LOTTE PR Hall

Chapter 2 Pledge to the customers

We will prioritize our customers, respect customer opinions, act with sincerity, and continue creating new values based on our customers’ perspectives so as to win their endless trust.

Article 4 [ Customer respect ]

We will always courteously listen to customer opinions, actively address the customers’ valid demands, and think from the perspective of our customers when making all decisions and actions.

Article 5 [ Customer satisfaction ]

We will embody the spirit of customer respect to maximize customer satisfaction.

1. ①We will always welcome our customers with a clean appearance and attire, and serve them in a modest and sophisticated manner.
2. ②We will answer kindly and sincerely to all phone calls of our customers.
3. ③We will always handle our customers’ business with the utmost priority.
4. ④We will clarify all details that affect the customers’ interest, and create printed materials that facilitate customer understanding.
5. ⑤We will maintain a pleasant and clean facility and business environment for the convenience of our customers.
6. ⑥We will swiftly take care of valid requests for exchanges or refunds by our customers.
7. ⑦We will address customer complaints and suggestions in a swift and accurate manner.

Article 6 [ Creation of customer trust ]

We will attend our customers with sincerity to rise as a well-recognized and trusted corporation.

1. ①We will always treat our customers with sincerity and keep all promises to our customers.
2. ②We will not provide customer information to a third party for any purpose other than business operations without the prior approval of our customers.
3. ③We will seek diverse methods to facilitate communication with our customers.

Chapter 3 Responsibility and obligation on the stockholders

We will raise the market value of our stocks through sincere management based on righteousness, innovation, and transparency.

Article 7 [ Customer respect ]

All employees will adhere to the company’s articles of association, company rules, and relevant laws to carry out sincere management and improve company value.

Article 8 [ Transparency maintenance ]

The management documents will adhere to the general principles of business management and will be properly prepared and notified according to the business accounting standards.

Article 9 [ The right to know among the stockholders ]

We will respect the stockholders’ right to know and respect their valid requests or suggestions.

Chapter 4 Basic ethics of employees

The employees of Lotte Shopping Co., Ltd. will always prioritize customer value and pursue a customer-oriented, fair, and bright corporate culture based on customer trust. Based on this ideology, we will exert our utmost efforts to uphold the company’s reputation and individual workers' dignity through adherence to positive law, social regulations, and ethical values. We will also sincerely fulfill our responsibilities and obligations as employees and use mutual respect, active attitude, and creativity to contribute to the development of the company.

Article 10 [ Observation of regulations ]

Employees will refrain from all actions that go against positive law, company regulations, social values, and conscience.

1. ①We will strictly adhere to the positive law to avoid criminal prosecution.
2. ②We will conduct our work operations fairly and ethically, and adhere to the company regulations and relevant legal regulations.
3. ③We will refrain from unethical and illegal activities that deserve social criticism in our daily lives and work operations.
4. ④We will always maintain a clean appearance and confident attitude, and refrain from taking any action that may arouse contempt from others.
5. ⑤We will not take any form of financial gain such as acceptance of money, gifts, treats, and entertainments that hinder the fairness of work. However, socially accepted forms of gains are exceptions.
6. ⑥We will adhere to the relevant laws and regulations on transparency in undertaking all financial and fiscal operations.
7. ⑦We will refrain from sending invitations during company events to supplier companies, so as to not impose pressure for attendance or gifts. Furthermore, we will refrain from unduly notifying family events of employees to the suppliers to refrain from imposing pressure.
8. ⑧We will not use company assets for personal reasons, and refrain from disclosing confidential company information acquired during work to external parties.
9. ⑨All executive rank members will keep close consideration of CSR when responding to opportunities and risks, and will serve as leaders in the industry by acting in accordance with the internationally prescribed business management conduct.
10. ⑩To prevent sexual harassment in the workplace, the company will conduct at least 1 annual sexual harassment prevention training which needs to be attended by all employees. When any harassment occurs, strong measures should be taken.
    1. Employees should refrain from causing sexual humiliation or emphasizing pre-established gender roles.
    2. Employees should refrain from lewd jokes and forceful drinking or dancing during get-togethers.
    3. Employees should refrain from watching pornographic materials during work through the internet, computer, or other medium.
    4. Employees should not pass sexual evaluations or comparisons related to a coworker’s physical appearance.
    5. Employees should refrain from intentional or unnecessary physical contact.
11. ⑪Employees will refrain from using illegal computer software.
12. ⑫We will not engage in any activities that may be deemed unethical in an objective assessment.
13. ⑬All employees of Lotte Shopping Co., Ltd. should refrain from using their ranks or work authorities to acquire confidential management secrets or unannounced information for personal gains through stock trades, or leak the information to an external party.

