Business Report

SAMSUNG ELECTRONICS Co., Ltd.
Interim Business Report
For the quarter ended September 30, 2014
Note about forward-looking statements
Certain statements in the document, other than purely historical information, including estimates, projections, statements relating to our business
plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.”
Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and
events to differ materially from such forward-looking statements is included in our financial reports available on our website.
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Table of Contents
Certification ........................................................................................................................................................................... 3
I.
Corporate Overview .................................................................................................................................................... 4
II.
Businesses Overview................................................................................................................................................ 20
III. Management Discussion and Analysis.................................................................................................................... 53
IV. Corporate Governance and Affiliates ...................................................................................................................... 54
V.
Information on Shareholders ................................................................................................................................... 92
VI. Executives and Employees ...................................................................................................................................... 98
VII. Related Party Transactions .................................................................................................................................... 105
VIII. Other Information Related to Investment Protection ........................................................................................... 109
IX. Auditor’s Report ...................................................................................................................................................... 115
X.
Financial Statements............................................................................................................................................... 117
XI. Summary of Significant Accounting Policies ....................................................................................................... 133
XII. Supplementary Information .................................................................................................................................... 148
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Certification
Letter of Certification
We, Oh-Hyun Kwon and Sang-Hoon Lee, as CEO and director of the company in charge of reporting, certify
that we have reviewed the interim business report of Samsung Electronics Co., Ltd. for the quarter ended
September 30, 2014.
Based on our knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary that would be misleading with respect to the period covered by this report.
Based on our knowledge, the financial statements, and other financial information included in the report, fairly
present in all materials respects the financial condition, results of operations and cash flows of the company as
of, and for, the periods presented in this report.
We confirm that Samsung Electronics operates an Internal Accounting Management System, responsible for
establishing and maintaining disclosure controls and procedures and internal controls over financial reporting,
as defined in Article 2.2 and 2.3 of the External Audit Act. We have disclosed our most recent evaluation of
internal controls over financial reporting to the Company’s auditors and to the audit committee of the
Company’s board of directors.
Date: 2014. 11. 14
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I. Corporate Overview
1. Overview
A. Legal, Commercial Name:
- Samsung Electronics Co., Ltd.
B. Date of Establishment:
- Samsung Electronics (“SEC” or `“The Company”) was established as Samsung Electronics Industry Co., Ltd.
on January 13, 1969, held an Initial Public Offering on June 11, 1975.
- The Company changed its name from Samsung Electronics Industry Co., Ltd. to Samsung Electronics Co., Ltd. in
accordance with the resolution of the Annual General Meeting of Shareholders on February 28, 1984.
C. Address, Phone Number, and Website of the corporate headquarter
- Address: 129, Samsung-ro, Yeongtong-gu, Suwon, Gyeonggi-do, Korea
- Phone Number: 82-31-200-1114
- Website: http:// www.samsung.com/us
D. The Company is not subject to Article 2 of the Framework Act on Small and Medium Enterprises.
E. Core Businesses
- The Company independently manages three independent divisions, CE (Consumer Electronics), IM (Information
Technology & Mobile Communications), and DS (Device Solutions).
Products in each division are presented below:
Division
Products
CE
CTV, Monitor, Printer, Air Conditioner, Refrigerator, Washing Machine, Medical Devices, etc.
IM
HHP, Network System, Computer, Digital Camera, etc.
DS
DRAM, NAND Flash, Mobile AP, LCD panel, OLED panel, LED, etc.
The Company is a global electronics company comprised of the headquarters in Korea and 158 subsidiaries across the
world including nine (9) regional headquarters for the CE and IM divisions and five (5) regional headquarters for the DS
division.
[CE Division]
The CE division is leading the global digital era by continuously offering new products with innovative technology,
unique design, and value.
CTV is the core product of the CE. The Company has maintained its market leadership position for the past eight (8)
consecutive years through competitive advantage in hardware products such as LCD and LED TV as well as software
driven product features with our Smart TV product portfolio.
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[IM Division]
The IM division is leading mobile lifestyle innovation with consumer-friendly products such as the premium brand
‘GALAXY’ series, while driving the paradigm shift in the market beyond mobile convergence to focus on software.
The IM division is focused on meeting market demands by enhancing mobile product differentiation through integration
of key features from various product categories.
In addition to HHP products including smartphones, the IM division is also leading technological development and
standardization in the global networks system market including Long Term Evolution (LTE).
[DS Division]
The DS division is comprised of semiconductor and display businesses. The semiconductor business is divided into
memory and System LSI businesses. The memory business manufactures and sells DRAM and NAND products. The
System LSI business manufactures Mobile AP (Application Processors) and various sensors including CIS (Central
Imaging Sensors). The display business manufactures and sells display panels, including TFT-LCD and OLED.
The memory business produces differentiated products and has maintained number one position in the global memory
market by applying advanced process technology. The System LSI business is leading the industry shift from PC to
mobile. For display business, the Company is leading the market with technological development and investment resulting
in superior quality and cost competitiveness in TFT-LCD and increasing applications of OLED panels in various IT
products.
☞ Refer to 『II. Businesses Overview』, for more details about each division
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F. Affiliates
The Company is an affiliate of Samsung Group under the Monopoly Regulation and Fair Trade Act.
As at September 30, 2014, Samsung Group had a total of seventy (70) domestic affiliates, where four (4) new affiliates
(Samsung Welstory, Seoul Lakeside CC, Samsung Card Customer Service, and Shilla Stay) were included and nine (9)
affiliates (Samsung Corning Precision Materials, Samsung SNS, Global Tech, 365Homecare, Samsung Petrochemical,
Cheil Industries, World Cyber Games, SMP, and SKKU dormitory) were excluded. Among the Samsung Group’s seventy
(70) domestic affiliates, sixteen (16) affiliates including Samsung Electronics are listed, and fifty-four (54) affiliates are
unlisted.
[As of Sep 30, 2014]
No. of
affiliates
Name of affiliates
Samsung C&T, Samsung Electronics, Samsung SDI, Samsung Techwin, SEMCO, Samsung Heavy Industries,
Listed
16
Samsung Card, Samsung Life Insurance, Hotel Shilla, Samsung Fire & Marine Insurance, Samsung
Securities, Samsung Fine Chemicals, Samsung Engineering, S1, Cheil Worldwide, CREDU
Cheil Industries(formerly Samsung Everland), Samsung SDS, Samsung General Chemicals, Samsung Total
Petrochemicals, Samsung Lions, SERI, STECO, Samsung Thales, SEMES, Samsung Electronics Sales,
Samsung Electronics Service, Samsung Electronics Logitech, Hantok Chemicals, CVnet Corporation, Care
Camp, Allat., SECUI, Gacchinet, Open Tide Korea, Samsung Futures, Samsung Venture Investment
Corporation, Samsung Asset Management, Saengbo, SD Flex, Samsung Claim Adjustment Service, Samsung
Unlisted
54
Fire & Marine Insurance Service, S-Core, Suwon Samsung Bluewings FC, Human TSS, RAY, Songdo Land
Mark City, S-1CRM, OpenHands, S-EnPol, Samsung Medison, Samsung Biologics, STM, Nuri Solution,
Colombo Korea, Samsung Life Service, Miracom, SU Materials, Natural9, Samsung Display, Samsung
Bioepis, Samsung Corning Advanced Glass , Daejung Offshore Wind Power Co., Ltd., Samsung SRA Asset
Management, Jeongahm Wind Power, Samsung SGL Carbon Composite Materials, Samsung Welstory,
Samsung Card Customer Service, Seoul Lakeside CC, Shilla Stay
Total
70
※
The former Cheil Industries merged with Samsung SDI in July 2014, and Samsung Everland has been renamed as Cheil
Industries.
☞
Refer to 『4. Affiliates and Subsidiaries』 in 『IV. Corporate Governance and Affiliates』 for more details about domestic and
overseas affiliates.
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G. Subsidiaries Subject to Consolidated Financial Statements
As at September 30, 2014, Samsung Electronics’ consolidated subsidiaries totaled 158 with ten(10) subsidiaries being
newly included and five(5) subsidiaries being excluded as compared to December 31, 2013. Below is the list of
consolidated subsidiaries.
(Unit: KRW million)
Dec 31,
2013
Assets
%
ownership
Classified as
major
subsidiary
(Y/N)
Sale of electronic goods
12,248,560
Over 50%
Y
1998.03
Receivable management
2,780,689
Over 50%
Y
Samsung Semiconductor Inc.
1983.07
Sale of semiconductors and DP
7,346,339
Over 50%
Y
Samsung Electronics Canada Inc.
1980.07
Sale of electronic goods
522,775
Over 50%
Y
Samsung Information Systems America Inc.
1988.10
R&D
184,101
Over 50%
Y
Grandis, Inc.
2002.06
R&D
108,037
Over 50%
Y
Samsung International Inc.
1983.10
Production of CTV and monitors
34,424
Over 50%
N
Samsung Mexicana S.A. de C.V
1988.03
Production of electronic goods
1,065,830
Over 50%
Y
Samsung Telecommunications America LLC.
1992.01
Sale of telecom products
4,735,432
Over 50%
Y
Samsung Austin Semiconductor LLC.
1996.02
Production of semiconductors
6,393,348
Over 50%
Y
Samsung Electronics Mexico S.A. De C.V.
1995.07
Sale of electronic goods
1,554,638
Over 50%
Y
SEMES America Inc.
1998.10
Semiconductor equipment
1,090
Over 50%
N
Samsung Electronics Digital Appliance Mexico, SA de CV
2012.12
Production of electronic goods
503,513
Over 50%
Y
Samsung Electronics Latinoamerica Miami, Inc.
1995.05
Sale of electronic goods
259,165
Over 50%
Y
Nvelo, Inc.
2010.05
Software
1,519
Over 50%
N
Samsung Electronics Latinoamerica (Zona Libre)
1989.04
Sale of electronic goods
375,274
Over 50%
Y
Samsung Electronics Venezuela, C.A.
2010.05
Marketing and services
8,928
Over 50%
N
Samsung Electronica Colombia S.A.
1997.03
Sale of electronic goods
327,320
Over 50%
Y
Samsung Electronics Panama. S.A.
2012.07
Consulting
3,549
Over 50%
N
Samsung Electronica da Amazonia Ltda.
1994.10
Production and sale of
electronic goods
3,429,136
Over 50%
Y
Samsung Electronics Argentina S.A.
1996.06
Marketing and services
49,454
Over 50%
N
Samsung Electronics Chile Limitada
2002.12
Sale of electronic goods
492,709
Over 50%
Y
Samsung Electronics Peru S.A.C.
2010.04
Sale of electronic goods
150,228
Over 50%
Y
Samsung Electronics (UK) Ltd.
1995.07
Sale of electronic goods
1,393,507
Over 50%
Y
Samsung Electronics(London) Ltd.
1999.01
Holding company
7,647
Over 50%
N
Samsung Electronics Holding GmbH
1982.02
Holding company
886,338
Over 50%
Y
Samsung Semiconductor Europe GmbH
1987.12
Sale of semiconductors and DP
1,016,296
Over 50%
Y
Samsung Electronics GmbH
1984.12
Sale of electronic goods
1,214,277
Over 50%
Y
Samsung Electronics Iberia, S.A.
1989.01
Sale of electronic goods
783,438
Over 50%
Y
Samsung Electronics France S.A.S
1988.01
Sale of electronic goods
1,157,900
Over 50%
Y
Samsung Electronics Hungarian Private Co. Ltd.
1989.10
Production and sale of
electronic goods
1,249,691
Over 50%
Y
Name of Subsidiaries
Date of
Establishment
Major business
Samsung Electronics America Inc.
1978.07
Samsung Receivables Corporation
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%
ownership
Classified as
major
subsidiary
(Y/N)
170,011
Over 50%
Y
Sale of electronic goods
1,004,423
Over 50%
Y
1991.05
Logistics
1,903,892
Over 50%
Y
Samsung Electronics Benelux B.V.
1995.07
Sale of electronic goods
1,290,124
Over 50%
Y
Samsung Display Slovakia s.r.o.
2007.03
DP Processing
299,196
Over 50%
Y
Samsung Electronics Romania LLC
2007.09
Sale of electronic goods
144,702
Over 50%
Y
Samsung Electronics Polska, SP.Zo.o
1996.04
Sale of electronic goods
557,370
Over 50%
Y
Samsung Electronics Portuguesa S.A.
1982.09
Sale of electronic goods
132,631
Over 50%
Y
Samsung Electronics Nordic Aktiebolag
1992.03
Sale of electronic goods
533,252
Over 50%
Y
Samsung Nanoradio Design Center
2004.02
R&D
21,737
Over 50%
N
Samsung Semiconductor Europe Ltd.
1997.04
Sale of semiconductor and DP
98,884
Over 50%
Y
Samsung Electronics Austria GmbH
2002.01
Sale of electronic goods
323,756
Over 50%
Y
Samsung Electronics Slovakia s.r.o
2002.06
Production of CTV and monitors
1,764,078
Over 50%
Y
Samsung Electronics European Holding Cooperatief U.A.
2008.10
Holding company
5,780,302
Over 50%
Y
Samsung Electronics Poland Manufacturing SP.Zo.o
2010.02
Production of home appliances
373,469
Over 50%
Y
Samsung Electronics Greece S.A.
2010.04
Sale of electronic goods
108,514
Over 50%
Y
Nanoradio Hellas AE
2007.11
R&D
21,737
Over 50%
N
Samsung Denmark Research Center ApS
2012.09
R&D
22,520
Over 50%
N
Samsung France Research Center SARL
2012.10
R&D
22,406
Over 50%
N
Samsung Cambridge Solution Centre Limited
2012.09
R&D
132,919
Over 50%
Y
Samsung Electronics Baltics SIA
2001.10
Sale of electronic goods
44,495
Over 50%
N
Samsung Electronics Overseas B.V.
1997.01
Sale of electronic goods
173,644
Over 50%
Y
Samsung Electronics Rus LLC
1999.03
Marketing
12,392
Over 50%
N
Samsung Electronics Rus Company LLC
2006.10
Sale of electronic goods
1,410,054
Over 50%
Y
Samsung Electronics Ukraine LLC
2004.01
Marketing
79
Over 50%
N
Samsung Electronics Ukraine Company LLC
2008.09
Sale of electronic goods
189,644
Over 50%
Y
Samsung R&D Institute Rus LLC
2011.11
R&D
13,767
Over 50%
N
Samsung Electronics Kazakhstan LLP
2006.07
Marketing
964
Over 50%
N
Samsung Electronics Central Eurasia LLP
2008.09
Sale of electronic goods
161,062
Over 50%
Y
Samsung Electronics Rus Kaluga LLC
2007.07
Production of CTV
1,122,495
Over 50%
Y
Samsung Russia Service Centre LLC
1997.11
Service
41,567
Over 50%
N
Samsung Electronics West Africa
2010.03
Marketing
61,414
Over 50%
Y
Samsung Electronics East Africa
2011.12
Marketing
26,006
Over 50%
N
Samsung Gulf Electronics Co., Ltd.
1995.05
Sale of electronic goods
1,071,694
Over 50%
Y
Samsung Electronics Egypt S.A.E
2012.07
Production and sale of
electronic goods
251,866
Over 50%
Y
Samsung Electronics Israel Ltd.
2012.09
Marketing
3,150
Over 50%
N
Name of Subsidiaries
Date of
Establishment
Major business
Samsung Electronics Czech and Slovak s.r.o.
2010.01
Sale of electronic goods
Samsung Electronics Italia S.P.A.
1991.04
Samsung Electronics Europe Logistics B.V.
Dec 31,
2013
Assets
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%
ownership
Classified as
major
subsidiary
(Y/N)
1,667
Over 50%
N
1,814
Over 50%
N
Sale of electronic goods
787,562
Over 50%
Y
1984.12
Sale of electronic goods
674,173
Over 50%
Y
Samsung Semiconductor Israel R&D Center Ltd.
2007.10
R&D
22,940
Over 50%
N
Samsung Electronics Levant Co.,Ltd.
2009.07
Sale of electronic goods
403,713
Over 50%
Y
Samsung Electronics Morocco SARLAU
2009.11
Sale of electronic goods
88,406
Over 50%
Y
Samsung Japan Corporation
1975.12
Sale of electronic goods
1,174,832
Over 50%
Y
Samsung R&D Institute Japan Co. Ltd
1992.08
R&D
181,723
Over 50%
Y
Samsung Electronics Japan Co., Ltd.
2008.09
Sale of electronic goods
712,050
Over 50%
Y
Samsung Electronics Display (M) Sdn. Bhd.
1995.03
Production and sale of
electronic goods
814,820
Over 50%
Y
Samsung Electronics (M) Sdn. Bhd.
1989.09
Production of home appliances
277,354
Over 50%
Y
Samsung Vina Electronics Co., Ltd.
1995.01
Production and sale of
electronic goods
175,780
Over 50%
Y
Samsung Asia Private Ltd.
2006.07
Sale of electronic goods
2,425,585
Over 50%
Y
Samsung India Electronics Private Ltd.
1995.08
Production and sale of
electronic goods
1,924,832
Over 50%
Y
Samsung R&D Institute India-Bangalore Private Ltd.
2005.05
R&D
147,900
Over 50%
Y
Samsung Electronics Australia Pty. Ltd.
1987.11
Sale of electronic goods
578,624
Over 50%
Y
PT Samsung Electronics Indonesia
1991.08
647,199
Over 50%
Y
PT Samsung Telecommunications Indonesia
2003.03
15,944
Over 50%
N
Thai Samsung Electronics Co., Ltd.
1988.10
1,476,296
Over 50%
Y
Samsung Electronics Philippines Corporation
1996.03
Sale of electronic goods
127,203
Over 50%
Y
Samsung Malaysia Electronics (SME) Sdn. Bhd.
2003.05
Sale of electronic goods
814,104
Over 50%
Y
Samsung R&D Institute BanglaDesh
2010.08
R&D
6,662
Over 50%
N
Samsung Electronics Vietnam Co., Ltd.
2008.03
Production of electronic goods
5,625,759
Over 50%
Y
Samsung Telecommunications Malaysia Sbn. Bhd.
2009.08
Sale of telecom systems
and services
11,593
Over 50%
N
Samsung Display Dongguan Co., Ltd.
2001.11
DP production
1,015,838
Over 50%
Y
Samsung Display TianJin Co., Ltd.
2004.06
DP production
650,311
Over 50%
Y
Samsung Electronics Hong Kong Co., Ltd.
1988.09
Sale of electronic goods
1,188,620
Over 50%
Y
Suzhou Samsung Electronics Co., Ltd.
1995.04
Production of home appliances
645,699
Over 50%
Y
Samsung Suzhou Electronics Export Co., Ltd.
1995.04
Production of home appliances
352,780
Over 50%
Y
Samsung (CHINA) Investment Co., Ltd.
1996.03
Sale of electronic goods
8,406,438
Over 50%
Y
Samsung Mobile R&D Center, China-Guangzhou
2010.01
R&D
38,323
Over 50%
N
Samsung Tianjin Mobile Development Center
2010.08
R&D
28,245
Over 50%
N
Samsung Electronics Suzhou Semiconductor Co., Ltd.
1994.12
Semiconductor processing
660,374
Over 50%
Y
Samsung Electronics (Shandong) Digital Printing Co., Ltd.
1993.03
Production of printers
761,018
Over 50%
Y
Samsung Electronics Huizhou Co., Ltd.
1992.12
Production of electronic goods
4,599,200
Over 50%
Y
Name of Subsidiaries
Date of
Establishment
Major business
Samsung Electronics Tunisia S.A.R.L
2012.09
Marketing
Samsung Electronics Pakistan(Private) Ltd.
2012.11
Marketing
Samsung Electronics South Africa(Pty) Ltd.
1994.06
Samsung Electronics Turkey
Production and sale of
electronic goods
Sale of telecom systems and
services
Production and sale of
electronic goods
Dec 31,
2013
Assets
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%
ownership
Classified as
major
subsidiary
(Y/N)
907,752
Over 50%
Y
1,390,404
Over 50%
Y
44,780
Over 50%
N
Production of telecom products
2,939,027
Over 50%
Y
2001.10
Sale of semiconductor and DP
1,310,109
Over 50%
Y
Samsung Electronics Suzhou Computer Co., Ltd.
2002.09
Production of electronic goods
846,670
Over 50%
Y
Samsung Display SuZhou Co., Ltd.
2002.09
DP Processing
554,424
Over 50%
Y
Samsung Suzhou LCD Co., Ltd
2011.07
DP Production
1,463,589
Over 50%
Y
Shenzhen Samsung Electronics Telecommunication Co., Ltd.
2002.02
Sale of telecom products
88,698
Over 50%
Y
Samsung Electronics Shanghai Telecommunication Co., Ltd.
2001.11
Sale of telecom
and network products
1,411
Over 50%
N
Samsung Semiconductor (China) R&D Co., Ltd.
2003.04
R&D
18,982
Over 50%
N
Samsung Electronics China R&D Center
2004.05
R&D
25,429
Over 50%
N
Samsung (China) Semiconductor Co., Ltd.
2012.09
Semiconductor Production
3,752,682
Over 50%
Y
Samsung Electronics Hainan Fiberoptics Co., Ltd.
2004.04
Fiber optic and cable Production
111,367
Over 50%
Y
Samsung Electronics (Beijing) Service Company Ltd.
2005.01
Services
140,868
Over 50%
Y
Tianjin Samsung LED Co., Ltd.
2009.05
LED Productions
457,896
Over 50%
Y
Tianjin Samsung Opto-Electronics Co., Ltd.
1994.02
Camera/camcorder Production
241,957
Over 50%
Y
Samsung Display
2012.04
DP Sales and Production
35,754,894
Over 50%
Y
SU Materials
2011.08
DP component production
21,711
Over 50%
N
91,556
Over 50%
Y
669,232
Over 50%
Y
Name of Subsidiaries
Date of
Establishment
Major business
Tianjin Samsung Electronics Co., Ltd.
1993.04
Production of CTV and monitors
Samsung Electronics Taiwan Co., Ltd.
1994.11
Sale of electronic goods
Beijing Samsung Telecom R&D Center
2000.09
R&D
Tianjin Samsung Telecom Technology Co., Ltd.
2001.03
Shanghai Samsung Semiconductor Co., Ltd.
Semiconductor component
production
Semiconductor/FPD manufacturing
equipment
Dec 31,
2013
Assets
STECO
1995.06
SEMES
1993.01
Samsung Electronics Service
1998.10
Electronics goods repair services
335,588
Over 50%
Y
Samsung Electronics Sales
1996.07
Sales of electronic goods
564,361
Over 50%
Y
Samsung Electronics Logitech
1998.04
Total logistic services
140,733
Over 50%
Y
SVIC #6 Venture Capital Union
2005.07
37,284
Over 50%
N
SVIC #14 Venture Capital Union
2009.05
55,465
Over 50%
Y
SVIC #20 Venture Capital Union
2011.03
30,532
Over 50%
N
SVIC #21 Venture Capital Union
2011.11
61,384
Over 50%
Y
SVIC #22 Venture Capital Union
2011.11
93,554
Over 50%
Y
SVIC #23 Venture Capital Union
2012.10
10,746
Over 50%
N
Hi Pioneer Private Securities Investment Trust 1
2011.08
19,189
Over 50%
N
Samsung Medison
1985.07
Medical equipment
309,321
Over 50%
Y
RAY
2004.10
Dental CT
5,950
Over 50%
N
SonoAce Deutschland GmbH
2001.10
Medical equipment
322
Over 50%
N
Samsung Medison Shanghai Medical Instrument Co., Ltd.
1992.11
Medical equipment
10,692
Over 50%
N
Samsung Medison India Private Ltd.
2009.01
Medical equipment
96
Over 50%
N
Investment in venture firms
and new technologies
Investment in venture firms
and new technologies
Investment in venture firms
and new technologies
Investment in venture firms
and new technologies
Investment in venture firms
and new technologies
Investment in venture firms
and new technologies
Investment in venture firms
and new technologies
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%
ownership
Classified as
major
subsidiary
(Y/N)
15,214
Over 50%
N
Medical equipment
-
Over 50%
N
2004.02
Medical equipment
187,297
Over 50%
Y
Samsung Electronics Vietnam THAINGUYEN Co., Ltd.
2013.03
Production of telecom products
590,033
Over 50%
Y
Samsung Network R&D Center, China-Shenzhen
2013.03
R&D
5,738
Over 50%
N
Samsung Electronics Switzerland GmbH
2013.05
Sale of electronic goods
115,759
Over 50%
Y
Samsung R&D Institute China-Xian
2013.07
R&D
8,179
Over 50%
N
SEMES (XIAN) Co., Ltd.
2013.07
Semiconductor equipment
242
Over 50%
N
Samsung Electronics New Zealand Limited
2013.09
Sale of electronic goods
3,163
Over 50%
N
RT SV CO-INVEST, LP
2014.02
Investment in venture firms
-
Over 50%
N
Samsung Display Bac Ninh
2014.07
DP Production
-
Over 50%
N
Samsung Electronics South Africa Production (pty) Ltd.
2014.07
Production of CTV and monitors
-
Over 50%
N
Quietside LLC
2001.07
Sale of Air-conditioner
17,407
Over 50%
N
SmartThings, Inc.
2012.04
Sale of Smart-home Devices
12,775
Over 50%
N
PrinterOn Inc.
2000.04
Sale of Printing Solutions
4,545
Over 50%
N
PrinterOn America Corporation
1986.04
Sale of Printing Solutions
28
Over 50%
N
PrinterOn Europe Limited
2013.11
Sale of Printing Solutions
-
Over 50%
N
1397011 Ontario Ltd.
2000.09
Sale of Printing Solutions
-
Over 50%
N
-
Over 50%
N
Name of Subsidiaries
Date of
Establishment
Major business
NexusDX Inc.
2009.07
Medical equipment
Nanogen Recognomics GmbH
2001.07
NeuroLogica Corp.
Investment in venture firms
and new technologies
※ Companies with over KRW50 billion total assets as at December 31, 2013 are classified as major subsidiaries.
SVIC #27 Venture Capital Union
2014.09
Dec 31,
2013
Assets
※ Refer to 『II. Businesses Overview』 for additional information about major business segments.
H. Credit Rating
The Company’s credit rating is assessed by two external credit ratings agencies: As at September 30, 2014, Moody’s
rating is A1 and investment outlook is Positive. In October 2014, Moody’s changed the Company’s investment outlook
from Positive to Stable. S&P’s rating is A+ and investment outlook is stable.
Date
Securities
Ratings
Credit Rating Agency
Rating Range
’12.08
Corporate bond
A
S&P (USA)
(AAA ~ D)
’12.08
Corporate bond
A1
Moody’s (USA)
(Aaa ~ C)
’13.08
Corporate bond
A+
S&P (USA)
(AAA ~ D)
’13.12
Corporate bond
A1
Moody’s (USA)
(Aaa ~ C)
Samsung Electronics 2014 Interim Business Report
Note
Annual
Review
11 / 152
2. Company History
(The Information disclosed below outlines major changes to the Company such as asset transfers, M&A, and security offerings)
2010.01.01
2010.04.01
2011.01.01
2011.02.16
2011.04.19
2011.04.29
2011.07.01
2011.07.22
2012.01.19
2012.04.01
2012.04.01
2012.04.10
2012.07.01
2012.09.01
2012.12.01
2013.01.01
2013.01.28
2014.01.15
Transferred VSS business to Samsung Techwin
Merged with Samsung Digital Imaging
Merged with Samsung Electronics Gwangju
Acquired shares of Prosonic (100%) and Medison (43.5%)
Signed a comprehensive partnership contract (including HDD business transfer) with Seagate
Acquired additional shares of Medison (22.3%)
Transferred solar cell business to Samsung SDI
Acquired shares of Grandis (100%), an affiliate of subsidiary SISA
(Samsung Information System America)
Acquired remaining shares of S-LCD Corporation (50%) from SONY
Separated LCD business (established Samsung Display)
Merged with Samsung LED
Corporate bond ($1 billion) issued by SEA
Samsung Mobile Display merged with S-LCD (a subsidiary of Samsung Display)
Merged Prosonic with Samsung Medison
Acquired SEHF Korea
Merged SECRON with GES (a subsidiary of SEMES)
Acquired shares of NeuroLogica (100%) of a subsidiary SEA
Disposed stocks of Samsung Corning Precision Materials, a subsidiary of Samsung Display.
Purchased convertible preferred stocks from Corning Incorporated.
Samsung Electronics 2014 Interim Business Report
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(Changes in Subsidiaries)
AMER
Dec 31,
2009
Dec 31,
2010
Dec 31,
2011
Dec 31,
2012
※
17
19
26
30
Europe/
MEA/
CIS
39
44
51
61
Asia
20
21
25
23
China
25
27
30
32
Domestic
Total
Increase
-
Decrease
15
116
-
17
[Americas: 2]
Samsung Electronics Peru S.A.C.,
Samsung Electronics Venezuela, C.A.
[Europe/MEA/CIS: 5]
Samsung Electronics West Africa, Samsung
Electronics Greece S.A., Samsung LCD Netherlands
R&D Center B.V,
Samsung LCD Netherlands R&D Center(UK) Limited,
[China: 2]
Samsung Opto-Electronics GmbH
128
Tianjin Tongguang Samsung Electronics,
[Asia: 1]
Tianjin Samsung Electronics Display
Samsung Electronics Bangladeshi Research Center
[China: 4]
Samsung Guangzhou Mobile R&D Center, Samsung
Tianjin Mobile Development Center, Tianjin Samsung
Opto-Electronics Co., Ltd., Samsung LCD Netherlands
R&D Center(HK) Limited
[Domestic: 2]
RAY, GES
24
[Americas: 7]
Samsung Medison Brasil Ltda., Samsung Medison
America Inc., Grandis, Inc., Nexus DX Inc., HX
Diagnostics, Inc., HX Reagents, Inc., Deltapoint
Cardiac Diagnostics, Inc.
[Europe/MEA/CIS: 7]
SONOACE Deutschland GmbH, Samsung Medison
France S.A.S., Samsung Medison Italia S.r.l.,
Samsung Medison Europe B.V., Samsung Moscow
Research Centre, Samsung Electronics East Africa,
Nanogen Recognomics GmbH
[Asia: 4]
Samsung Medison Japan Co., Ltd., Samsung Medison
156 India Private Ltd., Medison Medical Systems India
Private Ltd., TNP Small/Medium Size & Venture
Enterprises Growth-Promotion Investment Limited
Partnership(TSUNAMI)
[China: 4]
Samsung Medison Shanghai Medical Instrument Co.,
Ltd., Medison (Shanghai) Co., Ltd., Medison Medical
Equipment Shanghai, Samsung Suzhou LCD Co., Ltd.
[Domestic: 10]
Prosonic, SVIC #20 Venture Capital Union, Samsung
Medison, Medison Healthcare, CSL, Medison X-ray,
SU Materials, Hi Pioneer Private Securities Investment
Trust 1, SVIC #21 Venture Capital Union, SVIC #22
Venture Capital Union
[China: 1]
Samsung Electronics Shenzhen Co., Ltd.
[Domestic: 3]
Samsung Electronics Gwangju,
Medison X-ray,
CSL
20
[Domestic: 2]
Samsung Display , SVIC #23 Venture Capital Union
[Americas: 8]
Samsung LED AMERICA, Inc.,mSpot Inc.,Nanoradio
Inc., Samsung Electronics Panama. S.A, Samsung
Electronics Corportativo SA de CV, Samsung
Electronics Digital Appliance Mexico SA de CV, Nvelo
Inc., Newton Sub. Corp.
[Europe/MEA/CIS: 11]
Samsung LED Europe GmbH, Samsung Nanoradio
166
Design Center, Nanoradio Hellas AE, General RF
Modules AB, Samsung Cambridge Solution Centre
Limited, Samsung Denmark Research Center ApS,
Samsung Electronics Egypt S.A.E, Samsung
Electronics Tunisia S.A.R.L, Samsung Electronics
Israel, Samsung France Research Center SARL,
Samsung Electronics Pakistan (Private) Ltd.
[China: 2]
Tianjin Samsung LED Co., Ltd., Samsung (China)
Semiconductor Co., Ltd.
[Domestic: 6]
Medison Healthcare, Samsung Mobile Display,
S-LCD, SVIC #7 Venture Capital Union, Prosonic,
SEHF-Korea
[America: 4]
Samsung LED AMERICA, Inc., HX Diagnostics, Inc.,
HX Reagents, Inc., Nanoradio Inc.
[Europe/MEA/CIS: 1]
Samsung LED Europe GmbH,
[Asia: 2]
Samsung Asia Private Ltd.,
Samsung Medison Japan Co., Ltd.
AMER = America; MEA = Middle East and Africa, CIS = Commonwealth of Independent States
Samsung Electronics 2014 Interim Business Report
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AMER
Dec 31,
2013
Sep 30,
2014
※
25
31
Europe/
MEA/
CIS
55
56
Asia
22
22
China
Domestic
33
32
Total
Increase
Decrease
18
[Americas: 2]
NeuroLogica Corp.,
Intellectual Keystone Technology LLC.
[Europe/MEA/CIS: 1]
Samsung Electronics Switzerland GmbH
[Asia: 2]
153
Samsung Electronics Vietnam THAINGUYEN Co.,
Ltd., Samsung Electronics New Zealand Ltd.
[China: 3]
Samsung Network R&D Center China-Shenzhen,
Samsung R&D Institute China-Xian, SEMES (XIAN)
Co., Ltd.
[Domestic: 2]
Secron, GES
[Americas: 7]
Newton Sub. Corp., mSpot, Inc., Deltapoint Cardiac
Diagnostics, Inc., Samsung Medison America, Inc.,
Intellectual Keystone Technology LLC., Samsung
Medison Brasil Ltda., Samsung Electronics
Corporativo, SA de CV
[Europe/MEA/CIS: 7]
Samsung Telecoms (UK) Ltd., Samsung LCD
Netherlands R&D Center B.V, Samsung LCD
Netherlands R&D Center (UK) Limited,
General RF Modules AB, Samsung Medison France
S.A.S., Samsung Opto-Electronics GmbH, Samsung
Medison Italia S.r.l.
[Asia: 3]
Samsung Electronic Philippines Manufacturing Corp.,
Batino Realty Corporation, TNP Small/Medium Size &
Venture Enterprises Growth Promotion Investment
Limited Partnership(TSUNAMI)
[China: 2]
Samsung LCD Netherlands R&D Center (HK)Limited,
Medison (shanghai) Co., Ltd.
17
[Domestic : 1]
SVIC #27 Venture Capital Union
[America: 6]
RT SV CO-INVEST, LP, Quietside LLC,
SmartThings, Inc., PrinterOn Inc., PrinterOn America
158 Corporation, 1397011 Ontario Ltd.
[Europe/MEA/CIS: 2]
PrinterOn Europe Limited, Samsung Electronics South
Africa Production(pty) Ltd.
[Asia : 1]
Samsung Display Bac Ninh
[Domestic: 2]
Samsung Blue wings, World cyber games
[Europe: 1]
Samsung Medison Europe B.V
[Asia: 1]
Medison Medical Systems India Private Ltd.
[China: 1]
Medison Medical Equipment Shanghai Co., Ltd..
AMER = America; MEA = Middle East and Africa, CIS = Commonwealth of Independent States
(Important changes in executives)
Following the annual general shareholder meeting on March 16, 2012, of three Executive Directors with expired
terms (Gee-Sung Choi, Yoon-Woo Lee, Ju-Hwa Yoon), Yoon-Woo Lee retired and Gee-Sung Choi and Ju-Hwa Yoon
were re-appointed. Oh-Hyun Kwon was newly appointed as Executive Director. In addition, of three Independent
Directors with expired terms (Dong-Min Yoon, Jae-Woong Lee, Oh-Soo Park), Jae-Woong Lee and Oh-Soo Park
retired and Dong-Min Yoon was re-appointed. Han-Joong Kim and Byeong-Gi Lee were newly appointed as
Independent Directors.
On June 8, 2012, the CEO was changed from Gee-Sung Choi to Oh-Hyun Kwon.
On February 7, 2013, Independent Director Dong-Min Yoon retired (deceased).
On March 14, 2013, Executive Directors Gee-Sung Choi and Ju-Hwa Yoon resigned.
Following the shareholders’ meeting on March 15, 2013, Boo-Keun Yoon, Jong-Kyun Shin, and Sang-Hoon Lee were
newly appointed as Executive Directors. Independent Director In-Ho Lee was reappointed, and Kwang-Soo Song and
Eun-Mee Kim were newly appointed as Independent Directors.
On March 15, 2013, we appointed three CEOs, executive directors Boo-Keun Yoon and Jong-Kyun Shin were newly
appointed as CEO in addition to CEO Oh-Hyun Kwon.
As of the reporting date, the Company’s BOD is comprised of four Executive Directors (Oh-Hyun Kwon, Boo-Keun Yoon,
Jong-Kyun Shin, Sang-Hoon Lee) and five Independent Directors (In-Ho Lee, Han-Joong Kim, Byeong-Gi Lee, KwangSoo Song and Eun-Mee Kim).
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(Changes in Organizational Structure)
In December 2012, following an organizational change, CE and IM businesses were upgraded to individual division
status, and the IT Solution business was divided into Printing Solution and Computer businesses. The Printing
Solution business was incorporated into the CE division and the Computer business was integrated into the Mobile
business under the IM division. The Medical Device business team was upgraded to a business unit within the CE
division.
In December 2013, the Digital Imaging business was changed to a team unit, and then integrated with newly
established the Mobile business.
[As of December 2012]
Before
After
DMC division
(CE: Visual display, Digital appliances)
(IM: Mobile, IT solution, Network, Digital imaging)
Business
organization
CE division (Visual display, Digital appliances, Printing
solution, Medical devices)
IM division (Mobile, Network, Digital imaging)
DS division (Memory, SYS.LSI, LCD,LED)
DS division (Memory, SYS.LSI, DP, LED)
Korea, North America, Latin America, Europe, CIS, Southwest
Asia, Southeast Asia, China, Middle East, Africa
Korea, North America, Latin America, Europe, CIS, Southwest Asia,
Southeast Asia, China, Middle East, Africa
Americas(DS), Europe(DS), China(DS), Southeast Asia(DS),
Japan(DS)
Americas(DS), Europe(DS), China(DS), Southeast Asia(DS), Japan
(DS)
Before
After
CE division (Visual display, Digital appliances, Printing
solution, Medical devices)
CE division (Visual display, Digital appliances, Printing
solution, Medical devices)
IM division (Mobile, Network, Digital imaging)
IM division (Mobile, Network)
DS division (Memory, SYS.LSI, DP, LED)
DS division (Memory, SYS.LSI, DP, LED)
Korea, North America, Latin America, Europe, CIS, Southwest
Asia, Southeast Asia, China, Middle East, Africa
Korea, North America, Latin America, Europe, CIS, Southwest Asia,
Southeast Asia, China, Middle East, Africa
Americas(DS), Europe(DS), China(DS), Southeast Asia(DS),
Japan(DS)
Americas(DS), Europe(DS), China(DS), Southeast Asia(DS),
Japan (DS)
Regional
headquarters
[As of December 2013]
Business
organization
Regional
headquarters
3. Changes in Paid-in Capital
No changes were reported during the past five (5) consecutive years.
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4. Stock Information
A. Total number of Stock
The total number of authorized stocks according to the articles of incorporation is 500,000,000 (par value per share:
KRW 5,000). As of September 30, 2014, the Company has issued 147,299,337 shares of registered common stock
and 22,833,427 of registered preferred stock without voting right (excluding canceled stock). The Company has
canceled 8,310,000 shares of common stock and 1,060,000 shares of preferred stock. As of September 30, 2014, the
number of floating common stock is 130,962,651 and the number of floating preferred stock is 19,853,734, excluding
treasury stockss (of 16,336,686 common stock and 2,979,693 preferred stock).
[As of Sep 30, 2014]
(Unit: shares)
Classification
Type of Stocks
Common
Preferred
Note
Total
I. Number of authorized stocks
400,000,000
100,000,000
500,000,000 -
II. Number of stocks issued
155,609,337
23,893,427
179,502,764 -
8,310,000
1,060,000
9,370,000 -
-
-
- -
8,310,000
1,060,000
3. Redemption of redeemable stocks
-
-
- -
4. Others
-
-
- -
147,299,337
22,833,427
170,132,764 -
16,336,686
2,979,693
19,316,379 -
130,962,651
19,853,734
150,816,385 -
III. Number of stocks decreased
1. Capital Reduction
2. Number of stocks canceled
IV. Number of Outstanding Stocks (II-III)
V. Treasury stocks
VI. Number of Floating Stocks (IV-V)
9,370,000
Cancellation of
treasury stocks
※ The Company’s common stock carry voting rights but preferred stock carry no voting rights.
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B. Treasury Stock
In 2014, Samsung Electronics distributed 47,530 common stocks in relation to the exercise of previously granted stock
options of current and former management and employees. As of September 30, 2014, the Company holds 16,336,686
common treasury stockss and 2,979,693 preferred treasury stocks.
[As of Sep 30, 2014]
(Unit: Shares)
Acquisition method
Intra-market direct acquisition
(Within dividend related capital gains limit)
Share
type
Periodbeginning
shares
Common
Change
Period-end
shares
Acquisition
(+)
Disposal
(-)
Cancellation
(-)
16,384,216
-
47,530
-
16,336,686
Preferred
2,979,693
-
-
-
2,979,693
Common
16,384,216
-
47,530
-
16,336,686
Preferred
2,979,693
-
-
-
2,979,693
Total
C. Types of Registered Stock
The Company has two types of registered equity securities: 1) Common stock; 2) Non-voting and non-cumulative
preferred stock.
The shareholders of preferred stock are entitled to dividend payments of an additional 1% of par value compared to
shareholders of common stock. As of September 30, 2014, the total number of outstanding preferred stock is 22,833,427.
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5. Voting Shares
Samsung Electronics has 147,299,337 outstanding common stocks, which represents 29.5% of total authorized stocks of
500 million (500,000,000). There are 22,833,427 outstanding preferred stocks (with no voting rights). The Company holds
16,336,686 treasury stocks (with no voting rights) and 12,506,577 shares with limited voting rights under relevant laws.
Thus, the total number of shares with voting rights is 118,456,074.
[As of Sep 30, 2014]
(Unit: Shares)
Number
of shares
Classification
Note
Common
147,299,337 -
Preferred
22,833,427 -
Shares with no voting rights (B)
Common
16,336,686 Treasury stock according to Korean Commercial Act
Shares with no voting rights according
to Articles of Incorporation (C)
Preferred
22,833,427 2,979,693 preferred treasury stocks included
Common
Restricted by the Monopoly Regulation and Fair Trade Act:
12,479,184 10,622,814 shares held by Samsung Life Insurance &
1,856, 370 shares held by Samsung Fire & Marine Insurance
Number of outstanding shares (A)
Shares with limited voting rights under
relevant laws (D)
Common
27,393
Restricted by the Insurance Business Act: Some part of shares
held by special account of Samsung Life Insurance
Common
118,456,074 -
Preferred
- -
Shares with voting rights
(F = A - B - C - D)
※ According to the Monopoly Regulation and Fair Trade Act, shareholders with limited voting rights (D) can exercise certain rights
in accordance with related laws, including the right to vote on agendas such as the appointment or dismissal of directors and
revisions to the Articles of Incorporation.
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6. Shareholder Return
As a part of the Company’s shareholder return policy, a part of profit has been returned to shareholders by way of
dividends and share buyback. The Company carefully considers strategic investments for sustainable growth, business
performance, and cash flows in determining the level of total shareholder return.
Dividends paid out in the recent three (3) fiscal years are as follows:
(Unit: Shares / %)
2014
Classification
(Quarter ending September 30)
Par value per share (won)
2013
2012
5,000
5,000
5,000
11,144,838
17,929,520
17,398,530
EPS (won)
73,900
118,946
115,576
Total cash dividend (million won)
75,408
2,156,969
1,206,562
Total stock dividend (million won)
-
-
-
0.7
12.0
6.9
Common
0.04
1.0
0.5
Preferred
0.05
1.4
1.0
Common
-
-
-
Preferred
-
-
-
Common
500
14,300
8,000
Preferred
500
14,350
8,050
Common
-
-
-
Preferred
-
-
-
Net profit (million won)
Dividend payout ratio (%)
Cash dividend yield (%)
Stock dividend yield (%)
Cash dividend per share (won)
Stock dividend per share (share)
※ 2014 interim dividend declared was KRW 75,408 million (KRW 500 per share).
※ Based on separate financial statements.
※ EPS denotes basic earnings per common share.
※ For further information relating to the calculation of basic EPS, refer to Note 『22. Earnings per share』in the Interim Separate
Financial Statements
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II. Businesses Overview
1. Overview
A. Business Overview by division
In addition to our headquarters in Korea, Samsung Electronics is comprised of 158 subsidiaries across the world
responsible for sales and production. Also, there are nine (9) regional headquarters for Consumer Electronics (“CE”) and
Information Technology & Mobile Communications (“IM”) divisions and five (5) regional headquarters for Device
Solutions (“DS”) division.
The Company business divisions are organized in two-pronged business framework of set (brand products) and
component businesses. The set business is comprised of CE and IM divisions, and the component business is comprised of
DS division. The CE division is responsible for the production and sales of CTVs, monitors, printers, air conditioners and
refrigerators, and the IM division focuses on the production and sales of handheld phones (HHPs) (such as feature phones
and smartphones), network systems, and computers. The DS division is comprised of the Semiconductor business which
manufactures and sells DRAM, NAND and Mobile AP, etc. and the Display Panel (“DP”) business which manufactures
and sells TFT-LCD and OLED panels for TV, Monitor, Notebook PC, and Mobile devices.
<Major products by business division>
DS
Division
Business Division
Major Products
CE Division
CTV, Monitor, Printer, Air Conditioner, Refrigerator, Washing Machine, Medical Devices, etc.
IM Division
HHP, Network System, Computer, Digital Camera, etc.
Semiconductor Business
DRAM, NAND Flash, Mobile AP, etc.
DP Business
TFT-LCD, OLED, etc.
The Company maintains its corporate headquarter and seventeen (17) consolidated domestic subsidiaries in Korea.
The Company’s corporate headquarters is established at the following 5 locations: Suwon (CE division and R&D Center);
Gumi (IM division); Giheung and Hwasung (Semiconductor business); and Gwangju (Home Appliance business). The
Company’s consolidated domestic subsidiaries include Samsung Display for display panel production, Samsung
Electronics Sales for domestic retail sales, Samsung Electronics Service for after service care, and Samsung Electronics
Logitech for logistics.
We have 141 overseas subsidiaries for product manufacturing, sales, and R&D.
In the America, we have 31 subsidiaries responsible for product manufacturing and sales including SEA (New Jersey,
United States) responsible for sales of products such as CTV in the US, STA (Dallas, United States) responsible for sales
of HHPs and other communication products in the US, SAMEX (Tijuana, Mexico) responsible for manufacturing CTVs,
and SAS (Austin, United States) responsible for manufacturing semiconductor products.
In Europe, we operate 33 subsidiaries including SEUK (UK), SEF (France), SEG (Germany), and SEI (Italy). SESK
(Slovakia) and SEH (Hungary) are responsible for manufacturing CTVs, and SEPM (Poland) is responsible for
manufacturing home appliances.
In Asia, we have 22 overseas subsidiaries, including SAPL (Singapore), SEAU (Australia), SEPCO (Philippines), and
SME (Malaysia), responsible for regional sales. In addition, we operate numerous production sites including SEV
(Vietnam) for HHP, SDMA (Malaysia) for CTV, and SIEL (India) for both CTV and HHP.
We operate 32 subsidiaries in China including regional sales operations in Beijing (SCIC) and Hong Kong (SEHK). We
also operate production and processing facilities sites in Tianjin and Suzhou (TSTC, SSEC, and SESS)
In addition, we have 23 production and sales subsidiaries across Africa, the Middle East and the CIS regions.
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[CE Division]

