reviewing necessary measures and reporting to the disclosure officer, to ensure compliance of applicable laws and regulations, such as frequent checks on enactments of and amendments to applicable laws and regulations relating to disclosure
⑤ Identifying, inspecting, evaluating, and managing risks from disclosure at the company-wide level
⑥ Any other matters that the representative director or the disclosure officer finds necessary.

2.4 Business Department

(1) Upon the occurrence of each of the following events, the head of each business department shall timely send information to the disclosure department:
① Where any disclosure matters prescribed under applicable laws and regulations on disclosure have occurred or are expected to occur;
② Where a matter of important impact on management of the company occurs, but it is unclear whether to disclose the information;
③ Where there is any cause of cancellation or modification for matters previously disclosed occurs or is expected to occur; or
④ Where the disclosure officer or the head of the disclosure department otherwise requests disclosure of information.
(2) In the case of delivering the disclosure information in the preceding paragraph, a copy of the relevant contents and necessary evidence and reference materials shall be delivered in writing to the disclosure department and the original shall be kept. However, if it is urgent or there are unavoidable reasons, it may be delivered by an appropriate method other than a document, but a copy of the relevant content may be delivered as a document afterwards.

3. DISCLOSURE CONTROL ACTIVITY AND OPERATION

3.1 Regular Disclosure

3.1.1 Regular Disclosure

The company shall prepare the regular disclosure documents and file them with the FSC and the Korea Exchange within a relevant disclosure period.

3.1.2 Disclosure Department

(1) The head of the disclosure department shall check the disclosure items and schedule for disclosure of regular disclosure matters, establish an annual disclosure work plan, and implement it after obtaining approval from the disclosure officer.
(2) If necessary, for regular disclosure, the head of the disclosure department may request the head of each business department to submit information and evidence relating to preparation of regular disclosure documents, in which case the relevant business department shall comply therewith. However, if the head of the business department determines that a relevant matter requires significant security or that confidentiality must be maintained, he or she shall report it to the disclosure officer and follow the instructions.
(3) The head of the disclosure department shall prepare regular disclosure documents in accordance with the format and completion method as prescribed by relevant laws and submit them to the disclosure officer by deadline for submission specified in a relevant annual disclosure work plan. In this case, if there is a risk that the submission deadline may not be observed, it shall be reported to the disclosure officer and the necessary measures shall be taken and instructed.
(4) The head of the disclosure department shall implement regular disclosure within a statutory deadline for submission with approval of the disclosure officer. However, when approval of the representative director is required under applicable regulations, certificate of approval made by the representative director shall be attached.

3.1.3 Disclosure Officer and Representative Director

(1) The disclosure officer shall check the work status required for disclosure implementation for regular disclosure, and take necessary measures when he or she is unlikely to meet a statutory deadline for submission.
(2) The disclosure officer shall review the regular disclosure documents submitted by the head of the disclosure department in order to check whether they are appropriately prepared in accordance with applicable laws and regulations and the information released by regular disclosure is accurate and complete, report it to the representative director, obtain approval from the representative director. After obtaining approval, the head of the disclosure department should be notified to carry out the disclosure.
(3) The representative director shall check and review the appropriateness of regular disclosure documents submitted by the disclosure officer at the first hand before providing approval and certifications required by applicable laws and regulations.

3.1.4 Post Check of the Content of Disclosure

(1) The head of the business department relating to preparation of regular disclosure documents and the head of the disclosure department shall examine the appropriateness of content of the prepared disclosure immediately after making the disclosure.
(2) The head of the disclosure department shall take necessary measures, such as revised disclosure, immediately when any omission or error is found in the disclosed information through post check.

3.2 Occasional disclosure

3.2.1 Occasional disclosure

The company shall prepare occasional disclosure documents and file them with the Korea Exchange within a relevant disclosure period.

3.2.2 Business Department

(1) Each business department shall immediately deliver the information to the disclosure department when an occasional disclosure occurs or are expected to occur, and when reasons for cancellation or change of previously disclosed contents occur or are expected to occur.
(2) Where the head of the disclosure department requests for submission of relevant supplementary or additional materials with information as provided in Section 1 above, the business department shall immediately respond thereto. However, if the head of the business department finds that relevant matters are highly confidential or require a stricter level of security, the head of the business department shall report it to the disclosure officer and follow instructions.

