Article 1 (Purpose)

This policy sets the code of conduct of Tapex (hereinafter referred to as the “Company”) executives and employees to comply with fair trade order, thereby protecting consumer rights and interests, establishing fair cooperative relationships with suppliers, and settling a proper competitive order for the purpose of contributing to the creation of a sound corporate culture and the balanced development of the national economy.

Article 2 (Compliance with laws and regulations related to fair trade)

The company's executives and employees shall, in carrying out their duties, comply with the domestic/foreign fair trade-related laws and internal regulations enacted for the purpose of maintaining fair trade such as 「Act on Monopoly Regulation and Fair Trade」, 「Act on Fair Subcontract Transactions」, 「Act on Fairness of Franchise Transactions」, 「Act on Fair Labeling and Advertisement」, 「Door Sales Act」, 「Act on Consumer Protection in Electronic Commerce, etc.」, and 「Act on Regulation of Terms and Conditions」. We shall not engage in any misbehavior that violates or deems to violate the laws and regulations.

Article 3 (Conformity to Organizational Purposes)

The company's executives and employees shall comply with this fair trade policy to eliminate the risk of violating fair trade laws, thereby contributing to the establishment of a fair corporate culture and sustainable management.

Article 4(Employees’ Fair Trade Guidelines for Stakeholders)

The company's executives and employees shall observe the following guidelines in order to comply with fair trade laws and implement fair management in dealings with stakeholders.

1. Consumers

① Advertising and marketing processes should be fair and neutral with respect to gender, religion, race, and politics.

②We provide information on products and goods transparently and fairly in a way that consumers can understand.

③Conclusion of a contract should be fair and transparently communicate the relevant information to consumers so their rights are assured.

④For consumer's personal information, only essential items should be collected, used and managed in a legally fair manner.

⑤We actively reflect consumers’ opinions to prevent complaints in advance, and provide appropriate reimbursement for any occured damages according to prompt and fair procedures.

2. Partners

①We should not engage in unfair trade practices, such as forcing unfair trading conditions, or requesting excessive cost and technical data etc.

②We should protect the material and intellectual property rights of partners and should not infringe on their interests through counterfeiting or plagiarism.

③We should not take any illegal or unreasonable profits by abusing power in dealings with business partners.

④We should fairly treat our partners without any discrimination, and maintain a win-win relationship through aggressive support.

⑤In the transaction with subcontractors, we must comply with the “four practices for fair trade with partners” to prevent the violation of fair contracts and laws.

3. Competitors

①We should not abuse our market-dominant position, such as abusive pricing, control of production output, and interference with business activities of other companies.

②We should not jointly set price, types, specifications, and transaction conditions with other companies.

③We should not engage in any unfair trade practices such as unfairly excluding competitors or attracting customers of competitors.

④We should respect the material and intellectual property rights of competitors and should not encroach their profit through counterfeiting or plagiarism.

⑤We should not distribute false information for the purpose of slandering competitors.

Article 5 (Obligations of Executives and Employees)

When judging that there is a possibility of violating fair trade-related laws and regulations in relation to the performance of business, the company's executives and employees shall seek for advice or counsel with the fair trade department. In addition, if you find any violations or suspected violations of fair trade laws by other executives and employees, you must immediately report it through the online report menu on the website of company or report it to the fair trade department immediately.

Article 6 (Protection of informant's identity)

The company shall keep the personal information of the informant of the violation of fair trade laws strictly confidential, and if the informant is an executive or employee, company shall protect them from personnel assessment and deployment, and adverse economic treatment based on the report. In addition, the informant’s contribution to company should be reflected in performance evaluation, etc.

Article 7 (Fair Trade Education)

The company shall provide continuous and systematic training to enable its employees to autonomously comply with fair trade-related laws, and focus on helping employees know which actions specifically violate fair trade-related laws and regulations in their fields in charge. In particular, intensive special training should be provided on a regular basis for those who are engaged in work that is highly likely to violate relevant laws.

Article 8 (Measures in case of non-compliance with the Fair Trade Policy)

If an executive and employee violates this policy or fair trade-related laws and regulations, or does not take reasonable measures after finding a violation, the company shall promptly take disciplinary measures corresponding to the severity of violation in accordance with the company's regulations. In addition, all executive and employees should be aware of the cases related to disciplinary action so as to prevent similar acts from reoccurring in the future.

Ⅰ. Purpose

These action items, correspondingly applying “Act On The Promotion Of Mutually Beneficial Cooperation Between Large Enterprises And Small And Medium Enterprises”, presented by Fair Trade Commission, aim to establish fair trade practice by enabling small and medium enterprises to properly reflect their interests in signing with Tapex (hereinafter referred to as ‘Company’), by presenting the compliances for the contract in order to prevent Company from abusing its superior bargaining power to undermine the Freedom of Contract.

II. Building Contractual Infrastructure

1. Criteria of Selecting contract signing method

For the contract with partners, Company shall select contract signing method e.g. private contract, general competition contract, restricted competition contract, nominated competition contract etc. in consideration of the importance and specificity of transaction items, number of potential parties, transaction experience, and criteria against total transaction amount.

A. Method of Contracting

①Private Contract The contract, finalized by selecting an appropriate partner arbitrarily without going through specific method including bidding etc.

②General Competition Contract : When a contract is concluded by determining a successful bidder after freely competing without restricting the qualifications of participants or appointing participants in the biddin

③Restricted Competition Contract: When a contract is finalized by selecting a successful bidder from the competition where only qualified competitors participate in.

④Nominated Competition Contract : When a contract is concluded by determining a successful bidder from the competition where nominated competitors participate in.

B. Criteria of Selecting contract signing method

①Private Contract

• - In case of a spike in the price of raw materials where there’s no rooms for competition
• -Where there is no choice but to sign a contract with the current counterparty (incompatibility issue will be raised if the goods concerned are supplied by other parties, not current supplier.
• -Where the competition is virtually not available e.g. the current supplier is the only manufacturer for the goods concerned
• -Where the competition is impossible due to specific person’s technical service, specific location, structure, quality, performance, or efficiency etc.
• -Where are purchased the goods whose price is controlled by law or public notice under statutes
• Where the orderer (customer) designated the partner
• -Where active technical cooperation or competitive pre-quotation contributes to Company’s obtaining order
• -Where the contract with the contracted company is extended at the same unit price
• -Where a specific company makes contract with self-developed goods
• -Where a private contract is the only option as a specific company can fulfills it or due to other reasons such as securing safety, emergency construction, trade secret protection, regional development, et
• -Where joint purchase with other company could bring synergy effect such as price reduction and saving cost etc.
• -Where there’s no successful bidder as a result of three times of rebidding
• -Where a private contract is deemed to be correct option in terms of the nature and purpose of the contract

②General Competition Contract : No special requirements (selection should be made in consideration of the type and importance of goods, number of counterparties, etc.)

