Korea Construction Equipment Manufacturers Association 9.1 Regulations Update 25 th JTLM 16~17 th. April, 2015

Korea Construction Equipment Manufacturers Association Corrective Action Plan (Product Recall) for defective construction equipment. 1.Corrective Action Plan (Product Recall) Provision of product recall in amended Construction Equipment Management Law in Korea. 2.Effective date  Mar 17,2013 (Machine manufactured or imported into Korea as of the date) 3.Product in the scope 27 types of construction equipment classified in the Law 4. Defect subject to a Recall  A safety-related defect and(or) non-compliance with Construction Equipment Safety Regulation  Followings are excluded ; Corrosion on chassis, noise, vibration that could be defined as quality of the machine Higher fuel consumption, reduced engine power Others that are not classified as product defect by Product Defect Evaluation Committee 5. Responsible body Manufacturer or Importer who applied type approval to MOLIT * MOLIT : Ministry Of Land, Infrastructure and Transport Recall Law Update 2

Korea Construction Equipment Manufacturers Association 6. Procedure for Corrective Action Plan(CAP) Same procedure implemented in Automotive recall has been adapted  Voluntary or Mandatory Recall  Reporting : Reported to MOLIT with CAP within 30 days as soon as identifying the defective product and quarterly reporting for completion rate.  Corrective Action Plan period : more than 18 months  Public notice on newspaper and a recall letter to owner. 7. Conformity Of Production(COP) COP provision has been implemented  MOLIT propose manufacturer a yearly plan of COP for product type approved - Specific model of the company, which sells most in the machine category - One new machine at the factory and the other in the field  KATRI conduct COP based upon COP plan from MOLIT.  COP can also be conducted during Product Defect Investigation. * KATRI : Korea Automobile Testing and Research Institution Recall Law Update(Cont.) Collect Defective Data Monitoring, analysis, research, and site visit Pre- investigation, Main investigation CAP Procedure Proceed recall if defective Close with notice if not defined as defective 3

Korea Construction Equipment Manufacturers Association 8. Status of recall 172 cases were reported & registered, but no case was defined as recall case.  Since many users of the machinery has less understanding about the new recall law, non-recall related items (related to aftermarket service and old machine) were reported. Recall Law Update(Cont.) Machines Amount (units) Excavators66 Loaders3 Forklift trucks20 Dump trucks46 mixer trucks28 etc9 total172 4

Korea Construction Equipment Manufacturers Association Type approval for Excavator with Quick coupler Change of the type approval for excavators equipped with quick couplers for preventing related incident/accident 1.Type approval  Notice specification of the quick couplers on the machine specification table  Information of - Manufacturer of quick coupler, type, weight, drawing - Changed machine spec.: weight, Max. operating radius, dump height, Max. digging depth. - Front/rear axle load for wheeled excavator, contact pressure for crawler excavators  Allow type approval of multiple quick couplers for one excavator type  COP (Conformity of Production) is executed with one machine equipped with quick couplers 2.Effective date  November, 2014 [Note] Safety related to the quick couplers  Locking system should be interlocked  Acoustic alarm should be operated if the hydraulic locking system was released to open  The system should be protected from overcurrent, and the switch should be operated only by the control of the operators 5

Korea Construction Equipment Manufacturers Association Back Ground Regulate total population of the machines in the market being registered as business purpose not to create an excessive supply which may result in unfair business practices by sizeable contractors. Subject : Dump Truck, Concrete Mixer Truck Same as last report Duration : ~ Dump trucks or concrete mixer trucks are prohibited to register in the market as business purpose until 31 st Jul Quota Council meeting will be held in July of this year, in order to decide enforced subject and duration again. Quota Law update 6