Lotte Innovate

Lifetime Value Creator

COMPLIANCE

A clean and prosperous world where everyone can trust each other completely.
That is the beautiful future we, the Lotte family, should aspire towards.

LOTTE COMPLIANCE

Administrative Compliance Charter

Under the mission statement “we enrich people’s lives by providing superior products and services that our customers love and trust,” we pledge that we will pursue growth as a company that is loved by the people and committed to social responsibility, and will follow the declaration of compliance management as follows below.

Article 1 (Code of conduct of employees)

① We carry out our tasks with honest, diligent, and responsible attitudes, and establish our company’s culture based on mutual respect and trust.
② We increase the value of company through transparent and efficient management, and always do our best to maximize benefit for the shareholders.
③ We set customer satisfaction as the top priority, and provide the best quality products and services that customers desire.
④ We establish clean, fair, and orderly relationships with partners and pursue mutual development through partnership reinforcement.
⑤ We respect our competitors, relevant regulations, and commercial practices to pursue fair and free competition.
⑥ We continue to do our best to grow as an environmentally-friendly company and contribute to the conservation of the earth and human prosperity.
⑦ We abide the law, and contribute to national and social interests, and we fully commit ourselves to the realization of our corporate social responsibility.
⑧ We respect human rights and protect the weak, setting respect and love for all humankind as our key value.

Article 2 (Duties and responsibilities of employees)

① We have to hold the strictest standards of ethics for ourselves, and establish and maintain a culture where creditability, honesty, ethics, and mutual respect are maintained.
② We must have a depth of knowledge and understanding of the regulations and internal company policies (referred as “related regulations” below) applicable to the execution of tasks, and constantly ensure compliance to the related regulations when carrying out daily tasks.
③ We, when we cannot judge how to respond to a particular situation, contact superiors, company compliance teams, legal teams, and so on to make the most appropriate and ethical decisions.
④ We, upon discovery of infringement of the related regulations, have to take appropriate actions to identify and prevent the unjust act in a prompt manner. When it is difficult to act ethically on behalf of the company, or the situation becomes known, we must cooperate with the compliance team.

Article 3 (Duties and responsibilities of the company)

① The company should make sure that employees understand the related regulations and offer compliance training and education sessions on a regular basis to ensure fair and transparent execution of tasks.
② The company should establish a management system so that employees can inspect and check whether related regulations are appropriately followed, monitoring and managing whether the practice is regularly carried out.
③ The company should protect employees who report suspicious activities which involves infringement of related regulations, and no harm should be inflicted on the employee.
④ The company should take appropriate actions to hold any employee accountable when an infringement of related regulations is confirmed.

LOTTE Personnel Code of Conduct

Trust with Our Customers

Providing the Best Products and Services – Be the first brand in customers’ hearts.

The reason why a specific product or service is chosen by customers out of many is because it provides the best satisfaction for customers. We shall always be committed to giving our customers the belief that our products and services are the best. We shall provide the best products and services at reasonable prices. In recent days, when a lot of products and services are springing up at a rapid pace, it is getting harder to compare every product and service to choose one over others. Accordingly, brand value, which is another way of showing trust, is rising in importance. We shall keep customers’ trust in the Lotte brand so that those who have experienced our products and services, even once, could choose ours again without hesitation.

Principle of Lotte

We shall pursue the quality and service which our competitors can never imitate, and shall always make utmost efforts to this end. The quality and completeness of products and services to be used by customers shall be our most important value. Through our products and services, we shall build and maintain the trust that Lotte is reliable. This is our mission and the purpose of our existence; to create an affluent society.

Action Plan

- Make utmost efforts in order for our products and services to be customers’ first choice.

- Always pursue the highest level of satisfaction for a price that our competitors can never imitate.

- Make customers trust and use the products and services only with the brand name of Lotte. To this end, strictly comply with all policies and procedures regarding safety, hygiene and quality at every moment.

- Accurately identify the rapidly changing demands of customers, and be committed to meeting the expectation of customers by, for example, quickly responding to the reasonable complaints and requirements of customers.

- Pursuing short-term profits or concealing products’ defects is an unconscientious act. Specifically, report and correct problems regarding the hygiene and safety or quality of products promptly.

- Always check if products or components supplied by our partners comply with the standards and safety regulations of the company. Since even a minor component could largely affect the whole product, components or materials not meeting the standards or with defects shall be strictly excluded.

- Domestic and foreign laws related to the safety of products are the minimum standards that we must basically comply with. In order to respond to safety problems which could occur later, establish and follow stricter inhouse standards and safety criteria.

Honest Marketing – Honesty is the easiest way of gaining customers’ trust.