Article 11 [ Good faith ]

We will give our best to sincerely complete all tasks that are our duties, and engage in our work in honesty and fairness,

1. ①Employees should undertake the roles assigned to each individual according to the company’s management ideology.
2. ②Employees should prevent any risk that may arise as a result of his/her decision-making or action, and take full responsibility in case of trouble.
3. ③Employees should work hard to guarantee active inter-departmental cooperation and communication with colleagues.
4. ④Providing financial payments or gifts among employees is strictly prohibited with the following exceptions:
   1. Voluntary financial payment of gift by a superior to a subordinate
   2. Giving gifts for birthdays and other special anniversaries through personal funds
   3. Giving gifts purely as a way of expressing gratitude, with no expectations of a reciprocal action or gift
5. ⑤Celebratory payments among employees during family events should be voluntary and in accordance with social customs.
6. ⑥Borrowing of money among employees is strictly prohibited. If lending is necessary, permission must be given by the superior of the lender prior to the lending activity.
7. ⑦Employees should refrain from standing as guarantor for each other. However, for company loans offered as part of the company’s welfare project, employees may stand as guarantor for one another with the approval of their superiors.
8. ⑧Employees should not receive any form of gain including financial payments and treats in exchange for an unethical favor.
9. ⑨When the application of these provisions cause a conflict of interest between the company and the individual, priority should be given to the communal interests of the company.

Article 12 [ Mutual respect ]

We will respect individual value and inherent dignity of each person, and give our best to create a healthy and happy work life.

1. ①Employees will refrain from any actions that veer away from basic etiquette.
2. ②Employees will refrain from impolite actions or arrogant comments that offend suppliers and coworkers.
3. ③Employees will take care to maintain a clean appearance and confident attitude, and refrain from any action that may arouse contempt.
4. ④Employees will refrain from giving preferential treatment based on education, gender, religion, age, and place of origin.
5. ⑤HR management should be able to prevent complaints regarding HR management policies, such as promotions and transfers, through continuous monitoring and feedback.
6. ⑥The company should exert additional efforts to improve the quality of work life.

Article 13 [ Ability development ]

Based on a firm background knowledge and refinement required as a worker, we will take pride and confidence as a Lotte member.

1. ①We will give our best for self-development, so as to become a talent that can lead Lotte Shopping globally.
2. ②Superiors will not hold back on guidance and advices for their subordinates’ characters and talents, while the subordinates will improve their ability to conduct work operations individually.
3. ③The company will provide equal opportunities for training programs that are designed to improve creative thinking and autonomous work capacities.
4. ④All tangible and intangible knowledge acquired during work operations should be shared by all employees so as to help develop the company.

Chapter 5 Proper relationship with partners

We will reinforce mutual trust and cooperation through transparency and fair trade, so as to pursue mutual growth under the free market competition.

Article 14 [ Fair trade]

1. ①Under the principles of free competition, we will guarantee equal opportunities for participation and ensure equitable provision of information necessary for transaction so as to realize mutual benefits.
2. ②All transactions will undergo sufficient negotiation under the principle of reciprocity so as to ensure fair trade.
3. ③We will not unilaterally make alterations to the conditions and procedures of the transactions that may bring harm to the suppliers without prior negotiation with the suppliers.
4. ④We will not take part in any action deemed unethical by the fair trade regulations, including antitrust and anticompetitive behavior.

