Article 1 (Purpose)

The purpose of these Regulations is to set forth provisions for the composition and operation of the Audit Committee (the “Committee”) as contemplated by the Articles of Incorporation and the Regulations on Board of Directors.

Article 2 (Scope of Application)

Matters relating to the Committee shall be governed by these Regulations unless provided otherwise by applicable laws, ordinances and the Articles of Incorporation, and the Regulations on Board of Directors; provided, however, that, if no provision is provided in these Regulations in respect of a matter or if there is an objection to application of these Regulations in regards to a matter, such matter shall be decided by resolution of the Committee.

Article 3 (Duties)

The Committee shall perform the function of effectiveness audit on internal control system, accounting audit, operation audit and any ancillary functions thereto as follows:

  1. Preparation, execution, outcome valuation, post factum measures, submission of improvement plan for internal audit plan divided into finance audit and operation audit, etc.;
  2. Consent on appointment and dismissal of the head of department related to the internal audit;
  3. Approval on appointment of external auditor;
  4. Evaluation of audit activities of external auditor;
  5. Measures regarding matters pointed out in the auditing;
  6. Handling matters provided in the relevant laws and ordinances or the Articles of Incorporation and matters entrusted by the Board of Directors; or
  7. Audit of any other matters that are recognized by the Board of Directors or the Committee as necessary.

Article 4 (Authority)

  1. The Committee shall have the following authorities if necessary to perform its duties.
    1. Request for submission of relevant certificates, confirmation documents, statements, goods and/or any other related materials;
    2. Sealing of safes, books, other goods and/or depositories;
    3. Request for attendance and answer by relevant persons;
    4. Request for submission of documents regarding all information of the Company and its subsidiaries;
      • 4.2. Audit and request for submission of relevant materials on work, property of complete(a 100% owned) subsidiaries and complete sub-subsidiaries whose issued total number of stock is owned by complete subsidiaries( “complete subsidiaries, etc.”)
    5. Request for submission of documents regarding accounting-related business acquaintances; or
    6. Request for any other matters necessary for performance of audits.
  2. Any person requested by the Committee to perform any item set forth in Article 4.1 shall comply therewith unless there are special reasons for refusal thereof.

Article 5 (Responsibilities)

The Committee shall perform each of the following duties in connection with audits.

  1. The Committee shall audit fairly;
  2. The Committee shall not, without due cause, disclose or use for purposes outside its duties, the confidential information acquired from performance of its duties;
  3. The Committee shall, in connection with the performance of its duties, perform its duties in accordance with the relevant laws and ordinances and instructions, based on facts and proofs thereof, and shall secure sufficient records and supporting evidence with regard to the subject of the audit.
  4. The Committee shall perform each of the following duties when exercising the authority described in Article 4.1.4-2
    • 4.1. The Committee shall not harm the managerial soundness of complete subsidiaries, etc., the rights and interests of consumers and the sound banking transactions.
    • 4.2. The Committee shall not disclose the confidential information which is related to the business of complete subsidiaries, etc. and acquired from its duties, not only during the terms of office but also after retired.
    • 4.3. The Committee shall not violate related laws and ordinances.

Article 6 (Principle of Independence)

The Committee shall perform its functions independently from the Board of Directors, executive organs and any other departments.

Article 7 (Request for Management Information, etc.)

  1. If necessary for performance of audit, the Committee may request at any time for information regarding major management activities.
  2. If necessary for performance of its duties, the Committee may request the relevant officers, employees and outside persons make appearances before the Committee and submit relevant documents and statements.
  3. If necessary, the Committee may request advice from experts at the Company’s expense.