Today, companies and customers have a relationship through brands. A beloved brand cannot be made in a day. It is critical to build customers’ trust in the Lotte brand so that customers can trust and choose us at the moment of choice. We shall provide only accurate information for customers in order to build strong trust. Information that distorts the facts will end up being revealed to be false and the resulting sense of disappointment and betrayal would become the biggest reason why customers leave us. Pursuing honest marketing at any moment! This is what has cultivated the brand of Lotte until now, and the mission and pride that we all will follow.

Principle of Lotte

We shall provide only honest and truthful information in order to create the right customer values. We shall keep in mind that providing customers with false or exaggerated information for short-term sales growth or profits would in one moment, destroy customers’ trust which our colleagues have built with their best efforts. We shall actively disclose any information which may significantly affect our customers, even if it is disadvantageous to us.

Action Plan

- Those who are responsible for the marketing of products and services and communication with customers shall be well aware of in advance and comply with the related laws and company regulations.

- In the event of producing PR material, check if inaccurate information is included.

- When using PR material produced by external agencies, thoroughly check if there are any factual errors or violations of intellectual property rights.

- Refrain from the marketing plan indiscriminately criticizing competitors’ products based on information which is distorted and not objective. Pay particular attention when mentioning competitors’ products in order not to violate the Fair-Trade Acts, etc.

- Refrain from using vague or exaggerated wording when producing marketing material, and use words with clear meanings.

- When the information about a product and service changes, inform the related division of such change to ensure that the product information is accurately reflected in the related material.

Protecting Customer Information Protection – Customer information matters the most.

With the development of digital and information and communication technologies, there is a growing risk that customer information is leaked to the outside and abused. The security policy and system of the company shall be built above legal standards, and we shall thoroughly comply to it. The responsibility of protecting customer information is not limited to only related divisions. The protection of customer information is the basic obligation that every executive and employee of Lotte must observe, regardless of rank.

Principle of Lotte

The damage done by the leakage of the company’s confidential information is to be borne by our company, but the damage caused by the leakage of customer information is directly passed on to our customers who are trusting us. Therefore, our company handles and manages customer information at the level beyond our company’s confidentiality. We shall set the internal standards regarding customer information protection above legal standards and shall collect and manage customer information in accordance with such standards.

Action Plan

- The principles of customer information protection are applied to all information which can identify individuals. Treat such information as the subject of first priority protection.

- Limit the access to customers’ personal information to ensure that only executives and employees involved in the applicable work are allowed to browse it.

- The act of collecting customers’ personal information indiscriminately may be the subject of punishment. Do not collect any personal information, except that which is allowed to be collected by law.

- Use personal information only for the business with which the customers agreed. Completely destroy the personal information of the customers which becomes no longer relevant or necessary to your business in order to ensure that such information is not recovered, according to the related regulation within the set period.

- Be fully aware of the personal information-related laws of each country, since the level of regulations regarding personal information may vary depending on country.

- The leakage of personal information does not only occur online. The personal information of customers may be leaked in unexpected places such as on photocopiers, desks or in the boxes collecting reusable paper. Manage such information strictly.

- Treat the customer information received from our partners at the same level with our own information.

- In the event of entrusting our customer information to a partner company, Check if the partner company has physical, administrative and technical capabilities, enough to protect the customer information, and make sure whether it completely destroys such information after use.

Protecting Our Brand – The best way to represent our brand Lotte to our customers is you.

As there are various communication channels such as TV, blogs and social media, allowing active communication, the ripple effect and significance of the media is increasingly getting bigger. Such contents are likely to become public and be published as news articles; contrary to our intentions, and once published, they are very hard to be completely deleted. Specifically, when publishing the information regarding the company, pay particular attention not to leak our company’s confidential or personal information, and make sure that our words and actions do not negatively affect our company. We shall consider the position of our company and stockholders once again when having an interview about our company with the media or posting information on social media.

Principle of Lotte

Thinking that we are the face of Lotte, we shall first consider the position of our company and the profit of our customers before speaking about our company’s business through media such as TV, blogs, Twitter, Facebook and Internet Websites. We shall be committed to protecting the logo, mission, trademark and brand value of our company without damaging them via the media.

Action Plan

- Keep in mind that the behavior of each executive and employee is directly connected with the image of the company, and work to be careful in our words and actions to keep our dignity.

- Do not mention any confidential information regarding the company (financial, sales, customers, partners, employee information and intellectual property rights, etc.) and the policy, accidents and rumors which the company has not announced officially, or do not publish and distribute files containing photos, video and voice via the media without permission.

- Do not slander our company and stakeholders through the media, and do not mention the accidents, complaints and slandering happening in the business process with the company and stakeholders.

- Do not distribute false information, encourage illegal/unlawful acts, distribute pornography, make a personal insult, swear and cause sexual discrimination, etc. which all may damage the reputation of the company, stakeholders or others.

- Consult with the related division, including a PR Officer, about the purpose and details of the interview in advance when having an interview with the media.

- In the event of mentioning your personal opinion regarding the company, make clear that it is not the company’s opinion, but your own.