③Restricted Competition Contract

• -Construction capacity with contract limit amount or performance of the same type of construction with the construction concerned
• -Purchase contracts that require special technical equipment performance, construction methods, and quality financial position of the competition participant
• -Service contracts that require special skills
• -Financial status of competitiors, if necessary, to prevent insolvency of contract
• -In other cases, where a restricted competition contract is deemed appropriate for the nature and purpose of the contract.

④Procurement By Nominated Competition

• - In case of having difficulty in attaining the purpose of contract except for the person who has the special equipment, technology, materials, items or result in the light of the nature or purpose of the contract, of which the bidders shall be within 10 persons.
• - In case of purchasing the product with a certified standard indication & a certified environment mark
• -In case that Procurement By Nominated Competition is judged to be appropriate from the nature & purpose of the contract

2. Proposal System for those who hope to be partners

The Company shall operate a proposal system in which new companies wishing to trade with the Company can freely express suggestions or suggestions through connection with related bulletin boards and purchasing departments on our website (https://www.tapex.co.kr).

3. Build Partner Relationship Management (PRM)

A.Company shall ensure transparency and stability of transactions by sharing various types of information necessary for the transactions with partners, and provide information necessary for business activities of the partners for more practical mutual development.

B. Company shall arrange regular gatherings such as partners meeting to listen to them and support the cooperation and information sharing among the partners.

III. Conclusion of a contract with guaranteed the self-determination right

1. Compliance with contract signing

A. Pre-issuance in writing

① In principle, a contract shall be concluded in advance, but a contract with a signature and seal shall be concluded at least before starting work for delivery, etc. (in the case of construction, 'delivery', hereinafter the same).

②The contract shall include the details of the subcontract, such as the subcontract price and its payment method, and the contents stipulated in the Enforcement Decree, such as the conditions, methods and procedures for adjusting the subcontract price according to changes in the price of raw materials.

③In the case of frequent transactions, the basic contract shall be issued first, and the amount of transactions for a certain period of time shall be paid, then a statement of settlement must be issued.

④If a change in quantity is clearly expected due to minor and frequent additional work, a settlement agreement must be issued immediately after delivery is completed.

⑤Where additional request is made within a period significantly shorter than the normally permitted period, the main contents shall be agreed upon in advance in writing.

B. Determination of unit price by reasonable calculation method

①The unit price shall be determined in accordance with a reasonable calculation method that adds appropriate management costs and profits by considering the quantity quality specification, delivery date, material price, labor cost, or market price.

② If there’s a reason for changing the initial unit price during the contract period, an application for unit price adjustment may be made to the other party and the price shall be determined via mutual talk within 30 days (30-day extension is allowed) from the application.

③Where the unit price determination is delayed due to special reasons, the temporary unit price determined by consultation shall be applied. In this case, the difference between temporary unit price and fixed unit price shall be settled retroactively.

④The realistic unit price shall be presented based on regular investigation on the wage rate, which is the standard for cost calculation, however, the wage rate shall be set according to the characteristics of each company, such as working conditions, partner size, and technology level in consideration of the labor costs of the same industry.

⑤Where the initially set unit price is changed, standards and procedures that may be negotiated between the parties shall be stipulated in the contract.

⑥The reason for unit price change (prices, raw material cost, change in exchange rate, etc.), consultation period, payment terms, etc. shall be indicated in detail.

C. Clear Deadline of Delivery

①n consideration of the characteristics of each industry, the delivery date suitable for commonly accepted practice shall be determined through sufficient consultation with small and medium-sized suppliers.

②Where a contract is concluded, a delivery date must be set and when the delivery date is changed, it must be clarified. Where a shorter delivery date than usual is determined due to emergency order, etc., it shall be agreed upon via consultation with the partners.

③If the partner suffers damage due to an unfair delay in receipt or rejection even though there is no reason to attribute responsibility to the partner, it shall be compensated.

D. Objective Inspection Standard

①For the inspection of deliverables, etc. (‘Finished work’ for construction and the same shall apply hereinafter), the standards and methods of objective, fair, and appropriate inspection shall be determined in consultation with the partner.

②Where there is a delivery, etc., a receipt shall be issued immediately even before the inspection, and the inspection shall be conducted promptly in accordance with the predetermined inspection regulations and procedures.

③Except in extenuating circumstances, the results of the inspection shall be notified within 10 days from the date of receipt of the delivered goods from the partner company.

④The ordered parts before or during the inspection period must be managed with the care of a good manager.

E. Determination of Reasonable Payment Due Date

①In the case of consignment of manufacturing to a partner, the payment shall be made within 60 days from the date of receipt of the delivery to the payment date set as short as possible. (the date of completion for construction, the date of completed product in entrust for service, the designated date where the delivery is frequently made so that the parties to a transaction should issue the tax invoice more than once a month and the same shall be applied hereinafter).

②Where entrusting manufacturing to a partner, a principal contractor shall pay for the service within 15 days from the date on which it receives an advance payment from an ordering person (or the due date of payment if it arrives before that date) for the completion of manufacturing, repair, construction, or services .

③When the manufacturing, repair, construction, or service performance proceeds, a considerable amount shall be paid within 15 days(When the payment date of the price arrives before that date, the payment date thereof) from the date of receipt of the manufacturing, repair, construction, or service performed by the partner.

④In paying the price, it shall be paid at least the cash ratio paid by the orderer for manufacturing and entrustment.

⑤In the case of paying the price by bills, a principal contractor shall pay a subcontractor with a bill the payment period of which does not exceed that of the bill it has received from the orderer in connection with the consignment of the manufacturing concerned.

⑥ In the case of payment by bill, the bill shall be discountable by a financial institution, established in accordance with the legislation, and the bill discount fees for the period from the date of issuance of the bill to the maturity date of the bill (discount rate determined and announced by the Fair Trade Commission) shall be paid on the delivery date of the bill. However, if a bill is issued within 60 days from the date of receipt of the delivery, etc.(the payment due date, if the payment due date is set in accordance with (1) above or the date, designated at (3) in the case of receiving the completion or completion money from the orderer), the discount fee for the period from the date of expiration after the date of receipt of the delivery, etc. shall be paid within 60 days from the date of receipt of the delivery, etc.

⑦When payment is made using an alternative payment method, the fees (including interest on the loan) for the period from the date of payment (the date of approval of the card payment in case of a credit card for corporate purchase; the date of delivery, etc. in case of a loan secured by accounts receivable; the date of payment of the purchase price in the case of a purchase loan) to the one of the repayment of subcontract payment must be paid on the payment date payment date. However, if the payment was made by the alternative payment method within 60 days from the date of receipt of the delivery, etc.(the payment due date, if the payment due date is set in accordance with (1) above or the date, designated at (3) in the case of receiving the completion or completion money from the orderer), the fees for the period from the extra days after the subject matter is delivered to the due date of repayment of subcontract payment shall be paid within 60 days from the date of receipt of the delivery, etc.