Article 8 (Composition)

  1. The members of the Committee shall possess one of the following qualifications.
    1. Persons who have professional license(s) such as bar membership, KICPA, certified internal auditor, etc., and with five (5) years’ or more experience in the relevant area;
    2. Persons who have master’s degree or higher academic degree in the areas of law or economics/business, and have five (5) years’ or more experience at academic institutions including school and research center;
    3. Persons who have worked in the areas of finance or related fields for ten (10) years or more, and are deemed to have expertise in the areas of accounting, internal control, audit, computation, etc.; or
    4. Persons who are recognized by the General Meeting of shareholders or the nomination committee for candidates of an audit committee to be equally qualified as the foregoing.
  2. The Committee shall consist of more than three (3) directors, provided that one (1) or more accounting or finance experts as prescribed in the relevant laws and ordinances shall be included and more than two thirds (2/3) of the members shall be outside directors.
  3. Each member of the Committee shall be elected among the candidates who have been nominated by the nomination committee for candidates of an audit committee by the General Meeting of shareholders as prescribed in the relevant laws, regulations and the Articles of Incorporation.

Article 9 (Chairman)

  1. The chairman of the Committee shall be elected among the Committee members who are outside directors by a resolution of the Committee, and the chairman shall preside over the meeting of the Committee.
  2. The term of the chairman shall be one (1) year.
  3. If the chairman is absent or disabled, the position shall be deputized in accordance with the order established by the Committee.

Article 10 (Convening of Meetings)

  1. The Committee meeting shall be periodically held once per each quarter, provided that meetings can be convened on occasion as deemed necessary by the chairman.
  2. The meeting shall be convened by the chairman; provided, however, that, if the chairman is disabled, Article 9.3 shall be applied mutatis mutandis.
  3. The Committee shall be convened upon determined date, by giving notice to each of the Committee members at least seven (7) days prior to such date; provided, however, that the said procedures may be omitted with the consent thereon of all the Committee members.
  4. Each member of the Committee may request the chairman to convene a meeting after informing of the agenda and purpose thereof, and the chairman shall convene the meeting unless special reasons exist. If there is a special reason not to convene the meeting, such fact shall be notified in writing to each member of the Committee.

Article 11 (Resolutions)

  1. The following matters shall be determined by resolution of the Committee.
    1. Request for convocation of extraordinary general meeting of shareholders;
    2. Statement regarding agenda and documents to be submitted to general meeting of shareholders;
    3. Preparation and submission of audit report;
    4. Request for convocation of special meeting of Board of Directors;
    5. Request for injunction against director’s unlawful act;
    6. Preparation of annual audit plan;
    7. Inspection on work, property and subsidiaries that are related with internal audit;
    8. Consent on appointment and dismissal of the head of the department related to internal audit;
    9. Approval on appointment and dismissal of external auditor;
    10. Establishment and amendment of Office Regulations of the Standing Member of Audit Committee(hereinafter “the Standing Member”);
    11. Matters provided by the relevant laws and ordinances, the Articles of Incorporation, and other relevant rules; or
    12. Any other matters recognized by the Board of Directors or the Committee as necessary.
  2. The following matters shall be determined upon deliberation by the Committee.
    1. Review on the feasibility of the major accounting principles and change of accounting estimates, etc.;
    2. Review on the soundness and appropriateness of financial activities and accuracy of financial reports;
    3. Review on the appropriateness of establishment and implementation of policies regarding public announcement notice;
    4. Evaluation of audit activities of external auditor;
    5. Unlawful acts done by the management with regard to performance of their duties, or important matters which are in breach of laws and ordinances or the Articles of Incorporation, which were reported by external auditor;
    6. Violation of accounting principles by the Company which were reported by external auditor;
    7. Valuation on appropriateness of status of implementation of internal accounting control system, and review of matters to be improved;
      • 7-2. Evaluation on the operation of internal control system and review on its improvement plan
      • 7-3. Establishment, amendment and abolition of any rules and regulations on internal control related to the duties of the compliance officer
      • 7-4. Review on the matters reported by the compliance officer
      • 7-5. Request for dismissal of the compliance officer
    8. Matters provided in the relevant laws and ordinances, the Articles of Incorporation or other relevant regulations; or
    9. Any other matters deemed by the Committee as necessary.