Industry Overview
Since the development of black-and-white TVs in 1926 and subsequent mass production of Color TVs, technological
development has led to products such as Trinitron CRT (1967) and flat CRT (1996). As the penetration rate in major
countries reached over 90%, the CRT TV business became stagnant. The industry regained strong growth momentum
following the launch of Flat Panel TVs (LCD, PDP) with the expansion of digital broadcasting (UK/US 1998~).
FP-TVs replaced the CRT driven by strong annual average growth of 36% from 2004 to 2013 (Source: 2Q14 Display
Search, Quantity basis) due to enhanced product performance with respect to design, picture quality, etc., and a sharp
decline in prices. In addition, 3D TVs were launched in 2010, and the rise of internet video services (OTT, OVER-THETOP) along with increased consumer interest in smart devices from 2011 to 2012 led to the birth of the Smart TV market.
In 2013, OLED and UHD TV with innovatively high resolution were launched and the TV market continues to evolve.
In 2014, Annual TV shipment is expected to reach 226.62 million units, an increase 0.3% from the previous year. LCDTV (including LED-TV) shipment is expected to be around 217.44 million units with an increase of 4.7% year-over-year,
while PDP-TV shipment is expected to decline by 48.6% to 5.3 million units from the previous year (Source: 3Q14
Display Search).

Market Condition
The trend towards large size and high-resolution screens is accelerating due to intensified competition between
manufacturers. Accordingly, market share of major manufacturers with high-quality products and brand power is
increasing. The FP-TV market has been growing in advanced markets, but demand is also expected to grow in emerging
markets such as BRICS in the future. In addition, as consumer demand for high-resolution and slim design increases, sales
of LED TV, with eco-friendly LED BLU (Back Light Unit) which helps brightness and contrast as well as electricity
consumption, is on the rise.
The Company has focused on smart TV sales based on forecasts that consumers’ desire to acquire internet information
from TVs will increase. The Company led the smart TV market in 2011 by launching smart TVs with various smart hubbased Apps and implementing a premium category sales strategy. In 2012, the Company introduced a new market trend
with the introduction of the Smart Interaction™ system based on voice and gesture commands for convenient interaction
with devices. In 2013, the Company introduced a system that recommends TV programs based on the user’s viewing
history. In 2014, the Company plans to enhance usability through innovation, secure various video contents, and
strengthen its platform in order to maximize viewing experience.
<Market share of major products in the CE division >
Product
The quarter ending on 9/30/2014
2013
2012
CTV
23.9%
21.6%
※ 2012 and 2013 Market share data is from research agency Display Search (Global market share in quantity).
Market share for 3Q 2014 is the Company’s estimation.

21.1%
Business Condition
The Company is addressing market demand with an expansive portfolio product mix within LCD and PDP categories. The
Company has maintained market leadership in overall TV, FP-TV, LCD-TV sales for eight consecutive years from 2006 to
2013 (Source: 3Q14 Display Search).
In 2009, the Company was industry first to launch the LED TV (LED BLU, ultra-slim/ultra-light and eco-friendly) as a
separate product category. In the first quarter of 2010, the Company took the lead in the 3D TV market through the launch
of a 3D Total Solution offering 3D TV/BDP/glasses/BD Title. In addition, the Company launched the world’s first TV
App store ‘Samsung Apps’ in 2010 and smart hub with services including ‘Your Video’, ‘Social TV’, ‘Search All’, ‘Web
Browser’ in 2011 and established consumers perception that ‘Smart TV=SAMSUNG’.
In 2012, the Company enhanced service features for broader consumer markets, by developing exercise and educational
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contents to enhance the ‘All Share’ function that facilitates connections with other digital devices. Such enhancements
have helped to maintain competitive edge in the smart TV market. In 2013, the Company led the market with OLED TV
and UHD TV through technological innovations in picture definition and resolution. For 2014, the Company plans to
capture market leadership in markets with high growth potential, such as the UHD TV market.
[IM Division]

Industry Overview
The mobile phone industry started with the first generation analogue phone in the early 1980s. It evolved to second
generation digital, and to third generation mobile communication such as WCDMA with high-speed data transmission.
Today, fourth generation mobile communication technology with ultrahigh-speed data transmission is becoming
commonplace in the market. In particular, the LTE market is spreading to all parts of the world, and LTE-Advanced with
higher speeds has been commercialized in Korea since June 2013 through cooperation between the Company and mobile
communication carriers. Recently, the mobile phone market is changing rapidly around not only smartphone and tablet but
also new hybrid product categories such as Galaxy Note. This puts emphasis on not only existing hardware
competitiveness but also on software competitiveness including Application and UX that enables users to access useful
information more conveniently. Accordingly, industry business models are shifting to integrate software and hardware
capabilities.

Market Condition
In 2014, the HHP market is expected to reach 1.8 billion units with a growth of 7% from 2013. The smartphone market
is expected to increase from 1billion units in 2013 to 1.3 billion units in 2014 with a growth of 27% year over year.
The tablet market is expected to reach 260 million units (16% growth rate YoY) shipped by the end of 2014 from 230
million units in 2013. (Source: Strategy Analytics – Mobile: Aug. ’14, Smartphone: Sep., Tablet: Aug.)
< Market share of major products of the IM division >
Product
HHP
The quarter ending on 9/30/2014
23.9%
2013
2012
26.8%
25.1%
※ Market share data is from research agency Strategy Analytics (Global market share in quantity).

Business Condition
The Company strengthened market leadership by maintaining its wide range of product lineup from premium to mass
market models and by leading new market such as the LTE market. In particular, the Company has maintained its status as
No.1 in terms of global smartphone market share, based on the success of Flagship smartphones such as the Galaxy S
series and Galaxy Note series.
In 2014, the Company continued to solidify market leadership in premium smartphone and tablet categories and creates
consumer demand with new products, such as Galaxy S, VR, and Circle, and advanced features, such as Flexible Display.
Furthermore, we will continuously strengthen competitiveness of our strategic models amid unfavorable market
environments resulted from intensifying products and price competitions. In addition, we will strive to become a company
that continuously offers new values to customers by making strategic investments in mobile healthcare and B2B for future
growth and by utilizing our R&D capacity that is the best in the industry.
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[DS Division]
- Semiconductor

Industry Overview
The semiconductor industry is cyclical by nature, and imbalances between supply and demand frequently occur. Many
manufacturers have not been able to maintain competitiveness during periods of global economic recession and
oversupply, resulting in consolidation within the industry. Supply and demand volatility is expected to decrease as a result
of increased demand for semiconductors in new smartphone, tablet PC and server markets.

Market Condition
Throughout 2014, PC DRAM prices are expected to remain strong amid stable supply and demand condition. In the third
quarter of 2014, overall DRAM demand has increased as driven by new product launch, but supply is not stable due to
difficulties in process migration. In the fourth quarter, supply of PC DRAM is expected to increase within the industry.
However, supply of advanced process high-density server and mobile DRAM is expected to have difficulties. As NAND
supply and demand condition improves due to the launch of new smartphones with high-density memory, price is being
stabilized in the third quarter. Stable supply and demand condition is expected to continue in the fourth quarter.
< Market share of major products of the semiconductor business >
Product
The quarter ending on 9/30/2014
DRAM
41.3%
2013
2012
36.2%
41.0%
※ 2012 and 2013 market share data is from research agency iSuppli (Global market share in amount). Market share for 3Q 2014 is the Company’s
estimation.

Business Condition
The Company was the first to develop and produce DRAM 20nm products and has also developed products with
differentiated design, secure technology and cost competitiveness ahead of competitors. The Company has commenced
mass production of Vertical-NAND products to enter the premium market. The Company is also maximizing cost
competitiveness to remain ahead of competitors by developing high-performance solution products such as SSD and
eMCP and expanding into 3bit product categories.
Going forward, the Company plans to maintain its No.1 position in the memory industry by reducing costs, strengthening
its technological advantage through development of advanced processing technology, and developing differentiated highperformance products.
-DP

Industry Overview
Display products include TFT-LCD (Thin Film Transistor Liquid Crystal Display) and OLED (Organic Light Emitting
Diode) panels.
TFT-LCD panel is a liquid crystal based display that consumes less electricity and features a thinner profile, while
maintaining high resolution. It has a wide range of potential applications in devices of all sizes and functionality. The
market growth rate has slowed down recently due to a reduction of replace demands for CRT monitors and high market
penetration of LCD TVs.
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OLED panels use organic materials which offer wide contrast and color, high color concordance, and fast response rates.
Such differentiating features provide advantages in smartphone products, and as a result the market demand for under 10”
small to medium size displays has increased.
 Market Condition
During the second half of 2014, the large size panel market is expected to grow due to year-end seasonal demand. In
particular, we expect market demand increases for large size TVs (over 40” and UHD TV), however, we expect relatively
stable demand and supply market conditions until the end of the year as a result of increased investment in production for
new products such as UHD TV.
For Mobile, the product mix is expected to expand, particularly in the mid-range category. The trend toward higher
resolution and larger size panels is expected to continue, while the demand for new product categories such as wearable
devices is expected to increase.
< Market share of major products of the DP division >
Product
Display Panel
The quarter ending on 9/30/2014
21.8%
2013
2012
20.4%
25.4%
※ 2012, 2013, and 3Q 2014 M/S data are from Display Search (Global market share, large size panel in amount).