⑧Where the payment is made exceeding 60 days from the date of receipt of the delivered goods, interest shall be paid at the rate determined and announced by the Fair Trade Commission for the excess period.

F. Reasonable return of goods for defects found after delivery, etc.

The return of goods shall be made by the agreement between the parties concerned, identifying the cause of the defect, and its type and determining the proportion of liability thereof.

G. Cancellation/Termination of Contract

① The reason shall be determined by agreement between the parties concerned. Where the reason of cancellation or termination occurs, it shall be notified in writing without delay but the reason shall be classified with 'acceptable cases without notice' and 'cases where notice is necessary'.

② The acceptable cases without notice are:

• - Where the counter party has received a transaction suspension from a financial institution or been penalized such as business cancellation or business suspension from the supervisory authority.
• - Where the counter party makes resolutions to dissolve, transfer business, or merge with another company, or where both parties acknowledge that it is difficult to fulfill the basic or individual contract due to disaster or other reasons.

③The cases where a notice is necessary are as follows, and in this case, it shall set a period of one month or more to give the counter party a final notice to ask for the fulfillment, and if the fulfillment is not made within the period, the contract shall be canceled or terminated.

• - Where the counter party violates important matters of this contract or individual contract - Where the supplier receiving the delivery delays the implementation of the matters necessary for the production of ordered parts without justifiable reasons, thereby disrupting the work of the subcontractor
• - Where it deems to be difficult to deliver the ordered parts within the due date as the subcontractor refuses to manufacture ordered parts without justifiable reasons or delays it
• - Where there is a recognizable reason the subcontractor is unable to fulfill the contract properly due tor the lack of its technology or production and quality control capability.

H. Deposit System for Technical Data

In order to protect its subcontractors' original technology, Company shall actively use the system to deposit the technical data to a third party through mutual consultation.

2. Restrictions on signing a contract

A. Failure to issue or preserve documents

①Where a document without stating the matters which are difficult to be determined at the time of entrustment without justifiable grounds is issued and the document doesn’t state the reason the matters have not been determined, and the scheduled date for the determination.

② Where updated document is delayed or not issued to a subcontractor, even though the relevant matters have been confirmed after the document with some matters missing had been issued.

③Where the reply was not made in writing to acknowledge or refuses the entrusted works within 15 days after receiving a request from a subcontractor to confirm the entrusted contents, such as the details of the entrusted work, subcontract payment, date and time of entrustment, etc for orally entrusted job (order).

④Where Company replies with its expression of acknowledging or refusing the orally entrusted matters but its person in charge of the contract or contract manager didn’t sign or seal the reply.

⑤Where Company does not issue a specific additional contract or work order etc. even though the scope of the additional work is identified and the amount is considerable.

⑥ In the case of construction work, either change contract or the statement of accounts in association with a dispute over settlement between the parties is not issued, although the amount of additional or changed construction has been proven;

⑦ Where Company discards the legal documents arbitrarily within 3 years in accordance with its regulations, etc. without preserving legal documents for 3 years

⑧Where Company preserves documents for 3 years from the date of closing of the transaction, but it makes the false documents or documents with false contents after that preservation.

⑨Where Company does not preserve the documents related to the determination of subcontract consideration, such as the bidding details, the written decision of the successful bidder, the quotation, the site description in the case of a construction consignment, and the specification

B. Determination of Unfair Subcontract Payment

①Deciding the subcontract consideration by reducing the unit price at a uniform rate without justifiable reasons

②Determining the subcontract consideration by reducing the relevant fees after unilateral allocation of a certain amount regardless nominal request for cooperation, etc., such as a request for cooperation

③Deciding the price by discriminating a subcontractor without any justifications, or unilaterally determining the price based on a low unit price without an agreement with a subcontractor.

④An act of deceiving a subcontractor in a way that causes an error in terms of transaction conditions such as quantity in order, or discloses an estimate or a false estimate of another businesses for the price determination

⑤ For a private contract, the act of determining the price lower than the sum of the direct construction cost items without justifications in concluding a contract through a private contract

⑥ In concluding a contract through competitive bidding, the act of determining the price at a lower price than the lowest bid without any justifiable reason;

⑦Determining the price by lowering the unit price indiscriminately without objectively justifiable reasons for unit price reduction, such as a decrease in the price of materials or a decrease in wages.

⑧An act of discriminating against a specific subcontractor to make the price lower even though there is no difference in terms of payment, transaction quantity, difficulty of work, etc.

⑨ An act of determining the price based on the estimated price for large order but ordering a small amount in reality

⑩An act of entrusting manufacturing, etc. without setting the price, and then determining the price by lowering the normally paid price without consulting with the partner;

⑪An act of requesting and receiving delivery-related technical data, etc., and then providing it to another business operator to try to lower the price based on the quoted price from the business operator;

⑫An act of drawing up a significantly lower execution budget compared to the original contract price to determine the price to be low with the grounds that construction should be carried out within the same level of the execution budget;

⑬Determining the price significantly lower than the price normally paid for export, special sale at discount, freebies, samples, etc.

⑭An act of forcing a subcontractor to deliver at a price significantly lower than the normal delivery price in order to hold a special sale event such as a special discount sale or low-price sale.

⑮Other unfair subcontract payment decisions

C. Verbal request for proposal or development

An act of canceling the development, or requesting a reduction in the verbally suggested unit price upon verbal request development after a subcontractor completed the equipment or production preparation for the contract

D. Unfair business interference

① An act of interfering in personnel affairs, such as having a subcontractor obtain its instructions or approval in appointing or dismissing executives and/or employees, or hiring a specific person against the will of the subcontractor;

② Intervening in re-subcontract transactions and restricting the contents of the re-subcontract transactions, such as selection and setting of contract terms, regardless the purposes of its subcontract transaction, such as maintaining the quality of the entrusted products and delivery within the due date

③An act of mobilizing field workers for the construction project against the will of a subcontractor even though the construction is being performed normally

④Restricting a subcontractor's production items, the size of facility, etc., or preventing the subcontractor from transacting with its competitors or their affiliates;

⑤An act of requesting a subcontractor to provide its technical data, etc. in association with the delivery without justifiable reasons

⑥ An act of coercing a partner to participate in special sales events such as sales of giveaways and special discounts, or forcing them to purchase products or gift certificates, etc.

⑦Other unfair business interference

E. Non-reflection of additional construction costs (in case of construction-related contracts)

①Acts that prevent Company from requesting the settlement account for additional quantities when additional quantities occur after construction is completed

②An act of passing the cost of installing and operating the supervisor's office to a subcontractor, or prohibiting any changes to the contract due to wage increase or price fluctuations after the initial contract.