3.2.3 Disclosure Department

(1) Where the disclosure department receives information on occasional disclosure matters from a business department, it shall review whether the information is required to be disclosed, and also review the accuracy, completeness, etc. of the information provided. If necessary, the head of the disclosure department may request the business department to supplement or submit additional materials for information previously provided.
(2) The head of the disclosure department, as a result of the review in the preceding paragraph, if it falls under any of the occasional disclosure matters, shall prepare a review of the information and occasional disclosure documents and report it to the disclosure officer, and implement the disclosure should be implemented in accordance with the disclosure methods prescribed under applicable laws and regulations. However, where it is difficult to obtain approval of the disclosure officer due to his or her absence or for any other reason, the head of the disclosure department may implement disclosure on his or her behalf, in which case it shall be reported to the disclosure officer afterwards.
(3) If the result of the review in Paragraph 1 does not correspond to the disclosure matters, the head of the disclosure department shall write the reason and the contents of the review of the information in writing and report it to the disclosure officer.

3.2.4 Disclosure Officer

(1) The disclosure officer shall review whether the results of review and disclosure documents mentioned in Article 16 Paragraphs 2 and 3 above are prepared appropriately in accordance with applicable laws and regulations and make approval on matters of disclosure.
(2) The disclosure officer shall report important matters concerning occasional disclosure to the representative director.

3.2.5 Post Check of the Content of Disclosure

The provision of Article 3.1.4 shall be applied with respect to occasional disclosure. In this case, the “regular disclosure documents” shall be considered as the “occasional disclosure documents.”

3.3 Fair Disclosure

3.3.1  Fair Disclosure

The company shall prepare fair disclosure documents and file them with the Korea Exchange within a relevant deadline for disclosure.

3.3.2 Prohibition on Circumvention of Information Subject to Fair Disclosure Person

The fair disclosure information provider (referring to the person specified in Article 15 (2) of the Disclosure Regulations) shall not provide fair disclosure matters in a circumvent way before disclosure of fair disclosure matters through various ratios and scales of increase or decrease, etc. to a subject person who receives fair disclosure information (referring to the person specified in Article 15 (3) of the Disclosure Regulations)  prior to the disclosure).

3.3.3 Notes

(1) When fair disclosure is made, in order to allow investors intending to know the detailed information on the content of fair disclosure to easily ask questions, a relevant disclosure officer, a person in charge of disclosure, a relevant department and its contact information relating to the fair disclosure information, etc. shall be specified.
(2) If there is a request from the Korea Exchange, the information on the summary of fair disclosure and the website address should be written and disclosed on the Korea exchange, and the summary and the original text shall be posted on the company’s website

3.3.4 Application mutatis mutandis

The provisions of Articles 3.1.4, and 3.2.2 to 3.2.4 shall apply mutatis mutandis to fair disclosure. In this case, “regular disclosure documents” in Article 3.1.4 shall be construed as “fair disclosure documents”, and “occasional disclosure” in Articles 3.2.2 to 3.2.3 as “fair disclosure”

3.4 Inquiry Disclosure

3.4.1 Inquiry Disclosure

The company shall prepare inquiry disclosure documents and file them with the Korea Exchange within a relevant deadline for disclosure.

3.4.2 Disclosure Department

(1) When the head of the disclosure department receives an inquiry disclosure request from the Korea Exchange, he/she shall immediately check the facts and the existence of important information, prepare disclosure documents, and respond to inquiry disclosure with approval from the disclosure officer.
(2) The head of the disclosure department may request the submission of data or statements of opinion from each business department to confirm the facts or the existence of important information in the preceding paragraph, and in this case, the business department shall comply with the request. However, if the head of the business department determines that the relevant matter requires significant security or that confidentiality must be maintained, he/she shall report it to the disclosure officer and follow the instructions
(3) In the event that the head of the disclosure department has received a request for inquiry disclosure and made inquiry disclosure stating that they are in the process of making a decision (hereinafter referred to as “unconfirmed disclosure”), the head shall identify facts or the progress of problems at hand, and issue revised disclosure after obtaining approval of the disclosure officer within one (1) month from the date of the unconfirmed disclosure. However, when it is not possible to issue revised disclosure within one (1) month as described above, relevant disclosure indicating a clear timeline for revised disclosure shall be posted.