Business Condition
The Company is improving competitiveness through increasing production yields by developing advanced process
technologies, developing high transmission panels, and domestically producing core equipment. In addition, the Company
continues to improve profitability through close collaboration with TV and smartphone manufacturers from R&D to
production.
For the large size panel business, the Company plans to improve profitability through increased cost competitiveness
while meeting the demand for new premium products such as UHD TV and Curved TV.
For mobile, the Company plans to secure long-term growth momentum by expanding its customer base through enhanced
cost competitiveness, and expansion of new product categories, including mid-range products and Flexible Ultra HighResolution products.
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B. Financial Summary by Division
(Unit: KRW million, %)
Division
CE
IM
Semiconductor
DS
DP
Classification
3Q 2013
Portion
Amount
2013
Portion
Amount
2012
Portion
Amount
Portion
Total sales
88,921,865
24.3%
88,715,835
21.5%
125,088,762
22.4%
117,897,781
24.6%
Internal sales
53,005,877
24.9%
52,649,562
21.6%
74,757,247
22.7%
66,792,679
24.0%
Net sales
35,915,988
23.4%
36,066,273
21.3%
50,331,515
22.0%
51,105,102
25.4%
Operating profit
1,004,513
5.1%
1,014,309
3.6%
1,673,343
4.5%
2,324,036
8.0%
Total asset
45,812,374
13.6%
46,915,165
14.7%
47,183,953
14.9%
38,947,252
14.1%
Total sales
180,415,490
49.3%
225,454,070
54.6%
299,161,654
53.6%
224,920,171
46.9%
Internal sales
94,943,836
44.6%
120,523,352
49.4%
160,344,435
48.7%
119,075,488
42.8%
Net sales
85,471,654
55.7%
104,930,718
61.9%
138,817,219
60.7%
105,844,683
52.6%
Operating profit
12,601,764
63.8%
19,487,577
68.4%
24,957,741
67.8%
19,418,235
66.8%
Total asset
98,455,930
29.1%
88,733,985
27.8%
86,132,881
27.1%
68,743,115
24.9%
Total sales
54,357,702
14.8%
50,191,364
12.1%
70,908,145
12.7%
66,976,623
14.0%
Internal sales
25,289,738
11.9%
23,193,842
9.5%
33,471,566
10.2%
32,090,017
11.5%
Net sales
29,067,964
18.9%
26,997,522
15.9%
37,436,579
16.4%
34,886,606
17.3%
Operating profit
6,074,097
30.8%
4,893,293
17.2%
6,887,978
18.7%
4,173,730
14.4%
Total asset
82,649,026
24.5%
70,385,435
22.1%
76,224,096
24.0%
67,136,914
24.4%
Total sales
38,553,383
10.4%
48,068,381
11.6%
61,294,886
11.0%
69,359,762
14.5%
Internal sales
19,872,808
9.1%
24,693,209
10.1%
31,457,770
9.5%
36,360,406
13.1%
Net sales
18,680,575
12.2%
23,375,172
13.8%
29,837,116
13.0%
32,999,356
16.4%
187,880
1.0%
2,873,712
10.1%
2,980,563
8.1%
3,214,750
11.1%
Total asset
48,057,499
14.2%
43,694,173
13.7%
42,195,558
13.3%
41,429,074
15.0%
Total sales
96,024,484
26.1%
99,731,189
24.1%
134,394,781
24.1%
136,724,256
28.5%
Internal sales
47,948,414
22.3%
48,965,309
20.1%
66,633,875
20.2%
68,436,962
24.6%
Net sales
48,076,070
31.3%
50,765,880
30.0%
67,760,906
29.6%
68,287,294
34.0%
Operating profit
6,295,992
31.9%
7,858,030
27.6%
10,000,665
27.2%
7,416,325
25.5%
155,629,871
46.1%
142,095,438
44.5%
145,872,686
45.9%
130,371,546
47.3%
Operating profit
Total
3Q 2014
Amount
Total asset
※ Restated on 3Q 2014 basis (presented on a consolidated basis).
※ Net sales reported here includes inter-divisional sales.
Cumulative Net sales for the 3Q of 2014 were KRW 153.4759 trillion. By division, CE reported KRW 35,916 billion
(23.4%) and IM reported KRW 85,472 billion (55.7%). The DS division contributed approximately 31.3% of net sales,
KRW 29,068 billion (18.9%) by semiconductor business and KRW 18,681 billion (12.2%) by DP business.
Cumulative operating profit for the 3Q of 2014 was KRW 19.7366 trillion. The IM division accounted for 63.8% with
KRW 12,602 billion and the DS division accounted for 31.9% with KRW 6,296 billion.
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
Reasonable Allocation of Common SG&A (Selling General & Administrative) Expenses and Assets
(1) For common SG&A expenses, specific expenses are allocated to each product/model, and other common expenses that
cannot be attributed by product/model category are reasonably allocated throughout the Company based on an allocation
standard (expense-to-sales ratio, number of personnel), etc.
(2) For common assets, assets that can be directly allocated (inventory assets, fixed assets, investment assets, etc.) are
allocated to the corresponding organizational unit. Assets that are commonly managed are allocated to each division based
on an allocation standard (expense-to-sales ratio, pre-tax profit, etc.).
2. Key Products and Services
A. Revenue
From January to September of 2014, the CE division’s revenue accounted for 23.4% of the total net revenue with KRW
35,916 billion, the IM division accounted for 55.7% with KRW 85,472 billion, and the DS division accounted for 31.3%
with KRW 48,076 billion.
The Company’s net revenues by division as of Sep 30, 2014 are as follows:
(Unit: KRW 100 million, %)
Division
Major Products
CE
CTV, monitor, printer, air conditioner, refrigerator, washing machine, medical
equipment, etc.
359,160
23.4%
IM
HHP, network system, computer, digital camera, etc.
854,717
55.7%
Semiconductor
DRAM, NAND flash, Mobile AP, etc.
290,680
18.9%
DP
TFT-LCD, OLED, etc.
186,806
12.2%
Sub-Total
480,761
31.3%
-
-159,879
-10.4%
Total
1,534,759
100.0%
DS
Others
Net Revenue
Portion
※ Includes sales between divisions (on consolidated basis).
☞ Refer to 『5. Sales and Distribution』 for sales by each product.
B. Average Selling Price (ASP) Changes
Throughout 2014, CTV ASP decline continued from 2013. HHP ASP remained at a similar level since 2013, while
Memory ASP decline slowed down from 2013 to the level of 10.5% due to stable market demand and supply conditions.
The downward momentum of Display panel ASP continued due to weak demand from China and developed markets.
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3. Key Raw Materials
(On consolidated basis as of Sep 30, 2014)
(Unit: KRW 100 million, %)
Division
Type
Item
Specific usage
Purchase price
Portion
Note (supplier)
Raw materials
Display panel
Color picture signaler
27,746
Raw material
PDP module
Color picture signaler
8,324
Raw material
Others
123,109
77.3%
Division Total
159,179
100.0%
17.4%
CMI, AUO, etc.
5.2% Samsung SDI, etc.
CE
Raw material
Mobile display panel
Color picture signaler
38,895
12.4%
Iljin Display, etc.
Raw material
Base Band Chip
CPU
38,670
12.3%
Qualcomm, etc.
Raw material
Others
236,499
75.3%
Division Total
314,064
100.0%
IM
DS
Raw material
Glass
Glass substrate for display
13,961
9.5%
Corning Precision
Materials, etc.
Raw material
POL
Polarizer plate
13,842
9.4%
Dongwoo FineChem, NITTO, etc.
Raw material
Window
Tempered glass
9,094
6.2%
BIEL, etc.
Raw material
Wafer
Semiconductor wafer
6,471
4.4%
SUMCO, etc.
Raw material
Others
104,260
70.6%
Division Total
147,628
100.0%
346
-
621,217
-
Others
Total
※ As of Sep 30, 2014, Samsung SDI is an affiliate of the Company.
For the CE division, key raw materials include display panels for TVs and monitors and PDP modules. For the IM
division, key raw materials include display panels for mobile and Baseband Chips. For the DS division, key raw materials
include glass, polarizer (POL) and wafers.
Large display panels for TVs and monitors are supplied by Cummins (CMI) and AU Optronics (AUO), mobile display
panels are supplied by Iljin Display, and Baseband Chips are supplied by the System LSI division and Qualcomm. The
Company manufactures display panels with glass and POL supplied by Samsung Corning and Dongwoo Fine-Chem.
(Raw Materials Price Trends)
The price of TV and monitor display panels, which are the major raw materials for the CE division, declined 12% on
average since 2013 due to oversupply from increased CAPEX and improved productivity. For the IM division since 2013,
the price of mobile display panels declined by 8%, and the price of Baseband Chips increased by 12%. For the DS
division, the price of raw materials continues to decrease. Also, since 2013, the price of Semiconductor wafer has declined
by 17% and the price of glass for display panels has declined by 18%.
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4. Production and Facilities
A. Production Capacity, Output, Utilization Rate
(Capacity)
(Unit: 1,000)
Division
CE
IM
3Q 2014
(’14.1.1~9.30)
2013
2012
Quantity
Quantity
Quantity
Item
CTV
53,102
53,375
397,100
556,600
461,950
122,697,000
116,909,000
80,159,000
6,742
8,260
9,218
HHP
Memory
DS
44,802
DP
※Global production capacity for major product categories
The CE and IM division production capacity, by major product, is calculated as follows:
The average number of lines (x) the average output per hour (x) the average operation hours per day (x) the days of
operation
Memory production capacity for DS division is calculated as follows:
Converted output (1GB equivalent) ÷ the utilization rate.
DP production capacity is calculated as follows:
The total producible panel surface area ÷ the dimensions of eighth generation glass (2200x2500mm)
(Output)
(Unit: 1,000)
Division
3Q 2014
(’14.1.1~9.30)
2013
2012
Quantity
Quantity
Quantity
Item
CE
CTV
38,857
47,527
48,357
IM
HHP
336,486
499,480
416,632
122,697,000
116,909,000
80,159,000
6,076
7,340
7,800
Memory
DS
DP
※Global output for major product categories
For the third quarter of 2014, the CE division CTV output was 38.857 million (major production sites: Korea, China,
Mexico, Brazil, and Hungary). The IM division HHP output was 336.486 million (major production sites: Korea, China,
Vietnam, and Brazil). The DS division Memory output (1GB equivalent) was 122,697 million (major production sites:
Korea and China). The DS division DP output was 6.076 million (major production sites: Korea, China, and Slovakia).
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(Utilization Rate)
(Unit: 1,000)
3Q 2014
Production capacity
3Q 2014
Actual output
Division
Item
Utilization Rate
CE
CTV
44,802
38,857
86.7%
IM
HHP
397,100
336,486
84.7%
In the 3Q of 2014, CE and IM utilization rates were calculated as actual output relative to production capacity.
CTV is 86.7% and HHP is 84.7%.
(Unit: hours)
Division
DS
Item
3Q 2014
Potential
Production Time
3Q 2014
Actual
Production Time
Utilization Rate
Memory
37,152
37,152
100.0%
DP
65,520
64,072
97.8%
The DS division operates Memory and DP production in three shifts (24 hours a day). Cumulative operating days in the
3Q of 2014 including holidays were 273 days. The utilization rate was calculated as actual hours [273 days (x) number of
production lines (x) 24 hours] relative to production capacity.
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B. Production Facilities and Investment
(1) Key facilities for production and operation
The Company’s operational activities includes manufacturing, development, marketing, and sales at domestic operations –
including operations in Seocho, Seoul, Suwon, Gumi, Giheung, Onyang, Gwangju – and 9 regional headquarters under
the CE and IM divisions and 5 under the DS division in North America, Europe, and China.
[Operations]
Region
Domestic
(8)
Overseas
(9 regional headquarters for
CE and IM Division)
Overseas
(5 regional headquarters for
DS Division)
Headquarters
Location
Seocho
Seoul, Korea
Suwon
Suwon, Korea
Gumi1
Gumi, Korea
Gumi2
Gumi, Korea
Giheung
Yongin, Korea
Onyang
Asan, Korea
Hwaseong
Hwaseong, Korea
Gwangju
Gwangju, Korea
North America
New Jersey, US
Europe
London, UK
China
Beijing, China
Southeast Asia
Singapore, Singapore
Southwest Asia
New Delhi, India
CIS
Moscow, Russia
Middle East
Dubai, UAE
Africa
Johannesburg, Republic of South Africa
Latin America
Sao Paolo, Brazil
Americas
San Jose, US
Europe
Eschborn, Germany
China
Shanghai, China
Southeast Asia
Singapore, Singapore
Japan
Tokyo, Japan
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The Company’s property, plant and equipment include land, buildings and structures, machinery and equipment, and
construction in progress. As of September 30, 2014, the book value of them is KRW 76,121 billion, an increase of KRW
515.7 billion from December 31, 2013. In the 3Q of 2014, new acquisitions of KRW 14,460 billion and depreciation of
KRW 12,532 billion were recorded.
(Unit: KRW million)
Classification
Buildings and Machinery and
Structures
Equipment
Land
Construction
in –progress
Others
Total
Book value
7,429,287
15,715,064
36,498,478
13,840,172
2,013,387
75,496,388
Acquisition cost
7,429,287
23,375,035
118,621,699
13,840,172
5,518,351
168,784,544
-
(7,659,971)
(82,123,221)
-
(3,504,964)
(93,288,156)
47,768
2,825,909
13,898,296
(3,089,660)
777,733
14,460,046
Acquisition as a result of business
combination
-
-
-
-
940
940
Depreciation
-
(964,699)
(10,917,582)
-
(649,206)
(12,531,487)
Disposal/Discard/Damage
(65,418)
(423,283)
(226,163)
52,690
(49,564)
(711,738)
Others
(6,869)
(88,531)
24,114
(567,717)
(63,081)
(702,084)
Book value
7,404,768
17,064,460
39,277,143
10,235,485
2,030,209
76,012,065
Acquisition cost
7,404,768
25,560,592
125,894,081
10,235,485
5,588,041
174,682,967
-
(8,496,132)
(86,616,938)
-
(3,557,832)
(98,670,902)
At 1 January 2014
Accumulated depreciation
(Including accumulated impairment loss)
General acquisition and capital expenditure
Increase
(Decrease)
Balance at
30 Sep 2014
Accumulated depreciation
(Including accumulated impairment loss)
※ Others: Includes effects of changes in FX rates and changes in the scope of consolidated financial statements.
※ Property, Plant, and Equipment above is presented on a consolidated basis.
(2) CAPEX
During the first half of 2014, the Company invested KRW 14.5 trillion in CAPEX, including upgrade production lines of
semiconductor and DP business. The total projected CAPEX for 2014 is about KRW 24 trillion, although this is subject to
change depending upon the business environment.
[CAPEX by division]
(Unit: KRW 100 million)
Investment in
3Q 2014
Business
Purpose
Period
Assets
Semiconductor
Establishment, addition,
upgrade
Jan '14 ~ Sep ’14
Buildings, facilities
87,789
DP
Establishment, addition,
upgrade
Jan '14 ~ Sep '14
Buildings, facilities
25,702
Others
Others
Jan '14 ~ Sep '14
Buildings, facilities
31,109
Total
144,600
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5. Sales and Distribution
A. Sales
In the 3Q of 2014, the Company recorded KRW 153,476 billion of total revenue, a decline of 9.4% from the prior year. By
division from 2013, the CE division revenue increased by 0.4%, the IM division revenue decreased by 18.5%, and the DS
division revenue decreased by 5.3%.
(Unit: KRW 100 million)
3Q 2014
(’14.1.1~9.30)
Division
Sales types
Product categories
CE
Goods
Products
Service
Others
CTV, monitor, printer, air
conditioner, refrigerator,
washing machine, medical
equipment
359,160
503,315
511,051
IM
Goods
Products
Service
Others
HHP,
Network System, Computer,
Digital camera
854,717
1,388,172
1,058,447
Semiconductor
Goods
Products
Service
Others
DRAM,
NAND Flash, Mobile AP
290,680
374,366
348,866
DP
Goods
Products
Service
Others
TFT-LCD,
OLED
186,806
298,371
329,994
480,761
677,609
682,873
-159,879
-282,169
-241,335
1,534,759
2,286,927
2,011,036
DS
Division total
Others
Other revenue
-
Total
2013
2012
※ Includes internal sales between divisions.
※ Represented on 3Q 2014 basis.
□ Sales by major product
(Unit: KRW 100 million)
Classification
3Q 2014
(’14.1.1~9.30)
2013
2012
CTV
226,571
331,207
350,381
Mobile
823,910
1,353,537
1,032,875
MEMORY
211,462
237,146
208,640
DP
186,806
298,371
329,994
※ Including internal sales between divisions.
※ Represented on 3Q 2014 basis.
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□ Sales by sales type
(Unit: KRW 100 million)
3Q 2014
(’14.1.1~9.30)
Classification
Products
2013
1,515,164
2,252,839
1,926,709
19,595
34,088
84,327
1,534,759
2,286,927
2,011,036
Service and other sales
Total
2012
※Other sales consists of royalty income and rental income.
□ Sales by major region (on a parent company financial statement basis)
(Unit: KRW 100 million)
3Q 2014
(’14.1.1~9.30)
Classification
2013
2012
Korea
122,205
172,004
204,703
Americas
310,071
442,526
315,846
Europe
166,014
335,645
312,650
Asia and Africa
226,738
341,059
290,832
China
216,789
292,487
288,033
Total
1,041,763
1,583,721
1,412,064
B. Sales Channels
□ Domestic
Classification
Sales Channel
Consumer
Retailer
Manufacture
(Facility)
Distributor (General merchandise store, Discount store, Department Store, Home-Shopping, Internet)
Retailer
Cooperative Joint Market, Sales Shop, Open Stores
Consumer
Telecommunication Service Provider (SKT, KT, LG U+)
Direct Sales
□ Overseas
Classification
Sales Channel
Consumer
Retailer
Regional Sales Office
Dealer
Retailer
Distributor
Dealer
Retailer
Telecommunication Service Provider
Production
Subsidiaries
Regional Distribution Office
Consumer
Retailer
Regional Sales
Office
Dealer
Distributor
Retailer
Dealer
Dealer
Direct Sales
□ Sales ratio by channel
Channel
Wholesale
Retail
Special/direct sale
Others
Ratio
36%
25%
34%
5%
※ On a global basis
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C. Sales methods and conditions
□ Domestic
Classification
Channel
Collection
Incidental expense sharing
Exclusive
Agency
- Credit agreement (Cash, 30 day credit)
(Credit applied within 100% of collateral)
- Share cost under mutual agreement for each case
Distributor
General merchandise store,
Discount store, Department store,
Home shopping, Internet
Case by case contract
- Share cost under mutual agreement for each case
Special/direct sale
General companies
Case by case contract
Channel
Collection
Retailer
Retail store
Case by case contract
- Share cost under mutual agreement for each case
Dealer
General merchandise store,
Discount store, Department store
Case by case contract
- Share cost under mutual agreement for each case
Distributor
Direct sales to local distributors
Case by case contract
- Share cost under mutual agreement for each case
N/A
□ Overseas
Classification
B2B
General companies
Incidental expense sharing
Case by case contract
N/A
D. Sales Strategy
○ Expand market leadership based on smart devices
○ Provide differentiated value to customers through brand, products, and service
○ Strengthen operational capabilities for customer/market
○ Enhance sales capabilities
E. Major customers
During the 3Q of 2014, major customers included Apple, Deutsche Telekom, Ingram Micro, Sprint and Verizon. Sales to
our five major customers accounted for about 13% of total sales.
6. Long-term Contracts
N/A
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7. Financial Risk Management
The Company’s financial risk management focuses on minimizing market risk, credit risk, and liquidity risk arising from
operating activities. To mitigate these risks, the Company implements and operates a financial risk policy and program that
closely monitors and manages such risks.
The finance team mainly carries out the Company’s financial risk management. With the cooperation of the Company’s
divisions, domestic and foreign subsidiaries, the finance team periodically measures, evaluates and hedges financial risk
and also establishes and implements global financial risk management policies.
Financial risk management officers are dispatched to the regional headquarters of each area including the USA, UK,
Singapore, China, Japan, Brazil and Russia to oversee application of global financial risk management policies at the local
finance centers.
Financial assets subject to the Company’s financial risk management are as follows: Cash and cash equivalents, short-term
financial instruments, available-for-sale financial assets, trade, and other receivables, and other financial assets. The
Company’s financial liabilities subject to financial risk management are as follows: Trade and other payables, borrowings,
debentures, and other financial liabilities.
A. Market risk
(1) Foreign exchange risk
The Company is exposed to foreign exchange risk arising from various currency exposures due to global operations. The
Company is mostly exposed to foreign currency volatility due to exchange positions of currencies, including the US Dollar,
Euro, Japanese Yen, and Chinese Yuan.
To minimize foreign exchange risk arising from operating activities, the Company’s foreign exchange management
policy requires normal business transactions to be in local currency or for the cash-in currency to be matched with the
cash-out currency. The Company’s foreign exchange risk management policy also defines foreign exchange risk,
measuring period, ownership responsibilities, management procedures, hedging period and hedge ratio.
The Company prohibits all speculative foreign exchange transactions. The Company has established a global foreign
exchange system to manage exposures related to receivables and payables denominated in foreign currencies.
(2) Stock price risk
The Company’s investment portfolio consists of direct and indirect investments in equity securities classified as availablefor-sale, which is in line with the Company’s strategy.
As of September 30, 2014 and December 31, 2013 a price fluctuation in relation to marketable equity securities by 1%
would result in changes in other comprehensive income (before income tax) of KRW 56,297 million and KRW 43,993
million, respectively.
(3) Interest rate risk
Risk of changes in interest rate for a floating interest rate financial instrument is defined as the risk that the fair value of
future cash flows of a financial instrument will fluctuate because of changes in market interest rates and the risk that cash
flows from investing/financing activities will fluctuate with changes in interest gain/loss. The Company is exposed to
interest rate risk mainly through interest bearing liabilities and assets. The Company has policies to minimize uncertainty
and finance expenses from changes in interest rates. In order to avoid interest rate related risks, the Company maintains
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minimum external borrowing by facilitating cash pooling systems on a regional and global basis. The Company manages
exposed interest rate risk via periodic monitoring and handles risk factors on a timely manner.
B. Credit risk
Credit risk arises during the normal course of transactions and investing activities where clients or other parties fail to
discharge an obligation. The Company monitors and sets counterparty’s credit limits on a periodic basis based on the
counterparty’s financial conditions, default history, and other important factors.
Credit risk can arise from transactions with financial institutions which include financial instrument transactions such as
cash and cash equivalents, savings, and derivative instruments. To minimize such risk, the Company transacts only with
banks which have a strong international credit rating (S&P A and above), and all new transactions with financial
institutions with no prior transaction history are approved, managed and monitored by the Company’s finance team and
the local finance center. The Company carries out financial transactional contracts according to its debt ratio limit policy
to provide collateral goods and collect external borrowings. The Company requires separate approval for contracts with
restrictions.
Most of the Company’s accounts receivable are adequately insured to limit exposure to credit risk. The Company
estimates that its maximum exposure to credit risk is the carrying value of its financial assets, net of impairment losses.
C. Liquidity risk
Due to large investments made by the Company, maintaining adequate levels of liquidity risk is critical. The Company
strives to achieve this goal by periodically forecasting its cash flow, estimating required cash levels, and managing income
and expenses.
The Company manages its liquidity risk by periodically forecasting projected cash flows. If abnormal signs are identified,
the Company works with the local finance center and provides liquidity support by utilizing a globally integrated finance
structure, such as Cash Pooling. In addition, the Company maintains a liquidity management process which provides
additional financial support by the local finance center and the Company. The Cash Pooling program allows sharing of
surplus funds among entities and contributes to minimizing liquidity risk and strengthening the Company’s competitive
position by reducing capital operation expenses and finance expenses.
In addition, the Company mitigates liquidity risk by contracting with financial institutions with respect to bank overdrafts
and foreign trade finance and by providing payment guarantees to subsidiaries. For large scale facility investments,
liquidity risk is minimized by utilizing internal reserves and long term borrowings according to the capital injection
schedule.
D. Capital risk management
The purpose of capital management is to maintain a sound capital structure. The Company monitors capital on the basis of
the ratio of total liabilities to total equity. This ratio is calculated by dividing total liabilities by total equity in the
consolidated financial statements.
The Company’s capital risk management policy has not changed since the fiscal year ended December 31, 2013. The
Company has maintained A+ and A1 credit ratings from S&P and Moody’s, respectively.
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The total liabilities to equity ratios as of September 30, 2014 and December 31, 2013 are as follows:
(Unit: KRW million)
September 30, 2014
December 31, 2013
Total liabilities
68,278,794
64,059,008
Total equity
163,467,695
150,016,010
41.8%
42.7%
Total liabilities to equity ratio
E. Fair value measurement
- Carrying amounts and fair values of financial instruments by category as of September 30, 2014 and December 31,
2013 are as follows:
(Unit: KRW million)
Classification
September 30, 2014
Carrying amount
December 31, 2013
Fair value
Carrying amount
Fair value
Financial assets
Cash and cash equivalents1
18,004,063
-
16,284,780
-
45,695,172
-
36,722,702
-
3,251,924
3,251,924
1,488,527
1,488,527
Trade and other receivables1
24,069,510
-
24,988,532
-
Long-term available-for-sale
financial assets2
12,317,751
11,902,526
6,238,380
5,850,155
5,772,600
5,743,505
5,472,956
5,436,470
Short-term financial
instruments1
Short-term available-for-sale
financial assets
Other
Total Financial assets
109,111,020
91,195,877
Financial liabilities
Trade and other payables1
16,733,181
-
16,314,720
-
Short-term borrowings1
9,722,014
-
6,438,517
-
Debentures
1,309,116
1,333,728
1,311,068
1,327,569
Long-term borrowings
1,774,255
1,709,050
985,117
971,844
Long-term other payables
2,576,575
2,721,437
1,023,714
1,090,580
Other1
9,133,739
-
13,288,343
-
Total Financial liabilities
1
2
41,248,880
39,361,479
Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair
value disclosures.
Amount measured at cost (3Q 2014: KRW 415,225 million and 4Q 2013: KRW 388,225 million) is excluded as the
range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be
reasonably assessed.
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The following table presents the assets and liabilities, by level, that are measured at fair value:
As of September 30, 2014
(In millions of Korean won)
Level 1
Level 2
Level 3
Total balance
Derivatives
Available-for-sale financial assets1
6,695,188
54,413
5,344,222
2,471
3,115,040
56,884
15,154,450
Total assets
6,695,188
5,398,635
3,117,511
15,211,334
Derivatives
-
306,643
-
306,643
Total liabilities
-
306,643
-
306,643
December 31, 2013
(In millions of Korean won)
Level 2
Level 3
Total balance
Derivatives
Available-for-sale financial assets1
5,656,806
40,552
1,188,498
493,378
40,552
7,338,682
Total assets
5,656,806
1,229,050
493,378
7,379,234
-
244,172
-
244,172
Derivatives
1
Level 1
Total liabilities
244,172
244,172
Amount measured at cost (September 30, 2014: KRW 415,225 million, December 31, 2013: KRW 388,225 million) is excluded as
the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably
assessed.
The levels of the fair value hierarchy and its application to financial assets and liabilities are described below.
ㆍLevel 1: Quoted market prices (unadjusted) for identical assets or liabilities
ㆍLevel 2: Fair valuation based on inputs that are observable in the market
(Other than quoted prices included within level 1)
ㆍLevel 3: Fair valuation based on inputs that are unobservable in the market
The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of
financial position date. A market is regarded as active if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by
the Company is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 are listed
equity investments classified as trading securities or available-for-sale financial assets.
The fair value of financial instruments that are not traded on an active market (for example, over-the-counter derivatives)
is determined using valuation methods. These valuation methods maximize the use of observable market data where it is
available and rely as little as possible on entity specific estimates. If all significant inputs required to measure the fair
value of an instrument are observable, the instrument is included in Level 2.
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If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
The Company performs the fair value measurements required for financial reporting purposes, including level 3 fair
values and discusses valuation processes and results at least once every quarter in line with the Company’s quarterly
reporting dates. The Company’s policy is to recognize transfers between levels at the end of the reporting period, if
corresponding events or changes in circumstances have occurred.
Specific valuation methods used to value financial instruments include:
ㆍQuoted market prices or dealer quotes for similar instruments.
ㆍThe fair value of foreign exchange forward contracts is determined using forward exchange rates at the statement
of financial position date, with the resulting value discounted back to present value.
Other methods, such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments. For trade and other receivables, the book value approximates a reasonable estimate of fair value.
- Valuation methods and the inputs
ㆍThe Company utilizes a present value method to discount future cash flows at a proper interest rate for
corporate bonds, government and public bonds, and bank debentures that are classified as Level 2 in the fair
value hierarchy.
ㆍThe following table presents the valuation methods and the inputs used for major financial instruments classified
as Level 3.
(In millions of Korean won)
Fair
Classification
Value
Long-term available-for-sale financial assets
Samsung Petrochemical
80,347
Input Range
(Weighted Average)
2,625,324
Permanent growth rate
Weighted average cost of capital
Permanent growth rate
Weighted average cost of capital
Permanent growth rate
Weighted average cost of capital
Permanent growth rate
Weighted average cost of capital
Permanent growth rate
Weighted average cost of capital
Risk adjusted discount rate
Price volatility
-1.00% ~ 1.00% (0%)
6.37% ~ 8.37% (7.37%)
-1.00% ~ 1.00% (0%)
7.01% ~ 9.01% (8.01%)
-1.00% ~ 1.00% (0%)
6.06% ~ 8.06% (7.06%)
-1.00% ~ 1.00% (0%)
8.81% ~ 10.81% (9.81%)
-1.00% ~ 1.00% (0%)
7.69% ~ 9.69% (8.69%)
5.49% ~ 7.49% (6.49%)
30.90% ~ 36.90% (33.90%)
2,471
Binomial model
Discount rate
Stock price volatility
5.50% ~ 10.90% (7.74%)
10.26% ~ 16.83% (13.30%)
80,653
Taewon Electric
17,072
Pantech
53,053
Coming Incorporated
convertible preferred stock
Derivatives
Embedded derivatives
(convertible bonds)
Level 3 Inputs
Discounted cash
flow
Discounted cash
flow
Discounted cash
flow
Discounted cash
flow
Discounted cash
flow
Trinomial model
Samsung General Chemicals
Samsung Venture Investment
Valuation
Technique
7,021
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-Changes in Level 3 instruments:
(In millions of Korean won)
2014
Balance as of January 1
Purchases
Disposals
Amount recognized in profit or loss
Amount recognized in other comprehensive income
Other
Balance as of September 30
2013
493,378
2,498,800
(10,871)
(14,518)
192,453
(41,731)
3,117,511
389,195
131,151
(15,067)
(5,129)
5,798
6,722
512,670
- Sensitivity analysis for recurring fair value measurements categorized within Level 3
Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair
value of financial instruments which are affected by the unobservable parameters, using a statistical technique.
When the fair value is affected by tow or moreinput parameters, the amounts represent the most favorable or most
unfavorable.
The results of the sensitivity analysis for the effect on profit or loss from changes in inputs for each financial
instrument, which is categorized within Level 3 and subject to sensitivity analysis, are as follows:
(In millions of Korean won)
Classification
Long-term available for sale
financial assets1
Embedded derivatives
(convertible bonds)2
Total
Favorable Changes
Profit or Loss
Equity
Unfavorable Changes
Profit or Loss
Equity
-
278,243
-
(202,701)
469
469
(482)
(482)
469
278,712
(482)
(203,183)
1
Changes in fair value are calculated by increasing or decreasing the correlation between volatility (30.9% to
36.90%) and discount rate for convertible preferred stock. Similarly, for other equity securities, changes in fair
value are calculated with the correlation between growth ratio (-1% to 1%) and discount rate, which are
significant unobservable inputs.
2
For equity derivatives, changes in their fair value are calculated by increasing or decreasing the correlation
between stock prices and volatility by 10%.
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8. Derivative Instruments and Put Options
The Company holds convertible bonds in several companies, including FTS, as well as bonds with warrants of Shinwha
Intertek Co., Ltd.
(A) The value of derivative instruments as of Sep 30, 2014 is presented below:
(Unit: KRW million)
Asset
Liabilities
Valuation Gain
Valuation Loss
Put options
8,854
-
-
10,768
Total
8,854
-
-
10,768
※ The option values were calculated using appropriate valuation methodologies, including the Black-Scholes model
(B)
To manage foreign exchange risk, the Company’s subsidiaries hedge by trading forward currency contracts based
on foreign currency positions. Overseas subsidiaries buy or sell currency forwards with less than one year maturity
via a bank to avert risk.
The Company holds convertible preferred shares of Corning Incorporated and its value is as follows.
(Unit: KRW million)
Purchasing Price
Convertible preferred
Stocks
Fair Value
2,434,320
2,625,324
Valuation Gain
Valuation Loss
191,004
-
※ Fair value determined using Trinomial Tree model
(C)
Currency forwards as of Sep 30, 2014 are as follows.
(Unit: KRW million)
Asset
Liabilities
Valuation Gain
Valuation Loss
Currency forwards
54,302
306,607
52,261
94,897
Total
54,302
306,607
52,261
94,897
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9. Major contracts
Account
Ericsson
Item
Contents
Contract type
Mutual patent-use contract
Contract date
2014.01.25
Purpose and contents
Secure operational advantage through mutual patent licensing
Contract type
Mutual patent-use contract
Contract date and period
2014.01.25 / indefinite term
Purpose and contents
Secure business freedom through mutual patent licensing
Others
Permanent license contract (including patent applications in the next 10 years)
Contract type
Mutual patent-use contract
Contract date
2014.01.23
Purpose and contents
Secure operational advantage through mutual patent licensing
Contract type
Process technology license contract
Contract date
2014.02.28
Purpose and contents
Expand customer base of 14nm process
Contract type
Patent-use contract
Contract date
2014.06.03
Purpose and contents
Secure business freedom through patent licensing
Google
Cisco
Global Foundries
Inc.
InterDigital
※ Information related to other IP disputes, including contract amount, was not included.
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10. Research and Development Activities
A. Summary of activities and R&D expenditures
The Company is leading the global market by continuously developing creative and innovative products and the future
technology through shifting its way of thinking and understanding customer demand.
The Company is currently developing creative and innovative products and doing its utmost to cement its position in the
world IT industry and become a truly Leading Company that leads world’s industrial technology by securing nextgeneration and original technology.
[R&D expenses]
(Unit: KRW million)
3Q 2014
Total R&D expenditure
Capitalization of
development expenses
(intangible asset)
Accounting
R&D costs
(expenses)
R&D expenses/sales Ratio
3Q 2013
2013
2012
11,412,295
10,840,199
14,780,432
11,892,434
679,094
314,340
461,030
359,639
10,733,201
10,525,859
14,319,402
11,532,795
7.4%
6.4%
6.5%
5.9%
※ On a consolidated basis (in conformity with K-IFRS)
As of Sep 30, 2014, the Company’s R&D expenses were KRW 11,412 billion, a 5.3% YoY basis. The Company
capitalized KRW 679 billion and recognized KRW 10,733 billion as the current expenditure.
B. R&D Organization and Operations
Domestic
The Company operates three levels of R&D organizations; a business unit development team under each division that
develops market ready technologies with a 1-2 year outlook, a research institute under each business unit that develops
mid to long-term technology with a 3-5 year outlook, and the Samsung Advanced Institute of Technology that develops
core technology as a future growth engine.
Samsung Advanced Institute of Technology is the central research institute of Samsung Electronics that has been
established to lead the future as a birthplace of cutting-edge technology. It has a creative R&D system and provides R&D
directions for promising growth sectors at the Company level, exploring future growth engines and strengthening
technological competitiveness of core businesses.
Overseas
The Company operates R&D organizations in the US (SRA-Silicon Valley, SRA-Dallas), the UK (SRUK), Russia (SRR),
Israel (SRIL,SIRC), India (SRI-Bangalore, SRI-Delhi), Japan (SRJ), China (SSCR, SRC-Beijing, SRC-Nanjing, SRCTianjin, SRC-Guangzhou) to carry out research activities for product development and basic technological research.
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※ As of Sep 30, 2014
※ Refer to 『G. Subsidiaries subject to consolidation』 in 『I. Corporate Overview』 for more details about overseas R&D organizations.
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C. R&D Results
Research project
Research results and expected effect
In case applied to a product, name of
the product and application
□ Smart Monitor (TB750, 24"/27)
- Support mobile device connectivity via MHL
- Support wireless transmission of picture via WiFi
- Can use smart hub and smart TV apps
- AllShare and Connect Share functions
- 7W x 2 Ch speaker
- Asymmetric slim design
□ Region: Americas/Europe/
domestic, etc.
□ Launch: Feb ‘12
□ Supply commercialized broadcasting set-top box for UK Virgin Media
- Develop cable TV set-top box (equipped with TiVo middle ware)
- HD broadcasting and mass recording functions (1T class)
※ Virgin Media: The largest media group in UK
□ Region: UK
□ Launch: Feb ‘12
Smart TV Service
□ Smart TV Service launch in ‘12
- Cloud-based contents sharing among family members
- Provide and manage contents for toddlers
- Customized exercise guide service
- Contents sharing between various devices
□ SDK3.1 Public Release (March)
- Smart Control input device and In-App advertisement
- Provide utility tool (Automatic Testing Tool)
□ Region: Global
□ Launch: Feb ‘12
Smart Input Device
□ Introduction of smart wireless keyboard
Easy to control device with QWERTY text input and Touch Pad
Bluetooth Pairing for controlling TV and Mobile devices
□ Region: Americas/Europe/
domestic, etc.
□ Launch: Feb ‘12
□ Applied products:
LED/PDP products in response to BT
□ Smart Station Monitor (CB750, 24")
- Support connection to Wireless PC screen
- Mobile control function
- Support mobile device connectivity via MHL
- Can control 2 PCs (Drag & Drop file transfer, etc.)
- Support USB Hub and USB Super Charging
- 5W x 2 Channel speaker
□ Region: Americas/Europe/
domestic, etc.
□ Launch: May ‘12
□ Product Concept
- All-in-one Cloud Display Monitor(AMD Solution)
* Cloud Display Monitor: All-in-one LED monitor for creating server-based computing
environment, which is the next generation IT infra solution that can efficiently manage
IT resources and strengthen security
□ Purpose and effects
- Respond to EnergyStar5.0 and Erp(European energy standard)
- Apply platform/DDR3 and SSD/enable Fan less via 2 chip solution AMD Ontario
- Increase opportunity of sales expansion by adding 23.6" 16:9, 19" 5:4 Format Line-up
- ECO-Friendly → LED BLU /Energystar/TCO/Thin Design
- Secure sales channel in response to VMware/Citrix virtualization solution
□ Region: Global
□ Launch: Dec ‘12
□ Inch : 19"/23.6"
□ Product Concept
- Changed to new Echo-E chip dedicated to LFD from existing Genoa-P
- DP LoopOut & DP1.2 MST using ST Athena chip
- 24/7 operable Heavy Usage LED models
- High intensity (700nit) anti-Glare required for information delivery
□ Spec and effects
- Panel : New, Edge-LED, 700nit
- SMPS (PD-Board) : New
- 12 hours use per day (3 year warranty)
- Safety standard 60950-1(monitor), EMC class A
- Remote control: TM1240B
- Stand not provided (Option accessory)
- In response to competitors’ line-up
- Secure LFD product line-up
□ Region: Global
□ Launch: Oct ‘12
□ Inch : 40"/46"/55"
Smart
TV monitor
Set-Top Box
for Virgin Media
Smart Station Monitor
All-in-one
Cloud Monitor
LFD
DEC
(LH40DECPLBA/ZA)
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Research project
Develop
high-resolution
large size TV panel
Research results and expected effect
In case applied to a product, name of
the product and application
□ Differentiate Main Stream TV products and secure competitiveness
□ Region: Global
□ Launch: 1Q 13
□ Achieve low power consumption of table products by enhancing transmitivity and enhance
production yield
□ Region: Global
□ Launch: 4Q 12
□ Mass produce 20nm 4GB DDR3 DRAM as the first in the world
- Developed as the first in the world for 4 consecutive generations since 50nm 4GB in '09
- Transmission speed of 1,833Mbps, which is the fastest for server
□ Maintain competitive advantage in the value-added DRAM market with cutting-edge
‘green memory’ from server to PC market
□ Region: Global
□ Launch: Feb ‘12
□ Name : 4GB DDR3 DRAM
□ Mass produce 20nm 4GB mobile DRAM as the first in the world
- Mass produce products from 1GB to 4GB, highest capacity in the industry
- Only provider of 4GB ultra-thin 0.8mm solution in the industry
□ In the future, expand 4GB market by increasing the proportion of 20nm DRAM
Maintain competitive advantage in the premium memory market
□ Region: Global
□ Launch: Apr ‘12
□ Name : 4GB LPDDR2
Mobile DRAM
Develop 30nm
4GB DDR4
DRAM for computer
□ Develop next generation 30nm 4GB DDR4 DRAM as the first in the world
- Launched 16GB DDR4 DRAM as the first after the launch of 2GB DDR4 DRAM in ‘11
- In the future, plan to develop products with fastest speed of 3.2Mb/s
□ Create differentiated market by mass producing 20nm products in '13 and maintain
competitive advantage with high-capacity green memory
□ Region: Global
□ Launch: Jun '12
□ Name : 4GB DDR4 DRAM
Mass produce 30nm
4GB LPDDR3 mobile
DRAM for mobile
□ Mass produce next generation 30nm 4GB mobile DRAM as the first in the world
- Mass produce largest range of LPDDR3 products in the industry from 1GB to 2GB
- Only provider of 2GB ultra-slim 0.8mm solution in the industry
□ Maintain competitive advantage in the premium memory market by taking the lead in
high-capacity next generation LPDDR3 DRAM market in the future
□ Region: Global
□ Launch: Aug ‘12
□ Name : 4GB LPDDR3
Mobile DRAM
High-resolution
low-power consumption
Tablet product technology
Mass produce 20nm
4GB DDR3
DRAM for computer
Mass produce 20nm
4GB LPDDR2
mobile DRAM for mobile
□ Mass produce high-capacity 20nm 128GB eMMC as the first in the world
Mass produce 20nm
- Launched 128GB in Aug ’12 after mass production of 64GB in Jul '12
128GB eMMC
- Can store 15 8GB Full HD contents
internal storage for mobile □ Continue to expand next generation high-capacity mobile device market with 5 times faster
speed than external memory card Class10
Mass produce 2ynm
4GB DDR3
DRAM for computer
Mass produce
2ynm
512GB SSD
for computer
□ Region: Global
□ Launch: Aug ‘12
□ Name : 128GB eMMC
internal memory card
□ Mass produce cutting-edge 2ynm 4GB DDR3 DRAM as the first in the world
- Launched DRAM produced by new process for 4 consecutive years since '09
- Enhance product competitiveness with the best capacity low power consumption property
□ Continue to strengthen business competitive advantage by expanding sales in
differentiated market through mass production of 20nm products in '13
□ Region: Global
□ Launch: Oct ‘12
□ Name : 4GB DDR3 DRAM
□ Mass produce the best performance high-capacity 512GB SSD in the world
- Develop high-performance SSD with high-performance 3bit MLC as the first in the
industry
- Lead market expansion by mass producing high-end/mass market SSD simultaneously
□ Continue to strengthen business competitiveness in the premium memory market by
expanding premium ultra notebook market in '13
□ Region: Global
□ Launch: Oct ‘12
□ Name : 512GB SSD
□ Mass produce 64GB eMMC with next generation standard as the first in the world
Mass produce 10nm
- Launched next generation product after the launch of eMMC 4.5 product in Jul '12.7
64GB eMMC
- Equipped with best performance 10nm 64GB NAND since Oct '12
internal storage for mobile □ Take the lead in high performance mobile device market with subminiature package that
has 10 times faster speed than external memory card Class10
□ Region: Global
□ Launch: Nov ‘12
□ Name : 64GB eMMC
internal memory card
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Research project
Smart TV Service
Smart Input Device
HDD Broadcasting
Multi-device
(BD-F8500)
BD Player
(BD-F7500)
Smart
Interaction
Monitor
(SC770)
Research results and expected effect
□ Smart Hub service launch in ‘13
- Provides Smart Hub that enables easy and fast access to contents by category via
five panel UIs
 On TV: Recommends program based on viewing history by the hour
 Movies & TV Shows: Recommends popular/new VOD based on user’s viewing history
 Photos, Videos & Music: Provides list of recently played/recorded photos/music/videos
 Social: list of contents recommended by SNS friends/ video call
 Apps: Shows recommended/ downloaded apps
□ SDK 4.1 Public Release
- Reinforces platform and ecosystem by adding major S/W module platform of ‘13
- Supports Linux and Mac emulator and provides local Cloud Emulator functions
- Adds Smart Controller functions of ‘13
- Native IME (response to ’13 input device)
□ Introduction of 2013 smart wireless keyboard
Easy to control device with QWERTY text input and Touch Pad
Supports multi pairing between BT standard devices including TV/mobile (shortcut)
□ Introduction of 2013 external camera
Improves Skype resolution with 5M pixel camera
EPTZ(Electronic Pan Tilt Zoom), Face Tracking
One Hand Gesture Recognition
□ Key features
Dual Tuner , CI , LAN, USB 2.0, HDMI, S-PDIF, Internal HDD, WiFi, Record 3D broadcasts
□ Development
Applied ‘13 UX & Apps, Applied Fox-B, New Micom (Nuvoton, 32bit), Movie & TV Show,
Screen Mirroring, Remote Access
□ Key features
4K 3D Wifi BDP premium model
Internal 4K Scaler / 2HDMI (4K/Audio)
TV 7080 design matching
VFD Front Display
Smart Hub / Screen mirroring
2 x 2 Dual band Wifi module (minimized interference)
□ Development
Scaler Chip for 4K
HDMI exclusively for Audio (increase usability)
Strengthen Smart Hub functions (Movie & TV Show, Screen Mirroring, Remote Access)
Reinforce security with TrustZone
In case applied to a product, name of
the product and application
□ Region: Global
□ Launch: Feb '13
□ Region: Global
□ Launch: Mar '13
□ Region: Europe
□ Launch: Mar ‘13
□ Region: Global
□ Launch: Mar ‘13
□ Improved motion recognition
- Improve motion sensitivity, Thumbs Up recognition
□ Increased interactive voice response supported countries
- Countries added: Canada/Switzerland/Spain
 Countries supported: 9 (as of end-June)
 US, UK, Korea, France, Germany, Australia, Canada, Switzerland, Spain
□ Introduced built-in camera for OLED/UHD TV
Reflected new developments on circuit/apparatus for OLED Design
5M pixels, support motion/face recognition (same spec as LED F8000)
□ Region: Global
□ Launch: Jun ‘13
□ Applied products
- Motion recognition:
TV with built-in camera
- Interactive voice response: Models
of LED 6400 or higher
- Built-in camera:
OLED TV KN55S9CAF,
UHD TV 55/65 F9000
□ Added Touch Monitor Line up in ‘13
- Introduced Touch Monitor to create a new market
□ Reinforced user convenience
- Secured absolute advantage over competitors by providing differentiated usability&design
□ Optimum solution for using Touch
- Fast Touch and 10 Points multi Touch possible by applying capacitive sensing Touch,
Windows8 certification
- Ergonomic sliding stand structure
- Wide viewing range Panel and contrast range three times wider than plain monitor
□ Premium design
- Premium design with metallic materials
- Narrow Bezel design that maximizes immersive experience when using Touch
□ Region: America/Europe/etc.
□ Launch: Jun ‘13
□ Inch : 24"
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Research project
Open Cell Monitor
(SC590)
LFD ME95C
Mobile AP development
Research results and expected effect
In case applied to a product, name of
the product and application
□ Seek to introduce Open Cell to Display product line
- Introduced Open Cell model
□ Reinforced line ups
- Open Cell new line ups
- Cheaper model than existing SC570 model as responding to 27” Slim Design
□ Reinforced user convenience
- Narrow Bezel Design provides immersive experience aesthetic value
- Applied wide viewing range PLS Panel, reproduce vivid color in any angle
- Increased connection devices such as PC and imaging device by supporting HDMI
□ Region: Global
□ Launch: Aug ‘13
□ Inch : 27”
□ Product Concept
- Ultra large size 95" LED LFD(world’s largest Edge LED LFD)
- Slim Bezel & Depth Metallic Black Premium Design
- Symmetric Design for both vertical/horizontal use
- Valuable functions for Smart Meeting Room
□ Product specification
- Support PIM Half Embedded structure
- Support automatic Pivot, using sensor
- Terminal: D -sub,DVI,Component(AV),DP,HDMIx3,RS232C
□Region:
America/Europe/Domestic, etc.
□ Launch: Dec ‘13
□ Inch : 95”
□ Developed and mass produced big.LITTLE based octa-core Mobile AP as the first in the
industry
- Maximized benefits of low power consumption with big.LITTLE based octa-core
- GPU capacity twice the 'Exynos 4 Quad' products
- Support WQXGA – can be applied to smartphone and tablet
- Applied eMMC 5.0 and USB 3.0 interface as the first in the industry
- Continue to secure the Company’s AP technology leadership
□ Region : Global
□ Launch : Mar ‘13
□ Name : Exynos 5 Octa
□ Mass produced high capacity 10nm 128Gb NAND Flash
Mass produce
- Launched twice the capacity of 10nm 64Gb in Nov ‘12
10nm 128Gb NAND Flash - Equipped best capacity 20nm 64Gb NAND from May ‘12
for mobile
□ Strengthen product competitive edge and lead memory market growth
with 128Gb NAND-based memory card and expansion of SSD market
□ Region : Global
□ Launch : Mar ‘13
□ Name : 128Gb NAND Flash
Mass produce
20nm 1TB Server SSD
for Server
□ Mass produced world best performance 1TB class Server storage
- High-efficiency solution for cloud service market
- Enhanced Server system capacity by six fold, reduced power consumption by 30%
□ Lead premium SSD market growth by developing next generation SSD
- Solidified competitive advantage with high value-added Server SSD
□ Region : Global
□ Launch : Mar ‘13
□ Name : 960GB Server SSD
Smart card IC
□ Acquired 'CC EAL7' with Smart card IC as the first in the industry
- Applied world-class design/manufacture/security technology
- Established standard modeling that can resist various types of hacking attacks
Issue certification via ANSSI, a French security agency
□ Promote the Company’s image as a leader of smart card IC technology and continue
to increase FSID market presence
□ Region : Global
□ Launch : Mar ‘13
□ Name : S3FT9KF
eFlash process
□ Developed 45nm eFlash process as the first in the industry
- Secured commercialization technology by developing smart card IC test chip
- Reduced power consumption 25%, data reading time 50%
- Plan to mass produce the first commercialized product in 2H14
- Applied to MCU product foundry/ASIC business
□ Promote the Company’s image as a leader of smart card IC technology and induce
foundry/ASIC customers
□ Region : Global
□ Launch: May ‘13
□ Name: 45nm eFlash
□ Mass produced 160lm/W middle power, which is the best in the industry
- Middle power achieved luminance efficiency of 160 lumen per watt
- First to mass produce industry-best LED package
□ Promote the Company’s image as a leader of middle power technology and continue to
secure LED market presence
□ Region : Global
□ Launch: Feb ‘13
□ Name: LM561B
□ Mass produce new concept 128Gb 3D V-NAND Flash as the first in the world
- Overcome the limits of miniaturization by 3D CTF(Charge Trap Flash) cell structure
innovation and vertical layer process innovation
- Increased degree of integration by twofold/ cell life by tenfold/ writing speed by twofold
□ Secured Tera bit NAND mass production technology with 300 core patents
- Strengthen technological competitive advantage to take the lead in large capacity market
□ Region : Global
□ Launch: Aug ‘13
□ Name: 128Gb V-NAND Flash
160lm/W middle power
LED package
Mass produce
3D vertical
128Gb
V-NAND Flash
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Research project
Research results and expected effect
In case applied to a product, name of
the product and application
□ Develop next generation 20nm 8Gb LPDDR4 DRAM as the first in the world
- Develop lowest power consumption/ highest speed mobile DRAM
- Create LPDDR4 market in ’14 after LPDDR3 in '12
□ Build 20nm 8Gb DRAM mobile/server full line up
- Create new market by launching 4GB in ‘14, the largest capacity in mobile '
□ Region : Global
□ Launch: Dec ‘13
□ Name : 8Gb LPDDR4
Mobile DRAM
□ Develop next generation image sensor pixel technology as the first in the industry
- Applied new method that isolates adjacent pixel
- Enhanced sensitivity by minimizing loss of electric signal
- Provide a sample of the first product with new technology
□ Strengthened the Company’s leadership in image sensor market
□ Region : Global
□ Launch : Nov ‘13
□ Name : S5K4H5YB
5Develop
ultra large size/ high
resolution LCD TV panel
□ Mass produced 55”,65” UHD TV panel
□ Strengthen market leadership and contribute to commercialization of UHD TV
by expanding UHD TV line ups
□ Region : Global
□ Launch : Jun ‘13
Develop
OLED TV panel (55”)
□ Take the lead in the next generation TV market by launching curved OLED TV
□ Secure competitiveness by enabling Zero Pixel Defect definition
□ Region : Global
□ Launch : Jun ‘13
□ Create new OLED Application market based on design differentiation
□ Develop 1.63” high-resolution Compact Design
□ Region : Global
□ Launch : Sep ‘13
□ Secure advantages in terms of resolution compare to competitors and strengthen market
competitiveness by developing high-resolution technology
□ Mass produce smartphone OLED panel
□ Region : Global
□ Launch : Apr ‘13
□ Secure advanced technology to take the lead in the next generation products
□ Mass produce curved display for smartphone as the first in the world
□ Region : Global
□ Launch : Oct ‘13
□ Develop R/G/B technology UHD products as the first in the world
□ Reinforce market leadership and differentiate products by expanding UHD TV line ups
□ Region : Global
□ Launch : TBD
□ Mass produce high-resolution Tablet panel
□ Achieved low power consumption of tablet products and higher rate of production by
enhancing transmissivity
□ Region : Global
□ Launch : Feb ‘14
Mass produce
Server
3D V-NAND based
960GB
high reliability SSD
□ Mass produced 3D V-NAND based high-reliability 960GB SSD as the first in the world
Equal performance with SLC NAND SSD by using 3D V-NAND
Increased customer value with high-reliability/high performance/high capacity/ low power
consumption
□ Maximized efficiency of investment in datacenter with ultra power saving solution
Secure competitiveness for expansion of next generation green IT market
□ Region : Global
□ Launch : Sep ‘13
□ Name: 960GB 3D V-NAND SSD
Mass produce 20nm
4GB
DDR3 DRAM
for server
□ Mass produce ultra-fine 20nm 4GB DDR3 DRAM as the first in the world
- Applied independently developed high-density/high-speed/low-power consumption
technology
- Enhanced productivity by 30% compare to 25nm
□ PC and server full line-up to be launched with 20nm 4GB DRAM
- Enhance competitiveness by launching the whole line-up including mobile in the future
□ Region : Global
□ Launch : Feb ‘14
□ Name : 4GB DDR3 DRAM
Develop
new ISOCELL
image sensor
□ Launched new 1600 megapixel ISOCELL image sensor
- Clear image even in dark places
- 16 megapixel / 30pfs per second (first in the industry)
- 16:9 aspect ratio FullHD resolution
□ Developed 13 megapixel stacked ISOCELL image sensor
- Smaller chip size and wider circuit range by applying stacked structure
- Diversification of exposure with smart WDR function improves color in backlight
□ Region : Global
□ Launch : Mar ‘14
□ Name : S5K2P2
Develop new mobile AP
product
with HMP solution
□ Launched new Exynos 5 Octa (5422) product
- Enhance power efficiency by combining and utilizing 8 high-capacity/low-power
consumption cores through applying HMP solution
- Support WQHD and WQXGA ultra-high resolution
- Strengthen low-power consumption capacity by using automatic conversion to
power save mode and mobile video compression technology
□ Launched new Exynos 5 Hexa (5250) product
- Enhance power efficiency by combining and utilizing 6 high-capacity/low power
consumption cores through applying HMP solution
- Support WQXGA ultra-high resolution
□ Region : Global
□ Launch: Jan/Mar ‘14
□ Name : Exynos5250/
Exynos5422
Mobile
20nm
8Gb LPDDR4 DRAM
Develop
ISOCELL
Pixel technology
Wearable Display
Watch
Develop high-resolution
OLED panel
Develop
Flexible technology
Develop UHD
OLED TV panel
High-resolution low power
consumption
Tablet product technology
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Research project
Research results and expected effect
In case applied to a product, name of
the product and application
□ Launched NFC with internal flash memory (e-flash)
- Used 45nm e-flash logic process as the only one in the industry, which improves density
and power efficiency compare to 90nm products
- Miniaturized products by supporting smallest antenna solution
- Enabled mobile POS through NFC chip as the first in the industry
※ POS (Point of Sales): point of sale information management system
□ Region : Global
□ Launch: Jan ‘14
□ Name : S3FWRN5
UHD TV
HU9000
□ Ultimate Curved UHD TV that provides perfect immersive experience
- Adopted ergonomic Curved LED Panel
□ Clear differentiation values compare to competitors
- Smart Hub function with Multi-Link Screen added
- The only Evolutionary UHD TV
□ Premium design
- Ergonomic Curved Design
- The best premium image through Immersive Viewing Experience
□ Region : Global
□ Launch: Mar ‘14
□ Inch : 55"/65"
UHD TV
HU9000
(105")
□ Wide Curved(21:9) 105" UHD TV
- Introduced ultra-large size 105" Curved UHD TV as the first in the world
- Adopted SDC 4200R 105" Wide Curved Panel
- Applied Golf-AP/MP Platform
- Provide ultimate immersive experience and realistic viewing experience
□ Region : Middle East
□ Launch : Jun ‘14
□ Inch : 105"
□ Mass produced 2nd generation 3D V-NAND based 1TB SSD as the first in the world
- Opened up ‘the era of popularized 3D memory’ with 2nd generation V-NAND
- Target PC market after creating server market last year
□ Launched high-reliability, high-capacity, low-power consumption V-NAND SSD line-up
- Increased life by twofold and reduced power consumption by 20% compare to
existing SSD
- Launch ‘V-NAND SSD’ in 53 nations around the world starting in July
□ Region : Global
□ Launch : May ‘14
□ Name : 1TB, V-NAND SSD
Develop new ISOCELL
Image sensor
□ Develop 13 megapixel stacked ISOCELL image sensor
- Smaller chip size and wider circuit range by applying stacked structure
- Diversification of exposure with smart WDR function improves color in backlight
□ Region : Global
□ Launch : Jun ‘14
□ Name : S5K3M2
Develop new mobile AP
product
□ Launched new Exynos 5 Octa (5430) product
- Increased power efficiency by applying 20nm low-power consumption HKMG process
- Enhanced performance by applying HMP solution and can work individually depending on
low power core needs
- Enhanced low power consumption property by using automatic conversion to power
save mode and mobile video compression technology
- Support WQHD and WQXGA ultra high-resolution
□ Region : Global
□ Launch : Jun ‘14
□ Name : Exynos 5430
□ Product Concept
- Wide Curved(21:9) 105” UHD TV
- Need to solidify market leadership by introducing ultra-large size 105” UHD TV as
the first in the world
□ Spec and effects
- Adopted SDC 4200R 105" Wide Curved Panel
- Applied Golf-AP/MP Platform
- Provide the ultimate immersive and realistic viewing experience
□ Region : Global
□ Launch : Jul ‘14
□ Inch: 105”
□ Introduced Premium UHD Line Up
- Introduced high resolution UHD LFD line up
- Applied SE13U Platform
- Applied spec to respond to LFD Usage
- Reduced additional investment costs by sharing TV HU7K design
□ Main functions
- Support full HD screen split in 4 (2/3/4 splits)
- DP 1.2 and SBB applicable
□ Region : Global
□ Launch : Aug ‘14
□ Inch: 85”
Develop new smart card
product
Mass produce
2nd generation
V-NAND based
1TB SSD for PC
UHD TV
(UN105S9WAF)
LFD
QMD
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11. Other Information for Investment Decision Making
A. Intellectual property right
In 2013, the Company invested KRW 14.8 trillion and registered 7,643 domestic and 11,289 overseas patents including
approval for 4,676 US patents. As a result, the Company maintained second place in terms of numbers of patents
registered in US amongst global technology companies, for eight (8) consecutive years since 2006.
<Number of patents registered in each country (as of December 31, 2013, cumulative)>
(Unit: # of Patents)
Korea
Number
US
36,559
Europe
34,203
China
15,091
Japan
9,898
Others
7,143
7,871
The Company first registered US patents in 1984, and now holds 110,765 patents around the world. The Company holds a
significant number of registered US patents to effectively respond to disputes in the U.S
<Number of patents registration per year>
(Unit: # of Patents)
‘13
‘12
‘11
‘10
‘09
‘08
‘07
Korea
2,762
2,013
1,610
1,612
1,485
4,740
10,974
US
4,676
5,081
4,894
4,551
3,611
3,515
2,725
These patents are mostly related to smartphone, flash memory, System LSI and DTV for the Company’s strategic business
products or for future use. These patents not only protect the Company’s business but also play the role of keeping similar
technology and patents, as well as competitors in check. In addition, as some of the patents are for new material, new
multimedia codec, and next-generation mobile communication, the Company expects them to protect its business in the
future when it enters into new businesses.
The Company has also been focusing on securing design patents to protect its original design applied to smartphone and
LED TV by acquiring 516 US patents in 2013.
B. Environmental regulations
The Company strictly abides by environmental regulations on products and workplace prescribed by law. In addition, to
following “the low carbon green growth policy” of the Korean government, the Company has been increasing the number
of “Green Technology Certifications” and reports “the amount of CO2 emission and energy use” to the government and
transparently provides related information to stakeholders.
(Refer to 『9. Green Management』 of 『VIII. Other Information Related to Investment Protection』 for more details
about green technology certification.)
(Environmental regulation on products)
The environmental regulations on products are getting stricter reflecting its potential direct and indirect impacts
consumers’ health and safety as consumers carry them or install at home for use. Accordingly, the Company is working to
minimize environmental impact throughout the whole life cycle of products from development stage of components and
products to manufacturing, distribution, use, and disposal. The Company offers “Eco partner Certification” to partner
companies for components without harmful substances, and runs an “Eco design evaluation” system to reflect ecoSamsung Electronics 2014 Interim Business Report
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friendly elements on products (reduced use of resources, energy, and harmful substances and application of eco-friendly
materials) at the development stage, and operates a “waste electronics collection recycle system” in Europe, North
America, Korea, and India for collecting and recycling waste electronics. These activities are in line with domestic and
foreign environmental laws on electronics and are a differentiation factor of the Company and its products.
Relevant laws are as follows:
1. Law on collection and· recycle of waste electronics (e.g., EU WEEE Directive)
2. Limit on the use of harmful substances (e.g., EU RoHS Directive, REACH Regulation)
3. Regulation on energy efficiency (e.g., EU ErP Directive)
(Environmental regulations on workplace)
The Company operates environmental pollution prevention facilities for preventing air pollution, water pollution, and
disposal of waste to minimize discharge of pollutants, thereby minimizing impact on the surrounding environment.
Environmental management of workplace is supervised by relevant government authorities. All production facilities,
domestic and overseas, have acquired International Occupational Health and Safety Management System Certification
(ISO 14001, OHSAS18001) to strengthen compliance.
Domestic and International major relevant laws are as follows:
1. Regulation related to emission of pollutants: Water Quality and Ecosystem Conservation Act, Clean Air
Conservation Act, Wastes Control Act, Noise and Vibration Control Act, Environmental Impact Assessment Act
2. Management of greenhouse gas emission: Greenhouse gas emission report, Goal management system
3. Others: Toxic Chemicals Control Act, Odor Control Law, Soil Environment Conservation Act
(Greenhouse gas emission and energy consumption management)
The Company is a “controlled entity” according to article 42 of the “Framework Act on Low Carbon, Green Growth.”
Thus, the Company has been reporting the amount of greenhouse gas emission and energy consumption, verified by a
third-party, to the authorities and disclosing it to stakeholders according to article 44 of the same Act since May 2011.
The reported amount of greenhouse gas emission and energy use are presented below:
2013
Greenhouse gas
(Unit: tCO2e)
Energy
(Unit: TJ)
2012
2011
6,303,033
6,004,674
9,955,301
96,298
91,330
125,370
※ 62 workplaces including domestic manufacturing facilities, company buildings, and company owned buildings.
※ DP business was excluded from the total amounts of 2012 due to the spin-off of Samsung Display.
※ Reported Greenhouse gas emission excludes Ozone Depletion Substance (ODS).
The Company achieved its own greenhouse emission and energy consumption limit goal for 2013 by installing energy
efficient equipment and energy-saving activities to meet greenhouse gas reduction.
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III. Management Discussion and Analysis
Pursuant to the reporting guidelines set forth by the Financial Supervisory Service of South Korea, the Management
Discussion and Analysis section, reported in the annual Business Report, is not included in quarterly and half year reports.
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IV. Corporate Governance and Affiliates
1. Board of Directors
A. Overview of Board of Directors
As of September 30, 2014, the Board of Directors (BOD) consists of nine (9) directors, four (4) of whom are executive
directors (Oh-Hyun Kwon, Boo-Keun Yoon, Jong-Kyun Shin, and Sang-Hoon Lee) and five (5) independent directors (InHo Lee, Han-Joong Kim, Kwang-Soo Song, Byeong-Gi Lee, and Eun-Mee Kim). The Board has six (6) committees as
follows: Management Committee, Audit Committee, Independent Director Recommendation Committee, Related Party
Transactions Committee, Compensation Committee, and CSR Committee.
B. The BOD Agendas considered and voting results
Independent directors
Date
Agenda
Results
In-Ho Lee
Jan 24,
2014
① Approval of FY2013 financial statements and
annual business report
② Approval of FY2014 business plan
③ Revision to management committee regulations
④ Participation in Samsung BioLogics equity rights offerings
⑤ Appointment of compliance officer
HanJoong
Kim
KwangSoo Song
ByeongGi
Lee
Eun-Mee
Kim
Approved
For
For
For
For
For
Approved
Approved
Approved
Approved
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
※ Reported Items
① Report on the internal accounting management system
② Assessment of the internal accounting management system
③ Report on the results of establishment of research committee for
environmental safety
Feb 18,
2014
① Decision to convene the 45th (FY2014) AGM
② Decision of the 45th AGM agenda items
- report items:
1) FY2013 annual audit report
2) FY2013 annual business report
- Item 1: Approval of FY2013 financial statements, including
balance sheet, income statement, and the statement
of appropriation of retained earnings, etc.
- Item 2: Approval of remuneration limit for Directors
③ Donation to Chung-nam Samsung Institute
Approved
Approved
Did not
attend
Approved
Did not
attend
For
For
For
※ Reported Item
① Report on the results of compliance review
Apr 29,
2014
①
②
③
④
Approval of 1Q FY14 financial statements and business report
Renewal of the existing Directors' liability insurance policy
Donation
Application for Venture Capital Union
① Disposal of technology assets
② Equity investments
③ A property Leasing contract with Samsung Display
Jun 03,
2014
Approved
Approved
Approved
Approved
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
Approved
Approved
Approved
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
※ Reported Items
① Research results and findings from the advancement of
corporate ecosystem research council
② Reported Progress of research results for the environmental
safety
Samsung Electronics 2014 Interim Business Report
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Jul 31,
2014
① Approval of the 46th 1H14 financial statements, business report,
and interim dividend
② Approval of Samsung Asset Management annual trade volume
③ Application for property insurance
④ Donation to Sungkyunkwan University
⑤ Donation to Samsung Science & Technology Foundation
Approved
For
For
For
For
For
Approved
Approved
Approved
Approved
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
C. The Committees of BOD
(1) Composition of the BOD Committees as of September 30, 2014
Committee Name
Members
Member Name
Management
4 Executive
Directors
Oh-Hyun Kwon, Boo-Keun Yoon,
Jong-Kyun Shin, Sang-Hoon Lee
Related Party
Transactions
3 Independent
Directors
In-Ho Lee, Han-Joong Kim,
Kwang-Soo Song
Compensation
3 Independent
Directors
Kwang-Soo Song, In-Ho Lee, Byeong-Gi Lee
CSR
5 Independent
Directors
Byeong-Gi Lee, In-Ho Lee, Han-Joong Kim,
Kwang-Soo Song, Eun-Mee Kim
Responsibility and
Authority
See description below
※ The Audit Committee and Independent Director Recommendation Committee were excluded according to Corporate Disclosure
Guidelines set forth by the Financial Supervisory Service Authority of South Korea.
i) The Management Committee
- Responsibility:
The Management Committee deliberates and decides on matters specified by the BOD regulations and
resolutions or specifically delegated by the BOD. The composition and operation of the management
committee are determined by the BOD.
- Authority
The Management Committee deliberates and decides on the following matters:
(A) General management
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Annual or mid to long-term management policy and strategy
Key management strategy
Business planning and restructuring
Establishment, relocation, and withdrawal of overseas branch and corporation
Initiating cooperation such as strategic partnership with foreign companies
Acquisition or disposal of domestic and overseas subsidiaries
Other major management matters
Establishment, relocation, and withdrawal of branches and operations
Appointment or dismissal of supervisors
Suspension or shutdown of production over 5% of the total production in the recent year
Licensing agreements and technology transfer, partnership in regards to technology of over 0.5% of the total equity
Acquisitions and transfers of patents related to new material and new technology of over 0.5% of the total equity
Collection and destruction of products corresponding to over 5% of the total sales in the recent business year
Contracting for over 5% of the total sales in the recent business year
Contracting or canceling of single sales agency and suppliers over 5% of the total sales in the recent business year
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16.
17.
18.
19.
20.
21.
Set basic principles of organization management
Decision making on basic principles and any changes related to wages, bonus, and fringe benefits
Appointments, dismissals and changes of transfer agent
Closing of shareholder register and setting reference date
Establishing corporate guidelines for business and management related activities
Donations over KRW 50 billion per donation. Donation to related parties between KRW 1 billion and KRW 5 billion
(B) Matters related to Finance
1.
2.
3.
4.
5.
6.
7.
8.
Acquisitions or disposals of equity investments with a value between 0.1% and/or less than 2.5% of the total equity
Direct overseas investments with a value of over 0.1% and/or less than 2.5% of the total equity
New debt guarantee (excluding extension of period) or collateral issuance with a value of over 0.1% and/or less
than 2.5% of the total equity
A. Collateral: Only in the case of providing collateral for others
B. Guarantee: Excludes performance guarantee (e.g., bid, contract, defect, difference guarantee) and tax
payment guarantee
New credit agreement contract (excluding extension of period) with a value of over 0.1% and/or less than 5% of
the total equity
Approval of related party transactions:
Related party transactions with affiliates involving cash (loans and payments), equity (stocks and bonds) or
assets (such as real estate and intangible property rights) with a value between KRW 1 billion and/or less than
KRW 5 billion, as defined in the Monopoly Regulation and Fair Trade Act
※ Excluding cases where existing contracts are renewed without significant change).
Issuance of Corporate Bond
Acquisition and disposal of real estate with a value of over 0.1% of the total equity, provided that the transaction
is with the third party
Any matters that the CEO deems necessary and important for the business (e.g., CAPEX)
(C) All other matters except for those delegated to the BOD and other committees in accordance with BOD regulations
ii) Related Party Transactions Committee
- Responsibility: Improve management transparency through establishment of a voluntary compliance system
- Authority
1) Right to receive reports on related party transactions:
The Committee can request reports on related party transactions with affiliates
※ According to the Monopoly Regulation and Fair Trade Act, the Related Party Transactions committee is
permitted to conduct preliminary reviews and approves on related party transactions over KRW 5 billion and
other transactions that are deemed as significant.
2) Right to order ex officio investigation of related party transactions
3) Right to propose corrective measures for related party transactions
iii)
Compensation Committee
- Responsibility: Provide transparent and objective decision making process related to remuneration of directors
- Authority
1) Propose remuneration limit of directors at annual general shareholders’ meeting
2) Establish the director remuneration system
3) Other matters delegated by the Board
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iv) CSR Committee
- Responsibility: Address social responsibilities of the Company and make contributions to public interest
- Authority
1) Make decisions on matters related to social contributions of the Company
2) Establish research groups under the committee, appoint researchers, and devise CSR management plan
3) Other matters delegated by the Board
(2) The BOD Committee Activities
※ The Audit Committee and Independent Director Recommendation Committee were excluded according to Corporate
Disclosure Guidelines set forth by the Financial Supervisory Service Authority of South Korea.