③An act of refusing to accept additional contracts with the ground of fact that the delays and suspensions due to construction circumstances, natural disasters from climatic conditions, and suspension of construction due to rainy season are excluded from the construction period.

F. Non-adjustment of subcontract consideration from design change, etc.

①Failing to pay an additional amount, or paying less than the received proportion or amount even after receiving an additional amount from the orderer due to design changes or changes in economic conditions,

②Failing to increase or decrease the contract amount by the date exceeding 30 days from or making adjustments beyond 30 days after the day where the original contract amount had been adjusted by the orderer due to design changes or changes in economic conditions

③An act of not paying the delayed interest, discounted bill and other fees for the extra days after 15 days have passed from the date of receipt of the additional amount from the orderer due to design changes or economic conditions, etc. where the payment is made in cash or using bills or alternative payment methods,

④Failing to notify the subcontractor of the reason and details of the increase or decrease within 15 days from the date of receipt of the contract amount even after receiving the changed contract amount from the orderer with the grounds of design changes or changes in economic conditions etc.

G. Non-adjustment of subcontract price due to fluctuations in raw material price

①Failing to respond to the request for consultation or failing to conduct substantive consultation procedures such as holding a meeting, exchanging opinions, or presenting a unit price adjustment plan after notifying that consultations will be initiated

②Where the person in charge of actual unit price adjustment with its authority does not engage in the consultation even though 30 days have passed since the request for consultation

③Repeatedly suggesting a price that is unacceptable to the counter party without any objective grounds such as market research for unit price adjustment, cost estimation, etc.

H. Request for Exclusive Transaction

Preventing a subcontractor from doing business with companies designated by Company (excluding the case where Company and the subcontractor agreed with the exclusive contract due to the joint technology development)

I. Unilateral transfer of complaint handling

Taking all economic and administrative responsibilities for various civil complaints during construction, but deducting all expenses from Company’s handling the complaint if the complaint is not resolved and the potential for a dispute continues

J. Unfair special contract

①Establishing contract conditions that unreasonably infringe on or restrict the interests of a subcontractor

②An act of setting up the contract terms to bear the costs incurred from the request for the matters not specified in the contract

③An act of setting up the contract terms to bear the costs related to civil complaint handling, industrial accidents etc. that company should bear

④An act of setting up the contract terms to bear the costs incurred from the request for the items that are not in the bidding details

⑤Setting up other unfair agreements

IV. Faithful fulfillment of contracts in accordance with the contract and related laws

1. Compliances with the contract

A. Compliance with relevant laws such as civil law etc.

Company shall observe the principle of good faith and relevant laws such as Fair Trade in Subcontracting Act, and the Fair Trade Act, but when a dispute arises, it shall be resolved by written materials.

B. Sufficient agreement and written issuance upon unit price reduction

In the case of a unit price reduction due to a decrease in the price of raw materials or an increase in quantity, the reasonable justification for the amount in reduction due to an increase in quantity shall be presented.

C. Adjustment of price according to contract change

If additional costs are required due to contract changes such as requesting for additional specifications, the corresponding price shall be paid.

2. Restrictions on contract performance

A. Unreasonable refusal to receive

①The act of refusing to receive delivered goods even though it is difficult to determine whether the contents of them are different from the details of consignment due to the unclear details of the contents.

②The act of refusing to receive items that had already been consigned due to the claims from the orderer, foreign importers, or customers or poor sales, etc.

③The act of refusing to receive the items with the ground of delay in delivery even though delivery, delivery before the deadline or construction is impossible due to late supply of raw materials or building materials, etc.

④The act of applying the standard higher than the normal standard without setting the inspection standard

⑤The act of refusing to receive the items as the content is not clear or the higher standard than the inspection standard set in the original contract is applied.

⑥An act of refusing to receive goods without justifiable reasons, such as lack of storage space, even when there is a request from a subcontractor for receipt.

⑦An act of arbitrarily refusing to receive the goods that had already been ordered because it is deemed that a stable supply is difficult due to the bankruptcy of the subcontractor, etc.

⑧An act of refusing to receive other goods due to multi-lateral manufacturing entrustment and the defects in some items, or the cancellation or suspension of order by the orderer

⑨Refusal of receipt with other unfair reasons

B. unreasonable return of goods

①An act of returning an ordered goods with the reasons such as cancellation of an order from a counterparty or a change in economic conditions

②An act of refusing the return of goods that didn’t pass the inspection as its criteria and methodology are not clearly determined.

③The act of returning the items despite the fact that it was found to be rejected due to poor quality of the supplied raw material

④The act of returning goods with the reasons of delay in delivery despite delay in supply of raw materials

⑤The act of returning goods that had already been received due to claims from the orderer, foreign importer, or customer, poor sales, etc.

⑥An act of returning the goods, delivered after the completed inspection by a third party as Company entrusted the inspection to another third party.

⑦An act of returning goods due to the delay in delivery or completion even though there is an objective fact that Company accepted it.

⑧Returning goods with other unreasonable reasons

C. Unreasonable reduction of money

①An act of reducing the price for unreasonable reasons, such as request for cooperation after entrustment without specifying the conditions, etc. to reduce the price, cancellation of orders from the counterparty, changes in economic conditions, etc.

②An act of unilaterally applying retroactively to the part entrusted before the establishment of the agreement to reduce the price In case of the agreement on unit price reduction

③ An act of excessively reducing the amount due to payment in cash or before the due date

④ An act of unilaterally reducing the amount due to a minor negligence of a subcontractor which does not substantially affect the occurrence of damage.

⑤An act of deducting more amount than the appropriate purchase price or the payment for use where a subcontractor was asked to purchase or use goods of Company, etc. necessary for manufacturing, repair, construction, or service performance.

⑥An act of deducting the price due to the fact that the price or material price at the time of payment has fallen compared to the time of delivery, etc.

⑦An act of deducting the price unfairly with unreasonable reasons, such as a business deficit or a decrease in sales price.

⑧An acts of reducing indirect labor costs, general management costs, profits, value-added tax, etc. which is different from the original contract

⑨ An acts of making subcontractors bear the employment insurance premiums, occupational safety and health management expenses, and other expenses that Company must pay in accordance with the Act on the Collection of Insurance Premiums etc. for Employment Insurance and Industrial Accident Insurance Insurance, the Occupational Safety and Health Act, etc.

⑩An act of reducing the payment due to the failure to deliver goods or complete projects within the period by setting an unreasonable due date or delaying the supply where materials, equipment etc. are to be supplied.

