Business Report

SAMSUNG ELECTRONICS Co., Ltd. 2014 Business Report For the year ended December 31, 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. See, also, 『1. Note on
Forward-Looking Statements』 in 『V. Management Discussion and Analysis』.
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Table of Contents
Certification................................................................................................................................................................................3
I. Corporate Overview ...............................................................................................................................................................4
II. Businesses Overview .........................................................................................................................................................20
III. Financial Affairs..................................................................................................................................................................57
IV. Auditor’s Report .................................................................................................................................................................96
V. Management Discussion and Analysis .............................................................................................................................99
VI. Corporate Governance ....................................................................................................................................................107
VII. Information on Shareholders......................................................................................................................................... 118
VIII. Executives and Employees...........................................................................................................................................124
IX. Affiliates and Subsidiaries ..............................................................................................................................................132
X. Related Party Transactions..............................................................................................................................................161
XI. Other Information Related to Investor Protection ........................................................................................................165
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Certification
Letter of Certification
We, Oh-Hyun Kwon and Sang-Hoon Lee, respectively, as CEO and director of the company in charge of
reporting, certify that we have reviewed the annual business report of Samsung Electronics Co., Ltd. for the
year ended December 31, 2014.
To 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.
To 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: 2015. 4. 29
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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, and 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 English Language 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 (each a “Division”), CE (Consumer Electronics),
IM (Information Technology & Mobile Communications), and DS (Device Solutions).
Products in each Division are presented below:
Division
Products
CE
TV, 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.
TV is the core product of CE. The Company has maintained its market leadership position for the past nine (9)
consecutive years through competitive advantage in hardware products such as LCD and LED TV as well as software
driven product features within 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 ‘GALAXY’
branded series of smartphones and tablets, 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 handheld phone (“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 the semiconductor sub-division and the display panel business. The semiconductor
sub-division (“Semiconductor Sub-Division”) is further divided into the memory business and system LSI business. The
Company’s memory business unit (“Memory” or “Memory Business Unit”) manufactures and sells DRAM and NAND
products. The Company’s system LSI business unit (“System LSI”) manufactures mobile application processors (“Mobile
APs” or “APs”) and various sensors including CMOS imaging sensors (“CIS”). The display business (“DP Business
Unit”) manufactures and sells display panels (“DP”), including TFT-LCD and OLED.
The Memory Business Unit produces differentiated products and has maintained the number one position in the global
memory market by applying advanced process technology. System LSI is leading the industry shift from PCs to mobile.
The Company’s DP Business Unit is leading the market with technological development and investment resulting in
superior quality and cost competitiveness in TFT-LCDs and increasing applications of OLED panels in various IT
products.
☞ See 『II. Businesses Overview』, for more details about each Division.
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F. Affiliates
The Company is an affiliate of the Samsung group as defined under Korea’s Monopoly Regulation and Fair Trade Act
(“Samsung Group”).
As at December 31, 2014, Samsung Group had a total of sixty-nine (69) domestic affiliates, where five (5) new affiliates
(Samsung Welstory, Seoul Lakeside CC, Samsung Card Customer Service, Shilla Stay, and Samoo Architects &
Engineers) were included and eleven (11) affiliates (Samsung Corning Precision Materials, Samsung SNS, Global Tech,
365Homecare, Samsung Petrochemical, Cheil Industries, World Cyber Games, SMP, SKKU dormitory, Care Camp,
Gacchinet) were excluded. Among the Samsung Group’s sixty nine (69) domestic affiliates, eighteen (18) affiliates
including Samsung Electronics are listed, and fifty-one (51) affiliates are unlisted.
[As of December 31, 2014]
No. of
affiliates
Name of affiliates
Samsung C&T, Samsung Electronics, Samsung SDI, Samsung Techwin, SEMCO, Samsung Heavy Industries,
Listed
18
Samsung Card, Samsung Life Insurance, Hotel Shilla, Samsung Fire & Marine Insurance, Samsung
Securities, Samsung Fine Chemicals, Samsung Engineering, S1, Cheil Worldwide, Cheil Industries, Samsung
SDS, CREDU
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, Allat., SECUI, Open Tide Korea, Samsung Futures, Samsung Venture
Investment Corporation, Samsung Asset Management, Saengbo, SD Flex, Samsung Claim Adjustment
Unlisted
51
Service, Samsung Fire & Marine Insurance Service, Suwon Samsung Bluewings FC, S-Core, 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, Samsung Welstory, Jeongahm Wind Power, Samsung SGL Carbon Composite
Materials, Samsung Card Customer Service, Seoul Lakeside CC, Shilla Stay, Samoo Architects & Engineers
Total
69
※
The former Cheil Industries merged with Samsung SDI in July 2014, and Samsung Everland has been renamed as Cheil
Industries.
☞
See 『IX. Corporate Governance and Affiliates』 for more details about domestic and overseas affiliates.
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G. Subsidiaries Subject to Consolidated Financial Statements
As of December 31, 2014, Samsung Electronics’ consolidated subsidiaries totaled 158 with twelve (12) subsidiaries being
newly included and seven (7) subsidiaries being excluded when compared to December 31, 2013. Below is the list of
consolidated subsidiaries.
(Unit: KRW million)
Name of Subsidiaries
Date of
Establishment
Major business
Dec 31,
2013
Assets
%
ownership
Classified as
major
subsidiary
(Y/N)
Samsung Electronics America Inc.
1978.07
Sale of electronic goods
12,248,560
Over 50%
Y
Samsung Receivables Corporation
1998.03
Receivable management
2,780,689
Over 50%
Y
Samsung Semiconductor Inc.
1983.07
Sale of semiconductors and
display panels
7,346,339
Over 50%
Y
Samsung Electronics Canada Inc.
1980.07
Sale of electronic goods
522,775
Over 50%
Y
Samsung Research America, Inc
(formerly 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 TVs 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
display panels
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
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Dec 31,
2013
Assets
%
ownership
Classified as
major
subsidiary
(Y/N)
Production and sale of
electronic goods
1,249,691
Over 50%
Y
2010.01
Sale of electronic goods
170,011
Over 50%
Y
Samsung Electronics Italia S.P.A.
1991.04
Sale of electronic goods
1,004,423
Over 50%
Y
Samsung Electronics Europe Logistics B.V.
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
Display panel 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 semiconductors and
display panels
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 TVs 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 TVs
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%
N
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
Name of Subsidiaries
Date of
Establishment
Major business
Samsung Electronics Hungarian Private Co. Ltd.
1989.10
Samsung Electronics Czech and Slovak s.r.o.
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%
ownership
Classified as
major
subsidiary
(Y/N)
251,866
Over 50%
Y
Marketing
3,150
Over 50%
N
2012.09
Marketing
1,667
Over 50%
N
Samsung Electronics Pakistan(Private) Ltd.
2012.11
Marketing
1,814
Over 50%
N
Samsung Electronics South Africa(Pty) Ltd.
1994.06
Sale of electronic goods
787,562
Over 50%
Y
Samsung Electronics Turkey
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
647,199
Over 50%
Y
15,944
Over 50%
N
1,476,296
Over 50%
Y
Name of Subsidiaries
Date of
Establishment
Major business
Samsung Electronics Egypt S.A.E
2012.07
Production and sale of
electronic goods
Samsung Electronics Israel Ltd.
2012.09
Samsung Electronics Tunisia S.A.R.L
Production and sale of
electronic goods
Sale of telecom systems and
services
Production and sale of
electronic goods
Dec 31,
2013
Assets
PT Samsung Electronics Indonesia
1991.08
PT Samsung Telecommunications Indonesia
2003.03
Thai Samsung Electronics Co., Ltd.
1988.10
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 Sdn. Bhd.
2009.08
Sale of telecom systems
and services
11,593
Over 50%
N
Samsung Display Dongguan Co., Ltd.
2001.11
Display panel production
1,015,838
Over 50%
Y
Samsung Display TianJin Co., Ltd.
2004.06
Display panel 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
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%
ownership
Classified as
major
subsidiary
(Y/N)
660,374
Over 50%
Y
761,018
Over 50%
Y
Production of electronic goods
4,599,200
Over 50%
Y
1993.04
Production of TV and monitors
907,752
Over 50%
Y
Samsung Electronics Taiwan Co., Ltd.
1994.11
Sale of electronic goods
1,390,404
Over 50%
Y
Beijing Samsung Telecom R&D Center
2000.09
R&D
44,780
Over 50%
N
Tianjin Samsung Telecom Technology Co., Ltd.
2001.03
Production of telecom products
2,939,027
Over 50%
Y
Shanghai Samsung Semiconductor Co., Ltd.
2001.10
Sale of semiconductor and display
panels
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
Display panel processing
554,424
Over 50%
Y
Samsung Suzhou LCD Co., Ltd
2011.07
Display panel 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 production
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
Display panel sales and production
35,754,894
Over 50%
Y
21,711
Over 50%
N
91,556
Over 50%
Y
669,232
Over 50%
Y
Name of Subsidiaries
Date of
Establishment
Major business
Samsung Electronics Suzhou Semiconductor Co., Ltd.
1994.12
Semiconductor processing
Samsung Electronics (Shandong) Digital Printing Co., Ltd.
1993.03
Production of printers
Samsung Electronics Huizhou Co., Ltd.
1992.12
Tianjin Samsung Electronics Co., Ltd.
Display panel component
production
Semiconductor component
production
Semiconductor/FPD manufacturing
equipment
Dec 31,
2013
Assets
SU Materials
2011.08
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 logistics 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%
N
SVIC #20 Venture Capital Union
2011.03
30,532
Over 50%
N
SVIC #21 Venture Capital Union
2011.11
61,384
Over 50%
N
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
309,321
Over 50%
Y
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
Medical equipment
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%
ownership
Classified as
major
subsidiary
(Y/N)
5,950
Over 50%
N
Medical equipment
322
Over 50%
N
1992.11
Medical equipment
10,692
Over 50%
N
Samsung Medison India Private Ltd.
2009.01
Medical equipment
96
Over 50%
N
NexusDX Inc.
2009.07
Medical equipment
15,214
Over 50%
N
NeuroLogica Corp.
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
Display panel production
-
Over 50%
N
Samsung Electronics South Africa Production (pty) Ltd.
2014.07
Production of TV 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
SVIC #27 Venture Capital Union
2014.09
Investment in venture firms
and new technologies
-
Over 50%
N
Samsung Electronics Caucasus Co., Ltd.
2014.10
Marketing
-
Over 50%
N
-
Over 50%
N
Name of Subsidiaries
Date of
Establishment
Major business
RAY
2004.10
Dental CT
SonoAce Deutschland GmbH
2001.10
Samsung Medison Shanghai Medical Instrument Co., Ltd.
Investment in venture firms
and new technologies
Companies with over KRW75 billion in total assets as of December 31, 2013, are classified as major subsidiaries.
SVIC #26 Venture Capital Union
※
2014.11
Dec 31,
2013
Assets
※ See 『II. Businesses Overview』 for additional information about major business segments.
Samsung Electronics 2014 Business Report
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H. Credit Rating
The Company’s credit rating is assessed by two external credit ratings agencies. As of December 31, 2014, the Company’s
credit ratings are: A1 and investment outlook is stable, as rated by Moody’s; and A+ and investment outlook is stable, as
rated by S&P.
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)
’14.08
Corporate bond
A+
S&P (USA)
(AAA ~ D)
’14.10
Corporate bond
A1
Moody’s (USA)
(Aaa ~ C)
Note
Annual
Review
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
2014.08.18
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%), a subsidiary of SEA
Disposed of stocks of Samsung Corning Precision Materials, a subsidiary of Samsung Display
Purchased convertible preferred stocks from Corning Incorporated
Acquired shares of SmartThings (100%), a subsidiary of SEA
Samsung Electronics 2014 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,
Samsung Opto-Electronics GmbH
[China: 2]
128 [Asia: 1]
Tianjin Tongguang Samsung Electronics,
Samsung Electronics Bangladeshi Research Center
Tianjin Samsung Electronics Display
[China: 4]
Samsung Guangzhou Mobile R&D Center, Samsung
Tianjin Mobile Development Center, Tianjin Samsung OptoElectronics 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
India Private Ltd., Medison Medical Systems India Private
156
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]
166 Samsung LED Europe GmbH, Samsung Nanoradio 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 Business Report
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AMER
Dec 31,
2013
Dec 31,
2014
25
30
Europe/
MEA/
CIS
55
56
Asia
22
22
China
33
32
Domestic
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.
18
[Domestic : 2]
SVIC #26 Venture Capital Union
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: 3]
PrinterOn Europe Limited, Samsung Electronics South
Africa Production(pty) Ltd., Samsung Electronics
Caucasus Co., Ltd.
[Asia : 1]
Samsung Display Bac Ninh
[Domestic: 2]
Samsung Blue wings, World cyber games
[America: 6]
1397011 Ontario Ltd.
[Europe: 2]
Samsung Medison Europe B.V
Nanogen Recognomics GmbH
[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 Management Executives)
Following the annual general meeting of shareholders on March 16, 2012, of the three Executive Directors with
expired terms (Gee-Sung Choi, Yoon-Woo Lee, Ju-Hwa Yoon), Yoon-Woo Lee retired and Gee-Sung Choi and JuHwa Yoon were re-appointed. Oh-Hyun Kwon was newly appointed as Executive Director. In addition, of the three
Independent Directors with expired terms (Dong-Min Yoon, Jae-Woong Lee, Oh-Soo Park), Jae-Woong Lee and OhSoo 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, Oh-Hyun Kwon succeeded Gee-Sung Choi as CEO.
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, the Company appointed Executive Directors Boo-Keun Yoon and Jong-Kyun Shin as CEOs to
serve alongside incumbent CEO Oh-Hyun Kwon as co-CEOs.
Samsung Electronics 2014 Business Report
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On March 13, 2015, Executive Director Oh-Hyun Kwon and Independent Directors Han-Joong Kim and Byeong-Gi
Lee were reappointed at the annual general meeting of shareholders.
As of March 31, 2015, (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, Kwang-Soo Song and Eun-Mee Kim).
(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 was integrated with the Mobile
business. No further changes have been made as of year-end 2014.
[As of December 2012]
Before
DMC Division
(CE: Visual display, Digital appliances)
(IM: Mobile, IT solution, Network, Digital imaging)
Business
organization
After
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
Samsung Electronics 2014 Business Report
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3. Changes in Paid-in Capital
No changes were reported during the past five (5) consecutive years.
4. Stock Information
A. Total Number of Shares
The total number of authorized shares according to the articles of incorporation is 500,000,000 (par value per share:
KRW 5,000). As of December 31, 2014, the Company has issued 147,299,337 shares of registered common stock and
22,833,427 shares of registered preferred stock without voting rights (excluding canceled shares). The Company has
canceled 8,310,000 shares of common stock and 1,060,000 shares of preferred stock. As of December 31, 2014, the
number of floating common stock is 130,204,596 shares and the number of floating preferred stock is 19,722,484
shares, excluding treasury shares (of 17,094,741 shares of common stock and 3,110,943 shares of preferred stock).
[As of December 31, 2014]
(Unit: shares)
Classification
Type of Stocks
Common
Preferred
Note
Total
I. Number of authorized shares
400,000,000
100,000,000
500,000,000 -
II. Number of shares 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 shares
-
-
- -
4. Others
-
-
- -
147,299,337
22,833,427
170,132,764 -
17,094,741
3,110,943
20,205,684 -
130,204,596
19,722,484
149,927,080 -
III. Number of shares decreased
1. Capital Reduction
2. Number of shares canceled
IV. Number of outstanding shares (II-III)
V. Treasury shares
VI. Number of floating shares (IV-V)
9,370,000
Cancellation of
treasury shares
※ Shares of the Company’s common stock carry voting rights but preferred stock do not carry voting rights.
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B. Treasury Shares
In 2014, Samsung Electronics distributed 47,530 shares of common stock in connection with the exercise of previously
granted stock options by current and former management and employees. The Company acquired 758,055 shares of
common stock and 131,250 shares of preferred stock for its treasury to enhance shareholder value by stabilizing the price
of its shares. As of December 31, 2014, the Company holds 17,094,741 shares of common stock and 3,110,943 shares of
preferred stock as treasury shares.
[As of December 31, 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
758,055
47,530
-
17,094,741
Preferred
2,979,693
131,250
-
-
3,110,943
Common
16,384,216
758,055
47,530
-
17,094,741
Preferred
2,979,693
131,250
-
-
3,110,943
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 December 31, 2014, the total number of outstanding preferred stock is 22,833,427
shares.
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5. Voting Shares
Samsung Electronics has 147,299,337 shares of common stock outstanding, which represents 29.5% of the total number
of authorized shares of 500 million (500,000,000). There are 22,833,427 shares of preferred stock outstanding (with no
voting rights). The Company holds 17,094,741 shares of common stock (with no voting rights) in its treasury, and
12,506,577 shares of common stock are held by the Company’s affiliates and have limited voting rights under applicable
laws. Thus, the total number of shares with voting rights is 117,698,019.
[As of December 31, 2014]
(Unit: Shares)
Number
of shares
Classification
Note
Common
147,299,337 -
Preferred
22,833,427 -
Shares with no voting rights (B)
Common
17,094,741 Treasury stock according to Korean Commercial Act
Shares with no voting rights according
to Articles of Incorporation (C)
Preferred
22,833,427 3,110,943 shares of preferred treasury stock 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: Shares held by
Samsung Life Insurance in certain special accounts
Common
117,698,019 -
Preferred
- -
Shares with voting rights
(F = A - B - C - D)
※ Pursuant to Korea’s 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 the profits have been returned to shareholders by way of
dividends and shareholder value has been increased through open market purchases of floating shares (share repurchase).
The Company carefully considers strategic investments for sustainable growth, business performance, and cash flows in
determining the level of total shareholder return.
Dividends paid in the most recent three (3) fiscal years are as follows:
(Unit: Shares / %)
Classification
2014
Par value per share (won)
2013
2012
5,000
5,000
5,000
23,082,499
29,821,215
23,185,375
153,105
197,841
154,020
Total cash dividend (million won)
2,999,972
2,156,969
1,206,562
Total stock dividend (million won)
-
-
-
13.0
7.2
5.2
Common
1.5
1.0
0.5
Preferred
1.9
1.4
1.0
Common
-
-
-
Preferred
-
-
-
Common
20,000
14,300
8,000
Preferred
20,050
14,350
8,050
Common
-
-
-
Preferred
-
-
-
Net profit (million won)
EPS (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).
※ EPS denotes basic earnings per common share.
※ For further information relating to the calculation of basic EPS, see Earnings Per Share in 『3. Note to Consolidated Financial
Statements』 in 『Ⅲ. Financial Affairs』.
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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’s business Divisions are organized in a 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 TVs, 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 Unit”)
business which manufactures and sells TFT-LCD and OLED panels for TVs, monitors, notebook PCs, and mobile devices.
<Major Products by Business Division>
DS
Division
Business Division
Major Products
CE Division
TV, Monitor, Printer, Air Conditioner, Refrigerator, Washing Machine, Medical Devices, etc.
IM Division
Semiconductor (SubDivision)
DP Business Unit
HHP, Network System, Computer, Digital Camera, etc.
DRAM, NAND Flash, Mobile AP, etc.
TFT-LCD, OLED, etc.
The Company maintains its corporate headquarter and eighteen (18) consolidated domestic subsidiaries in Korea.
The Company’s corporate headquarters in Korea is divided along Divisions and/or businesses, and are situated 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 140 overseas subsidiaries for product manufacturing, sales, and R&D.
In the Americas, we have 30 subsidiaries responsible for product manufacturing and sales including SEA (New Jersey,
United States) which is responsible for sales of products such as TVs, HHPs and other communication products in the US,
SAMEX (Tijuana, Mexico) responsible for manufacturing TVs, and SAS (Austin, United States) responsible for
manufacturing semiconductor products.
In Europe, we operate 32 subsidiaries including SEUK (UK), SEF (France), SEG (Germany), and SEI (Italy). SESK
(Slovakia) and SEH (Hungary) are responsible for manufacturing TVs, 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), which are responsible for regional sales. In addition, we operate numerous production sites including
SEV (Vietnam) for HHPs, SDMA (Malaysia) for TVs, and SIEL (India) for both TVs and HHPs.
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 24 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 the Trinitron CRT (1967) and the 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~).
Flat panel TVs (“FP-TVs”) replaced the CRT driven by 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-THE-TOP) 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 TVs with innovatively high resolution were launched and the TV
market continues to evolve.
In 2014, Annual TV shipment is expected to reach 232.51 million units, an increase 3.3% from the previous year. LCDTV (including LED-TV) shipment is expected to be around 223.36 million units with an increase of 7.5% year-over-year,
while PDP-TV shipment is expected to decline by 45.6% to 5.6 million units from the previous year (Source: Dec ‘14
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. In addition, as consumer demand for high-resolution and slim design increases, LED TVs, with eco-friendly
LED back light units (“BLU”) which increases brightness and contrast as well as energy efficiency, has become the
mainstream of the market.
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, as competition among TV set makers accelerated in large-screen and high definition TVs, competitive
products and strong brand power have become important factors in gaining and/or maintaining market share. Going
forward, we expect this trend to continue in the global TV market, and with increasing customer demand for large-screen
TVs with high definition, and expect that sales of ultra-high-definition (“UHD”) TVs will continue to increase.
< Market Share of the CE Division’s Main Product >
Product
2014
2013
2012
TV
22.6%
21.6%
※ Market share data is from research agency Display Search (Global market share in quantity).

21.1%
Business Condition
We have maintained the top position in the Flat Panel TV market (in terms of market share) for nine consecutive years
since 2006. In 2014, we introduced a variety of UHD TV products, offering differentiated benefits to our customers.
Samsung UHD TVs, as the next step in the evolution of TVs, not only offers superior picture quality, but also supports
upcoming UHD broadcasting standards through its Evolution Kit. Also, our Curved TV products, which offer a greater
sense of depth and an immersive viewing experience, made our products unique and different. Thus, we were able to
solidify our leadership in the premium TV market by expanding sales of UHD and Curved TVs.
We aim to maintain our leadership in the market in 2015 by focusing on new premium products such as SUHD TVs.
Samsung Electronics 2014 Business Report
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SUHD TVs, featuring our Nano Crystal technology, will offer superior picture quality in important material aspects
including color, brightness, and contrast. Furthermore, most of our premium TV products, including SUHD TVs, will be
offered as Smart TVs, and all our new Smart TV products will be equipped with: our own open‐source platform, Tizen, to
offer easy compatibility with other smart devices; fast and intuitive user interface for better user experience (“UX”); and
customized contents and services.
[IM Division]

Industry Overview
A mobile phone is one of the most ubiquitous electronics devices. As of year-end 2014, the global penetration rate was
74%. In 2015, it is expected to reach 77%. (Source: Dec ’14 Strategy Analytics)
The mobile phone industry started with the first generation analogue phones in the early 1980s. It evolved to second
generation digital, and to third generation mobile communication standards such as WCDMA with high-speed data
transmission. Today, fourth generation mobile communication technology with ultra-high-speed data transmission is
becoming commonplace in the market. In particular, the LTE market is spreading to all parts of the world, and LTEAdvanced 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.

Market Condition
In 2015, the HHP market is expected to reach 1.9 billion units with a growth of 5% from 1.8 billion in 2014. The
smartphone market is expected to increase from 1.25 billion units in 2014 to 1.4 billion units in 2015 with a growth of
12% year over year.
The tablet market is expected to reach 290 million units (16% growth rate YoY) shipped in 2015 from 250 million units in
2014. (Source: Strategy Analytics – Mobile/Smartphone: Dec ’14, Tablet: Nov.)
< Market share of the IM Division’s Main Product >
Product
HHP
2014
2013
22.4%
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 being at the forefront of new markets 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.
Going forward, the Company will continue to solidify its market leadership in premium smartphones and tablets and
create consumer demand with new products (such as Galaxy S, Gear VR, and Gear Circle) and advanced features (such as
flexible displays). Furthermore, we will continue to strengthen the competitiveness of our strategic models to overcome
unfavorable market conditions resulting from intensifying competition as more competitors enter the market with more
products and lower prices. In addition, we will strive to become a company that consistently offers new value 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
In general, semiconductor is divided into memory semiconductor that stores information and system LSI (non-memory
semiconductor) that logically processes information including mental calculation and inference. Memory semiconductor is
divided into RAM products that can read and write and ROM products that can only read. RAM is called volatile memory
as the information is deleted when power is off. It is used for temporary loading and storage of application programs.
There are various types of system LSI products for various applications. CPU (Central Processing Unit) for PCs and
servers is the biggest market. System LSI products are used in many product categories such as household electronics,
telecommunications, network, and games. The Company supplies its system LSI semiconductor products for use in media
players including digital TVs, DVDs, and MP3s. The company also manufactures CMOS image sensors (“CIS”) for
camera phones, Mobile APs for smartphones, and other customized system LSI semiconductor products.
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 smartphones, tablet PCs and servers.

Market Condition
Throughout 2014, PC DRAM prices remained strong amid stable supply and demand. In the fourth quarter of 2014,
overall DRAM demand increased driven by new product launch, but supply did not increase due to difficulties in process
migration. In the fourth quarter, while supply of PC DRAM increased, supply for high density server and mobile DRAM
adapting advanced processes continued to be limited. NAND supply and demand condition has been improving since the
second half of 2014 driven by an increase in NAND contents in new smartphones and adoption of solid state drives
(“SSDs”).
< Market share of the Semiconductor Business’ Main Product >
Product
DRAM
2014
2013
40.9%
2012
37.2%
42.1%
※ Market share data is from research agency IDC (Global market share in amount).

Business Condition
The Company was the first to develop and produce 20nm DRAM products and also secured technology and cost
competitiveness ahead of competitors. In addition, the Company is solidifying its leadership position in the DRAM
market by developing differentiated 20nm products and 10nm-class DRAM. For NAND, the Company is simultaneously
developing and mass producing both planar and vertical NANDs, addressing customer demand in a timely manner. In
particular, the Company is entering the premium market by adding vertical NAND, with technology that is one year ahead
of competitors, to high-performance SSD. The Company is also expanding high-quality 3bit products to maximize cost
competitiveness.
In 2015, the cloud server market and the mid-to-low end mobile markets are expected to grow. As such, the Company will
expand differentiated products based on advanced processes and address each market segment with diverse product
lineups to continue to lead the market as the No.1 memory maker.
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-DP Business Unit

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 demand for CRT monitors and high market
penetration of LCD TVs.
OLED panels use organic materials which offer sharp 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. In addition, OLED has recently made a foray into the high-end TV market.
The TFT-LCD and OLED businesses have high barriers to entry as they are capital intensive and need large-scale
production to realize economies of scale. These types of businesses are generally sensitive to business fluctuations.
Therefore, even if demand increases continuously, supply and demand balance tends to change regularly due to
competitive investment in facilities by producers. Also, production capacity can sharply increase as producers invest in
facilities contemporaneously as they compete with one another to address demand increase ahead of the competition. As
such, when production capacity sharply increases, the average selling price (“ASP”) of panels may decrease. In contrast,
when supply cannot meet increasing demand, ASP may increase.

Market Condition
In 2015, supply and demand of large-size panels is expected to be solid driven by the trend towards large-screen TVs and
continued growth of UHD TVs. However, there may be excess supply due to an increase in industry capacity in the
second half.
For mobile devices, 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 the DP Business’ Main Product >
Product
Display Panel
2014
2013
20.9%
2012
20.4%
25.4%
※ Market share data is from Display Search (Global market share, large-size panel in [units shipped]).

Business Condition
The Company is improving cost competitiveness through increasing production yields by developing advanced process
technologies, developing high transmission panels, and internally 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 its 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 TVs and Curved TVs.