The Management Committee
Name
Date
Voting Results
① Patent license agreement
② Patent license agreement
③ Establishment of production base in the Republic of South
Africa
④ Product donations to Chung-nam Samsung Institute
Approved
Approved
Approved
Feb 19, 2014
① Technology license agreement
② Liquidation of a subsidiary
Approved
Approved
Mar 19, 2014
① Ownership sales of Samsung Bluewings
Approved
May 14, 2014
① Increase the limit on trade finance
② Exercise of voting rights for merger with affiliates
③ Donation
Approved
Approved
Approved
Jan 20, 2014
Management
Committee
Agenda
Attendance/Voting
Results of
Independent Directors
Approved
N/A
Jun 3, 2014
① Patent license agreement
② Closing of shareholder register for interim dividend
Approved
Approved
Jul 16, 2014
① Stake acquisition
② Stake acquisition
③ LED investment
Approved
Rejected
Approved
Jul 31, 2014
① Stake acquisition
② Patent license agreement
Approved
Approved
Aug 13, 2014
① Stake acquisition
② Memory investment
Approved
Approved
Sep 17, 2014
① Bid for real estate purchase
② S.LSI investment
③ Establishment of overseas marketing corporate entity
Approved
Approved
Approved
(All comprised of
executive directors)
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
The Related Party Transactions Committee
Name of independent directors
Date
Agenda
Voting
Results
In-Ho Lee
(Attendance: 80%)
Han-Joong Kim
(Attendance: 100%)
Kwang-Soo Song
(Attendance:
100%)
For/against
-
-
-
-
-
-
Did not attend
-
-
-
-
-
-
-
-
-
-
-
-
- Preliminary review on large-scale related party
transactions
Jan 23,
2014
1) Participation in Samsung BioLogics capital
raising
N/A
- Report on 4Q13 related party transactions
Feb 18,
2014
- Preliminary review on large-scale related party
transactions
1) Donation to Chung-nam Samsung Institute
N/A
- Preliminary review on large-scale related party
transactions
1) Renewal of the existing directors’ liability
insurance policy
Apr 28,
2014
2) Donation
N/A
3) Application for Venture Capital Union
- Report on 1Q14 related party transactions
-
- Preliminary review on large-scale related party
transactions
Jun 3,
2014
1) Disposal of Technology assets
2) Ownership investment
N/A
3) Rental contract with Samsung Display
- Preliminary review on large-scale related party
transactions
Jul 30,
2014
1) Approval of Samsung Asset Management
annual trade volume
2) Application for property insurance
3) Donation to Sungkyunkwan University
4) Donation to Samsung Science & Technology
Foundation
N/A
-
- Report on 2Q14 related party transactions
※ Agendas presented here are non-voting resolutions.
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
The Compensation Committee
Name of Independent Directors
Date
Voting
Results
Agenda
Kwang-Soo Song
(Attendance: 100%)
In-Ho Lee
(Attendance: 50%)
Byeong-Gi Lee
(Attendance: 100%)
For/Against
Feb 13, Appointment of the head of compensation
2014 committee
Approved
For
For
For
Feb 18, Preliminary review on remuneration limit
2014 for Directors
Approved
For
Did not attend
For