⑪An act of deducting the subcontract consideration that has already been confirmed with the grounds of continuous ordering, or the specific details of manufacturing or construction after contracting in total amount;

⑫An act of deducting the price differently from the original contract due to the fact that the order was received at a low price, etc.

⑬An acts of deducting the price at the end with contract change, even though the contents and conditions of the consignment remain unchanged

⑭An act of deducting the price by transferring foreign exchange losses, etc. to the subcontractors differently from the original contract terms

⑮An act of deducting the price with other unfair reasons

D. Acts of unreasonably demanding economic benefits

①An act of demanding economic benefits such as sponsorship money, incentives, and subsidies under condition of initiation of a transaction or large-scale transaction

②An act of demanding economic benefits such as sponsorship money, incentives, and subsidies for unreasonable reasons, such as worsening profits or business conditions;

③An act of demanding economic benefits such as sponsorship money, incentives, and subsidies even though there are no legal obligations to be borne by other subcontractors

E. An act of transferring the cost due to the cause by Company

An act of transferring expenses to subcontractors with the grounds of the causes, incurred by Company such as wage increase or internal delay in the internal review process

F. Unreasonable act of payment in substitutes

An act of requesting subcontractors to accept the goods as a fixed price,unlike the initial contract, against the will of subcontractors

G. Retaliatory action

An act of restricting the opportunity to receive orders, suspending transactions or giving other disadvantages due to the fact that the subcontractors reported any violation of the Fair Transactions in Subcontracting Act to the Fair Trade Commission.

H. Illegal act

①An acts that substantially evade the application of the Fair Transactions in Subcontracting Act by indirect means in connection with subcontracting transactions

②An act of collecting the payment after paying the subcontractors in accordance with the corrective action, ordered by the Fair Trade Commission, or collecting it by deducting the amount from the delivery price, etc.

③An act of indiscriminately lowering the unit price by an amount corresponding to the payment of a discount on bills, delayed interest, etc. to a partner company;

I. Forced purchase of goods, etc./h5>

①An act of forcibly selling or making use of products or services of Company, its affiliates, or specific companies without justifiable reasons

②An act of unreasonably forcing a subcontractor to purchase the materials, used by the subcontractor at the construction site against its will, or forcing the subcontractor to buy and use the goods and equipment, designated by Company without any justifiable reasons

③An act of requesting a subcontractor for purchasing even though the subcontractor has expressed no intention to purchase without any justifiable reason, or even if it doesn’t express the intention, it is clearly recognized that there is no intention to purchase

J. Requesting for unfair payment for purchases of goods, etc.

① An act of having a subcontractor buy or use the goods necessary for delivery, etc. of Company, and pay all or part of the purchase use price before the payment due date;

②An act of having a subcontractor buy or use the goods necessary for delivery, etc. of Company, and making the payment with significantly disadvantageous than the payment purchased and used by itself or supplied to third parties

K. Coercion and misuse of technical data

①An act of forcing a subcontractor to provide the following technical data to Company or a third party without justifiable reasons

• - Data on manufacturing, repair, construction, or service performance methods which have been kept in secret due with considerable effort
• - Information related to intellectual property rights, such as patent rights, utility model rights, design rights, and copyrights
• - Other technical or managerial information that is useful for business activities and has independent economic value

②An act of misusing technical data acquired from business partners for our company or a third party

1. Purpose

These action items, correspondingly applying “Action Items for Selection,Operation of Partners”, presented by Fair Trade Commission, aim to contribute to the establishment of fair subcontractor transaction order in consideration of transparency and fairness in the process of selecting and operating partners by Tapex (hereinafter referred to as ‘Company’), and to determine the general items for prevention of any violation of Fair Transactions in Subcontracting Act.

II. Terms of Definition

1.The term "partner" means a business entity to be or incumbent target company for manufacturing, construction, and service consignment transactions of Company, including not only contractors prescribed in the Fair Transactions in Subcontracting Act but also general entrusted business operators.

2.The term "Pool of Partners" means a group of partners registered, managed, and operated in accordance with the certain standard by Company.

3.The term "Selection of partners" means registration in Company's Partner Pool of Partners.

4.The term "operation of partners" means that Company manages the pool of partners according to certain standards, such as granting opportunities of commencing transactions to companies selected and registered as partners, or cancellation of registration, etc.

II. Action Items for Selecting and Operating Partners

1. Disclosure of selection criteria of partners, its procedures and tis results

A.The information on the criteria and procedures for selecting partners shall be disclosed to business premise, electronic media (including renewal registration) for at least 15 days before the expiration of the validity period of the partner's registration or 30 days before the commencement of the registration (including renewal registration).

B.Where the selection criteria for partner companies are changed, Company shall notify the companies subject to renewal registration individually of the changes in writing (including electronic documents, the following shall be the same) 45 days in advance.

C.The results shall be individually notified in writing within 15 days from the date of the selection of the partner, and for the unselected company, the notification shall include the reasons therefor in writing.

2. Specificity and clarity of selection criteria

Company shall make the criteria for selecting partners specifically and clearly so that there is no concern about arbitrary interpretation.

3. Fairness of selection criteria and its procedures

A. Company shall conduct a fair evaluation by applying the legitimate when selecting a partner in accordance with the legitimate selection criteria set out below and shall not disadvantage with the ground of transactions with competitors or registration of overlapping partners.

<Selection Criteria for Partners>

B.The period of application and reception for registration of partners shall be at least 15 days.

C.Any companies that are deemed to have been excluded from the selection of partners due to their own reasons shall be granted an opportunity to file an objection for at least 15 days from the date of receipt of the notification of selection.

D.There should be no discrimination against the selection criteria between existing and new registered companies without justifiable reasons.

4. Granting Opportunity of Commencing Transactions

Businesses selected and registered as partners shall not be restricted or discriminated against from participating in bidding for the commencement of transactions without justifiable reasons.

5. Disclosure of criteria and procedures for cancellation of registration of partners

Company shall disclose the criteria and procedures for selecting partners, and at the same time, disclose matters in association with the criteria and procedures for cancellation of registration to workplaces, electronic media, etc. for at least 15 days.

6. Specificity and clarity of criteria for cancellation of registration of partner companies

Company shall make the criteria for selecting partners specifically and clearly so that there is no concern about arbitrary interpretation.

7. Fairness of criteria and procedures for cancellation of registration of partners

A.The cancellation of registration as a partner company shall be made fairly if it meets the criteria for cancellation based on objective and appropriate justification as below, and Company is prohibited cancelling the registration due to unfair reasons such as non-cooperation in matters unilaterally presented or registration as a partner of its competitor.

①Where normal management is impossible due to bankruptcy, suspension of business, liquidation, etc.

②In case of violation of related laws such as the Fair Transactions in Subcontracting Act.