Trust with Our Employees

Equal Opportunity and Fair Treatment – We set apart between business and pleasure, and provide fair opportunity.

Lotte shall never allow providing a specific person with more opportunities and making better evaluations for him/her due to personal, regional, and school relations. Providing fair opportunities for all and fairly evaluating them only on their capabilities and performance is the source of strong motivation and excellent performance and the basic principle which helps Lotte executives and employees trust and work for the company. Do you want to be treated fairly? If so, you would be better to treat the executives and employees in a fair way first.

Principle of Lotte

We, the members of Lotte, shall provide fair opportunities for all, treat all in a fair way and pursue the open organizational culture where anyone could grow as much as their ability and efforts. We did not enter the company and were not promoted through external pressure or improper solicitation, and we are responsible for handing down the clean organizational culture with no external pressure or improper solicitation over to our junior employees. We shall only reflect fair factors such as the characteristics of our business, capabilities and performance in the HR affairs. All HR-related decisions shall exclude discrimination based on personal characteristics, including gender, age, race, nationality and the region of origin, generation, religion and disability. In doing so, all executives and employees of Lotte could trust the company’s decision-making.

Action Plan

- Create a community where a specific person is not discriminated against due to personal characteristics.

- Eliminate from the organization the discrimination against individuals due to characteristics such as gender, age, race, nationality or the region of origin, generation, religion and disability, most of which cannot be personally changed. Do not discriminate against individuals due to their unique characteristics in the processes of recruitment, promotion, placement, salary, compensation, welfare benefits and education, etc.

- Laws or policies regarding working conditions may vary depending on country. If this results in a difference between the HR regulation or policy of the local corporation and the policy of Lotte Group, stipulate such regulation and policy and reasonably explain its difference from the Group policy.

- Be wary of anyone who claims that only those with a certain gender, age and background are able to conduct the job well.

- Any improper solicitation regarding HR is prohibited, as it would deal a fatal blow to our community in the long term.

- Evaluate everyone based only on their capability and performance and clearly explain our principle to those who solicit recruitment and promotion.

Mutual Respect among Our Members – We all are someone’s precious family.

We, Lotte, consist of people with various values. Therefore, there may be different opinions and sometimes, work performance may not meet expectations. Even in such a case, the executives and employees of Lotte do not treat their colleagues in an unfair way. We shall consider the unfair treatment of our colleagues the same as that of our family. Lotte is pursuing a community where everyone always respects and treats one another like their own family members. Of course, everyone shall fulfill his/her duty without any problem. When anyone needs a reprimand, he/she should be reprimanded, and when anyone needs encouragement, he/she should be encouraged. However, such reprimands and encouragement shall pursue the growth of each other and shall be based on the respect of personality. Such culture is the best way of maximizing the growth of us all and the secret of Lotte’s growth.

Principle of Lotte

Every one of Lotte’s executives and employees is valuable. We shall not allow any words and actions to undermine our respect and dignity. We shall reject any words or actions that undermine the dignity and class of our community and shall not create a working environment which is threatening, insulting, hostile or unpleasant.

Action Plan

- Always respect and care for your colleagues like your family.

- Do not judge others with your own values. Create the culture where various opinions and values of various people are recognized not as wrong, but as different and can also be understood.

- The head of the department can only exist if there are members of the department. Since the members of the department are talents whom we entrusted to you to treat and foster with loving care, do your best to support them.

- Employees shall do as they wish outside working hours. The director shall avoid making work orders outside working hours and ensure that the members strike the balance between work and family.

- Avoid words and actions that express violence and sadism or show the sense of repulsion or incompatibility to others. Always be careful to ensure that your thoughtless words or actions do not hurt or cause misunderstanding to others.

- In addition to words and actions, create a working environment devoid of bullying in the workplace by eradicating the acts of using improper wording or posting and sending improper content via communication systems such as telephone, messenger, social media, e-mail.

- The above principles are applied not only to Lotte executives and employees, but also to relationships with our customers, partners and all stakeholders. Always speak and act carefully.

Gender Equality – Lotte is working for creating happy families and a fair workplace.

Gender Equality – Lotte is working for creating happy families and a fair workplace. We are well aware that both childbirth and child-rearing require the understanding and support from the society as well as individuals. We intend to create a workplace where anyone does not need to worry about suffering unfair disadvantages due to childbirth and child-rearing and can fully fulfil his/her role as a parent. We shall not discriminate against our employees based on their gender and shall strictly ban any behavior which could bring hatred. Instead of discriminating against and dividing people based on their gender, we shall work for creating a society where everyone can be respected as they are and gender equality can be widespread.

Principle of Lotte

The phrase ‘the members of Lotte’ includes the qualification and rights to be equally respected and treated. Lotte shall not discriminate against anyone due to gender and shall strictly ban words and actions expressing displeasure or hatred regarding gender.