The CSR Committee
Name of Independent Directors
Date
Agenda
Voting
Results
Byeong-Gi Lee
(Attendance:
100%)
In-Ho Lee
(Attendance:
100%)
Han-Joong Kim
(Attendance:
100%)
Kwang-Soo
Song
(Attendance:
100%)
Eun-Mee
Kim
(Attendance:
50%)
For/Against
- Establishment of research
Jan 24,
2014
Approved
For
For
For
For
-
-
-
-
Did not attend
-
-
-
-
committee for the environmental
safety and appointment of
research members
- Report on research results of
May 30,
2014
For
research committee for the
advancement of corporate
ecosystem
- Report on research committee for
environmental safety
N/A
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D. Director Independence
(1) Appointment of Directors
Directors are appointed by shareholders at the annual general meeting of shareholders. The Board is responsible for
nominating candidates for Executive Directors, and the Independent Director Recommendation Committee nominates
independent director candidates, which are presented to shareholders as separate agendas and voted on at the annual
general meeting.
The Board submits shareholders’ proposal for appointment of Directors at the annual general shareholder meeting as a
separate agenda if the proposal satisfies related laws and regulations.
The Board of Directors appointed by shareholders is as follows:
[As of September 30, 2014]
Position
Name
Nominated by
Responsibility
Executive
Director
Oh-Hyun Kwon
BOD
Chairman of BOD
Head of DS division
Executive
Director
Boo-Keun Yoon
BOD
Head of CE division
Executive
Director
Jong-Kyun Shin
BOD
Head of IM division
Executive
Director
Sang-Hoon Lee
BOD
CFO, Head of Corporate
Management Office
In-Ho Lee
Independent
Director
Recommendation
Committee
Overall management
of the Company
Han-Joong Kim
Independent
Director
Recommendation
Committee
Overall management
of the Company
Kwang-Soo Song
Independent
Director
Recommendation
Committee
Overall management
of the Company
Byeong-Gi Lee
Independent
Director
Recommendation
Committee
Overall management
of the Company
Eun-Mee Kim
Independent
Director
Recommendation
Committee
Overall management
of the Company
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Transactions with
the Company
Relation with the
controlling
shareholder
N/A
N/A
※ Oh-Hyun Kwon, Boo-Keun Yoon, and Jong-Kyun Shin are appointed as the Represented Directors of the Company in accordance
with the Commercial Act of Korea.
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(2) Independent Director Recommendation Committee
The Independent Director Recommendation Committee assesses the independence and ability of potential candidates and
recommends selected candidates to be appointed at the annual general meeting of shareholders. The committee is
composed of three Independent Directors (Han-Joong Kim, Byeong-Gi Lee, and Eun-Mee Kim) and one Executive
Director (Oh-Hyun Kwon) based on related laws that states more than a majority of members should be independent
directors in accordance with clause 4 of Article 542-8 of the Commercial Law.
(3) Professionalism of Independent Directors
There are designated support group in the Company that supports independent directors to perform their duties
professionally in the BOD and the Board committees. The support group provides reference materials on the meeting
agendas in advance so Directors can thoroughly review them before the Board and committee meetings. If necessary, the
support group provides separate information sessions on any agenda and frequently provides updates on other key
management issues. In addition, the support group conducts internal education programs which allow Independent
Directors to visit and conduct inspect domestic and overseas business sites and receive reports of the current state of
business operation.
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2. Audit System
A. Profile of the member of the Audit Committee
As of September 30, 2014, the Company operates an Audit Committee consisting of three (3) Independent Directors.
Name
In-Ho Lee
Han-Joong Kim
Kwang-Soo Song
Career
Note
- Corporate Advisor, Shinhan Bank (2009-2011)
- Chief Executive Officer, Shinhan Financial Group (2005-2009)
- President & CEO, Shinhan Bank (1999-2003)
Independent director
- Professor Emeritus, Yonsei University (2012~Present)
- President, Yonsei University (2008-2012)
- Professor, Dept. of Preventive Medicine & Public Health (1982-2012)
Independent director
- Advisor, Kim & Chang Law Office (2007-Present)
- Prosecutor General, Supreme Prosecutors’ Office (2003-2005)
- Chief Prosecutor, Daegu High Prosecutors’ Office (2002-2003)
Independent director
B. Audit Committee Independence
Pursuant to related laws and the Articles of Incorporation, the Company has prepared internal audit regulations which
encompass composition, operation, authority, and responsibility of the Audit Committees to carry out audit related
activities.
The Audit Committee is exclusively composed of Independent Directors appointed at the annual general shareholder
meeting and includes audit and financial experts. Also, the Audit Committee satisfies requirements of relevant laws.
(e.g., The stipulation that the role of head of the committee be held by an Independent Director.
The Audit Committee reviews accounting documents including financial statements and audit process related documents
presented by the external auditor, and if needed, requests the external auditor to perform additional reviews on accounting
books and records. To ensure the reliability of accounting related disclosures, the audit committee receives and reviews a
report on internal accounting control systems prepared by internal accounting managers. In addition, the Committee
attends the BOD meetings and other significant meetings. The Committee receives reports on deliberations of the
Management Committee and on business performance from Directors and requests additional reviews and
supplementation of data as needed.
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C. Major Activities of the Audit Committee
See the table below for major activities of the Audit Committee by reporting date.
Name of independent directors
Name
Date
Agenda
Voting
Results
In-Ho Lee
(Attendance: 75%)
Han-Joong Kim
(Attendance: 100%)
Kwang-Soo Song
(Attendance: 100%)
For/Against
Audit
Committee
Jan 23,
2014
- 2013 financial and business reports
- Report on 2013 internal accounting management
system activities
- Report on 4Q13 non-audit activities
- Report on appointment plan of external auditor
- Report on 2013 audit activities
-
Feb 18,
2014
- Review and approval of appointment of external auditor
- Review of the 2013 AGM agenda
- Assessment of 2013 activities of internal compliance
system
Approved
-
Apr 28,
2014
- Report on the 1Q14 financial statements and business
report
- Report on 1Q14 non-audit activities
-
Jul 30,
2014
- Report on the 1H14 financial statements and business
report
- Report on 2Q14 non-audit activities
- Report on 1H14 audit activities
For
-
For
-
-
-
-
-
-
-
-
-
-
-
-
Did not Attend
3. Voting rights of shareholders
A. Voting method
The Company has not adopted the concentrated voting system, voting in writing, or electronic voting system.
B. Minority Shareholder Right
No minority shareholder right was exercised during the reporting period.
C. Competition over management right
No competition over management rights occurred during the reporting period.
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4. Affiliates & Subsidiaries
A. Affiliates
- Name of affiliated group: Samsung Group
As at September 30, 2014, Samsung Group had a total of 70 domestic affiliates. Compared to December 31, 2013, four (4)
new affiliate (Samsung Welstory, Seoul Lakeside CC, Samsung Card Customer Service, and Shilla Stay) were included
and nine (9) (Samsung Corning Precision Materials, Samsung SNS, Global Tech, 365Homecare, Samsung Petrochemical,
Cheil Industries, World Cyber Games, SMP, and SKKU dormitory) were excluded. Among Samsung Group’s 70 affiliates,
16 including Samsung Electronics are listed, and 54 are unlisted.
[As of September 30, 2014]
No. of
affiliates
Name of affiliates
Samsung C&T, Samsung Electronics, Samsung SDI, Samsung Techwin, SEMCO, Samsung Heavy Industries,
Listed
16
Samsung Card, Samsung Life Insurance, Hotel Shilla, Samsung Fire & Marine Insurance, Samsung Securities,
Samsung Fine Chemicals, Samsung Engineering, S1, Cheil Worldwide, CREDU
Cheil Industries(formerly Samsung Everland), Samsung SDS, Samsung General Chemicals, Samsung Total
Petrochemicals, Samsung Lions, SERI, STECO, Samsung Thales, SEMES, Samsung Electronics Sales, Samsung
Electronics Service, Samsung Electronics Logitech, Hantok Chemicals, CVnet Corporation, Care Camp, Allat.,
SECUI, Gacchinet, Open Tide Korea, Samsung Futures, Samsung Venture Investment Corporation, Samsung Asset
Unlisted
54
Management, Saengbo, SD Flex, Samsung Claim Adjustment Service, Samsung Fire & Marine Insurance Service, SCore, Suwon Samsung Bluewings FC, Human TSS, RAY, Songdo Land Mark City, S-1CRM, OpenHands, S-EnPol,
Samsung Medison, Samsung Biologics, STM, Nuri Solution, Colombo Korea, Samsung Life Service, Miracom, SU
Materials, Natural9, Samsung Display, Samsung Bioepis, Samsung Corning Advanced Glass , Daejung Offshore Wind
Power Co., Ltd., Samsung SRA Asset Management, Jeongahm Wind Power, Samsung SGL Carbon Composite
Materials, Samsung Welstory, Samsung Card Customer Service, Seoul Lakeside CC, Shilla Stay
Total
70
※ The former Cheil Industries merged with Samsung SDI in July 2014, and Samsung Everland has been renamed as Cheil Industries
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B. Ownership Status of Affiliates and Subsidiaries
1) Domestic
Investee
Investor
Samsung
C&T Corp
Samsung C&T
Corporation
Samsung
Electronics
Samsung SDI
Samsung
Electronics
Samsung
SDI
Samsung
ElectroMechanics
Samsung
Heavy
Industries
Samsung
Techwin
4.1
Hotel Shilla
4.3
19.6
23.7
7.4
7.8
17.6
25.5
5.1
0.4
0.1
0.1
Samsung Electromechanics
2.4
Cheil Industries
0.1
Samsung
Engineering
Cheil
Worldwide
Samsung
Fine
Chemicals
S1
Corpo
ration
Samsung
SDS
12.6
5.6
17.1
2.6
8.4
22.6
13.1
14.7
11.0
0.3
Cheil
Industries
1.5
8.0
7.9
4.0
Samsung Heavy
Industries
Samsung
Techwin
0.1
Cheil Worldwide
0.1
Samsung Fine
Chemicals
Samsung General
Chemicals
Hotel Shilla
2.2
S1 Corporation
SERI
Samsung SDS
Samsung Life
Insurance
0.5
7.5
0.2
0.0
3.5
0.6
7.7
0.0
0.2
0.0
5.5
Samsung Fire &
Marine Insurance
4.8
1.3
0.0
0.0
0.0
0.0
0.0
1.1
0.0
0.0
1.0
2.0
3.1
Samsung
Securities.
Samsung Card
1.3
1.3
3.0
1.9
5.0
SDC
Samsung
BioLogics
SVIC #6
Total
12.7
12.9
19.8
23.7
24.2
32.4
17.3
22.0
18.5
31.1
20.7
47.5
18.5
※ (% of Ownership; As of September 30, 2014; Based on Common shares)
Samsung Electronics 2014 Interim Business Report
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Investee
Investor
Samsung C&T
Corporation
Samsung
Electronics
Samsung SDI
Samsung Electromechanics
Samsung
General
Chemicals
Samsung
Total
Petrochemi
cals
Hantok
Chemicals
Samsung
Lions
37.3
7.5
1.0
5.3
27.5
29.8
13.1
15.0
29.6
9.0
12.5
23.8
Cheil
Industries
STECO
51.0
SEMES
91.5
Samsung
Electronics
Service
Samsung
Electronics
Sales
99.3
100.0
Suwon
Samsung
Bluewings
FC
Samsung
Electronics
Logitech
100.0
Samsung
Display
Ray
84.8
15.2
2.0
Samsung Heavy
Industries
Samsung
Techwin
Cheil
Worldwide
Samsung Fine
Chemicals
SERI
1.0
22.7
0.3
3.0
3.1
Samsung General
Chemicals
100.0
50.0
50.0
Hotel Shilla .
S1 Corporation
SERI
Samsung SDS
Samsung Life
Insurance
14.8
Samsung Fire &
Marine Insurance.
Samsung
Securities
Samsung Card
SDC
Samsung
BioLogics
SVIC #6
Total
64.6
90.8
50.0
50.0
67.5
100.0
51.0
91.5
99.3
100.0
100.0
100.0
100.0
64.6
※ (% of Ownership; As of September 30, 2014; Based on Common shares)
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Investee
Investor
Samsung
Medison
Samsung C&T
Corporation
Samsung
Electronics
Samsung
BioLogics
Samsung
BioEpis
Samsung
Corning
Advanced
Glass
SU
Materials
Samsung
Thales
CVnet
5.7
68.5
Care Camp
40.1
Songdo
Landmark
City
41.4
Seoul
Lakeside
CC
SD Flex
Colombo
Korea
Natural
80.0
45.7
Samsung SDI
50.0
Samsung Electromechanics
Cheil
Industries
45.7
20.0
100.0
51.0
100.0
51.0
Samsung Heavy
Industries
Samsung Techwin
50.0
Cheil Worldwide
Samsung Fine
Chemicals
Samsung General
Chemicals
Hotel Shilla
S1 Corporation
SERI
Samsung SDS
9.4
Samsung Life
Insurance
Samsung Fire &
Marine Insurance.
Samsung
Securities
Samsung Card
SDC
Samsung
BioLogics
50.0
50.0
50.0
50.0
90.3
SVIC #6
Total
68.5
97.1
90.3
50.0
49.5
0.0
41.4
100.0
50.0
※ (% of Ownership; As of September 30, 2014; Based on Common shares)
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Investee
Investor
Samsung
Welstory
Daejung
Offshore
Wind
Power
Jeongahm
Wind
Power
SECUI
Human
TSS
S-1CRM
S-EnPol
STM
CREDU
Gacchinet
Open
Tide
Korea
S-Core
OpenHands
Samsung C&T
Corporation
Samsung Electronics
13.8
Samsung SDI
Samsung Electromechanics
Cheil
Industries
100.0
Samsung Heavy
Industries
8.7
50.1
21.0
50.0
Samsung Techwin
9.8
Cheil Worldwide
Samsung Fine
Chemicals
100.0
58.0
Samsung General
Chemicals
Hotel Shilla
52.2
S1 Corporation
100.0
93.4
1.1
SERI
4.3
Samsung SDS
Samsung Life
Insurance
15.2
5.2
47.2
10.5
70.2
94.8
100.0
81.1
94.8
100.0
0.0
Samsung Fire &
Marine Insurance.
Samsung Securities
1.6
Samsung Card
3.3
SDC
Samsung BioLogics
SVIC #6
Total
100.0
50.1
50.0
65.2
100.0
93.4
100.0
71.8
62.4
41.5
※ (% of Ownership; As of September 30, 2014; Based on Common shares)
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Investee
Investor
Miracom
Nuri Solution
Samsung SGL
Carbon
Composite
Materials
Shilla
Stay
Samsung Life
Insurance
Saengbo
Samsung Life
Service
Samsung SRA Samsung Fire
Asset
& Marine
Management
Insurance
Samsung
Claim
Adjustment
Service
Samsung Fire
& Marine
Insurance
Service
Samsung C&T
Corporation
Samsung
Electronics
Samsung SDI
Samsung Electromechanics
Cheil
Industries
19.3
Samsung Heavy
Industries
Samsung
Techwin
Cheil Worldwide
Samsung Fine
Chemicals
Samsung General
Chemicals
50.0
Hotel Shilla
100.0
S1 Corporation
SERI
Samsung SDS
100.0
100.0
Samsung Life
Insurance
50.0
99.8
100.0
15.0
Samsung Fire &
Marine Insurance.
99.9
100.0
99.9
100.0
Samsung
Securities
Samsung Card
SDC
Samsung
BioLogics
SVIC #6
Total
100.0
100.0
50.0
100.0
19.3
50.0
99.8
100.0
15.0
※ (% of Ownership; As of September 30, 2014; Based on Common shares)
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Investee
Investor
Samsung C&T
Corporation
Samsung Securities
Samsung Card
Samsungcard
Customer Service
Allat
Samsung Asset
Management
Samsung Futures
Samsung Venture
Investment
0.3
Samsung
Electronics
37.5
16.3
Samsung SDI
16.3
Samsung Electromechanics
17.0
Cheil
Industries
30.0
Samsung Heavy
Industries
17.0
Samsung Techwin
16.7
Cheil Worldwide
Samsung Fine
Chemicals
Samsung General
Chemicals
Hotel Shilla
S1 Corporation
SERI
Samsung SDS
Samsung Life
Insurance
11.1
Samsung Fire &
Marine Insurance.
8.0
34.4
96.8
Samsung
Securities
Samsung Card
30.0
100.0
60.0
100.0
99.9
16.7
99.9
100.0
SDC
Samsung BioLogics
SVIC #6
Total
19.4
71.9
96.8
※ (% of Ownership; As of September 30, 2014; Based on Common shares)
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2) Overseas
Investor
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Investee
MYODO METAL CO., Ltd.
Samsung C&T Japan Corporation
Samsung C&T America Inc.
Samsung Finance Corporation.
Samsung E&C America, Inc.
SAMSUNG OIL & GAS USA CORP
Samsung Renewable Energy Inc.
SCNT Power Norte S. De R.L. de C.V.
QSSC, S.A. de C.V.
Samsung C&T Oil & Gas Parallel
Samsung C&T Automation Inc.
Samsung C&T Canada Ltd.
Samsung C&T Deutchland GmbH
Samsung C&T U.K. Ltd.
Xiod Distribution
Samsung C&T France S.A.S
Samsung C&T ECUK Limited
Whessoe Project Limited
SCNT Investment Atlantic SPRL
POSS-SLPC, s.r.o
Solluce Romania 1 B.V.
SAM investment Manzanilo.B.V
Solluce Slovenia 1 B.V.
Ecosolar OOD
Ecoenergy Solar OOD
Agirlplam EOOD
Fishtrade EOOD
Manageprojekt EOOD
Solar Park EOOD
Veselinovo Energy OOD
Samsung C&T Construction Hunga
Samsung C&T (KL) Sdn.,Bhd.
Samsung C&T Malaysia SDN. BHD
Erdsam Co., Ltd.
Samsung Chemtech
S-print Inc.
Cassava Investment Korea Pte. Ltd.
P.T. Samsung Development
Samsung Development (Thailand) Co., Ltd.
Samsung C&T Thailand Co., Ltd.
Cheil Holding Inc.
Samsung Const. Co. Phils., Inc.
Samsung Design Philippines Inc.
Samsung Oil & Gas(Timor Sea 06-102) Ltd.
Samsugn Oil & Gas Australia PTY. Ltd.
PT. INSAM BATUBARA ENERGY
Samsung C&T India Pte., Ltd.
Samsung C&T Corporation India
Malaysia Samsung Steel Center Sdn.Bhd
Samsung C&T Singapore Pte., Ltd.
S&G Biofuel PTE.LTD
SAMSUNG C&T Mongolia LLC.
Samsung C&T Eng.&Const. Mogolia
SAMSUNG C&T HONGKONG Ltd.
GUANGDONG XINGPU STEEL CENTER CO.,LTD
Samsung C&T Taiwan Co., Ltd.
Samsung Precision Stainless Steel (pinghu) Co., Ltd.
Samsung C&T (Shanghai) Co., Ltd.
Samsung Nigeria Co., Ltd.
LOBINAVE - Estaleiro Naval do Lobito, Ltda.
SAMSUNG C&T CORPORATION SAUDI ARABIA
Samsung Electronics 2014 Interim Business Report
Ownership
100.0
100.0
100.0
80.0
100.0
90.0
100.0
100.0
60.0
100.0
70.0
100.0
100.0
100.0
25.0
100.0
100.0
100.0
100.0
50.0
80.0
53.3
80.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
51.7
40.0
29.7
100.0
33.0
44.0
40.0
25.0
100.0
100.0
100.0
90.0
100.0
100.0
70.0
100.0
50.5
70.0
100.0
100.0
51.6
100.0
55.0
100.0
99.9
40.0
100.0
71 / 152
Investor
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T Corporation
Samsung C&T America Inc.
Samsung C&T America Inc.
Samsung C&T America Inc.
Samsung C&T America Inc.
Samsung C&T America Inc.
Samsung C&T America Inc.
Samsung C&T America Inc.
Samsung E&C America, INC
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Renewable Energy Inc.
Samsung Green repower, LLC
Kingston Solar GP Inc.
K2 Wind Ontario Inc.
SP Armow Wind Ontario GP Inc
Samsung C&T Oil & Gas Parallel
Samsung C&T Oil & Gas Parallel
SRE GRW EPC GP Inc.
SRE SKW EPC GP Inc.
PLL Holdings LLC
SRE GRW LP Holdings LP
SRE SKW LP Holdings LP
SRE WIND PA GP INC.
SRE GRS Holdings GP Inc.
SRE GRS Holdings GP Inc.
SRE K2 EPC GP Inc.
SRE K2 LP HOLDINGS LP
SRE KS HOLDINGS GP INC.
SRE KS HOLDINGS GP INC.
Investee
Samsung C&T Chile Copper SpA
SCNT Power Kelar Inversones Li
Samsung C&T do BRASIL CONSTRUCTORA LTDA.
Samsung C&T Corporation Rus LLC
KSI LLP
JSC BALKHASH THERMAL POWER PLA
Samsung SDI America, Inc.
Samsung SDI (Malaysia) SDN. BHD.
Samsung SDI (Hong Kong) Ltd.
Samsung SDI Brasil Ltda.
Beijing Samsung Real Estate Co., Ltd.
Meadowland Distribution
SAMSUNG OIL & GAS USA CORP
Samsung Green repower, LLC
Samsung Solar Construction Inc.
QSSC, S.A. de C.V.
Samsung C&T Automation Inc.
S-print Inc.
Samsung E&C RADIUS, Inc.
SRE GRW EPC GP Inc.
SRE GRW EPC LP
SRE SKW EPC GP Inc.
SRE SKW EPC LP
SRE GRW LP Holdings LP
SRE SKW LP Holdings LP
SRE WIND PA GP Inc.
SRE WIND PA LP
SRE GRS Holdings GP Inc.
SRE GRS Holdings LP
SRE K2 EPC GP Inc.
SRE K2 EPC LP
SRE K2 LP HOLDINGS LP
SRE KS HOLDINGS GP Inc.
SRE KS HOLDINGS LP
SOUTHGATE SOLAR GP Inc.
SOUTHGATE SOLAR LP
WINDSOR SOLAR GP Inc.
WINDSOR SOLAR LP
SRE Belle River LP Holdings LP
SRE Armow EP CGP Inc.
SRE Armow EP CLP
SRE Armow LP Holdings LP
SRE Wind GP Holding Inc.
SP Ontario Wind Development LP
SP Southgate Wind LP
SOLAR PROJECTS SOLUTIONS,LLC
Kingston Solar LP Inc.
K2 Wind Ontario LP Inc.
SP Armow Wind Ontario LP Inc.
PLL Holdings LLC
PLL E&P LLC
SRE GRW EPC LP
SRE SKW EPC LP
Parallel Petroleum LLC
Grand Renewable Wind LP Inc.
South Kent Wind LP Inc.
SRE WIND PA LP
Grand Renewable Solar GP Inc.
SRE GRS Holdings LP
SRE K2 EPC LP
K2 Wind Ontario LP
Kingston Solar GP Inc.
SRE KS HOLDINGS LP
Samsung Electronics 2014 Interim Business Report
Ownership
100.0
99.0
100.0
100.0
25.0
57.5
8.3
6.4
2.4
0.0
10.0
100.0
10.0
100.0
100.0
20.0
30.0
24.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0
50.0
66.0
0.0
0.0
0.0
83.6
90.0
0.0
0.0
61.0
44.5
50.0
0.0
50.0
0.0
0.0
33.3
50.0
0.0
72 / 152
Investor
SRE KS HOLDINGS LP
SOUTHGATE SOLAR GP INC.
WINDSOR SOLAR GP INC.
SRE Belle River LP Holdings LP
SP Belle River Wind GP Inc
SRE Armow EP CGP Inc.
SRE Armow LP Holdings LP
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SRE Wind GP Holding Inc.
SP Ontario Wind Development GP
South Kent Wind GP Inc.
Grand Renewable Wind GP Inc.
Samsung C&T Deutchland GmbH
Samsung C&T Deutchland GmbH
Samsung C&T Deutchland GmbH
Samsung C&T Deutchland GmbH
Samsung C&T Deutchland GmbH
Samsung C&T Deutchland GmbH
Samsung C&T Deutchland GmbH
Samsung C&T U.K. Ltd.
Samsung C&T U.K. Ltd.
Samsung C&T France S.A.S
Solluce Romania 1 B.V.
SAM investment Manzanilo.B.V
Solluce Slovenia 1 B.V.
Samsung C&T (KL) Sdn.,Bhd.
Cassava Investment Korea Pte.
Cassava Investment Korea Pte.
Samsung C&T Thailand Co., Ltd
Cheil Holding Inc.
Samsung C&T Singapore Pte. Ltd.
Samsung C&T Singapore Pte. Ltd.
Samsung C&T Singapore Pte. Ltd.
Samsung C&T Singapore Pte. Ltd.
Samsung C&T Singapore Pte. Ltd.
Samsung C&T Singapore Pte. Ltd.
S&G Biofuel PTE.LTD
S&G Biofuel PTE.LTD
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG C&T HONGKONG Ltd.
Samsung (China) Logistics Ltd.
Samsung (China) Logistics Ltd.
Samsung C&T Chile Copper SpA
S.C. Otelinox S.A
Samsung Electronics
Samsung Electronics
Samsung Electronics
Investee
Kingston Solar LP Inc.
SOUTHGATE SOLAR LP
WINDSOR SOLAR LP
SP Belle River Wind LP
SP Belle River Wind LP
SRE Armow EPC LP
SP Armow Wind Ontario LP
K2 Wind Ontario Inc.
SP Armow Wind Ontario GP Inc.
SP Southgate Wind GP
SRE GRW LP Holdings LP
SRE SKW LP Holdings LP
SRE K2 LP HOLDINGS LP
SRE Belle River LP Holdings LP
SP Belle River Wind GP Inc.
SRE Armow LP Holdings LP
SP Ontario Wind Development GP
South Kent Wind GP Inc.
Grand Renewable Wind GP Inc.
SP Ontario Wind Development LP
South Kent Wind LP Inc.
Grand Renewable Wind LP Inc.
Samsung C&T Italia S.A.R.L
SCNT Investment Atlantic SPRL
POSS-SLPC, s.r.o
Solluce Romania 1 B.V.
Solluce Slovenia 1 B.V.
S.C. Otelinox S.A
KSI LLP
Xiod Distribution
Samsung Nigeria Co., Ltd.
Comptoir Des Produits Inoxydables S.A.S.
LJG GREEN SOURCE ENERGY ALPHA
Terminal KMS de GNL S. de R.L de C.V
ZE Solar 1 D.O.O.
SS KUKDONG JASATERA J/V
PT. Cahaya Borneo Sukses Agros
PT. Cassava Borneo Sukses Plan
Samsung Development (Thailand) Co., Ltd.
Samsung Const. Co. Phils.,Inc.
Samsung Chemtech
S-print Inc.
Cassava Investment Korea Pte. Ltd.
PT. INSAM BATUBARA ENERGY
Malaysia Samsung Steel Center Sdn.Bhd
S&G Biofuel PTE.LTD
PT. Gandaerah Hendana
PT. Inecda
Samsung C&T Thailand Co., Ltd.
SAMSUNG (TIANJIN) INTERNATIONAL TRADING CO., Ltd.
SAMSUNG TRADING (SHANGHAI)CO., Ltd.
Karson Industrial Co., Ltd.
SAMSUNG TRADING (SHENZHEN) CO., Ltd.
Samsung Precision Stainless Steel(pinghu) Co., Ltd.
Samsung (China) Logistics Ltd.
Samsung Corporation (Gaungzhou) Limited.
Samsung Logistics (Tianjin) Ltd.
SAMSUNG TRADING (SHENZHEN) CO., Ltd.
Pampa Camarones S.A.
Comptoir Des Produits Inoxydables S.A.S.
Samsung Japan Corporation
Samsung R&D Institute Japan Co. Ltd.
Samsung Electronics America Inc.
Samsung Electronics 2014 Interim Business Report
Ownership
25.0
0.0
0.0
50.0
0.0
0.0
50.0
50.0
50.0
50.0
0.0
0.0
0.0
0.0
50.0
0.0
50.0
50.0
50.0
0.0
0.0
0.0
100.0
0.0
20.0
20.0
20.0
94.3
25.0
75.0
0.1
12.5
78.0
37.5
70.0
70.0
49.0
49.0
67.0
75.0
48.3
16.0
12.7
10.0
30.0
12.6
95.0
95.0
13.2
100.0
100.0
100.0
100.0
45.0
100.0
100.0
100.0
100.0
46.5
87.5
100.0
100.0
100.0
73 / 152
Investor
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung Electronics
Samsung BioEpis
Samsung Display
Samsung Display
Samsung Display
Samsung Display
Investee
Samsung Electronics Canada Inc.
Samsung Electronics Mexico S.A. De C.V.
Nvelo Inc.
Samsung Electronics (UK) Ltd.
Samsung Electronics(London) Ltd.
Samsung Electronics Holding GmbH
Samsung Electronics Iberia, S.A.
Samsung Electronics France S.A.S
Samsung Electronics Hungarian RT.
Samsung Electronics Italia S.P.A.
Samsung Electronics Europe Logistics B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Overseas B.V.
Samsung Electronics Polska, SP.Zo.o
Samsung Electronics Portuguesa S.A.
Samsung Electronics Nordic Aktiebolag
Samsung Electronics Austria GmbH
Samsung Electronics Slovakia s.r.o
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Display (M) Sdn Bhd
Samsung Electronics (M) Sdn. Bhd.
Samsung Vina Electronics Co., Ltd.
Samsung Asia Private Ltd.
Samsung India Electronics Private Ltd.
Samsung R&D Institute India-Bangalore Private Limited
Samsung Electronics Australia Pty. Ltd.
PT Samsung Electronics Indonesia
Thai Samsung Electronics Co., Ltd.
Samsung Malaysia Electronics (SME) Sdn. Bhd.
Samsung Electronics Hong Kong Co., Ltd.
Suzhou Samsung Electronics Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung Electronics Suzhou Semiconductor Co., Ltd.
Samsung Electronics (Shandong) Digital Printing Co., Ltd.
Samsung Electronics Huizhou Co., Ltd.
Tianjin Samsung Electronics Co., Ltd.
Samsung Electronics Taiwan Co., Ltd.
Tianjin Samsung Telecom Technology Co., Ltd.
Shanghai Samsung Semiconductor Co., Ltd.
Samsung Electronics Suzhou Computer Co., Ltd.
Shenzhen Samsung Electronics Telecommunication Co., Ltd.
Samsung Electronics Shanghai Telecommunication Co., Ltd.
Samsung Semiconductor (China) R&D Co., Ltd.
Samsung (China) Semiconductor Co., Ltd.
Samsung Electronics Hainan Fiberoptics Co., Ltd
Samsung Gulf Electronics Co., Ltd.
Samsung Electronics Egypt S.A.E
Samsung Electronics South Africa(Pty) Ltd.
Samsung Electronics Latinoamerica (Zona Libre)
Samsung Electronica da Amazonia Ltda.
Samsung Electronics Argentina S.A.
Samsung Electronics Chile Ltda.
Samsung Electronics Rus Company LLC
Samsung Electronics Rus Kaluga LLC
Samsung Russia Service Centre LLC
Samsung SDI Brasil Ltda.
Tianjin Samsung LED Co., Ltd.
Tianjin Samsung Opto-Electronics Co., Ltd.
SAMSUNG BIOEPIS UK LIMITED
Intellectual Keystone Technology LLC.
Samsung Display Slovakia s.r.o.
Samsung Display Bac Ninh
Samsung Display Suzhou Co., Ltd.
Samsung Electronics 2014 Interim Business Report
Ownership
100.0
63.6
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
55.7
100.0
75.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
91.8
100.0
100.0
69.1
100.0
100.0
87.1
89.6
48.2
100.0
90.0
100.0
73.7
95.0
100.0
100.0
100.0
100.0
100.0
0.1
100.0
100.0
87.0
98.0
4.1
100.0
100.0
100.0
0.1
100.0
82.0
100.0
41.9
100.0
100.0
100.0
74 / 152
Investor
Samsung Display
Samsung Display
Samsung Display
Samsung Display
SEMES
SEMES
Samsung Medison
Samsung Medison
Samsung Medison
Samsung Electronics America, Inc.
Samsung Electronics America, Inc.
Samsung Electronics America, Inc.
Samsung Electronics America, Inc.
Samsung Electronics America, Inc.
Samsung Electronics America, Inc.
Samsung Electronics America, Inc.
Samsung Electronics America, Inc.
Samsung Electronics America, Inc.
NexusDX, Inc.
Samsung Semiconductor, Inc.
Samsung Semiconductor, Inc.
SamsungElectronicsCanadaInc
Printer On Inc
Printer On Inc
Printer On Inc
Samsung International, Inc.
Samsung Telecommunications America LLC.
Samsung Electronics Mexico S.A. De C.V.
Samsung Electronics (UK) Ltd.
Samsung Electronics Holding GmbH
Samsung Electronics Holding GmbH
Samsung Electronics Hungarian RT.
Samsung Electronics Hungarian RT.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Benelux B.V.
Samsung Electronics Austria GmbH
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Europe Holding Cooperatief U.A.
Investee
Samsung Suzhou LCD Co., Ltd.
Samsung Display Dongguan Co., Ltd.
Samsung Display Tianjin Co., Ltd.
Novaled GmbH
SEMES America, Inc.
SEMES (XIAN) Co., Ltd.
SonoAce Deutschland GmbH
Samsung Medison India Private Ltd.
Samsung Medison Shanghai Medical Instrument Co., Ltd.
NexusDX, Inc.
NeuroLogica Corp.
Samsung Receivables Corporation
Quietside
Smart Things
Samsung Semiconductor, Inc.
Samsung Information Systems America, Inc.
Samsung International, Inc.
Samsung Telecommunications America LLC.
Nanogen Recognomics GmbH
Grandis, Inc.
Samsung Austin Semiconductor LLC.
PrinterOn, Inc.
1397011 Ontario Ltd.
Printer On America Corporation
Printer On Europe Limited
Samsung Mexicana S.A. de C.V
Samsung Receivables Corporation
Samsung Electronics Digital Appliance Mexico, SA de CV
Samsung Semiconductor Europe Limited
Samsung Semiconductor Europe GmbH
Samsung Electronics GmbH
Samsung Electronics Czech and Slovak s.r.o.
Samsung Electronics Slovakia s.r.o
Samsung Electronics Mexico S.A. De C.V.
SAMSUNG ELECTRONICS BALTICS SI
Samsung Electronics West Africa
Samsung Electronics East Africa
Samsung Electronics Egypt S.A.E
Samsung Electronics Israel Ltd.
Samsung Electronics Tunisia S.A.R.L
Samsung Electronics Pakistan(Private) Ltd.
Samsung Electronics South Africa
Samsung Electronics Turkey
Samsung Semiconductor Israel R&D Center, Ltd.
Samsung Electronics Levant Co., Ltd.
Samsung Electronics Morocco SARLAU
Samsung Electronics Venezuela, C.A.
Samsung Electronica da Amazonia Ltda.
Samsung Electronics Chile Ltda.
Samsung Electronics Peru S.A.C.
Samsung Electronics Russia LLC
Samsung Electronics Ukraine LLC
Samsung Electronics Ukraine Company LLC
Samsung R&D Institute Rus LLC
Samsung Electronics Kazakhstan LLP
Samsung Electronics KZ and Central Asia LLP
Samsung Electronics Switzerland GmbH
Samsung Electronics Czech and Slovak s.r.o.
Samsung Electronics Romania LLC
Samsung Electronics Poland Manufacturing SP.Zo.o
Samsung Electronics Greece S.A.
Samsung Nanoradio Design Center
Samsung Denmark Research Center ApS
Samsung Electronics 2014 Interim Business Report
Ownership
60.0
100.0
95.0
9.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
40.1
100.0
100.0
100.0
100.0
100.0
100.0
60.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
59.9
100.0
100.0
100.0
100.0
30.0
44.3
36.4
100.0
100.0
100.0
99.9
100.0
99.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
13.0
95.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
70.0
100.0
100.0
100.0
100.0
100.0
75 / 152
Investor
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Nanoradio Design Center
Samsung Electronics Display (M) Sdn. Bhd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
Samsung Asia Private Ltd.
PT Samsung Electronics Indonesia
Samsung Electronics Hong Kong Co., Ltd.
Suzhou Samsung Electronics Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung (CHINA) Investment Co., Ltd.
Samsung Gulf Electronics Co., Ltd.
Samsung Electronics Morocco SARLAU
Samsung Electronics Latinoamerica (Zona Libre)
Samsung Electronics Latinoamerica (Zona Libre)
Samsung Electronics Latinoamerica (Zona Libre)
Samsung Electronica da Amazonia Ltda.
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI
Samsung SDI America, Inc.
Investee
Samsung France Research Center SARL
Samsung Cambridge Solution Centre Limited
Novaled GmbH
Nanoradio Hellas AE
Tianjin Samsung Electronics Co., Ltd.
Samsung Electronics Japan Co., Ltd.
Samsung Electronics Display (M) Sdn. Bhd.
Samsung Electronics New Zealand Limited
Samsung Electronics Philippines Corporation
Samsung R&D Institute BanglaDesh
Samsung Electronics Vietnam Co., Ltd.
Samsung Telecommunications Malaysia Sbn. Bhd.
Samsung Electronics Vietnam THAINGUYEN Co., Ltd.
Samsung SDI (Malaysia) SDN. BHD.
Samsung Electro-Mechanics Thailand Co., Ltd.
iMarket Asia Co., Ltd.
PT Samsung Telecommunications Indonesia
iMarket Asia Co., Ltd.
Samsung Suzhou Electronics Export Co., Ltd.
Suzhou Samsung Electronics Co., Ltd.
Samsung Mobile R&D Center China-Guangzhou
Samsung Tianjin Mobile Development Center
Samsung Network R&D Center China-Shenzhen
Samsung R&D Institute China-Xian
Samsung Electronics (Shandong) Digital Printing Co., Ltd.
Samsung Electronics Huizhou Co., Ltd.
Tianjin Samsung Electronics Co., Ltd.
Beijing Samsung Telecom R&D Center
Samsung Electronics Suzhou Computer Co., Ltd.
Samsung Electronics China R&D Center
Samsung Electronics (Beijing) Service Company Limited
Tianjin Samsung Opto-Electronics Co., Ltd.
Samsung Electronics Egypt S.A.E
Samsung Electronics Tunisia S.A.R.L
Samsung Electronics Latinoamerica Miami, Inc.
Samsung Electronica Colombia S.A.
Samsung Electronics Panama. S.A.
Samsung Electronics Argentina S.A.
Intellectual Keystone Technology LLC.
Samsung SDI Japan co., Ltd.
Samsung SDI America, Inc.
Samsung SDI Hungary Rt.
Samsung SDI Europe GmbH.
Samsung SDI (Malaysia) SDN. BHD.
Samsung SDI Vietnam Co., Ltd.
Samsung SDI Energy Malaysia SD
Samsung SDI (Hong Kong) Ltd.
Samsung SDI China Co., Ltd.
Samsung SDI-ARN(Xian) Power Ba
Samsung SDI Brasil Ltda.
SAMSUNG CHEIL INDUSTRIES JAPAN
Samsung Chemical(USA), INC.
Starex Compounding America Inc.
Samsung Chemical Europe Gmbh
Samsung Chemical Hungary Limited
Novaled GmbH
SAMSUNG CHEMICAL(THAILAND) CO.
Samsung Chemical Material Trad
Tianjin Samsung Engineering Plastics Co., Ltd.
Dongguan Samsung Engineering Plastics Co., Ltd.
SAMSUNG CHEMICAL ELECTRONIC MA
iMarket Asia Co., Ltd.
Samsung SDI Mexico S.A. de C.V.
Samsung Electronics 2014 Interim Business Report
Ownership
100.0
100.0
40.0
100.0
2.2
100.0
25.0
100.0
100.0
100.0
100.0
100.0
100.0
25.0
25.0
11.4
99.0
11.3
100.0
19.2
100.0
100.0
100.0
100.0
12.9
10.3
40.8
100.0
26.3
100.0
100.0
8.0
0.1
1.0
100.0
100.0
100.0
2.0
41.0
100.0
91.7
100.0
100.0
68.6
100.0
100.0
97.6
100.0
50.0
45.0
100.0
100.0
100.0
100.0
100.0
50.1
59.4
100.0
100.0
100.0
100.0
8.7
100.0
76 / 152
Investor
Samsung SDI America, Inc.
Samsung SDI (Hong Kong) Ltd.
Samsung SDI (Hong Kong) Ltd.
Samsung SDI (Hong Kong) Ltd.
Samsung SDI (Hong Kong) Ltd.
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics
Samsung Electro-Mechanics Japan Advanced Technology Co.,Ltd
Samsung Electro-Mechanics America, Inc.
Calamba Premier Realty Corpora
Samsung Fire & Marine Insurance
Samsung Fire & Marine Insurance
Samsung Fire & Marine Insurance
Samsung Fire & Marine Insurance
Samsung Fire & Marine Insurance
Samsung Fire & Marine Insurance
Samsung Fire & Marine Insurance
Samsung General Chemicals
Samsung Total Petrochemicals
Samsung Total Petrochemicals
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Co.,Ltd.
Camellia Consulting Corporation
Offshore 1 consulting Corporat
SAMSUNG HEAVY INDUSTRIES NIGERIA Co., Ltd
Samsung Life Insurance
Samsung Life Insurance
Samsung Life Insurance
Samsung Life Insurance
Samsung Life Insurance
Samsung Life Insurance
Samsung Asset Management
30 GRESHAM STREET(JERSEY) LIMI
Starex Compounding America Inc.
SAMSUNG CHEMICAL(THAILAND) CO.
Samsung Techwin
Samsung Techwin
Investee
Samsung SDI Brasil Ltda.
Shenzhen Samsung SDI Co., Ltd.
Tianjin Samsung SDI Co., Ltd.
Shanghai Samsung Electronic Devices Co., Ltd.
Samsung SDI Brasil Ltda.
Samsung Electro-Machanics Japan Co., Ltd
Samsung Electro-Mechanics Japan Advanced Technology Co.,Ltd.
Samsung Electro-Mechanics America, Inc.
Samsung Electro-Mechanics Gmbh
Samsung hungary Electro-Mechanics Private Ltd Liability Company
Samsung Electro-Mechanics(Thailand) Co., Ltd.
Samsung Electro-Mechanics Phils., Corp.
Calamba Premier Realty Corporation.
Samsung Electro-Mechanics Pte., Ltd.
Samsung Electro Mechanics Vietnam Co., Ltd.
Dongguan Samsung Electro-Mechanics Co., Ltd.
Tianjin Samsung Electro-Mechanics Co., Ltd.
Samsung Electro-Mechanics(HK) Co., Ltd.
Samsung High-Tech Electro-Mechanics(Tianjin) Co., Ltd.
Samsung Electro-Mechanics(Shenzhen) Co., Ltd.
Kunshan Samsung Electro-Mechanics Co., Ltd.
iMarket Asia Co., Ltd.
Samsung Electro-Mechanics Nakhonratchasima Co.,Ltd.
Samsung Electro-Mechanics do Brasil Intermediacoes de Negocios Ltda.
BATINO REALTY CORPORATION
Samsung Fire & Marine Management Corporation
Samsung Fire & Marine Insurance Company of Europe Ltd.
P.T. Asuransi Samsung Tugu
Samsung Vina Insurance Co., Ltd.
Samsung Reinsurance Pte., Ltd.
Samsung Property and Casualty Insurance Co(China) Ltd.
SAMSUNG FIRE & MARINE CONSULTORIA EM SEGUROS Ltda.
SAMSUNG PETROCHEMICAL (SHANGHAI)
Dongguan Samsung Total Engineering Plastic co.,ltd.
Samsung Total Petrochemicals Trading (Shanghai) Co., Ltd.
Camellia Consulting Corporation
Samsung Wind Energy Inc.
Offshore 1 consulting Corporation
Samsung heavy Industries Hamburg GmbH
Samsung Heavy Industries India Pvt. Ltd.
SAMSUNG HEAVY INDUSTRIES (M) SDN.BHD
Samsung Heavy Industries(Ningbo) Co., Ltd.
Samsung Heavy Industries(Rongcheng) Co., Ltd.
Rongcheng Gaya Heavy Industries Co., Ltd.
Samsung Heavy Industries Trade(Shanghai) Co., Ltd.
SAMSUNG HEAVY INDUSTRIES NIGERIA Co., Ltd.
Samsung Heavy Industries Brazil
SHI BRAZIL CONSTRUCTION
Oil & Gas Solution LLC
AMEC Samsung Oil&Gas, LLC
MCI - SHI FZE
Samsung Life Investment (America)
Samsung Life Investment (U.K.) Limited
30 GRESHAM STREET(JERSEY) Limited
THAI SAMSUNG LIFE INSURANCE CO.
Samsung Air China Life Insurance
Beijing Samsung Real Estate Co., Ltd.
Samsung Investment Management (Hong Kong)
30 GRESHAM STREET (SINGAPORE)
STARCOM MEXICO
Samsung Thai Engineering Co.
Techwin Engineering Center Co.
Samsung Opto-Electronics America
Samsung Electronics 2014 Interim Business Report
Ownership
40.4
80.0
80.0
60.3
14.5
100.0
100.0
100.0
100.0
100.0
75.0
100.0
39.8
100.0
100.0
100.0
81.7
100.0
95.0
100.0
100.0
8.7
100.0
100.0
100.0
100.0
100.0
70.0
75.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0
51.0
70.0
100.0
100.0
100.0
35.8
50.0
90.0
100.0
100.0
100.0
19.0
100.0
100.0
77 / 152
Investor
Samsung Techwin
Samsung Techwin
Samsung Techwin
Samsung Techwin
Cheil Industries Inc.
Cheil Industries Inc.
Cheil Industries Inc.
Cheil Industries Inc.
Cheil Industries Inc.
Cheil Industries Inc.
Samsung Welstory
Credu
Opentide Greater China Co., Ltd.
Opentide Greater China Co., Ltd.
Opentide Greater China Co., Ltd.
Opentide China Co., Ltd.
Opentide China Co., Ltd.
iMarket Asia Co., Ltd.
Samsung Fine Chemicals
Samsung Fine Chemicals
Samsung Securities
Samsung Securities
Samsung Securities
Samsung SDS
Samsung SDS
Samsung SDS
Samsung SDS
Samsung SDS
Samsung SDS
Samsung SDS
Samsung SDS
Miracom
Samsung SDS America,Inc.
Samsung SDS America,Inc.
Samsung SDS America,Inc.
Samsung SDS Europe Ltd.
Samsung SDS Europe Ltd.
Samsung SDS Europe Ltd.
Samsung SDS Europe Ltd.
Samsung SDS Europe Ltd.
Samsung SDS Europe Ltd.
Samsung SDS Europe Ltd.
Samsung SDS Europe Ltd.
Samsung SDS Global SCL Netherland Cooperatief U.A
Samsung SDS Global SCL Netherland Cooperatief U.A
Samsung SDS Asia Pacific Pte.
Samsung SDS Asia Pacific Pte.
Samsung SDS Asia Pacific Pte.
Samsung SDS Asia Pacific Pte.
Samsung SDS Asia Pacific Pte.
Samsung SDS Asia Pacific Pte.
Samsung SDS China, Ltd.
Samsung SDS China, Ltd.
MIRACOM ASIA PACIFIC
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Investee
SAMSUNG TECHWIN EUROPE LIMITED
Tianjin Samsung Techwin Opto-Electronics
Shanghai Samsung Techwin
SAMSUNG TECHWIN DO BRASIL EQUIPAMENTOS
Samsung Fashion America Inc.
Samsung Fashion S.r.L
COLOMBO VIA DELLA SPIGA S.R.L
Samsung Fashion Trading (Shanghai)
Samsung Everland Inc. Vietnam
iMarket Asia Co., Ltd.
Shanghai Ever-Hongjun Business
Language Testing International
Opentide China Co., Ltd.
OpenTide Taiwan Co., Ltd.
OpenTide Interactive Advertising Co., Ltd.
OpenTide e-Commerce Co., Ltd.
OpenTide Marketing Service Co., Ltd.
iMarket China Co., Ltd.
Samsung Fine Chemicals Europe
Samsung Fine Chemicals Trading (Shanghai) Co., Ltd.
Samsung Securities (America), Inc.
Samsung Securities (Europe) Limited.
Samsung Securities (Asia) Limited.
iMarket Asia Co., Ltd.
Samsung SDS America, Inc.
Samsung SDS Europe Ltd.
Samsung SDS Global SCL Netherland Cooperatief U.A
Samsung SDS Asia Pacific Pte. Ltd.
Samsung SDS India PVt. Ltd.
Samsung SDS China, Ltd.
Samsung SDS Latin America, Ltd.
MIRACOM ASIA PACIFIC
Samsung SDS Latin America, Ltd.
Samsung SDS Mexico, S.A. DE C.
Samsung SDS Global SCL Panama
Samsung SDS Global SCL Hungary
Samsung SDS Global SCL Slovaki
SAMSUNG SDS GSCL POLAND
Samsung SDS Global SCL Netherland Cooperatief U.A
SAMSUNG SDS Global SCL Egypt C
Samsung SDS global SCL South A
Samsung SDS Global SCL Transpo
Samsung SDS Global SCL Rus Lim
SAMSUNG SDS GSCL POLAND
Samsung SDS Global SCL Rus Lim
Samsung SDS GSCL Vietnam Co Ltd.
PT. Samsung SDS Global SCL Indonesia
Samsung SDS Global SCL Philippines Co., Ltd.
Samsung SDS Global SCL Thailand Co., Ltd.
Samsung SDS Global SCL Malaysia SDN.BHD.
Samsung SDS Global SCL Hong Kong Ltd.
Samsung SDS Global Development
Samsung SDS Global SCL Beijing Co., Ltd.
MIRACOM CHINA
Offshore 1 consulting Corporation
Samsung Engineering America Inc.
Samsung Engineering Magyarorszag Kft
Samsung Engineering (Malaysia) SDN. BHD.
PT Samsung Engineering Indonesia Co., Ltd.
Samsung Thai Engineering Co., Ltd.
Samsung Engineering India Private Ltd.
Samsung Engineering Vietnam Co.
Samsung Engineering Construction(Shanghai) Co., Ltd.
Samsung Electronics 2014 Interim Business Report
Ownership
100.0
95.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
19.3
51.0
82.4
100.0
100.0
100.0
100.0
100.0
80.0
100.0
100.0
100.0
100.0
100.0
40.6
100.0
100.0
100.0
100.0
100.0
100.0
99.7
100.0
0.3
99.0
100.0
100.0
100.0
100.0
0.0
100.0
100.0
100.0
100.0
0.0
0.0
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
49.0
100.0
100.0
100.0
100.0
81.0
100.0
100.0
100.0
78 / 152
Investor
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering
Samsung Engineering America Inc
Samsung Engineering (Malaysia)
Samsung Thai Engineering Co.,
Samsung Engineering India Private Ltd.
Samsung Saudi Arabia Ltd.
Muharraq Holding Company 1 Limited
Muharraq Holding Company 2 Limited
S1 Corporation
S1 Corporation
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Cheil Worldwide
Hotel Shilla
Hotel Shilla
Hotel Shilla
Hotel Shilla
Hotel Shilla
Hotel Shilla
Hotel Shilla
SVIC #22
Cheil USA Inc.
Cheil USA Inc.
Cheil USA Inc.
Cheil USA Inc.
Samsung Hospitality America
Cheil Europe Ltd.
Cheil Europe Ltd.
Investee
Samsung Saudi Arabia Ltd.
Muharraq Wastewater Services Company W.L.L.
Muharraq STP Company B.S.C.
Muharraq Holding Company 1 Limited
Samsung INGENIERIA MEXICO S.A DE C.V.
Samsung Ingenieria Minatitlan, S.A. De C.V.
Samsung Engineering Trinidad Co., Ltd.
Samsung Ingenieria Manzanillo, S.A. De C.V.
Grupo Samsung Ingenieria Mexico, S.A. De C.V.