3.4.3 Application mutatis mutandis

The provisions of Articles 3.1.4, 3.2.3, Paragraph 2, and the provisions of Article 3.2.4 shall apply mutatis mutandis to inquiry disclosure. In this case, “regular disclosure” in Article 3.1.4 shall be construed as “inquiry disclosure”, “occasional disclosure” in Article 3.2.4 as “inquiry disclosure”, and the “content of review and disclosure documents under Paragraphs 2 and 3” of Article 3.2.4 Section 1 shall be construed as “the content of verification and disclosure documents of Paragraph 1.”

3.5 Autonomous Disclosure

3.5.1 Autonomous Disclosure

The company may prepare Autonomous disclosure documents and file them with the Korea Exchange by a relevant due date for disclosure.

3.5.2 Judgment of Necessity for Autonomous Disclosure and Collection of Information

(1) If the disclosure officer finds that autonomous disclosure is necessary or cancellation or modification of voluntary disclosure already made is required or expected to be required, he or she may instruct the head of the disclosure department to collect necessary information and prepare disclosure documents.
(2) In the event that natters deemed necessary for autonomous disclosure or a reason for cancellation or change of previously disclosed contents occurs or is expected to occur, or if there is an instruction from the disclosure officer pursuant to the preceding paragraph, the head of the disclosure department may request the head of the business department to provide necessary information or submit data.
(3) In the event that natters deemed necessary for autonomous disclosure or a reason for cancellation or change of previously disclosed contents occurs or is expected to occur, or if there is an instruction from the head of the disclosure department pursuant to the preceding paragraph, the head of the disclosure department may request to provide necessary information or submission of data, the head of the business department shall immediately deliver the necessary information or data in writing to the disclosure department in accordance with the method stipulated in Article 2.4, Paragraph 2.
(4) The head of the business department shall promptly respond to a request from the head of the disclosure department to supplement the notice in the preceding paragraph or to submit additional data. However, if it is determined that the relevant matter requires significant security or confidentiality must be maintained, it shall be reported to the disclosure officer for instructions as necessary.

3.5.3 Application mutatis mutandis

Articles 3.1.4, 3.2.3 and 3.2.4 shall apply mutatis mutandis to voluntary disclosure. In this case, “regular disclosure” in Article 3.1.4 shall be construed as “autonomous disclosure”, and “review on whether it is a disclosure matter” in Article 3.2.3 (1) shall be construed as “review on the necessity of disclosure”, “cases subject to disclosure”  In Paragraph 2 of the same Article shall be construed as “when disclosure is deemed necessary”, and “cases that do not fall under disclosure matters” in Paragraph 3 of the same Article as “cases where disclosure is deemed unnecessary”, and “occasional disclosure” in Articles 3.2.3 and 3.2.4 shall be construed as ‘autonomous disclosure’.

3.6 Issuance Disclosure and Major Issues Report

3.6.1 Issuance Disclosure and Major Issues Report

The company shall prepare issuance disclosure documents and major issues report and file them with the FSC within a relevant deadline for disclosure.

3.6.2 Establishment of Business Plan

In case of major issues to be reported occur or expected to occur under Article 161, Paragraph 1, No. 6 to No. 8 of the Act, the head of the disclosure department, after confirming the required disclosure matters and disclosure schedule, and establishing a business promotion plan for issuance and disclosure of major issues, shall obtain approval of the disclosure officer and deliver it to each business department in writing.

3.6.3 Application mutatis mutandis

(1) The provisions of Articles 3.1.2, Paragraphs 2 to 4, 3.1.3 and 3.1.4 shall apply mutatis mutandis to the issuance disclosure and reporting of major matters in the preceding Article. In this case, “annual disclosure business plan” in Article 3.1.2 (3) shall be construed as “issuance disclosure and major issue reporting business promotion plan”, and “Periodic disclosure documents” in Articles 3.1.2 (3), 3.1.3 and 3.1.4 shall be construed as “issuance disclosure and documents and major issues report document”.
(2) Articles 3.2.2 to 3.2.5 shall apply mutatis mutandis to the major matters report under Article 161, Paragraph 1, Nos. 1 to 5 and 9 of the Act. In this case, “occasional disclosure” and “occasional disclosure document” shall be construed as “report on major issues” and “documents for reporting on major issues” respectively.

4. Management of Information and Disclosure Risk

4.1 Collection, Maintenance, and Management of Information

Each disclosure control organization shall collect, maintain, and manage necessary information and supporting data both inside and outside the company related to its duties in order to secure the accuracy, completeness, fairness and timeliness of the disclosure information.

