Appointments and Qualifications

Directors are appointed by the shareholder’s General Meeting upon the Board of Directors’ recommendations. In an appointment of directors, we ensure that Directors fulfill all legal requirements and qualifications specified in the Articles of Incorporation and comply with the appropriate procedures. In accordance with the provisions of Article 363 of the Commercial Law and Article 21 of the Articles of Incorporation, we provide written or electronic notice to shareholders of the time, place, and purpose of the general meeting at least two weeks in advance. When the purpose of the meeting involves director appointments, we also notify shareholders of the candidates’ names and biographies.

Career and Term

Committees

Activities

Appointment, Independence, and Duties

Our Audit Committee operates under the Audit Committee Charter in accordance with relevant laws, regulations, and the Articles of Incorporation. The Committee is composed of independent directors appointed by the shareholders’ General Meeting upon the Board of Directors’ recommendations, and the Committee includes accounting and financial experts. There are no relationships between the Committee members and the Company or its major shareholders that could compromise the Committee’s independence. Moreover, the Committee meets all legal requirements, including having chaired by an independent director.

The Audit Committee carries out its responsibilities as follows: It reviews accounting documents, such as financial statements, and the audit procedures and results conducted by external auditors. When necessary, the Committee requests additional reviews of books and related documents and evaluates the findings. Furthermore, the Committee receives reports from the internal accounting officer and assesses the functioning of the internal control over financial reporting system, ensuring the preparation and disclosure of reliable financial information. Additionally, the Audit Committee participates in important meetings, including the Board of Directors gatherings, to conduct audits of the business. If required, the Committee receives reports on management and business from directors and reviews important business reports using appropriate methods, including requesting further reviews and supplementary materials.

Career and Term

Activities

Policies to ensure independence and expertise when appointing external auditor

For the appointment of an external auditor, the Audit Committee reviews proposals of firms and assesses candidates and approves the agenda item to appoint an external in accordance with the Act on External Audit of Stock Companies and a regulation regarding the appointment of an external auditor. Based on the approval of the Audit Committee, an external auditing contract is signed with external auditors. The Company consults with external auditors to determine the audit time, capacity, fees, and plan, ensuring the auditor’s independence. Also, the Audit Committee evaluates after the conclusion of the external audit whether the external auditor has fulfilled its duties and whether the content and frequency of communications were appropriate.

Appointment status

In accordance with Article 11-2 of the Act on External Audit of Stock Companies, we were requested to use a designated external auditor in 2022, after voluntarily appointing an external auditor for six consecutive years. In October 2021, the Securities & Futures Commission designated Nexia Samduk as an external auditor for three consecutive years from FY2022 through FY2024.

Provision of non-audit services by an external auditor

No non-audit services have been provided by Nexia Samduk to CLASSYS. The Audit Committee conducts preliminary reviews on the non-audit services from external auditors and approves only if they do not compromise independence and audit quality.