Samsung Ingenieria Energia S.A. De C.V.
Samsung Engineering America Do Sul Projecto E Consultoria Ltda.
Samsung Engineering Bolivia S.
SamsungIngenieriaDUBAS.A.d
Samsung Engineering Kazakhstan LLP
SEA Construction, LLC
Muharraq Wastewater Services Company W.L.L.
SAMSUNG CHEMICAL(THAILAND) CO.
Samsung Saudi Arabia Ltd.
Samsung EPC Company limited
Muharraq Holding Company 2 Lim
Muharraq STP Company B.S.C.
SOCM LLC
Samsung Beijing Security Systems
Cheil USA Inc.
Cheil Central America Inc.
Cheil Europe Ltd.
Cheil Germany GmbH
Cheil France SAS
Cheil Nordic AB
Cheil India Pvt. Ltd.
Cheil (Thailand) Ltd.
Cheil Singapore Pte. Ltd.
Cheil Vietnam Co. Ltd.
Cheil Integrated Marketing Philippines, Inc.
Cheil Malaysia SDN BHD
Cheil China
Cheil Hong Kong Limited
Bravo Asia Limited
Bravo Asia-Shanghai
Cheil MEA FZ-LLC
Cheil South Africa Pty., Ltd.
CHEIL KENYA LIMITED
Cheil Jordan
Cheil Brazil Communications Ltda.
Cheil Mexico Inc. SA de CV
Cheil Rus LLC.
Cheil Ukraine LLC
Cheil Kazakhstan LLC
Samsung Hospitality America
New Jersey International M.C. Inc.
SAMSUNG HOSPITALITY U.K. Limited
Shilla Travel Retail Pte., Ltd.
SHILLA LIMITED Macao
Samsung Shilla Business Service Beijing Co., Ltd.
SHILLA LIMITED Hong Kong
RT SV CO-INVEST, LP
The Barbarian Group, LLC
McKinney Ventures LLC.
Cheil India Pvt. Ltd.
Cheil Mexico Inc. SA de CV
Samsung Hospitality EUROPE
Beattie McGuinness Bungay Limited
Cheil Italia S.r.l
Samsung Electronics 2014 Interim Business Report
Ownership
95.0
64.8
5.1
45.0
99.7
99.9
100.0
99.9
100.0
100.0
100.0
99.9
100.0
100.0
100.0
0.3
40.6
5.0
75.0
100.0
88.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
90.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.0
100.0
100.0
98.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.9
100.0
100.0
0.0
2.0
100.0
75.0
100.0
79 / 152
Investor
Cheil Europe Ltd.
Cheil Europe Ltd.
Cheil Germany GmbH
Cheil Singapore Pte. Ltd.
Cheil Singapore Pte. Ltd.
Cheil Hong Kong Limited
Cheil MEA FZ-LLC
Cheil MEA FZ-LLC
Cheil South Africa Pty., Ltd.
One Agency FZ LLC
One Agency FZ LLC
One Agency FZ LLC
One Agency FZ LLC
One Agency FZ LLC
Cheil RusLLC.
Investee
CHEIL SPAIN S.L
CHEIL BENELUX B.V.
CHEIL AUSTRIA GMBH
Opentide Greater China Co., Ltd.
PT. CHEIL WORLDWIDE INDONESIA
Opentide Greater China Co., Ltd.
One Agency FZ LLC
One Agency Istanbul Advertisement, Communication & Production LLC
CHEIL KENYA LIMITED
One Agency Istanbul Advertisement, Communication & Production LLC
One Agency Interior Design LLC
One Agency Printing LLC
One Agency South Africa
One Agency Russia LLC
One Agency Russia LLC
Ownership
100.0
100.0
100.0
95.0
100.0
3.1
100.0
0.0
1.0
100.0
100.0
100.0
100.0
99.9
0.1
※ (% of Ownership; As of September 30, 2014; Based on Common shares)
Samsung Electronics 2014 Interim Business Report
80 / 152
C. Related Statute & Regulation
Regulatory restrictions including the restriction on cross-holdings in accordance with the Monopoly Regulation and Fair
Trade Act
(1) Date of announcement by the authorities related to companies deemed as a part of Samsung Group for the current year:
April 1, 2014
(2) Summary of Restrictions
-
Restriction of cross-holdings
-
Restriction of debt guarantee between affiliates
-
Restriction of voting rights for affiliates, including financial and insurance companies
-
Decision by board committee and public disclosure of large-scale related party transactions
-
Public disclosure of important matters of unlisted companies
-
Other public disclosures related to the Group status
Samsung Electronics 2014 Interim Business Report
81 / 152
D. Equity Investments in other corporations
(1) The total book value of equity investments in other corporations as of September 30, 2014 is KRW 46,297 billion
[As of September 30, 2014]
(Unit: 1,000 shares, KRW million, %)
Beginning Balance
Account
Name of
Company
Acquisition
Date
Objective
Acquisition
Cost
Qty
Dom
estic*
Increase/Decrease
Owners
hip (%)
Book Value
Acquisition/Disposal
Qty
Amount
Ending Balance
Valuati
on
Ownership
(%)
Qty
Current Financial Stats
Book
Value
Total Asset
Net
Income
(Loss)
Listed
Samsung ElectroMechanics
1977.01
Management
250
17,693
23.69
445,244
0
0
0
17,693
23.69
445,244
7,185,343
345,692
Listed
Samsung Card
1988.12
Management
10,000
43,393
37.45
1,455,485
0
0
0
43,393
37.45
1,455,485
16,560,926
273,232
Listed
Samsung Techwin
1977.12
Management
336
13,527
25.46
235,638
0
0
0
13,527
25.46
235,638
3,434,224
133,039
Unlisted
STECO
1995.06
Business
24,000
2,448
51.00
32,724
0
0
0
2,448
51.00
32,724
91,556
3,188
Unlisted
SEMES
1992.12
Business
1,000
2,167
91.30
70,817
6
1,089
0
2,173
91.54
71,906
669,232
38,062
Unlisted
SERI
1991.05
Management
320
3,576
29.80
24,942
0
0
0
3,576
29.80
24,942
123,875
5,014
Unlisted
Samsung SDS
1992.07
Management
6,160
17,472
22.58
560,827
0
0
0
17,472
22.58
560,827
5,300,100
325,983
Unlisted
Samsung Lions
1986.08
Management
240
55
27.50
-102
0
0
0
55
27.50
-102
65,889
-12,166
Unlisted
Samsung
Electronics
Service
1998.01
Business
30,000
6,000
99.33
48,121
0
0
0
6,000
99.33
48,121
335,588
4,363
Unlisted
MEMC Korea
1991.12
Management
36,000
3,440
20.00
35,286
-3,440
-35,286
0
0
0.00
0
266,963
5,418
2000.12
Business
3,100
1,767
100.00
247,523
0
0
0
1,767
100.00
247,523
564,361
4,425
1999.04
Business
76
1,011
100.00
46,669
0
0
0
1,011
100.00
46,669
140,733
3,185
2012.04
Management
52,296
4,378
19.99
0
0
0
0
4,378
19.99
0
191,164
-64,194
Unlisted
Unlisted
Unlisted
Samsung
Electronics Sales
Samsung
Electronics
Logitech
SSLM
※ Domestic account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
82 / 152
Beginning Balance
Account
Name of
Company
Acquisition
Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Dom
estic*
Increase/Decrease
Acquisition/Disposal
Book
Value
Qty
Amount
Ending Balance
Valuation
Ownership
(%)
Qty
Current Financial Stats
Book
Value
Total Asset
Net
Income
(Loss)
Unlisted
Samsung Display
2012.04
Business
16,009,547
221,969
84.78
18,509,307
0
0
0
221,969
84.78
18,509,307
35,754,894
2,400,779
Unlisted
SVIC #6
2005.07
Business
26,800
1
99.00
2,277
0
0
0
1
99.00
2,277
37,284
-10,041
Unlisted
SVIC #14
2009.05
Business
18,000
0
99.00
0
0
0
0
0
99.00
0
55,465
-1,882
Unlisted
SVIC #21
2011.11
Business
19,800
0
99.00
81,180
0
17,182
0
0
99.00
98,362
61,384
-11,804
Unlisted
SVIC #22
2011.11
Business
19,800
0
99.00
102,633
0
36,630
0
0
99.00
139,263
93,554
-4,497
Unlisted
SVIC #27
2014.09
Business
5,940
0
0.00
0
0
5,940
0
0
99.00
5,940
0
0
Unlisted
World Cyber
Games
2003.12
Business
1
450
47.60
0
-450
0
0
0
0.00
0
2,234
486
Unlisted
Suwon Samsung
Bluewings FC
2008.12
Business
2,000
400
100.00
2,000
-400
-2,000
0
0
0.00
0
4,115
-26
2011.02
Business
286,384
87,350
68.45
477,648
0
0
0
87,350
68.45
477,648
309,321
28,856
2011.04
Management
30,000
5,058
42.55
244,665
4,240
167,400
0
9,298
45.65
412,065
653,426
-140,762
Unlisted
Unlisted
Samsung
Medison
Samsung
BioLogics
Unlisted
Intellectual
Discovery
2011.05
Management
5,000
1,784
15.71
5,241
0
0
0
1,784
15.71
5,241
48,125
12,619
Listed
Samsung Heavy
Industries
1977.09
Management
125
40,676
17.61
1,547,708
0
0
-520,648
40,676
17.61
1,027,060
17,427,147
632,205
Listed
Samsung Fine
Chemicals
1995.05
Management
1,346
2,165
8.39
96,449
0
0
-13,747
2,165
8.39
82,702
1,900,118
3,340
Listed
Hotel Shilla
1979.12
Management
252
2,005
5.11
133,314
0
0
106,250
2,005
5.11
239,564
1,712,071
10,810
Listed
Cheil Worldwide
1988.09
Management
185
2,999
2.61
82,465
0
0
-15,443
2,999
2.61
67,022
1,704,531
102,269
Listed
A-Tech Solution
2009.11
Management
26,348
1,592
15.92
9,568
0
0
-1,576
1,592
15.92
7,992
181,148
-1,340
※ Domestic account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
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Beginning Balance
Account
Name of
Company
Acquisition
Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Book
Value
Acquisition/
Disposal
Qty
Amount
Valuation
Qty
Ending Balance
Current Financial
Stats
Ownership
(%)
Book Value
Total
Asset
Net
Income
(Loss)
Listed
iMarket Korea
2000.12
Management
1,900
647
1.80
16,668
0
0
3,917
647
1.80
20,585
791,733
38,557
Listed
KT Skylife
2001.12
Management
3,344
240
0.50
7,092
0
0
-1,656
240
0.50
5,436
684,444
72,724
Listed
Samsung SDI
1977.01
Management
304
9,283
20.38
874,079
4,180
1,306,874
-531,776
13,463
19.58
1,649,177
10,555,671
147,916
Listed
Cheil Industries
2014.06
Management
312,380
0
0.00
0
0
0
0
0
0.00
0
4,987,794
255,032
1978.01
Management
100
514
12.96
80,347
-514
-80,347
0
0
0.00
0
883,798
-42,180
1988.07
Management
1,500
1,914
3.91
80,653
1,103
48,257
0
3,017
5.29
128,910
1,597,400
205,314
1995.01
Management
5,000
1,000
17.24
5,000
0
0
0
1,000
17.24
5,000
85,615
691
1997.09
Management
590
1,135
0.98
5,677
0
0
0
1,135
0.98
5,677
682,137
35,726
1987.05
Management
150
72
0.39
365
0
0
0
72
0.39
365
221,876
12,938
1999.06
Management
1,097
219
19.00
368
-219
-368
0
0
0.00
0
4,279
294
Unlisted
Unlisted
Unlisted
Unlisted
Dom
estic*
Increase/Decrease
Unlisted
Unlisted
Samsung
Petrochemical
Samsung
General
Chemicals
Kihyup
Technology
Banking
Pusan Newport
The Korea
Economic Daily
Brooks
Automation Asia
Unlisted
Samsung
Venture
Investment
1999.11
Management
4,900
980
16.33
7,021
0
0
0
980
16.33
7,021
64,049
2,575
Unlisted
Cyber Bank
2000.12
Management
8,000
1,083
7.46
0
0
0
0
1,083
7.46
0
0
0
Unlisted
FineChips
2001.12
Management
10
2
3.81
10
0
0
0
2
3.81
10
3,231
361
Unlisted
SK Telink
2010.11
Management
4,357
15
1.13
4,357
0
0
0
15
1.13
4,357
253,332
16,093
Unlisted
Inkel
2006.11
Management
130
0
0.00
0
0
0
0
0
0.00
0
153,629
974
Unlisted
Yongpyong
Resort
2007.05
Management
1,869
400
1.05
1,869
0
0
0
400
1.05
1,869
734,627
12,019
※ Domestic account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
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Beginning Balance
Account
Name of Company
Acquisition
Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Book Value
Acquisition/Disposal
Qty
Amount
Current Financial
Stats
Ending Balance
Valuation
Qty
Ownership
(%)
Book
Value
Total
Asset
Net
Income
(Loss)
Unlisted
E-SCOM
2007.12
Management
0
0
0.01
0
0
0
0
0
0.01
0
14,329
-7,482
Unlisted
TGSambo
2012.09
Management
0
0
0.01
0
0
0
0
0
0.01
0
37,940
1,467
Unlisted
Icube #1
2009.12
Management
4,000
0
16.23
4,000
0
0
0
0
16.23
4,000
24,399
97
Unlisted
KT Wibro
2010.07
Management
60,000
600
24.20
60,000
0
0
0
600
24.20
60,000
262,713
3,169
Unlisted
Shinsung Eng &
Construction
2010.07
Management
1
1
0.01
0
-1
0
0
0
0.01
0
61,878
3,281
Unlisted
Woobang
2010.07
Management
0
1
0
0
0
0
0
1
0
0
171,444
1,109
2010.07
Management
0
2
0.02
0
0
0
0
2
0.02
0
42,516
-8,168
2012.12
Management
0
0
0.02
0
0
0
0
0
0.02
0
153,402
-51,563
2012.12
Management
0
9
0.02
0
0
0
0
9
0.02
0
1,217,768
-267,694
Unlisted
Unlisted
Dome
stic*
Increase/Decrease
Unlisted
Heehoon Design &
Global
Daewoo
Development
Daewoo Songdo
Development
Unlisted
Daewoo Motor
Sales
2012.12
Management
0
1
0
0
0
0
0
1
0
0
318,071
-369
Unlisted
Woojung
Construction
2014.04
Withdrawal
0
0
0
0
5
0
0
5
0.35
0
23,920
-6,902
Unlisted
Hyunjin
2014.04
Withdrawal
0
0
0
0
23
0
0
23
0.25
0
47,994
1,579
Unlisted
Sungwon
Construction
2014.04
Withdrawal
0
0
0
0
1
0
0
1
0.03
0
35,318
-18,343
Unlisted
Inhee
2014.04
Withdrawal
0
0
0
0
2
0
0
2
0.17
0
15,780
-942
Unlisted
Samsung Solution
2014.04
Withdrawal
0
0
0
0
4
0
0
4
6.70
0
11,713
173
Unlisted
STX Construction
2014.04
Withdrawal
0
0
0
0
1
0
0
1
0.02
0
247,859
-443,500
Unlisted
Poonglim
2014.05
Withdrawal
0
0
0
0
52
0
0
52
0.37
0
512,015
72,350
※ Domestic account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
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Beginning Balance
Account
Name of Company
Acquisition
Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Dome
stic*
Increase/Decrease
Book
Value
Acquisition/Disposal
Qty
Valuation
Amount
Current Financial
Stats
Ending Balance
Ownership
(%)
Qty
Book
Value
Total
Asset
Net
Income
(Loss)
Unlisted
JNT
2011.02
Investment
1,800
0
24.00
3,360
0
0
0
0
24.00
3,360
13,647
-310
Unlisted
SV
2011.02
Investment
1,850
0
14.80
3,403
0
0
0
0
14.85
3,403
19,873
-1,730
Unlisted
Seoul Investment
Partners
2011.10
Investment
1,550
0
19.40
3,047
0
-175
0
0
19.38
2,872
15,778
1,257
Unlisted
Daishin Aju IB
2011.08
Investment
258
0
3.00
2,277
0
-379
0
0
3.00
1,898
68,934
2,235
Unlisted
TS
2011.11
Investment
1,700
0
20.48
3,400
0
-718
0
0
20.32
2,682
17,032
745
Unlisted
IMM
2011.11
Investment
760
0
7.60
2,489
0
805
0
0
7.60
3,294
34,792
1,512
Unlisted
L&S
2012.07
Investment
848
0
8.10
1,687
0
402
0
0
7.50
2,089
23,610
1,871
Unlisted
Taewon Electric
2012.04
Management
16,544
9
15.00
17,072
36
0
0
45
15.00
17,072
82,347
5,386
Unlisted
Pantech
2013.06
Business
53,000
53,000
10.03
53,053
0
0
0
53,000
10.03
53,053
714,097
-619,909
Unlisted
KTCNP-GC
2013.12
Business
960
0
3.00
960
0
0
0
0
3.00
960
25,578
-1,591
Listed
Wonik IPS
2013.12
Business
31,625
3,610
4.48
30,975
0
0
14,332
3,610
4.48
45,307
590,142
37,354
Unlisted
Postech Technology
Investment
2013.12
Business
600
0
10.00
600
0
0
0
0
10.00
600
118,613
3,514
Unlisted
High Pioneer Private
Investment Trust #1
2011.09
Business
29,244
0
100.00
19,470
0
0
0
0
100.00
19,470
19,189
-303
※ Domestic account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
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Beginning Balance
Account
Name of
Company
Acquisition
Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Book
Value
Acquisition/Disposal
Qty
Current Financial
Stats
Ending Balance
Valuation
Amount
Ownership
(%)
Qty
Book
Value
Total Asset
Net
Income
(Loss)
Unlisted
SECA
1992.08
Position
Security
3,823
0
100.00
90,922
0
0
0
0
100.00
90,922
522,775
48,920
Unlisted
SEA
1978.07
Position
Security
59,362
492
100.00
4,861,334
0
166,546
0
492
100.00
5,027,880
11,316,048
56,864
Unlisted
SELA
1989.04
319
40
100.00
86,962
0
0
0
40
100.00
86,962
375,274
-26,800
Unlisted
SEM
1995.07
3,032
3,173
63.58
111,697
664
53,941
0
3,837
63.58
165,638
1,554,638
10,689
Unlisted
SEASA
1996.06
4,696
21,854
98.00
6,779
0
0
0
21,854
98.00
6,779
49,454
6,353
Unlisted
SEDA
1994.01
13,224
62,816,336
87.04
577,483
0
0
0
62,816,336
87.04
577,483
3,429,136
914,548
Unlisted
SECH
2002.12
597
0
4.10
597
0
0
0
0
4.10
597
492,709
28,128
42,892
100
100.00
42,892
0
0
0
100
100.00
42,892
1,519
246
654
0
25.00
4,115
0
0
0
0
25.00
4,115
10,084
-728
3,276
8,021
100.00
142,091
0
0
0
8,021
100.00
142,091
783,438
57,386
392
1,000
100.00
69,372
0
0
0
1,000
100.00
69,372
533,252
39,394
1,954
753
100.00
650,157
0
0
0
753
100.00
650,157
1,249,691
103,658
204
1,751
100.00
37,616
0
0
0
1,751
100.00
37,616
132,631
8,139
230
2,700
100.00
234,115
0
0
0
2,700
100.00
234,115
1,157,900
127,155
Unlisted
Int’l*
Increase/Decrease
Unlisted
Nvelo,
Inc.
CMLA
LLC
2012.12
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
2008.02
Management
Position
Security
Unlisted
SESA
1989.01
Unlisted
SENA
1992.03
Unlisted
SEH
1991.05
Unlisted
SEP
1982.09
Unlisted
SEF
1991.08
Unlisted
SEUK
1995.07
Position
Security
33,908
109,546
100.00
433,202
0
0
0
109,546
100.00
433,202
1,393,507
92,969
Unlisted
SEHG
1982.02
Position
Security
28,042
0
100.00
354,846
0
0
0
0
100.00
354,846
886,338
122,818
Position
Security
Position
Security
Position
Security
Position
Security
※ International account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
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Beginning Balance
Account
Name of
Company
Acquisitio
n Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Increase/Decrease
Acquisition/Disposal
Book
Value
Qty
Valuation
Amount
Current Financial
Stats
Ending Balance
Ownership
(%)
Qty
Book
Value
Total
Asset
Net
Income
(Loss)
Unlisted
SEAG
2002.01
Position Security
40
0
100.00
32,162
0
0
0
0
100.00
32,162
323,756
17,845
Unlisted
SEI
1993.05
Position Security
862
677
100.00
143,181
0
0
0
677
100.00
143,181
1,004,423
70,337
Unlisted
SEBN
1995.07
Position Security
236
500,285
100.00
860,716
21,129
41,261
0
521,414
100.00
901,977
1,290,124
25,233
Unlisted
SELS
1991.05
Position Security
18,314
1,306
100.00
24,288
0
0
0
1,306
100.00
24,288
1,903,892
7,613
Unlisted
SEPOL
1996.04
Position Security
5,462
106
100.00
78,267
0
0
0
106
100.00
78,267
557,370
41,945
Unlisted
SSA
1998.12
Position Security
263
2,000
100.00
32,622
0
0
0
2,000
100.00
32,622
787,562
87,809
Unlisted
SESK
2002.06
Position Security
8,976
0
55.68
263,767
0
0
0
0
55.68
263,767
1,764,078
140,825
Unlisted
SEEH
2008.01
Position Security
4,214
0
100.00
1,304,648
0
0
0
0
100.00
1,304,648
5,780,302
-28,769
Unlisted
SEO
1997.01
Position Security
120
0
100.00
-10,043
0
0
0
0
100.00
-10,043
173,644
-352
Unlisted
SRSC
1997.11
Position Security
707
0
100.00
8,211
0
0
0
0
100.00
8,211
41,567
3,546
Unlisted
SERC
2006.01
Position Security
24,877
0
100.00
180,079
0
0
0
0
100.00
180,079
1,410,054
-11,137
Unlisted
SERK
2007.07
Position Security
4,600
0
100.00
204,555
0
0
0
0
100.00
204,555
1,122,495
69,837
Unlisted
SEAU
1987.11
Position Security
392
53,200
100.00
111,964
0
0
0
53,200
100.00
111,964
578,624
31,998
Unlisted
SEMA
1989.09
Position Security
4,378
16,247
100.00
153,602
0
0
0
16,247
100.00
153,602
277,354
33,000
Unlisted
SGE
1995.05
Position Security
827
0
100.00
32,836
0
0
0
0
100.00
32,836
1,071,694
-13,157
Unlisted
SEEG
2012.07
Position Security
23
0
0.05
39
0
0
0
0
0.05
39
251,866
-11,788
Int’l*
※ International account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
88 / 152
Beginning Balance
Account
Name of
Company
Acquisitio
n Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Increase/Decrease
Book
Value
Acquisition/Disposal
Qty
Ending Balance
Valuation
Amount
Ownership
(%)
Qty
Current Financial Stats
Book
Value
Total
Asset
Net
Income
(Loss)
Unlisted
SEIN
1991.08
Position Security
7,463
46
99.99
118,909
0
0
0
46
99.99
118,909
647,199
141,290
Unlisted
SDMA
1995.03
Position Security
21,876
71,400
75.00
244,382
0
0
0
71,400
75.00
244,382
814,820
70,830
Unlisted
SIEL
1995.08
Position Security
5,414
216,787
100.00
75,263
0
0
0
216,787
100.00
75,263
1,924,832
324,171
Unlisted
SRI-B
2005.05
Position Security
7,358
17
100.00
31,787
0
0
0
17
100.00
31,787
147,900
20,316
Unlisted
SAVINA
1995.01
Position Security
5,839
0
100.00
28,365
0
0
0
0
100.00
28,365
175,780
18,173
Unlisted
TSE
1988.01
Position Security
1,390
11,020
91.83
279,163
0
0
0
11,020
91.83
279,163
1,476,296
222,389
Unlisted
STE
1996.01
Position Security
4,206
0
49.00
4,474
0
0
0
0
49.00
4,474
23,979
-7
Unlisted
SME
2003.05
Position Security
4,796
17,100
100.00
7,644
0
0
0
17,100
100.00
7,644
814,104
36,427
Unlisted
SAPL
2006.07
Position Security
793
736,269
100.00
870,623
0
0
0
736,269
100.00
870,623
2,425,585
674,510
Unlisted
SEHK
1988.09
Position Security
349
274,250
100.00
79,033
0
0
0
274,250
100.00
79,033
1,188,620
37,977
Unlisted
SET
1994.11
Position Security
456
27,270
100.00
112,949
0
0
0
27,270
100.00
112,949
1,390,404
30,802
Unlisted
SESS
1994.12
Position Security
18,875
0
100.00
483,923
0
20,390
0
0
100.00
504,313
660,374
64,362
Unlisted
SCIC
1996.03
Position Security
23,253
0
100.00
617,941
0
0
0
0
100.00
617,941
8,406,438
743,369
Unlisted
SEHZ
1992.12
Position Security
792
0
89.56
255,535
0
0
0
0
89.56
255,535
4,599,200
1,012,728
Unlisted
SSEC
1995.04
Position Security
32,128
0
69.06
130,551
0
0
0
0
69.06
130,551
645,699
67,668
Unlisted
TSEC
1993.04
Position Security
15,064
0
48.20
138,101
0
0
0
0
48.20
138,101
907,752
155,258
Int’l*
※ Overseas account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
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Beginning Balance
Account
Name of
Company
Acquisition
Date
Objective
Acquisition
Cost
Qty
Unlisted
SSDP
1993.08
Unlisted
TSTC
2001.03
Unlisted
SSTC
2001.11
Unlisted
SSET
2002.02
Unlisted
SESC
2002.09
Unlisted
SSS
2001.01
Unlisted
SEHF
2004.04
Unlisted
SSCR
2006.09
Unlisted
TSOE
2010.04
Unlisted
TSLED
2012.04
Unlisted
SCS
2012.09
Unlisted
SJC
1975.12
Unlisted
SRJ
1992.08
Unlisted
TSST Japan
2004.03
Unlisted
SDIB
Unlisted
Semiconductor
Portal
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Position
Security
Increase/Decrease
Ownership
(%)
Book Value
Acquisition/
Disposal
Qty Amount
Current Financial
Stats
Ending Balance
Valuation
Ownershi
p (%)
Qty
Book
Value
Total
Asset
Net
Income
(Loss)
4,446
0
87.10
65,319
0
0
0
0
87.10
65,319
761,018
94,541
10,813
0
90.00
490,041
0
0
0
0
90.00
490,041
2,939,027
767,822
15,799
0
100.00
-1,186
0
0
0
0
100.00
-1,186
1,411
-4,958
6,009
0
60.00
121,624
0
0
0
0
95.00
121,624
88,698
7,122
5,471
0
73.70
34,028
0
0
0
0
73.70
34,028
846,670
58,194
1,200
0
100.00
19,189
0
0
0
0
100.00
19,189
1,310,109
130,082
17,204
0
100.00
85,088
0
0
0
0
100.00
85,088
111,367
-7,855
3,405
0
100.00
9,332
0
0
0
0
100.00
9,332
18,982
1,874
33,837
167,199
82.00
93,154
0
0
0
167,199
82.00
93,154
241,957
34,236
119,519
0
100.00
119,519
0
0
0
0
100.00
119,519
457,896
15,570
111,770
0
100.00
2,538,826
0
173,270
0
0
100.00
2,712,096
3,752,682
-40,537
273
1,560
100.00
370,647
0
0
0
1,560
100.00
370,647
1,174,832
2,866
3,120
122
100.00
117,257
0
0
0
122
100.00
117,257
181,723
4,905
Management
1,639
0
49.03
11,137
30
39,380
-50,517
30
49.03
0
169,322
-41,875
1996.09
Management
3,110
586
0.08
0
0
0
0
586
0.08
0
49,372
10,088
2002.12
Management
38
0
1.21
10
0
0
0
0
1.21
10
1,724
2,141
Int’l*
※ International account noted here reflects approved for sales securities
Samsung Electronics 2014 Interim Business Report
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Beginning Balance
Account
Name of
Company
Acquisition
Date
Objective
Acquisition
Cost
Qty
Unlisted
Unlisted
Unlisted
Int’l*
FTS
Nanosys
Inc.
ONE BLUE
LLC
Increase/Decrease
Ownership
(%)
Book Value
Acquisition/
Disposal
Qty
Amount
Ending Balance
Valuation
Ownership
(%)
Qty
Current Financial Stats
Book Value
Net
Income
(Loss)
Total
Asset
2008.12
Management
1,952
116
41.50
563
0
0
0
116
41.50
563
2,710
406
2010.08
Management
4,774
1,747
1.67
2,387
0
0
0
1,747
1.67
2,387
22,159
857
2011.07
Management
1,766
0
16.67
1,766
0
0
0
0
16.67
1,766
33,803
875
Unlisted
TidalScale
2013.08
Management
1,112
2,882
18.98
1,112
0
0
0
2,882
18.98
1,112
1,214
-1,948
Listed
SSL
2014.05
Business
37,553
0
0.00
0
2,426
37,553
11,757
2,426
5.84
49,310
-
-
Unlisted
Mantis
Vision
2014.01
Business
1,594
0
0.00
0
301
1,594
0
301
3.53
1,594
3,236
-4,186
Unlisted
INEDA
2014.04
Business
3,181
0
0.00
0
3,918
3,181
0
3,918
5.55
3,181
9,878
2,955
Unlisted
Leman
2014.08
Business
1,019
0
0.00
0
17
1,019
0
17
3.91
1,019
1,630
-1,495
Unlisted
Alces
2014.09
Business
4,832
0
0.00
0
421
4,832
0
421
20.10
4,832
799
-738
Listed
Rambus
2010.01
Business
185,363
4,788
4.34
47,851
0
0
14,928
4,788
4.19
62,779
752,829
-36,931
Listed
SEAGATE
2011.12
Business
788,454
12,539
3.80
743,161
0
0
11,313
12,539
3.80
754,474
9,754,138
2,011,378
33,533 2,008,273
-972,866
Total
18,955,878
45,261,470
46,296,877
* International account noted here reflects approved for sales securities
* Based on separate financial statements
* Ownership is calculated based on common share
Samsung Electronics 2014 Interim Business Report
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V. Information on Shareholders
1. Ownership of shares by the major shareholder and related parties
The following table presents changes in shares held by the major shareholder and related parties as of the beginning and
end of the reporting period.
[As of September 30, 2014]
Name
Relationship
(Unit: Shares, %)
Type of
share
Number of Shares owned
Beginning of period
# shares owned
End of period
%
# shares owned
Note
%
Kun-Hee Lee
Major
shareholder
Common
4,985,464
3.38
4,985,464
3.38
-
Kun-Hee Lee
Major
shareholder
Preferred
12,398
0.05
12,398
0.05
-
Samsung C&T
Affiliate
Common
5,976,362
4.06
5,976,362
4.06
-
Samsung Welfare
Foundation
Affiliate
Common
89,683
0.06
89,683
0.06
-
Samsung Foundation
Of Culture
Affiliate
Common
37,615
0.03
37,615
0.03
-
Ra-Hee Hong
Affiliate
Common
1,083,072
0.74
1,083,072
0.74
-
Jae-Yong Lee
Affiliate
Common
840,403
0.57
840,403
0.57
-
Samsung Life
Insurance
Affiliate
Common
10,622,814
7.21
10,622,814
7.21
-
Samsung Life
Insurance
Affiliate
Preferred
879
0.00
879
0.00
-
Samsung Life
Insurance
(special accounts)
Affiliate
Common
514,098
0.35
479.389
0.33
Open market sales
Samsung Life
Insurance
(special accounts)
Affiliate
Preferred
26,379
0.12
48,509
0.21
Open market sales
Samsung Fire &
Marine Insurance
Affiliate
Common
1,856,370
1.26
1,856,370
1.26
-
Samsung Fire &
Marine Insurance
(special accounts)
Affiliate
Common
143
0.00
143
0.00
-
Samsung Fire &
Marine Insurance
(special accounts)
Affiliate
Preferred
53
0.00
53
0.00
-
Cheil Industries
Affiliate
Common
9,679
0.01
0
0.00
Open market sales
Oh-Hyun Kwon
Affiliate
Common
3,000
0.00
3,000
0.00
-
Sang-Hoon Lee
Affiliate
Common
1,473
0.00
1,473
0.00
-
Common
26,020,176
17.66
25,975,788
17.63
-
Preferred
39,709
0.17
61,839
0.27
-
Total
※ Note: According to the closed shareholder register, as at June 30,2014, Yong-Jin Jeong, CEO of Shinsegye, holds 293,500 shares.
※ The definition of major shareholder is as defined in the Monopoly Regulation and Fair Trade Act
Samsung Electronics 2014 Interim Business Report
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[The major shareholder]
○ Name of the major shareholder: Kun-Hee Lee
○ Education: Waseda University School of Commerce (1965)
George Washington University MBA (1966)
○ Career (recent 5 years): Chairman of Samsung Electronics (2010.3 ~)
Chairman/CEO of Samsung Electronics (1998.4 ~ 2008.4)
Vice Chairman of the Federation of Korean Industries (1987 ~)
Member of the International Olympic Committee (1996 ~)
-
There are no changes of the major shareholder recorded during the reporting period.
2. Ownership of shares
As at June 30, 2014, the date of Suspension of Entry in the Register of Shareholders, shareholders with over 5% voting
shares, excluding the major shareholder, are as follows:
[As of June 30, 2014]
(Unit: Shares)
Classification
Shareholders with
over 5% voting
shares
Name
Number of shares owned
Share ratio
Note
National Pension Service
11,509,043
7.81
-
Samsung Life Insurance
11,125,049
7.55
-
-
Employee Stock Ownership Association
-
-
※ The number of shares owned and share ratio of Samsung Life Insurance includes special accounts.
3. Minority Shareholders
[As of June 30, 2014]
(Unit: Person, Shares, %)
Shareholder
Shares owned
Classification
Note
# of shareholders
Portion
# of shares
Portion
Minority
shareholder
134,000
99.95
80,030,253
54.33
Total
134,068
100.00
147,299,337
100.00
Shareholders with shares less than 1/100 of
total issued stocks
※ On common stock (with voting right) basis.
Samsung Electronics 2014 Interim Business Report
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4. Stock Affairs
1. New shares to be issued by the Company shall be allocated to the shareholders in proportion to their
respective shareholdings in accordance with Paragraph 6, Article 8. If shareholders wave or lose their
preemptive right to new shares issues or if there are fractional shares at the time of allocation of new
shares, such shares may be handled by a resolution of the Board of Directors.
2. Notwithstanding the above Paragraph 1, new shares may be allocated to persons other than
shareholders in the following cases:
a. If the Company issues new shares or causes underwriters to underwrite new shares by a resolution of
the Board of Directors in accordance with the applicable laws and regulations including the Securities
and Exchange Act ("SEA");
b. If the Company allocates new shares preferentially to members of the Employee Stock Ownership
Association by a resolution of the Board of Directors in accordance with the applicable laws and
regulations including SEA;
c. If the Company issues new shares for the issuance of depositary receipts (DR) by a resolution of the
Board of Directors in accordance with the applicable laws and regulations including SEA;
d. If the Company issues new shares by public offering in accordance with Article 11-3;
e. If new shares are issued by the exercise of stock options in accordance with Article 11-4;
Preemptive Rights in the
Articles of Incorporation
f. If the Company issues new shares to the extent of 30% of the total issued and outstanding shares, to
domestic or foreign financial institutions to obtain financing urgently, or to partner companies to induce
technology therefrom, etc., by a resolution of the Board of Directors; provided that the issue price of the
new shares shall not be less than the price prescribed by Article 84-5 of the Enforcement Decree of
SEA.
☞(Note) Paragraph 6, Article 8
In the case of rights issues, bonus issues or stock dividends, common shareholders shall be entitled to common
shares, and preferred shareholders shall be entitled to preferred shares, in proportion to their respective
shareholdings; provided that in the case of rights issue and stock dividend the Company may, if necessary, issue
only one kind of shares, where all the shareholders, regardless of the class of their shares, shall be entitled to
the kind of shares to be issued.
☞ (Note) Article 11-3
(Public Offering)
1. The Company may issue new shares by public offering to the extent that the new shares do not exceed 30% of
the total number of issued and outstanding shares by a resolution of the Board of Directors, pursuant to Article
189-3 of the SEA.
2. If the Company issues new shares by public offering, the type, number and issue price of the new shares shall be
determined by a resolution of the Board of Directors; provided that the issue price of such new shares shall not
be less than the price prescribed by Article 84-5 of the Enforcement Decree of the SEA.
☞ (Note) Article 11-4
(Stock Options)
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1. The Company may grant stock options to its officers and employees (in this Article, “officers and employees” include
officers and employees of the related companies as set forth in Article 189-4, Paragraph 1 of the SEA) by a
special resolution of the general meeting of shareholders pursuant to Article 189-4 of the SEA, to the extent
permitted by the SEA; provided, however, that the Company may grant the stock options to its officers and
employees (except for the directors of the Company) by a resolution of the Board of Directors to the extent
determined by the relevant laws and regulations.<Amended, Feb.28, 2002>
2. The persons to whom stock options may be granted are the officers and employees who have contributed or
have the capacity to contribute to the establishment, management, overseas business, technical innovation, etc.
of the Company; provided, however, that the officers and employees who are not entitled to stock options under
the relevant laws and regulations shall be excluded.<Amended, Feb.28, 2002>
3. The shares to be issued to the officers or employees by the exercise of their stock options (in case the Company
pays, either in cash or treasury shares, the difference between the exercise price of stock options and the market
price, they refer to the shares which are the basis for such calculation) shall be common shares in registered
form or preferred shares in registered form.
Preemptive Rights in the
Articles of Incorporation
4. Total number of shares to be delivered in accordance with the exercise of stock options shall be up to the extent
permitted by the relevant laws and regulations.
5. The stock options may be exercised until an expiry date determined by a resolution of the general meeting of
shareholders or the Board of Directors and the expiry date shall be in no more than eight (8) years from when
two (2) years have elapsed from the date of the general meeting of shareholders or the Board of Directors'
meeting at which a resolution to grant such stock options was; provided, however, that the person to whom a
stock option is granted should serve the Company for at least two (2) years after the date of such resolution in
order to exercise such stock option, unless otherwise set forth by relevant laws and regulations.<Amended,
Feb.28, 2002>
6. The terms and conditions of stock options, such as the contents and exercise price thereof shall be determined
by a special resolution of the general meeting of shareholders or by a resolution of the Board of Directors in
accordance with the relevant laws and regulations and the Articles of Incorporation; provided, however, that such
matters which are not provided for as matters reserved for resolutions of the general meeting of shareholders or
the Board of Directors' meeting under the relevant laws and regulations or the Articles of Incorporation may be
determined by the Board of Directors or a committee authorized by the Board of Directors.<Amended, Feb.28,
2002>
7. The Company may cancel the grant of stock options by a resolution of the Board of Directors in any of the
following cases: <Amended, Feb.28, 2002>
a. In case the option grantees voluntarily retire from their office or leave the Company after the grant of stock
options;
b. In case the option grantees cause substantial damage to the Company due to their willful misconduct or
negligence;
c. In case any of the causes for cancellation set forth in the stock option agreement occur
Settlement date
Annual General
Meetings of
Shareholders
December 31
Shareholder register closing period
Stock type
Transfer agent
Shareholder benefit
Within 3 months after the end of every business year
One month from January 1
1,5,10,50,100,500,1000,10000(8 types)
Korea Securities Depository(T: +82-2-3774-3000): 23, Yeouinaru-ro 4-gil, Yeongdeungpo-gu, Seoul, Korea
n/a
Published on
Joongang Daily
Samsung Electronics 2014 Interim Business Report
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5. Stock Price and Stock Transactions
A. Domestic stock market
(Unit: KRW, Shares)
Type
Stock price
Common
stock
Volume
Stock price
Preferred
stock
Volume
April 2014
May
June
July
August
September
Highest
1,407,000
1,460,000
1,470,000
1,395,000
1,317,000
1,226,000
Lowest
1,339,000
1,335,000
1,301,000
1,284,000
1,222,000
1,150,000
Average
1,376,455
1,409,211
1,373,895
1,329,565
1,261,450
1,193,895
Highest
(day)
381,976
385,621
478,053
487,027
564,621
466,184
Lowest
(day)
65,985
74,712
148,789
119,577
168,153
113,281
Monthly
4,950
4,612
5,222
4,749
5,113
4,991
Highest
1,094,000
1,165,000
1,151,000
1,128,000
1,044,000
1,008,000
Lowest
1,037,000
1,031,000
1,033,000
1,040,000
956,000
875,000
Average
1,072,000
1,102,368
1,075,526
1,075,522
1,001,050
946,842
Highest
(day)
92,408
95,484
96,237
88,913
96,322
96,922
Lowest
(day)
2,708
9,501
18,274
7,019
21,972
11,188
Monthly
792
767
1,056
780
931
775
※ Monthly trading volume in 1,000 shares
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B. Overseas stock market
□ Name of stock exchange: London Stock Exchange (common stock)
(Unit: $, KRW, DR)
Type
April ‘14
Highest
(Converted to KRW)
Stock
price
Lowest
(Converted to KRW)
Common
stock
Average
Highest (day)
Volume
Lowest (day)
Monthly
May
June
July
August
September
670.00
715.00
718.50
674.00
636.50
607.00
696,465
731,159
735,960
690,648
657,950
616,044
632.00
643.50
640.50
630.50
600.00
553.00
670,236
663,899
652,029
641,849
612,360
576,281
654.98
681.35
677.52
649.17
614.65
577.55
200,931
146,900
118,089
78,983
117,894
134,943
700
24
28,418
14,277
2,122
16,902
1,603
1,275
1,210
881
1,014
1,404
※ Monthly volume in 1,000 Depository Receipt (DR) shares.
※ Stock price converted to KRW is based on KRW/USD exchange rate of closing price of trading day.
Ratio: Common one (1) share equals DR two (2) shares
□ Name of stock exchange: Luxembourg Stock Exchange (Preferred stock)
(Unit: USD, KRW, 1,000 Shares )
Type
Stock price
Preferred
stock
Volume
April ‘14
May
June
July
August
September
Highest (USD)
520.50
569.00
563.50
548.50
501.00
497.50
(Converted to
KRW)
541,997
581,916
577,193
562,048
517,884
504,913
Lowest (USD)
490.60
499.00
507.00
511.50
475.20
424.50
(Converted to
KRW)
520,281
514,818
516,278
517,740
484,989
442,371
Average (USD)
509.34
532.95
530.71
525.54
487.95
459.41
Highest (day)
71,163
32,913
41,921
33,490
104,610
14,596
Lowest (day)
953
3,058
895
529
490
279
Monthly
244
296
179
134
561
104
※ Monthly volume in 1,000 DR shares.
※ Stock price converted to KRW is based on KRW/USD exchange rate of closing price of trading day.
Ratio: Common one (1) share equals DR two (2) shares
Samsung Electronics 2014 Interim Business Report
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VI. Executives and Employees
1. Executives and Employees
A. Registered Executives
[As of September 30, 2014]
Name
Date of
Gender
birth
Position
(Unit: # of shares)
Registered
executive
Full/
parttime
Responsibility
Major
career
Chairman of BOD
Head of DS
division
Number of shares
owned
Length of
Service
Term expiration
Common
Preferred
Head of DS
division
3,000
0
31 mo.
2015.03.15
OhHyun
Kwon
M
1952.10
CEO
Registered
Full time
executive
BooKeun
Yoon
M
1953.02
CEO
Registered
Full time
executive
Head of CE
division
Head of CE
division
0
0
19 mo.
2016.03.14
JongKyun
Shin
M
1956.01
CEO
Registered
Full time
executive
Head of IM
division
Head of
IM division
0
0
19 mo.
2016.03.14
SangHoon
Lee
M
1955.06
CFO
Registered
Full time
executive
CFO, Head of
Corporate
Management
Office
Head of
Corporate
Management
Office
1,473
0
19 mo.
2016.03.14
In-Ho
Lee
M
1943.11
Independent
Director
Registered
Part time
executive
Overall
management of
the Company
President
& CEO of
Shinhan
Bank
0
0
55 mo.
2016.03.14
HanJoong
Kim
M
1948.11
Independent
Director
Registered
Part time
executive
Overall
management of
the Company
President
of Yonsei
University
0
0
31 mo.
2015.03.15
1950.01
Independent
Director
Registered
Part time
executive
Overall
management of
the Company
Advisor at
Kim &
Chang Law
Office
0
0
19 mo.
2016.03.14
Registered
Part time
executive
Overall
management of
the Company
Professor of
Electrical
Engineering
at Seoul
National
University
0
0
31mo.
2015.03.15
Overall
management of
the Company
Dean of
Graduate
School of
International
Studies at
Ewha
Womans
University
0
0
19 mo.
2016.03.14
KwangSoo
Song
ByeongGi Lee
EunMee
Kim
M
M
F
1951.05
1958.09
Independent
Director
Independent
Director
Registered
Part time
executive
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B. Concurrent position with other companies
Concurrent office holder
Company
Name
Position
Name of company
Position
Kwang-Soo Song
Independent director
Doosan Corp.
Independent director
C. Employees
[As of September 30, 2014]
(Unit: KRW million)
No. of employees
Division
Regular
Contractbased
Others
Total
Average length
of service
(years)
Gender
Total
Compensation
Average
Compensation
per employee
CE
M
12,995
354
-
13,349
11.5
-
-
CE
F
2,593
295
-
2,888
6.0
-
-
IM
M
19,612
344
-
19,956
9.5
-
-
IM
F
7,856
222
-
8,078
6.9
-
-
DS
M
29,183
249
-
29,432
9.6
-
-
DS
F
13,064
257
-
13,321
8.7
-
-
Others
M
9,560
446
-
10,006
11.4
-
-
Others
F
2,082
444
-
2,526
6.7
-
-
Gender Total
M
71,350
1,393
-
72,743
10.2
4,854,272
67
Gender Total
F
25,595
1,218
-
26,813
7.6
1,137.613
43
96.945
2,611
-
99,556
9.5
5,991,885
61
Total
※ Total compensation and average compensation per employee were calculated before income deduction based on the earned income
payment record submitted to the district tax office in accordance with Article 20 of the Income Tax Law.
※ The number of employees represent domestic employees, excluding four executive directors.
※ Average compensation per employee was calculated based on total average employee figure of 98,305
(male: 72,015; female: 26,290)
Samsung Electronics 2014 Interim Business Report
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2. Remuneration for Directors
A. Summary on Total Remuneration
(1) Remuneration approved at the annual general meetings of shareholders
(Unit: KRW million)
Amount Approved at
Shareholders’ Meeting
Number of Persons
Note
Executive Directors
4
-
-
Independent Directors
2
-
-
Audit Committee member or Auditor
3
-
-
Total
9
48,000
-
※ Number of persons as of the reporting date.
※ The amount approved at shareholders’ meeting is the remuneration limit for registered directors according to the Article 388 of the
Korean Commercial Act. It includes compensation for registered directors who retired this fiscal year or in the past years.
(2) Remuneration Paid
(Unit: KRW million)
Number
of Persons
Total amount of
remuneration
Average remuneration
per Director
Note
Executive Directors
4
24,328
6,082
-
Independent Directors
2
125
62
-
Audit Committee member or Auditor
3
201
67
-
Total
9
24,654
-
-
※ Number of persons is as of the reporting date.
※ The total amount is the income based on the Income Tax Law that incumbent or retired executive directors, independent directors,
and members of audit committee in the fiscal year received as a registered director according to the Article 159 of the Financial
Investment Services and Capital Markets Act and the Article 168 of the enforcement decree of the same law.
※ Average remuneration per Director was calculated by dividing total remuneration by annual average number of persons.
※ There is no recognized expenses (compensation expenses) in this term from granting stock option.
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B. Summary on Remuneration by Executive
(Unit: KRW million)
Total amount of
remuneration
Remuneration not included
in total amount
Name
position
Oh-Hyun Kwon
CEO
6,257
-
Boo-Keun Yoon
CEO
3,611
-
Jong-Kyun Shin
CEO
12,034
-
Sang-Hoon Lee
CFO
2,426
-
※ Total amount of compensation for each individual is a sum of earned, retirement, and other related incomes based on the Income
Tax Law that incumbent or retired executive directors, independent directors, and members of audit committee in the fiscal year
received as a registered director according to the Article 159 of the Financial Investment Services and Capital Markets Act and the
Article 168 of the enforcement decree of the same law.
(2) Criteria and methodology
Criteria and methodology