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
Business
Unit
Classification
2013
Portion
Amount
2012
Portion
Amount
Portion
Total sales
124,916,892
25.3%
125,088,762
22.4%
117,897,781
24.6%
Internal sales
74,733,757
25.9%
74,757,247
22.7%
66,792,679
24.0%
Net sales
50,183,135
24.3%
50,331,515
22.0%
51,105,102
25.4%
Operating profit
1,184,325
4.7%
1,673,343
4.5%
2,324,036
8.0%
Total asset
43,116,374
12.8%
47,183,953
14.9%
38,947,252
14.1%
Total sales
236,438,979
47.9%
299,161,654
53.6%
224,920,171
46.9%
Internal sales
124,674,435
43.3%
160,344,435
48.7%
119,075,488
42.8%
Net sales
111,764,544
54.2%
138,817,219
60.7%
105,844,683
52.6%
Operating profit
14,562,885
58.2%
24,957,741
67.8%
19,418,235
66.8%
Total asset
94,227,108
27.9%
86,132,881
27.1%
68,743,115
24.9%
Total sales
75,058,071
15.2%
70,908,145
12.7%
66,976,623
14.0%
Internal sales
35,328,169
12.3%
33,471,566
10.2%
32,090,017
11.5%
Net sales
39,729,902
19.3%
37,436,579
16.4%
34,886,606
17.3%
Operating profit
8,776,442
35.1%
6,887,978
18.7%
4,173,730
14.4%
Total asset
87,567,196
25.9%
76,224,096
24.0%
67,136,914
24.4%
Total sales
52,227,615
10.6%
61,294,886
11.0%
69,359,762
14.5%
Internal sales
26,500,446
9.2%
31,457,770
9.5%
36,360,406
13.1%
Net sales
25,727,169
12.5%
29,837,116
13.0%
32,999,356
16.4%
660,181
2.6%
2,980,563
8.1%
3,214,750
11.1%
Total asset
46,826,533
13.8%
42,195,558
13.3%
41,429,074
15.0%
Total sales
131,459,756
26.6%
134,394,781
24.1%
136,724,256
28.5%
Internal sales
65,669,950
22.8%
66,633,875
20.2%
68,436,962
24.6%
Net sales
65,789,806
31.9%
67,760,906
29.6%
68,287,294
34.0%
Operating profit
9,430,915
37.7%
10,000,665
27.2%
7,416,325
25.5%
160,138,321
47.4%
145,872,686
45.9%
130,371,546
47.3%
Operating profit
Total
2014
Amount
Total asset
※ Restated on 2014 basis (presented on a consolidated basis).
※ Net sales reported here includes inter-divisional sales.
Cumulative Net sales for 2014 were KRW 206.206 trillion. By Division, CE reported KRW 50,183 billion (24.3%) and
IM reported KRW 111,765 billion (54.2%). The DS Division contributed approximately 31.9% of net sales: KRW 39,730
billion (19.3%) by the Semiconductor Sub-Division and KRW 25,727 billion (12.5%) by the DP Business Unit.
Cumulative operating profit for 2014 was KRW 25.025 trillion. The IM Division accounted for 58.2% with KRW 14,563
billion and the DS Division accounted for 37.7% with KRW 9,431 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 that are allocable to specific product/model are allocated to such
product/model. However, common expenses that cannot be attributed to a specific 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
In 2014, the CE Division’s revenue of KRW 50,183 billion accounted for 24.3% of the total net revenue; the IM Division
accounted for 54.2% with KRW 111,765 billion; and the DS Division accounted for 31.9% with KRW 65,790 billion.
The Company’s net revenue by Division as of year-end 2014 are as follows:
(Unit: KRW 100 million, %)
DS
Division
Major Products
Net Revenue
CE
TV, monitor, printer, air conditioner, refrigerator, washing machine, medical
equipment, etc.
IM
HHP, network system, computer, digital camera, etc.
Portion
501,831
24.3%
1,117,645
54.2%
Semiconductor
DRAM, NAND flash, Mobile AP, etc.
397,299
19.3%
DP Business Unit
TFT-LCD, OLED, etc.
257,272
12.5%
Sub-Total
657,898
31.9%
-
-215,314
-10.4%
Total
2,062,060
100.0%
Others
※ Includes sales between Divisions (on consolidated basis).
☞ See 『5. Sales and Distribution』 for sales by each product.
B. Average Selling Price (ASP) Changes
Throughout 2014, the ASP of TVs continued to decline from 2013. The ASP of HHPs declined slightly compared to 2013,
while the ASP of memory products stabilized, declining only 14% from 2013, due to stable market demand and supply
conditions. The downward momentum of the ASP of display panels continued, due to weak demand from China and
developed markets.
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3. Key Raw Materials
(On consolidated basis as of year-end 2014)
(Unit: KRW 100 million, %)
Division
CE
Type
Item
Specific usage
Raw materials
Display panel
Color picture signaler
Raw material
Purchase price
Portion
Note (supplier)
39,249
18.0%
Others
178,666
82.0%
Division Total
217,915
100.0%
CMI, AUO, etc.
Raw material
Mobile display panel
Color picture signaler
49,043
12.0%
Iljin Display, etc.
Raw material
Baseband Chip
CPU
48,375
11.8%
Qualcomm, etc.
Raw material
Others
312,900
76.2%
Division Total
410,318
100.0%
IM
DS
Raw material
Glass
Glass substrate for display
18,392
9.2%
Corning Precision
Materials, etc.
Raw material
POL
Polarizer plate
18,880
9.4%
Dongwoo FineChem, NITTO, etc.
Raw material
Window
Tempered glass
12,435
6.2%
BIEL, etc.
Raw material
Others
150,272
75.2%
Division Total
199,979
100.0%
444
-
828,656
-
Others
Total
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 devices and baseband chips. For the DS Division, key raw
materials include glass, polarizers (“POL”) and wafers.
Large display panels for TVs and monitors are supplied by Cummins (CMI) and AU Optronics (AUO) (among others),
mobile display panels are supplied by Iljin Display, and baseband chips are supplied by the System LSI business unit and
Qualcomm. The Company manufactures display panels with glass and POLs 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 11% on
average since 2013 due to oversupply from increased capacity 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 7%. 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 16%.
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4. Production and Facilities
A. Production Capacity, Output, Utilization Rate
(Capacity)
(Unit: 1,000)
2014
2013
2012
Quantity
Quantity
Quantity
Division
Item
CE
TV
62,990
53,102
53,375
IM
HHP
523,750
556,600
461,950
173,506,000
116,909,000
80,159,000
9,185
8,260
9,218
DS
Memory
Display Panel
※Global production capacity for major product categories
The CE and IM Divisions’ 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 the DS Division is calculated as follows:
Converted output (1GB equivalent) ÷ the utilization rate.
Display panel production capacity is calculated as follows:
The total producible panel surface area ÷ the dimensions of eighth generation glass (2200x2500mm)
(Output)
(Unit: 1,000)
Division
Item
2014
2013
2012
Quantity
Quantity
Quantity
CE
TV
55,066
47,527
48,357
IM
HHP
439,520
499,480
416,632
173,506,000
116,909,000
80,159,000
8,252
7,340
7,800
DS
Memory
Display Panel
※Global output for major product categories
In 2014, the CE Division’s output of TVs was 55.066 million units (major production sites: Korea, China, Mexico, Brazil,
and Hungary). The IM Division’s output of HHPs was 439.520 million units (major production sites: Korea, China,
Vietnam, and Brazil). The DS Division’s memory output (1GB equivalent) was 173,506 million (major production sites:
Korea and China). The DS Division’s output of display panels was 8.252 million units (major production sites: Korea,
China, and Slovakia).
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(Utilization Rate)
(Unit: 1,000)
2014
Production capacity
2014
Actual output
Division
Item
Utilization Rate
CE
TV
62,990
55,066
87.4%
IM
HHP
523,750
439,520
83.9%
In 2014, CE and IM utilization rates were calculated as actual output relative to production capacity.
TV is 87.4% and HHP is 83.9%.
(Unit: hours)
Division
DS
Item
2014
Potential
Production Time
2014
Actual
Production Time
Utilization Rate
Memory
50,400
50,400
100.0%
Display Panel
87,600
85,384
97.5%
The DS Division operates memory and display panel production in three shifts (24 hours a day). Cumulative operating
days in 2014 including holidays were 365 days. The utilization rate was calculated as actual hours [365 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 include manufacturing, development, marketing, and sales in Korea – 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
Korea
(10)
Overseas
(9 Regional Headquarters for
CE and IM Divisions)
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
Cheonan
Cheonan, Korea
Asan
Asan, 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
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 year-end 2014, their total book value is KRW 80,873 billion, which is an increase of KRW
5.377 trillion from year-end 2013. In 2014, new acquisitions of KRW 23,435 billion and depreciation of KRW 16,910
billion were recorded.
(Unit: KRW million)
Classification
Buildings and Machinery and Construction
Structures
Equipment
in –progress
Land
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)
357,794
3,595,210
16,048,623
2,476,963
956,520
23,435,110
Acquisition as a result of business
combination
-
-
-
-
940
940
Depreciation
-
(1,305,220)
(14,729,718)
-
(875,088)
(16,910,026)
(67,001)
(457,634)
(193,077)
(44,883)
(71,550)
(834,145)
-
(2,280)
(173,140)
-
(6,710)
(182,130)
(9,728)
53,407
300,724
(439,945)
(37,645)
(133,187)
Book value
7,710,352
17,598,547
37,751,890
15,832,307
1,979,854
80,872,950
Acquisition cost
7,710,352
26,474,937
127,603,897
15,832,307
5,664,513
183,286,006
-
(8,876,390)
(89,852,007)
-
(3,684,659)
(102,413,056)
At 1 January 2014
Accumulated depreciation
(Including accumulated impairment loss)
General acquisition and capital expenditure
Increase
(Decrease)
Disposal/Discard
Damage
Others
Balance at
31 Dec 2014
Accumulated depreciation
(Including accumulated impairment loss)
※ Others: Includes effects of changes in FX rates and changes in the scope of consolidated financial statements.
※ Market value of major tangible assets is omitted as objective assessment is difficult.
※ Property, plant, and equipment above is presented on a consolidated basis.
(2) CAPEX
During 2014, the Company invested KRW 23.4 trillion in CAPEX, including upgrading production lines of the
Semiconductor Sub-Division and the DP Business Unit. The total CAPEX for 2015 is expected to increase compared to
the previous year, although this is subject to change depending on changes in the business environment and market
conditions.
[CAPEX by Division]
(Unit: KRW 100 million)
Investment in
2014
Business
Purpose
Period
Assets
Semiconductor
Establishment, addition,
upgrade
Jan '14 ~ Dec '14
Buildings, facilities
143,156
DP Business Unit
Establishment, addition,
upgrade
Jan '14 ~ Dec '14
Buildings, facilities
39,846
Others
Others
Jan '14 ~ Dec '14
Buildings, facilities
51,349
Total
234,351
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5. Sales and Distribution
A. Sales
In 2014, the Company recorded KRW 206,206 billion of total revenue, a decline of 9.8% from the prior year. By Division,
from 2013, the CE Division’s revenue decreased by 0.3%, the IM Division’s revenue decreased by 19.5%, and the DS
Division’s revenue decreased by 2.9%.
(Unit: KRW 100 million)
Division
Sales types
Product categories
CE
Goods
Products
Service
Others
TV, monitor, printer, air
conditioner, refrigerator,
washing machine, medical
equipment
501,831
503,315
511,051
IM
Goods
Products
Service
Others
HHP,
Network System, Computer,
Digital camera
1,117,645
1,388,172
1,058,447
Semiconductor
Goods
Products
Service
Others
DRAM,
NAND Flash, Mobile AP
397,299
374,366
348,866
DP Business Unit
Goods
Products
Service
Others
TFT-LCD,
OLED
257,272
298,371
329,994
657,898
677,609
682,873
-215,314
-282,169
-241,335
2,062,060
2,286,927
2,011,036
DS
2014
Division total
Others
Other revenue
-
Total
2013
2012
※ Includes internal sales between Divisions.
※ Represented on 2014 basis.
□ Sales by Major Product
(Unit: KRW 100 million)
Classification
TV
Mobile Devices
Memory
Display Panel
※ Including internal sales between Divisions.
※ Represented on 2014 basis.
2014
2013
2012
324,486
331,207
350,381
1,074,149
1,353,537
1,032,875
293,244
237,146
208,640
257,272
298,371
329,994
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□ Sales by Type
(Unit: KRW 100 million)
Classification
2014
Products
2013
2,036,716
2,252,839
1,926,709
25,344
34,088
84,327
2,062,060
2,286,927
2,011,036
Service and other Sales
Total
2012
※Other sales consists of royalty income and rental income.
□ Sales by Region (on a Parent Company Financial Statement Basis)
(Unit: KRW 100 million)
Classification
2014
2013
2012
Korea
153,247
172,004
204,703
Americas
433,940
442,526
315,846
Europe
208,982
335,645
312,650
Asia and Africa
298,140
341,059
290,832
China
283,946
292,487
288,033
Total
1,378,255
1,583,721
1,412,064
B. Sales Channels
□ Korea
Seller
Sales Channel
Consumer
Retailer
Manufacturer
(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
Seller
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
Retailer
Direct Sales
□ Sales Ratio by Channel
Channel
Wholesale
Retail
Special/direct sale
Others
Ratio
34%
26%
35%
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)
- Case specific cost sharing as determined by mutual
agreement
Distributor
General Merchandise Store,
Discount Store, Department Store,
Home Shopping, Internet
Case specific and contract specific
- Case specific cost sharing as determined by mutual
agreement
Special/direct sale
Corporate Clients, etc.
Case specific and contract specific
Classification
Channel
Collection
Retailer
Retail store
Case specific and contract specific
- Case specific cost sharing as determined by mutual
agreement
Dealer
General merchandise store,
Discount store, Department store
Case specific and contract specific
- Case specific cost sharing as determined by mutual
agreement
Distributor
Direct sales to local distributors
Case specific and contract specific
- Case specific cost sharing as determined by mutual
agreement
N/A
□ Overseas
B2B
Corporate Clients, etc.
Incidental expense sharing
Case specific and contract specific
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 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 risks
and also establishes and implements global financial risk management policies.
Financial risk management officers are dispatched to the regional headquarters of located in the US, 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 (including imports and exports) to be in the local currency or for the cashin 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.
The foreign currency exposure to financial assets and liabilities of a 5% currency rate change against the Korean won
(KRW) are presented below:
(Unit: KRW million)
Year-End 2014
Year-End 2013
Classification
Appreciation
Depreciation
Appreciation
Depreciation
USD
(171,265)
171,265
8,472
(8,472)
EUR
(36,381)
36,381
9,136
(9,136)
JPY
(42,529)
42,529
(45,131)
45,131
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(2) Risk of Volatility in Equity Securities Held as Investment
The Company’s investment portfolio consists of direct and indirect investments in equity securities and is classified as
available-for-sale, which is in line with the Company’s strategy.
As of December 31, 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 57,768 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 expenses from changes in interest rates. In order to minimize interest rate related risks, the Company minimizes
external borrowings by facilitating cash pooling systems on a regional and global basis. The Company manages its
exposure to interest rate risks by regularly monitoring risk factors and timely resolution, and prevention, of issues.
The sensitivity risk of the Company is determined based on the following assumptions:
- Changes in market interest rates that could impact the interest income and expenses of floating interest rate financial
instruments
Based on the above assumption, changes to profit and net equity as a result of a 1% increase in interest rates on
borrowings are presented below:
(Unit: KRW million)
Year-End 2014
Year-End 2013
Classification
Interest Rate Increase
Financial Assets
52,977
Interest Rate Decrease
Interest Rate Increase
(52,977)
Interest Rate Decrease
(46,025)(46,025)
46,025
Financial Liabilities
Net Effect
(30,722)
30,722
(22,942)
22,94222,942
22,255
(22,255)
23,083
(23,083)(23,083)
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 actively monitors its credit risk on a regular basis and determines a counterparty’s
credit limit periodically 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 that have strong international credit ratings (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
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finance center. The Company requires separate approval for contracts with restrictions.
Most of the Company’s trade receivables are adequately insured to manage any risk, therefore, the Company estimates its
credit risk exposure to be limited. 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 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 globally integrated finance
structures such as cash pooling. In addition, the Company maintains a liquidity management process which provides
additional financial support through the local finance center and the Company when necessary. 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.
As of year-end 2014, financial liabilities classified according to remaining term until the expiration date is as follows:
(1) Year-End 2014
(Unit: KRW million)
Under 3 mo.
Financial liabilities
34,502,783
~6 mo.
706,077
~1yr
3,528,699
1~5 yrs
Over 5 yrs
3,994,862
106,857
(2) Year-End 2013
(Unit: KRW million)
Under 3 mo.
Financial liabilities
33,862,896
~6 mo.
1,095,285
~1yr
4,806,477
1~5 yrs
2,564,769
Over 5 yrs
65,772
The above financial liabilities were classified according to the remaining term until the expiration date from the Reporting
Date. The cash flows included were not discounted to present value. Please note, as expiry of derivatives bought and sold
is not necessary for understanding liquidity requirements in a given period, its fair value of KRW 78,348 million (year-end
2013: KRW 244,172 million) is included in the “under 3 mo.” figure. These derivatives contracts are managed based on
their fair value rather than expiration. Cash-settled derivatives are composed of currency forwards used for managing the
Company’s exchange rate fluctuations.
The maximum amount of liquidity exposure from payment guarantees and performance guarantees of affiliates other than
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the above financial liabilities is KRW 115,211 million (year-end 2013: KRW 183,644 million).
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D. Capital Risk Management
The purpose of capital management is to maintain a healthy capital structure. The Company uses debt ratio as an indicator
and measure of an appropriate capital structure. The debt 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.
The total liabilities to equity ratio as of year-end 2014 and year-end 2013 are as follows:
(Unit: KRW million)
December 31, 2014
December 31, 2013
Total liabilities
62,334,770
64,059,008
Total equity
168,088,188
150,016,010
37.1%
42.7%
Total liabilities to equity ratio
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E. Fair Value Measurement
- Carrying amounts and fair values of financial instruments by category as of December 31, 2014 and December 31,
2013 are as follows:
(Unit: KRW million)
Classification
December 31, 2014
Carrying amount
December 31, 2013
Fair value
Carrying amount
Fair value
Financial assets
Cash and cash equivalents
16,840,766
(1)
16,284,780
(1)
Short-term financial instruments
41,689,776
(1)
36,722,702
(1)
Short-term available-for-sale
financial assets
3,286,798
Trade and other receivables
24,694,610
Long-term available-for-sale
financial assets(2)
12,667,509
12,272,756
6,238,380
5,850,155
4,762,971
4,725,263
5,472,956
5,436,470
Other
Total Financial assets
3,286,798
1,488,527
24,988,532
(1)
103,942,430
1,488,527
(1)
91,195,877
Financial liabilities
Trade payables
7,914,704
(1)
8,437,139
(1)
Short-term borrowings
8,029,299
(1)
6,438,517
(1)
Other payables
9,258,344
(1)
7,877,581
(1)
Current portion of long-term
borrowings
1,778,667
(1)
2,425,831
(1)
Debentures
1,355,882
1,377,113
1,311,068
1,327,569
101,671
82,271
985,117
971,844
2,520,277
2,606,179
1,023,714
1,090,580
Long-term borrowings
Long-term other payables
1
2
Other
11,474,129
Total Financial liabilities
42,432,973
(1)
10,862,512
39,361,479
Assets and liabilities whose carrying amounts are reasonable approximations of their fair value are excluded from the
fair value disclosures.
Amount measured at cost (2014: KRW 394,753 million and 2013: KRW 388,225 million) is excluded, as the range of
reasonable fair value estimates are significant and the probabilities of the various estimates cannot be reasonably
assessed.
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The following table presents the fair value of assets and liabilities, by Level (as defined below), measured as of the dates
indicated:
As of December 31, 2014
(In millions of Korean won)
Short-term available-for-sale financial assets
Long-term available-for-sale financial assets1
Other
Level 1
Level 2
Level 3
Total balance
1,016,878
5,776,836
2,269,920
3,050,338
45,898
3,445,582
102,513
3,286,798
12,272,756
148,411
Other
-
78,348
-
78,348
Total liabilities
-
Total assets
December 31, 2013
(In millions of Korean won)
Short-term available-for-sale financial assets
Long-term available-for-sale financial assets1
Other
Level 1
Level 2
Level 3
Total balance
1,257,492
231,035
-
1,488,527
4,399,314
-
957,463
40,552
493,378
-
5,850,155
40,552
-
244,172
-
244,172
Total assets
Derivatives
1
Total liabilities
Amount measured at cost (December 31, 2014: KRW 394,753 million, December 31, 2013: KRW 388,225 million) is excluded, as
the range of reasonable fair value estimates are significant and the probabilities of the various estimates cannot be reasonably
assessed.
The levels of the fair value hierarchy (based on characteristics of the input variables) 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 in Level 1 include 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 models. These valuation models maximize the use of observable market data where it is
available and rely as little as possible on entity specific information. If all significant inputs required to measure the fair
value of an instrument are observable, the instrument is included in Level 2.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
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The Company performs 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 recognizes changes in Levels at the end of the reporting period, if corresponding events or changes in
circumstances necessitating such reclassification 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, among other things, 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 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 inputs used for major financial instruments classified as
Level 3.
Fair
Classification
Value
Long-term available-for-sale financial assets
Taewon Electric
17,094
Level 3 Inputs
(In millions of Korean won)
Input Range
(Weighted Average)
3,106,332
Discounted cash
flow
Discounted cash
flow
Discounted cash
flow
Trinomial model
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%)
7.76% ~ 9.76% (8.76%)
-1.00% ~ 1.00% (0%)
7.74% ~ 9.74% (8.74%)
-1.00% ~ 1.00% (0%)
10.48% ~ 12.48% (11.48%)
4.96% ~ 6.96% (5.96%)
30.50% ~ 36.50% (33.50%)
2,462
Binomial model
Discount rate
Stock price volatility
5.16% ~ 10.30% (7.78%)
11.88% ~ 17.60% (14.53%)
Samsung Venture Investment
6,586
Samsung General Chemicals
100,051
Coming Incorporated
convertible preferred stock
Derivatives
Embedded derivatives
(convertible bonds)
Valuation
Technique
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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 December 31
2013
493,378
2,586,120
(97,487)
(67,581)
646,856
(13,191)
3,548,095
389,195
151,741
(46,357)
(5,177)
2,615
1,361
493,378
- 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 inputs that are unobservable in the market, using a statistical
technique. When the fair value is affected by two or more input variables, such fair value is calculated using the
most favorable or most unfavorable input values.
The results of the sensitivity analysis for the effect on profit or loss from changes in inputs for each type of 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
-
231,909
-
(225,568)
466
466
(475)
(475)
466
232,375
(475)
(226,043)
1
Changes in the fair value of convertible preferred stock have been calculated by increasing or decreasing the
correlation between volatility (30.50% ~ 36.50%) and the discount rate. Similarly, for other equity securities,
changes in fair value have been calculated by increasing or decreasing the correlation between growth ratio (-1%
~ 1%) and the discount rate, which are significant unobservable inputs.
2
For equity derivatives, changes in fair value have been calculated by increasing or decreasing the correlation
between stock prices and volatility by 10%.
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- As of December 31, 2014, assets and liabilities that are not measured at fair value but whose fair value is disclosed
are as follows:
[Unit : KRW million]
Year-End 2014
Classification
Book value
Level 1
Level 2
Level 3
Total
(1) Assets
Other non-current assets
4,614,560
-
4,576,852
-
4,576,852
1,355,882
-
1,377,113
-
1,377,113
101,671
-
82,271
-
82,271
2,520,277
-
2,606,179
-
2,606,179
(2) Liabilities
Debentures
Long-term borrowings
Long-term other payables
[Unit : KRW million]
Year-End 2013
Classification
Book value
Level 1
Level 2
Level 3
Total
(1) Assets
Other non-current assets
5,432,404
-
5,395,918
-
5,395,918
1,311,068
-
1,327,569
-
1,327,569
985,117
-
971,844
-
971,844
1,023,714
-
1,090,580
-
1,090,580
(2) Liabilities
Debentures
Long-term borrowings
Long-term other payables
The Company utilizes a present value method to discount future cash flows by utilizing an appropriate interest rate for the
above assets and liabilities that are classified as Level 2 in the fair value hierarchy.
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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 year-end 2014 is presented below:
(Unit: KRW million)
Asset
Liabilities
Valuation Gain
Valuation Loss
Put options
8,844
-
-
10,778
Total
8,844
-
-
10,778
※ 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 their foreign currency positions by trading
currency forward contracts of such currencies. Overseas subsidiaries buy or sell currency forwards with less than
one year maturity through a bank to minimize such risks.
The Company holds convertible preferred shares of Corning Incorporated and its value as of year-end 2014 is as
follows.
(Unit: KRW million)
Purchasing Price
Convertible preferred
Stocks
Fair Value
2,434,320
Valuation Gain
3,106,332
Valuation Loss
672,012
-
※ Fair value determined using Trinomial Tree model
(C)
Currency forwards as of year-end 2014 are as follows.
(Unit: KRW million)
Asset
Liabilities
Valuation Gain
Valuation Loss
Currency forwards
45,775
78,311
44,308
74,023
Total
45,775
78,311
44,308
74,023
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9. Major Contracts
Account
Ericsson
Item
Contents
Contract type
Patent cross-license agreement
Contract date
2014.01.25
Purpose and contents
Secure operational advantage through mutual patent licensing
Contract type
Patent cross-license agreement
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
Patent cross-license agreement
Contract date
2014.01.23
Purpose and contents
Secure business freedom 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 license agreement
Contract date
2014.06.03
Purpose and contents
Secure business freedom through patent licensing
Contract type
Settlement Agreement
Contract date
-
Purpose and contents
End dispute over royalty payment
Google
Cisco
Global Foundries
Inc.
InterDigital
Microsoft
※ Information that may be referenced or used in other IP disputes, including contract amount, is 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.
(Unit: KRW million)
[R&D expenses]
2014
Total R&D expenditure
Capitalization of development
expenses (intangible asset)
Accounting
R&D costs
(expenses)
R&D expenses/sales Ratio
2013
2012
15,325,507
14,780,432
11,892,434
940,001
461,030
359,639
14,385,506
14,319,402
11,532,795
7.4%
6.5%
5.9%
※ On a consolidated basis (in conformity with K-IFRS)
As of December 31, 2014, the Company’s R&D expenses were KRW 15,326 billion, a 3.7% YoY basis. The Company
capitalized KRW 940 billion and recognized KRW 14,386 billion as current expenditure.
B. R&D Organization and Operations
Korea
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 seeds for future growth engines.
Samsung Advanced Institute of Technology is the central research institute of Samsung Electronics that has been
established to lead the future and serve as an incubator of cutting-edge technology. It has a creative R&D system and
provides R&D direction 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 and SRA-Dallas), the UK (SRUK), Russia
(SRR), Israel (SRIL and SIRC), India (SRI-Bangalore and SRI-Delhi), Japan (SRJ), China (SSCR, SRC-Beijing, SRCNanjing, SRC-Tianjin, and SRC-Guangzhou) to carry out research activities for product development and basic
technological research.
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※ As of December 31, 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 set-top boxes 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
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Research Project
Research Results and Expected Effect
□ 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
Smart TV Service
Smart Input Device
HDD Broadcasting
Multi-device
(BD-F8500)
BD Player
(BD-F7500)
Smart
Interaction
□ 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
□ 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)
In case applied to a product, name of
the product and application
□ Region: Global
□ Launch: Nov ‘12
□ Name : 64GB eMMC
internal memory card
□ Region: Global
□ Launch: Feb '13
□ Region: Global
□ Launch: Mar '13
□ Region: Europe
□ Launch: Mar ‘13
□ Region: Global
□ Launch: Mar ‘13
□ 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
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Research Project
Monitor
(SC770)
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
□ 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"
□ Seek to introduce Open Cell to Display product line
- Introduced Open Cell model
□ Reinforced lineups
- Open Cell new lineups
- 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
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Research Project
Research Results and Expected Effect
In case applied to a product, name of
the product and application
□ 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
□ 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 lineup
- 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
Develop
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 lineups
□ 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 UHD
OLED TV panel
□ Develop R/G/B technology UHD products as the first in the world
□ Reinforce market leadership and differentiate products by expanding UHD TV lineups
□ Region : Global
□ Launch : TBD
High-resolution low power
consumption
Tablet product technology
□ 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 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
eFlash process
160lm/W middle power
LED package
Mass produce
3D vertical
128Gb
V-NAND Flash
Mobile
20nm
8Gb LPDDR4 DRAM
Develop
ISOCELL
Pixel technology
Wearable Display
Watch
Develop high-resolution
OLED panel
Develop
Flexible technology
Mass produce
Server
3D V-NAND based
960GB
high reliability SSD
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Research Project
Research Results and Expected Effect
In case applied to a product, name of
the product and application
□ 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
□ 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 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
Mass produce 20nm
4GB
DDR3 DRAM
for server
Develop new smart card
product
Mass produce
2nd generation
V-NAND based
1TB SSD for PC
Develop new ISOCELL
Image sensor
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In case applied to a product, name of
the product and application
Research Project
Research Results and Expected Effect
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 lineup
- 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”
Bendable TV
Nov
(UN78S9BAF)
□ World’s first Bendable UHD TV
- Secured technology leadership
□ Design
- Adopted Timeless Gallery Design
- Becomes an aesthetic object when power is off
□ Region : Domestic
□ Launch : Nov ‘14
□ Inch: 78”
Mass produce
PC/server
32 layer 3bit
3D V-NAND
□ Mass produced the world’s first 3bit 3D V-NAND based 1TB SSD
- Opened up the era of “popularized V-NAND SSD” with 3bit V-NAND
- Target the standard SSD market with V-NAND that has 50% higher productivity
□ Reinforced highly reliable, high-performance, low energy consuming V-NAND SSD lineup
- Launched mSATA and M.2 SSD lineups in addition to the existing 2.5”
- Launched '850 EVO SSD' in 53 nations around the world in Dec
□ Region : Global
□ Launch : Oct ‘14
□ Inch: 128Gb 3bit
3D V-NAND
(850 EVO SSD)
UHD TV
(UN105S9WAF)
LFD
QMD
Mass produce
mobile
20nm 8Gb
LPDDR4 DRAM
□ Mass produced the world’s first ultrafine 20nm 8Gb LPDDR4 DRAM
- Applied “highly integrated/ultrahigh speed/high-density” solution developed by the Company
□ Region : Global
- Created the world’s first 4GB market and took the lead
□ Launch : Dec ‘14
□ Led growth of the DRAM market by expanding 20nm DRAM lineup
□ Inch: 8Gb LPDDR4 DRAM
- Plan to take the lead in the market by expanding next-generation lineups(8/6/4Gb) in the
future
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11. Other Information
A. Intellectual Property Rights
In 2014, the Company invested KRW 15.3 trillion and registered 7,574 domestic and 14,342 overseas patents, including
approval for 4,952 US patents. As a result, the Company maintained second place in terms of numbers of patents
registered in US amongst global technology companies for nine (9) consecutive years since 2006.