Action Plan

- Childbirth and child-rearing are very important issues. Welcome and congratulate the maternity/paternity leave of your colleagues. Firmly eradicate any HR-related discrimination or inconvenience in connection with childbirth and child-rearing.

- The phrase ‘female employee’ is unnecessary, since it distinguishes employees by gender. In addition, female talents are not the subject of caring and compassion. Treat men and women equally without discrimination.

- Ban any gender-related offensive conducts, sexual harassment and unwanted sexual contact and approach as well as any behaviors which create an uncomfortable working atmosphere due to the reason of refusing to go on a date.

- Report to the inhouse sexual harassment prevention team if you suffered or witnessed the above behaviors.

- Anyone who commits sexual harassment will be strictly punished regardless of rank and the intention of their behaviors. Taking disadvantageous actions, including firing or placing the victim of sexual harassment to another department against their will shall also be subject to punishment.

- The protection of victims shall be a top priority, when dealing with the sexual harassment cases. Do not push victims to reach a compromise with the abuser. Fulfil the confidentiality obligation in the disciplinary process.

- The company shall strive to prevent sexual harassment by, for example, providing the education course once a year in order to prevent sexual harassment at work.

Safe Working Environment – Safety is the first priority in all circumstances.

We shall not allow psychological compromises from the thinking of ‘it’ll never happen!’ in relation to safety. Lotte has a belief that ‘safety can never be overemphasized’. The starting point of all businesses conducted by the members of Lotte is to establish and strictly follow safety regulations beyond the level required by the law under the belief that every safety accident in the world can be prevented.

Principle of Lotte

We shall not only strictly comply with all laws regarding safety and hygiene, but also establish and follow even stricter inhouse regulations to prevent any safety accidents. We shall be committed to providing a safe working environment not only for Lotte executives and employees, but also for our partners and all stakeholders, and actively spread the significance of safety to them. Lotte employees shall never neglect even any familiar jobs since we know that many accidents are caused by the mind of ‘it’ll never happen’ and ‘carelessness’ in our daily life, not by the lack of experience.

Action Plan

- Prioritize safety more than other values, and do not hesitate to address or correct safety-related problems due to costs, delivery date and practice, etc.

- Aggressively find out dangerous working conditions and problems threatening safety, and promptly consult with the director or safety manager to improve even minor ones.

- Be well aware of safety-related regulations and measures in the place where you are working, and follow the user manual, safety regulations and emergency response procedure when using the equipment within the workplace.

- Analyze the types of possible safety accidents and prepare the initial response manual for each accident. Establish elaborate management plans for the safety of human/material resources regarding the continuous operating of the company such as employees, facilities and IT assets, and conduct education and training for the executives and employees on a regular basis.

- The executives and employees shall not allow unauthorized access to the workplace of the company, proactively inform partners and stakeholders of the significance of safety and hygiene and request them to follow the regulations.

- Consult with management if you or your colleagues are having a hard time working normally due to health problems, psychological anxiety, etc.

- Do not drink too much alcohol to interfere with your performance at work, and do not produce, use, sell, possess any illegal drugs or work after taking such drugs.

- If a safety accident occurs, do not cover it up; check the facts through accurate investigation so as to make relevant people responsible, and then compensate the victim properly.

Protecting Our Assets – The assets of the company are for all employees.

The assets of the company are not for one individual, but for all executives and employees of our community. As even the smallest asset is a basic resource for the survival and prosperity of all Lotte executives and employees, the assets shall be used only for related businesses. The assets of the company not only include tangible ones but also intangible ones such as working hours. Such tangible and intangible assets of the company can only be proven to be worth when we use and protect them appropriately.

Principle of Lotte

We shall be committed to protecting the company’s assets and use them for the intended purposes only. We shall actively protect not only tangible assets such as buildings, lands, communication equipment, funds, system, tickets for PR and vehicles, but also intangible assets such as information, technologies, working hours, especially trademarks and copyrighted works.

Action Plan

- The working hours of each employee also constitute the assets of the company. Avoid using private phone-calls, personal e-mail, social media and surfing the Web during working hours. It is the act of abusing the community’s assets to use private calls and e-mailing beyond the level of common sense.

- Protect property, data infrastructure, equipment and consumables from misuse, damage, theft or improper management.

- The intentional damage, embezzlement and theft of the company assets are subject to the cancellation of the employment agreement and criminal punishment. The unauthorized transfer and leakage of information and false reporting about costs are also not allowed.

- Do not conduct illegal actions such as stock trading, gambling and downloading pornographic material using the electronic equipment of the company.

- Do not instruct or ask about private affairs, including financial work, buying a present and searching for information, other than the official business of the company to other executives and employees. The waste of employees’ working hours caused by your instructions is also the abuse of the company’s assets.

- Do not use invitation cards, gift cards or giveaways for PR purposes for your private use.

- The assets of our competitors are as important as ours. Protect the assets of our partners and competitors in a precious way.