CEO
Oh-Hyun Kwon

Total compensation of KRW 6,257 million
– Earned Income
•
Salary: KRW 1,562 million (consists of monthly wage)
•
Bonus: KRW 3,946 million (consists of traditional holiday bonus, Target Achievement
Incentive, long-term incentive)
•
Profit from exercising stock option : n/a
•
Other earned income: KRW 749 million
– Retirement Income: n/a
– Other Income: n/a
Compensation criteria and calculation method
– Salary: According to internal regulation for executive treatment (Board resolution)
– Bonus: According to internal regulation for executive treatment (Board resolution)
•
Traditional holiday bonus: 100% of monthly wage
– Target Achievement Incentive: Paid biannual basis within the range of 100~400% of monthly wage
* According to the level of target achieved
–
–

CEO
Boo-Keun Yoon

Long-term incentive: According to internal regulation for executive long-term incentive (Board resolution)
Other earned income: According to internal regulation for executive treatment (Board resolution)
•
Consists of a special bonus (one-off) and fringe benefits
Total compensation of KRW 3,611 million
– Earned Income
•
Salary: KRW 1,296 million (consists of monthly wage)
•
Bonus: KRW 1,680 million (consists of traditional holiday bonus, Target Achievement
Incentive, long-term incentive)
•
Profit from exercising stock option : n/a
•
Other earned income: KRW 635 million
– Retirement Income: n/a
– Other Income: n/a
Compensation criteria and calculation method
– Salary: According to internal regulation for executive treatment (Board resolution)
– Bonus: According to internal regulation for executive treatment (Board resolution)
•
Traditional holiday bonus: 100% of monthly wage
– Target Achievement Incentive: Paid biannual basis within the range of 100~400% of monthly wage
* According to the level of target achieved
–
–
Long-term incentive: According to internal regulation for executive long-term incentive (Board resolution)
Other earned income: According to internal regulation for executive treatment (Board resolution)
•
Consists of a special bonus (one-off) and fringe benefits
Samsung Electronics 2014 Interim Business Report
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Criteria and methodology

CEO
Jong-Kyun Shin

Total compensation of KRW 12,034 million
– Earned Income
•
Salary: KRW 1,296 million (consists of monthly wage)
•
Bonus: KRW 1,644 million (consists of traditional holiday bonus, Target Achievement
Incentive, long-term incentive)
•
Profit from exercising stock option : n/a
•
Other earned income: KRW 9,094 million
– Retirement Income: n/a
– Other Income: n/a
Compensation criteria and calculation method
– Salary: According to internal regulation for executive treatment (Board resolution)
– Bonus: According to internal regulation for executive treatment (Board resolution)
•
Traditional holiday bonus: 100% of monthly wage
– Target Achievement Incentive: Paid biannual basis within the range of 100~400% of monthly wage
* According to the level of target achieved
–
–