③Where its license has been revoked in accordance with relevant laws

④In case of serious accidents under the Occupational Safety and Health Act

⑤Where Transaction is inappropriate to be retained due to the violation of the Code of Ethics

⑥In case of serious quality problems resulting in economic loss to the company tangibly and intangibly

⑦Where similar companies in the same industry sector is instigated to disrupt the bidding order such as rigging

⑧In case of suspension of transactions with promissory note and checks

⑨Where there was a disposition of suspension or cancellation of business by the supervisory government agency, provisional seizure or compulsory execution of provisional disposition on important business property

⑩Where it is judged that it is impossible to fulfill the contract due to bankruptcy or an application for the commencement of company reorganization, etc.

⑪Where a transaction item is repeatedly delayed or the delivery of a confirmed order is deliberately refused.

⑫Where any other significant and obvious reasons attributable to the subcontracting transaction concerned have occurred.

B. In case of canceling the registration of a supplier, its reason shall be notified in written, and the supplier shall be able to raise objections within 15 days or more from the date of receipt of the notice. If the cancellation was made imputable to Company, it shall take immediate re-registration measures.

8. Company shall take corresponding sanctions if executives and employees did not comply with the practice due to intentional or gross negligence.

1. Purpose

These action items, correspondingly applying “Action Items for Establishment,Operation of Internal Deliberation Committee for Subcontractors”, presented by Fair Trade Commission, aim to help Tapex (hereinafter referred to as ‘Company’) contribute to the establishment of fair subcontractor transaction order by auditing the fairness and adequacy for the subcontractors with more than certain level of subcontracting transaction. and determine the general items for prevention of violation of Fair Transactions in Subcontracting Act.

II. Practices for Establishment, Operation of Internal Deliberation Committee

1. Adequate Composition of Internal Deliberation Committee

가. Internal Deliberation Committee shall be comprised of not more than three members, including a person in charge of subcontractors and, if necessary, can appoint external expert such as nonexecutive directors.

나. In the case of introducing the Compliance Program (CP) for operation, the organized deliberation committee in operation may be operated as an internal deliberation committee if it meets the requirements of A. above.

2. Effectiveness of the internal deliberation committee in operation

A.The internal deliberation committee shall be held regularly at least once a month, and may be held at any time when pending issues arise. However, if there is no separate agenda, its record may not be kept separately.

B. The internal deliberation committee shall fulfill the pre-review on the legality of related laws and regulations for transactions that fall under Fair Transactions in Subcontracting Act, as stipulated below.

①Whether complying with the obligation to issue a written contract

②Whether violating the prohibition of unfair subcontract payment

③Whether violating the prohibition of forced purchase of goods, etc.

④Whether violating the prohibition of unreasonable demands for economic profit

⑤Whether or not there is a violation of other related laws

C.If necessary, the opinions of related partners may be heard, and in this case, anonymity should be guaranteed depending on the situations.

D.The internal deliberation committee shall review the objections to non-selection of suppliers or cancellation of registration.

E.Where the agenda for deliberation is likely to violate relevant laws, such as Fair Transactions in Subcontracting Act, it shall be rectified by itself.

F.Where there is intentional or gross negligence of the relevant executives and employees, disciplinary sanctions corresponding to the degree of violation shall be taken.

G.Documents related to the review results and measures taken by the internal deliberation committee shall be kept for at least 3 years from the date of completion of the review.

1. Purpose

These actions items, correspondingly applying “Practices for Issuance and Preservation of Preferred Documents in Subcontract Transactions”, presented by the Fair Trade Commission, aim to help Tapex Co., Ltd. (hereinafter referred to as “Company”) suggest the items to be observed or to be tried in relation to the issuance or preservation of the document in detail in the process of conclusion and transaction so that both Company and its partners may clearly recognize the matters related to the issuance of documents under Fair Transactions in Subcontracting Act, thereby it may facilitate the exercise of rights and fulfilling their obligations, promoting advanced document issuance practices, and establishing a fair subcontract transaction order.

II. Matters concerning the issuance of various documents in the process of subcontract transactions

Company shall issue documents as stipulated below in the process of concluding and implementing a subcontract contract. Document Subject to Issuance are in following Table 1

<Table 1: Document Subject to Issuance>

1. Issuance of Subcontract Form

A. Obligation of issuance in writing (Article 3 of the Subcontracting Act)

①When entrusting manufacturing, repair, construction, or service (hereinafter referred to as 'manufacturing, etc.') of objects, etc. to a partner under Fair Transactions in Subcontracting Act, Company shall agree to the main details of the contract with the partner, such as the contents of the consigned object, quantity, unit price, etc before issuing the subcontracting contract in written.

②Where the original contract contents are changed due to the change in design or additional construction entrustment etc., an additional changed document shall be prepared for issuance unless there are special circumstances.

B. Information to be described

The contents in the subcontract document shall be consistent with the facts of the actual transaction, and in principle, each of the following items should be described.

①Consignment date, contents, quantity and unit price of consigned objects, time and place of delivery, delivery or provision of objects, method and time of inspection of objects, etc., subcontract payment (advance payment for construction work, work progress payment, completion payment, etc.) and its payment method and date;

②Product name, quantity, delivery date, payment method and payment date of the raw material, etc. where Company intends to provide its partners with consumable raw materials, etc. for manufacturing of the target;

③Subcontract price adjustment requirements, methods, procedures, etc. according to price fluctuations of raw materials, etc.after the consignment of manufacturing target product

C. Time to issue the document in writing

The contents in the subcontract document shall be consistent with the facts of the actual transaction, and in principle, each of the following items should be described.

①In principle, Company shall issue a written contract without delay after agreeing and settling the main contents of the consignment contract with the partner.

②Even if there are circumstances where it is difficult for Company to issue a written contract to a partner without delay, the contract shall be issued in writing at least by the deadline specified in each of the following paragraphs unless there is a special reason.

1. 1.Where the manufacturing is entrusted: Before the subcontractor commences any work for delivery of goods etc.
2. 2.Where the repair is entrusted: Before the subcontractor commences the act of the repair on the basis of the the concluded contract
3. 3.Where the construction is entrusted: Before the subcontractor commences the contracted construction work
4. 4.Where the service is entrusted: Before the subcontractor commences the act of performing the contracted service

D. How to issue the document in writing

①Company shall provide the partners with the contract form affixing CEO’s signature (including digital signature referring to one that can identify the real name of a signer under subparagraph 2 of Article 2 of the Digital Signature Act) or putting name and seal thereon.

①Where the document is issued without the signature or seal of the party of the subcontract transaction, it is considered as non-issuance of the document.

③A written document may be issued by providing an electronic record as follows.

• -Transmitting through a telecommunication line and recording it in a file on electronic recording device used by a partner (e.g.: E-mail)
• -Providing the access to a partner through a telecommunications line and record it in a file on an electronic recorder used by the partner (e.g.: website)
• -Providing partners with the electronic records such as floppy disks, CD-ROMs etc.

