SOOP ESG2024

Risk Management Governance

When an issue arises, the relevant departments identify and analyze risks depending on the nature of the issue and share them on a step-by-step basis through the internal reporting system. Major risks are reported to the management, including the CEO, and, if necessary, to the Board of Directors or its committees for review and response.

Risk Identification and Response

SOOP has an integrated management system that proactively identifies various risks that could negatively impact business goals in advance and sets priorities based on a comprehensive assessment of their likelihood and impact. We are particularly focused on proactively responding to new risks emerging from advances in AI technology and global regulatory changes.

Business Risks

We consider risks related to content as our core business risk and operate a prevention-centered management system, including AI filtering, user reporting system and partner education. At the same time, we also respond to company-wide risks such as information security and new business expansion to strengthen the foundation for stable platform operations and to create a sustainable content ecosystem.

Key Monitoring Targets

• Official Content
• Content with High User Participation
• Chats
• Password-Set Content
• Reported Content
• Nicknames
• Age-Restricted Content
• Streamers with a History of Violations
• VOD/Posts/Comments
• Teen Streamer Content
• Personal Channels & Bulletin Boards
• Private Messages

Monitoring Method

Financial/Investment Risks

SOOP has a Board of Directors, an Audit Committee, its Internal Accounting Management Rules and other internal oversight mechanisms to identify and control financial risks through periodic internal audits and follow-up management. At the board level, we thoroughly verify the feasibility of large-scale investments by complying with regulations on delegation and approval for different investment sizes and persistently monitor changes in the market and business environments to identify potential risks at an early stage. We respond to financial and investment risks from a mid- to long-term perspective by assessing the feasibility of investments and continuously managing them in close collaboration with relevant departments. In addition, we have established the Internal Control Management Rules to ensure compliance with laws and regulations and to improve operational efficiency. In particular, in line with the trend of stressing the importance of internal accounting management systems, we are continuously improving related regulations and processes to enhance the reliability of our accounting information.

Social/Human Rights Risks

SOOP strictly complies with relevant laws and regulations such as the Personal Information Protection Act, the Information and Communications Network Act and the Electronic Commerce Act to manage social risks. To proactively respond to changes in the regulatory environment and ethical standards, we have adopted a self-regulation framework and maintain a continuous monitoring system. We have voluntarily set a cap on the amount of item purchases and set a separate purchase cap for minors to prevent excessive consumption on the platform.
As we expand our global business, we are actively responding to higher risks involving human rights. We regularly review and revise our Human Rights Statement and conduct ethics and human rights training for our partners and employees. We have also established and strictly adhere to a dedicated Operating Policy to minimize the risk of human rights violations on our platform and content.

Emerging Risks

SOOP defines "emerging risks" as uncertainties that could have an impact on our business following the growth of and changes in the industry. We have identified emerging risks related to our key businesses and built response strategies for such risks, and ensure that they are effectively carried out.

Tax Risk Management Process

Tax Policy and Transparent Disclosure

SOOP aims to contribute to the development of society and the national economy by strictly complying with tax laws and related regulations and systematically managing tax risks. To this end, SOOP has established clear tax policy principles, strictly adhere to domestic and international tax standards, actively cooperates with tax policies of the relevant jurisdictions, while maintaining a transparent working relationship with tax authorities. Furthermore, to enhance transparency, we periodically disclose tax-related information to internal and external stakeholders through our business reports, and faithfully fulfill our reporting obligations following reviews by internal and external tax experts. The Board of Directors deliberates on the status of the company's corporate tax payment obligations through quarterly preliminary performance reports, under the supervision of the Audit Committee. We plan to further refine our tax management system as we continue to expand our global business.

Encouraging Streamers to Fulfill Tax Duties

Following the sophistication of online technologies, expansion of network infrastructure and continuous growth of mobile and internet users, we are experiencing more diversified and advanced over-the-top (OTT) service platforms. One-person media creators are generating revenue not only from advertisements, sponsorships and lectures based on video platforms, but also in new areas such as NFTs and the metaverses. The National Tax Service is managing these new digital economic activities with greater segmentation, and is also strengthening the taxation system for digital assets. To support the sustainable growth of streamers, SOOP provides detailed guidance on fulfilling tax obligations in time for the annual comprehensive income tax return in May. We provide information on filing procedures, methods and precautions to help streamers readily fulfill their tax obligations.

4 Principles of Tax Management