Investor Presentaiton

Positive Long-term Tariff Outlook K-water will continue to closely cooperate with the Government for sufficient cost recovery under the current tariff mechanism. Overview of Mechanism for Setting Water Tariffs K-water ME MOSF K-water Request Approval Cost Calculation Reviewed by Tariff Deliberation Committee Public Utility Tariff Advisory Committee Execution of Rates • The Government has continuously pushed for full cost realization of water tariffs by raising water tariffs by at least 10% every year since 1995. A water tariff freeze was imposed by the Government in 2005 in order to offset inflation on cost of basic necessities • Tariff was raised by 4.9% in January 2013 and further by 4.8% in September 2016 Current Status • After the tariff increase in 2016, revenue in 2017 increased by KRW 81 bn Outlook • The Government continues to focus on setting water tariffs to fully recover costs • According to the "Mid-to Long-term Financial Plan of Public Entities" published by the Ministry of Strategy and Finance, public utility tariffs will be raised in order to improve public institutions' financial structure • In line with the plan, K-water will strive to raise multi-regional and dam water tariffs to achieve sufficient cost recovery • Regardless of changes in tariffs, K-water anticipates sustained revenue growth from an increase in demand Source: Company information. 13 K water

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