4.2 Management of Disclosure Risks

(1) The representative director and the disclosure officer shall ensure that the following disclosure risks, which may negatively affect the accuracy, completeness, fairness and timeliness of disclosure information, are checked in a timely manner and continuously managed.
① Financial information error: disclosure risks resulting from inconsistency between actual financial conditions and disclosure details attributable to accounting mistakes or miscommunications among persons in charge
② Insufficient information in the form, error in description: Risk of disclosure due to omission or error in the information required in the form related to disclosure due to lack of understanding of the instructions, etc., typos, etc.
③ Unclear, insufficient, incorrect disclosure statement: disclosure risks resulting from use of jargons or abbreviations which are hard for general public to understand, the lack of sufficient explanations, inconsistency between actual events and disclosure statements
④ Non-fulfillment of obligations to meet the deadline for disclosure: disclosure risks resulting from non-compliance with a deadline for disclosure due to a delay in providing or approving information, or misunderstandings of the deadline for disclosure
⑤ Omission, misstatement, understatement of disclosure items: Disclosure risk due to omission of disclosure due to failure to understand disclosure obligations, or concealment or understatement of negative information to the company
⑥ Risk of disclosure of forecast information: Risk of disclosure due to whether the forecast information is not based on reasonable grounds or assumptions, intentional false statements, or omission of important matters
⑦ Leakage of undisclosed information: Risk of disclosure due to whether the forecast information is not based on reasonable grounds or assumptions, intentional false statements, or omission of important matters
⑧ Risks associated with changes to the disclosure system: disclosure risks resulting from changes in statutory provisions governing disclosure, government policies, Korea Exchange or market in which the company is listed, or disclosure risks that may arise due to changes in the person in charge or practice of the relevant supervisory authority and market operating organization, etc.
⑨ Replacement of disclosure administrators: disclosure risks resulting from breakdown of information trails, loss of continuity in disclosure administration accompanying replacement of the disclosure administrator
⑩ Any other disclosure risks that may have a negative impact on disclosure information.
(2) The head of the disclosure department shall list disclosure risk factors following the instructions of the disclosure officer and continue to verify and manage such disclosure risks.

5. Prohibition of Unfair Trading by Officers or Employees

5.1 General Principles

Executives and employees shall not use undisclosed material information related to the work, etc. stipulated in Article 174 (1) of the Act (hereinafter referred to as ‘undisclosed material information’) for the sale or other transactions of specific securities, etc. prescribed in Article 172 (1) of the Act,  (hereinafter referred to as ‘specific securities, etc.’) or shall not allow others to use.

5.2 Transaction of Specified Securities by Executives or Employees

(1) Executives and employees shall notify the internal audit officer or legal officer of the situation in advance when they wish to trade or trade specific securities, regardless of whether or not they use material undisclosed information.
(2) An executive in charge of internal audit or an officer in charge of legal affairs who has received the notice in the preceding paragraph may prohibit the sale or other transaction if it is judged that it is likely to be regarded as a transaction using undisclosed material information. In this case, the relevant executives and employees shall comply with it.
(3) When an executive or employee has engaged in sales or any other transactions, he or she shall report the details of transactions (type of specific securities, etc., number of transactions, transaction date) to a relevant internal audit officer or a relevant legal officer within 10 days from the end date of the quarter in which the transaction date belongs.

5.3 Management of Undisclosed Important Information

(1) The representative director or the disclosure officer shall take necessary measures to manage undisclosed important information in accordance with the following requirements
① Any document that contains undisclosed important information shall be kept in safe places to which only the authorized executives and employees may have access.
② Executives or employees shall not discuss undisclosed important information in a place where a third party may overhear the content of conversations, such as elevator, corridor and other open areas.
③ Any document that contains undisclosed important information shall not be placed in an open place and, when documents are to be disposed, it shall be disposed in an appropriate way, such as shredding or other means, in order to ensure that the documents are rendered illegible after disposal.
④ Executives or employees shall maintain confidentiality both in and outside of the company for undisclosed important information they hold.
⑤ Electronic transmissions of documents by fax, PC communications, etc. with respect to material non-public information shall be made under security guarantee conditions.
⑥ Copying documents with material non-public information shall be avoided if possible, and documents shall be cleared off from conference rooms or work related areas promptly after relevant works are done.
⑦ Spare document copies containing the material non-public information shall be completely disposed of by means of shredding, etc.
(2) Executives or employees shall not disclose the company’s material non-public information. However, where it becomes unavoidable to share material non-public information with the other party, such as transaction partner, legal representative, external auditor, etc, it shall be reported in advance to the disclosure officer or the head of the disclosure department, so that the material non-public information is shared only to a required extent.
(3) Where an executive or employee has disclosed material non-public information without intending to do so, it shall be reported without delay to the head of the disclosure department.
(4) Upon receiving a report of such an event as described in the paragraphs above, the head of the disclosure department shall report it to the disclosure officer, receive relevant instructions, and take necessary measures, such as making fair disclosure.