<Number of Patents Registered in Each Country (as of December 31, 2014, cumulative)>
(Unit: # of Patents)
Korea
Number
US
32,507
Europe
35,718
China
14,834
Japan
9,099
Others
6,814
7,735
The Company registered its first US patent in 1984, and now holds 106,707 patents around the world.
<Number of Patent Registrations Per Year>
(Unit: # of Patents)
‘14
‘13
‘12
‘11
‘10
‘09
‘08
‘07
Korea
3,970
2,762
2,013
1,610
1,612
1,485
4,740
10,974
US
4,952
4,676
5,081
4,894
4,551
3,611
3,515
2,725
These patents are mostly related to smartphone, smart TV, flash memory, and system LSI products for the Company’s
strategic business products or for future use. These patents not only protect the Company’s business but also play a role in
keeping similar technology and patents, as well as competitors, in check. In addition, as some of the patents are for new
materials 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 smartphones and
LED TVs. In 2014, the Company acquired 832 US patents, in part for the aforementioned purpose.
B. Environmental regulations
The Company strictly abides by environmental regulations on products and in the workplace, as 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 provides related information to stakeholders.
(See 『9. Green Management』 of 『XI. Other Information Related to Investment Protection』 for more details about
Green Technology Certification.)
(Environmental Regulation of Products)
The environmental regulation of products are becoming stricter reflecting the concerns of governments and regulators
about potential direct and indirect impact of products to consumers’ health and safety as consumers. Accordingly, the
Company is working to minimize the environmental impact throughout the entire life cycle of products from the
development stage of components and products to manufacturing, distribution, use, and disposal. The Company offers
“Eco-Partner Certification” to suppliers for components free of harmful substances, and runs an “eco-design evaluation”
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system to reflect eco-friendly elements on products (reduced use of resources, energy and harmful substances, and the use
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 for 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 in the Workplace)
The Company operates environmental pollution prevention facilities to reduce air pollution, water pollution, and waste
disposal, and to minimize the discharge of pollutants, thereby minimizing impact on the surrounding environment.
Environmental management of workplace is supervised by the relevant government authorities. All production facilities,
domestic and overseas, have acquired the International Occupational Health and Safety Management System Certification
(ISO 14001, OHSAS18001) to strengthen compliance.
Major Relevant Domestic and International Laws are as follows:
1. Regulations 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 Korea’s “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 provided below:
2014
Greenhouse gas
(Unit: tCO2e)
Energy
(Unit: TJ)
2013
2012
6,775,019
6,303,033
6,004,674
101,386
96,298
91,330
※ 62 workplaces, including domestic manufacturing facilities, company buildings, and company owned buildings.
※ Reported Greenhouse gas emission excludes ozone depletion substances (ODS).
The Company achieved its own greenhouse emission and energy consumption limit goal for 2014 through energy-saving
activities and by installing energy efficient equipment to meet greenhouse gas reduction.
Samsung Electronics 2014 Business Report
57 / 170
III. Financial Affairs
1. Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of U.S dollars (refer to Ⅲ. 2 - 2.28))
Assets
Current assets
Cash and cash equivalents
Short-term financial instruments
Short-term available-for-sale
financial assets
Trade receivables
Non-trade receivables
Advances
Prepaid expenses
Inventories
Other current assets
Assets held-for-sale
Total current assets
Non-current assets
Long-term available-for-sale
financial assets
Investment in affiliates and joint
ventures
Property, plant and equipment
Intangible assets
Long-term prepaid expenses
Deferred income tax assets
Other non-current assets
Total assets
December 31,
2013
KRW
December 31,
2014
KRW
4, 6, 7
5, 6, 7
16,840,766
41,689,776
16,284,780
36,722,702
15,997,688
39,602,713
15,469,535
34,884,299
3,286,798
24,694,610
3,539,875
1,989,470
3,346,593
17,317,504
1,795,143
645,491
115,146,026
1,488,527
24,988,532
2,887,402
1,928,188
2,472,950
19,134,868
2,135,589
2,716,733
110,760,271
3,122,255
23,458,355
3,362,663
1,889,874
3,179,057
16,450,560
1,705,275
613,177
109,381,617
1,414,009
23,737,562
2,742,854
1,831,660
2,349,150
18,176,943
2,028,678
2,580,729
105,215,419
12,667,509
6,238,380
12,033,351
5,926,076
5,232,461
80,872,950
4,785,473
4,857,126
4,526,595
2,334,818
230,422,958
6,422,292
75,496,388
3,980,600
3,465,783
4,621,780
3,089,524
214,075,018
4,970,515
76,824,309
4,545,904
4,613,970
4,299,986
2,217,933
218,887,585
6,100,781
71,716,907
3,781,324
3,292,280
4,390,406
2,934,857
203,358,050
6, 9
6, 7, 10
10
11
12, 37
6, 9
12
13
14
29
December 31,
2014
USD
Samsung Electronics 2014 Business Report
December 31,
2013
USD
Notes
58 / 170
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of U.S dollars (refer to Ⅲ. 2 - 2.28))
December 31,
2014
KRW
December 31,
2013
KRW
6
6, 8, 15
6
7,914,704
8,029,299
10,318,407
1,427,230
1,161,635
12,876,777
2,161,109
8,437,139
6,438,517
9,196,566
1,706,313
1,176,046
11,344,530
3,386,018
7,518,480
7,627,338
9,801,850
1,355,780
1,103,482
12,232,143
2,052,920
8,014,761
6,116,194
8,736,170
1,620,892
1,117,171
10,776,603
3,216,508
6, 15, 16
18
1,778,667
5,991,510
326,259
28,316
52,013,913
2,425,831
6,736,476
467,973
51,315,409
1,689,624
5,691,565
309,930
26,898
49,410,010
2,304,390
6,399,236
444,548
48,746,473
1,355,882
101,671
2,562,271
201,342
4,097,811
499,290
1,502,590
62,334,770
1,311,068
985,117
1,053,756
1,854,902
6,012,371
460,924
1,065,461
64,059,008
1,288,004
96,581
2,433,999
191,262
3,892,667
474,295
1,427,368
59,214,186
1,245,434
935,800
1,001,003
1,762,042
5,711,381
437,849
1,012,122
60,852,104
Notes
Liabilities and Equity
Current liabilities
Trade and other payables
Short-term borrowings
Other payables
Advances received
Withholdings
Accrued expenses
Income tax payable
Current portion of long-term
liabilities
Provisions
Other current liabilities
Liabilities held-for-sale
Total current liabilities
Non-current liabilities
Debentures
Long-term borrowings
Long-term other payables
Net defined benefit liabilities
Deferred income tax liabilities
Provisions
Other non-current liabilities
Total liabilities
37
6, 16
6, 15
6
17
29
18
December 31,
2014
USD
Samsung Electronics 2014 Business Report
December 31,
2013
USD
59 / 170
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In millions of Korean won, in thousands of U.S dollars (refer to Ⅲ. 2 - 2.28))
December 31,
2013
KRW
December 31,
2014
USD
119,467
778,047
4,403,893
169,529,604
(12,729,387)
119,467
778,047
4,403,893
148,600,282
(9,459,073)
113,486
739,097
4,183,426
161,042,656
(12,092,132)
113,486
739,097
4,183,426
141,161,092
(8,985,535)
Non-controlling interests
Total equity
80,101
162,181,725
5,906,463
168,088,188
144,442,616
5,573,394
150,016,010
76,091
154,062,624
5,610,775
159,673,399
137,211,566
5,294,380
142,505,946
Total liabilities and equity
230,422,958
214,075,018
218,887,585
203,358,050
Notes
Equity attributable to owners
of the parent
Preferred stock
Common stock
Share premium
Retained earnings
Other components of equity
Accumulated other comprehensive
income attributable to assets heldfor-sale
20
20
21
23
37
December 31,
2014
KRW
Samsung Electronics 2014 Business Report
December 31,
2013
USD
60 / 170
CONSOLIDATED STATEMENTS OF INCOME
(In millions of Korean won, in thousands of U.S dollars (refer to Ⅲ. 2 - 2.28))
For the year ended December 31,
Notes
Revenue
Cost of sales
Gross profit
Selling and administrative expenses
Operating profit
Other non-operating income
Other non-operating expense
Share of profit of affiliates
and joint ventures
Financial income
Financial expense
Profit before income tax
Income tax expense
Profit for the year
Profit attributable to owners of the
parent
Profit attributable to non-controlling
interests
Earnings per share for profit
attributable to owners of the parent
(in Korean Won, in US dollars)
- Basic
- Diluted
25
25, 26
27
27
12
28
28
29
2014
KRW
2013
KRW
2014
USD
2013
USD
206,205,987
128,278,800
228,692,667
137,696,309
195,882,955
121,856,939
217,243,913
130,802,991
77,927,187
52,902,116
25,025,071
3,801,357
2,259,737
90,996,358
54,211,345
36,785,013
2,429,551
1,614,048
74,026,016
50,253,744
23,772,272
3,611,054
2,146,611
86,440,922
51,497,430
34,943,492
2,307,923
1,533,246
342,516
8,259,829
7,294,002
27,875,034
4,480,676
23,394,358
504,063
8,014,672
7,754,972
38,364,279
7,889,515
30,474,764
325,369
7,846,328
6,928,852
26,479,560
4,256,366
22,223,194
478,829
7,613,444
7,366,745
36,443,697
7,494,552
28,949,145
23,082,499
29,821,215
21,926,949
28,328,313
311,859
653,549
296,245
620,832
153,105
153,096
197,841
197,800
145.44
145.43
187.94
187.90
30
Samsung Electronics 2014 Business Report
61 / 170
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions of Korean won, in thousands of US dollars (refer to Ⅲ. 2 - 2.28))
For the year ended December 31,
Notes
Profit for the year
Other comprehensive loss
Items not to be reclassified to profit or loss
subsequently:
Remeasurement of net defined benefit liabilities, net of
tax
Items to be reclassified to profit or loss
subsequently:
Changes in value of available-for-sale financial assets,
net of tax
Share of other comprehensive income (loss) of
affiliates and joint ventures, net of tax
Foreign currency translation, net of tax
Other comprehensive loss for the year, net of tax
Total comprehensive income for the year
Comprehensive income attributable to :
Owners of the parent
Non-controlling interests
2014
2013
2014
2013
KRW
KRW
USD
USD
23,394,358
30,474,764
22,223,194
28,949,145
17, 23
(710,318)
(213,113)
(674,758)
(202,444)
9, 23
(232,105)
186,480
(220,485)
177,144
12, 23
23
(128,932)
(922,059)
(1,993,414)
21,400,944
20,756
(1,000,961)
(1,006,838)
29,467,926
(122,477)
(875,899)
(1,893,619)
20,329,575
19,717
(950,851)
(956,434)
27,992,711
20,990,732
410,212
28,837,590
630,336
19,939,900
389,675
27,393,930
598,781
Samsung Electronics 2014 Business Report
62 / 170
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of Korean won)
2013 KRW
Balance as at January 1, 2013
Profit for the year
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
(loss) of affiliates and joint ventures,
net of tax
Foreign currency translation, net of tax
Remeasurement of net defined benefit
liabilities, net of tax
Notes
Balance as at December 31, 2013
Common
stock
Share
premium
Retained
earnings
Equity
attributable
to owners of
the parent
Noncontrolling
interests
778,047
-
4,403,893
-
119,985,689
29,821,215
(8,193,044)
-
-
117,094,052
29,821,215
4,386,154
653,549
121,480,206
30,474,764
9, 23
-
-
-
-
187,477
-
187,477
(997)
186,480
12, 23
23
-
-
-
-
20,949
(986,691)
-
20,949
(986,691)
(193)
(14,270)
20,756
(1,000,961)
17, 23
-
-
-
-
(205,360)
-
(205,360)
(7,753)
(213,113)
-
-
-
29,821,215
(983,625)
-
28,837,590
630,336
29,467,926
22
-
-
-
(1,206,622)
-
-
(1,206,622)
(42,155)
(1,248,777)
23, 24
23, 24
-
-
-
(1,206,622)
(312,959)
41,817
(11,999)
737
(282,404)
-
(312,959)
41,817
(11,999)
737
(1,489,026)
600,042
(918)
(65)
556,904
287,083
(918)
41,817
(11,999)
672
(932,122)
119,467
778,047
4,403,893
148,600,282
(9,459,073)
-
144,442,616
5,573,394
150,016,010
Samsung Electronics 2014 Business Report
Total
119,467
-
Total comprehensive income (loss)
Dividends
Capital transaction under common
control
Changes in consolidated entities
Disposal of treasury stock
Stock option activities
Others
Total transactions with owners
Preferred
stock
Other
components
of equity
Accumulated
other
comprehensive
income
attributable to
assets held-for-sale
63 / 170
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (refer to Ⅲ. 2 - 2.28))
2013 USD
Balance as at January 1, 2013
Profit for the year
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
(loss) of affiliates and joint ventures,
net of tax
Foreign currency translation, net of tax
Remeasurement of net defined benefit
liabilities, net of tax
Notes
Balance as at December 31, 2013
Common
stock
Share
premium
Retained
earnings
Equity
attributable
to owners of
the parent
Noncontrolling
interests
739,097
-
4,183,426
-
113,978,996
28,328,313
(7,782,886)
-
-
111,232,119
28,328,313
4,166,575
620,832
115,398,694
28,949,145
9, 23
-
-
-
-
178,091
-
178,091
(947)
177,144
12, 23
23
-
-
-
-
19,900
(937,295)
-
19,900
(937,295)
(183)
(13,556)
19,717
(950,851)
17, 23
-
-
-
-
(195,079)
-
(195,079)
(7,365)
(202,444)
-
-
-
28,328,313
(934,383)
-
27,393,930
598,781
27,992,711
22
-
-
-
(1,146,217)
-
-
(1,146,217)
(40,045)
(1,186,262)
23, 24
23, 24
-
-
-
(1,146,217)
(297,292)
39,724
(11,398)
700
(268,266)
-
(297,292)
39,724
(11,398)
700
(1,414,483)
570,003
(872)
(62)
529,024
272,711
(872)
39,724
(11,398)
638
(885,459)
113,486
739,097
4,183,426
141,161,092
(8,985,535)
-
137,211,566
5,294,380
142,505,946
Samsung Electronics 2014 Business Report
Total
113,486
-
Total comprehensive income (loss)
Dividends
Capital transaction under common
control
Changes in consolidated entities
Disposal of treasury stock
Stock option activities
Others
Total transactions with owners
Preferred
stock
Other
components
of equity
Accumulated
other
comprehensive
income
attributable to
assets held-for-sale
64 / 170
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of Korean won)
2014 KRW
Balance as at January 1, 2014
Profit for the year
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
(loss) of affiliates and joint ventures,
net of tax
Foreign currency translation, net of tax
Remeasurement of net defined benefit
liabilities, net of tax
Classified as held-for-sale
Notes
Balance as at December 31, 2014
Common
stock
Share
premium
Retained
earnings
Equity
attributable
to owners of
the parent
Noncontrolling
interests
778,047
-
4,403,893
-
148,600,282
23,082,499
(9,459,073)
-
-
144,442,616
23,082,499
5,573,394
311,859
150,016,010
23,394,358
9, 23
-
-
-
-
(314,069)
-
(314,069)
81,964
(232,105)
12, 23
23
-
-
-
-
(128,495)
(954,999)
-
(128,495)
(954,999)
(437)
32,940
(128,932)
(922,059)
17, 23
37
-
-
-
-
(694,204)
(80,101)
80,101
(694,204)
-
(16,114)
-
(710,318)
-
-
-
-
23,082,499
(2,171,868)
80,101
20,990,732
410,212
21,400,944
22
-
-
-
(2,157,011)
-
-
(2,157,011)
(74,216)
(2,231,227)
23, 24
23, 24
23, 24
-
-
-
3,834
(2,153,177)
(158)
(1,125,322)
32,764
(9,436)
3,706
(1,098,446)
-
(158)
(1,125,322)
32,764
(9,436)
7,540
(3,251,623)
244
569
(3,740)
(77,143)
86
569
(1,125,322)
32,764
(9,436)
3,800
(3,328,766)
119,467
778,047
4,403,893
169,529,604
(12,729,387)
80,101
162,181,725
5,906,463
168,088,188
Samsung Electronics 2014 Business Report
Total
119,467
-
Total comprehensive income (loss)
Dividends
Capital transaction under common
control
Changes in consolidated entities
Acquisition of treasury stock
Disposal of treasury stock
Stock option activities
Others
Total transactions with owners
Preferred
stock
Other
components
of equity
Accumulated
other
comprehensive
income
attributable to
assets held-for-sale
65 / 170
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (refer to Ⅲ. 2 - 2.28))
2014 USD
Balance as at January 1, 2014
Profit for the year
Changes in value of available-for-sale
financial assets, net of tax
Share of other comprehensive income
(loss) of affiliates and joint ventures,
net of tax
Foreign currency translation, net of tax
Remeasurement of net defined benefit
liabilities, net of tax
Classified as held-for-sale
Notes
Balance as at December 31, 2014
Common
stock
Share
premium
Retained
earnings
Equity
attributable
to owners of
the parent
Noncontrolling
interests
739,097
-
4,183,426
-
141,161,092
21,926,949
(8,985,535)
-
-
137,211,566
21,926,949
5,294,380
296,245
142,505,946
22,223,194
9, 23
-
-
-
-
(298,346)
-
(298,346)
77,861
(220,485)
12, 23
23
-
-
-
-
(122,062)
(907,190)
-
(122,062)
(907,190)
(415)
31,291
(122,477)
(875,899)
17, 23
37
-
-
-
-
(659,451)
(76,091)
76,091
(659,451)
-
(15,307)
-
(674,758)
-
-
-
-
21,926,949
(2,063,140)
76,091
19,939,900
389,675
20,329,575
22
-
-
-
(2,049,027)
-
-
(2,049,027)
(70,500)
(2,119,527)
23, 24
23, 24
23, 24
-
-
-
3,642
(2,045,385)
(150)
(1,068,987)
31,124
(8,964)
3,520
(1,043,457)
-
(150)
(1,068,987)
31,124
(8,964)
7,162
(3,088,842)
232
541
(3,553)
(73,280)
82
541
(1,068,987)
31,124
(8,964)
3,609
(3,162,122)
113,486
739,097
4,183,426
161,042,656
(12,092,132)
76,091
154,062,624
5,610,775
159,673,399
Samsung Electronics 2014 Business Report
Total
113,486
-
Total comprehensive income (loss)
Dividends
Capital transaction under common
control
Changes in consolidated entities
Acquisition of treasury stock
Disposal of treasury stock
Stock option activities
Others
Total transactions with owners
Preferred
stock
Other
components
of equity
Accumulated
other
comprehensive
income
attributable to
assets held-for-sale
66 / 170
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of Korean won, in thousands of U.S dollars (refer to Ⅲ. 2 - 2.28))
For the year ended December 31,
Notes
2014
KRW
2013
KRW
2014
USD
2013
USD
Cash flows from operating
activities
Profit for the year
Adjustments
Changes in operating assets and
liabilities
31
23,394,358
22,323,765
30,474,764
23,804,832
22,223,194
21,206,200
28,949,145
22,613,120
31
(3,837,136)
(1,313,245)
(3,645,042)
(1,247,502)
41,880,987
52,966,351
39,784,352
50,314,763
Interest received
Interest paid
1,555,373
(463,740)
1,034,074
(434,857)
1,477,508
(440,524)
982,306
(413,087)
Dividend received
1,495,658
592,217
1,420,783
562,570
(7,492,889)
(7,450,345)
(7,117,782)
(7,077,368)
36,975,389
46,707,440
35,124,337
44,369,184
(1,110,842)
(19,391,643)
(1,055,231)
(18,420,863)
(713,452)
33,663
(677,735)
31,978
202,904
1,691,463
192,746
1,606,785
(6,212,102)
(1,531,356)
(5,901,113)
(1,454,694)
2,014,430
240
1,913,584
228
(719,800)
(181,307)
(683,766)
(172,230)
385,610
377,445
366,306
358,549
(22,042,943)
(23,157,587)
(20,939,435)
(21,998,278)
Disposal of intangible assets
Purchases of intangible assets
Cash outflows from business
combination
31,731
(1,324,307)
4,562
(934,743)
30,142
(1,258,010)
4,334
(887,948)
(176,625)
(167,155)
(167,783)
(158,787)
Others
(3,141,012)
(1,490,601)
(2,983,767)
(1,415,979)
(32,806,408)
(44,747,019)
(31,164,062)
(42,506,905)
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 availablefor-sale financial assets
Proceeds from disposal of affiliates
and joint ventures
Acquisition of affiliates and joint
ventures
Disposal of property, plant and
equipment
Purchases of property, plant and
equipment
Net cash used in investing activities
Samsung Electronics 2014 Business Report
67 / 170
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of Korean won, in thousands of U.S dollars (refer to Ⅲ. 2 - 2.28))
For the year ended December 31,
Notes
2013
KRW
2014
USD
2013
USD
1,833,419
(1,125,322)
27,582
(1,861,536)
34,390
1,741,635
(1,068,986)
26,201
(1,768,344)
32,668
1,740,573
26,672
1,653,437
25,337
(3,299,595)
(2,233,905)
(1,368,436)
(1,249,672)
(3,134,412)
(2,122,072)
(1,299,930)
(1,187,111)
139
281,551
132
267,456
(3,057,109)
(4,137,031)
(2,904,065)
(3,929,924)
(555,886)
(330,070)
(528,057)
(313,546)
555,986
(2,506,680)
528,153
(2,381,191)
Cash and cash equivalents
Beginning of the year
16,284,780
18,791,460
15,469,535
17,850,726
End of the year
16,840,766
16,284,780
15,997,688
15,469,535
Cash flows from financing activities
Net increase (decrease) in short-term
borrowings
Acquisition of treasury stock
Disposal of treasury stock
Proceeds from long-term borrowings
and debentures
Repayment of long-term borrowings
and debentures
Payment of dividends
Net increase in non-controlling
interests
Net cash used in financing activities
Effect of exchange rate changes on
cash and cash equivalents
Net increase (decrease) in cash and
cash equivalents
2014
KRW
Samsung Electronics 2014 Business Report
68 / 170
2. Notes to Consolidated Financial Statements
1. General Information
1.1 Company Overview
Samsung Electronics Co., Ltd. (“SEC”) was incorporated under the laws of the Republic of Korea in 1969 and listed its shares on
the Korea Stock Exchange in 1975.
SEC and its subsidiaries (collectively referred to as the “Company”) operate three business Divisions: Consumer Electronics (“CE”),
Information technology & Mobile communications (“IM”), and Device Solution (“DS”). The CE Division includes digital TVs,
monitors, printers, air conditioners and refrigerators and the IM Division includes mobile phones, communication systems, and
computers. The DS Division manufactures products such as memory and system LSI products in the semiconductor business
(“Semiconductor Business”, or when the context requires, “Semiconductor Sub-Division”), and LCD and OLED panels in the
display panel business (“DP Business Unit”). SEC is domiciled in the Republic of Korea and the address of its registered office is
Suwon, the Republic of Korea.
These consolidated financial statements have been prepared in accordance with the Korean International Financial Reporting
Standards (“Korean IFRS”) 1110, Consolidated Financial Statements. SEC, as the controlling company, consolidates its 158
subsidiaries, including Samsung Display and Samsung Electronics America (Note 1.2). The Company also applies the equity
method of accounting to its 37 affiliates, including Samsung Electro-Mechanics.
