Governance (G)

We will contribute to the growth and development of all stakeholders based on sound business ethics and legal compliance.

Governance

HD Construction Equipment has an independent governance structure based on checks and balances to enhance transparency in the decision-making process and protect the rights of various stakeholders, including shareholders.

Board of Directors

In order to ensure diversity and expertise when appointing directors, HD Construction Equipment appoints professionals with job expertise in their respective fields without discrimination or restrictions in regard to age, educational background, etc. Outside directors are appointed from among the candidates nominated by the Outside Director Candidate Nomination Committee in consideration of promoting transparent governance and board expertise. Appointment decisions are made by taking into consideration a number of factors such as share ownership, interests in the company, employment at a competitor, diversity, and stakeholder representation.

Composition of the Board of Directors

Inside Directors

Chairperson of the Board

Choi Cheol-gon

Career Highlights

Current) Chairman, Board of Directors, HD Construction Equipment Current) Vice President, HD Construction Equipment Former) Senior Managing Director, Heavy BG, Doosan Infracore Former) Senior Managing Director, Asia Operations Division, Volvo Construction Equipment

Term of Office

Nov. 2021 to Mar. 2026

Lee Sang-hyeok

Career Highlights

Current) HD Korea Shipbuilding & Offshore Engineering Co., Ltd. Cost and Accounting Department Manager Former) Hyundai Heavy Industries Co., Ltd. Shipbuilding and Marine Cost Manager Former) Hyundai Heavy Industries Co., Ltd. Accounting and Taxation Department

Term of Office

Mar. 2025 to Mar. 2027

Outside Directors

Park Ki-tae

Career Highlights

Current) Full-time Advisor, PwC Current) Member, Capital Market Subcommittee, Financial Development Council Former) Deputy CEO, PwC

Term of Office

Mar. 2025 to Mar. 2028

Yoo Myung-hee

Career Highlights

Former) Ambassador for Economic and Trade Affairs, Ministry of Foreign Affairs Former) Head of Trade Negotiation Division, Ministry of Trade, Industry and Energy

Term of Office

Oct. 2022 to Mar. 2027

Cha Kyung-hwan

Career Highlights

Current) Lawyer, Pyeongan Law Firm Former) Chief Prosecutor, Suwon District Prosecutors' Office Former) Head of Planning and Coordination, Supreme Prosecutors' Office

Term of Office

Mar. 2023 to Mar. 2026

※ As of the end of March 2025

※ All directors have had no interest in the largest shareholder or transactions with the company in the past three years.

Board of Directors Competency Scheme

Evaluation Item	Choi Cheol-gon (Inside Director)	Lee Sang-hyeok (Inside Director)	Park Ki-tae (Outside Director)	Cha Kyung-hwan (Outside Director)	Yoo Myung-hee (Outside Director)	Ratio

Key Industry  (Expertise in the construction equipment and parts business)	●	●	-	-	-	40%

Finance & Accounting  (Expertise in finance and accounting for business management and management oversight)	-	●	●	-	-	40%

International Business  (Expertise in international political dynamics and regional risk management)	●	●	-	-	●	60%

Leadership  (Expertise in running organizations)	●	●	-	-	●	40%

Mergers & Acquisitions  (Expertise useful for making decisions about investment activities)	●	●	●	●	-	80%

ESG  (Expertise in ESG materiality review and decision-making)	●	-	●	●	●	80%

Legal & Public Policy  (Expertise in analyzing and dealing with legal and policy risks)	-	-	-	●	●	40%

Characteristics of the Board of Directors

Independence

①

All board members comply with relevant laws and regulations such as prohibitions against self-dealing and usurpation of corporate opportunity and disclosure of large-scale internal transactions to prevent conflict of interest.

②

All outside directors are not in any special relations with major shareholders, management, or affiliated companies.

③

All outside directors are not in any special relations with major shareholders, management, or affiliated companies.

Expertise & Diversity

①

To ensure diversity and expertise, the Board of Directors is composed of experts with professional expertise in relevant fields.

②

Outside directors are appointed from among those with expertise or experience in management, economics, law, or related technologies, or who are socially reputable and meet the qualifications under relevant laws and regulations.

③

There is no discrimination or restriction based on age, gender, education, or regional background in evaluating competence and appointing directors.

④

Training is provided for outside directors to fulfill their duties.

Transparency

①

Information is provided on terms of office, new appointments, and key career details of board members in the notice convening the general meeting of shareholders.