5.4 Material non-public Information of Affiliated Companies

Articles 5.1 to 5.3 shall apply mutatis mutandis to the prohibition of the use of material non-public information of the Company’s affiliates to its executives and employees.

5.5 Return of short-term trading profits, etc.

(1) Executives and employees in each of the following subparagraphs shall return the profits to the company in accordance with the provisions of Article 172 of the Act, in the case where a profit is obtained by selling certain securities within 6 months after purchasing or by purchasing within 6 months after the sale.
① Employees engaged in establishment, change, promotion, and disclosure of matters subject to the report of major matters in Article 1.3 (13) and other related tasks
② Any employee engaging in finance, accounting, planning, R&D related works
(2) In the event that the Company’s shareholders (including those who own equity securities or depository securities other than stock certificates; hereafter the same shall apply in this Article) request the Company to request the return of the profits from the executives and employees who made short-term arbitrage transactions, the head of the disclosure department shall report it to the disclosure officer.
(3) The disclosure officer shall proceed with the necessary procedures to receive the profit back, within two months from the date of receipt of the request in the preceding paragraph.
(4) The disclosure officer shall post the following matters on the company’s website without delay for two (2) years from the date of his/her receipt of a relevant notification from the Securities and Futures Commission (hereinafter referred to as the “SFC”) regarding short-swing profits taken by the company’s executives or employees, except for cases where such short swing profits have been returned.
① Position of the person who is to return short-swing profits
② Amount of short- swing profits (It means the sum of each executive, employee, or major shareholder)
③ The date of notification of short-term swing profits from the SFC
④ The company’s short-swing profit return claim plan
⑤ Shareholders of a relevant corporation (Including any person who owns equity securities or securities deposit certificates other than the stock certificate; hereinafter the same shall apply in this subparagraph) may request the corporation to claim the return of short-swing profits from the person who has gained profits from the securities trading, and if the claim is not made within two (2) months from the date of request by the corporation, a relevant shareholder may bring the claim on behalf of the corporation.

6. Other Disclosure Control

6.1 Contact with the Press, Including Distribution of Press Release. Etc.

6.1.1 Press Release

(1) When the head of each business department intends to distribute press releases to mass media such as media press companies, it must be delivered to the disclosure department in advance and distributed with the approval of the disclosure officer. In this case, if the disclosure officer deems it necessary, he/she shall report it to the representative director and follow the instructions.
(2) When the information provided by the relevant press release is applicable to a matter of fair disclosure under Article 3.3.1, the head of the disclosure department shall prepare fair disclosure documents, obtain the approval of the disclosure officer, and make fair disclosure in accordance with Articles 3.3.3 and 3.3.4.

6.1.2 Listening to Opinions

If required, the disclosure officer may hear opinions of professional insight from executives, employees or external experts for information provided by the press release.

6.1.3 Post Inspection of Content of the Press Coverage

The head of a relevant business department and the head of the disclosure department that have generated the press release shall conduct post inspection on the content reported after distribution of the press release, and where it has content different from the facts, it shall be reported to the disclosure officer and necessary measures shall be taken in accordance with instructions of the disclosure officer.

6.1.4 Media coverage, etc.

(1) Where a mass media, such as the press, requests the company for interviews, etc., each of the following persons may respond to the interviews. However, in inevitable cases, the disclosure officer may designate a relevant person to respond to them.
① Representative Director
② Disclosure officer
③ IR officer
④ Finance officer
(2) When there is a request for coverage, etc. in the preceding paragraph, the head of the disclosure department shall receive inquiries from the relevant media company, etc. in advance or prepare expected questions and answers and deliver them to the person who responds to the coverage after review by the disclosure officer.
(3) The head of the disclosure department shall check the contents of media reports, such as the media, and if there is a report that is different from the facts, report it to the disclosure officer and take necessary measures according to the instructions of the disclosure officer.