Article 15 [ Pursuit of mutual development ]

1. ①We will view our suppliers as partners and maintain equal positions in contracts, and give our best efforts for improving mutual cooperation.
2. ②We will help improve our suppliers’ competitiveness and strive for mutual development.
3. ③We will spread and promote the company’s code of ethics and Ethics and Conduct Regulations to the suppliers so as to encourage their active participation.

Article 16 [ Prohibition of non-ethical acts on partners ]

1. ①We will not receive any financial payments, treats, entertainment, or convenience-oriented treatments from our suppliers for any operations related to our work. However, socially accepted customs are exceptions.
2. ②Other prohibited and non-ethical acts
   1. Substitute payments of card bills, credits, loans, and other financial obligations by the supplier for any work-related operation are prohibited. Receiving guarantorship for loans and movable assets, and other real estate, stock, sales, membership, and other asset-related gains are prohibited.
   2. Employees should not borrow money from suppliers.
   3. Employees should not lease or borrow assets or receive collaterals from suppliers in any work-related operation for personal convenience or gain.
   4. Employees are prohibited from buying from the suppliers any movable assets or real estate assets at a lower-than-mark value price for practical gain.
   5. Employees are prohibited from taking non-ethical actions against suppliers for other operations.

Chapter 6 Social and national responsibility

By constantly reminding ourselves that the company exists only on top of a stable foundation in the nation and society, we will promote healthy business practices to develop the company and create social wealth, so as to contribute to bringing a bountiful life for the people and social development for the nation.

Article 17 [ Stable business activity]

We will respect social values to undertake practical and healthy business activities.

1. ①We will reject all irregularities that hinder stable business activities.
2. ②We will do our best to fulfill our CSR through education, culture, scholarship, and welfare projects.
3. ③We will encourage employee participation in volunteering projects and contribute to social development.
4. ④We will humbly respect and listen to the demands of all classes and local residents.
5. ⑤We will continue to create new jobs so as to contribute to the nation’s development.
6. ⑥We will respect and operate in accordance with internationally recognized conventions based on the Universal Declaration of Human Rights (UDHR) in all our activities.

Article 18 [ Non-political intervention]

Lotte Shopping Co., Ltd. will refrain from meddling in politics.

Article 19 [ Environment-friendliness ]

We will continue to implement activities aimed at preserving the earth and exert our utmost efforts for saving the environment.

1. ①We will follow environmental regulations and actively partake in preventing climate change and reducing greenhouse gases.
2. ②We will build the necessary facilities to prevent pollution and improve the environment, and continuously manage these facilities.
3. ③We will protect the living environment of the region of our business activity and give our best to the creation of a pleasant environment for the local residents.

Article 20 [ Safety management and accident prevention ]

Lotte Shopping Co., Ltd. believes that the protection of safety for our employees, workers dispatched from suppliers, and customers is a crucial management requirement that should be complied by businesses. Furthermore, the Lotte Shopping Co., Ltd. personnel will ensure strict safety management for the customers and do their best to follow all regulations regarding accident prevention.

1. ①In case of accident, the company will take swift measures that prioritize the safety of customers and local residents.
2. ②The company will offer comprehensive education and training courses to its employees regarding safety handling as well as accident and disaster prevention, and adhere to all safety regulations.
3. ③The company will conduct regular evaluation of various facilities (elevator, escalator, etc.) and give the best efforts to prevent accidents caused by fire or gas.

Supplementary provisions

Article 1 [ Period of execution ]

1. ①These provisions came into effect on January 1, 2001.
2. ②These provisions were enacted and put into effect on May 1, 2010.

Article 2 [ Prohibition of retroactivity]

These provisions are not applicable for unethical behaviors conducted prior to the effective date.