②

All directors are appointed by resolution of the general meeting of shareholders.

③

In addition to disclosures required by law, voluntary disclosures provide detailed and accurate information that may significantly affect the decisions of stakeholders.

Conflict Mineral Policy

①

Prioritize legal and ethical compliance in our business practices and actively support the goal of ending the violence and human rights abuses associated with the mining of conflict minerals

②

Comply with the U.S. legislation and SEC rules requiring reporting and disclosure related to the sourcing of conflict minerals from the Democratic Republic of the Congo and neighboring countries

③

Carefully investigate the source of materials, parts, and components we source to manufacture our products and taking appropriate action if they contain conflict minerals

④

Not prohibit or discourage the sourcing of conflict minerals from the Democratic Republic of Congo, but comply with the use of independently certified non-conflict mineral materials

⑤

Maintain a responsible supply chain, expecting suppliers to adhere to the same principles

Committees within the Board of Directors

We pursue efficiency and independence in the decision-making of the Board of Directors by having three committees (Outside Director Candidate Nomination Committee, Audit Committee, and ESG Committee, Compensation Committee) where outside directors make up the majority. In particular, the Audit Committee, which audits the management's execution of duties and the status of the Company's assets, is composed entirely of outside directors to strengthen monitoring and oversight of the Company and management and ensure independence in decision-making.

Audit Committee

Check the regulatory materials

Outside Director

Director (non-full-time)

Park Ki-tae

(Chairperson of the Audit Committee)

Term of Office

2025-03 ~ 2028-03

Director (non-full-time)

Cha Kyung-hwan

Term of Office

2023-03 ~ 2026-03

Director (non-full-time)

Yoo Myung-hee

Term of Office

2022-10 ~ 2027-03

Outside Director Candidate Nomination Committee

Check the regulatory materials

Inside Director

Director (full-time)

Choi Cheol-gon

Term of Office

2021-11 ~ 2026-03

Outside Director

Director (non-full-time)

Cha Kyung-hwan

(Chairperson of the Outside Director Candidate Nomination Committee)

Term of Office

2023-03 ~ 2026-03

Director (non-full-time)

Yoo Myung-hee

Term of Office

2022-10 ~ 2027-03

Director (non-full-time)

Park Ki-tae

Term of Office

2021-11 ~ 2026-03

ESG Committee

Check the regulatory materials

Inside Director

Director (full-time)

Choi Cheol-gon

Term of Office

2021-11 ~ 2026-03

Outside Director

Director (non-full-time)

Yoo Myung-hee

(Chairperson of the ESG Committee)

Term of Office

2022-10 ~ 2027-03

Director (non-full-time)

Cha Kyung-hwan

Term of Office

2023-03 ~ 2026-03

Director (non-full-time)

Park Ki-tae

Term of Office

2025-03 ~ 2028-03

※ We have subscribed to a liability insurance policy for the directors with the approval of the BOD or committee based on our internal policy.

Compensation Committee

Check the regulatory materials

Outside Director

Director (non-full-time)

Cha Kyung-hwan

(Chairperson of the Compensation Committee)

Term of Office

2023-03 ~ 2026-03

Director (non-full-time)

Yoo Myung-hee

Term of Office

2022-10 ~ 2027-03

Director (non-full-time)

Park Ki-tae

Term of Office

2025-03 ~ 2028-03

Category	Choi Cheol-gon (Inside Director)	Lee Sang-hyeok (Inside Director)	Park Ki-tae (Outside Director)	Cha Kyung-hwan (Outside Director)	Yoo Myung-hee (Outside Director)

ESG Committee	○	-	○	○	●

Audit Committee	-	-	●	○	○

Outside Director Candidate Nomination Committee	○	-	○	●	○

Compensation Committee	-	-	○	●	○

Board of Directors

Audit Committee

(3 outside directors)

Audits the management's execution of duties and has access to materials and information necessary for audits

Reviews internal audit results and plans

Outside Director Candidate Nomination Committee

(3 outside directors and 1 inside director)

Performs the function of nominating candidates for outside directors with the necessary competencies to achieve the management goals

ESG Committee

3 outside directors and 1 inside director)

Deliberates and votes on the Company's ESG promotion strategies and plans

Deliberates on major matters related to the Company's corporate social responsibility

Compensation Committee

(3 outside directors)

Ensuring objectivity and transparency in the process of determining compensation for directors and executives