6.2 Rumors in Market and Others

6.2.1 Rumors in Market

(1) In principle, the company shall not make any comments about market rumors.
(2) The disclosure officer or the head of the disclosure department shall check whether the content of the market rumors are consistent with material non-public information, through inquiry of a relevant department etc., and if they are consistent as such, he or she shall take necessary measures to disclose the relevant information immediately.
(3) The disclosure officer or the head of the disclosure department shall establish and implement appropriate response plans when it is judged to be an agenda that may have a negative impact to the interest of the company even if the content of market rumors are not consistent with material non-public information.

6.2.2 Request for Information

(1) When shareholders or interested parties request for disclosure of company related information, the disclosure officer shall review the legitimacy of such a request and determine whether to provide the requested information.
(2) When information is provided based on a decision of the previous Section, the disclosure officer may listen to the opinions of a relevant internal audit officer or a relevant outside legal officer to review whether the provided information may have an impact on investor decisions and stock prices. In the case of information subject to fair disclosure or affecting investment judgment and stock price, necessary measures shall be taken so that the information can be disclosed to the public at the same time (or before the information is provided) to the person who requested the provision of the information.

6.2.3 Company Briefing Session

(1) In the case of holding a company briefing session (hereinafter referred to as a “company briefing session”) such as an investment briefing session or an analyst meeting, the head of the business department in charge of the task must report to the disclosure officer in advance and obtain approval.
(2) In the case of holding a company briefing session, the head of the business department in charge of the relevant affairs shall notify the disclosure department of the date, time, place, target, etc. of the company briefing session, and the head of the disclosure department shall implement it before it is held.
(3) The head of the disclosure department shall take necessary measures to ensure that the information is disclosed to the public without delay if there is any provision of information that is not disclosed to the public through questions and answers at the company briefing session.

6.2.4 Provision of information through website and e-mail

(1) When the head of each business department provides information regarding the company on the homepage, by e-mail, etc., the information must be delivered to the disclosure department in advance and provided with the approval of the disclosure officer.
(2) Articles 6.1.1 (2), 6.1.2, and 6.1.3 shall apply mutatis mutandis in this Article. In this case, “press release” and “information provided through press release” shall be construed as “information provided through website, e-mail, etc.”

7. Supplementary Rules

7.1 Training

(1) The disclosure officer shall establish and implement an annual training plan related to the disclosure control system for all executives and employees of the company in order to fully understand and properly implement relevant works. In this case, specialized education or training shall be completed for business departments and disclosure departments with a high frequency of disclosure information.
(2) The head of the disclosure department shall check schedules of compulsory training provided by the Korea Exchange or the Korea Listed Companies Association, and ensure to have relevant staff to complete programs, and take necessary measures for them to disseminate training content they have received to relevant officers or employees.

7.2 Notification to the Company of Disclosed Information of Subsidiaries and Affiliates

(1) The company shall instruct subsidiaries and affiliates to notify the content immediately to the disclosure department if any disclosed information is generated or expected to occur.
(2) The company shall take measures to establish regulations of disclosure information management for subsidiaries and affiliates to conduct efficient disclosure control. In this case, the company shall cause its subsidiary and affiliate to appoint a person in charge of disclosure works. In this case, the subsidiaries and affiliates shall have a disclosure manager in charge of disclosure, and if the disclosure manager is designated or changed, the company shall be notified immediately.
(3) The company may request subsidiaries and affiliates to submit relevant materials to the extent necessary for disclosure works. The company may investigate works and properties of subsidiaries and affiliates if necessary materials cannot be obtained or it is necessary to confirm the content of materials submitted by affiliates. (This article is newly established on December 27, 2013).

7.3 Penalties

The company may impose penalties or sanctions on executives and employees who violate this regulation according to the company’s related regulations.

7.4 Establishment and Repeal of Rules

Establishment and repeal of this regulation shall be undertaken by the representative director.

Supplementary provisions

Article 1 (Enforcement Date) This regulation shall come into effect from July 1, 2015.
Article 2 (Repeal of inside information management regulations) With the enforcement of this regulation, the company’s inside information management regulation will be repealed.

Dongsung Fintec

CHAPTER 1. GENERAL PROVISIONS

Purpose

The purpose of these regulations is to set forth matters relating to the comprehensive management and appropriate disclosure of the company’s internal information in order to make prompt and accurate disclosure and prevent insider trading by executives and employees.