E. Exceptions

As exemplified below, if the document is issued in a reasonable manner consistent with the actual subcontract transaction, the obligation to issue the document may be fulfilled differently from the above written items and the time of issuance of the document.

• - Where there are matters that makes it difficult to confirm at the time of consignment. However, for matters that are difficult for Company to make decision at the time of entrustment, a document not stating the relevant matters may be issued only if there is a justifiable reason
  * However, even in this case, the reason why the relevant matter has not been determined and the anticipated date for determining it shall be specified, and when the relevant matter is finalized, a document stating the matter shall be issued without delay
• - Where there are frequent transactions of subcontracting transactions in reality, and there is no major problem in the establishment and maintenance of contracts in light of the characteristics and reality of the industry
  • Where the details of the order are objectively clear as it was ordered by issuing a basic contract and copying (Fax), other electrical and electronic forms, etc.
  • Where some of the legal matters are missing in the contract, but it is possible to identify the omission due to the item list, work order, etc. provided at the time of ordering by case.
  • Where a basic contract and manufacturing goods for export was sent and the submitted offer sheets by the partner may be recognized as individual contract.
  • Where the contract with a settlement agreement was immediately replaced after completion of construction for a construction project that is clearly expected to change due to minor and frequent additional work in connection with the entrustment of additional works.
  * However, following cases are considered as non issuance of the document.
  • Where a specific additional contract or work order, etc. is not issued despite the identified scope of additional construction and its significant amount.
  • Where the amount of construction added or changed during the construction process has been proved, but a change contract or the statement of account has not been issued due to a dispute between the parties.

F. Special Rule

①Estimation of subcontract

1. 1.Where Company does not issue a subcontract form stating the matters under Article 3 Paragraph 2 of the Fair Transactions in Subcontract Act (including where the document with some matters missing against the Article 3 was issued) while entrusting manufacturing, etc., suppliers may request confirmation by notifying the details of the entrusted work, subcontract payment, the date and time of the entrustment, the name and address of the business operator of the company and the partner, and other details entrusted by the company in written.
   - In this case, the supplier uses [Form 1] “Request for Confirmation of Consignment Details” in the 「Guidelines for fair transactions in subcontracting」 in the standard format.
2. 2.Company shall reply to the partner in writing of its intention to acknowledge or deny the contents within 15 days after receiving the notification of the request for confirmation of the above entrusted contents from the partner.
   - In this case, Company shall use [Form 2] Response to request for confirmation of consignment contents” in the standard form of the “Guidelines for fair transactions in subcontracting”
3. 3.If Company does not send the reply within 15 days, it is presumed that the consignment has been made as notified by the supplier, except in case of natural disasters or other events to make it impossible to reply.
4. 4.Written notification of the request for confirmation of consignment contents and written reply to the request for confirmation of consignment contents above shall be made to the address of Company and its partners, but its method shall be in a way of checking the contents and receipt of the notification and reply (excluding e-mail) objectively.

②In the case of a joint contract, if it’s the contract in a joint performance type, all joint contractors may sign a subcontract in joint name for the document issuance or individually sign a subcontract for their share, or their representative may sign a subcontract on behalf of the joint contractor for the document issuance.

2. Issuance of a subcontract consideration reduction document

A. Obligation of issuance in writing (Article 11 of Fair Transactions in Subcontracting Act)

①Where Company has intention to pay for the subcontract consideration with some amount subtracted, not the price set “at the time of consignment” for manufacturing, etc., it shall issue a written reduction letter to a subcontractor.

②Where the subcontracting is concluded and the transaction is frequently made, basic contract shall contain the transaction conditions such as payment, transportation, inspection, return, etc., and the general information related to specifications, materials, and manufacturing process. The content in association with subcontract consideration such as unit price and quantity etc. shall be moved to a special agreement or order details. Where the subcontractor consideration is determined in accordance with the special agreement or order details, the time in which they are notified to the subcontractors shall be deemed as “at the time of consignment”.

B. Information to be described

Where Company issue the document for the reduction of subcontract consideration, it shall describe its reasons and standards for reduction, the quantity of subject matters for reduction, the amount of reduction, the method of reduction such as deductions, and other matters proving the justification of the reduction.

C. Time to issue the document in writing

Where Company intends to reduce the price, it shall issue a reduction letter to the subcontractor in advance before the reduction.

D. How to issue the document in writing

①Company shall provide the subcontractors with the document affixing CEO’s signature (including recognized digital signature under subparagraph 2 of Article 2 of the Digital Signature Act) or putting name and seal thereon.

②Where Company intends to reduce the amount, it shall use [Attachment 3] Written Reduction of Subcontract Price” of [Attached Table 7] “Practical matters regarding desirable issuance and preservation of documents in subcontract transactions” in 「Standards for evaluating the implementation of an agreement on fair transactions between large enterprises and small and medium enterprises (Subcontractors) J」 as a standard form.

③A written document may be issued by providing an electronic record as follows.

- Transmitting through a telecommunication line and recording it in a file on electronic recording device used by a subcontractor (e.g.: E-mail)

- Providing the access to a subcontractor through a telecommunications line and record it in a file on an electronic recorder used by the partner (e.g.: website)

- Providing subcontractors with the electronic records such as floppy disks, CD-ROMs etc.

E. Exceptions

For the matters which is difficult to determine the time where Company issues the reduction document, a document without the corresponding matters in may be issued only if there is a justifiable reason.
* However, even in this case, the reason why the relevant matter has not been determined and the anticipated date for determining it shall be specified, and when the relevant matter is finalized, a document stating the matter shall be issued without delay.

3. Issuance of a written request for technical data

A. Obligation of issuance in writing (Article 3 of the Fair Transactions in Subcontracting Act)

As stipulated below, if Company requests a subcontractor to provide technical data due to a justifiable reason, it shall issue the request document to the subcontractor. Justifications for requesting technical data

①Where Company requests a subcontractor for the technical data to meet the requirements of the evaluation of technology capabilities of the subcontractor, preparation of standard prices for orders, review of proposals, joint technology development, and request for proposals from the subcontractor in the process of concluding subcontractor contract through private contracts and competitive bidding (general competition contract, restricted competition contract, nominated competition contract, etc.)

②Where Company requests a subcontractor for the technical data in the name of technical guidance, quality control, performance testing, joint patent application, patent application support, joint technology development, and delivery unit price adjustment during subcontract transactions

③Where Company requests the provision of technical data from its subcontractors due to the conditions of delivery under the lease contract for the technology that has concluded the lease contract.

④Where Company requests the subcontractor to provide technical data for other justifiable reasons

B. Information to be described

The written document requesting the provision of technical data shall include the name and scope of the technical data, the purpose of the request, the confidentiality*, the relationship of rights attribution*, the price of technical data, the date of request, the delivery date, the method of delivery, and other justification of the request.