Article 12 (Method of Resolution)

  1. All resolutions of the Committee shall be adopted by the presence of more than one half (1/2) of all members and a majority vote of the members present at the meeting.However, in the case of resolution on Article 11.1.9 (approval on appointment and dismissal of external auditor), it shall be adopted by the presence of more than two thirds (2/3) of all members and a majority vote of the members present at the meeting.
  2. The Committee may allow all members to take part in the adoption of a resolution by means of a communication system of transmitting and receiving visual images and sounds simultaneously, without the personal attendance of all or part of them at the meeting. In this case, the relevant members shall be deemed to have attended the meeting.
  3. A Committee member having a special interest in respect of the matter for deliberation by the Committee shall not exercise the voting right, and such member shall not be included in the members present for the calculation of the votes.

Article 13 (Minutes)

  1. Deliberations of the Committee meeting shall be recorded in minutes.
  2. The minutes of the Committee meetings shall set forth the agenda, summary of progress, results thereof, objecting members, and reasons thereto, and shall affix the seal or signatures of the members in attendance and be kept securely.

Article 14 (Delegation of Authorities)

  1. For effective performance of audits, the Committee shall delegate the following matters to the Standing Member, who shall report to the Committee regarding significant progress of the matters that have been delegated.
    1. General matters regarding performance of internal audit including audit plan, auditing, audit report, post factum measures;
    2. Measures taken according to requests for measures to be taken under audit results;
    3. Matters delegated pursuant to the Committee’s resolutions; and
    4. Any other matters related to performance of audit.
  2. The Committee shall set forth provisions for the duty of the Standing Member or supplementary audit organization, etc. in Office Regulations of the Standing Member of Audit Committee.

Article 15 (Proxy)

  1. If convening the Committee meeting is difficult due to reasons including the business trip of the members, etc., and the agenda is of an urgent nature, the Standing Member shall act for the Committee and later obtain the Committee’s consent.
  2. In case the Standing Member cannot perform as provided in Article 15.1 above, the head of the audit&compliance team shall act for the Committee and later obtain the Committee’s consent.

Article 16 (Report to Board of Directors)

  1. The Committee shall report to the Board of Directors regarding resolutions adopted by the Committee.
  2. The Committee shall report to the Board of Directors regarding matters that the Committee deems to need correction or improvement among the matters to be deliberated after review of the Committee.
  3. If the Committee decides that the management has committed or is likely to commit an act in violation of laws and ordinances or the Articles of Incorporation, the Committee shall immediately request for convening of the Board of Directors’ meeting and report to the meeting thereon.
  4. The Committee shall report to the Board of Directors regarding the results of the audits at least once a year.

Article 17 (Report on Audit Committee)

The Standing Member shall report to the Committee regarding the outcome of the performance of significant duties other than the matters delegated pursuant to Article 14.

Article 18 (Use of External Auditors)

  1. The Committee shall exert efforts to achieve the purpose of audit by utilizing the audit plan, audit procedures and results of the external auditor.
  2. If necessary to the audit, the Committee may request the external auditor to attend the meeting and to submit relevant documents and statements.

Article 19 (Supplementary Audit Organization)

  1. For effective performance of its duties, the Committee shall establish an internal audit department as a supplementary audit organization at the department level.
  2. Manpower with expertise and appropriate number of personnel shall be maintained for the internal audit department so that the audit may be performed smoothly.

Article 20 (Preparation of Audit Report)

  1. The Committee shall prepare an audit report regarding the audit.
  2. In the audit report, the progress and outcome of the audit shall be recorded, and the members who performed the audit shall affix a seal or signature on the report.

Article 21 (Amendment and Repeal of Regulations)

Amendment and repeal of these Regulations shall be decided by the resolution of the Board of Directors.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from December 1, 2005.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from March 24, 2006.

SUPPLEMENTARY PROVISIONS

These Regulations shall be effective from March 28, 2008.