Article 3 [ Installation and operation of Ethics Management Committee ]

1. ①The company will install an Ethics Management Committee to assess and implement the company’s code of ethics and the ethics and conduct regulations, and establish an ethics office to support the committee work.
2. ②The operations of the Ethics Management Committee will be detailed in a separate regulation.

Article 4 [ About report ]

For all actions that do not fit into the social norms listed in the provisions, the employees should report the action prior to or right after its occurrence. Reporting and handling procedures will be detailed in a separate regulation for the Ethics Management Committee.

Article 5 [ Operation of internal report system and protection of a reporter ]

1. ①For any items that may hurt the company, all personnel of Lotte Shopping Co., Ltd. should report to the department in charge (Lotte Shopping Co., Ltd. ethics headquarters) regardless of the severity of the situation, and these internal reports should be processed anonymously.
2. ②All department staff and administrators working for the internal report system should never reveal the identity of the reporter, and there should be no consequences or unfair treatment as a result of the reporting.

Article 6 [ Reward and punishment]

1. ①Those with the biggest contribution to the ethics management activities may be rewarded on the decision by the Ethics Management Committee, and the reward standard and procedures will follow related procedures in the company’s internal regulations.
2. ②Violators of the code of ethics and the ethics and conduct regulation will be sanctioned upon the decision of the Ethics Management Committee, and the details on the severity of the disciplinary action or penal measures will depend on the company’s internal regulations.

Article 7 [ Standard of interpretation ]

1. ①This provision takes priority over all regulations applied to the company with the exception of the articles of association and the code of ethics.
2. ②Measures not included in the provision or disputes in interpretations of the provision will be submitted to the Ethics Management Committee for interpretation and decision making.

Article 8 [ Revision ]

Renewal of the application of this provision will follow the decision by the board.

02. Execution of objective and fair business

1. Clarity and transparency

Employees should perform their duties with clarity and transparency.

• When there is a conflict of interest in carrying out assigned duties, consult your seniors on how to perform your duties ethically.
• Do not give special treatment to a subset of people based on personal relations, family connections, or academic affiliation.
• Manage all documents and records pertaining to important decisions and other matters according to the document management regulation.
• Do not use vague language in the document, adhere to arbitration regulations, and always resort to negotiations in relevant matters.

2. Standing up against unjust orders

Employees should stand up against wrongful orders that hamper the fairness of operations.

• All employees should conduct themselves with the basic etiquette, while those of superior ranks should refrain from abusing their ranks to give unreasonable directives or apply undue pressure.
• If the order from above is deemed harmful to the fair execution of the operation, the subordinate should face his/her superior and expound on his/her reasons for uneasiness. If the unreasonable orders continue, the subordinate should consult the issue with other superiors.

3. Ban on the abuse of power

Employees should not abuse their ranks or power to make unfair demands or benefit from unethical disbursements.

• Examples of abuse of power in business transactions
  • Demanding payments for corporate get-togethers, expenses for leisure activities, business trip expenses, card payments, credit sales payments, and loan payments.
  • Requesting special treatment for a job position, sales of tangible or intangible products, insurance purchases, partaking in pyramid selling, pressuring to take out private loans.
• Employees should refrain from causing undue burden on their clients and suppliers through intentional delays.
• Employees should not demand or receive any personal sponsorship or patronage.
• Employees should not demand excessive discounts or free plus deals when dealing with suppliers.
• Employees should not utilize the weaknesses or faults of interested parties to hint at or resort to blackmails.
• Passing on interior costs to the suppliers is a violation of the fair trade regulations.

03. Relationship with partners

1. Fair business practice

Employees should refrain from complicating fair business practices by imposing the following onto suppliers.

• Demanding or accepting cash, gift certificates, or gifts
• Being treated in terms of trips, transportation, and accommodations
• Occupying simultaneous posts at the supplier without the authorization of the company
• Taking loans, providing collaterals, standing as guarantor, or engaging in real estate leases with suppliers
• Requesting the job hiring of specific individuals at the suppliers

2. Business meals with suppliers

All meal costs pertaining to meetings with suppliers will be paid by the company.

