Dividend Policy for Subsidiaries

The dividend policy for subsidiaries must be considered and approved by the Board of Directors every year. The exception is for interim dividend payments, which the Board of Directors of the subsidiary can approve from time to time if the Board believes that the subsidiary has sufficient profits to do so under the legal framework of the country in which the subsidiary or associated company is located. In addition, the Board of Directors of the subsidiary must report the decision at the next shareholders’ meeting of the subsidiary. When considering the dividend payment, the Board of Directors of the subsidiary needs to consider various factors, mainly for the shareholders’ benefit. These factors include operating results, financial structure and financial position, liquidity, additional investment needs, investment plans, business expansion, provision for repayment of borrowings or working capital within subsidiaries, the conditions and limitations stipulated in any loan agreement, and other factors involved in the management of the subsidiary, determined by the Board of Directors and/or the shareholders of the subsidiary company, as appropriate.

SCGP’s guidelines for subsidiaries to make regular dividend payments state that the main subsidiary must have a dividend payout ratio of 20% to 100% of its net profit. However, the dividend payment of the main subsidiary depends on factors such as operating results, financial structure and financial position, legal reserves, and agreements between shareholders.