- Consult with and get an approval from the director when using the company’s assets for external use or for any purpose other than as intended.

Protecting Our Intellectual Property Rights – We shall protect our intellectual property that we achieved by our sweat and efforts.

Intellectual property rights of design and information, etc. as well as various technologies possessed by us are valuable assets of our community. Such assets are the source of innovative products and services which our competitors cannot imitate. The value of intellectual property rights can be paid off only when the security is maintained both internally and externally, and our competitiveness could continue only when they are preciously managed. We shall respect and protect the intellectual property rights of not only our partners, but also our competitors. It is because we can expect the further development of our society when we compete with each other in a fair way.

Principle of Lotte

We shall always value and protect the intellectual property rights of the company. We shall not disclose the intellectual property and various information of the company to the outside without prior permission or due procedure. The range of intellectual property rights include not only trademarks, patent rights, copyright, design rights and utility model rights, but also the business and technical secrets of the company which are yet to be disclosed to the outside.

Action Plan

- All information related to the company business is the intellectual property of the company. Accurately record, report and systematically manage such information.

- Be well aware of which information must be protected, and comply with the inhouse regulations on the intellectual property rights protection.

- Pay particular attention not to violate the regulations on intellectual property rights protection when in contact with outsiders.

- Clearly recognize that the unauthorized use, reproduction, distribution and alteration which infringes the intellectual property rights are subject to disciplinary actions or criminal punishment according to related regulations or laws.

- Know-hows or technologies produced by the executives and employees at work shall not belong to individuals, but to the assets of the company. Manage even the intellectual property rights produced by individuals in accordance with the company regulations.

- Check national differences and ensure that the intellectual property of the company is also protected overseas, since the laws on intellectual property rights may vary depending on country.

- In the event of conducting business in cooperation with our partners, consult on and clarify who is the owner of the intellectual property rights in advance in order to avoid disputes over the intellectual property rights.

- The intellectual property rights of our partners and all stakeholders shall be respected. Always check whether our new products or services infringe the intellectual property rights of others.

- When we recruit manpower from our competitors and vice versa, verify and manage the entrance/resignation procedures of the company so as to check whether the intellectual property rights of others or our company are infringed.

Preventing Information Leakage – Information leakage begins with minor carelessness.

The development of digital and communication technologies is helping our working environment become more convenient. However, behind the convenience is a risk that the leakage of corporate information becomes easier. Now is the time when we need to pay more particular attention to the use of digital and communication equipment. In a world where information is power, we shall raise awareness about and step up countermeasures on security as the world gets more transparent and the speed of connection gets more rapid.

Principle of Lotte

We shall properly use the communication equipment where needed at work, and ensure that information leakage does not occur by strictly following the company regulations on the information protection.

Action Plan

- All electronic equipment provided by the company is only for the company’s business. Check the acceptable standards if you wish to use them for purposes other than the company’s business.

- The company is obliged to check and record how the executives and employees use communication and services through electronic equipment in order to protect information.

- Frequently check whether a personal computer is infected with a virus, and that the firewall is active and the security software is updated to the latest standards.

- Use only authorized software within the company. Follow the company regulations and procedures when uploading and downloading all data.

- Change your PIN(Personal Identification Number) more than once every three months and do not share it with others.

- Delete the data related to the company business saved in your personal hard disk or electronic devices in the event of leaving the company or moving to another company. The director shall strictly manage the data to ensure that illegal data leakage does not occur when an employee leaves the company or moves to another company.

- Manage your business through the company’s security system within the company. Get approval from the director if necessary since it is not allowable to leak the documents and information of the company via unauthorized storage media or e-mail to the outside without permission.

- Always clearly designate a recipient and set a password for documents requiring confidentiality in order to prevent the leakage of the company’s important information via e-mail.

- Pay particular attention not to leak the important information of the company in offline occasions such as meetings with the executives and employees of the company, our customers and partners.

- Ensure that the personal social media does not become a channel to leak the information about the company.

Trust with Our Partners

Compliance with the Fair Trade Act – Fairness and trust is the power binding us and our partners as one team.

We and our partners are one team working together toward a common purpose. In order for different companies to form a team, the top priority is trust for each other. Nothing can be done without trust that both parties would fulfill their duty as expected. Behind such trust is fairness. If either one is damaged by unfair trade, it would not make the utmost effort for its counterpart and the relationship would not continue for long. While the Fair Trade Act stipulates the relationships with competitors and partners, we shall pursue standards beyond what is specified in the law. Fair trade that can always be trusted is the way for the co-existence of us and our partners.

Principle of Lotte

We are taking the lead in complying with the Fair Trade Acts applicable to the subject regions around the world. The principles of equality, fairness and openness are the most important principles which have grown our society. We shall consider these principles as the very basic principles in our relationship with all partners around the world. We shall aggressively correct the existing practices of unfair trade, if any, to set the culture of fair trade, and shall pursue the beautiful culture of co-existence.