1.2 Consolidated Subsidiaries
(A) The consolidated subsidiaries as at December 31, 2014 are as follows:
Area
Domestic
America
Subsidiaries
High Pioneer Private Investment Trust #1
Samsung Display (SDC)
SU Materials
STECO
SEMES
Samsung Electronics Service
Samsung Electronics Sales
Samsung Electronics Logitech
Samsung Medison
Ray
Samsung Venture Capital Union #6
Samsung Venture Capital Union #14
Industry
Technology business, Venture capital investments
Manufacture and sale of display panels
Manufacture of LCD components
Manufacture of semiconductor components
Manufacture of semiconductor/FPD
Repair services for electronic devices
Sale of electronic devices
General logistics agency
Medical equipment
Dental CT
Technology business, Venture capital investments
Technology business, Venture capital investments
Percentage of
ownership1
100.0
84.8
50.0
51.0
91.5
99.3
100.0
100.0
68.5
68.1
99.0
99.0
Samsung Venture Capital Union #20
Samsung Venture Capital Union #21
Samsung Venture Capital Union #22
Samsung Venture Capital Union #23
Samsung Venture Capital Union #26
Samsung Venture Capital Union #27
Technology business, Venture capital investments
Technology business, Venture capital investments
Technology business, Venture capital investments
Technology business, Venture capital investments
Technology business, Venture capital investments
Technology business, Venture capital investments
99.0
99.0
99.0
99.0
99.0
99.0
Samsung Electronics America (SEA)
NexusDX (Nexus)
Samsung Receivables (SRC)
NeuroLogica
Sale of electronic devices
Medical equipment
Credit management
Medical equipment
Samsung Electronics 2014 Business Report
100.0
100.0
100.0
100.0
69 / 170
Area
Europe
Industry
Sale of semiconductor/LCD
Sale of electronic devices
R&D
R&D
Manufacture of electronic devices
Manufacture of CTV/monitors
Sale of communication equipment
Manufacture of semiconductor
Sale of electronic devices
Semiconductor equipment
Manufacture of electronic devices
Sale of electronic devices
Software
Sale of electronic devices
Marketing and services
Sale of electronic devices
Consulting
100.0
100.0
100.0
100.0
100.0
100.0
Samsung Electronica da Amazonia (SEDA)
Samsung Electronics Argentina (SEASA)
Samsung Electronics Chile (SECH)
Samsung Electronics Peru (SEPR)
Manufacture and sale of electronic devices
Marketing and services
Sale of electronic devices
Sale of electronic devices
100.0
100.0
100.0
100.0
RT SV CO-INVEST (RT-SV)
Quietside
SmartThings
PrinterOn
PrinterOn America
Samsung Electronics (UK) (SEUK)
Technology business, Venture capital investments
Sale of heating and cooling products
Sale of smart home electronics
Sale of printing solutions
Sale of printing solutions
Sale of electronic devices
99.9
100.0
100.0
100.0
100.0
Samsung Electronics Holding (SEHG)
Holding Company
100.0
Samsung Semiconductor Europe GmbH (SSEG)
Sale of semiconductor/LCD
100.0
Samsung Electronics GmbH (SEG)
Sale of electronic devices
100.0
Samsung Electronics Iberia (SESA)
Sale of electronic devices
100.0
Samsung Electronics France (SEF)
Sale of electronic devices
100.0
Samsung Electronics Hungarian (SEH)
Manufacture and sale of electronic devices
100.0
Samsung Electronics Czech and Slovak (SECZ)
Sale of electronic devices
100.0
Samsung Electronics Italia (SEI)
Sale of electronic devices
100.0
Samsung Electronics Europe Logistics (SELS)
Logistics
100.0
Samsung Electronics Benelux (SEBN)
Sale of electronic devices
100.0
Samsung Display Slovakia (SDSK)
Toll processing of LCD
100.0
Samsung Electronics Romania (SEROM)
Sale of electronic devices
100.0
100.0
Samsung Electronics Overseas (SEO)
Sale of electronic devices
100.0
Samsung Electronics Polska (SEPOL)
Samsung Electronics Portuguesa (SEP)
Sale of electronic devices
Sale of electronic devices
100.0
100.0
Samsung Electronics Nordic (SENA)
Samsung Semiconductor Europe (SSEL)
Samsung Electronics Austria (SEAG)
Samsung Electronics Slovakia (SESK)
Samsung Electronics Europe Holding (SEEH)
Samsung Electronics Poland Manufacturing
(SEPM)
Samsung Electronics Greece (SEGR)
Samsung Nanoradio Design Center (SNDC)
Sale of electronic devices
Sale of semiconductor/LCD
Sale of electronic devices
Manufacture of CTV/monitors
Holding Company
Manufacture of home appliances
100.0
100.0
100.0
100.0
100.0
100.0
Sale of electronic devices
R&D
100.0
100.0
Samsung Electronics 2014 Business Report
Percentage of
ownership1
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.9
100.0
99.9
Subsidiaries
Samsung Semiconductor (SSI)
Samsung Electronics Canada (SECA)
Samsung Research America (SRA)
Grandis
Samsung Mexicana (SAMEX)
Samsung International (SII)
Samsung Telecommunications America (STA)
Samsung Austin Semiconductor (SAS)
Samsung Electronics Mexico (SEM)
SEMES America (SEMESA)
Samsung Electronics Digital Appliance Mexico
(SEDAM)
Samsung Electronics Latinoamerica Miami (SEMI)
Nvelo
Samsung Electronics Latinoamerica (SELA)
Samsung Electronics Venezuela (SEVEN)
Samsung Electronica Colombia (SAMCOL)
Samsung Electronics Panama (SEPA)
70 / 170
Area
Nanoradio Hellas
SonoAce Deutschland (SMDE)
Samsung Electronics Rus (SER)
Samsung Electronics Rus Company (SERC)
Samsung Electronics Ukraine (SEU)
Samsung Electronics Baltics (SEB)
Samsung Electronics Ukraine Company (SEUC)
Samsung R&D Institute Rus (SRR)
Samsung Electronics Kazakhstan (SEK)
Samsung Electronics Central Eurasia (SECE)
Samsung Electronics Rus Kaluga (SERK)
Samsung Russia Service Centre (SRSC)
Samsung Electronics (London) Limited (SEL)
Samsung Denmark Research Center (SDRC)
Samsung France Research Center (SFRC)
Samsung Cambridge Solution Centre (SCSC)
Samsung Electronics Switzerland GmbH (SESG)
PrinterOn Europe
Samsung Electronics Caucasus (SECC)
R&D
Medical equipment
Marketing
Sale of electronic devices
Marketing
Sale of electronic devices
Sale of electronic devices
R&D
Marketing
Sale of electronic devices
Manufacture of CTV
Services
Holding Company
R&D
R&D
R&D
Sale of electronic devices
Sale of printing solutions
Marketing
Percentage of
ownership1
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
Samsung Electronics West Africa (SEWA)
Samsung Electronics East Africa (SEEA)
Samsung Gulf Electronics (SGE)
Marketing
Marketing
Sale of electronic devices
100.0
100.0
100.0
Manufacture of CTV/monitors
Marketing
Marketing
Marketing
Sale of electronic devices
Sale of electronic devices
R&D
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Subsidiaries
Samsung Electronics Egypt (SEEG)
Samsung Electronics Israel (SEIL)
Samsung Electronics Tunisia (SETN)
Samsung Electronics Pakistan (SEPAK)
Middle East and
Samsung Electronics South Africa (SSA)
Africa
Samsung Electronics Turkey (SETK)
Samsung Semiconductor Israel R&D Center
(SIRC)
Samsung Electronics Levant (SELV)
Samsung Electronics Morocco (SEMRC)
Samsung Electronics South Africa Production
(SSAP)
Samsung Display Dongguan (SDDG)
Samsung Display Tianjin (SDTJ)
Samsung Electronics Hong Kong (SEHK)
China
Suzhou Samsung Electronics (SSEC)
Samsung Suzhou Electronics Export
(SSEC-E)
Samsung (China) Investment (SCIC)
Samsung Mobile R&D Center China-Guangzhou
(SRC-Guangzhou)
Samsung Tianjin Mobile Development Center
(STMC)
Samsung Network R&D Center China-Shenzhen
(SRC-Shenzhen)
Samsung Electronics Suzhou Semiconductor (SESS)
Samsung Electronics (Shandong) Digital Printing
(SSDP)
Samsung Electronics Huizhou (SEHZ)
Tianjin Samsung Electronics (TSEC)
Samsung Electronics Taiwan (SET)
Beijing Samsung Telecom R&D Center (BST)
Industry
Sale of electronic devices
100.0
Sale of electronic devices
Manufacture of CTV/monitors
100.0
100.0
Manufacture of LCD
Manufacture of LCD
Sale of electronic devices
100.0
95.0
100.0
Manufacture of home appliances
Manufacture of home appliances
88.3
100.0
Sale of electronic devices
R&D
100.0
100.0
R&D
100.0
R&D
100.0
Toll processing of semiconductor
Manufacture of printers
100.0
100.0
Manufacture of electronic devices
Manufacture of CTV/monitors
Sale of electronic devices
R&D
99.9
91.2
100.0
100.0
Samsung Electronics 2014 Business Report
71 / 170
Area
Rest of Asia
1
Industry
Manufacture of communication equipment
Sale of semiconductor/LCD
Manufacture of electronic devices
Toll processing of LCD
Manufacture of LCD
Manufacture of communication equipment
Samsung Medison Shanghai Medical Instrument
(SMS1)
Tianjin Samsung LED (TSLED)
Tianjin Samsung Opto-Electronics (TSOE)
Samsung R&D Institute China-Xian
(SRC-Xian)
SEMES (Xian)
Semiconductor equipment
100.0
Samsung Japan (SJC)
Samsung R&D Institute Japan (SRJ)
Sale of electronic devices
R&D
100.0
100.0
Samsung Electronics Japan (SEJ)
Samsung Electronics Display (M) (SDMA)
Samsung Electronics (M) (SEMA)
Samsung Vina Electronics (SAVINA)
Samsung Asia Private (SAPL)
Samsung India Electronics (SIEL)
Samsung R&D Institute India-Bangalore (SRI-B)
Samsung Electronics Australia (SEAU)
Samsung Electronics Indonesia (SEIN)
Samsung Telecommunications Indonesia (STIN)
Sale of electronic devices
Manufacture and sale of electronic devices
Manufacture of home appliances
Manufacture and sale of electronic devices
Sale of electronic devices
Manufacture and sale of electronic devices
R&D
Sale of electronic devices
Manufacture and sale of electronic devices
Sale and services of communication systems
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Thai Samsung Electronics (TSE)
Samsung Electronics Philippines (SEPCO)
Samsung Malaysia Electronics (SME)
Samsung R&D Institute Bangladesh (SRBD)
Samsung Electronics Vietnam (SEV)
Manufacture and sale of electronic devices
Sale of electronic devices
Sale of electronic devices
R&D
Manufacture of electronic devices
91.8
100.0
100.0
100.0
100.0
Samsung Telecommunications Malaysia (STM)
Samsung Electronics Vietnam THAINGUYEN
(SEVT)
Samsung Medison India (SMIN)
Samsung Electronics New Zealand (SENZ)
Samsung Display Bac Ninh (SDBN)
Communication system services
Manufacture of communication equipment
100.0
100.0
Medical equipment
Sale of electronic devices
Manufacture of LCD
100.0
100.0
100.0
Sale of mobile communication and network equipment
100.0
R&D
R&D
Manufacture of semiconductor
Manufacture of optical fiber/cable
Services
100.0
100.0
100.0
100.0
100.0
Medical equipment
100.0
Manufacture of LED
Manufacture of cameras/camcorders
R&D
100.0
90.0
100.0
Ownership represents the Company’s ownership of voting rights in each entity.
Samsung Electronics 2014 Business Report
Percentage of
ownership1
90.0
100.0
100.0
100.0
60.0
95.0
Subsidiaries
Tianjin Samsung Telecom Technology (TSTC)
Shanghai Samsung Semiconductor (SSS)
Samsung Electronics Suzhou Computer (SESC)
Samsung Display Suzhou (SDSZ)
Samsung Suzhou LCD (SSL)
Shenzhen Samsung Electronics Telecommunication
(SSET)
Samsung Electronics Shanghai Telecommunication
(SSTC)
Samsung Semiconductor (China) R&D (SSCR)
Samsung Electronics China R&D Center (SCRC)
Samsung (China) Semiconductor (SCS)
Samsung Electronics Hainan Fiberoptics (SEHF)
Samsung Electronics (Beijing) Service (SBSC)
72 / 170
(B) A summary of financial data of major consolidated subsidiaries is as follows:
(1) 2014
(In millions of Korean won)
Samsung Display (SDC)
Samsung Electronics America (SEA)
Samsung (China) Investment (SCIC)
Samsung Semiconductor (SSI)
Samsung Electronics Europe Holding (SEEH)
Samsung (China) Semiconductor (SCS)
Samsung Electronics Vietnam (SEV)
Samsung Austin Semiconductor (SAS)
Samsung Telecommunications America (STA)
Samsung Electronics Huizhou (SEHZ)
Samsung Electronics Vietnam THAINGUYEN (SEVT)
Samsung Electronica da Amazonia (SEDA)
Samsung Asia Private (SAPL)
Samsung India Electronics (SIEL)
Shanghai Samsung Semiconductor (SSS)
Tianjin Samsung Telecom Technology (TSTC)
Samsung Electronics Slovakia (SESK)
Samsung Suzhou LCD (SSL)
Thai Samsung Electronics (TSE)
Samsung Electronics Europe Logistics (SELS)
Samsung Electronics Taiwan (SET)
Samsung Electronics Hungarian (SEH)
Samsung Electronics (UK) (SEUK)
Samsung Electronics Benelux (SEBN)
Samsung Electronics GmbH (SEG)
Assets
₩
37,939,965
10,697,787
9,603,679
7,577,935
7,022,746
6,765,278
6,553,628
6,503,003
5,321,014
4,966,486
3,957,700
3,797,166
3,110,433
2,949,605
2,560,852
2,316,054
1,869,697
1,831,794
1,654,988
1,621,583
1,583,027
1,287,972
1,235,239
1,207,723
1,142,897
2014
Liabilities
₩
6,728,991
₩
5,409,749
7,830,941
3,883,673
5,062,988
3,911,166
1,251,667
3,375,099
4,573,413
1,258,635
3,042,402
1,330,302
671,729
1,776,936
2,120,738
789,395
405,089
768,230
307,109
1,524,468
1,299,330
323,972
964,058
245,237
1,082,420
Sales
24,980,628
14,076,007
16,451,983
19,105,338
877,508
19,811,537
2,423,230
23,002,379
17,166,345
8,265,414
7,936,105
1,423,212
6,849,389
13,331,324
11,413,234
4,248,232
815,705
4,442,707
13,320,129
4,472,432
3,113,297
4,304,335
2,394,375
6,377,894
Net Income (Loss)
₩
1,698,239
(80,403)
162,677
194,713
93,605
166,754
2,012,173
78,747
66,255
829,880
772,450
887,715
1,057,873
428,757
125,239
510,357
142,416
(38,931)
202,647
38,209
44,559
109,549
72,231
30,404
(17,881)
(2) 2013
2013
(In millions of Korean won)
Samsung Display (SDC)
Samsung Electronics America (SEA)
Samsung (China) Investment (SCIC)
Samsung Semiconductor (SSI)
Samsung Austin Semiconductor (SAS)
Samsung Electronics Europe Holding (SEEH)
Samsung Electronics Vietnam (SEV)
Samsung Telecommunications America (STA)
Samsung Electronics Huizhou (SEHZ)
Samsung (China) Semiconductor (SCS)
Samsung Electronica da Amazonia (SEDA)
Tianjin Samsung Telecom Technology (TSTC)
Samsung Asia Private (SAPL)
Samsung India Electronics (SIEL)
Samsung Electronics Europe Logistics (SELS)
Samsung Electronics Slovakia (SESK)
Samsung Electronics Mexico (SEM)
Thai Samsung Electronics (TSE)
Samsung Suzhou LCD (SSL)
Samsung Electronics Rus Company (SERC)
Samsung Electronics (UK) (SEUK)
Samsung Electronics Taiwan (SET)
Shanghai Samsung Semiconductor (SSS)
Samsung Electronics Benelux (SEBN)
Samsung Electronics Hungarian (SEH)
Assets
₩ 35,754,894
12,248,560
8,406,438
7,346,339
6,393,348
5,780,302
5,625,759
4,735,432
4,599,200
3,752,682
3,429,136
2,939,027
2,425,585
1,924,832
1,903,892
1,764,078
1,554,638
1,476,296
1,463,589
1,410,054
1,393,507
1,390,404
1,310,109
1,290,124
1,249,691
Liabilities
₩
6,682,229
7,262,519
6,780,610
3,991,768
3,467,968
4,025,760
1,493,868
4,085,299
1,802,686
1,284,560
1,658,072
1,415,277
1,099,521
1,195,824
1,806,486
317,224
1,311,133
373,181
379,118
1,107,915
705,504
1,141,842
1,005,056
322,622
253,536
₩
Sales
29,386,907
14,321,018
25,605,822
17,932,937
2,409,773
26,594,578
21,387,737
22,664,923
7,852,428
15,293,633
1,558,990
6,737,419
14,543,524
4,561,795
3,261,067
5,033,203
18,892
5,809,646
6,075,490
3,909,546
15,937,922
2,700,887
3,272,358
Samsung Electronics 2014 Business Report
Net Income
(Loss)
₩
2,400,779
70,690
743,369
39,289
60,980
(17,863)
3,087,252
173,510
1,012,728
(40,537)
920,157
767,822
674,510
324,171
7,613
140,825
9,886
222,389
12,067
(11,137)
92,969
30,802
130,082
25,233
103,658
73 / 170
(C) Changes in scope of consolidation
(1)
Subsidiaries newly included in the consolidation for the year ended December 31, 2014:
Area
Domestic
America
Europe
Middle East and
Africa
Asia
Subsidiary
Samsung Venture Capital Union #26
Samsung Venture Capital Union #27
RT SV CO-INVEST (RT-SV)
Quietside
SmartThings
PrinterOn
PrinterOn America
1397011 Ontario
PrinterOn Europe
Samsung Electronics Caucasus (SECC)
Description
Incorporation
Incorporation
Acquisition of shares
Acquisition of shares
Acquisition of shares
Acquisition of shares
Acquisition of shares
Acquisition of shares
Acquisition of shares
Incorporation
Samsung Electronics South Africa Production (SSAP)
Incorporation
Samsung Display Bac Ninh (SDBN)
Incorporation
(2) Subsidiaries excluded from the consolidation for the year ended December 31, 2014:
Area
Domestic
America
Europe
Asia
China
Subsidiary
World Cyber Games
Samsung Electronics Football Club
1397011 Ontario
Samsung Medison Europe (SMNL)
Nanogen Recognomics (Nanogen)
Medison Medical Systems (India) (MI)
Medison Medical Equipment (Shanghai) (MMS)
Description
Liquidation
Disposal
Liquidation
Liquidation
Liquidation
Liquidation
Liquidation
Samsung Electronics 2014 Business Report
74 / 170
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of Presentation
The Company maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language
(Hangul) in accordance with the International Financial Reporting Standards as adopted by the Republic of Korea (“Korean IFRS”).
The accompanying consolidated financial statements have been condensed, restructured and translated into English from the Korean
language financial statements.
Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Company's
financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.
The consolidated financial statements of the Company presented have been prepared in accordance with Korean IFRS. International
Financial Reporting Standards (“IFRS”) have been adopted by the Korean Accounting Standards Board as Korean IFRS based on
standards and interpretations published by the International Accounting Standards Board.
Korean IFRS permits the use of critical accounting estimates in the preparation of the financial statements and requires management
judgments in applying accounting policies. The areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 3.
2.2 Changes in Accounting Policy and Disclosures
(A)
New and Amended Standards Adopted by the Company
The Company applied the following amended and enacted standards for the annual period beginning on January 1, 2014:
Amendment to Korean IFRS 1032, Financial Instruments: Presentation
Amendment to Korean IFRS 1032, Financial Instruments: Presentation, 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 the
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.
Enactment of Korean IFRS 2121, Levies
Korean IFRS 2121, Levies, is applied to a liability to pay a levy imposed by the government in accordance with the legislation. The
interpretation requires that the liability to pay a levy is recognized when the activity that triggers the payment of the levy occurs
(obligating event), as identified by the legislation. The application of this interpretation did not have a material impact on the
consolidated financial statements.
(B) New and Amended Standards Not Adopted by the Company
The Company expects that new standards, amendments and interpretations issued but not effective for the financial year beginning
January 1, 2014, and not early adopted, would not have a material impact on its consolidated financial statements.
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2.3 Consolidation
The Company prepares the consolidated financial statements in accordance with Korean 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 non-controlling
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 this consideration (1) is lower than the fair value of the acquiree’s net assets in (2), the
difference is recognized in profit or loss.
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 affiliate, 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. As a result, the previously recognized other comprehensive
income are reclassified into profit or loss.
(D) Non-Controlling Interests
Each component of profit or loss and other comprehensive income is attributed to owners of the parent and to non-controlling
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.
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(E) Affiliates
Associates are all entities over which the Company has significant influence but does not have control, generally investees of which
from 20% to 50% of voting stock is owned by the Company. Investments in affiliates are initially recognized at acquisition cost
using the equity method. Unrealized gains on transactions between the Company and its affiliates are eliminated to the extent of the
Company’s interest in the affiliates. If there is any objective evidence that the investment in the affiliate is impaired, the Company
recognizes the difference between the recoverable amount of the affiliate 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.
2.4 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 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 no longer
exercises control over a foreign subsidiary, the exchange differences that were recorded in equity are reclassified into profit or loss
when such gain or loss on disposition is recognized.
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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.
2.5 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.
2.6 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-derivative financial assets 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.
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.
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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 financial 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 de-recognition because the Company has retained
substantially all of 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.
2.7 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 no longer
be 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.
2.8 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, they are classified as current assets. If collection is expected beyond one year, 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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2.9 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.
2.10 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 of their carrying
amount and the fair value less costs to sell.
2.11 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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2.12 Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net identifiable assets
of the acquired subsidiary, affiliates, 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 affiliates and joint ventures is included in
the investments in affiliates 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 an
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 lives 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
2.13 Impairment of Non-Financial Assets
Goodwill or intangible assets with indefinite useful lives 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 for which an impairment charge was previously recorded are
reviewed for possible reversal of the impairment at each reporting date.
2.14 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.
(B) Derecognition
Financial liabilities are removed from the statement of financial position when they are extinguished, for example, when the
obligation specified in the contract is discharged, cancelled or expires or when the terms of an existing financial liability are
substantially modified.
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2.15 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, they are classified as current liabilities. If payment is expected beyond one year, 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.
2.16 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.
2.17 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.
2.18 Net Defined Benefit Liabilities
The Company has a variety of retirement pension plans including defined benefit and 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.
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.
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2.19 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.
2.20 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, affiliates, 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.
2.21 Derivative Instruments
All derivative instruments are accounted for at their fair value according to the rights and obligations associated with the derivative
contracts. The resulting changes are recognized in profit or loss in the year in which they are incurred. Certain derivatives that
qualify as cash flow hedges and hedges on net investments in foreign operations are recognized under equity.
2.22 Dividend
Dividend distribution to the Company’s shareholders is recognized as a liability when the dividends are approved.
2.23 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
as treasury shares. Consideration received on the subsequent sale or issuance of treasury shares is credited to equity.
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2.24 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 the amount of revenue can be reliably measured; when it is probable that future economic
benefits will flow to the entity; and when specific criteria have been met for each of the Company’s activities, as described below.
The Company measures revenue by reliably estimating the contingencies associated with revenue based 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. Revenue is recognized net of discounts and returns, estimated at the time of sale based on past experience.
(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) Interest Income
Interest income is recognized using the effective interest method according to the time passed. When a loan or receivable is
impaired, the Company reduces the carrying amount to its recoverable amount, to the extent of the estimated future cash flow
discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest
income on impaired loans and receivables is recognized using the original effective interest rate.
(D) Royalty Income
Royalty income is recognized on an accrual basis in accordance with the substance of the relevant agreements.
(E) Dividend Income
Dividend income is recognized when the right to receive payment is established.
2.25 Government Grants
Government grants are recognized at their fair values when there is reasonable assurance that the grant will be received and the
Company will comply with the conditions attached to it. Government grants relating to costs are deferred and recognized in the
income statement over the period necessary to match them with the costs that they are intended to compensate. Government grants
relating to assets are recognized in liabilities as deferred income government grants and are credited to the income statement on a
straight– line basis over the expected lives of the related assets.
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2.26 Earnings per Share
Basic earnings per share is calculated by dividing net profit for the period available to common shareholders by the weightedaverage 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.
2.27 Operating Segments
Operating segments are disclosed in the manner reported to the chief operating decision-maker (Note 33). The chief operating
decision-maker is responsible for making strategic decisions on resource allocation and performance assessment of the operating
segments. The Management Committee, which makes strategic decisions, is regarded as the chief operating decision-maker.
2.28 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 U.S. dollars at the rate of ￦1,052.70 to US $1, the average exchange rate for the year ended
December 31, 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.
2.29 Approval of the Consolidated Financial Statements
These consolidated financial statements were approved by the Board of Directors on January 29, 2015.
3. 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.
(A) 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.
(B) 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 past experience.
(C) 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.
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(D) 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.
(E) Estimated Impairment of Goodwill
At the end of each reporting period, the Company tests whether goodwill has become impaired by comparing the carrying amounts
of cash-generating units to the recoverable amounts. The recoverable amounts of cash-generating units have been determined based
on value-in-use calculations, and these calculations are based on estimates.
(F) 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 throughout 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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3. Other Financial Information
A. Matters of Interest
- Restatement of Financial Statements: N/A
- Acquisitions and Divestments (Separate only)
Refer to 8.Acquisition and Divestments (VIII. Other Information Related to Investment Protection)
B. 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
2014
Account
Allowance (%)
24,972,069
277,459
1.1%
Short-term loans
9,650
118
1.2%
Other receivables
3,549,692
9,817
0.3%
Advances
1,993,788
4,318
0.2%
Trade receivables (Long-term)
35,944
329
0.9%
Other receivables (Long-term)
9,419
77
0.8%
176,949
793
0.4%
Long-term loans
176,232
1,246
0.7%
Total
30,923,743
294,157
1.0%
Trade receivables
25,256,002
267,470
1.1%
Short-term loans
33,382
271
0.8%
Other receivables
2,907,221
19,819
0.7%
Advances
1,932,530
4,342
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
2012
Allowance Amount
Trade receivables
Advances (Long-term)
2013
Receivables Amount
152,005
36,727
24.2%
Total
30,418,182
329,853
1.1%
Trade receivables
24,138,022
276,787
1.1%
Short-term loans
60,843
675
1.1%
Other receivables
2,815,696
2,335
0.1%
Advances
1,676,804
2,376
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
Total
166,689
643
0.4%
28,992,793
283,869
1.0%
※ 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)
2014
1. Allowance for bad debts (beginning balance)
2. Net Bad Debt Expense (①－②±③)
① Bad Debt Expense
(Write-off)
2013
329,853
283,869
259,161
49,349
17,833
53,433
50,705
20,393
55,592
1,356
2,560
2,159
-
-
-
13,653
63,817
78,141
294,157
329,853
283,869
② Bad Debt Recovered
③ Others
3. Bad debts expense
4. Allowance for bad debts (Ending balance)
2012
※ Based on consolidated financial statements.
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.
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The outstanding period of trade receivables
(Unit : KRW million)
Less than
6 months
Amount
Ratio
6 months ~
1 year
1 year ~
3 years
More than
3 years
Total
24,910,404
18,920
57,012
21,678
25,008,014
99.6%
0.1%
0.2%
0.1%
100.0%
* Receivables amount on net present value (consolidated)
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C. Inventory
- The inventory status by Division over the last three years is as follows:
(Unit: KRW million)
Division
CE
IM
Category
1,868,910
Work In Process
80,122
73,876
72,375
Raw Material
1,566,121
1,435,023
1,468,295
Material In Transit
1,694,448
1,689,040
1,634,797
Total
5,287,173
5,125,723
5,044,377
Finished Goods
2,210,160
2,896,647
3,113,848
Work In Process
279,861
333,109
305,543
2,751,331
3,363,195
2,736,050
488,877
1,026,147
895,088
5,730,229
7,619,098
7,050,529
Finished Goods
777,450
1,219,189
1,317,615
Work In Process
3,677,543
3,022,125
2,461,713
Raw Material
419,398
351,646
486,166
Material In Transit
121,477
89,670
83,312
4,995,868
4,682,630
4,348,806
Finished Goods
409,516
553,108
460,600
Work In Process
244,324
443,611
259,324
Raw Material
281,223
328,955
239,414
Material In Transit
55,176
4,988
63,721
Total
990,239
1,330,662
1,023,059
Finished Goods
1,228,783
1,810,852
1,797,309
Work In Process
4,105,675
3,663,346
2,852,724
Raw Material
750,929
726,455
775,434
Material In Transit
178,218
98,897
150,237
Total
6,263,605
6,299,550
5,575,704
Finished Goods
5,773,448
7,429,350
6,837,250
Work In Process
4,465,071
4,070,266
3,230,576
Raw Material
5,957,006
6,809,112
5,081,396
Material In Transit
1,121,979
826,140
2,598,191
Total
17,317,504
19,134,868
17,747,413
7.5%
8.9%
9.8%
7.0
7.5
7.6
Total
DS
Total
Total
Note
1,927,784
Total
DS
2012
1,946,482
Material In Transit
DP Business
Unit
2013
Finished Goods
Raw Material
SemiConductor
Sub-Division
2014
Inventory Ratio (%)– Total Assets
[Inventory ÷ Total Assets]
Inventory Turn-over
[ Yearly CGS ÷{(Beginning of Inventory End of
Inventory)÷2}]
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Inventory Counts
(1) Inspection Date
ㆍ End of May and 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 Sub-Division and DP Business Unit 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.
Inventory Aging and Valuation
Inventories are stated at the lower of cost or net realizable value. Inventory as at December 31st, 2014 is as follows:
(Unit : KRW million)
Category
Acquisition
Cost
Inventory
Valuation Reserve
Balance
Note
Finished Goods
6,011,078
237,630
5,773,448
Work In Process
5,018,416
553,345
4,465,071
Raw Material
6,244,161
287,155
5,957,006
Material In Transit
1,121,979
Total
18,395,634
1,078,130
1,121,979
17,317,504
※ Prepared on a consolidated basis
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D. Fair Value Estimation
(1) Carrying amounts and fair values of financial instruments by category as at December 31, 2014 and 2013 are as follows:
2014
(In millions of Korean won)
2013
Carrying amount
Fair value
Carrying amount
Fair value
Financial assets
Cash and cash equivalents1
16,840,766
￦
Short-term financial instruments1
-
￦
￦
16,284,780
￦
-
41,689,776
-
36,722,702
-
3,286,798
3,286,798
1,488,527
1,488,527
Trade receivables1
24,694,610
-
24,988,532
-
Long-term available-for-sale financial assets2
12,667,509
12,272,756
6,238,380
5,850,155
4,762,971
4,725,263
5,472,956
5,436,470
Short-term available-for-sale financial assets
Other
￦
Total financial assets
103,942,430
￦
91,195,877
Financial liabilities
Trade payables1
￦
7,914,704
￦
-
￦
8,437,139
￦
-
Short-term borrowings1
8,029,299
-
6,438,517
-
Other payables1
9,258,344
-
7,877,581
-
Current portion of long-term liabilities1
1,778,667
-
2,425,831
-
Debentures
1,355,882
1,377,113
1,311,068
1,327,569
101,671
82,271
985,117
971,844
2,520,277
2,606,179
1,023,714
1,090,580
11,474,129
-
10,862,512
-
Long-term borrowings
Long-term other payables
Other1
Total financial liabilities
￦
42,432,973
￦
39,361,479
1
Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair value disclosures.
Amount measured at cost (2014: ￦394,753 million, 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.
2
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(2) The following table presents the assets and liabilities, by level, that are measured at fair value:
2014
(In millions of Korean won)
Level 1
Level 2
Level 3
Total balance
Short-term available-for-sale financial assets
￦ 1,016,878
￦ 2,269,920
Long-term available-for-sale financial assets1
5,776,836
3,050,338
3,445,582
12,272,756
-
45,898
102,513
148,411
-
78,348
-
78,348
1) Assets
Other
￦
￦
-
3,286,798
2) Liabilities
Derivatives
2013
(In millions of Korean won)
Level 1
Level 2
Level 3
Total balance
Short-term available-for-sale financial assets
￦ 1,257,492
￦
Long-term available-for-sale financial assets1
4,399,314
957,463
493,378
5,850,155
-
40,552
-
40,552
-
244,172
-
244,172
1) Assets
Other
231,035
￦
-
￦
1,488,527
2) Liabilities
Derivatives
1
Amount measured at cost (2014: ￦394,753 million, 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.
ㆍ Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
ㆍ Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
ㆍ Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
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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 in an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. These valuation techniques 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 are not based on observable market data, the instrument is included in Level 3.
Specific valuation techniques used to value financial instruments include:
ㆍ Quoted market prices or dealer quotes for similar instruments.