CFO
Sang-Hoon Lee

Long-term incentive: According to internal regulation for executive long-term incentive (Board resolution)
Other earned income: According to internal regulation for executive treatment (Board resolution)
•
Consists of a special bonus (one-off) and fringe benefits
Total compensation of KRW 2,426 million
– Earned Income
•
Salary: KRW 842 million (consists of monthly wage)
•
Bonus: KRW 1,149 million (consists of traditional holiday bonus, Target Achievement
Incentive, long-term incentive)
•
Profit from exercising stock option : n/a
•
Other earned income: KRW 435 million
– Retirement Income: n/a
– Other Income: n/a
Compensation criteria and calculation method
– Salary: According to internal regulation for executive treatment (Board resolution)
– Bonus: According to internal regulation for executive treatment (Board resolution)
•
Traditional holiday bonus: 100% of monthly wage
– Target Achievement Incentive: Paid biannual basis within the range of 100~400% of monthly wage
* According to the level of target achieved
–
–
Long-term incentive: According to internal regulation for executive long-term incentive (Board resolution)
Other earned income: According to internal regulation for executive treatment (Board resolution)
•
Consists of a special bonus (one-off) and fringe benefits
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B. Stock Options Granted and Exercised
(1) Status of stock options granted to registered directors
There have been no stock options granted to, or exercised by, the executive BOD or Audit Committee members during the
reporting period.
(2) Status of stock options granted to non-registered executives
As at September 30, 2014, the accumulated weighted average exercise price of outstanding stock options is KRW 606,700.
[Weighted average exercise price = Sum of (no. of unexercised stocks per period x exercise amount per period) / total no.
of unexercised stocks]
[As of September 30, 2014]
(Unit: KRW, shares)
Method
Type of
stock
Kyung-Hoon Unregistered
Apr 16, 2004
Kang
executive
Treasury
share
Common
Myung-Soo
Kim
Unregistered
Apr 16, 2004
executive
Treasury
share
Seok-ki Kim
Unregistered
Apr 16, 2004
executive
Seok-Pil Kim
Grantee
Relationship
Date
Changes
Grant
Exercise
Cancel
Unexercised
Exercise
period
Exercise
price
4,000
3,924
76
0
'06.4.17~
'14.4.16
580,300
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Haeng-Il Kim
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Hyuk-Cheol
Kim
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Byung-Dae
Park
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Seung-Kun
Park
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Sang-Jo Ban
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Jae-Hyun
Seong
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Hak-Kyung
Sung
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Byung-Se So
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Seong-Won
Song
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Soon-Seon
Sim
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Young-Hoon Unregistered
Apr 16, 2004
Um
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Wong-Tong
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Moon-Kyun
Woo
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Ki-Ok Lee
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Ki-Woong
Lee
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
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Grantee
Relationship
Date
Method
Type of
stock
Changes
Grant
Exercise
Unexercised
Exercise
period
Cancel
Exercise
price
Sang-Cheol
Lee
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Jae-Hyung
Lee
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Chung-Ki
Jang
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
30,000
29,426
574
0
'06.4.17~
'14.4.16
580,300
Joon-Young
Jeon
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Keum-Yong
Jeong
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
4,000
3,924
76
0
'06.4.17~
'14.4.16
580,300
Woo-In
Jeong
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Eun-Seung
Jeong
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Seung-Hwan Unregistered
Apr 16, 2004
Cho
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
In-Soo Cho
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Jae-Moon
Cho
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Seung-Cheol Unregistered
Apr 16, 2004
Choi
executive
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
Young-Jun
Choi
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
4,000
3,924
76
0
'06.4.17~
'14.4.16
580,300
In-Kwon Choi
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Jeong-Hyuk
Choi
Unregistered
Apr 16, 2004
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Myung-Seob Unregistered
Apr 16, 2004
Han
executive
Treasury
share
Common
5,000
4,905
95
0
'06.4.17~
'14.4.16
580,300
Treasury
share
Common
3,500
3,434
66
0
'06.4.17~
'14.4.16
580,300
580,300
Deuk-Kyu
Hwang
Unregistered
Apr 16, 2004
executive
Kyung-Do
Kim and
other 83
-
Apr 16, 2004
Treasury
share
Common
409,500
359,867
49,633
0
'06.4.17~
'14.4.16
Sub-total
-
-
-
-
590,000
536,939
53,061
0
-
Young-Soo
Kwak
and
other 1
-
Dec 20, 2005
10,000
5,000
0
5,000
'07.12.21~
’15.12.20
Total
-
-
600,000
541,939
53,061
5,000
-
Treasury
share
-
Common
-
-
606,700
-
※ The change in number of shares granted reflects the cancellation of share grants according to Company’s internal revocation policy
and decline of earnings in 2004.
※ As of September 30, 2014, the closing price was KRW 1,184,000. ‘Relationship’ is as of the reporting date (September 30, 2014).
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VII. Related Party Transactions
1. Credit Offerings for Affiliates and Subsidiaries
A. Details on Debt Guarantee (as at September 30, 2014)
- Domestic:
N/A
- Overseas:
(Unit: USD thousand)
Company
Relationship
Creditor
Guarantee Expiry
Date
Transactions
Beginning of
period
Increase
Decrease
Limit of
Guarantee
End of period
SEA
Subsidiary
SMBC, etc.
2017-04-10
2,840,000
0
1,308,000
1,532,000
2,425,000
SECA
Subsidiary
Nova Scotia
2014-10-10
0
0
0
0
15,000
SEM
Subsidiary
Santander, etc.
2015-08-19
314,620
73,150
0
387,770
566,000
SAMCOL
Subsidiary
Citibank, etc.
2015-06-13
34,050
27,805
0
61,855
160,000
SEDA
Subsidiary
HSBC, etc.
2015-08-29
257,366
0
252,257
5,109
1,110,000
SECH
Subsidiary
Citibank, etc.
2015-06-13
49,400
43,667
0
93,067
168,000
SEPR
Subsidiary
BBVA, etc.
2015-06-13
63,688
0
9,579
54,109
192,000
SELA
Subsidiary
Citibank
2014-12-16
0
0
0
0
5,000
SEEH
Subsidiary
HSBC, etc.
2015-09-05
0
0
0
0
920,000
SSA
Subsidiary
Citibank, etc.
2015-06-13
64,729
68,858
0
133,587
335,000
SEMRC
Subsidiary
SocGen, etc.
2014-12-16
22,157
12,413
0
34,570
110,000
SETK
Subsidiary
BTMU, etc.
2015-06-13
150,784
17,286
0
168,070
420,000
SERK
Subsidiary
BNP, etc.
2015-06-28
0
0
0
0
375,000
SEI
Subsidiary
Intesa
2014-10-31
550
0
550
0
0
SECE
Subsidiary
Citibank, etc.
2015-07-21
10,400
0
6,550
3,850
105,000
SEUC
Subsidiary
Credit Agricole, etc.
2015-06-13
16,920
0
16,920
0
175,000
SELV
Subsidiary
Citibank
2014-12-16
0
0
0
0
10,000
SAPL
Subsidiary
BOA, etc.
2015-06-13
0
0
0
0
467,270
SEV
Subsidiary
SCB
2014-11-08
0
0
0
0
15,000
SAVINA
Subsidiary
SCB
2014-11-08
0
0
0
0
30,000
SEEG
Subsidiary
HSBC
2014-06-13
3,000
0
3,000
0
0
SEPCO
Subsidiary
Citibank, etc.
2014-12-16
54,225
0
6,495
47,730
47,730
SET
Subsidiary
SCB, etc.
2014-11-08
0
0
0
0
50,000
SEIN
Subsidiary
HSBC
2014-06-13
16,400
40,379
0
56,779
140,000
SCIC
Subsidiary
HSBC, etc.
2015-06-13
0
0
0
0
200,000
SJC
Subsidiary
Mizuho Bank, etc.
2015-05-31
285,600
79,039
0
364,639
874,000
SRJ
Subsidiary
SMBC
2016-02-28
26,085
0
3,235
22,850
22,850
SEDAM
Subsidiary
Citibank, etc.
2015-06-13
54,315
147,240
0
201,555
366,000
SME
Subsidiary
SCB
2014-11-08
0
0
0
0
120,000
SAMEX
Subsidiary
Citibank
2014-11-08
0
0
0
0
5,000
4,264,289
509,837
1,606,586
3,167,540
9,428,850
Total
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Other than the guarantee obligations presented above, the Company provides payment guarantees of KRW 18,490 million
(HUF 4.32 billion) to SEH (Samsung Electronics Hungarian) in Hungary to guarantee fulfillment of an investment
incentive contract with the Hungarian government.
The Company requires BOD approval for individual guarantees exceeding 2.5% of total equity. When the guarantee
amount is between 0.1% and/or less than 2.5%, the approval decision is delegated to the Management Committee.
B. Purchase and Sales of Securities
(Unit: KRW million)
Changes
Company
Relationship
Samsung
Asset
Management
Affiliate
Total
Purchase
Beneficiary
certificate
-
200,000
200,000
2,710
1,065,463
-
200,000
200,000
2,710
1,065,463
Sale
Total
Profit &
Loss
Balance
Securities
Type
Note
Asset management
※ Profit and loss of securities is based on gain from disposition.
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2. Acquisitions and disposals of Assets with Affiliates and Subsidiaries
During the first nine months of 2014, the Company disposed assets to affiliates including SCS (Samsung China
Semiconductor Co., Ltd.) for the purpose of increasing production capacity.
In addition, the Company acquired assets including facility equipment from affiliates to improve efficiency of domestic
production.
(Unit: KRW million)
Company
Relationship
Purpose
Samsung SDI
Affiliate
Asset sale/purchase
Samsung Card
Affiliate
Cheil Industries
Affiliate
SCS
Subsidiary
Samsung Techwin
Affiliate
SAS
Subsidiary
Samsung Biologics
Affiliate
SESS
Transaction Date
Date based on
Asset
Amount
2014.07.01
Date of sale/purchase
Stock, etc.
669,591
Asset purchase
2014.06.03
Date of purchase
Stock, etc.
169,030
Asset purchase
2014.06.03
Date of purchase
Machinery, etc.
143,037
2014.09.23
Date of sale
Machinery, etc.
46,303
Asset purchase
2014.07.07
Date of purchase
Machinery, etc.
41,254
Asset purchase
2014.09.22
Date of purchase
Machinery, etc.
20,769
Asset sale
2014.06.05
Date of sale
Intellectual property right, etc.
10,433
Subsidiary
Asset sale/purchase
2014.09.05
Date of sale/purchase
Machinery, etc.
6,883
SEV
Subsidiary
Asset sale/purchase
2014.09.03
Date of sale/purchase
Machinery, etc.
4,155
SEVT
Subsidiary
Asset sale
2014.09.30
Date of sale
Machinery, etc.
3,086
SII
Subsidiary
Asset sale/purchase
2014.06.09
Date of sale/purchase
Machinery, etc.
2,593
Samsung Display
Affiliate
Asset purchase
2014.02.01
Date of purchase
Intellectual property right, etc.
1,458
SESC
Subsidiary
Asset purchase
2014.04.18
Date of purchase
Machinery, etc.
950
SRC-Guangzhou
Subsidiary
2014.02.17
Date of sale
Machinery, etc.
879
SEMES
Affiliates
2014.05.30
Date of purchase
Machinery, etc.
808
TSST Korea
Subsidiary
Asset sale
2014.09.30
Date of sale
Intellectual property right, etc.
647
SSEC-E
Subsidiary
Asset sale
2014.02.01
Date of sale
Machinery, etc.
524
SSEC
Affiliate
Asset sale
2014.03.21
Date of sale
Machinery, etc.
190
SEHZ
Subsidiary
Asset sale
2014.09.05
Date of sale
Machinery, etc.
189
Cheil Wordwide
Affiliate
Asset sale
2014.09.18
Date of sale
Machinery, etc.
180
TSOE
Subsidiary
Asset sale
2014.07.25
Date of sale
Machinery, etc.
124
SEMCO
Subsidiary
Asset sale
2014.06.23
Date of sale
Machinery, etc.
110
Asset sale
Asset sale
Asset purchase
※ Transaction date: most recent transaction
※ The former Cheil Industries merged with Samsung SDI in July 2014, and Samsung Everland name has been renamed as Cheil Industries
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3. Business Transactions with Affiliates and Subsidiaries
During the first nine months of 2014, the Company had business transactions with affiliates STA (Samsung
Telecommunications America LLC.) and SEV (Samsung Electronics Vietnam Co., Ltd.).
(Unit: KRW million)
Company
Relationship
Type of
Transaction
STA
Subsidiary
Sales/Purchases
2014.01 - 2014.09
Sales of HHP and Network
Equipment, etc.
13,029,581
SEV
Subsidiary
Sales/Purchases
2014.01 - 2014.09
Purchase of HHP and Home
Appliance, etc.
11,375,462
SEHZ
Subsidiary
Sales/Purchases
2014.01 - 2014.09
Purchase of HHP and CTV,
etc.
9,859,862
SSI
Subsidiary
Sales/Purchases
2014.01 - 2014.09
Purchase of semiconductor,
etc.
9,790,281
SEA
Subsidiary
Sales/Purchases
2014.01 - 2014.09
Purchase of HHP and Home
Appliance, etc.
8,518,686
Date
Details
Amount
4. Transactions with Stakeholders other than Affiliates and Subsidiaries
As at September 30, 2014, the Company’s outstanding loan amount is KRW 114 billion related to support for supplier
companies for product competitiveness and mutual development as well as home loan and educational expenses for
employee welfare. In addition, the Company provides debt guarantees up to KRW 13.8 billion for employees’ loans from
financial institutions relating to housing rental.
(Unit: KRW million)
Loans
Company
Transaction
Relationship
Account title
Jeil Precision
Industrial, etc
Partner company
Dooil I&D, etc
Partner company and
employee
Total
Beginning of period
(January 1, 2014)
Increase
Decrease
End of period
(September 30, 2014)
Short-term
loans
30,977
2,169
3,565
29,581
Long-term loans
77,303
31,195
24,060
84,438
108,280
33,364
27,625
114,019
※ The amount shown above reflects present value of discounted debts before accounting for bad debts.
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VIII. Other Information Related to Investor Protection
1. Public Disclosure
(A)
Progress on major disclosed information related to management
Report date
Feb 7, 2011
Mar 4, 2011
Title
Report
Progress
Appeal of Court’s
Ruling on Samsung
Motors Case
Related to the agreement regarding court receivership of
Samsung Motors between 28 Samsung affiliates (including
Samsung Electronics) and creditors of Samsung Motors in
September 1999, the Samsung affiliates (including Samsung
Electronics) appealed the Court’s ruling of January 1, 2011,
against the case filed by the defendants (Creditors filed the
case on December 2005).
Filing of a lawsuit
Related to the agreement regarding court receivership of
Samsung Motors between 28 Samsung affiliates (including
Samsung Electronics) and creditors of Samsung Motors in
September 1999, creditors appealed the Court’s ruling of
January 1, 2011 regarding the dispute case filed by the
creditors on December 2005.
In progress
In progress
(The Company received on Mar 4, 2011 the petition
of appeal that the creditors of Samsung Motors
submitted on Feb 1, 2011)
2. Summary of Shareholder Meeting results
Date
Agenda
Results
FY2014 annual general meeting of
shareholders ('14.3.14)
1. Approval of Balance Sheet, Income Statement, and Statement of Appropriation of Retained
Earnings (Draft), etc. for FY2013
2. Approval of the limit on the remuneration for the Directors
Approved
1. Approval of Balance Sheet, Income Statement, and Statement of Appropriation of Retained
Earnings (Draft), etc. for FY2012
Approved
2. Appointment of Directors
2.1 : Appointment of Independent Directors
2.1.1: In-Ho Lee
2.1.2: Kwang-Soo Song
2.1.3: Eun-Mee Kim
Approved
FY2013 annual general meeting of
shareholders ('13.3.15)
Approved
2.2: Appointment of Executive Directors
2.2.1: Boo-Keun Yoon
2.2.2: Jong-Kyun Shin
2.2.3: Sang-Hoon Lee
2-3: Appointment of Members of Audit Committee
2.3.1: In-Ho Lee
2.3.2: Kwang-Soo Song
3. Approval of the limit on the remuneration for the Directors
FY2012 annual general meeting of
shareholders ('12.3.16)
Approved
1. Approval of Balance Sheet, Income Statement, and Statement of Appropriation of Retained
Earnings (Draft), etc. for FY2011
Approved
2. Appointment of Directors
2.1: Appointment of Independent Directors
2.2: Appointment of Executive Directors
2.3: Appointment of Members of Audit Committee
Approved
3. Approval of the limit on the remuneration for the Directors
Approved
Approved
4. LCD business spin-off
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3. Litigation
On December 2005, based on the agreement entered on September 1999 with respect to Samsung Motor Inc.(“SMI”)’s
bankruptcy proceedings, SMI’s creditors (the “Creditors”) filed a civil action against Mr. Kun-Hee Lee, chairman of the
Company, and 28 Samsung Group affiliates including the Company under joint and several liability for failing to comply
with such agreement. Under the suit, the Creditors have sought KRW 2,450 billion for loss of principal on loans extended
to SMI and additional amounts for default interest. During the course of Samsung Life Insurance(“SLI”)’s Initial Public
Offering (“IPO”), its shares owned by the Creditors were disposed of, and the part of proceeds exceeding the par value of
KRW 70,000 was deposited into an escrow account (KRW 877.6 billion). Most of the claims with regards to the lawsuit
have been withdrawn. On January 11, 2011, the Seoul High Court ordered Samsung Group affiliates to pay to the
Creditors KRW 600 billion and penalties for the delay. In accordance with the Seoul High Court order, KRW 620.4 billion
(which includes penalties and interest owed) was paid to the Creditors from the funds held in escrow during January 2011.
Samsung Group affiliates and the Creditors appealed the Seoul High Court’s ruling to the Korean Supreme Court, and the
appeal is currently in progress.
As at the time of this disclosure, there are a number of on-going IP related litigations with Apple Inc. Regarding the
ongoing lawsuit in the U.S.A, on August 24, 2012, the jury determined that the Company partially infringed Apple’s
design and utility patent and should pay damages to Apple. On March 1, 2013, however, the Judge ordered a new trial for
a certain portion of the damages, ruling that it was originally miscalculated. On March 6, 2014, the Judge denied Apple's
bid for a permanent injunction against the Company and made a final judgment restating the total damages amount
determined by a jury verdict on November 21, 2013. The Company appealed the decision on the damages amount on
March 7, 2014, and the appeal is currently in progress. The final conclusion and the effect of the patent lawsuits with
Apple are uncertain as of the reporting date. In August 2014, the company and Apple Inc. reached an agreement to
withdraw suits held in countries other than U.S.A
As at the time of this disclosure, there are multiple on-going lawsuits and civil damage claims by some overseas
purchasers of TFT-LCD panels, as well as investigations by regulatory authorities, in connection with the price fixing of
LCD panels. These lawsuits, claims and investigations were initiated prior to the spin-off of LCD business. The timing of
payments related to these matters is currently uncertain but our management believes that the ultimate resolution of such
lawsuits, claims, and investigations would not materially affect the financial condition of the company.
In addition, during the normal course of business with numerous companies, the Company has been involved in various
claims, disputes, and investigations conducted by regulatory bodies. Although the outflow of resources and timing of these
matters are uncertain, the Company believes the outcome will not have a material impact on the financial condition of the
Company.
4. Guarantees
Refer to Commitments and Contingencies notes in the Separate and Consolidated Financial Statements
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5. Sanctions and Others
The Company paid a fine of KRW 1.602 billion on 7 August 2012 according to a corrective order resulting from the
violation of Article 8 (Prohibition of Unreasonable Cancellation of Entrustment) in pursuant to the Fair Transactions in
Subcontracting Act. On 21 March 2012, the Company paid a fine of KRW 12.907 billion according to a corrective order
resulting from the violating of Article 19 (Prohibition of Unfair Collaborative Acts) of the Monopoly Regulation and Fair
Trade Act from the Fair Trade Commission relating to sales of washing machines, flat panel TVs, and notebook PCs.
The Company is still engaged in a lawsuit after being issued a corrective order and fine (KRW 14.126 billion) on July 10,
2012 for violating Article 23 (Prohibition of Unfair Trade Practices) of the Monopoly Regulation and Fair Trade Act. In
relation to the same lawsuit, the Company and two executives (one incumbent senior vice president at the time and one
retired vice president at the time) were ordered to pay a fine (the Company: KRW 300 million, two executives: 50 million
each) on Mar 12, 2012, and have subsequently paid.
The Company was ordered to pay a fine (KRW 26 million) on Jan 13, 2014 from the Fair Trade Commission for violating
Article 4 (Announcement of Critical Information and Integrated Notification) of the Act on Fair Labeling and Advertising),
and this has been subsequently paid.
For the hydrofluoric acid gas leak occurred on January 28, 2013, the Company was ordered to pay a fine (KRW 267
million) on March 7, 2013, for violating the Occupational Safety and Health Act, and have subsequently paid. The
Company was issued an improvement order and ordered to pay a fine (KRW 2.2 million) on April 1, 2013, for violating
the Toxic Chemicals Control Act. Accordingly, the Company reported compliance with the improvement order and
subsequently paid the fine. For this case, three employees and executives of the Company were ordered to pay a fine
(KRW 15 million) at the first trial on October 31, 2014. The Company appealed against the decision on November 7, 2014.
For the hydrofluoric acid gas leak occurred on May 2, 2013, the Company was ordered to pay a fine (KRW 4.5 million)
on February 27, 2014, for violating the Occupational Safety and Health Act and the Toxic Chemicals Control Act, and
have subsequently paid.
The Company was ordered and paid a fine of KRW 166.7 million for not reporting imported chemical substances in
August 2013, when the Ministry of Environment and Gyeong-Gi province conducted a joint inspection.
The Company is consistently providing education to executives and employees to promote fair competition that is up to
global standards, and operating various programs for compliance. The Company reinforced internal controls to comply
with relevant laws on environmental safety and provides related education for executives and employees.
6. Return of Short-Swing Profits
The Company has not received any notification of short-swing profits from the Securities & Futures Commission (the
Governor of the Financial Supervisory Service) over the last three years and until the date of this report.
7. Subsequent Events
N/A
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8. Acquisition and Divestments
A. Acquisitions and divestments
[Samsung LED Merge]
ㆍ Type: Merger
ㆍ Purpose: Efficiency and profitability of LED business
ㆍ Board Decision Date: 26 December 2011
ㆍ Board Approval Date: 20 February 2012
(※ The merger was approved at the shareholder meeting in lieu of the BOD.)
ㆍ Merger Date: April 1, 2012
Acquiring Company
Samsung Electronics Co., Ltd.
Predecessor Company
Samsung LED Co., Ltd.
Address
416, Maetan-dong, Yeongtong-gu,
Suwon-si, Gyeonggi-do, Korea
San 24, Nongseo-dong, Giheung-gu, Yongin-si, Gyeonggi-do, Korea
President
Rate of Merger
Gee-sung Choi
1
Nam-sung Cho
0.0134934
Name
[LCD Business Spin-off]
ㆍ Type: Physical division (establishment of Samsung Display Co., Ltd.)
ㆍ Purpose: Efficiency of LCD business and profitability
ㆍ Approval Date: March 16, 2012 (At the Annual Shareholder Meeting)
ㆍ Spin-off Date: April 1, 2012
[Samsung Electronics Hainan Fiber Optics Korea Merge]
ㆍ Type: Merger
ㆍ Purpose: Efficiency and profitability of Camera module and Touchscreen
ㆍ Board Decision Date: September 13, 2012
ㆍ Board Approval Date: October 26, 2012
(※ The merger was approved at the shareholder meeting in lieu of the BOD.)
ㆍ Merger Date: 1 December 2012
Acquiring Company
Predecessor Company
Name
Samsung Electronics Co., Ltd.
Samsung Electronics Hainan Fiber Optics Korea Co., Ltd.
Address
129, Samsung-ro, Yeongtong-gu,
Suwon-si, Gyeonggi-do, Korea
94-1, Imsu-dong, Gumi-si, Gyeongsangbuk-do, Korea
President
Oh-Hyun Kwon
Phil-Young Kim
Merger Ratio
1
0.2056163
※ We acquired Hainan Fiber Optics Korea Corp. without issuance of new shares as the Company held 100% ownership of equity.
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B. Post Information
[Samsung LED]
(Unit: KRW million)
Year 2 (2012)
Predecessor
Company
Samsung
LED
Account
Forecast
Forecast Vs.
Actual
Reason for Difference
Actual Ratio
Revenue
2,381,405
1,587,265
33%
Operating
Profit
258,250
-54,283
121%
EBIT
234,507
-76,422
133%
IT market and lighting business stagnation
※ For Year 1 (2011), refer to the Audited Financial Statement of Samsung LED.
[Samsung Electronics Hainan Fiber Optics Korea]
(Unit: KRW million)
Year 1 (2012)
Predecessor
Company
SEHF-K
Account
Forecast
Forecast Vs.
Actual
Reason for Difference
Actual Ratio
Revenue
1,111,692
1,086,135
2%
Operating
Profit
33,366
5,121
85%
EBIT
31,517
1,008
97%
Decrease of profitability of Touch Screen
Panel Business
※ For Year 2 (2013), the Company’s financial results are difficult to determine as the business was incorporated into the IM division.
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9. Green Management
The Company is increasing acquisitions of “Green Technology Certifications” to follow the Low Carbon Green Growth
policy of the Korean government.
(Green Technology Certification)
In accordance with Clause 2, Article 32 of the Framework Act on Low Carbon Green Growth, the Company acquires
Green Technology Certification. Green technology development is a part of our Planet First strategy, which aims for
business activities that respect people and nature. Since the certification system was introduced in 2010, the Company has
secured 35 valid green certifications as of September 30, 2014. In addition, the Company has acquired 21 ‘Green
technology product certificates (410 models), for commercialized products. Meanwhile, the Company withdrew the
application for Giheung/Hwasung Campus to be re-designated as green company, and as of April 5, 2013, the Company
no longer qualified for “the Green Company” status.
Certified Green Technologies as of September 30, 2014 are as follows:
Division
Business
Name of green technology and green projects
No.
CE
Eco Bubble washing technology, etc.
23
IM
Membrane laminated air filter for telecommunication base transceiver stations;
Low power consumption cooling, heating, and controlling humidity, etc.
6
Semiconductor
3-bit NAND Flash semiconductor design technology, etc.
5
DP
Transparent LCD Display technology, etc.
1
DS
Total
35
※ The reported data above is based on parent company only.
※ Refer to 『11. Other Information for Investment Decision Making (B. Environmental regulations)』 in 『II. Businesses Overview』
for greenhouse gas emission and energy use.
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IX. Auditor’s Report
1. Introduction
Samil PriceWaterhouseCooper (PwC) has reviewed the interim consolidated/separate financial position of the Company
as of September 30, 2014, and the related interim consolidated/separate statements of income and comprehensive income
for the three and nine months ended September 30, 2014, and the interim consolidated/separate statements of changes in
equity and cash flows for the nine months ended September 30, 2014. Nothing has come to attention that causes them to
believe the accompanying interim consolidated/separate financial statements are not presented fairly, in all material
respects, in accordance with the K-IFRS 1034, Interim Financial Reporting. Samil PwC also conducted audits on the
consolidated/separate financial statement of financial position of the Company as of December 31, 2012 and 2013, and the
related consolidated/separate statements of income, comprehensive income, changes in equity and cash flows for the year
then ended and expressed an unqualified opinion on those financial statements. There are 158 subsidiaries as of September
30, 2014 and no auditors have changed for the subsidiaries for the nine months ended September 30, 2014.
<Review plan for six-month period ended September 30, 2014 >
Consolidated Financial
Statements
Separate Financial
Statements
Pre-Review
Review
2014.09.08 ~ 2014.09.26
2014.10.07 ~ 2014.11.07
2014.09.08 ~ 2014.09.26
2014.10.07 ~ 2014.11.07
<Audit Contract Description>
Fiscal Year
Auditor
Nine-months ended
September 30, 2014
Samil PwC
Year ended
December 31, 2013
Samil PwC
Year ended
December 31, 2012
Samil PwC
(Unit: KRW million)
Description
Compensation
- Review of the interim consolidated/separate
financial statements
- Review of the interim consolidated/separate
financial statements
Total Hours
1,751
20,123
3,840
44,702
3,660
43,572
- Audit on consolidated/separate financial statements
- Review of the interim consolidated/separate
financial statements
- Audit on consolidated/separate financial statements
Samil PwC has performed non-audit services and has been paid KRW 2,722 million from the Company for the nine
months ended September 30, 2014.
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<Non-Audit Service Contract Description>
(Unit: KRW million)
Fiscal Year
Ninemonths
ended
Contract Date
Non-audit Service Description
Period for Service
September 2013
Incorporation, M&A and Divestiture Advisory
2014.01~2014.09
1,161
August 2013
Tax Advisory
2014.01~2014.09
533
October 2013
Process Improvement Advisory
2014.01~2014.09
731
September
Compensation
Others
297
30, 2014
Subtotal
Year ended
December
2,722
November 2012
Incorporation, M&A and Divestiture Advisory
2013.01~2013.12
2,466
August 2012
Tax Advisory
2013.01~2013.12
2,272
June 2012
Process Improvement Advisory
2013.01~2013.12
1,896
31, 2013
Others
1,573
Subtotal
Year ended
8,207
January 2012
Incorporation and M&A Advisory
2012.01~2012.12
3,520
January 2011
Tax Advisory
2012.01~2012.12
3,995
November 2011
IP Advisory
2012.01~2012.12
1,287
January 2012
Process Improvement Advisory
2012.01~2012.12
2,815
December
31, 2012
Others
802
Subtotal
12,419
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X. Financial Statements
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of U.S dollars (refer to XI.-28))
September 30,
2014
KRW
December 31,
2013
KRW
September 30,
2014
USD
December 31,
2013
USD
Assets
Current Assets
Cash and cash equivalents
Short-term financial instruments
Available-for-sale financial assets
Trade and other receivables
Advances
Prepaid expenses
Inventories
Other current assets
Assets held for sale
Total current assets
18,004,063
45,695,172
3,251,924
26,584,479
1,605,417
3,974,010
18,872,710
1,823,527
119,811,302
16,284,780
36,722,702
1,488,527
27,875,934
1,928,188
2,472,950
19,134,868
2,135,589
2,716,733
110,760,271
17,136,934
43,494,358
3,095,302
25,304,092
1,528,095
3,782,610
17,963,745
1,735,700
114,040,836
15,500,457
34,954,028
1,416,835
26,533,347
1,835,321
2,353,845
18,213,276
2,032,733
2,585,887
105,425,729
Non-current assets
Available-for-sale financial assets
Associates and joint ventures
Property, plant and equipment
Intangible assets
Long-term prepaid expenses
Deferred income tax assets
Other non-current assets
Total assets
12,317,751
5,391,924
76,012,065
4,684,752
5,140,876
4,824,644
3,563,175
231,746,489
6,238,380
6,422,292
75,496,388
3,980,600
3,465,783
4,621,780
3,089,524
214,075,018
11,724,491
5,132,233
72,351,099
4,459,121
4,893,276
4,592,275
3,391,562
220,584,893
5,937,921
6,112,975
71,860,259
3,788,883
3,298,861
4,399,181
2,940,724
203,764,533
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INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of U.S dollars (refer to XI.-28))
September 30,
2014
KRW
Liabilities and Equity
Current liabilities
Trade and other payables
Short-term borrowings
Advances received
Withholdings
Accrued expenses
Income tax payable
Current portion of long-term borrowings and
debentures
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Debentures
Long-term borrowings
Long-term trade and other payables
Net defined benefit liabilities
Deferred income tax liabilities
Provisions
Other non-current liabilities
Total liabilities
December 31,
2013
KRW
September 30,
2014
USD
December 31,
2013
USD
17,975,973
9,722,014
1,981,972
1,066,256
9,254,550
3,943,563
1,133,104
17,633,705
6,438,517
1,706,313
1,176,046
11,344,530
3,386,018
2,425,831
17,110,197
9,253,773
1,886,514
1,014,902
8,808,824
3,753,629
1,078,530
16,784,414
6,128,419
1,624,132
1,119,404
10,798,144
3,222,937
2,308,996
7,604,860
525,466
53,207,758
6,736,476
467,973
51,315,409
7,238,587
500,159
50,645,115
6,412,027
445,434
48,843,907
1,309,116
1,774,255
2,606,322
2,697,054
4,606,139
661,624
1,416,526
68,278,794
1,311,068
985,117
1,053,756
1,854,902
6,012,371
460,924
1,065,461
64,059,008
1,246,065
1,688,802
2,480,794
2,567,156
4,384,294
629,758
1,348,302
64,990,286
1,247,923
937,671
1,003,004
1,765,564
5,722,797
438,725
1,014,146
60,973,737
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INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of U.S dollars (refer to XI.-28))
September 30,
2014
KRW
December 31,
2013
KRW
September 30,
2014
USD
December 31,
2013
USD
Equity attributable to owners
of the parent
Preferred stock
Common stock
Share premium
Retained earnings
Other components of equity
119,467
778,047
4,403,893
164,244,856
(11,829,111)
119,467
778,047
4,403,893
148,600,282
(9,459,073)
113,713
740,574
4,191,789
156,334,338
(11,259,387)
113,713
740,574
4,191,789
141,443,253
(9,003,496)
Non-controlling interests
Total equity
5,750,543
163,467,695
5,573,394
150,016,010
5,473,580
155,594,607
5,304,963
142,790,796
Total liabilities and equity
231,746,489
214,075,018
220,584,893
203,764,533
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INTERIM CONSOLIDATED STATEMENTS OF INCOME
(In millions of Korean won, in thousands of U.S dollars (refer to XI.-28))
For the nine-months ended September 30,
For the three-months ended September 30,
2014
KRW
2013
KRW
2014
USD
2013
USD
2014
KRW
2013
KRW
2014
USD
2013
USD
Revenue
Cost of sales
47,447,310
30,711,398
59,083,499
35,527,620
45,162,107
29,232,246
56,237,863
33,816,505
153,475,865
94,432,732
169,416,042
101,248,394
146,084,014
89,884,572
161,256,465
96,371,972
Gross profit
Selling, general and administrative
expenses
Operating profit
Other non-operating income
Other non-operating expense
Share of profit of
associates and joint ventures
Finance income
Finance expense
Profit before income tax
Income tax expense
Profit for the period
Profit attributable to owners of the parent
Profit attributable to non-controlling
interests
Earnings per share for profit
attributable to the owners of the parent
(in Korean Won, in US dollars)
- Basic
- Diluted
16,735,912
23,555,879
15,929,861
22,421,358
59,043,133
68,167,648
56,199,442
64,884,493
12,675,390
4,060,522
828,296
286,460
13,392,285
10,163,594
419,495
449,455
12,064,906
3,864,955
788,403
272,663
12,747,273
9,674,085
399,291
427,808
39,306,489
19,736,644
3,327,828
1,572,572
39,693,913
28,473,735
996,647
1,037,977
37,413,373
18,786,069
3,167,550
1,496,832
37,782,137
27,102,356
948,646
987,985
2,076
1,682,596
1,440,159
4,846,871
624,526
4,222,345
4,135,422
149,651
1,998,542
2,042,670
10,239,157
1,994,421
8,244,736
8,049,537
1,976
1,601,557
1,370,797
4,613,431
594,447
4,018,984
3,936,248
142,443
1,902,286
1,944,288
9,746,009
1,898,364
7,847,645
7,661,848
96,217
5,369,692
4,676,862
22,280,947
4,233,380
18,047,567
17,796,608
539,902
6,257,206
6,117,091
29,112,422
5,938,934
23,173,488
22,601,471
91,583
5,111,072
4,451,611
21,207,831
4,029,488
17,178,343
16,939,471
513,899
5,955,840
5,822,474
27,710,282
5,652,898
22,057,384
21,512,917
86,923
195,199
82,736
185,797
250,959
572,017
238,872
544,467
27,419
27,418
53,401
53,384
26.10
26.10
50.83
50.81
118,009
118,000
149,948
149,891
112.33
112.32
142.73
142.67
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INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions of Korean won, in thousands of U.S dollars (refer to XI.-28))
For the three-months ended September 30,
Profit for the period
Other comprehensive income
Items not to be reclassified
subsequently to profit or loss :
Remeasurement of the net defined
benefit liabilities, net of tax
Items to be reclassified
subsequently to profit or loss :
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
(loss) of associates and joint ventures,
net of tax
Foreign currency translation, net of tax
Other comprehensive income (loss) for
the period, net of tax
Total consolidated comprehensive
income for the period
Consolidated comprehensive income
attributable to :
Owners of the parent
Non-controlling interests
2014
USD
For the nine-months ended September 30,
2014
KRW
2013
KRW
2013
USD
2014
KRW
2013
KRW
2014
USD
4,222,345
8,244,736
4,018,984
7,847,645
18,047,567
23,173,488
17,178,343
22,057,384
(15,366)
(786)
(14,626)
(748)
(35,973)
(17,777)
(34,240)
(16,921)
(292,853)
200,941
(278,748)
191,263
(562,797)
1,039,847
(535,691)
989,765
22,408
112,396
(10,392)
(2,293,074)
21,329
106,983
(9,891)
(2,182,633)
(61,509)
(1,792,533)
(9,003)
(320,166)
(58,547)
(1,706,199)
(8,569)
(304,746)
(173,415)
(2,103,311)
(165,062)
(2,002,009)
(2,452,812)
692,901
(2,334,677)
659,529
4,048,930
6,141,425
3,853,922
5,845,636
15,594,755
23,866,389
14,843,666
22,716,913
3,977,392
71,538
6,023,479
117,946
3,785,829
68,093
5,733,370
112,266
15,400,519
194,236
23,293,031
573,358
14,658,785
184,881
22,171,170
545,743
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USD
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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of Korean won)
2013 KRW
Balance as of January 1, 2013
Profit for the period
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
of associates and joint ventures, net
of tax
Foreign currency translation,
net of tax
Remeasurement of net defined benefit
liabilities, net of tax
Preferred
stock
Common
stock
Other
components
of equity
Share
premium
Equity
attributable
to owners of
the parent
Retained
earnings
Noncontrolling
interests
Total
119,467
-
778,047
-
4,403,893
-
(8,193,044)
-
119,985,689
22,601,471
117,094,052
22,601,471
4,386,154
572,017
121,480,206
23,173,488
-
-
-
1,038,661
-
1,038,661
1,186
1,039,847
-
-
-
(8,833)
-
(8,833)
(170)
(9,003)
-
-
-
(320,514)
-
(320,514)
348
(320,166)
-
-
-
(17,754)
-
(17,754)
(23)
(17,777)
Total comprehensive income
-
-
-
691,560
22,601,471
23,293,031
573,358
23,866,389
Dividends
Capital transaction under common
control
Effect of business combination
Disposal of treasury stock
Stock option activities
Others
Total transactions with owners
-
-
-
-
(1,206,622)
(1,206,622)
(7,985)
(1,214,607)
-
-
-
1,688
22,685
(6,489)
541
18,425
(1,206,622)
1,688
22,685
(6,489)
541
(1,188,197)
287,641
894
(145)
280,405
289,329
894
22,685
(6,489)
396
(907,792)
119,467
778,047
4,403,893
(7,483,059)
141,380,538
139,198,886
5,239,917
144,438,803
Balance as of September 30, 2013
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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (refer to XI.-28))
2013 USD
Balance as of January 1, 2013
Profit for the period
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
of associates and joint ventures, net
of tax
Foreign currency translation, net of tax
Remeasurement of net defined benefit
liabilities, net of tax
Preferred
stock
Common
stock
Other
components
of equity
Share
premium
Equity
attributable
to owners of
the parent
Retained
earnings
Noncontrolling
interests
Total
113,713
-
740,574
-
4,191,789
-
(7,798,443)
-
114,206,824
21,512,917
111,454,457
21,512,917
4,174,903
544,467
115,629,360
22,057,384
-
-
-
988,636
-
988,636
1,129
989,765
-
-
-
(8,408)
(305,077)
-
(8,408)
(305,077)
(161)
331
(8,569)
(304,746)
-
-
-
(16,899)
-
(16,899)
(22)
(16,921)
Total comprehensive income
-
-
-
658,252
21,512,917
22,171,169
545,744
22,716,913
Dividends
Capital transaction under common
control
Effect of business combination
Disposal of treasury stock
Stock option activities
Others
Total transactions with owners
-
-
-
-
(1,148,508)
(1,148,508)
(7,600)
(1,156,108)
-
-
-
1,607
-
21,592
(6,176)
515
17,538
(1,148,508)
1,607
21,592
(6,176)
515
(1,130,970)
273,787
851
(138)
266,900
275,394
851
21,592
(6,176)
377
(864,070)
113,713
740,574
4,191,789
(7,122,653)
134,571,233
132,494,656
4,987,547
137,482,203
Balance as of September 30, 2013
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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of Korean won)
2014 KRW
Balance as of January 1, 2014
Profit for the period
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
of associates and joint ventures, net
of tax
Foreign currency translation, net of tax
Remeasurement of net defined benefit
liabilities, net of tax
Preferred
stock
Common
stock
Other
components
of equity
Share
premium
Equity
attributable
to owners of
the parent
Retained
earnings
Noncontrolling
interests
Total
119,467
-
778,047
-
4,403,893
-
(9,459,073)
-
148,600,282
17,796,608
144,442,616
17,796,608
5,573,394
250,959
150,016,010
18,047,567
-
-
-
(586,312)
-
(586,312)
23,515
(562,797)
-
-
-
(61,138)
(1,710,595)
-
(61,138)
(1,710,595)
(371)
(81,938)
(61,509)
(1,792,533)
-
-
-
(38,044)
-
(38,044)
2,071
(35,973)
Total comprehensive income
-
-
-
(2,396,089)
17,796,608
15,400,519
194,236
15,594,755
Dividends
Capital transaction under common
control
Effect of business combination
Disposal of treasury stock
Stock option activities
Others
Total transactions with owners
-
-
-
-
(2,157,011)
(2,157,011)
(16,312)
(2,173,323)
-
-
-
(158)
32,763
(9,436)
2,882
26,051
4,977
(2,152,034)
(158)
32,763
(9,436)
7,859
(2,125,983)
(549)
378
(604)
(17,087)
(707)
378
32,763
(9,436)
7,255
(2,143,070)
119,467
778,047
4,403,893
(11,829,111)
164,244,856
157,717,152
5,750,543
163,467,695
Balance as of September 30, 2014
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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (refer to XI.-28))
2014 USD
Balance as of January 1, 2014
Profit for the period
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
of associates and joint ventures, net
of tax
Foreign currency translation, net of tax
Remeasurement of net defined benefit
liabilities, net of tax
Preferred
stock
Common
stock
Other
components
of equity
Share
premium
Equity
attributable
to owners of
the parent
Retained
earnings
Noncontrolling
interests
Total
113,713
-
740,574
-
4,191,789
-
(9,003,496)
-
141,443,253
16,939,471
137,485,833
16,939,471
5,304,963
238,872
142,790,796
17,178,343
-
-
-
(558,073)
-
(558,073)
22,382
(535,691)
-
-
-
(58,193)
(1,628,208)
-
(58,193)
(1,628,208)
(354)
(77,991)
(58,547)
(1,706,199)
-
-
-
(36,212)
-
(36,212)
1,972
(34,240)
Total comprehensive income
-
-
-
(2,280,686)
16,939,471
14,658,785
184,881
14,843,666
Dividends
Capital transaction under common
control
Effect of business combination
Disposal of treasury stock
Stock option activities
Others
Total transactions with owners
-
-
-
-
(2,053,123)
(2,053,123)
(15,526)
(2,068,649)
-
-
-
(150)
31,185
(8,982)
2,743
24,796
4,737
(2,048,386)
(150)
31,185
(8,982)
7,480
(2,023,590)
(523)
360
(574)
(16,263)
(673)
360
31,185
(8,982)
6,906
(2,039,853)
113,713
740,574
4,191,789
(11,259,386)
156,334,338
150,121,028
5,473,581
155,594,609
Balance as of September 30, 2014
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INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of Korean won, in thousands of U.S dollars (refer to XI.-28))
Cash flows from operating activities
2014
2013
2014
2013
KRW
KRW
USD
USD
Profit for the period
18,047,567
23,173,488
17,178,343
22,057,384
Adjustments
16,303,949
18,253,468
15,518,703
17,374,327
638,514
(16,355)
607,761
(15,567)
34,990,030
41,410,601
33,304,807
39,416,144
Interest received
1,118,831
699,644
1,064,945
665,947
Interest paid
(341,456)
(332,175)
(325,010)
(316,176)
Dividend received
1,459,641
281,939
1,389,340
268,360
(5,657,246)
(5,627,868)
(5,384,777)
(5,356,814)
31,569,800
36,432,141
30,049,305
34,677,461
(6,524,466)
(16,502,340)
(6,210,228)
(15,707,539)
(784,666)
25,923
(746,874)
24,674
151,548
30,411
144,249
28,946
(5,940,674)
(326,961)
(5,654,554)
(311,214)
2,014,430
240
1,917,409
228
(653,567)
(37,534)
(622,089)
(35,726)
267,969
266,214
255,063
253,392
(14,478,346)
(15,077,203)
(13,781,026)
(14,351,040)
7,865
994
7,486
946
(951,358)
(651,853)
(905,538)
(620,458)
(176,625)
(167,155)
(168,118)
(159,104)
(2,951,180)
(1,599,723)
(2,809,043)
(1,522,674)
(30,019,070)
(34,038,987)
(28,573,263)
(32,399,569)
Changes in assets and liabilities arising
from operating activities
Cash flows from operating activities
Income tax paid
Net cash generated from operating
activities
Cash flows from investing activities
Net increase in short-term financial
instruments
Net decrease (increase) in short-term
available-for-sale financial assets
Proceeds from disposal of long-term
available-for-sale financial assets
Acquisition of long-term available-forsale financial assets
Proceeds from disposal of associates and
joint ventures
Acquisition of associates
and joint ventures
Disposal of property and equipment
Purchases of property and equipment
Disposal of intangible assets
Purchases of intangible assets
Cash outflows from business
combination
Others
Net cash used in investing activities
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INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of Korean won, in thousands of U.S dollars (refer to XI.-28))
For the nine-months ended September 30,
Notes
Cash flows from financing activities
Net increase(decrease)
in short-term borrowings
Disposal of treasury stock
Proceeds from long-term borrowings
and debentures
Repayment of long-term borrowings
and debentures
Payment of dividends
Net increase(decrease) in non-controlling
interests
Net cash generated(used) in financing
activities
2014
2013
2014
2013
KRW
KRW
USD
USD
3,474,181
27,582
(1,509,323)
18,284
3,306,854
26,254
(1,436,630)
17,403
1,739,653
26,672
1,655,866
25,387
(2,177,556)
(2,162,416)
(1,336,214)
(1,215,583)
(2,072,678)
(2,058,268)
(1,271,858)
(1,157,037)
(760)
282,016
(724)
268,435
900,684
(3,734,148)
857,304
(3,554,300)
(732,131)
64,298
(696,869)
61,201
1,719,283
(1,276,696)
1,636,477
(1,215,207)
Beginning of the period
16,284,780
18,791,460
15,500,457
17,886,408
End of the period
18,004,063
17,514,764
17,136,934
16,671,201
Effect of exchange rate changes
on cash and cash equivalents
Net increase(decrease) in cash and cash
equivalents
Cash and cash equivalents
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1. Allowance for bad debt
The allowances for bad debts over the past 3 years are as follows:
Bad debt allowance by account
(Unit: KRW million, %)
Period
September 30
2014
2013
2012
Account
Receivables Amount
Allowance Amount
Allowance (%)
Trade receivables
Short-term loans
Other receivables
Advances
24,353,730
4,837
2,527,675
1,608,996
284,220
73
12,706
3,579
1.2%
1.5%
0.5%
0.2%
Trade receivables
(Long-term)
34,636
308
0.9%
Other receivables
(Long-term)
29,292
79
0.3%
Advances
(Long-term)
201,674
793
0.4%
Long-term loans
154,563
1,287
0.8%
Total
28,915,403
303,045
1.0%
Trade receivables
Short-term loans
Other receivables
Advances
25,256,002
33,382
2,907,221
1,932,530
267,470
271
19,819
4,342
1.1%
0.8%
0.7%
0.2%
Trade receivables
(Long-term)
36,229
205
0.6%
Other receivables
(Long-term)
24,384
227
0.9%
Advances
(Long-term)
76,429
792
1.0%
Long-term loans
152,005
36,727
24.2%
Total
30,418,182
329,853
1.1%
Trade receivables
Short-term loans
Other receivables
Advances
24,138,022
60,843
2,815,696
1,676,804
276,787
675
2,335
2,376
1.1%
1.1%
0.1%
0.1%
Trade receivables
(Long-term)
30,405
-
0.0%
Other receivables
(Long-term)
18,491
260
1.4%
Advances
(Long-term)
85,843
793
0.9%
Long-term loans
166,689
643
0.4%
28,992,793
283,869
1.0%
Total
※ Receivables amount is based on net present value (Consolidated)
※ Presented in accordance with Korean International Financial Reporting Standards (“K-IFRS”)
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Allowance for Bad Debt (Roll Forward)
(Unit: KRW million)
September 30, 2014
2013
2012
1. Allowance for bad debts
(beginning balance)
329,853
283,869
259,161
50,081
17,833
53,433
51,160
20,393
55,592
1,079
2,560
2,159
-
-
-
23,273
63,817
78,141
303,045
329,853
283,869
2. Net Bad Debt Expense
(①－②±③)
① Bad Debt Expense
(Write-off)
② Bad Debt Recovered
③ Others
3. Bad debts expense
4. Allowance for bad debts
(Ending balance)
※ Based on consolidated financial statements.
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A. The guideline for Bad Debts Allowances
(1) Calculation of Bad Debts Allowances
 Bad Debts are calculated based on write-off experiences and future expected bad debts.
(2) Calculation method for write-off experience rate:
 Experience rate of write-off: the actual write-off rate for the average receivables balance of previous three (3) years
 Future expected bad debts: Cases of debtor bankruptcy, compulsory execution, death, or disappearance are reflected
in the bad debt allowance, ranging from 1% ~ 100% of the balance of trade-other receivable
[Bad Debt Allowance]
Situation
Rate of allowance
Dispute or Conflict
25%
Receivable through utilization of third party collection agency
50%
Receivable under litigation
75%
Customer filed or in the process of filing bankruptcy
100%
(3) Instruction: Write-off is recorded when trade receivables contain the following characteristics:
ㆍ Objective proof of bad debts, such as bankruptcy, compulsory execution, discontinuance of business, debtor’s death
or disappearance
ㆍ Legal action has failed or the right of collection is extinguished.
ㆍ When the collection agency gives as notice that collection is not possible.
ㆍ When the collateral is sold or insurance is received.
ㆍ The collection expenses exceed the amount of receivables.
B. The outstanding period of trade receivables
(Unit: KRW million)
Less than
6 months
6 months ~
1 year
1 year ~
3 years
More than
3 years
Total
24,297,380
9,139
58,704
23,143
24,388,366
Ratio
99.6%
0.1%
0.2%
0.1%
100.0%
* Receivables amount
on net present value (consolidated)
Amount
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2. Inventory
- The inventory status by division over the last three years is as follows:
(Unit: KRW million)
Division
Category
CE
IM
SemiConductor
DP
DS
Total
Total
2013
2012
Note
Finished Goods
2,164,815
1,927,784
1,868,910
Work in Process
103,520
73,876
72,375
Raw Material
1,741,768
1,435,023
1,468,295
Material in Transit
2,114,252
1,689,040
1,634,797
Total
6,124,355
5,125,723
5,044,377
Finished Goods
1,847,565
2,896,647
3,113,848
Work in Process
313,102
333,109
305,543
Raw Material
3,288,109
3,363,195
2,736,050
Material in Transit
1,044,283
1,026,147
895,088
Total
6,493,059
7,619,098
7,050,529
Finished Goods
779,626
1,219,189
1,317,615
Work in Process
3,588,409
3,022,125
2,461,713
Raw Material
450,221
351,646
486,166
Material in Transit
81,965
89,670
83,312
4,900,221
4,682,630
4,348,806
Finished Goods
308,634
553,108
460,600
Work in Process
400,739
443,611
259,324
Raw Material
268,777
328,955
239,414
Material in Transit
42,164
4,988
63,721
Total
1,020,314
1,330,662
1,023,059
Finished Goods
1,118,621
1,810,852
1,797,309
Work in Process
4,177,931
3,663,346
2,852,724
Raw Material
767,852
726,455
775,434
Material in Transit
129,816
98,897
150,237
Total
6,194,220
6,299,550
5,575,704
Finished Goods
6,134,399
7,429,350
6,837,250
Work in Process
4,594,487
4,070,266
3,230,576
Raw Material
7,075,267
6,809,112
5,081,396
Material in Transit
1,068,557
826,140
2,598,191
Total
18,872,710
19,134,868
17,747,413
8.1%
8.9%
9.8%
6.6
7.5
7.6
Total
DS
September 30, 2014
Inventory Ratio (%) – Total Assets
[Inventory ÷ Total Assets]
Inventory Turn-over
[ Yearly CGS ÷ {(Beginning of Inventory End of Inventory)÷2}]
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A. Inventory Counts
(1) Inspection Date
ㆍ End of May and end of November (twice a year)
ㆍ Performed check of the existence of inventories included in an accounting books and records on the inspection date
(2) Inspection Method
ㆍ Internal warehouse: Closed & Total Inspection
※ Sample check in semiconductor and DP inventory, SVC materials
ㆍ Outside warehouse Performed check of the possession confirmation documents and sample tests at third party warehouse and Inventory in
transit
ㆍ External auditors join and observe the inspection and carry out sample test to check the existence and completeness.
B. Inventory Aging and Valuation
Inventories are stated at the lower of cost or net realizable value. Inventory as at September 30, 2014 is as follows:
(Unit : KRW million)
Category
Acquisition
Cost
Inventory
Valuation Reserve
Balance
Finished Goods
6,274,274
139,875
6,134,399
Work In Process
4,841,325
246,838
4,594,487
Raw Material
7,307,399
232,132
7,075,267
Material In Transit
1,068,557
-
1,068,557
Total
19,491,555
618,845
18,872,710
Note
※ Prepared on a consolidated basis
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XI. Summary of Significant Accounting Policies
1. Basis of Presentation
The interim consolidated financial statements for the six months ended June 30, 2014, have been prepared in accor
dance with K-IFRS 1034, Interim Financial Reporting. These interim consolidated financial statements have been
prepared in accordance with the K-IFRS standards and interpretations effective or early adopted at the reporting date.
The Company applied the following amended and enacted standards for the annual period beginning on January 1, 2014:
K-IFRS 1032, ‘Financial Instruments: Presentation’
The standard provides that the right to offset must not be contingent on a future event and must be legally enforceable in
all of circumstances; and if an entity can settle amounts in a manner such that outcome is, in effect, equivalent to net
settlement, the entity will meet the net settlement criterion. The adoption of this standard did not have a material impact
on the consolidated financial statements.
K- IFRIC Interpretations 2121, ‘Levies’
The interpretation requires that the liability to pay a levy is recognized when the activity that triggers the payment of the
levy occurs, as identified by the legislation (the obligating event). The adoption of this interpretation did not have a
material impact on the consolidated financial statements.
2. Consolidation
The Company prepares interim consolidated financial statements in accordance with K-IFRS 1110, ‘Consolidated
Financial Statements’
A. Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Company has control. The Company
controls the corresponding investee when it is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Consolidation of a subsidiary
begins from the date the Company obtains control of a subsidiary and ceases when the Company loses control of the
subsidiary.
The Company applies the acquisition method to account for business combinations. The consideration transferred is
measured at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are initially measured at their fair values at the acquisition date. The
Company recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis in the event of
liquidation at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net
assets. Acquisition-related costs are expensed as incurred.
Goodwill is recognized as the excess of (1) the aggregate of i) the consideration transferred, ii) the amount of any noncontrolling interest in the acquiree and iii) the acquisition-date fair value of the Company’s previously held equity interest
in the acquiree over (2) the net identifiable assets acquired. If the aggregate amount in (1) is less than the fair value of the
acquiree’s net assets in (2), the difference is recognized in profit or loss.
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Balances of receivables and payables, income and expenses and unrealized gains on transactions between the Company
subsidiaries are eliminated. Accounting policies of subsidiaries are changed where necessary to ensure consistency with
the policies adopted by the Company.
B. Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions –
that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration
paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or
losses on disposals of non-controlling interests are also recorded in equity.
C. Disposal of subsidiaries
If the Company loses control of a subsidiary, any investment continuously retained in the subsidiary is re-measured at its
fair value at the date when control is lost and any resulting differences are recognized in profit or loss. Such fair value
becomes the initial carrying amount for the subsequent measurement of the retained interest accounted for as an associate,
joint venture, or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect
of such entity are accounted for as if the Company had directly disposed of the related assets or liabilities.
D. Non-controlling interests
Each component of profit or loss and other comprehensive income is attributed to owners of the parent and to noncontrolling interests. Total comprehensive income is attributed to owners of the parent and to non-controlling interests
even if this results in a negative balance of non-controlling interests
E. Associates
Associates are all entities over which the Company has significant influence, generally investees of which from 20% to
50% of voting stock is owned by the Company. Investments in associates are initially recognized at acquisition cost using
the equity method. Unrealized gains on transactions between the Company and its associates are eliminated to the extent
of the Company’s interest in the associates. If there is any objective evidence that the investment in the associate is
impaired, the Company recognizes the difference between the recoverable amount of the associate and its book value as
impairment loss.
F. Joint arrangements
A joint arrangement of which two or more parties have joint control is classified as either a joint operation or a joint
venture. A joint operator has rights to the assets, and obligations for the liabilities, relating to the joint operation and
recognizes the assets, liabilities, revenues and expenses relating to its interest in a joint operation. A joint venturer has
rights to the net assets relating to the joint venture and accounts for that investment using the equity method.
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3. Foreign Currency Translation
A. Functional and presentation currency
Items included in the financial statements of each of the Company’s entities are measured using the currency of the
primary economic environment in which each entity operates (the “functional currency”). The consolidated financial
statements are presented in Korean won, which is the parent company’s functional and presentation currency.
B. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in profit or loss.
Exchange differences arising on non-monetary financial assets and liabilities such as equity instruments at fair value
through profit or loss and available-for-sale equity instruments are recognized in profit or loss and included in other
comprehensive income, respectively, as part of the fair value gain or loss.
C. Translation into the presentation currency
The results and financial position of all the foreign entities that have a functional currency different from the presentation
currency of the Company are translated into the presentation currency as follows:
Assets and liabilities for each statement of financial position presented are translated at the closing rate at the end of the
reporting date.
Income and expenses for each statement of income are translated at average exchange rates, unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the rate on the dates of the transactions.
All resulting exchange differences are recognized in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are
recognized in other comprehensive income. When a foreign operation is partially disposed of or sold, the exchange
differences that were recorded in equity are reclassified as part of gains and losses on disposition in the statement of
income. When the Company loses control over foreign subsidiaries, the exchange differences that were recorded in equity
are reclassified into profit or loss when such gain or loss on disposition is recognized.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments are treated as the foreign
operation’s assets and liabilities. Such goodwill is expressed in the foreign operation’s functional currency and is
translated at the closing rate. Exchange differences are recognized in other comprehensive income.
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4. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in
value.
5. Financial Assets
A. Classification
The Company classifies its financial assets in the following categories: financial assets at fair value through profit or loss,
loans and receivables, available-for-sale financial assets, and held-to-maturity financial assets. The classification depends
on the terms of the instruments and purpose for which the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
(1) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the short-term. Derivatives not subject to hedge accounting
and derivatives separated from financial instruments such as embedded derivatives are also categorized as held for trading.
Assets in this category are classified as current assets.
(2) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for those with maturities greater than 12 months after the end of
the reporting period which are classified as non-current assets.
(3) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of
the other categories. They are included in non-current assets unless an investment matures or management intends to
dispose of it within 12 months of the end of the reporting period.
B. Recognition and measurement
Regular purchases and sales of financial assets are recognized on the trade date. At initial recognition, financial assets are
measured at fair value plus, in the case of financial assets not carried at fair value through profit or loss, transaction costs.
Transaction costs of financial assets carried at fair value through profit or loss are expensed in the statement of income.
After the initial recognition, available-for-sale financial assets and financial assets at fair value through profit or loss are
subsequently carried at fair value. Loans and receivables and held-to-maturity investments are subsequently carried at
amortized cost using the effective interest method.
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Changes in fair value of financial assets at fair value through profit or loss are recognized in profit or loss and changes in
fair value of available-for-sale financial assets are recognized in other comprehensive income. When the available-for-sale
financial assets are sold or impaired, the fair value adjustments recorded in equity are reclassified into profit or loss.
Interest on available-for-sale financial assets and held-to-maturity financial assets calculated using the effective interest
method is recognized in the statement of income as part of finance income. Dividends on available-for-sale financial
assets are recognized in the statement of income as part of other non-operating income when the Company’s right to
receive payments is established.
C. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the
asset and settle the liability simultaneously.
D. De-recognition of financial assets
If the Company transfers a financial asset and the transfer does not result in derecognition because the Company has
retained substantially of all the risks and rewards of ownership of the transferred asset due to a recourse in the event the
debtor defaults, the Company continues to recognize the transferred asset in its entirety and recognizes a financial liability
for the consideration received. The related financial liability is classified as ‘borrowings’ in the statement of financial
position.
6. Impairment of Financial Assets
The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment loss is
recognized only if there is objective evidence and that loss event (or events) has an impact on the estimated future cash
flows of the financial asset or group of financial assets that can be reliably estimated.
Impairment of loans and receivables is presented as a deduction in an allowance account. Impairment of other financial
assets is directly deducted from their carrying amount. The Company writes off financial assets when the assets are
determined to be no longer recoverable.
The objective evidence that a financial asset is impaired includes significant financial difficulty of the issuer or obligor; a
delinquency in interest or principal payments; or the disappearance of an active market for that financial asset because of
financial difficulties. A decline in the fair value of an available-for-sale equity instrument by more than 20% from its cost
or a prolonged decline below its cost for more than six months is also objective evidence of impairment.
7. Trade Receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of
business. If collection is expected in one year or less (or in the normal operating cycle of the Company if longer), they are
classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognized initially at
fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.
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8. Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the average cost method,
except for materials in transit. The cost of finished goods and work in progress comprises design costs, raw materials,
direct labor, other direct costs and related production overheads (based on normal operating capacity). It excludes costs of
idle plant and abnormal waste. Net realizable value is the estimated selling price in the ordinary course of business, less
applicable variable selling expenses.
Inventories are reduced for the estimated losses arising from excess, obsolescence, and decline in value. This reduction is
determined by estimating market value based on future customer demand. The losses on inventory obsolescence are
recorded as a part of cost of sales.
9. Disposal Group Held-for-Sale
Non-current assets (or disposal group) are classified as assets held-for-sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered highly probable. The assets are measured at the lower
amount between their carrying amount and the fair value less costs to sell.
10. Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Historical cost includes expenditures that are directly attributable to the acquisition of the items. Subsequent costs are
included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured
reliably. The carrying amount of those parts that are replaced is derecognized and repairs and maintenance expenses are
recognized in profit or loss in the period they are incurred.
Depreciation on tangible assets is calculated using the straight-line method to allocate the difference between their cost
and their residual values over their estimated useful lives. Land is not depreciated. Costs that are directly attributable to
the acquisition, construction or production of a qualifying asset, including capitalized interest costs, form part of the cost
of that asset and are amortized over the estimated useful lives.
The Company’s policy is that property, plant and equipment should be depreciated over the following estimated useful
lives:
Buildings and structures
Machinery and equipment
Other
Estimated useful lives
15, 30 years
5 years
5 years
The depreciation method, residual values and useful lives of property, plant and equipment are reviewed, and adjusted if
appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are
determined by comparing the proceeds with the carrying amount and are recognized within the statement of income as
part of other non-operating income and expenses.
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1. Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of the net identifiable
assets of the acquired subsidiary, associates, joint ventures and businesses at the date of acquisition. Goodwill on
acquisitions of subsidiaries and businesses is included in intangible assets and goodwill on acquisition of associates and
joint ventures are included in the investments in associates and joint ventures.
Intangible assets, except for goodwill, are initially recognized at their historical cost and carried at cost less accumulated
amortization and accumulated impairment losses.
Internally generated development costs are the aggregate costs recognized after meeting the asset recognition criteria,
including technical feasibility, and determined to have future economic benefits. Membership rights are regarded as
intangible assets with indefinite useful life and not amortized because there is no foreseeable limit to the period over
which the assets are expected to be utilized. Intangible assets with definite useful life such as trademarks and licenses are
amortized using the straight-line method over their estimated useful lives.
The Company’s policy is that intangible assets should be amortized over the following estimated useful lives:
Development costs
Trademarks, licenses and other intangible assets
Estimated useful lives
2 years
5 - 10 years
12. Impairment of Non-Financial Assets
Goodwill or intangible assets with indefinite useful life are not subject to amortization and are tested annually for
impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount
by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
13. Financial Liabilities
A. Classification and measurement
Financial liabilities at fair value through profit or loss are financial instruments held for trading. Financial liabilities are
classified in this category if incurred principally for the purpose of repurchasing them in the near term. Derivatives that
are not designated as hedges or bifurcated from financial instruments containing embedded derivatives are also
categorized as held-for-trading.
The Company classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or
loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for
derecognition, as financial liabilities carried at amortized cost and presented as ‘trade payables’, ‘borrowings’, and ‘other
financial liabilities’ in the statement of financial position.
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B. De-recognition
Financial liabilities are removed from the statement of financial position when it is extinguished, for example, when the
obligation specified in the contract is discharged, cancelled or expired or when the terms of an existing financial liability
are substantially modified.
14. Trade Payables
Trade payables are amounts due to suppliers for merchandise purchased or services received in the ordinary course of
business. If payment is expected in one year or less (or in the normal operating cycle of the Company if longer), they are
classified as current liabilities. If not, they are presented as non-current liabilities. Non-current trade payables are
recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
15. Borrowings
Borrowings are recognized initially at fair value, net of transaction costs and are subsequently measured at amortized cost.
Any difference between cost and the redemption value is recognized in the statement of income over the period of the
borrowings using the effective interest method. If the Company has an indefinite right to defer payment for a period
longer than 12 months after the end of the reporting date, such liabilities are recorded as non-current liabilities, otherwise,
they are recorded as current liabilities.
16. Provisions
A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. Provisions are not recognized for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
The increase in the provision due to passage of time is recognized as interest expense.
When it is probable that an outflow of economic benefits will occur due to a present obligation resulting from a past event,
and the amount is reasonably estimable, a corresponding provision is recognized in the financial statements. However,
when such outflow is dependent upon a future event, that is not certain to occur, or cannot be reliably estimated, a
disclosure regarding the contingent liability is made in the notes to the financial statements.
17. Net Defined Benefit Liabilities
The Company has a variety of retirement pension plans including defined benefit or defined contribution plans. A defined
contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The
Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to
pay all employees the benefits relating to employee service in the current and prior periods. For defined contribution plans,
the Company pays contributions to annuity plans that are managed either publicly or privately on a mandatory, contractual
or voluntary basis. The Company has no further future payment obligations once the contributions have been paid. The
contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an
asset to the extent that a cash refund or a reduction in the future payments is available.
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A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an
amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as
age, years of service and compensation. The liability recognized in the statement of financial position in respect to defined
benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected
unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the
benefits will be paid and that have terms to maturity approximating to the terms of the related pension obligation.
Actuarial gains and losses resulting from the changes in actuarial assumptions, and the differences between the previous
actuarial assumptions and what has actually occurred, are recognized in other comprehensive income in the period in
which they were incurred. Past service costs are immediately recognized in profit or loss.
18. Financial Guarantee Contract
Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a
loss it incurs because a specified debtor fails to make payments when due. Financial guarantees are initially recognized in
the financial statements at fair value on the date the guarantee was given. If the amount measured in subsequent periods
exceeds the unamortized balance of the amount initially recognized, the excess is classified as other financial liability.
19. Current and Deferred Tax
The tax expense for the period comprises current and deferred tax. Tax is recognized on the profit for the period in the
statement of income, except to the extent that it relates to items recognized in other comprehensive income or directly in
equity, in which case the tax is also recognized in other comprehensive income or directly in equity, respectively. The tax
expense is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Deferred tax is recognized for temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts as expected tax consequences at the recovery or settlement of the carrying amounts of the assets and
liabilities. However, deferred tax assets and liabilities are not recognized if they arise from initial recognition of an asset
or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilized.
A deferred tax liability is recognized for taxable temporary differences associated with investments in subsidiaries,
associates, and interests in joint ventures, except to the extent that the Company is able to control the timing of the
reversal of the temporary differences and it is probable that the temporary difference will not reverse in the foreseeable
future. In addition, a deferred tax asset is recognized for deductible temporary differences arising from such investments
to the extent that it is probable the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the
balances on a net basis.
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20. Derivative Instruments
All derivative instruments are accounted for at fair value with the resulting valuation gain or loss recorded as an asset or
liability. If the derivative instrument is not designated as a hedging instrument, the gain or loss is recognized in the
statement of income in the period of change.
Fair value hedge accounting is applied to a derivative instrument with the purpose of hedging the exposure to changes in
the fair value of an asset or a liability or a firm commitment (hedged item) that is attributable to a particular risk. Hedge
accounting is applied when the derivative instrument is designated as a hedging instrument and the hedge accounting
criteria have been met.
21. Dividend Distribution
Dividend distribution to the Company’s shareholders is recognized when the dividends are approved.
22. Share Capital
Common shares and preferred shares with no repayment obligations are classified as equity. When the Company
purchases its common shares, the acquisition costs including direct transaction costs are deducted from equity until the
redemption or reissuance of treasury shares. Consideration received on the subsequent sale or issue of treasury shares is
credited to equity.
23. Revenue Recognition
Revenue mainly comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary
course of the Company’s activities. Revenue is shown net of value-added tax, returns, sales incentives and discounts and
after eliminating intercompany transactions.
The Company recognizes revenue when specific recognition criteria have been met for each of the Company’s activities
as described below. The Company bases its estimates on historical results, taking into consideration the type of customer,
the type of transaction and the specifics of each arrangement.
Where multiple-element arrangements exist, the fair values of each element are determined based on the current market
price of each of the elements when sold separately. When the fair values of each element are indeterminable, the fair
values of deliverables which have already been provided are calculated in such way that the fair values of elements, which
are yet to be provided, are subtracted from total contract value of the arrangement.
A. Sales of goods
Sales of products and merchandise are recognized upon delivery when the significant risks and rewards of ownership of
goods have transferred to the buyer, continuing managerial involvement usually associated with ownership and effective
control have ceased, the amount of revenue can be measured reliably, it is probable that the economic benefits associated
with the transaction will flow to the Company and the costs incurred or to be incurred in respect of the transaction can be
measured reliably. The Company records reductions to revenue for special pricing arrangements, price protection and
other volume based discounts. If product sales are subject to customer acceptance, revenue is not recognized until
customer acceptance occurs.
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B. Sales of services
Revenues from rendering services are generally recognized using the percentage-of-completion method, based on the
percentage of costs to date compared to the total estimated costs, contractual milestones or performance.
C. Other sources of revenue
Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the Company
reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original
effective interest rate of the instrument, and continues unwinding the discount as interest income. Royalty income is
recognized on an accruals basis in accordance with the substance of the relevant agreements. Dividend income is
recognized when the right to receive payment is established.
24. Government Grants
Government grants are recognized at their fair values when there is reasonable assurance that the grant will be received
and the Group will comply with the conditions attaching to it. Government grants related to assets are presented by
deducting the grants in arriving at the carrying amount of the assets, and grants related to income are deferred and
presented by deducting the related expenses for the purpose of the government grants.
25. Earnings per Share
Basic earnings per share is calculated by dividing net profit for the period available to common shareholders by the
weighted-average number of common shares outstanding during the year. Diluted earnings per share is calculated using
the weighted-average number of common shares outstanding adjusted to include the potentially dilutive effect of common
equivalent shares outstanding.
26. Reportable Segments
Reportable segments are disclosed in the manner reported to the chief operating decision-maker (please see footnote 33).
The chief operating decision-maker is responsible for making strategic decisions on resource allocation and
performance assessment of the reportable segments. The management committee which makes strategic decisions is
regarded as the chief operating decision-maker.
27. Approval of the Consolidated Financial Statements
These consolidated financial statements were approved by the Board of Directors on 30 October 2014.
28. Convenience Translation into United States Dollar Amounts
The Company operates primarily in Korean won and its official accounting records are maintained in Korean won. The
US dollar amounts provided in the financial statements represent supplementary information solely for the convenience of
the reader. All Korean won amounts are expressed in US dollars at the rate of KRW 1,014.40 to USD 1, the exchange rate
in effect on 30 June 2014. Such presentation is not in accordance with generally accepted accounting principles, and
should not be construed as a representation that the Korean won amounts shown could be readily converted, realized or
settled in US dollars at this or at any other rate.
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[Critical Accounting Estimates and Assumptions]
The Company makes estimates and assumptions concerning the future. The estimates and assumptions are continuously
assessed, considering historical experience and other factors, including expectations of future events that are believed to
be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are addressed below.
(1) Revenue recognition
The Company uses the percentage-of-completion method in accounting for its fixed-price contracts to deliver installation
services. Use of the percentage-of-completion method requires the Company to estimate the services performed to date as
a proportion of the total services to be performed. Revenues and earnings are subject to significant change, effected by
early steps in a long-term projects, change in scope of a project, cost, period, and plans of the customers.
(2) Provision for warranty
The Company recognizes provision for warranty on products sold. The Company accrues provision for warranty based on
the best estimate of amounts necessary to settle future and existing claims. The amounts are estimated based on historical
data.
(3) Fair value of derivatives and other financial instruments
The fair value of financial instruments that are not traded in an active market is determined by using a variety of methods
and assumptions that are mainly based on market conditions existing at the end of each reporting period.
(4) Net defined benefit liabilities
The net defined benefit liability depends on a number of factors that are determined on an actuarial basis using a number
of assumptions. Any changes in these assumptions will impact the carrying amount of the net defined benefit liability. The
Company, in consideration of the interest rates of high-quality corporate bonds, determines the appropriate discount rate at
the end of each year. This is the interest rate that is used to determine the present value of estimated future cash outflows
expected to be required to settle the net defined benefit liability.
The principal actuarial assumptions associated with the net defined benefit liability are based on the current market
expectations.
(5) Estimated impairment of goodwill
The Company tests at the end of each reporting period whether goodwill has suffered any impairment in accordance with
the accounting policy described in Note 2.12. The recoverable amounts of cash-generating units have been determined
based on value-in-use calculations. These calculations are based on estimates.
(6) Income taxes
Income taxes on the Company’s taxable income from operating activities are subject to various tax laws and
determinations of each tax authority across various countries in the world. There is uncertainty in determining the eventual
tax effects on the taxable income from operating activities. The Company has recognized current tax and deferred tax at
the end of the fiscal year based on the best estimation of future taxes payable as a result of operating activities. However,
the resulting deferred income tax assets and liabilities may not equal the actual future taxes payable and such difference
may impact the current tax and deferred income tax assets and liabilities upon the determination of eventual tax effects.
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[Translation to International Financial Reporting Standards as adopted by the Republic of Korea from Generally
Accepted Accounting Principle in the Republic of Korea]
The Company adopted Korean IFRS from the fiscal year 2010 (the date of first-time adoption to Korean IFRS: 1 January
2010). The comparison year, 2009,is restated in accordance with Korean IFRS 1101, First-time adoption of international
financial reporting standards (the date of transition to Korean IFRS: 1 January 2009).
(1) Significant differences in accounting policies
Significant differences between the accounting policies chosen by the Company under Korean IFRS and under previous
Korean GAAP are as follows:
(A) First time adoption of Korean IFRS
a) Business combination: Past business combinations that occurred before the date of transition to Korean IFRS will
not be retrospectively restated under Korean IFRS 1103, Business combinations.
b) Fair value as deemed cost: The Company elects to measure certain land assets at fair value at the date of transition
to Korean IFRS and use the fair value as its deemed cost. Valuations were made on the basis of recent market
transactions on the arm's length terms by independent values.
c) Cumulative translation differences: All cumulative translation gains and losses arising from foreign subsidiaries
and associates as of the date of transition to Korean IFRS are reset to zero.
d) Employee benefits: The Company elected to use the ‘corridor’ approach for actuarial gains and losses and all
cumulative actuarial gains and losses have been recognized at the date of transition to Korean IFRS.
(B) Employee benefits
Employees and directors with at least one year of service are entitled to receive a lump-sum payment upon termination of
their employment with SEC, its Korean subsidiaries and certain foreign subsidiaries, based on their length of service and
rate of pay at the time of termination. Under the previous severance policy pursuant to Korean GAAP, Accrued severance
benefits represented the amount which would be payable assuming all eligible employees and directors were to terminate
their employment as of the end of the reporting period. However, under Korean IFRS, the liability is determined based on
the present value of expected future payments calculated and reported using actuarial assumptions.
(C) Capitalization of development costs
Under Korean GAAP the Company recorded expenditures related to research and development activities as current
expense. Under Korean IFRS if such costs related to development activities meet certain criteria they are recorded as
intangible assets.
(D) Goodwill or bargain purchase arising from business combinations
Under Korean GAAP, the Company amortizes goodwill or recognizes a gain in relation to bargain purchase (negative
goodwill1) acquired as a result of business combinations on a straight-line method over five years from the year of
acquisition. Under Korean IFRS, goodwill is not amortized but reviewed for impairment annually. Bargain purchase is
recognized immediately in the statement of income. The impact of this adjustment is included within “other” adjustment
in the tables below.
1 Negative goodwill under Korean GAAP is referred to as bargain purchase under Korean IFRS
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(E) Derecognition of financial assets
Under Korean GAAP, when the Company transferred a financial asset to financial institutions and it was determined that
control over the asset has been transferred the Company derecognized the financial asset. Under Korean IFRS, if the
Company retains substantially all the risks and rewards of ownership of the asset, the asset is not derecognized but instead
the related cash proceeds are recognized as financial liabilities.
(F) Deferred Tax
Under Korean GAAP, deferred tax assets and liabilities were classified as either current or non-current based on the
classification of their underlying assets and liabilities. If there are no corresponding assets or liabilities, deferred tax assets
and liabilities were classified based on the periods the temporary differences were expected to reverse. Under Korean
IFRS, deferred tax assets and liabilities are all classified as non-current on the statement of financial position. In addition,
there is a difference between Korean IFRS and Korean GAAP in terms of recognition of deferred tax assets or liabilities
relating to investments in subsidiaries. Under Korean GAAP there is specific criteria as to when deferred tax assets and
liabilities relating to investments in subsidiaries should be recognized, whereas under Korean IFRS, the related deferred
tax assets or liabilities are recognized according to sources of reversal of the temporary differences.
(2) Changes in scope of consolidation
At the date of transition, changes in the scope of consolidation as a result of adoption of Korean IFRS are as follows:
Changes
Description
Newly
added
Under the former ‘Act on External Audit
of Stock companies’ in the Republic of
Korea, companies those whose total
assets are less than 10 billion Korean
Won were not subject to consideration,
but they are subject to consolidation
under Korean IFRS.
Newly
added
Under Korean GAAP, a union is not
regarded as a legal entity and excluded
from scope of consolidation. However,
it is subject to consolidation under
Korean IFRS
Excluded
Under Korean GAAP, entities where the
Company owns more than 30% of
shares and is the largest shareholder
with the largest voting rights were
included in scope of consolidation.
Under Korean IFRS, such entities are
not subject to consolidation unless
control over the entity is established.
Name of Entity
World Cyber Games, Samsung Electronics Football Club,
SEMES America, Samsung Electronics Ukraine,
Samsung Electronics Romania, Samsung Electronics Kazakhstan,
Samsung Electronics Czech and Slovak s.r.o.
Samsung Electronics Levant, Samsung Electronics European Holding,
Batino Realty Corporation, Samsung Telecommunications Malaysia,
Samsung Electronics Shenzhen, Samsung Electronics China R&D Center,
Samsung Electronics Limited, Samsung Electronics Poland Manufacturing,
Samsung Telecoms(UK)
Samsung Venture Capital Union #6, #7 and #14
Samsung Card
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(3) The effects of the adoption of Korean IFRS on financial position, Comprehensive income and cash flows of the
Company
(A) Adjustments to the statement of financial position as of the date of transition, 1 January 2009.
(Unit: KRW million)
Korean GAAP
Adjustments:
Change in scope of consolidation
Fair valuation of land(*)
Derecognition of financial asset
Capitalization of development costs
Pension and compensated absence
Deferred tax on investments in equity and
reclassification to non-current
Effect of the adoption of IFRS for jointly
controlled entities and associates
Other
Tax-effect on adjustments
Total
Korean IFRS
(*) The adjustment includes the effect of deferred tax
Assets
105,300,650
Liabilities
42,376,696
Equity
62,923,954
(12,972,168)
3,816,293
1,807,675
200,478
(1,434,287)
(10,649,400)
927,141
1,807,675
186,978
(1,332,886)
(2,322,768)
2,889,152
200,478
(186,978)
(101,401)
155,163
-
155,163
(95,064)
(141)
(8,522,051)
96,778,599
2,010
(9,058,482)
33,318,214
(95,064)
(2,151)
536,431
63,460,385
(B) The effect of the adoption of Korean IFRS on financial position and comprehensive income of the Company as of and
for the year ended 31 December 2009.
(Unit: KRW million)
Assets
Korean GAAP
118,281,488
Adjustments:
Change in scope of consolidation
(10,120,256)
Fair valuation of land(*)
3,804,404
Derecognition of financial asset
754,969
Capitalization of development costs
214,451
Pension and compensated absence
Deferred tax on investments in equity
(874,056)
and reclassification to non-current
Effect of the adoption of IFRS for
266,742
jointly controlled entities and associates
Other
(143,058)
Tax-effect on adjustments
(4,895)
Total
(6,101,699)
Korean IFRS
112,179,789
(*) The adjustment includes the effect of deferred tax
45,227,196
73,054,292
Comprehensive
income
9,700,671
(7,372,830)
924,525
754,969
153,357
(564,016)
(2,747,426)
2,879,879
214,451
(153,357)
(310,040)
(489,504)
(9,273)
13,973
33,621
(200,099)
-
266,742
111,579
11,386
(6,092,609)
39,134,587
(143,058)
(16,281)
(9,090)
73,045,202
(47,994)
(14,130)
(601,827)
9,098,844
Liabilities
Equity
(C) Adjustments to the statement of cash flows for the year ended 31 December 2009
According to Korean IFRS 1007, Cash Flow Statements, cash flows from interest, dividends received and taxes on
income shall each be disclosed separately. The comparison year, 2009, is restated in accordance with Korean IFRS. There
are no other significant differences between cash flows under Korean IFRS and those under previous Korean GAAP for
the year ended 31 December 2009.
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XII. Supplementary Information
1. Fair Value Evaluation Procedures
A. Financial Assets
(1) Classification
The Company classifies its financial assets in the following categories: financial assets at fair value through profit or loss,
loans and receivables, available-for-sale financial assets, and held-to-maturity financial assets. The classification depends
on the terms of the instruments and purpose for which the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
(A) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the short-term. Derivatives not subject to hedge accounting
and derivatives separated from financial instruments such as embedded derivatives are also categorized as held for
trading. Assets in this category are classified as current assets.
(B) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for those with maturities greater than 12 months after the end of
the reporting period which are classified as non-current assets.
(C) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of
the other categories. They are included in non-current assets unless an investment matures or management intends to
dispose of it within 12 months of the end of the reporting period
B. Financial Liabilities
(1) Classification and measurement
Financial liabilities at fair value through profit or loss are financial instruments held for trading. Financial liabilities are
classified in this category if incurred principally for the purpose of repurchasing them in the near term. Derivatives that
are not designated as hedges or bifurcated from financial instruments containing embedded derivatives are also
categorized as held-for-trading.
The Company classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or
loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for
derecognition, as financial liabilities carried at amortized cost and presented as ‘trade payables’, ‘borrowings’, and ‘other
financial liabilities’ in the statement of financial position.
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(2) Derecognition
Financial liabilities are removed from the statement of financial position when it is extinguished, for example, when the
obligation specified in the contract is discharged, cancelled or expired or when the terms of an existing financial liability
are substantially modified.
C. Derivative Instruments
All derivative instruments are accounted for at fair value with the resulting valuation gain or loss recorded as an asset or
liability. If the derivative instrument is not designated as a hedging instrument, the gain or loss is recognized in the
statement of income in the period of change.
Fair value hedge accounting is applied to a derivative instrument with the purpose of hedging the exposure to changes in
the fair value of an asset or a liability or a firm commitment (hedged item) that is attributable to a particular risk. Hedge
accounting is applied when the derivative instrument is designated as a hedging instrument and the hedge accounting
criteria have been met.
D. Fair value estimation
- Carrying amounts and fair values of financial instruments by category as of 30 September 2014 and 31 December 2013
are as follows:
(Unit: KRW million)
Classification
September 30, 2014
Carrying amount
December 31, 2013
Fair value
Carrying amount
Fair value
Financial assets
Cash and cash equivalents1
Short-term financial
instruments1
Short-term available-for-sale
financial assets
18,004,063
16,284,780
45,695,172
36,722,702
3,251,924
3,251,924
1,488,527
1,488,527
Trade and other receivables1
24,069,510
Long-term available-for-sale
financial assets2
12,317,751
11,902,526
6,238,380
5,850,155
5,772,600
5,743,505
5,472,956
5,436,470
Other
Total Financial assets
24,988,532
109,111,020
91,195,877
16,733,181
16,314,720
Short-term borrowings1
9,722,014
6,438,517
Debentures
1,309,116
1,333,728
1,311,068
1,327,569
Long-term borrowings
1,774,255
1,709,050
985,117
971,844
Long-term other payables
2,576,575
2,721,437
1,023,714
1,090,580
Other1
9,133,739
13,288,343
41,248,880
39,361,479
Financial liabilities
Trade and other payables1
Total Financial liabilities
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1
2
Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair value
disclosures.
Amount measured at cost (30 September 2014: ￦415,225 million, 31 December 2013: ￦388,225 million) is excluded
as the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be
reasonably assessed.
The following table presents the assets and liabilities, by level, that are measured at fair value:
As of September 30, 2014
(In millions of Korean won)
Level 1
Level 2
Level 3
Total balance
Derivatives
Available-for-sale financial assets1
6,695,188
54,413
5,344,222
2,471
3,115,040
56,884
15,154,450
Total assets
6,695,188
5,398,635
3,117,511
15,211,334
Derivatives
-
306,643
-
306,643
Total liabilities
-
306,643
-
306,643
December 31, 2013
(In millions of Korean won)
1
Level 1
Level 2
Level 3
Total balance
Derivatives
Available-for-sale financial assets1
5,656,806
40,552
1,188,498
493,378
40,552
7,338,682
Total assets
5,656,806
1,229,050
493,378
7,379,234
Derivatives
-
244,172
-
244,172
Total liabilities
-
244,172
-
244,172
Amount measured at cost (September 30, 2014: ￦415,225 million, December 31, 2013: ￦388,225 million) is excluded as the
range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed.
The levels of the fair value hierarchy and its application to financial assets and liabilities are described below.
ㆍLevel 1: Quoted market prices (unadjusted) for identical assets or liabilities
ㆍLevel 2: Fair valuation based on inputs that are observable in the market
(Other than quoted prices included within level 1)
ㆍLevel 3: Fair valuation based on inputs that are unobservable in the market
The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of
financial position date. A market is regarded as active if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by
the Company is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 are listed
equity investments classified as trading securities or available-for-sale financial assets.
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The fair value of financial instruments that are not traded on an active market (for example, over-the-counter derivatives)
is determined using valuation methods. These valuation methods maximize the use of observable market data where it is
available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in Level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
The Company performs the fair value measurements required for financial reporting purposes, including level 3 fair
values and discusses valuation processes and results at least once every quarter in line with the Company’s quarterly
reporting dates. The Company’s policy is to recognize transfers between levels at the end of the reporting period, if
corresponding events or changes in circumstances have occurred.
Specific valuation methods used to value financial instruments include:
ㆍ Quoted market prices or dealer quotes for similar instruments.
ㆍ The fair value of foreign exchange forward contracts is determined using forward exchange rates at the
statement of financial position date, with the resulting value discounted back to present value.
Other methods, such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments. For trade and other receivables, the book value approximates a reasonable estimate of fair value.
- Valuation methods and the inputs
ㆍ The Company utilizes a present value method to discount future cash flows at a proper interest rate for
corporate bonds, government and public bonds, and bank debentures that are classified as Level 2 in the fair
value hierarchy.
ㆍ The following table presents the valuation methods and the inputs used for major financial instruments classified
as Level 3.
(In millions of Korean won)
Fair
Classification
Value
Long-term available-for-sale financial assets
Samsung Petrochemical
80,347
Input Range
(Weighted Average)
2,625,324
Permanent growth rate
Weighted average cost of capital
Permanent growth rate
Weighted average cost of capital
Permanent growth rate
Weighted average cost of capital
Permanent growth rate
Weighted average cost of capital
Permanent growth rate
Weighted average cost of capital
Risk adjusted discount rate
Price volatility
-1.00% ~ 1.00% (0%)
6.37% ~ 8.37% (7.37%)
-1.00% ~ 1.00% (0%)
7.01% ~ 9.01% (8.01%)
-1.00% ~ 1.00% (0%)
6.06% ~ 8.06% (7.06%)
-1.00% ~ 1.00% (0%)
8.81% ~ 10.81% (9.81%)
-1.00% ~ 1.00% (0%)
7.69% ~ 9.69% (8.69%)
5.49% ~ 7.49% (6.49%)
30.90% ~ 36.90% (33.90%)
2,471
Binomial model
Discount rate
Stock price volatility
5.50% ~ 10.90% (7.74%)
10.26% ~ 16.83% (13.30%)
80,653
Taewon Electric
17,072
Pantech
53,053
Coming Incorporated
convertible preferred stock
Derivatives
Embedded derivatives
(convertible bonds)
Level 3 Inputs
Discounted cash
flow
Discounted cash
flow
Discounted cash
flow
Discounted cash
flow
Discounted cash
flow
Trinomial model
Samsung General Chemicals
Samsung Venture Investment
Valuation
Technique
7,021
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-Changes in Level 3 instruments:
(In millions of Korean won)
2014
Balance as of January 1
Purchases
Disposals
Amount recognized in profit or loss
Amount recognized in other comprehensive income
Other
Balance as of September 30
2013
493,378
2,498,800
(10,871)
(14,518)
192,453
(41,731)
3,117,511
389,195
131,151
(15,067)
(5,129)
5,798
6,722
512,670
- Sensitivity analysis for recurring fair value measurements categorized within Level 3
Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair
value of financial instruments which are affected by the unobservable parameters, using a statistical technique.
When the fair value is affected by more than two input parameters, the amounts represent the most favorable or
most unfavorable.
The results of the sensitivity analysis for the effect on profit or loss from changes in inputs for each financial
instrument, which is categorized within Level 3 and subject to sensitivity analysis, are as follows:
(In millions of Korean won)
Classification
Long-term available for sale
financial assets1
Embedded derivatives
(convertible bonds)2
Total
Favorable Changes
Profit or Loss
Equity
Unfavorable Changes
Profit or Loss
Equity
-
278,243
-
(202,701)
469
469
(482)
(482)
469
278,712
(482)
(203,183)
1
Changes in fair value are calculated by increasing or decreasing the correlation between volatility (30.90 to
36.90%) and discount rate for convertible preferred stock. Similarly, for other equity securities, changes in fair
value are calculated with the correlation between growth ratio (-1% to 1%) and discount rate, which are
significant unobservable inputs.
2
For equity derivatives, changes in their fair value are calculated by increasing or decreasing the correlation
between stock prices and volatility by 10%.
E. Tangible Assets
No valuations were performed on tangible assets during the reporting period.
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