Action Plan

- Do not ask our partners to conduct unfair trade or practices by abusing your position. Fully understand the Fair Trade Act, and strictly reject any unfair actions that violate this Act.

- Select a partner publicly in accordance with the objective criteria and specified procedures such as quality, prices and financial soundness.

- Provide an opportunity for a company, which shares Lotte’s dedication to and effort in integrity, ethics and social responsibility, to be selected as our partner.

- Consult with and gain approval from the director since there could occur information leakage, improper solicitation or situations violating the Fair Trade Act when conducting business with our partners where the executives and employees’ relatives or friends are working, or any stakeholders.

- Frequently check and be well aware of the details to avoid the violation of the Fair Trade Act since the laws and policies regarding fair trade may vary depending on country and the details of the Fair Trade Act are changing as times and the world change.

Respect for Our Partners – Mutual respect strengthens the relationship between us and our partners.

The segmented and specialized corporate environment is making the role of our partners greater. The excellent partnership we have with our partners will be the yardstick of the company’s competitiveness. We shall put ourselves in our partners’ shoes. Comparing a company which respects and trusts its partners through transparent and fair trade and a company which doesn’t, it is obvious which company the potential partners would want to work with and do their best for. Without the active assistance of our partners, it is hard to achieve the sustainable growth of our company. Our partners also cannot continue to grow without our assistance. We shall grow together with our partners through mutual respect and cooperation.

Principle of Lotte

We shall value our cooperation and relationships with all partners and treat them in an equal and fair way. All the principles of the code of conduct that we observe shall be applied to the relationships with our partners.

Action Plan

- Respect and treat the executives and employees of our partners equally and fairly like those of Lotte.

- Respect the management policy and the executives and employees’ working hours of our partners.

- Explain the provisions regarding Lotte’s code of conduct and other policies to the partners, and request them to agree and comply to them.

- Treat the partners in a fair way, regardless of their size.

- Always pay particular attention to the protection of partners’ confidential information and intellectual property rights.

- Actively provide partners with various growth opportunities, including HR development, quality improvement and technology development. The improvement of their competitiveness will be a driving force of our growth.

Fair Competition – Fair competition makes us stronger.

Competition among companies to be able to enrich the life of customers and stakeholders is getting increasingly fierce. If such competition is inevitable, we shall join the competition in a fair way as it is the Lotte way. Dirty play which presents us with victory for a while would be an obstacle to securing true competitiveness, and the way of unfair competition does not befit the members of Lotte, who are trusted by others. Of course, collusion with the competitors also constitutes the above case. Collusion is an unfair action infringing the customers’ right of choice and undermining the development of the industry as a whole. The most desirable way for the development of our customers, the society and ourselves is to cultivate our capabilities through competition in good faith and fair competition.

Principle of Lotte

We shall compete in a fair way based on the creativity of the company for the proper development of the national economy. We shall discourage the acts of undermining fair competition and shall take the lead in creating a fair and transparent world.

Action Plan

- It is prohibited to conduct any acts of disturbing the reasonable choice of customers through mutual agreement or connivance among companies and limiting the actual competition among companies. Do not conduct any prohibited act for immediate gains or results.

- Never even discuss with the competitors on anything against the Fair Trade Acts, including prices, the details of bidding, costs, profits, market share, sales region, the distribution of product family, business conditions, distribution method, the allocation of regions or markets, the boycott of a specific supplier and customer, provided products or services, and the class of customers or suppliers.

- Do not participate in meetings with the competitors where the agenda is not clear. Even if participating in the meeting with a clear agenda, clearly show your intention to refuse the discussion when a dangerous subject begins to be discussed.

- While an act, which is allowed in a certain country, may be illegal in another country, our competitors in a certain country may become our partners in another country. In order to prevent the violation of laws in such a case, be fully aware of competition-related laws of each country in advance.

- Consider the possibility of violating the laws in advance, if the company runs the joint venture or cooperates with the competitor after finding it difficult to achieve its business goal alone.

- An illegal act could significantly affect not only individuals, but also the company’s reputation. In addition to doing an illegal act itself, do not abet, condone and assist an illegal act.

Lawful Information Collection – Information shall be collected in a lawful way.

It is sometimes required to collect the information of our competitors in order to create better customer values. Even in such a case, we shall use only legitimate and fair ways. It is possible to sufficiently secure the information of the competitors through information presented in the analysis reports or public announcement of specialized agencies without using illegal and unfair ways. Our rights could be protected only when we keep and protect the rights of our competitors. Success achieved by unfair ways will never be sustainable. Trust is very important in the relationship with our competitors. We all could grow together only when we keep mutual trust and compete with each other in a fair way.

Principle of Lotte

We shall collect and secure information about our competitors in a legitimate and fair way. We shall not take away or misuse technologies belonging to our partners by using our status in the business process, and shall strive to enhance the win-win cooperation relationship with our partners.