ㆍ The fair value of forward foreign exchange contracts is determined using forward exchange rates at the statement of financial
position date, with the resulting value discounted back to present value.
Other techniques, 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.
(3) Valuation technique and the inputs
The Company utilizes a present value technique 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.
The following table presents the valuation technique and the inputs used for major financial instruments classified as Level 3.
(In millions of Korean won)
Level 3 Inputs
Input Range
(Weighted Average)
Classification
Fair Value
Long-term available-for-sale financial assets
Taewon Electric
\ 17,094
Valuation Technique
Discounted cash flow
Permanent growth rate
Weighted average cost of capital
-1.00% ~ 1.00% (0%)
7.76%~9.76% (8.76%)
Samsung Venture Investment
6,586
Discounted cash flow
Samsung General Chemicals
100,051
Discounted cash flow
Coming Incorporated
convertible preferred stock
Derivatives
Embedded derivatives
(convertible bonds)
3,106,333
Trinomial model
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%)
7.74%~9.74% (8.74%)
-1.00%~1.00% (0%)
10.48%~12.48% (11.48%)
4.96%~6.96% (5.96%)
30.5%~36.5% (33.5%)
2,462
Binomial model
Discount rate
Stock price volatility
5.16%~10.3% (7.78%)
11.88%~17.6% (14.53%)
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(4) Changes in Level 3 instruments:
(In millions of Korean won)
2014
\
Balance as at January 1
2013
\
493,378
389,195
Purchases
2,586,120
151,741
Disposals
(97,487)
(46,357)
Amount recognized in profit or loss
(67,581)
(5,177)
Amount recognized in other comprehensive income
646,856
2,615
Other
(13,191)
1,361
\
Balance as at December 31
\
3,548,095
493,378
(5) 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 (before-tax amount for other comprehensive income 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
Favorable Changes
Profit or Loss
Equity
\
Embedded derivatives (convertible bonds)2
Total
-
\
466
\
466
Unfavorable Changes
Profit or Loss
231,909
\
466
\
232,375
-
Equity
\
(475)
\
(475)
(225,568)
(475)
\
(226,043)
1 Changes in fair value are calculated by increasing or decreasing the correlation between volatility (30.5% to 36.5%) 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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(6) Fair value hierarchy classifications of the financial assets and financial liabilities that are measured at fair value as at December
31, 2014 and 2013, are as follows:
(In millions of Korean won)
Classification
2014
Carrying amount
Level 1
Level 2
Level 3
Total
Assets
Other
\
4,614,560
\
-
\
4,576,852
\
-
\
4,576,852
Liabilities
Debentures
Long-term borrowings
Long-term other payables
(In millions of Korean won)
Classification
1,355,882
-
1,377,113
-
1,377,113
101,671
-
82,271
-
82,271
2,520,277
-
2,606,179
-
2,606,179
2013
Carrying amount
Level 1
Level 2
Level 3
Total
Assets
Other non-current assets
\
5,432,404
\
-
\
5,395,918
\
-
\
5,395,918
Liabilities
Debentures
Long-term borrowings
Long-term other payables
1,311,068
-
1,327,569
-
1,327,569
985,117
-
971,844
-
971,844
1,023,714
-
1,090,580
-
1,090,580
As at December 31, 2014, assets and liabilities not measured at fair value but for which the fair value is disclosed and categorized
within Level 2 in the fair value hierarchy, are measured using the present value technique which discounts future cash flows with
appropriate interest rates.
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IV. Auditor’s Report
1. Introduction
Samil PwC has audited the financial year end consolidated/separate financial position of the Company as of December 31,
2014, and the related financial year end consolidated/separate statements of income and comprehensive income for the
year ended December 31, 2014, and the consolidated/separate statements of changes in equity and cash flows for the year
ended December 31, 2014. Nothing has come to attention that causes them to believe the accompanying year end
consolidated/separate financial statements are not presented fairly, in all material respects, in accordance with K-IFRS.
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 years then ended and expressed an unqualified opinion on those financial
statements. There were no auditor changes at any subsidiaries for the year ended December 31, 2014. There are 8 newly
incorporated/acquired entities, and 6 of them, such as Samsung Display Bac Ninh, appointed PwC as the auditor and 2 of
them, such as SVIC #26, appointed Deloitte Anjin as external auditor at their own decision.
Year end
Company Auditor
Audit Opinion
Remarks
31 December 2014
Samil PwC
Unqualified
Not applicable
31 December 2013
Samil PwC
Unqualified
Not applicable
31 December 2012
Samil PwC
Unqualified
Not applicable
<Audit (Review) plan for the year ended December 31, 2014 >
Audit (review) Period
Planned dates
Pre-review
2014.03.10 ~ 2014.03.28
Review
2014.04.07 ~ 2014.05.09
Pre-review
2014.06.09 ~ 2014.06.27
Review
2014.07.09 ~ 2014.08.08
Pre-review
2014.09.08 ~ 2014.09.26
Review
2014.10.07 ~ 2014.11.07
2014 Q1
2014 Q2
2014 Q3
System and Internal Control Audit
2014.08.25 ~ 2014.09.26
Audit procedures
2014.12.01 ~ 2015.01.28
Completion of final audit procedures
2015.01.29 ~ 2015.02.24
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[Audit Contract Description]
Fiscal Year
Company
Samil PwC
31, 2014
Year ended
December
Samil PwC
31, 2013
Year ended
December
Description
Auditor
Year ended
December
(In millions of Korean won)
Samil PwC
31, 2012
Compensation
- Review of the interim consolidated/separate financial statements
- Audit on consolidated/separate financial statements
- Review of the interim consolidated/separate financial statements
- Audit on consolidated/separate financial statements
- Review of the interim consolidated/separate financial statements
- Audit on consolidated/separate financial statements
Total Hours
3,690
43,411
3,840
44,702
3,660
43,572
Samil PwC has performed non-audit services and has been paid KRW 2,987 million by the Company for the year ended
December 31, 2014.
[Non-Audit Service Contract Description]
Fiscal Year
Year ended
December
(In millions of Korean won)
Contract Date
Non-audit Service Description
Period for Service
September 2013
Incorporation, M&A and Divestiture Advisory
2014.01~2014.12
1,161
August 2013
Tax Advisory
2014.01~2014.12
533
October 2013
Process Improvement Advisory
2014.01~2014.12
996
31, 2014
Compensation
Others
297
Subtotal
Year ended
December
31, 2013
2,987
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
Others
1,573
Subtotal
8,207
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Note
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Fiscal Year
Year
ended
Contract Date
Non-audit Service Description
Period for Service
Compensation
January 2012
Incorporation, M&A and Divestiture 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
Note
December
31, 2012
Others
802
Subtotal
12,419
2. Regarding Internal Control
Samil PwC has reviewed management's report on the operations of the Internal Accounting Control System ("IACS") of
the Company as of December 31, 2014 and nothing has come to attention that causes them to believe that management's
report on the operations of the IACS is not presented fairly, in all material respects, in accordance with IACS standards.
Samil PwC has audited the financial year end consolidated/separate financial position of the Company as of December 31,
2014, and the related financial year end consolidated/separate statements of income and comprehensive income for the
year ended December 31, 2014, and the consolidated/separate statements of changes in equity and cash flows for the year
ended December 31, 2014. Nothing has come to attention that causes them to believe the accompanying year end
consolidated/separate financial statements are not presented fairly, in all material respects, in accordance with K-IFRS.
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 years then ended and expressed an unqualified opinion on those financial
statements. There were no auditor changes at any subsidiaries for the year ended December 31, 2014. There are 8 newly
incorporated/acquired entities, and 6 of them, such as Samsung Display Bac Ninh, appointed PwC as the auditor and 2 of
them, such as SVIC #26, appointed Deloitte Anjin as external auditor at their own decision.
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V. Management Discussion and Analysis
1. Note on Forward-Looking Statements
This annual report includes forward-looking statements that relate to future events and can be generally identified by
phrases containing words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words
or phrases of similar meaning. These forward-looking statements are not guarantees of future performance and may
involve known and unknown risks, uncertainties and other factors that may affect our actual results, performance,
achievements or financial position, making them materially different from the actual future results, performance,
achievements or financial position expressed or implied by these forward-looking statements. Unless otherwise specified,
all data presented in this report is from our consolidated financial statements.
Uncertain events that could positively or negatively affect the Company’s management condition and financial
performance include:
•
Trends of financial markets domestically and abroad, including changes in exchange rates and interest rates
•
The Company’s strategic decision making, including disposals and purchases of businesses
•
Unexpected sudden changes in core businesses such as CE, IM, Semiconductor, and DP
•
Other changes domestically and abroad that can affect management condition and financial performance
The Company assumes no obligation to revise or update this report to reflect risks or uncertainties that arise after the
reporting period.
2. Overview
Even though the U.S. economy showed gradual signs of recovery in 2014, political and economic uncertainties persisted
including a slowdown in China’s growth and growing tension in Russia and the Middle East. Accordingly, South Korea’s
economy also remained weak.
Despite intensifying price competition, we achieved record consolidated sales of KRW 206 trillion, operating profit of
KRW 25 trillion, stand-alone sales of KRW 138 trillion, and net profit of KRW 15 trillion.
From a financial management perspective, we maintained a sound capital structure with a consolidated debt to equity ratio
of 37.1%, capital adequacy ratio of 72.9%, and ROE of 14.7%. Additionally, the parent company had a debt to equity ratio
of 23.7%, a capital adequacy ratio of 80.9%, and an ROE of 11.4%. Furthermore, , our brand value rose to USD 45.5
billion, a 15% increase from the previous year, and ranked seventh in the global corporate list according to the Interbrand
survey as of October 2014.
During the year, we continued to lead the industry by launching products featuring advanced design and the industry
leading technology. We began mass production of the world’s best performing and highest-density server DRAM
memory modules and led the premium TV market with our UHD TV and curved TV.
As uncertainties in the global economy are expected to persist in 2015 due to an increase in the U.S. interest rate,
economic recession in the Eurozone, and financial risks in emerging countries resulting from a sharp fall in crude oil
prices, we expect growth in our core product markets to slow and competition to intensify.
Even under the rapidly changing business environment and difficult circumstances, we will strive to reinforce the
technological competitiveness of our existing businesses and secure opportunities in the future by discovering new
businesses.
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3. Financial Position and Performance (Consolidated)
A. Financial Position
(Unit: KRW million)
Classification
2014
2013
Increase/decrease
% change
Total assets
230,422,958
214,075,018
16,347,940
7.6%
Current assets
115,146,026
110,760,271
4,385,755
4.0%
- Cash and cash equivalents
16,840,766
16,284,780
555,986
3.4%
- Short-term financial instruments
41,689,776
36,722,702
4,967,074
13.5%
- Available-for-sale financial assets
3,286,798
1,488,527
1,798,271
120.8%
- Trade and other receivables
24,694,610
24,988,532
293,922
1.2%
- Inventories
17,317,504
19,134,868
1,817,364
9.5%
- Other current assets
11,316,572
12,140,862
824,290
6.8%
115,276,932
103,314,747
11,962,185
11.6%
12,667,509
6,238,380
6,429,129
103.1%
- Associates and joint ventures
5,232,461
6,422,292
1,189,831
18.5%
- Property, plant and equipment
80,872,950
75,496,388
5,376,562
7.1%
4,785,473
3,980,600
804,873
20.2%
- Other non-current assets
11,718,539
11,177,087
541,452
4.8%
Total liabilities
62,334,770
64,059,008
1,724,238
2.7%
Current liabilities
52,013,913
51,315,409
698,504
1.4%
Non-current liabilities
10,320,857
12,743,599
2,422,742
19.0%
Total equity
168,088,188
150,016,010
18,072,178
12.0%
Total liabilities and equity
230,422,958
214,075,018
16,347,940
7.6%
Capital adequacy ratio
72.9%
70.1%
2.8%p
-
Debt-to-equity ratio
37.1%
42.7%
5.6%p
-
7.0
7.5
0.5
-
Non-current assets
- Available-for-sale financial assets
- Intangible assets
Inventory turnover
※ Presented in accordance with Korean International Financial Reporting Standards (“K-IFRS”)
Samsung Electronics 2014 Business Report
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- Samsung Electronics’ total assets in 2014 were KRW 230.423 trillion, an increase of KRW 16.348 trillion (7.6%) from
the previous year. This includes an increase of KRW 5.4 trillion in property, plant and equipment from large-scale
facilities investment, as well as an increase of KRW 6.4 trillion in long-term available-for-sale financial assets due to
acquisition of Corning shares and purchase of bank debentures.
- Total liabilities were KRW 62.335 trillion, a decrease of KRW 1.724 trillion (2.7%) from the previous year. This includes
an increase of KRW 698.5 billion (1.4%) in current liabilities and a decrease of KRW 2.423 trillion (19.0%) in non-current
liabilities.
- Total equity was KRW 168.088 trillion, an increase of KRW 18.072 trillion (12.0%) from the previous year. Retained
earnings increased by KRW 20.929 trillion primarily from net income of KRW 23.394 trillion.
- In terms of financial ratios, the Company maintained the financial structure of a world-class company as the capital
adequacy ratio increased by 2.8% from the previous year to 72.9% and the debt-to-equity ratio decreased by 5.6% from
the previous year to 37.1%.
B. Performance
(Unit: KRW million)
Classification
Sales
Cost of sales
Gross profit
Selling and administrative expenses
Operating profit
Other revenue
Other expenses
Gain on valuation using the equity method of accounting
Financial revenue
Financial expenses
Income before income tax expense
Income tax expense
Net income
2014
2013
Increase/decrease
% change
206,205,987 228,692,667
22,486,680
9.8%
128,278,800 137,696,309
9,417,509
6.8%
77,927,187
90,996,358
13,069,171
14.4%
52,902,116
54,211,345
1,309,229
2.4%
25,025,071
36,785,013
11,759,942
32.0%
3,801,357
2,429,551
1,371,806
56.5%
2,259,737
1,614,048
645,689
40.0%
342,516
504,063
161,547
32.0%
8,259,829
8,014,672
245,157
3.1%
7,294,002
7,754,972
460,970
5.9%
27,875,034
38,364,279
10,489,245
27.3%
4,480,676
7,889,515
3,408,839
43.2%
23,394,358
30,474,764
7,080,406
23.2%
※ Presented in accordance with Korean International Financial Reporting Standards (“K-IFRS”)
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- In 2014, despite the increase in sales of semiconductors, including memory, intensifying competition in the smartphone
market led to a 9.8% decrease in revenue compared to the previous year, with revenues of KRW 206 trillion recorded for
2014.
- Operating profit decreased by 32.0% to KRW 25.025 trillion, income before income tax expense decreased by 27.3% to
KRW 27.875 trillion, and net income decreased by 23.2% to KRW 23.394 trillion.
Performance by division
[Unit: KRW million]
Classification
Division
Business
2014
Amount
2013
Share
% change
Amount
Share
Amount
(%)
CE
50,183,135
24.3%
50,331,515
22.0%
148,380
0.3%
IM
111,764,544
54.2%
138,817,219
60.7%
27,052,675
19.5%
Semiconductor
39,729,902
19.3%
37,436,579
16.4%
2,293,323
6.1%
DP
25,727,169
12.5%
29,837,116
13.0%
4,109,947
13.8%
Total
65,789,806
31.9%
67,760,906
29.6%
1,971,100
2.9%
228,692,667 100.0%
22,486,680
9.8%
Revenue
DS
Overall sales
206,205,987 100.0%
CE
1,184,325
4.7%
1,673,343
4.5%
489,018
29.2%
IM
14,562,885
58.2%
24,957,741
67.8%
10,394,856
41.6%
8,776,442
35.1%
6,887,978
18.7%
1,888,464
27.4%
660,181
2.6%
2,980,563
8.1%
2,320,382
77.9%
9,430,915
37.7%
10,000,665
27.2%
569,750
5.7%
36,785,013 100.0%
11,759,942
32.0%
Semiconductor
Operating profit
DS
DP
Total
Overall operating profit
25,025,071 100.0%
[CE Division]
- The CE division’s 2014 revenue decreased by 0.3% from the previous year to KRW 50.183 trillion. Consolidated
operating profit decreased by KRW 489 billion compared to the previous year to KRW 1.184 trillion.
- Despite a depressed economy and weak demand from developed markets, we maintained our growth momentum mainly
with our market-leading premium products such as ultra-high definition UHD TV and refrigerators.
For flat panel TVs, we maintained our No. 1 position in total TV market share, including FPTV and LCD-TV, for the
ninth consecutive year. We again achieved the "Triple Crown" thanks to our competitive advantages in technology and
design. We continued to widen the gap with our competitors and, as a result, solidified our top position in the market.
In 2015, we will continue to enhance our product leadership through exclusive design features in the premium and over60" large-size line ups, and lead the market with ultra-high definition SUHD TV.
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[IM Division]
- The IM division’s revenue and profitability decreased compared to the previous year. 2014 revenue decreased by 19.5%
to KRW 111.765 trillion and operating profit declined by 41.6% to KRW 14.563 trillion.
- Despite stronger demand in emerging markets and an increase in premium smartphone sales, our market share and
earnings declined compared to the previous year due to enhanced mid to low-end smartphone competitiveness of Chinese
local makers and the launch of a large screen premium smartphone by competitors.
In the premium market, the new Note line up and Galaxy Gear S, VR, and Circle are getting positive feedback based on
the Galaxy brand image, achieving strong sales from the fourth quarter.
This year, we will reinforce our leadership in the premium market based on differentiated design with new technologies,
such as flexible display, and continue to increase mass-market dominance through various line ups. In addition, we will
strengthen our position as a market leader who consistently provides new value to customers by investing in wearable
products tailored to customers’ needs, including Gear S, VR, and Circle, and new growth engines such as Mobile Health
Care and B2B.
[Semiconductor]
- The semiconductor business’s 2014 revenue increased by 6.1% from the previous year to KRW 39.730 trillion.
Operating profit increased by 27.4% compared to the previous year to KRW 8.776 trillion.
- Amid stable demand in the memory market, we enhanced our cost competitiveness and increased high value-added
product sales. As a result, our earnings improved remarkably. We also increased investment in the advanced process
technologies to reinforce our technology leadership.
- For DRAM, while ASP remained strong due to overall supply shortage, supply remained unstable in the fourth quarter of
2014. In particular, as other makers are experiencing a delay in producing cutting-edge high-performance and high-density
products such as DDR4 and LPDDR4, we had a high level of demand. For NAND, supply and demand condition has been
stabilizing since the second half of 2014 led by increased adoption in new smartphones and expansion of SSD adoption.
In the first quarter of 2015, we expect the cloud server and mid to low-end mobile markets to grow. Accordingly, we plan
to increase differentiated products based on cutting-edge processes and respond to each application by using various
product line ups so that we can continue to lead the market as the No.1 memory maker.
We have been maintaining our research and development competitive advantage which is over one year ahead of peer
companies. We are also reinforcing our market leadership by launching premium products.
For DRAM, we are leading the market by stabilizing production and yield of 20nm products and accelerating
development of 10nm DRAM. As for NAND, we are aggressively entering the premium market by adding V-NAND in
high-performance SSD, and expanding the share of high-quality 3bit products to maximize cost competitiveness.
Looking forward to 2015, we will maintain our industry leadership as the No. 1 memory maker by leveraging our
technological advantages and cost competitiveness from advanced process development. We will continue to expand our
market dominance by further improving cost competitiveness and offering differentiated products through advanced
process development.
- For System LSI, we expect continued growth of mobile products in 2015 as the mid to low-end smartphone and tablet
markets expanded further in emerging markets in 2014.
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For SOC products, demand for mobile IC, such as AP and modem SOC, is on the rise. Demand for an integrated chip,
which provides all functions at once, is also increasing due to the expansion of the mid to low-end smartphone and tablet
markets. We are securing the competitiveness of CIS products in emerging markets by differentiating our hardware with
high-pixel technology. In response to this increasing demand for mid to low-end IC chips, we plan to release more
competitive products earlier than competitors by leveraging our advanced process advantages.
The System LSI market is growing mainly due to mobile. We expect the wearable device and IOT markets to grow further.
Our AP business profits are driven by increased 28/20nm AP offerings. In the first quarter of 2015, we will introduce
14nm products to solidify our technological advantages. Additionally, we will further reinforce our competitiveness in AP
by expanding the modem/ModAP business and mass producing connectivity products. For the foundry business, we are
strengthening our market leadership by developing leading-edge processes, such as next-generation 14nm process, that are
ahead of our competitors.
[DP]
- The DP division’s 2014 revenue decreased by 13.8% from the previous year to KRW 25.727 trillion. Operating profit
decreased by 77.9% compared to the previous year to KRW 660.2 billion.
- We responded to the market needs in a timely manner by expanding sales of panels for curved and over-60” UHD TV
based on solid demand for large-size TV panel. However, small to medium size panel earnings decreased compared to the
previous year due to a decline in tablet market demand.
For the large size panel business, we improved our manufacturing competitiveness by enhancing yield and reducing
product defect rates across all product line ups based on our TFT-LCD technologies. We further strengthened our
competitive advantages by offering full line ups in large size TV panels and developing panels for curved TV.
For cost savings, we are continuing our efforts to develop highly transparent panels and to localize key manufacturing
equipment. We will strengthen partnerships with customers in technology and product development to maintain the
highest utilization rate in the industry and to maximize profitability.
For the small to medium size panel business, we expect the product line ups to expand from premium smartphones to mid
to low-end, and the trends toward higher resolution as well as higher size smartphone panel to continue. We will reinforce
our position in the premium market with our flexible and ultra-high resolution products, and focus on securing mid to
long-term growth momentum and strengthening business competitiveness by expanding our customer base in the mid to
low-end market.
In 2015, we plan to expand premium product sales, including high-quality curved and over-60” UHD TV, actively respond
to the market demand by reinforcing our mass-market display panel competitiveness, and strengthen cost competitiveness
to improve profitability. In addition, while we secure product competitiveness through next-generation displays, we will
also focus on developing future technologies such as transparent display to cement our position as a market-leading
display maker.
C. New businesses
N/A
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D. Changes in Organizational Structure
In December 2009, following an organizational change, the Company was reorganized from a two-divisional system
(DMC and DS) to a system of seven independent business units. Additionally, the total number of regional
headquarters increased to 10, as the Africa regional headquarters was newly established.
In April 2010, the Digital Imaging business unit was added through a merger with Samsung Digital Imaging. In
December 2010, an overseas semiconductor division was changed from a subsidiary to a regional headquarters.
In July 2011, the Company established the DS business headquarters to reinforce synergies in the component business.
In December 2011, following an organizational change, the DMC division was re-established and the Company
returned to a two-divisional system (DMC and DS).
In April 2012, the LED business unit was added through a merger with Samsung LED.
In May 2012, the Japan regional headquarters was established under the DS division.
In December 2012, following an organizational change, the CE and IM businesses were upgraded to individual
division status, and the IT Solution business was divided into the 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 was integrated with the Mobile
business.
No changes have made during 2014.
(Refer to 『2. Company History』 of 『I. Corporate Overview』 for more details about changes in the organizational
structure.)
E. Foreign Exchange Risk
The Company is exposed to foreign exchange risks of currencies, including USD, in carrying out business activities.
Uncertainty related to exchange rates could influence business transactions, assets and liabilities in the future. In particular,
as the Company exports more than it imports, won cash flow can be negatively impacted when the won is strong. As such,
the Company focuses on minimizing foreign exchange risk by matching foreign currency income and expenditure and
does not hedge foreign currencies using derivatives. In particular, macroeconomic factors such as a fall in KRW/USD
exchange rate and global policies to move away from ultra-low interest rates can negatively impact the Company’s
profitability.
4. Liquidity, Financing, and Expenditure
As of the end of2014, the Company has KRW 61.817 trillion of liquid funds.
These liquid funds include i) cash and cash equivalents, ii) short-term financial instruments, and iii) short-term availablefor-sale securities. This balance increased by KRW 7.321 trillion from KRW 54.496 trillion at the end of the previous
period.
The Company’s short-term borrowings (including alternatives for liquidity) are KRW 9.808 trillion, an increase of KRW
Samsung Electronics 2014 Business Report
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943.7 billion from KRW 8.864 trillion of the end of the previous year. Long-term borrowings are KRW 1.458 trillion, a
decrease of KRW 838.6 billion from KRW 2.296 trillion of the end of the previous year.
The Company’s net cash (liquid funds - borrowings) is KRW 50.552 trillion, which is an increase of KRW 7.216 trillion
from KRW 43.336 trillion of the end of the previous period.
The Company has ample liquidity according to the liquidity assessment index of the global credit rating agency Moody’s.
The Company’s cash coverage (cash and cash equivalents/borrowings), which is a major liquidity index that Moody’s uses,
corresponds to the highest level, Aaa.
2014
Cash Coverage
(Cash and cash equivalents /borrowings)
2013
549%
Note
488%
Moody's rating
Aaa : >100%
5. Other Information for Investment Decision Making
A. Significant accounting policies and estimation
- Refer to 『2. Note to Consolidated Financial Statements 』 in
『III. Financial Affairs』 for significant accounting
policies and estimates.
B. Environment and employees
- Refer to 『5. Sanctions and others』 in 『XI. Other information for investor protection』 for environmental sanctions or
administrative actions.
- No significant changes in employee positions during this period.
C. Legal regulations
- Refer to 『5. Sanctions and others』 of 『XI. Other information for investor protection』 for major legal regulations on
the Company’s businesses.
D. Derivatives and risk management policy
- To manage exchange rate risk, overseas companies enter into currency forwards which are denominated in the trading
currency of a foreign currency position as opposed to the companies’ reporting currencies. Overseas offices buy or sell
currency forwards with less than one year maturity via a bank to avert risk.
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VI. Corporate Governance
1. Board of Directors
A. Overview of Board of Directors
As of December 31, 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
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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
Oct.30
2014
① Approval of the 46th 3Q14 financial statements and business
report
Nov.26
2014
①
③
④
⑤
⑥
Approval of transactions with affiliate persons
Payment of retirement pensions
Equity investments
Real estate rental from Samsung Life Insurance
Acquisition of treasury stock
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
Approved
For
For
For
For
Did not
attend
Approved
Approved
Approved
Approved
Approved
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For
Did not
attend
C. The Committees of BOD
(1) Composition of the BOD Committees as of December 31, 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.
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
Samsung Electronics 2014 Business Report
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11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
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
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
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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
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
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
Jan 20, 2014
Management
Committee
Agenda
Attendance/Voting
Results of
Independent Directors
Approved
N/A
(All comprised of
executive directors)
Samsung Electronics 2014 Business Report
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Oct 15, 2014
① Memory investment
② Exercising voting rights regarding merger
Approved
Approved
Nov 12, 2014
① Stake acquisition
Approved
Nov 26, 2014
①
②
③
④
⑤
Dec 10, 2014
① Merger with overseas office
Stake sales
Establishment of overseas complex
Business disposal
Memory investment
Integration of corporate bases
Approved
Approved
Approved
Approved
Approved
Approved
Samsung Electronics 2014 Business Report
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
The Related Party Transactions Committee
Name of independent directors
Date
Agenda
Voting
Results
In-Ho Lee
(Attendance:
86%)
Han-Joong Kim
(Attendance:
100%)
Kwang-Soo Song
(Attendance:
100%)
For/against
Jan 23,
2014
-
-
-
-
-
-
Did not attend
-
-
-
-
-
- Report on 1Q14 related party transactions
-
-
-
- Preliminary review on large-scale related party transactions
1) Disposal of Technology assets
2) Equity investments
3) A property Leasing contract with Samsung Display
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- Preliminary review on large-scale related party transactions
1) Participation in Samsung BioLogics equity rights offerings
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
Apr 28,
2014
- Preliminary review on large-scale related party transactions
1) Renewal of the existing directors’ liability insurance policy
2) Donation
3) Application for Venture Capital Union
Jun 3,
2014
N/A
N/A
N/A
- 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
Oct 29,
2014
- Report on 3Q14 related party transactions
N/A
- Preliminary review on large-scale related party transactions
Nov 26,
2014
1) Approval of 2015 large-scale transactions of goods/services
2) Payment of retirement pensions
3) Equity investments
4) Real estate rental from Samsung Life Insurance
N/A
Samsung Electronics 2014 Business Report
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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
- Report on the results of
Jan 24,
2014
Approved
- Research results and findings
May 30,
2014
For
For
For
For
For
-
-
-
-
Did not attend
-
-
-
-
establishment of research
committee for environmental
safety
from the advancement of
corporate ecosystem research
council
N/A
- Reported Progress of research
results for the environmental
safety
Samsung Electronics 2014 Business Report
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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 December 31, 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.
Samsung Electronics 2014 Business Report
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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.
Samsung Electronics 2014 Business Report
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2. Audit System
A. Profile of the member of the Audit Committee
As of December 31, 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.
Samsung Electronics 2014 Business Report
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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: 80%)
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
Oct 29,
2014
- Report on the 3Q14 financial statements and business
report
- Report on 3Q14 non-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.