Definitions of Terminologies

(1)
“Internal information” refers to matters of disclosure requirement specified in the Regulations of Disclosure of the KOSDAQ market (hereinafter referred to as the “Regulations of Disclosure”) and any other matters that may affect the company’s management and property status, and decision-making of investors.

(2)
A “Disclosure Officer” refers to a person who can disclose reports on behalf of the company in accordance with Article 2 Section 2 of the Regulations of Disclosure.

(3)
An “Executive” refers to a director (Including any of the persons referred to in each of the Subparagraphs of Article 401-2 Section 1 of the Commercial Act) or an auditor.

(4)
In addition to Sections 1 through 3, definitions of the terms used in these regulations shall follow the definitions of the terms used in relevant laws and regulations.

Scope of Application

Matters relating to disclosure, insider trading, and internal information management shall comply with these regulations, except as stipulated in relevant laws or the Articles of Incorporation.

Management of Internal Information

(1)
Executives and employees shall strictly manage the company’s internal information that comes to his/her knowledge in the course of business, and shall not disclose internal information to the inside or outside of the company except in cases where it is necessary for business.

(2)
The representative director or the disclosure officer shall take necessary measures for internal information management, by establishing specific criteria for storage, delivery, and destruction of internal information and related documents.

Chapter 2. Management of Internal Information

Disclosure Officer

(1)
The representative director shall designate a disclosure officer and report it to the Korea Exchange. This provision same shall also apply when the disclosure officer is changed.

(2)
The disclosure officer shall generally manager the works relating to the establishment and operation of the internal information management system, and perform tasks in the following subparagraphs:
① Performing disclosure;
② Checking and evaluating the operational status of the internal information management system;
③ Reviewing internal information and decide whether to disclose information;
④ Taking measures necessary to operate the internal information management system, such as providing education for executives and employees;
⑤ Providing directions and supervision to departments or executives and employees in charge of managing internal information or performing disclosure; and
⑥ Performing any other tasks that the representative director finds to be necessary to operate the internal information management system.

(3)
The disclosure officer shall have authorities described in each of the following subparagraphs in performing his/her duties: the work:
ⓛ To request submission of and have access to various documents and records relating to internal information; and
② To hear necessary opinions from executives and employees of departments in charge of accounting or auditing works, or any other departments in charge of works relating to creation of internal information.

(4)
The disclosure officer may consult with executives in charge of relevant works if it is necessary to perform his/her works and may seek assistance of professionals at the company’s expense.

(5)
The disclosure officer shall report the operational status of the internal information management system to the representative director (or to the Board of Directors) on a regular basis.

Disclosure Administrator

(1)
The representative director shall designate a disclosure administrator and report it to the Korea Exchange. This provision same shall also apply when the disclosure administrator is changed.

(2)
The disclosure administrator shall perform tasks in each of the following subparagraphs under the direction of the disclosure officer in relation to internal information management:
① Collecting and reviewing internal information and reporting to the disclosure officer;
② Doing works necessary to perform disclosure;
③ Confirming matters necessary to manage internal information, such as changes in disclosure related laws and regulations, and report such matters to the disclosure officer; and
④ Performing any other tasks that the representative director or the disclosure officer finds to be necessary.

Concentration of Internal Information

Executives and the head of each department shall provide relevant information to the disclosure officer in each of the following subparagraphs:

(1)
Where internal information did or is expected to occur;

(2)
Where a relevant reason to cancel or change the previously disclosed information among internal information did or is expected to occur; or

(3)
Where the disclosure officer makes a request.

External Disclosure of Internal Information

(1)
Where it is unavoidable for executives and employees to provide internal information to the company’s counterparty, external auditors, agents, or persons who have entered into a consulting service agreement for legal or management advice, etc. for business reasons, relevant matters thereof shall be reported to the disclosure officer.

(2)
As for Section 1, the disclosure officer shall take necessary measures, such as entering into a confidentiality agreement for relevant internal information.

Chapter 3. Disclosure of Internal Information

Types of Disclosure

The company’s disclosures shall be classified as follows:

(1)
Reporting and disclosing major business matters under Title 1 Chapter 2 Clause 1 of the Regulations of Disclosure;

(2)
Conducting inquiry disclosure under Title 1 Chapter 2 Clause 1 of the Regulations of Disclosure;

(3)
Conducting fair disclosure under Title 1 Chapter 2 Clause 1 of the Regulations of Disclosure;

(4)
Conducting voluntary disclosure under Title 1 Chapter 3 of the Regulations of Disclosure;

(5)
Filing written reports of securities under Title 3 Chapter 1 of the Financial Investment Services And Capital Markets Act (hereinafter referred to as the “Act”);

(6)
Filing business reports, etc. under Articles 159, 160, and 165 of the Act and Clause 4 of the Regulations of Disclosure;

(7)
Filing reports of major matters under Article 161 of the Act; and

(8)
Conducting any other disclosure under other laws and regulations.

