BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX Audit Committee to support the performance of duties in accordance with the Board of Directors’ responsibilities, to sufficiently review the Company’s operations and other companies in the group, offering independent and fair opinions on the internal control system and risk management. (4) The auditors are required to annually affirm their independence to the Audit Committee and report on all procedures used in the auditing office to assure the independence of the auditors. (5) The auditors own the right to review reports or other financial reports issued by the Board of Directors in conjunction with their audited financial statements and have the right to file any anomalies in the reports which appear to be inconsistent with the audited financial statements. (6) The audit fees and other fees paid to the auditors are disclosed in the 56-1 One Report Form to increase transparency in the auditor independency. APPOINTMENT TO AND TERMINATION FROM THE BOARD OF DIRECTORS GC’s Articles of Association provide the following guidelines for the appointment to and termination from the Board of Directors: APPOINTMENT The Board of Directors shall be elected annually (for replacements of directors who have retired by rotations). Shareholders at a shareholders’ meeting shall vote to appoint Director(s) according to the following guidelines: (1) Each shareholder shall have one vote per share held. (2) In the event that the number of nominees for the election does not exceed the number of vacant positions, shareholders shall vote on these eligible nominees. Shareholders shall allocate all of their votes per (1) to one nominee without dividing their votes. (3) In the event that the number of nominees exceeds the number of vacant positions, shareholders shall still allocate all of their votes per (1) to one individual nominee without dividing their votes. Nominees receiving the majority of the votes shall be appointed to the Board until there are no vacancies left. Additionally, in the event that the number of nominees with equal votes exceeds the number of available positions, The Chairman of the meeting shall cast the deciding vote. The Board of Directors shall nominate one Director as Chairman of the Board of Directors. Decisions made during a Board meeting are based on majority votes. In the event of a tie, the Chairman of the meeting shall cast an additional vote as a casting vote. In the event that a Director’s position becomes vacant for any reason other than retirement by rotation, the Board may appoint an individual who is qualified and does not possess any attributes prohibited by law as Director to attend the next Board meeting, unless the remaining term is less than two months. The new Director shall serve only the remaining term of his or her predecessor. This decision shall be made only with the agreement of at least three-quarters of the remaining Directors. In the event that vacancies cause the number of Directors to fall below the quorum, the remaining Directors shall have the only authority to call for a shareholders’ meeting in which shareholders shall vote to appoint new Directors to fill these vacancies only. This process must be completed within one month from the date on which the number of Directors no longer constitutes the quorum. These newly appointed Directors shall serve only the remaining terms of their predecessors. TERMINATION At each Annual General Meeting of Shareholders, one-third of the serving Directors shall retire by rotation. In the event that the number of serving Directors is not equally divisible by three, the number of Directors retiring shall be as close to one-third as possible. Directors to retire in the first and second years after Company registration shall be randomly selected; however, in later years, Directors serving the longest terms shall retire. Directors who retire by rotation may be re-elected to the Board. In addition to retirement by rotation, other causes for di rectorship terminat ion include death, resignation, disqualification, and prohibition by law. Additionally, Directors can be terminated by a shareholders’ meeting resolution or a court order. Resigning Directors must submit their resignation notice to the Company. The resignation is effective from the day the Company receives such notice. In addition, Directors may submit their resignation notice through the registrar. At a shareholders’ meeting, shareholders may pass a resolution to force the termination of a Director before his or her term ends with three quarters of the attending and eligible shareholders’ votes. Additionally, these majority votes must constitute at least half of the shares held by attending and eligible shareholders. 137
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