Samsung Electronics 2014 Business Report
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VII. 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 December 31, 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
486,926
0.33
Open market sales
Samsung Life
Insurance
(special accounts)
Affiliate
Preferred
26,379
0.12
52,332
0.23
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
0
0.00
Open market sales
Samsung Fire &
Marine Insurance
(special accounts)
Affiliate
Preferred
53
0.00
0
0.00
Open market sales
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
25,983,182
17.64
-
Preferred
39,709
0.17
65,609
0.29
-
Total
※ In the beginning of the period(year-end 2013), Samsung Securities held 10 voting shares to broker loan transactions and ETF
transactions. But as of the end of the reporting period, it no longer owns any share.
Samsung Electronics 2014 Business Report
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※ As of April 24, 2014, Cheil Industries sold 9,679 shares in the market.
※ Note: According to the closed shareholder register, as at December 31,2014, Yong-Jin Jeong, CEO of Shinsegye, holds 245,000
shares.
※ The definition of major shareholder is as defined in the Monopoly Regulation and Fair Trade Act
[The major shareholder]
○ Name of the major shareholder: Kun-Hee Lee
○ 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 December 31, 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 December 31, 2014]
(Unit: Shares)
Classification
Shareholders with
over 5% voting
shares
Name
Number of shares owned
Share ratio
Note
National Pension Service
11,164,905
7.58
-
Samsung Life Insurance
11,109,740
7.54
-
-
Employee Stock Ownership Association
-
-
※ The number of shares owned and share ratio of Samsung Life Insurance includes special accounts.
3. Minority Shareholders
[As of December 31, 2014]
(Unit: Person, Shares, %)
Shareholder
Shares owned
Classification
Note
# of shareholders
Portion
# of shares
Portion
Minority
shareholder
115,030
99.94
84,010,794
57.03
Total
115,097
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 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.
Samsung Electronics 2014 Business Report
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☞ (Note) Article 11-4
(Stock Options)
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.
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.
Preemptive Rights in the
Articles of Incorporation
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 Business Report
122 / 170
5. Stock Price and Stock Transactions
A. Domestic stock market
(Unit: KRW, Shares)
Type
Stock price
Common
stock
Volume
Stock price
Preferred
stock
Volume
July ‘14
August
September
October
November
December
Highest
1,395,000
1,317,000
1,226,000
1,244,000
1,287,000
1,352,000
Lowest
1,284,000
1,222,000
1,150,000
1,083,000
1,190,000
1,266,000
Average
1,329,565
1,261,450
1,193,895
1,126,143
1,221,250
1,310,143
Highest
(day)
487,027
564,621
466,184
772,463
887,556
409,817
Lowest
(day)
119,577
168,153
113,281
124,877
120,604
112,756
Monthly
4,749
5,113
4,991
6,138
5,275
5,122
Highest
1,128,000
1,044,000
1,008,000
985,000
1,049,000
1,046,000
Lowest
1,040,000
956,000
875,000
822,000
919,000
959,000
Average
1,075,522
1,001,050
946,842
874,476
960,850
1,018,143
Highest
(day)
88,913
96,322
96,922
89,068
93,546
67,540
Lowest
(day)
7,019
21,972
11,188
15,137
19,263
12,605
Monthly
780
931
775
1,017
679
730
※ Monthly trading volume in 1,000 shares
Samsung Electronics 2014 Business Report
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B. Overseas stock market
□ Name of stock exchange: London Stock Exchange (common stock)
(Unit: $, KRW, DR)
Type
Stock
price
Common
stock
Volume
July ‘14
August
September
October
November
December
Highest
674.00
636.50
607.00
575.00
579.50
611.00
(Converted to KRW)
690,648
657,950
616,044
606,050
633,104
672,894
Lowest
630.50
600.00
553.00
515.50
541.00
577.00
(Converted to KRW)
641,849
612,360
576,281
552,771
601,700
627,834
Average
649.17
614.65
577.55
530.98
557.18
591.71
Highest (day)
78,983
117,894
134,943
161,340
111,237
128,518
Lowest (day)
14,277
2,122
16,902
20,239
29,845
4,706
881
1,014
1,404
1,650
1,041
1,400
Monthly
※ 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
July ‘14
August
September
October
November
December
Highest
548.50
501.00
497.50
457.20
468.00
472.00
(Converted to KRW)
562,048
517,884
504,913
481,889
515,315
519,814
511.50
475.20
424.50
378.70
417.00
437.30
(Converted to KRW)
517,740
484,989
442,371
406,080
457,658
475,826
Average
525.54
487.95
459.41
409.54
436.82
459.32
Highest (day)
33,490
104,610
14,596
47,310
42,035
33,245
Lowest (day)
529
490
279
2,043
2,188
245
Monthly
134
561
104
259
258
229
Lowest
※ 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 Business Report
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VIII. Executives and Employees
1. Executives and Employees
A. Registered Executives
[As of December 31, 2014]
Name
Gender
(Unit: # of shares)
Date of
birth
Position
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
34 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
22 mo.
2016.03.14
JongKyun
Shin
M
1956.01
CEO
Registered
Full time
executive
Head of IM
Division
Head of
IM
Division
0
0
22 mo.
2016.03.14
1955.06
CFO
Registered
Full time
executive
CFO, Head of
Corporate
Management
Office
Head of
Corporate
Management
Office
1,473
0
22 mo.
2016.03.14
Registered
Part time
executive
Overall
management of
the Company
President
& CEO of
Shinhan
Bank
0
0
58 mo.
2016.03.14
SangHoon
Lee
M
In-Ho
Lee
M
1943.11
Independent
Director
HanJoong
Kim
M
1948.11
Independent
Director
Registered
Part time
executive
Overall
management of
the Company
President
of Yonsei
University
0
0
34 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
22 mo.
2016.03.14
Registered
Part time
executive
Overall
management of
the Company
Professor of
Electrical
Engineering
at Seoul
National
University
0
0
34mo.
2015.03.15
Overall
management of
the Company
Dean of
Graduate
School of
International
Studies at
Ewha
Womans
University
0
0
22 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
※ At the AGM held on March 13, 2015, executive director Oh-Hyun Kwon and independent directors Han-Joong Kim and Byeong-Gi Lee were
reappointed.
Samsung Electronics 2014 Business Report
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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 December 31, 2014]
(Unit: KRW million)
No. of employees
Division
Gender
Regular
Contractbased
Others
Total
Average length
of service
(years)
Total
Compensation
Average
Compensation
per employee
CE
M
17,242
526
-
17,768
11.0
-
-
CE
F
3,346
397
-
3,743
6.3
-
-
IM
M
19,098
386
-
19,484
9.7
-
-
IM
F
7,660
245
-
7,905
7.1
-
-
DS
M
29,238
273
-
29,511
9.7
-
-
DS
F
13,011
347
-
13,358
8.8
-
-
Others
M
5,561
314
-
5,875
12.8
-
-
Others
F
1,354
384
-
1,738
7.1
-
-
Gender Total
M
71,139
1,499
-
72,638
10.3
8,084,727
112
Gender Total
F
25,371
1,373
-
26,744
7.8
1,957,242
74
96,510
2,872
-
99,382
9.6
10,041,969
102
Total
※ Total compensation and average compensation per employee were calculated before income tax and other deductions 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 resident in Korea, excluding four executive directors.
※ Average compensation per employee was calculated based on total average employee figure of 98,594
(male: 72,188; female: 26,406)
Samsung Electronics 2014 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 directors registered pursuant to Article 388 of the
Korean Commercial Act (“Registered Directors”). It includes compensation for Registered Directors who retired this fiscal year
and in past years.
(2) Remuneration Paid
(Unit: KRW million)
Number
of Persons
Total amount of
remuneration
Average remuneration
per Director
Note
Executive Directors
4
33,320
8,330
-
Independent Directors
2
168
84
-
Audit Committee member or Auditor
3
270
90
-
Total
9
33,758
-
-
※ 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 in accordance with Article 159 of the
Financial Investment Services and Capital Markets Act and 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 options.
Samsung Electronics 2014 Business Report
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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
9,388
-
Boo-Keun Yoon
CEO
5,496
-
Jong-Kyun Shin
CEO
14,572
-
Sang-Hoon Lee
CFO
3,864
-
※ Total amount of compensation for each individual is the sum of earned, retirement, and other related 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 in accordance with Article 159 of the Financial Investment Services and Capital Markets Act and
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 9,388 million
– Earned Income
•
Salary: KRW 2,083 million (consists of monthly wage)
•
Bonus: KRW 6,550 million (consists of traditional holiday bonus, Target Achievement
Incentive, Performance Incentive, Long-term Incentive)
•
Profit from exercising stock option : n/a
•
Other earned income: KRW 755 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 0~200% of monthly
wage
* CEO decides the amount according to the level of target achieved
Performance Incentive: When performance exceeds the Company’s goal;, CEO decides the
amount based on 20% of profit. Paid once a year within 0~50% of
salary. (Adjusted according to individual performance)
•
Long-term incentive: Calculated within the director remuneration limit, based on the average
salary of 3 years, using ROE, stock performance, and EBIT margin
as criteria. Paid over the course of 3 years.
Bonus awarded based on his contributions and consideration for his performance as he led the employees and
the company in a challenging business environment; he contributed to Samsung Electronics by achieving KRW
206 trillion of revenue and KRW 25 trillion of operating profit and maintaining the Company’s position as the No.1
IT Company as well as the best earnings and technological leadership in the semiconductor industry.
– 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 Business Report
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
CEO
Boo-Keun Yoon
Total compensation of KRW 5,496 million
– Earned Income
•
Salary: KRW 1,728 million (consists of monthly wage)
•
Bonus: KRW 3,114 million (consists of traditional holiday bonus, Target Achievement
Incentive, Performance Incentive, Long-term Incentive)
•
Profit from exercising stock option : n/a
•
Other earned income: KRW 653 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 0~200% of monthly
wage
CEO
Jong-Kyun Shin
Performance Incentive: When performance exceeds the Company’s goal, CEO decides the
amount based on 20% of profit. Paid once a year within 0~50% of
salary. (Adjusted according to individual performance)
•
Long-term incentive: Calculated within the director remuneration limit, based on the average
salary of 3 years, using ROE, stock performance, and EBIT margin
as criteria. Paid over the course of 3 years.
Bonus awarded based on his contributions and consideration for his performance as he led the employees
and the Company in a challenging business environment; he contributed to Samsung Electronics by
achieving KRW 206 trillion of revenue and KRW 25 trillion of operating profit and by improving products of
the CE Division as well as maintaining the Company’s global leadership of TV products.
– 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 14,572 million
– Earned Income
•
Salary: KRW 1,728 million (consists of monthly wage)
•
Bonus: KRW 3,732 million (consists of traditional holiday bonus, Target Achievement
Incentive, Performance Incentive, Long-term Incentive)
•
Profit from exercising stock option : n/a
•
Other earned income: KRW 9,113 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 0~200% of monthly
wage

* CEO decides the amount according to the level of target achieved
•


* CEO decides the amount according to the level of target achieved
Performance Incentive: When performance exceeds the Company’s goal, CEO decides the
amount based on 20% of profit. Paid once a year within 0~50% of
salary. (Adjusted according to individual performance)
•
Long-term incentive: Calculated within the director remuneration limit, based on the average
salary of 3 years, using ROE, stock performance, and EBIT margin
as criteria. Paid over the course of 3 years.
Bonus awarded based on his contributions and consideration for his performance as he led the employees
and the Company in a challenging business environment; he contributed to Samsung Electronics by
achieving KRW 206 trillion of revenue and KRW 25 trillion of operating profit and by maintaining the
Company’s lead in smartphones as well as by developing innovative products.
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 Business Report
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

CFO
Sang-Hoon Lee
Total compensation of KRW 3,864 million
– Earned Income
•
Salary: KRW 1,123 million (consists of monthly wage)
•
Bonus: KRW 2,297 million (consists of traditional holiday bonus, Target Achievement
Incentive, Performance Incentive, Long-term Incentive)
•
Profit from exercising stock option : n/a
•
Other earned income: KRW 444 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 0~200% of monthly
wage
* CEO decides the amount according to the level of target achieved
Performance Incentive: When performance exceeds the Company’s goal, CEO decides the
amount based on 20% of profit. Paid once a year within 0~50% of
salary. (Adjusted according to individual performance)
•
Long-term incentive: Calculated within the director remuneration limit, based on the average
salary of 3 years, using ROE, stock performance, and EBIT margin
as criteria. Paid over the course of 3 years.
Bonus awarded based on his contributions and consideration for his performance as he led the employees
and the Company in a challenging business environment; he contributed to Samsung Electronics by
achieving KRW 206 trillion of revenue and KRW 25 trillion of operating profit and pursued efficient
management of resources, corporate, and human resources as the head of the Corporate Management
Office.
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 of December 31, 2014, the accumulated weighted average exercise price of unexercised stock options is KRW 606,700.
[Weighted average exercise price = Sum of (no. of unexercised stocks per period x exercise price per period) / total no. of
unexercised stocks]
[As of December 31, 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
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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Exercise
price
131 / 170
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 December 31, 2014, the closing price was KRW 1,327,000. ‘Relationship’ is as of the reporting date (December 31, 2014).
Samsung Electronics 2014 Business Report
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IX. Affiliates and Subsidiaries
1. Affiliates & Subsidiaries
A. Affiliates
- Name of affiliated group:
Samsung Group (as defined under Korea’s Monopoly Regulation and Fair Trade Act)
As at December 31, 2014, Samsung Group had a total of sixty-nine (69) domestic affiliates, where five (5) new affiliates
(Samsung Welstory, Seoul Lakeside CC, Samsung Card Customer Service, Shilla Stay, and Samoo Architects &
Engineers) were included and eleven (11) affiliates (Samsung Corning Precision Materials, Samsung SNS, Global Tech,
365Homecare, Samsung Petrochemical, Cheil Industries, World Cyber Games, SMP, SKKU dormitory, Care Camp,
Gacchinet) were excluded. Among the Samsung Group’s sixty nine (69) domestic affiliates, eighteen (18) affiliates
including Samsung Electronics are listed, and fifty-one (51) affiliates are unlisted.
[As of December 31, 2014]
No. of
affiliates
Name of affiliates
Samsung C&T, Samsung Electronics, Samsung SDI, Samsung Techwin, SEMCO, Samsung Heavy Industries,
Listed
18
Samsung Card, Samsung Life Insurance, Hotel Shilla, Samsung Fire & Marine Insurance, Samsung
Securities, Samsung Fine Chemicals, Samsung Engineering, S1, Cheil Worldwide, Cheil Industries, Samsung
SDS, CREDU
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, Allat., SECUI, Open Tide Korea, Samsung Futures, Samsung Venture
Investment Corporation, Samsung Asset Management, Saengbo, SD Flex, Samsung Claim Adjustment
Unlisted
51
Service, Samsung Fire & Marine Insurance Service, Suwon Samsung Bluewings FC, S-Core, 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, Samsung Welstory, Jeongahm Wind Power, Samsung SGL Carbon Composite
Materials, Samsung Card Customer Service, Seoul Lakeside CC, Shilla Stay, Samoo Architects & Engineers
Total
※
69
The former Cheil Industries merged with Samsung SDI in July 2014, and Samsung Everland has been renamed as Cheil
Industries.
Samsung Electronics 2014 Business Report
133 / 170
B. Ownership Status of Affiliates and Subsidiaries
1) Domestic
Investor
Investee
Samsung
C&T Corp
Samsung C&T
Corporation
Samsung
Electronics
Samsung SDI
Samsung
Electronics
Samsung
SDI
Samsung
ElectroMechanics
Samsung
Heavy
Industries
Samsung
Techwin
Hotel Shilla
4.3
4.1
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
12.6
8.4
22.6
13.1
14.7
11.0
Cheil
Industries
1.4
3.7
0.3
3.7
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
Samsung Fire &
Marine Insurance
4.8
1.3
0.1
0.1
3.4
0.6
7.9
0.0
0.1
0.0
1.1
Samsung
Securities.
2.0
Samsung Card
5.6
1.0
3.1
1.3
1.3
1.9
3.0
SDC
Samsung
BioLogics
SVIC #6
Total
12.7
12.9
19.7
23.8
24.2
32.4
17.5
22.0
28.4
31.2
20.8
39.7
8.8
※ (% of Ownership; As of December 31, 2014; Based on Common shares)
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Investor
Investee
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
3.1
Samsung General
Chemicals
100.0
3.0
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 December 31, 2014; Based on Common shares)
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Investor
Investee
Samsung
Medison
Samsung C&T
Corporation
Samsung
Electronics
Samsung
BioLogics
Samsung
BioEpis
Samsung
Corning
Advanced
Glass
SU
Materials
Samsung
Thales
40.1
5.7
68.5
CVnet
Songdo
Landmark
City
41.4
Seoul
Lakeside
CC
80.0
Samwoo
Architects &
Engineers
SD Flex
Colombo
Korea
Natural9
100.0
45.7
Samsung SDI
50.0
Samsung Electromechanics
Cheil
Industries
20.0
45.7
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
41.4
100.0
100.0
50.0
※ (% of Ownership; As of December 31, 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
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
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
1.1
93.4
15.2
SERI
4.3
Samsung SDS
47.2
Samsung Life
Insurance
70.2
94.8
100.0
81.1
94.8
100.0
0.0
Samsung Fire &
Marine Insurance.
Samsung Securities
Samsung Card
SDC
Samsung BioLogics
SVIC #6
Total
100.0
50.1
50.0
65.2
100.0
93.4
100.0
71.8
62.4
※ (% of Ownership; As of December 31, 2014; Based on Common shares)
Samsung Electronics 2014 Business Report
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Investor
Investee
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
100.0
Hotel Shilla
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 December 31, 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
97.7
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
97.7
※ (% of Ownership; As of December 31, 2014; Based on Common shares)
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2) Overseas
Samsung C&T Corporation
Investor
MYODO METAL CO., LTD.
Investee
Ownership
100.0
Samsung C&T Corporation
Samsung C&T Japan Corporation
100.0
Samsung C&T Corporation
Samsung C&T America Inc.
100.0
Samsung C&T Corporation
Samsung Finance Corporation.
80.0
Samsung C&T Corporation
Samsung E&C America, INC.
100.0
Samsung C&T Corporation
SAMSUNG OIL & GAS USA CORP
90.0
Samsung C&T Corporation
Samsung Renewable Energy Inc.
100.0
Samsung C&T Corporation
SCNT Power Norte S. De R.L. de C.V.
100.0
Samsung C&T Corporation
QSSC, S.A. de C.V.
60.0
Samsung C&T Corporation
Samsung C&T Oil & Gas Parallel Corp.
100.0
Samsung C&T Corporation
Samsung C&T Automation Inc.
70.0
Samsung C&T Corporation
Samsung C&T Canada Ltd.
100.0
Samsung C&T Corporation
Samsung C&T Deutchland GmbH
100.0
Samsung C&T Corporation
Samsung C&T U.K. Ltd.
100.0
Samsung C&T Corporation
Xiod Distribution
25.0
Samsung C&T Corporation
Samsung C&T France S.A.S
100.0
Samsung C&T Corporation
Samsung C&T ECUK Limited
100.0
Samsung C&T Corporation
Whessoe Project Limited
100.0
Samsung C&T Corporation
SCNT Investment Atlantic SPRL
100.0
Samsung C&T Corporation
POSS-SLPC, s.r.o
50.0
Samsung C&T Corporation
Solluce Romania 1 B.V.
80.0
Samsung C&T Corporation
SAM investment Manzanilo.B.V
53.3
Samsung C&T Corporation
Solluce Slovenia 1 B.V.
80.0
Samsung C&T Corporation
Ecosolar OOD
100.0
Samsung C&T Corporation
Ecoenergy Solar OOD
100.0
Samsung C&T Corporation
Agirlplam EOOD
100.0
Samsung C&T Corporation
Fishtrade EOOD
100.0
Samsung C&T Corporation
Manageprojekt EOOD
100.0
Samsung C&T Corporation
Solar Park EOOD
100.0
Samsung C&T Corporation
Veselinovo Energy OOD
100.0
Samsung C&T Corporation
Samsung C&T Construction Hungary Kft.
100.0
Samsung C&T Corporation
Samsung C&T (KL) Sdn.,Bhd.
100.0
Samsung C&T Corporation
Samsung C&T Malaysia SDN. BHD
100.0
Samsung C&T Corporation
Erdsam Co., Ltd.
100.0
Samsung C&T Corporation
Samsung Chemtech
51.7
Samsung C&T Corporation
S-print Inc
40.0
Samsung C&T Corporation
Cassava Investment Korea Pte. Ltd.
29.7
Samsung C&T Corporation
P.T. Samsung Development
100.0
Samsung C&T Corporation
Samsung Development (Thailand) Co., Ltd.
33.0
Samsung C&T Corporation
Samsung C&T Thailand Co., Ltd
44.0
Samsung C&T Corporation
Cheil Holding Inc.
40.0
Samsung C&T Corporation
Samsung Const. Co. Phils.,Inc.
25.0
Samsung C&T Corporation
Samsung Design Philippines Inc
100.0
Samsung C&T Corporation
Samsung Oil & Gas(Timor Sea 06-102) Ltd.
100.0
Samsung C&T Corporation
Samsugn Oil & Gas Australia PTY. LTD
100.0
Samsung C&T Corporation
PT. INSAM BATUBARA ENERGY
90.0
Samsung C&T Corporation
Samsung C&T India Pte., Ltd.
100.0
Samsung C&T Corporation
Samsung C&T Corporation India Private Ltd.
100.0
Samsung C&T Corporation
Malaysia Samsung Steel Center Sdn.Bhd
70.0
Samsung C&T Corporation
Samsung C&T Singapore Pte., Ltd.
100.0
Samsung C&T Corporation
S&G Biofuel PTE.LTD
50.5
Samsung C&T Corporation
SAMSUNG C&T Mongolia LLC.
70.0
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Samsung C&T Corporation
Investor
Samsung C&T Eng.&Const. Mogolia LLC.
Investee
Ownership
100.0
Samsung C&T Corporation
Samsung C&T Hongkong Ltd.
100.0
Samsung C&T Corporation
GUANGDONG XINGPU STEEL CENTER CO.,LTD
51.6
Samsung C&T Corporation
Samsung C&T Taiwan Co., Ltd.
100.0
Samsung C&T Corporation
Samsung Precision Stainless Steel(pinghu) Co.,Ltd.
55.0
Samsung C&T Corporation
Samsung C&T (Shanghai) Co., Ltd.
100.0
Samsung C&T Corporation
Samsung Nigeria Co., Ltd.
99.9
Samsung C&T Corporation
LOBINAVE - Estaleiro Naval do Lobito, Limitada
40.0
Samsung C&T Corporation
SAMSUNG C&T CORPORATION SAUDI ARABIA
100.0
Samsung C&T Corporation
Samsung C&T Chile Copper SpA
100.0
Samsung C&T Corporation
SCNT Power Kelar Inversones Limitada
99.0
Samsung C&T Corporation
Samsung C&T do BRASIL CONSTRUCTORA LTDA.
100.0
Samsung C&T Corporation
Samsung C&T Corporation Rus LLC
100.0
Samsung C&T Corporation
KSI LLP
25.0
Samsung C&T Corporation
JSC BALKHASH THERMAL POWER PLANT
57.5
Samsung C&T Corporation
Samsung SDI America, Inc.
8.3
Samsung C&T Corporation
Samsung SDI (Malaysia) SDN. BHD.
6.4
Samsung C&T Corporation
Samsung SDI (Hong Kong) Ltd.
2.4
Samsung C&T Corporation
Samsung SDI Brasil Ltda.
0.0
Samsung C&T Corporation
Beijing Samsung Real Estate Co., Ltd
10.0
Samsung C&T America Inc.
Meadowland Distribution
100.0
Samsung C&T America Inc.
SAMSUNG OIL & GAS USA CORP
10.0
Samsung C&T America Inc.
Samsung Green repower, LLC
100.0
Samsung C&T America Inc.
Samsung Solar Construction Inc.
100.0
Samsung C&T America Inc.
QSSC, S.A. de C.V.
20.0
Samsung C&T America Inc.
Samsung C&T Automation Inc.
30.0
Samsung C&T America Inc.
S-print Inc
24.0
Samsung E&C America, INC
Samsung E&C RADIUS, INC.
100.0
Samsung Renewable Energy Inc.
SRE GRW EPC GP Inc.
100.0
Samsung Renewable Energy Inc.
SRE GRW EPC LP
100.0
Samsung Renewable Energy Inc.
SRE SKW EPC GP Inc.
100.0
Samsung Renewable Energy Inc.
SRE SKW EPC LP
100.0
Samsung Renewable Energy Inc.
SRE GRW LP Holdings LP
100.0
Samsung Renewable Energy Inc.
SRE SKW LP Holdings LP
100.0
Samsung Renewable Energy Inc.
SRE WIND PA GP INC.
100.0
Samsung Renewable Energy Inc.
SRE WIND PA LP
100.0
Samsung Renewable Energy Inc.
SRE GRS Holdings GP Inc.
100.0
Samsung Renewable Energy Inc.
SRE GRS Holdings LP
100.0
Samsung Renewable Energy Inc.
SRE K2 EPC GP Inc.
100.0
Samsung Renewable Energy Inc.
SRE K2 EPC LP
100.0
Samsung Renewable Energy Inc.
SRE K2 LP HOLDINGS LP
100.0
Samsung Renewable Energy Inc.
SRE KS HOLDINGS GP INC.
100.0
Samsung Renewable Energy Inc.
SRE KS HOLDINGS LP
100.0
Samsung Renewable Energy Inc.
SOUTHGATE SOLAR GP INC.
100.0
Samsung Renewable Energy Inc.
SOUTHGATE SOLAR LP
100.0
Samsung Renewable Energy Inc.
WINDSOR SOLAR GP INC.
100.0
Samsung Renewable Energy Inc.
WINDSOR SOLAR LP
100.0
Samsung Renewable Energy Inc.
SRE Belle River LP Holdings LP
100.0
Samsung Renewable Energy Inc.
SRE Armow EPC GP Inc.
100.0
Samsung Renewable Energy Inc.
SRE Armow EPC LP
100.0
Samsung Renewable Energy Inc.
SRE Armow LP Holdings LP
100.0
Samsung Renewable Energy Inc.
SRE Wind GP Holding Inc.
100.0
Samsung Renewable Energy Inc.
SP Ontario Wind Development LP Inc.
50.0
Samsung Renewable Energy Inc.
SP Southgate Wind LP
50.0
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Investor
Samsung Renewable Energy Inc.
SRE Dover LP Holding LP
Investee
Ownership
100.0
Samsung Green repower, LLC
SOLAR PROJECTS SOLUTIONS,LLC
66.0
Kingston Solar GP Inc.
Kingston Solar LP Inc.
0.0
K2 Wind Ontario Inc.
K2 Wind Ontario LP
0.0
SP Armow Wind Ontario GP Inc
SP Armow Wind Ontario LP
0.0
Samsung C&T Oil & Gas Parallel
PLL Holdings LLC
83.6
Samsung C&T Oil & Gas Parallel
PLL E&P LLC
90.0
SRE GRW EPC GP Inc.
SRE GRW EPC LP
0.0
SRE SKW EPC GP Inc.
SRE SKW EPC LP
0.0
PLL Holdings LLC
Parallel Petroleum LLC
61.0
SRE GRW LP Holdings LP
Grand Renewable Wind LP Inc.
44.5
SRE SKW LP Holdings LP
South Kent Wind LP Inc.
50.0
SRE WIND PA GP INC.
SRE WIND PA LP
0.0
SRE GRS Holdings GP Inc.
Grand Renewable Solar GP Inc.
50.0
SRE GRS Holdings GP Inc.
SRE GRS Holdings LP
0.0
SRE K2 EPC GP Inc.
SRE K2 EPC LP
0.0
SRE K2 LP HOLDINGS LP
K2 Wind Ontario LP
33.3
SRE KS HOLDINGS GP INC.
Kingston Solar GP Inc.
50.0
SRE KS HOLDINGS GP INC.
SRE KS HOLDINGS LP
0.0
SRE KS HOLDINGS LP
Kingston Solar LP Inc.
25.0
SOUTHGATE SOLAR GP INC.
SOUTHGATE SOLAR LP
0.0
WINDSOR SOLAR GP INC.
WINDSOR SOLAR LP
0.0
SRE Belle River LP Holdings LP
SP Belle River Wind LP
50.0
SP Belle River Wind GP Inc
SP Belle River Wind LP
0.0
SRE Armow EPC GP Inc.
SRE Armow EPC LP
0.0
SRE Armow LP Holdings LP
SP Armow Wind Ontario LP
50.0
SRE Wind GP Holding Inc.
K2 Wind Ontario Inc.
50.0
SRE Wind GP Holding Inc.
SP Armow Wind Ontario GP Inc
50.0
SRE Wind GP Holding Inc.
SP Southgate Wind GP
50.0
SRE Wind GP Holding Inc.