* Confidentiality: Specify which part of the technical data to be kept confidential, and attach a mutually signed confidentiality memorandum, if any.

* Relationship of rights attribution: The current holder of the right to the technical data requested by Company, whether a mutual technology transfer contract has been concluded, whether the requested technology is a jointly developed technology, matters of mutual agreement on the relationship of rights attribution after the technical data is provided

C. Time to issue the document in writing

Where Company requests the provision of technical data, in principle, the name and scope of the technical data, the purpose of the request, the date of request, the delivery date, the method of delivery, the confidentiality, the relationship of rights attribution, and the price of technical data shall be determined in advance and issued to the subcontractor without delay.

D. How to issue the document in writing

①Company shall provide the partners with the contract form affixing CEO’s signature (including digital signature (referring to one that can identify the real name of a signer under subparagraph 2 of Article 2 of the Digital Signature Act) or putting name and seal thereon.

②Where Company requests technical data of a subcontractor in writing, preferably, the standard written form (Form 1) for technical data request in the 「Guidelines for reviewing technical data requests and misuses」 (Established Rule of Fair Trade Commission Regulation No. 115) should be used.

③Company may request the provision of technical data by means of a separate contract such as a special agreement other than the standard form above. However, in a separate contract document, B. the entered items above 3 shall be included.

④A written document may be issued by providing an electronic record as follows.

- Transmitting through a telecommunication line and recording it in a file on electronic recording device used by a subcontractor (e.g.: E-mail)

- Providing the access to a partner through a telecommunications line and record it in a file on an electronic recorder used by the partner (e.g.: website)

- Providing subcontractors with the electronic records such as floppy disks, CD-ROMs etc.

E. Exceptions

As exemplified below, if the document is issued in a reasonable manner consistent with the actual subcontract transaction, the obligation to issue the document may be fulfilled differently from the above written items and the time of issuance of the document.

• - For matters that are difficult to be determined in advance by the company and its partners among the items stated in the document requesting technical data, a document without stating the relevant matters may be issued only if there is a justifiable reason.
• * However, even in this case, the reason why the relevant matter has not been determined and the anticipated date for determining it shall be specified, and when the relevant matter is finalized, a document stating the matter shall be issued without delay.
• - Where the requests for technical data are inevitable due to the characteristics of the industry or the reality in which there are frequent requests for the data are made, the basic information such as the name and scope of the technical data, the purpose of the request, the confidentiality matters, the relationship of rights attribution, the price, etc. shall be written in a written document signed or sealed by the party before additional items such as the date of request for technical data, delivery date, and delivery method may be set by using the separate request form.

4. Issuance of other documents

A. Issuance of Certificate of Receipt (Fair Transactions in Subcontract Act Article 8)

①Company shall issue a certificate of receipt of the object to the partner when the partner delivers, hands over, or provides the subject matters, etc. (excluding entrusted service supply), except the case where there is a reason to attribute it to the subcontractor.

②Company shall issue a certificate of receipt to the subcontractor immediately even before the inspection of the subject matter (immediately upon completion of inspection in the case of a domestic letter of credit, opened pursuant to Article 7 of Fair Transactions in Subcontracting Act).

B. Issuance of inspection results (Fair Transactions in Subcontracting Act Article 9)

①Upon receipt of the subject matters, etc. from the subcontractor, Company shall carry out necessary inspections to confirm the completion of the object, etc. and the scope of the payment in obligation before notifying the subcontractor of the result in writing.

②In principle, Company shall issue a written inspection result within 10 days from the date of receipt of the subject matters, etc. from the subcontractor.

- The date of receipt of the subject matters, etc., here, includes the date of receipt of the notice on the ready-made part (in case of consignment for manufacturing and repair), and the date of receipt of notice on the completed construction or the completed part of the construction by the subcontractor (in case of consignment of construction).

③However, Company may notify the subcontractor of the inspection result beyond 10 days if there is a justifiable reason as following examples below;

- Where it is difficult the inspection to be completed within 10 days due to excessive goods subject to inspection.

- Where it is possible to determine whether or not the inspection is passed only in a considerable period of time as it takes long time for the inspection;

- Where Company agreed with the subcontractor for the extension of the inspection period, etc.

④Where Company does not issue the inspection result in writing to the subcontractor within 10 days from the receipt of the subject matters, etc. without any justifiable reason, the inspection is deemed to have been passed.

C. Issuance of a statement of changes in contract amount due to design change, etc. (Fair Transactions in Subcontract Act Article 16)

Where the contract amount is increased or decreased due to changes in economic circumstances such as design changes or price fluctuations after entrusting manufacturing, etc., Company shall notify the subcontractors concerned of the reason and details of the increase or decrease from the orderer.

• - This is not the case where the orderer directly notifies the reason and details to the subcontractor.

Company shall issue the notice above to the subcontractor within 15 days from the date of the increase or decrease in the contract amount from the orderer.

D. How to issue the document in writing

① Company shall provide the partners with the contract form affixing CEO’s signature (including digital signature (referring to one that can identify the real name of a signer under subparagraph 2 of Article 2 of the Digital Signature Act) or putting name and seal thereon.

②A written document may be issued by providing an electronic record as follows.

- Transmitting through a telecommunication line and recording it in a file on electronic recording device used by a subcontractor (e.g.: E-mail)

- Providing the access to a subcontractor through a telecommunications line and record it in a file on an electronic recorder used by the partner (e.g.: website)

- Providing subcontractors with the electronic records such as floppy disks, CD-ROMs etc.

Ⅲ. Matters concerning the preservation of documents

1.Both Company and its subcontractors shall preserve the documents listed above at II and the documents referred to in each subparagraph of Article 6 (Preservation of Documents) of the Enforcement Decree of the Other Subcontracting Act. Documents to be preserved are in Table 2 below.

<Table 1: Documents subject to preservation>

①Documents to be preserved shall be preserved in the original state at the time where they are used for issuance, product, and other purposes. The same rule shall be applied to the one written, transmitted, received, or stored in electronic form by devices with information processing capabilities such as computers.

②Company and its subcontractors shall retain the documents above for 3 years from the date of the end of the subcontract transaction. The day, here, where the subcontract transaction is completed means the following date;

• - Entrustment of preparation of knowledge and information outcomes during the entrustment of manufacturing, repair, or services: Date on which the subcontractor delivered or handed over the object entrusted to Company
• - Entrustment of the supply of services during the entrustment of services: Date on which Company completes the entrustment of the services to its subcontractors
• - Where the construction is entrusted: Date on which the consigned work was completed
• - Where the subcontract contract is terminated or the transaction is suspended: Date of termination or suspension