Action Plan

- Do not collect the information of our competitors by using your personal relationships or through our customers and partners. Include and follow the provision of ‘Confidentiality’ in the agreements with the partners.

- Consult with the Compliance Officer in advance, especially since the direct collection/exchange of information with the competitors could be considered a violation of the Fair Trade Act.

- Since it could be a problem to require the confidential information of the competitors when hiring an employee who has worked for our competitor, do not acquire the information of the competitors through such an employee.

- In the event of acquiring the information of our competitors from anonymous sources, consult with the Compliance Officer in advance when viewing and processing such information.

- You may be subject to punitive damages if caught taking away or misusing the technical materials of partners such as our subcontractors. Do not require our partners to provide their technologies and related materials without any fair reasons.

Lawful Information Collection – Information shall be collected in a lawful way.

Principle of Lotte

Action Plan

- Consult with the Compliance Officer in advance, especially since the direct collection/exchange of information with the competitors could be considered a violation of the Fair Trade Act.

- In the event of acquiring the information of our competitors from anonymous sources, consult with the Compliance Officer in advance when viewing and processing such information.

Trust with Our Stockholders

Improving Stockholder Value – Lotte pursues the long-term improvement of stockholder value.

Preventing Conflicts of Interest – We think about the interests of the stakeholders.

In the business process, we may give into the temptation to put the interest of individuals before that of stakeholders such as the company and stockholders. However, we shall keep in mind that we would lose the trust of the stakeholders if acting upon such temptation, ending up with larger losses than gains. In the event of a conflict of interest, we shall first consider what is the best for the stakeholders such as the company and stockholders, not for individuals.

Principle of Lotte

If there is a conflict of interest between individuals and the company, we shall work to meet the interest of the stakeholders such as the company and stockholders. If there is, or is feared to be, a conflict of interest, we shall report the situation to and get approval from the company to ensure that our personal interests do not confuse the reasonable decision-making.

Action Plan

- Do not act against the interests of the stakeholders such as the company and stockholders, including making personal gains through the position of Lotte executives and employees. It is also prohibited to acquire personal gains indirectly through family members, friends and agents of Lotte executives and employees.

- Get approval from the company in advance in the event that there may be a conflict of interest with the company, including self-dealing transactions or utilizing the business opportunity of the company.

- Do not become the executive or employee of another company conducting the business in the same field or do not acquire the share of such company without the approval of the company.

- Consult with the Compliance Officer in advance in the event that there could be a conflict of interest between the executives and employees and the company or that it is unclear whether there is a conflict of interest.

Improvement of Accounting Transparency – Honest reporting makes our effort and passion more valuable.

We are obliged to accurately inform the stakeholders of the company’s management situation. No matter how it may be minor, an accounting error or arbitrary adjustment may cause not only the executives and employees, but also our stockholders and customers to make wrong decisions. Inaccurate or false reporting shall make our effort and performance in vain. We are well aware that transparent and honest reporting is the easiest way of drawing the accurate decisions and solutions.

Principle of Lotte

We shall accurately record any matters regarding the performance and financial position of the company in accordance with related laws, accounting standards and internal regulations. All accounting records shall be proven by appropriate accounting information. We shall record any matters regarding any performance and costs at the time of their occurrence in order to identify the accurate management situation. We shall not distort any data. Accurate accounting records are not an obligation simply limited to those who are responsible for accounting and finance, but the common obligation of all executives and employees.

Action Plan

- Prepare and manage the accounting records in accordance with the authorized accounting standards.

- Not only do international and national accounting standards differ, but they are also being frequently amended. Always check the latest standards.

- Record the related data within the proper accounting period. Do not record any revenues or costs in advance or later in order to exaggerate the short-term performance or temporarily avoid a reprimand.

- All costs incurred shall be proven by the uniform accounting data. Record time and expenses regarding the costs and submit it as a report.

- In the event that a person in charge manipulates the accounting documents according to the instruction of his/her supervisor, both he/she and his/her supervisor shall have civil/criminal responsibilities. In the event that the supervisor instructs the manipulation of documents, the person in charge shall immediately consult with the compliance officer.

- Consult on the problem with the director when your counterparty in the transaction is suspicious of manipulating the accounting documents or suspected as an individual, company or country having untransparent business practice, and reconsider such a transaction.

- The director shall thoroughly check everything in accordance with principles in order to provide accurate and transparent information, and shall monitor the data on a regular basis in order to prevent the manipulation of accounting documents.

Prohibition of In-house Trading – We shall not make unfair profit through intercompany trading.

We shall not make any personal gains by utilizing undisclosed and insider information since it constitutes an act of deceiving not only our colleagues, but also our stockholders and customers. This principle is also applied to our family members, relatives or friends as well as ourselves. In society, those who violate the laws regarding insider trades shall take civil/criminal responsibilities. In the world which is getting more transparent, such a dishonest act will be revealed in the end and may incur losses beyond the earned gains.