SRE GRW LP Holdings LP
0.0
SRE Wind GP Holding Inc.
SRE SKW LP Holdings LP
0.0
SRE Wind GP Holding Inc.
SRE K2 LP HOLDINGS LP
0.0
SRE Wind GP Holding Inc.
SRE Belle River LP Holdings LP
0.0
SRE Wind GP Holding Inc.
SP Belle River Wind GP Inc
50.0
SRE Wind GP Holding Inc.
SRE Armow LP Holdings LP
0.0
SRE Wind GP Holding Inc.
SP Ontario Wind Development GP Inc.
50.0
SRE Wind GP Holding Inc.
South Kent Wind GP Inc.
50.0
SRE Wind GP Holding Inc.
Grand Renewable Wind GP Inc.
50.0
SRE Dover LP Holding LP
SP Dover Wind LP
50.0
SP Ontario Wind Development GP
SP Ontario Wind Development LP Inc.
0.0
South Kent Wind GP Inc.
South Kent Wind LP Inc.
0.0
Grand Renewable Wind GP Inc.
Grand Renewable Wind LP Inc.
0.0
Samsung C&T Deutchland GmbH
Samsung C&T Italia S.A.R.L
100.0
Samsung C&T Deutchland GmbH
SCNT Investment Atlantic SPRL
0.0
Samsung C&T Deutchland GmbH
POSS-SLPC, s.r.o
20.0
Samsung C&T Deutchland GmbH
Solluce Romania 1 B.V.
20.0
Samsung C&T Deutchland GmbH
Solluce Slovenia 1 B.V.
20.0
Samsung C&T Deutchland GmbH
S.C. Otelinox S.A
94.3
Samsung C&T Deutchland GmbH
KSI LLP
25.0
Samsung C&T U.K. Ltd.
Xiod Distribution
75.0
Samsung C&T U.K. Ltd.
Samsung Nigeria Co., Ltd.
0.1
Samsung C&T France S.A.S
Comptoir Des Produits Inoxydables S.A.S.
12.5
Solluce Romania 1 B.V.
LJG GREEN SOURCE ENERGY ALPHA S.R.L.
78.0
SAM investment Manzanilo.B.V
Terminal KMS de GNL S. de R.L de C.V
37.5
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Investor
ZE Solar 1 D.O.O.
Ownership
70.0
Samsung C&T (KL) Sdn.,Bhd.
SS KUKDONG JASATERA J/V
70.0
Cassava Investment Korea Pte.
PT. Cahaya Borneo Sukses Agrosindo
49.0
Cassava Investment Korea Pte.
PT. Cassava Borneo Sukses Plantation
49.0
Samsung C&T Thailand Co., Ltd
Samsung Development (Thailand) Co., Ltd.
67.0
Cheil Holding Inc.
Samsung Const. Co. Phils.,Inc.
75.0
Samsung C&T Singapore Pte. Ltd.
Samsung Chemtech
48.3
Samsung C&T Singapore Pte. Ltd.
S-print Inc
16.0
Samsung C&T Singapore Pte. Ltd.
Cassava Investment Korea Pte. Ltd.
12.7
Samsung C&T Singapore Pte. Ltd.
PT. INSAM BATUBARA ENERGY
10.0
Samsung C&T Singapore Pte. Ltd.
Malaysia Samsung Steel Center Sdn.Bhd
30.0
Samsung C&T Singapore Pte. Ltd.
S&G Biofuel PTE.LTD
12.6
S&G Biofuel PTE.LTD
PT. Gandaerah Hendana
95.0
S&G Biofuel PTE.LTD
PT. Inecda
95.0
SAMSUNG C&T HONGKONG Ltd.
Samsung C&T Thailand Co., Ltd
13.2
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG (TIANJIN) INTERNATIONAL TRADING CO., LTD
100.0
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG TRADING (SHANGHAI) CO., LTD
100.0
SAMSUNG C&T HONGKONG Ltd.
Karson Industrial Co., Ltd.
100.0
SAMSUNG C&T HONGKONG Ltd.
SAMSUNG TRADING (SHENZHEN) CO., LTD
100.0
SAMSUNG C&T HONGKONG Ltd.
Samsung Precision Stainless Steel(pinghu) Co.,Ltd.
45.0
SAMSUNG C&T HONGKONG Ltd.
Samsung Logistics (China) Ltd.
100.0
SAMSUNG C&T HONGKONG Ltd.
Samsung Corporation (Gaungzhou) Limited.
100.0
Samsung (China) Logistics Ltd.
Samsung Logistics (Tianjin) Ltd
100.0
Samsung (China) Logistics Ltd.
SAMSUNG TRADING (SHENZHEN) CO., LTD
100.0
Samsung C&T Chile Copper SpA
Pampa Camarones S.A.
46.5
S.C. Otelinox S.A
Comptoir Des Produits Inoxydables S.A.S.
87.5
Samsung Electronics
Samsung Japan Corporation
100.0
Samsung Electronics
Samsung R&D Institute Japan Co. Ltd
100.0
Samsung Electronics
Samsung Electronics America Inc.
100.0
Samsung Electronics
Samsung Electronics Canada Inc.
100.0
Samsung Electronics
Samsung Electronics Mexico S.A. De C.V.
63.6
Samsung Electronics
Nvelo.Inc
100.0
Samsung Electronics
Samsung Electronics (UK) Ltd.
100.0
Samsung Electronics
Samsung Electronics(London) Ltd.
100.0
Samsung Electronics
Samsung Electronics Holding GmbH
100.0
Samsung Electronics
Samsung Electronics Iberia, S.A.
100.0
Samsung Electronics
Samsung Electronics France S.A.S
100.0
Samsung Electronics
Samsung Electronics Hungarian RT.
100.0
Samsung Electronics
Samsung Electronics Italia S.P.A.
100.0
Samsung Electronics
Samsung Electronics Europe Logistics B.V.
100.0
Samsung Electronics
Samsung Electronics Benelux B.V.
100.0
Samsung Electronics
Samsung Electronics Overseas B.V.
100.0
Samsung Electronics
Samsung Electronics Polska, SP.Zo.o
100.0
Samsung Electronics
Samsung Electronics Portuguesa S.A.
100.0
Samsung Electronics
Samsung Electronics Nordic Aktiebolag
100.0
Samsung Electronics
Samsung Electronics Austria GmbH
100.0
Samsung Electronics
Samsung Electronics Slovakia s.r.o
55.7
Samsung Electronics
Samsung Electronics Europe Holding Cooperatief U.A.
100.0
Samsung Electronics
Samsung Electronics Display (M) Sdn. Bhd.
75.0
Samsung Electronics
Samsung Electronics (M) Sdn. Bhd.
100.0
Samsung Electronics
Samsung Vina Electronics Co., Ltd.
100.0
Samsung Electronics
Samsung Asia Private Ltd.
100.0
Samsung Electronics
Samsung India Electronics Private Ltd.
100.0
Samsung Electronics
Samsung R&D Institute India-Bangalore Private Limited
100.0
Solluce Slovenia 1 B.V.
Investee
Samsung Electronics 2014 Business Report
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Samsung Electronics
Investor
Samsung Electronics Australia Pty. Ltd.
Investee
Ownership
100.0
Samsung Electronics
PT Samsung Electronics Indonesia
100.0
Samsung Electronics
Thai Samsung Electronics Co., Ltd.
91.8
Samsung Electronics
Samsung Malaysia Electronics(SME) Sdn.Bhd.
100.0
Samsung Electronics
Samsung Electronics Hong Kong Co., Ltd.
100.0
Samsung Electronics
Suzhou Samsung Electronics Co., Ltd.
69.1
Samsung Electronics
Samsung (CHINA) Investment Co., Ltd.
100.0
Samsung Electronics
Samsung Electronics Suzhou Semiconductor Co., Ltd.
100.0
Samsung Electronics
Samsung Electronics (Shandong) Digital Printing Co., Ltd.
87.1
Samsung Electronics
Samsung Electronics Huizhou Co., Ltd.
89.6
Samsung Electronics
Tianjin Samsung Electronics Co., Ltd.
48.2
Samsung Electronics
Samsung Electronics Taiwan Co., Ltd.
100.0
Samsung Electronics
Tianjin Samsung Telecom Technology Co., Ltd.
90.0
Samsung Electronics
Shanghai Samsung Semiconductor Co., Ltd.
100.0
Samsung Electronics
Samsung Electronics Suzhou Computer Co., Ltd.
73.7
Samsung Electronics
Shenzhen Samsung Electronics Telecommunication Co., Ltd.
95.0
Samsung Electronics
Samsung Electronics Shanghai Telecommunication Co., Ltd.
100.0
Samsung Electronics
Samsung Semiconductor (China) R&D Co., Ltd.
100.0
Samsung Electronics
Samsung (China) Semiconductor Co., Ltd.
100.0
Samsung Electronics
Samsung Electronics Hainan Fiberoptics Co., Ltd
100.0
Samsung Electronics
Samsung Gulf Electronics Co., Ltd.
100.0
Samsung Electronics
Samsung Electronics Egypt S.A.E
0.1
Samsung Electronics
Samsung Electronics South Africa(Pty) Ltd.
100.0
Samsung Electronics
Samsung Electronics Latinoamerica (Zona Libre)
100.0
Samsung Electronics
Samsung Electronica da Amazonia Ltda.
87.0
Samsung Electronics
Samsung Electronics Argentina S.A.
98.0
Samsung Electronics
Samsung Electronics Chile Limitada
4.1
Samsung Electronics
Samsung Electronics Rus Company LLC
100.0
Samsung Electronics
Samsung Electronics Rus Kaluga LLC
100.0
Samsung Electronics
Samsung Russia Service Centre LLC
100.0
Samsung Electronics
Samsung SDI Brasil Ltda.
0.1
Samsung Electronics
Tianjin Samsung LED Co., Ltd.
100.0
Samsung Electronics
Tianjin Samsung Opto-Electronics Co., Ltd.
82.0
Samsung BioEpis
SAMSUNG BIOEPIS UK LIMITED
100.0
Samsung Display
Intellectual Keystone Technology LLC
41.9
Samsung Display
Samsung Display Slovakia s.r.o.
100.0
Samsung Display
Samsung Display Bac Ninh Co., Ltd.
100.0
Samsung Display
Samsung Display Suzhou Co., Ltd.
100.0
Samsung Display
Samsung Suzhou LCD Co., Ltd.
60.0
Samsung Display
Samsung Display Dongguan Co., Ltd.
100.0
Samsung Display
Samsung Display Tianjin Co., Ltd.
95.0
Samsung Display
Novaled GmbH
9.9
SEMES
SEMES America, Inc.
100.0
SEMES
SEMES (XIAN) Co., Ltd.
100.0
Samsung Medison
SonoAce Deutschland GmbH
100.0
Samsung Medison
Samsung Medison India Private Ltd.
100.0
Samsung Medison
Samsung Medison Shanghai Medical Instrument Co., Ltd.
100.0
Samsung Electronics America, Inc.
NexusDX, Inc.
100.0
Samsung Electronics America, Inc.
NeuroLogica Corp.
100.0
Samsung Electronics America, Inc.
Samsung Receivables Corporation
40.1
Samsung Electronics America, Inc.
Quietside
100.0
Samsung Electronics America, Inc.
SmartThings
100.0
Samsung Electronics America, Inc.
Samsung Semiconductor, Inc.
100.0
Samsung Electronics America, Inc.
Samsung Information Systems America, Inc.
100.0
Samsung Electronics 2014 Business Report
144 / 170
Investor
Samsung Electronics America, Inc.
Samsung International, Inc.
Investee
Ownership
100.0
Samsung Electronics America, Inc.
Samsung Telecommunications America LLC.
100.0
Samsung Semiconductor, Inc.
Grandis, Inc.
100.0
Samsung Semiconductor, Inc.
Samsung Austin Semiconductor LLC.
100.0
Samsung Electronics Canada Inc
PrinterOn Corporation
100.0
PrinterOn Inc
PrinterOn America Corporation
100.0
PrinterOn Inc
PrinterOn Europe Limited
100.0
Samsung International, Inc.
Samsung Mexicana S.A. de C.V
100.0
Samsung Telecommunications America LLC.
Samsung Receivables Corporation
59.9
Samsung Electronics Mexico S.A
Samsung Electronics Digital Appliance Mexico, SA de CV
100.0
Samsung Electronics (UK) Ltd.
Samsung Semiconductor Europe Limited
100.0
Samsung Electronics Holding GmbH
Samsung Semiconductor Europe GmbH
100.0
Samsung Electronics Holding GmbH
Samsung Electronics GmbH
100.0
Samsung Electronics Hungarian RT.
Samsung Electronics Czech and Slovak s.r.o.
30.0
Samsung Electronics Hungarian RT.
Samsung Electronics Slovakia s.r.o
44.3
Samsung Electronics Benelux B.V.
Samsung Electronics Mexico S.A. De C.V.
36.4
Samsung Electronics Benelux B.V.
SAMSUNG ELECTRONICS BALTICS SIA
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics West Africa
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics East Africa
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Egypt S.A.E
99.9
Samsung Electronics Benelux B.V.
Samsung Electronics Israel Ltd.
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Tunisia S.A.R.L
99.0
Samsung Electronics Benelux B.V.
Samsung Electronics Pakistan(Private) Ltd.
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics South Africa Production
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Turkey
100.0
Samsung Electronics Benelux B.V.
Samsung Semiconductor Israel R&D Center,Ltd.
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Levant Co.,Ltd.
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Morocco SARLAU
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Venezuela, C.A.
100.0
Samsung Electronics Benelux B.V.
Samsung Electronica da Amazonia Ltda.
13.0
Samsung Electronics Benelux B.V.
Samsung Electronics Chile Limitada
95.9
Samsung Electronics Benelux B.V.
Samsung Electronics Peru S.A.C.
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Rus LLC
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Ukraine LLC
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Ukraine Company LLC
100.0
Samsung Electronics Benelux B.V.
Samsung R&D Institute Rus LLC
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Kazakhstan LLP
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics KZ and Central Asia LLP
100.0
Samsung Electronics Benelux B.V.
Samsung Electronics Caucasus Co., Ltd
100.0
Samsung Electronics Austria GmbH
Samsung Electronics Switzerland GmbH
100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Czech and Slovak s.r.o.
70.0
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Romania LLC
100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Porta Nuova Varesine Building 2 S.r.l.
49.0
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Poland Manufacturing SP.Zo.o
100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Electronics Greece S.A.
100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Nanoradio Design Center
100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Denmark Research Center ApS
100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung France Research Center SARL
100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Samsung Cambridge Solution Centre Limited
100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Novaled GmbH
40.0
Samsung Nanoradio Design Center
Nanoradio Hellas AE
100.0
Samsung Electronics Display (M) Sdn. Bhd.
Tianjin Samsung Electronics Co., Ltd.
2.2
Samsung Asia Private Ltd.
Samsung Electronics Japan Co., Ltd.
100.0
Samsung Asia Private Ltd.
Samsung Electronics Display (M) Sdn. Bhd.
25.0
Samsung Electronics 2014 Business Report
145 / 170
Investor
Investee
Samsung Electronics New Zealand Limited
Ownership
100.0
Samsung Asia Private Ltd.
Samsung Electronics Philippines Corporation
100.0
Samsung Asia Private Ltd.
Samsung R&D Institute BanglaDesh
100.0
Samsung Asia Private Ltd.
Samsung Electronics Vietnam Co., Ltd.
100.0
Samsung Asia Private Ltd.
Samsung Telecommunications Malaysia Sbn. Bhd.
100.0
Samsung Asia Private Ltd.
Samsung Electronics Vietnam THAINGUYEN Co., Ltd.
100.0
Samsung Asia Private Ltd.
Samsung SDI (Malaysia) SDN. BHD.
25.0
Samsung Asia Private Ltd.
Samsung Electro-Mechanics(Thailand) Co., Ltd.
25.0
Samsung Asia Private Ltd.
iMarket Asia Co., Ltd.
11.4
PT Samsung Electronics Indonesia
PT Samsung Telecommunications Indonesia
99.0
Samsung Electronics Hong Kong Co., Ltd.
iMarket Asia Co., Ltd.
11.3
Suzhou Samsung Electronics Co., Ltd.
Samsung Suzhou Electronics Export Co., Ltd.
100.0
Samsung (CHINA) Investment Co., Ltd.
Suzhou Samsung Electronics Co., Ltd.
19.2
Samsung (CHINA) Investment Co., Ltd.
Samsung Mobile R&D Center China-Guangzhou
100.0
Samsung (CHINA) Investment Co., Ltd.
Samsung Mobile R&D Center China - Tianjin
100.0
Samsung (CHINA) Investment Co., Ltd.
Samsung Network R&D Center China-Shenzhen
100.0
Samsung (CHINA) Investment Co., Ltd.
Samsung R&D Institute China-Xian
100.0
Samsung (CHINA) Investment Co., Ltd.
Samsung Electronics (Shandong) Digital Printing Co., Ltd.
12.9
Samsung (CHINA) Investment Co., Ltd.
Samsung Electronics Huizhou Co., Ltd.
10.3
Samsung (CHINA) Investment Co., Ltd.
Tianjin Samsung Electronics Co., Ltd.
40.8
Samsung (CHINA) Investment Co., Ltd.
Beijing Samsung Telecom R&D Center
100.0
Samsung (CHINA) Investment Co., Ltd.
Samsung Electronics Suzhou Computer Co., Ltd.
26.3
Samsung (CHINA) Investment Co., Ltd.
Samsung R&D Institute China - Nanjing
100.0
Samsung (CHINA) Investment Co., Ltd.
Samsung Electronics (Beijing) Service Company Limited
100.0
Samsung (CHINA) Investment Co., Ltd.
Tianjin Samsung Opto-Electronics Co., Ltd.
8.0
Samsung Gulf Electronics Co., Ltd.
Samsung Electronics Egypt S.A.E
0.1
Samsung Electronics Morocco SARLAU
Samsung Electronics Tunisia S.A.R.L
1.0
Samsung Electronics Latinoamerica (Zona Libre)
Samsung Electronics Latinoamerica Miami, Inc.
100.0
Samsung Electronics Latinoamerica (Zona Libre)
Samsung Electronica Colombia S.A.
100.0
Samsung Electronics Latinoamerica (Zona Libre)
Samsung Electronics Panama. S.A
100.0
Samsung Electronica da Amazonia Ltda.
Samsung Electronics Argentina S.A.
2.0
Samsung Electronics KZ and Cen
Samsung Electronics Caucasus Co., Ltd
0.0
Samsung SDI
Intellectual Keystone Technology LLC
41.0
Samsung SDI
Samsung SDI Japan co.Ltd
100.0
Samsung SDI
Samsung SDI America, Inc.
91.7
Samsung SDI
Samsung SDI Hungary Rt.
100.0
Samsung SDI
Samsung SDI Europe GmbH.
100.0
Samsung SDI
Samsung SDI Battery Systems GmbH
100.0
Samsung SDI
Samsung SDI (Malaysia) SDN. BHD.
68.6
Samsung SDI
Samsung SDI Vietnam Co., LTD.
100.0
Samsung SDI
Samsung SDI Energy Malaysia Sdn. Bhd.
100.0
Samsung SDI
Samsung SDI (Hong Kong) Ltd.
97.6
Samsung SDI
Samsung SDI China Co,.Ltd
100.0
Samsung SDI
Samsung SDI-ARN(Xian) Power Battery Co., Ltd
50.0
Samsung SDI
Samsung SDI Brasil Ltda.
45.0
Samsung SDI
SAMSUNG CHEIL INDUSTRIES JAPAN CO., LTD
100.0
Samsung SDI
Samsung Chemical U.S.A Inc.
100.0
Samsung SDI
Starex Compounding America Inc.
100.0
Samsung SDI
Samsung Chemical Europe Gmbh
100.0
Samsung SDI
Samsung Chemical Hungary LLC
100.0
Samsung SDI
Novaled GmbH
50.1
Samsung SDI
Samsung Chemical (Thailand) CO., Ltd
59.4
Samsung SDI
Samsung Chemical Material Trading(Shanghai)Co.Ltd.
100.0
Samsung SDI
TIANJIN SAMSUNG ENGINEERING PLASTICS CO.,LTD
100.0
Samsung Asia Private Ltd.
Samsung Electronics 2014 Business Report
146 / 170
Investor
Investee
DONGGUAN SAMSUNG ENGINEERING PLASTICS CO., Ltd.
Ownership
100.0
Samsung SDI
SAMSUNG CHEMICAL ELECTRONIC MATERIALS(SUZHOU)CO.,Ltd
100.0
Samsung SDI
iMarket Asia Co., Ltd.
8.7
Samsung SDI America, Inc.
Samsung SDI Mexico S.A. de C.V.
100.0
Samsung SDI America, Inc.
Samsung SDI Brasil Ltda.
40.4
Samsung SDI (Hong Kong) Ltd.
Shenzhen Samsung SDI Co., Ltd.
80.0
Samsung SDI (Hong Kong) Ltd.
Tianjin Samsung SDI Co., Ltd.
80.0
Samsung SDI (Hong Kong) Ltd.
Shanghai Samsung Electronic Devices Co., Ltd
60.3
Samsung SDI (Hong Kong) Ltd.
Samsung SDI Brasil Ltda.
14.5
Samsung Electro-Mechanics
Samsung Electro-Machanics Japan Co., Ltd.
100.0
Samsung Electro-Mechanics
Samsung Electro-Mechanics Japan Advanced Technology Co.,Ltd
100.0
Samsung Electro-Mechanics
Samsung Electro-Mechanics America, Inc.
100.0
Samsung Electro-Mechanics
Samsung Electro-Mechanics Gmbh
100.0
Samsung Electro-Mechanics
Samsung Hungary Electro-Mechanics Private LLC
100.0
Samsung Electro-Mechanics
Samsung Electro-Mechanics(Thailand) Co., Ltd.
75.0
Samsung Electro-Mechanics
Samsung Electro-Mechanics Phils., Corp.
100.0
Samsung Electro-Mechanics
Calamba Premier Realty Corporation.
39.8
Samsung Electro-Mechanics
Samsung Electro-Mechanics Pte., Ltd
100.0
Samsung Electro-Mechanics
Samsung Electro Mechanics Vietnam Co., Ltd
100.0
Samsung Electro-Mechanics
Dongguan Samsung Electro-Mechanics Co., Ltd
100.0
Samsung Electro-Mechanics
Tianjin Samsung Electro-Mechanics Co., Ltd
81.8
Samsung Electro-Mechanics
Samsung Electro-Mechanics(HK) Co., Ltd.
100.0
Samsung Electro-Mechanics
SAMSUNG HIGH-TECH ELECTRO-MECHANICS(TIANJIN) CO.,
95.0
Samsung Electro-Mechanics
Samsung Electro-Mechanics(Shenzhen) Co., LTd
100.0
Samsung Electro-Mechanics
Kunshan Samsung Electro-Mechanics Co., Ltd
100.0
Samsung Electro-Mechanics
iMarket Asia Co., Ltd.
8.7
Samsung Electro-Mechanics Japan Advanced Technology Co.,Ltd
Samsung Electro-Mechanics Nakhonratchasima Co.,Ltd
100.0
Samsung Electro-Mechanics America, Inc.
Samsung Electro-Mechanics do Brasil Intermediacoes de Negocios Ltda
100.0
Calamba Premier Realty Corpora
BATINO REALTY CORPORATION
100.0
Samsung Fire & Marine Insurance
Samsung Fire & Marine Management Corporation
100.0
Samsung Fire & Marine Insurance
Samsung Fire & Marine Insurance Company of Europe
100.0
Samsung Fire & Marine Insurance
P.T. Asuransi Samsung Tugu
70.0
Samsung Fire & Marine Insurance
Samsung Vina Insurance Co., Ltd.
75.0
Samsung Fire & Marine Insurance
Samsung Reinsurance Pte., Ltd.
100.0
Samsung Fire & Marine Insurance
Samsung Property and Casualty Insurance Co(China) Ltd.
100.0
Samsung Fire & Marine Insurance
SAMSUNG FIRE & MARINE CONSULTORIA EM SEGUROS LTDA.
100.0
Samsung General Chemicals
Samsung General Chemicals (Shanghai) Co., Ltd.
100.0
Samsung Total Petrochemicals
Dongguan Samsung Total Engineering Plastic co.,ltd.
100.0
Samsung Total Petrochemicals
Samsung Total Petrochemicals Trading (Shanghai) Co., Ltd.
100.0
Samsung Heavy Industries Co.,Ltd.
Camellia Consulting Corporation
100.0
Samsung Heavy Industries Co.,Ltd.
Samsung Wind Energy,Inc
100.0
Samsung Heavy Industries Co.,Ltd.
Offshore 1 consulting Corporation
51.0
Samsung Heavy Industries Co.,Ltd.
Samsung heavy Industries Hamburg GmbH
100.0
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries India Pvt.Ltd.
100.0
Samsung Heavy Industries Co.,Ltd.
SAMSUNG HEAVY INDUSTRIES (M) SDN.BHD
100.0
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries(Ningbo) Co., Ltd
100.0
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries(Rongcheng) Co., Ltd
100.0
Samsung Heavy Industries Co.,Ltd.
Rongcheng Gaya Heavy Industries Co., Ltd
100.0
Samsung Heavy Industries Co.,Ltd.
Samsung Heavy Industries Trade(Shanghai) Co., Ltd
100.0
Samsung Heavy Industries Co.,Ltd.
SAMSUNG HEAVY INDUSTRIES NIGERIA LIMITED
100.0
Samsung Heavy Industries Co.,Ltd.
SANGSUNG HEAVY INDUSTRIES BRAZIL ASSESSORIA EM PRO
100.0
Samsung Heavy Industries Co.,Ltd.
SHI BRAZIL CONSTRUCTION
100.0
Offshore 1 consulting Corporat
AMEC Samsung Oil&Gas, LLC
51.0
SAMSUNG HEAVY INDUSTRIES NIGERIA Co., Ltd
SHI - MCI FZE
70.0
Samsung SDI
Samsung Electronics 2014 Business Report
147 / 170
Investor
Porta Nuova Varesine Building 2 S.r.l.
Ownership
51.0
Samsung Life Insurance
SAMSUNG LIFE INVESTMENT (AMERICA) LTD.
100.0
Samsung Life Insurance
Samsung Life Investment (U.K.) Limited.
100.0
Samsung Life Insurance
30 GRESHAM STREET(JERSEY) LIMITED
100.0
Samsung Life Insurance
THAI SAMSUNG LIFE INSURANCE CO., LTD.
35.8
Samsung Life Insurance
Samsung Air China Life Insurance
50.0
Samsung Life Insurance
Beijing Samsung Real Estate Co., Ltd
90.0
Samsung Asset Management
Samsung Asset Management(Hong Kong) Limited.
100.0
30 GRESHAM STREET(JERSEY) LIMI
30 GRESHAM STREET (SINGAPORE) LIMITED
100.0
Starex Compounding America Inc.
Stacom Mexico, S.A. de C.V.
100.0
SAMSUNG CHEMICAL(THAILAND) CO.
Samsung Engineering (Thailand) Co., Ltd.
19.0
Samsung Techwin
Techwin Engineering Center
100.0
Samsung Techwin
Samsung Opto-Electronics America, Inc.
100.0
Samsung Techwin
SAMSUNG TECHWIN EUROPE, Ltd.
100.0
Samsung Techwin
Tianjin Samsung Techwin Opto-Electronics
95.0
Samsung Techwin
Shanghai Samsung Techwin
100.0
Samsung Techwin
SAMSUNG TECHWIN DO BRASIL EQUIPAMEN TOS DE SEGURANCA Ltda.
100.0
Cheil Industries Inc.
Cheil America Inc.
100.0
Cheil Industries Inc.
Samsung Fashion S.r.L
100.0
Cheil Industries Inc.
COLOMBO VIA DELLA SPIGA S.R.L
100.0
Cheil Industries Inc.
Samsung Fashion Trading (Shanghai) Co. ,Ltd
100.0
Cheil Industries Inc.
CHEIL INDUSTRIES INC. VIETNAM COMPANY LIMITED
100.0
Cheil Industries Inc.
iMarket Asia Co., Ltd.
19.3
Samsung Welstory
Shanghai Ever-Hongjun Business Mgt Service Co.,LTD
51.0
Credu
LANGUAGE TESTING INTERNATIONAL, INC
82.4
PengTai Greater China Co., Ltd
PengTai China Co., Ltd.
100.0
PengTai Greater China Co., Ltd
PengTai Taiwan Co., Ltd.
100.0
PengTai Greater China Co., Ltd
PengTai Interactive Advertising Co.,Ltd.
100.0
PengTai China Co., Ltd.
PengTai e-Commerce Co., Ltd.
100.0
PengTai China Co., Ltd.
PengTai Marketing Service Co., Ltd.
100.0
iMarket Asia Co., Ltd.
iMarket China Co., Ltd.