• The average meal costs should be lower than 20,000 won per person. Secondary after-feasts or drinking is prohibited.

3. Supplier evaluation

Supplier evaluation will be conducted in a transparent and fair manner according to a clear standard.

4. Promises with the supplier

We will keep our promises with our suppliers

5. Fair information provision

We will not discriminate in providing information when consulting with the suppliers.

04. Prohibition of benefit acquisition using the company asset

1. Prohibition of utilizing company assets for personal use

Employees should refrain from using company assets for personal reasons.

• The company’s human and physical resources should not be utilized for personal use.
• Employees should refrain from web surfing, stock trading, chatting, playing games, and engaging in other activities that are not related to their work operations.
• The company’s electronic network should not be used for personal secondary business or promotion of the business activities of others.

2. Prohibition of secondary occupations, double occupations

Employees should refrain from engaging in secondary occupations or double occupations without the explicit approval from the company.

• Employees should not engage in secondary jobs or hold double posts to further their gains, and should not establish another company.
• Employees should not invest in suppliers or use their relatives for indirect investments.
• Employees should not engage in multi-level marketing activities against the employees and supplier companies.

3. Effective management of company budgets

The company’s budgets should be used practically and efficiently according to the objectives and standards of the company.

• All budgets should be allotted as prescribed by regulations, and arbitrary use or changes are prohibited.
• Expenses unrelated to work operations should not be reimbursed with the company expense account.
  • Company budgets for client entertaining, conference expenses, department operation costs, and business trip expenses should not be used for personal entertainment or networking purposes.
  • The company credit card should not be utilized for personal use.

05. Protection of company information

1. Prohibition on leaking confidential information

Employees should not leak confidential or highly classified company information to external parties, and even after leaving the company, the information acquired during work cannot be given to external parties without prior approval by the company.

• Employees should not reveal the company’s confidential information during conferences, lectures, and seminars. Any official information exchange with an external institution should undergo the official procedures.
• Employees should not arbitrarily use the customer DB and other information for personal gains without the approval of the company.
• The administrator should control the information to make sure that the company’s confidential information are not leaked, and should implement appropriate security measures.

2. Prohibition on using inner sources for personal gains

Employees should not use confidential information acquired during employment at the company to pursue personal gains.

• Employees should not supply inside information in exchange for payments, or use the information to engage in stock trading and other actions that violate the information protection law and the securities and exchange act.
• Even after leaving the company, former employees should not provide intellectual property, technology, and intelligence information to others to avoid legal consequences.

3. Distortion or destruction of information

Employees should not distort, fabricate, or destroy information related to the company, and should not propagate false information or rumors.

• Falsified information should not be reported to the upper management so as to prevent misinformed decisions.
• Information should not be tampered to hide or minimize the employees' mistakes or corruption.

06. CSR

1. Healthy corporate practices

Healthy and practical corporate practices that respect social norms and values.

• Denounce all irregularities that hinder healthy corporate practices.
• Fulfill the business CSR through education, culture, scholarship, and welfare projects.
• Encourage volunteering by employees to further contribute to the society.
• Courteously listen to and respect the opinions and requests of local residents and people from all classes.
• Continue to create new jobs so as to contribute to the nation’s economic development.

2. Environment-friendly practices

Environment-friendly policies

• Respect environmental protection regulations and actively participate in environmental protection campaigns.
• Build essential facilities for the prevention of pollution and improvement of the environment, and continuously uphold proper management.
• Protect the living environment in the region of business activity and provide a pleasant living environment for the local residents.

3. Safety management and prevention of accidents

Safety management and accident prevention

• Maintain meticulous safety management and exert utmost efforts for accident prevention.
  • In case of accident, take swift measures to prioritize the safety of customers and local residents.
  • The company should provide continuous training and education for the employees regarding accident prevention and emergency measures to take during disasters.
  • The company will conduct regular inspection of various facilities (elevator, escalators, etc.) and prevent accidents caused by fire and gas.