Principle of Lotte

We shall not make any unfair profit for ourselves, our family members or friends by utilizing undisclosed and insider information. We shall be committed to protecting the profit of our stockholders through efficient and reasonable decision-making and transparent and sound management activities.

Action Plan

- Always pay particular attention when providing any information regarding our business. Specifically, if it is insider information, providing such information to others and using it for personal use are all illegal. In addition, it may harm the due rights of the stockholders who have affection to and interest in Lotte the most.

- Insider information includes data regarding management performance, the transfers of executives, restructuring, mergers, acquisition, new product development, new patents, information regarding large-scale investments and the investment plans for a certain region. Manage the information in accordance with the same standards as insider information, if it is unclear whether the information that you are handling is insider information.

- All trades such as transactions using the undisclosed important information and stock exchanges, the establishment/acquisition of the security right and securities lending transactions are strictly prohibited.

- Do not provide the undisclosed important information in expectance of transactions by others or do not recommend anyone to be involved in the other transactions by using such information.

- It is prohibited to conduct stock trading by using the insider information that you came to know at work even after leaving the company or moving to another company.

- Protect the information in accordance with the same standards applied to our insider information, in the event of coming to know the insider information of your partners and competitors.

- In principle, it is prohibited to own the stocks of our partners which have business relations with our company. The same applies to the case of acquiring the stocks of our partners in the name of your family members and relatives.

- Consult with the Compliance Officer even if you have owned the stocks of our partners before entering our company, since there may be a conflict of interest, including providing unfair convenience in the business process.

- It is prohibited to be involved in the trading of derivatives such as hedge trading and short stock selling for the stocks of our company and its affiliates and the related options and swaps.

Trust with Society

Environmental Protection – Nature is something we have borrowed from our future generation.

Environmental problems are directly related to the survival of humankind, and now we are living in a world where companies not considering the environment cannot continue to survive. We shall consider the impact that our business could have on the environment and shall continue to encourage our partners to join our effort in protecting the environment. We, the members of Lotte, shall be committed to protecting the environment, starting from small things, and shall proactively prevent the unnecessary waste of resources. Although the results achieved by individuals’ efforts may be minimal, the efforts of all the executives and employees of the Lotte community, once combined, could lead to tremendous results.

Principle of Lotte

We shall play a leading role in every type of business for environmental protection. We shall always think of the impact that our business could have on the environment and shall be committed to protecting the environment, starting from the small things. With the responsibility of environmental protection, we shall establish and strictly meet the standards beyond the level required by the environmental laws of each country, not only within our country, but also in every country where we are operating our business.

Action Plan

- IUse natural resources only as much as needed in an efficient way and reduce the emission of environmental pollutants below the statuary level.

- ICheck first whether the development of new products or the change of any processes could have an adverse impact on the environment.

- Establish the internal regulations to ensure that our activities meet the legal standards regarding the environment and regularly check if such regulations are complied with.

- Actively seek the way of environmental protection through the change or innovation of our business, and encourage the executives and employees to do or make the related activities and efforts.

- Require our partners and stakeholders to meet the same environmental protection standards as we do. Specify and sufficiently inform them that their contract with us may be cancelled if caught violating environment-related laws.

- Frequently check if local environment-related laws change when working overseas, and take advance measures in response to such change.

Creation of Social Values and Social Contribution – Sharing what is received from the society with society is our biggest pleasure.

We are well aware that freedom, justice and peace, which are the common goals of humanity, can be achieved only when we accept the dignity and value of human and inalienable rights. We shall be committed to creating a workplace culture where members of the company can exercise their potential without any prejudice, pressure or illegal discrimination and where they can respect one another. We shall conduct our business in a way that respects human rights and shall respect every one of our executives and employees anywhere at any time.

Principle of Lotte

Human rights are the basic rights and freedoms to be granted to everyone. The members of Lotte shall support and respect the “United Nations Guiding Principles on Business and Human Rights” declared internationally and guarantee human rights in places where we are conducting our business.

Action Plan

- Regarding our business, we shall respect human rights anywhere at any time.

- We shall follow our values and standards regarding respect for human rights and spread them to our partners.

- We shall work to prevent a negative impact on human rights, which may be caused by our business.

- We shall guarantee and support human rights in the local community which we belong to.

- We shall be well aware of and comply with local laws regarding labor.

- We shall not allow child labor in the workplace of our company and partners and shall follow the local laws and international standards regarding the minimum working age.

- Consult with the Compliance Officer and check the requirements of the minimum working age in accordance with the related laws, when an employee below 18 is required to be employed.

- Coercion, confinement or other forced labor, etc. shall not be allowed.

Respect for Human Rights – Love and respect for humanity is an important value of Lotte.