Notes regarding the price indexation system

Prohibition on Illegal Action related to delivery price indexation

• Commissioning enterprise shall not abuse its position, fake or use other illegal means related to delivery price indexation.
• If the Commissioning enterprise an illegal act, such as forcing Commissioned enterprise to non-indexation, Commissioning enterprise may receive a fine of 30 million won (1st), 40 million won (2nd), 50 million won (3rd), or penalty points*(Point 5.1) depending on the number of violations.

* Limited in public bidding application for exceeding 5 points in cumulative for 3 years.

Other Illegal Action

• In cases where a transaction falls under the scope of delivery price indexation, and despite not qualifying for any exceptions, an indexation agreement is not entered into, a fine of 10 million KRW, corrective actions, and a penalty ranging from 1.5 to 2.0 points based on the type of corrective actions may be imposed
• Penalty points of 1.5 to 2.0 may be imposed depending on the type of corrective action and corrective action if the Commissioning enterprise violates the obligation of sincere consultation with Commissioned enterprise or fails to fulfill the indexation agreement, or if the purpose and reason of the agreement are not stated in the agreement after agreeing not to index the delivery price.