Performance of Disclosure

(1)
In the event that there is a reason for disclosure as specified in Article 9, the disclosure administrator shall execute necessary content and prepare necessary documents, etc., and report it to the disclosure officer.

(2)
The disclosure officer shall review whether the content and documents of Section 1 violate relevant laws and regulations, and perform disclosure after reporting it to the representative director.

Post Measure after Disclosure

In the event that there is an error or omission in the disclosed content, the disclosure officer and the disclosure administrator shall take measures to correct them without delay.

Interviews, etc. by the Press

(1)
Where the media requests the company for interview, etc., the representative director or the disclosure officer shall respond to the request. If necessary, the company may cause executives and employees of a relevant department(s) to respond to such an interview.

(2)
Where the press release is to be distributed to the media, etc., approval of the disclosure officer shall be obtained. If necessary, the disclosure officer shall report to the representative director matters relating to the distribution of press release.

(3)
Where an executives or employee finds that the media reports of the press are incorrect, he/she shall report it to the disclosure officer. The disclosure officer shall report relevant matters to the representative director and take necessary measures.

Meetings of Investor Relations

Meetings of investor relations regarding the company’s management content, business plans and outlooks, etc. shall be held through approval of the disclosure officer.

Chapter 4. Regulations on Insider Trading

Return of Short-Swing Profits

(1)
If executives and employees (limited to a person who is specified in Article 194 of the Enforcement Decree of the Act and in a position to acquire material nonpublic information as defined in Article 174 Section 1 of the Act; this provision shall also apply to Article 15) earn a profit by purchasing specific securities defined in Article 172 Section 1 of the Act (hereinafter referred to as the “Specific Securities”) and then selling them within six months, or by selling such specific securities and then purchasing them within six months, such profits (hereinafter referred to as the “short-swing profits”) shall be returned to the company.

(2)
If the company’s shareholder (including a person who owns any equity security or depositary receipt other than stocks; this provision shall apply hereinafter in this Article) demands the company to claim for return of short-swing profits against one who has earned short-swing profits under Section 1, the disclosure officer shall take necessary measures within two (2) months from the date of its receipt of such a demand.

(3)
Where the Securities and Futures Commission has notified the company of the occurrence of short-swing profits under Section 1, the disclosure officer shall disclose each of the matters in the following subparagraphs without delay on the company’s internet homepage:
① Status of a person who is required to return short-swing profit;
② Amounts of short-swing profits;
③ The date of receipt of a notice of the occurrence short-swing profits from the Securities and Future Commission;
④ A plan to return short-swing profits;
⑤ The instruction stating that the company’s shareholder may demand the company to claim for return of short-swing profits against one who has earned short-swing profits, and (ii) if the company does not claim for return within two (2) months from the date of its receipt of such a demand, the shareholder may claim for return on behalf of the company.

(4)
The period of disclosure in Section 3 shall be two (2) years from the date of the company’s receipt of a notice of short-swing profits from the Securities and Futures Commission or the date when short-swing profits are returned, whichever comes earlier.

Notification of Sales of Specific Securities, etc.

Where executives and employees sell specified securities, etc. or do any other transaction works, they shall report it to the disclosure officer.

Prohibition on Use of Material Nonpublic Information

Executives and employees shall not use or cause third parties to use material nonpublic information specified in Article 171 Section 2 of the Act (including material nonpublic information of the company’s affiliates) for sales of specific securities, etc. or any other transactions.

Chapter 5. Supplementary Rules

Education

The disclosure officer and the disclosure administrator shall complete education on disclosure works required under Article 36 and Article 44 Section 5 of the Regulations of Disclosure, and the disclosure officer shall ensure that the content of education is disseminated to relevant executives and employees.
Article 18 (Establishment and Repeal of Regulations)
Amendments to or repeals of these regulations shall be undertaken by the representative director.

Publication of Regulations

These regulations shall be published on the company’s website. This provision shall also apply when these regulations are amended.

Addenda

These regulations shall be implemented from September 1, 2009.

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