80.0
Samsung Fine Chemicals
Samsung Fine Chemicals Europe GmbH
100.0
Samsung Fine Chemicals
Samsung Fine Chemicals Trading (Shanghai) Co., Ltd
100.0
Samsung Securities
Samsung Securities (America), Inc.
100.0
Samsung Securities
Samsung Securities (Europe) Limited.
100.0
Samsung Securities
Samsung Securities (Asia) Limited.
100.0
Samsung SDS
iMarket Asia Co., Ltd.
40.6
Samsung SDS
Samsung SDS America, Inc.
100.0
Samsung SDS
Samsung SDS Europe Ltd.
100.0
Samsung SDS
Samsung SDS Global SCL Netherlands Cooperatief U.A
100.0
Samsung SDS
Samsung SDS Asia Pacific Pte. Ltd.
100.0
Samsung SDS
Samsung SDS India PVt. Ltd.
100.0
Samsung SDS
Samsung SDS China, Ltd.
100.0
Samsung SDS
SAMSUNG SDS LATIN AMERICA SOLUCOES EM TECNOLOGIA Ltda
99.7
Miracom
MIRACOM INC ASIA PACIFIC LTD
100.0
Samsung Life Insurance
Investee
Samsung SDS America,Inc.
SAMSUNG SDS LATIN AMERICA SOLUCOES EM TECNOLOGIA Ltda
0.3
Samsung SDS America,Inc.
Samsung SDS Mexico, S.A. DE C.V.
99.0
Samsung SDS America,Inc.
Samsung SDS Global SCL Panama S. A.
100.0
Samsung SDS America,Inc.
Samsung SDS Global SCL Chile Limitada
100.0
Samsung SDS Europe Ltd.
Samsung SDS Global SCL Hungary Kft.
100.0
Samsung SDS Europe Ltd.
Samsung SDS Global SCL Slovakia, s.r.o.
100.0
Samsung SDS Europe Ltd.
SAMSUNG SDS GSCL POLAND
100.0
Samsung SDS Europe Ltd.
Samsung SDS Global SCL Netherlands Cooperatief U.A
0.0
Samsung SDS Europe Ltd.
SAMSUNG SDS Global SCL Egypt Co. Ltd.
100.0
Samsung Electronics 2014 Business Report
148 / 170
Samsung SDS Europe Ltd.
Investor
Samsung SDS global SCL South Africa
Investee
Ownership
100.0
Samsung SDS Europe Ltd.
Samsung SDS Global SCL Transport and Logistics Joint Stock Company
100.0
Samsung SDS Europe Ltd.
Samsung SDS Global SCL Rus Limited liability company
100.0
Samsung SDS Global SCL Netherland Cooperatief U.A
SAMSUNG SDS GSCL POLAND
0.0
Samsung SDS Global SCL Netherland Cooperatief U.A
Samsung SDS Global SCL Rus LLC
0.0
Samsung SDS Asia Pacific Pte.
Samsung SDS GSCL Vietnam Co Ltd
51.0
Samsung SDS Asia Pacific Pte.
PT. Samsung SDS Global SCL Indonesia
100.0
Samsung SDS Asia Pacific Pte.
Samsung SDS Global SCL Philippines Co., Ltd.
100.0
Samsung SDS Asia Pacific Pte.
Samsung SDS Global SCL Thailand Co.,Ltd
100.0
Samsung SDS Asia Pacific Pte.
Samsung SDS Global SCL Malaysia SDN.BHD.
100.0
Samsung SDS Asia Pacific Pte.
SAMSUNG SDS GLOBAL SCL AUSTRALIA PTY., LTD.
100.0
Samsung SDS Asia Pacific Pte.
Samsung SDS Global SCL Hong Kong Ltd
100.0
Samsung SDS China, Ltd.
Samsung SDS Global Development Center Xi'an
100.0
Samsung SDS China, Ltd.
Samsung SDS Global SCL Beijing Co., Ltd
100.0
MIRACOM INC ASIA PACIFIC LTD
MIRACOM INC CHINA LTD
100.0
Samsung Engineering
Offshore 1 consulting Corporation
49.0
Samsung Engineering
Samsung Engineering America Inc.
100.0
Samsung Engineering
Samsung Engineering Magyarorszag Epitoipari K. F.
100.0
Samsung Engineering
Samsung Engineering (Malaysia) SDN. BHD.
100.0
Samsung Engineering
PT Samsung Engineering Indonesia Co., Ltd.
100.0
Samsung Engineering
Samsung Engineering (Thailand) Co., Ltd.
81.0
Samsung Engineering
Samsung Engineering India Private Ltd.
100.0
Samsung Engineering
Samsung Engineering Vietnam Co
100.0
Samsung Engineering
Samsung Engineering Construction(Shanghai) Co., Ltd
100.0
Samsung Engineering
Samsung Saudi Arabia Company Limited.
95.0
Samsung Engineering
Muharraq Wastewater Services Company W.L.L.
64.8
Samsung Engineering
Muharraq STP Company B.S.C.
4.6
Samsung Engineering
Muharraq Holding Company 1 Ltd.
45.0
Samsung Engineering
Samsung Ingenieria Minatitlan, S.A. De C.V.
99.9
Samsung Engineering
Samsung Engineering Trinidad Co., Ltd.
100.0
Samsung Engineering
Samsung Ingenieria Manzanillo, S.A. De C.V.
99.9
Samsung Engineering
Grupo Samsung Ingenieria Mexico, S.A. De C.V.
100.0
Samsung Engineering
Samsung Ingenieria Energia S.A. De C.V.
100.0
Samsung Engineering
Samsung Engineering America Do Sul Projecto E Consultoria Ltda.
100.0
Samsung Engineering
Samsung Engineering Bolivia S.A
99.9
Samsung Engineering
Samsung Ingenieria DUBA S.A. de C.V.
100.0
Samsung Engineering
Samsung Engineering Kazakhstan LLP
100.0
Samsung Engineering America Inc
SEA Construction, LLC
100.0
Samsung Engineering (Malaysia)
Muharraq Wastewater Services Company W.L.L.
0.3
Samsung Engineering (Thailand)
Samsung Chemical (Thailand) CO., Ltd
40.6
Samsung Engineering India Private Ltd.
Samsung Saudi Arabia Company Limited.
5.0
Samsung Saudi Arabia Company
Samsung EPC Company Ltd.
75.0
Muharraq Holding Company 1 Ltd
Muharraq Holding Company 2 Ltd.
100.0
Muharraq Holding Company 2 Ltd
Muharraq STP Company B.S.C.
79.7
S1 Corporation
SOCM LLC
100.0
S1 Corporation
Samsung Beijing Security Systems
100.0
Cheil Worldwide
Cheil USA Inc.
100.0
Cheil Worldwide
Cheil Central America Inc.
100.0
Cheil Worldwide
Cheil Europe Ltd.
100.0
Cheil Worldwide
Cheil Germany GmbH
100.0
Cheil Worldwide
Cheil France SAS
100.0
Cheil Worldwide
Cheil Nordic AB
100.0
Cheil Worldwide
Cheil India Pvt. Ltd.
100.0
Cheil Worldwide
Cheil (Thailand) Ltd.
100.0
Samsung Electronics 2014 Business Report
149 / 170
Investor
Cheil Singapore Pte. Ltd.
Ownership
100.0
Cheil Worldwide
Cheil Vietnam Co. Ltd.
90.0
Cheil Worldwide
Cheil Integrated Marketing Philippines, Inc.
100.0
Cheil Worldwide
Cheil Malaysia SDN BHD
100.0
Cheil Worldwide
Cheil China
100.0
Cheil Worldwide
Cheil Hong Kong Ltd.
100.0
Cheil Worldwide
Bravo Asia Limited
100.0
Cheil Worldwide
Bravo Asia-Shanghai
100.0
Cheil Worldwide
Cheil MEA FZ-LLC
100.0
Cheil Worldwide
Cheil South Africa Pty., Ltd.
100.0
Cheil Worldwide
CHEIL KENYA LIMITED
99.0
Cheil Worldwide
Cheil Communications Nigeria Ltd.
99.0
Cheil Worldwide
Cheil Jordan
100.0
Cheil Worldwide
Cheil Brazil Communications Ltda.
100.0
Cheil Worldwide
Cheil Mexico Inc. SA de CV
98.0
Cheil Worldwide
Cheil Rus LLC
100.0
Cheil Worldwide
Cheil Ukraine LLC
100.0
Cheil Worldwide
Cheil Kazakhstan LLC
100.0
Hotel Shilla
Samsung Hospitality America
100.0
Hotel Shilla
New Jersey Int'l M.C.Inc.
100.0
Hotel Shilla
SAMSUNG HOSPITALITY U.K. Limited
100.0
Hotel Shilla
Shilla Travel Retail Pte.Ltd
100.0
Hotel Shilla
SHILLA LIMITED Macao
100.0
Hotel Shilla
Samsung Shilla Business Service Beijing Co., Ltd.
100.0
Hotel Shilla
SHILLA LIMITED Hong Kong
100.0
SVIC #22
RT SV CO-INVEST, LP
99.9
Cheil USA Inc.
The Barbarian Group LLC
100.0
Cheil USA Inc.
McKinney Ventures LLC
100.0
Cheil USA Inc.
Cheil India Pvt. Ltd.
0.0
Cheil USA Inc.
Cheil Mexico Inc. SA de CV
2.0
Samsung Hospitality America
Samsung Hospitality Europe GmbH
100.0
Cheil Europe Ltd.
Beattie McGuinness Bungay Limited.
75.0
Cheil Europe Ltd.
Cheil Italia S.r.l
100.0
Cheil Europe Ltd.
CHEIL SPAIN S.L
100.0
Cheil Europe Ltd.
CHEIL BENELUX B.V.
100.0
Cheil Germany GmbH
CHEIL AUSTRIA GMBH
100.0
Cheil Singapore Pte. Ltd.
PengTai Greater China Co., Ltd.
95.0
Cheil Singapore Pte. Ltd.
PT. CHEIL WORLDWIDE INDONESIA
100.0
Cheil Hong Kong Ltd.
PengTai Greater China Co., Ltd.
3.1
Cheil MEA FZ-LLC
One Agency FZ LLC
100.0
Cheil MEA FZ-LLC
One Agency Istanbul Advertisement, Communication & Production LLC
0.0
Cheil South Africa Pty., Ltd.
CHEIL KENYA LIMITED
1.0
Cheil Worldwide
Investee
Cheil South Africa Pty., Ltd.
Cheil Communications Nigeria Ltd.
1.0
One Agency FZ LLC
One Agency Istanbul Advertisement, Communication & Production LLC
100.0
One Agency FZ LLC
One Agency Interior Design LLC
100.0
One Agency FZ LLC
One Agency Printing LLC
100.0
One Agency FZ LLC
One Agency South Africa Pty., Ltd.
100.0
One Agency FZ LLC
One Agency Russia LLC
99.9
Cheil Rus LLC
One Agency Russia LLC
0.1
※ (% of Ownership; As of December 31, 2014; Based on Common shares)
Samsung Electronics 2014 Business Report
150 / 170
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 Company status
Samsung Electronics 2014 Business Report
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D. Equity Investments in other corporations
(1) The total book value of equity investments in other corporations as of December 31, 2014 is KRW 46,311 billion
[As of December 31, 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 Business Report
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Beginning Balance
Account
Dom
estic*
Name of
Company
Acquisition
Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
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
1
69,454
0
0
99.00
150,634
61,384
-11,804
Unlisted
SVIC #22
2011.11
Business
19,800
0
99.00
102,633
1
53,163
0
0
99.00
155,796
93,554
-4,497
Unlisted
SVIC #26
2014.11
Business
19,800
0
0.00
0
0
19,800
0
0
99.00
19,800
0
0
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
-736,229
40,676
17.61
811,479
17,427,147
632,205
Listed
Samsung Fine
Chemicals
1995.05
Management
1,346
2,165
8.39
96,449
0
0
-25,654
2,165
8.39
70,795
1,900,118
3,340
Listed
Hotel Shilla
1979.12
Management
252
2,005
5.11
133,314
0
0
49,917
2,005
5.11
183,231
1,712,071
10,810
Listed
Cheil Worldwide
1988.09
Management
185
2,999
2.61
82,465
11,500
221,021
-54,108
14,499
12.60
249,378
1,704,531
102,269
Listed
A-Tech Solution
2009.11
Management
26,348
1,592
15.92
9,568
0
0
-1,990
1,592
15.92
7,578
181,148
-1,340
※ Domestic account noted here reflects approved for sales securities
Samsung Electronics 2014 Business Report
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Beginning Balance
Ending Balance
Current Financial
Stats
Ownership
(%)
Book Value
Total
Asset
Name of
Company
Acquisition
Date
Objective
Listed
iMarket Korea
2000.12
Management
1,900
647
1.80
16,668
0
0
1,716
647
1.80
18,384
791,733
38,557
Listed
KT Skylife
2001.12
Management
3,344
240
0.50
7,092
0
0
-2,688
240
0.50
4,404
684,444
72,724
Listed
Samsung SDI
1977.01
Management
304
9,283
20.38
874,079
4,180
1,306,874
-619,283
13,463
19.58
1,561,670
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
-28,859
3,017
5.29
100,051
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
Account
Unlisted
Unlisted
Unlisted
Dom
estic*
Increase/Decrease
Unlisted
Unlisted
Unlisted
Samsung
Petrochemical
Samsung
General
Chemicals
Kihyup
Technology
Banking
Pusan Newport
The Korea
Economic Daily
Brooks
Automation Asia
Acquisition
Cost
Ownership
(%)
Qty
Book
Value
Acquisition/
Disposal
Qty
Amount
Valuation
Qty
Net
Income
(Loss)
Unlisted
Samsung
Venture
Investment
1999.11
Management
4,900
980
16.33
7,021
0
0
-435
980
16.33
6,586
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 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
Unlisted
Dome
stic*
Increase/Decrease
Heehoon Design &
Global
Daewoo
Development
Daewoo Songdo
Development
Unlisted
Zyle 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
0.01
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
Unlisted
SamGong
Development
2014.10
debt-equity
swap
0
0
0
0
0
0
0
0
0.09
0
181,532
628
※ Domestic account noted here reflects approved for sales securities
Samsung Electronics 2014 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
Total
Asset
Book
Value
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
-380
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
1,161
0
0
7.46
2,848
23,610
1,871
Unlisted
Taewon Electric
2012.04
Management
16,544
9
15.00
17,072
36
0
22
45
15.00
17,094
82,347
5,386
Unlisted
Pantech
2013.06
Business
53,000
53,000
10.03
53,053
0
0
-53,053
53,000
10.03
0
714,097
-619,909
Unlisted
KTCNP-GC
2013.12
Business
960
0
3.00
960
0
-42
0
0
3.56
918
25,578
-1,591
Listed
Wonik IPS
2013.12
Business
31,625
3,610
4.48
30,975
0
0
19,386
3,610
4.48
50,361
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 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 Business Report
157 / 170
Beginning Balance
Account
Name of
Company
Acquisitio
n Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Increase/Decrease
Acquisition/Disposal
Book
Value
Qty
Amount
Current Financial
Stats
Ending Balance
Valuation
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
30,304
43,592
0
530,589
100.00
904,308
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
65,344
0
0
100.00
1,369,992
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 Business Report
158 / 170
Beginning Balance
Account
Name of
Company
Acquisitio
n Date
Objective
Acquisition
Cost
Ownership
(%)
Qty
Increase/Decrease
Book
Value
Acquisition/Disposal
Qty
Amount
Ending Balance
Valuation
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
2,499
49.00
4,474
0
0
0
2,499
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
741,378
100.00
870,623
0
0
0
741,378
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*
※ International account noted here reflects approved for sales securities
Samsung Electronics 2014 Business Report
159 / 170
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
Net
Income
(Loss)
Total
Asset
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
-31,219
0
100.00
53,869
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
40,260
-51,397
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 Business Report
160 / 170
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
Net
Income
(Loss)
Total
Asset
Book Value
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
11,958
2,426
5.84
49,511
-
-
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
19.95
4,832
799
-738
Listed
Rambus
2010.01
Business
185,363
4,788
4.34
47,851
0
0
10,517
4,788
4.19
58,368
752,829
-36,931
Listed
SEAGATE
2011.12
Business
788,454
12,539
3.80
743,161
0
0
173,436
12,539
3.80
916,597
9,754,138
2,011,378
54,211 2,387,172
-1,337,965
Total
18,975,679
45,261,470
46,310,677
* International account noted here reflects approved for sales securities
* Based on separate financial statements
* Ownership is calculated based on common share
Samsung Electronics 2014 Business Report
161 / 170
X. Related Party Transactions
1. Credit Offerings for Affiliates and Subsidiaries
A. Details on Debt Guarantee (as at December 31, 2014)
- Domestic:
- Overseas:
N/A
(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
1,840,000
1,000,000
2,425,000
SECA
Subsidiary
Nova Scotia
2015-10-10
0
0
0
0
15,000
SEM
Subsidiary
Santander, etc.
2015-12-16
314,620
33,660
0
348,280
676,000
SAMCOL
Subsidiary
Citibank, etc.
2015-12-16
34,050
33,483
0
67,533
126,000
SEDA
Subsidiary
HSBC, etc.
2015-12-17
257,366
0
257,366
0
909,000
SECH
Subsidiary
Citibank, etc.
2015-12-16
49,400
4,932
0
54,332
178,000
SEPR
Subsidiary
BBVA, etc.
2015-12-16
63,688
0
970
62,718
180,000
SELA
Subsidiary
Citibank
2015-12-16
0
0
0
0
30,000
SEEH
Subsidiary
HSBC, etc.
2015-12-16
0
0
0
0
897,000
SSA
Subsidiary
Citibank, etc.
2015-12-16
64,729
96,366
0
161,095
335,000
SEMRC
Subsidiary
SocGen, etc.
2015-12-16
22,157
0
16,333
5,824
110,000
SETK
Subsidiary
BTMU, etc.
2015-12-16
150,784
0
64,907
85,877
420,000
SERK
Subsidiary
BNP, etc.
2015-12-16
0
0
0
0
370,000
SEI
Subsidiary
Intesa
2014-10-31
550
0
550
0
0
SECE
Subsidiary
Citibank, etc.
2015-12-16
10,400
0
10,400
0
105,000
SEUC
Subsidiary
Credit Agricole, etc.
2015-12-16
16,920
0
16,920
0
175,000
SELV
Subsidiary
Citibank
2015-12-16
0
0
0
0
10,000
SAPL
Subsidiary
BOA, etc.
2015-12-16
0
0
0
0
505,621
SEV
Subsidiary
SCB
2015-11-08
0
0
0
0
15,000
SAVINA
Subsidiary
SCB, etc.
2015-11-08
0
0
0
0
30,000
SEEG
Subsidiary
HSBC
2015-06-13
3,000
0
3,000
0
50,000
SEPCO
Subsidiary
BOA
2015-11-08
54,225
0
44,846
9,379
9,379
SET
Subsidiary
SCB
2015-11-08
0
0
0
0
30,000
SEIN
Subsidiary
BNP, etc.
2015-11-08
16,400
0
16,400
0
140,000
SCIC
Subsidiary
HSBC, etc.
2015-12-16
0
0
0
0
200,000
SJC
Subsidiary
Mizuho Bank, etc.
2015-12-16
285,600
0
73,718
211,882
891,397
SRJ
Subsidiary
SMBC
2016-02-28
26,085
0
5,157
20,928
20,928
SEDAM
Subsidiary
Citibank, etc.
2015-12-16
54,315
62,412
0
116,727
441,000
SME
Subsidiary
SCB
2015-11-08
0
0
0
0
120,000
SAMEX
Subsidiary
Citibank
2015-12-16
0
0
0
0
5,000
SEASA
Subsidiary
Citibank
2015-12-16
0
0
0
0
1,000
SSAP
Subsidiary
SCB
2015-11-08
Total
0
7,779
0
7,779
20,000
4,264,289
238,632
2,350,567
2,152,354
9,440,325
Samsung Electronics 2014 Business Report
162 / 170
Other than the guarantee obligations presented above, the Company provides payment guarantees of KRW 18,360 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
Profit &
Loss
Balance
Securities
Type
Purchase
Sale
Total
Beneficiary
certificate
1,450,000
1,700,000
3,150,000
24,131
1,016,878
1,450,000
1,700,000
3,150,000
24,131
1,016,878
Note
Asset management
※ Profit and loss of securities is based on gain from disposition.
Samsung Electronics 2014 Business Report
163 / 170
2. Acquisitions and disposals of Assets with Affiliates and Subsidiaries
During 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
Cheil Industries
Affiliate
Cheil Wordwide
Affiliate
Samsung Card
Affiliate
SAS
Subsidiary
SCS
Subsidiary
Samsung Techwin
Affiliate
Samsung Biologics
Affiliate
SESS
Transaction Date
Date based on
Asset
Amount
2014.12.18
Date of sale/purchase
Stock, etc.
670,081
2014.12.31
Date of purchase
Stock, etc.
374,046
2014.12.01
Date of sale/purchase
Stock, etc.
223,115
2014.10.23
Date of purchase
Stock, etc.
170,739
Asset sale/purchase
2014.11.23
Date of sale/purchase
Machinery, etc.
93,909
Asset sale
2014.12.30
Date of sale
Machinery, etc.
82,794
2014.12.31
Date of purchase
Building, etc.
51,650
Asset sale
2014.06.05
Date of sale
Intellectual property right, etc.
10,433
Subsidiary
Asset sale/purchase
2014.12.22
Date of sale/purchase
Machinery, etc.
10,352
SEV
Subsidiary
Asset sale/purchase
2014.11.01
Date of sale/purchase
Machinery, etc.
4,565
SEIN
Subsidiary
Asset sale
2014.12.11
Date of sale
Machinery, etc.
3,189
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
SRA
Subsidiary
Asset purchase
2014.12.04
Date of purchase
Intellectual property right, etc.
2,540
Samsung Display
Affiliate
2014.11.28
Date of purchase
Machinery, etc.
1,463
TSE
Subsidiary
Asset sale/purchase
2014.11.24
Date of sale/purchase
Machinery, etc.
1,398
SEHZ
Subsidiary
Asset purchase
2014.11.07
Date of purchase
Machinery, etc.
1,361
SESC
Subsidiary
2014.04.18
Date of purchase
Machinery, etc.
950
SRC-Guangzhou
Subsidiary
Asset sale
2014.02.17
Date of sale
Machinery, etc.
879
TSTC
Subsidiary
Asset purchase
2014.11.24
Date of purchase
Machinery, etc.
865
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
SSI
Subsidiary
Asset purchase
2014.12.05
Date of purchase
Machinery, etc.
407
SSAP
Subsidiary
Asset sale
2014.12.30
Date of sale
Machinery, etc.
197
SSEC
Subsidiary
Asset sale
2014.03.21
Date of sale
Machinery, etc.
190
TSOE
Subsidiary
Asset sale/purchase
2014.07.25
Date of sale/purchase
Machinery, etc.
124
SEMCO
Affiliate
Asset sale
2014.06.23
Date of sale
Machinery, etc.
110
Asset purchase
Asset sale/purchase
Asset purchase
Asset purchase
Asset purchase
Asset purchase
Asset purchase
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164 / 170
※ 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
3. Business Transactions with Affiliates and Subsidiaries
During 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 - 2014.12
Sales of HHP and Network
Equipment, etc.
18,229,215
SEV
Subsidiary
Sales/Purchases
2014.01 - 2014.12
Purchase of HHP and Home
Appliance, etc.
14,418,124
SSI
Subsidiary
Sales/Purchases
2014.01 - 2014.12
Purchase/sales of
semiconductor, etc.
13,668,329
SEHZ
Subsidiary
Sales/Purchases
2014.01 - 2014.12
Purchase/sales of HHP and
CTV, etc.
13,258,945
SEA
Subsidiary
Sales/Purchases
2014.01 - 2014.12
Purchase/sales of HHP and
Home Appliance, etc.
12,633,227
SII
Subsidiary
Sales/Purchases
2014.01 - 2014.12
Purchase/sales of CTV, etc.
7,555,735
Date
Details
Amount
4. Transactions with Stakeholders other than Affiliates and Subsidiaries
As at December 31, 2014, the Company’s outstanding loan amount is KRW 116 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 13.1 billion for employees’ loans from
financial institutions relating to housing rental.
(Unit: KRW million)
Loans
Company
Transaction
Relationship
Account title
Beginning of period
(January 1, 2014)
Increase
Decrease
End of period
(December 31, 2014)
Jangwon Tech, etc
Partner company
Short-term
loans
30,977
7,114
3,770
34,321
Dooil I&D, etc
Partner company and
employee
Long-term loans
77,303
41,634
37,404
81,534
108,280
48,749
41,173
115,855
Total
※ The amount shown above reflects present value of discounted debts before accounting for bad debts.
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XI. Other Information
1. Public Disclosure
(A)
Progress on major disclosed information related to management
Report date
Feb 7, 2011
Mar 4, 2011
2.
Title
Report
Appeal of Court’s
Ruling on Samsung
Motors Case
Filing of a lawsuit
Progress
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 Seoul High Court’s ruling of January
11, 2011, against the case filed by the defendants (Creditors
filed the case in December 2005).
Case closed by the Supreme Court decision on
January 29, 2015
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 11, 2011 regarding the dispute case filed by the
creditors in December 2005.
Summary of Results of Shareholder Meetings
Date
FY2015 annual general meeting of
shareholders ('15.3.13)
Agenda
Results
1. Approval of Balance Sheet, Income Statement, and Statement of Appropriation of Retained
Earnings (Draft), etc. for FY2014
Approved
2. Appointment of Directors
2.1: Appointment of Independent Directors
2.1.1: Han-Joong Kim
2.1.2: Byeong-Gi Lee
Approved
2.2: Appointment of Executive Director (Oh-Hyun Kwon)
2.3: Appointment of Member of Audit Committee (Han-Joong Kim)
3. Approval of the limit on the remuneration for Directors
FY2014 annual general meeting of
shareholders ('14.3.14)
FY2013 annual general meeting of
shareholders ('13.3.15)
Approved
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 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
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 Directors
Samsung Electronics 2014 Business Report
Approved
166 / 170
3.
Litigation
The litigation with Apple Inc. (“Apple”) is ongoing in the United States as of the Reporting Date. Regarding the ongoing
lawsuit in the United States, 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 a hearing on the appeal was held on December 4, 2014.
Additionally, on May 5, 2014, the jury in another ongoing lawsuit determined that the Company partially infringed
Apple’s utility patent and should pay damages to Apple. On November 25, 2014, first trial judgment was pronounced to
confirm the jury’s verdict. The Company appealed the decision on the damages and the appeal is currently on-going. 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 reached an agreement to withdraw from ongoing litigation in all regions other
than the United States, and the Company is currently in the process of withdrawing all non-United States based lawsuits.
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 authorities. 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
See 『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 August 7, 2012, pursuant to a corrective order resulting from the
violation of Article 8 (Prohibition of Unreasonable Cancellation of Entrustment) of the Fair Transactions in
Subcontracting Act. On March 21, 2012, the Company paid a fine of KRW 12.907 billion pursuant to a corrective order
issued by the Fair Trade Commission resulting from the violation of Article 19 (Prohibition of Unfair Collaborative Acts)
of the Monopoly Regulation and Fair Trade Act 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 March 12, 2012, and the parties have subsequently paid the fine.
The Company was ordered to pay a fine (KRW 26 million) on January 13, 2014 from the Fair Trade Commission for
violating Article 4 (Announcement of Critical Information and Integrated Notification) of the Fair Labeling and
Advertising Act, and has subsequently paid the fine.
The Company was ordered to pay a fine (KRW 267 million) on March 7, 2013, for violating the Occupational Safety and
Health Act in connection with a hydrofluoric acid gas leak that occurred on January 28, 2013, and has subsequently paid
the fine. 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. The Company reported compliance with the improvement order and
subsequently paid the fine. As a result of this incident, 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 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 has
subsequently paid the fine.
The Company was ordered and paid a fine of KRW 166.7 million for not reporting the importation of certain chemicals in
August 2013, following a joint inspection by the Ministry of Environment and Gyeong-Gi Province.
The Company regularly provides compliance education and training to executives and employees to promote global
standards of fair competition, and operates various compliance programs. 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) in the past three years and until the date of this report.
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7. Subsequent Events
On January 1, 2015, Samsung Electronics America (SEA), a subsidiary of the Company, merged with Samsung
Telecommunications America (STA), also a subsidiary of the Company. The merger was between two subsidiaries under
common control, therefore, the merger was accounted for by transferring the book values on the consolidated financial
statements. No additional goodwill was recognized.
Based on an agreement entered into in September 1999 related to Samsung Motor Inc.’s (“SMI”) insolvency proceedings,
SMI’s creditors (the “Creditors”) filed a civil action in December 2005 against 28 Samsung Group affiliates, including the
Company, seeking to recover KRW 2,450 billion in losses as well as additional penalty amounts. On January 11, 2011, the
Seoul High Court ordered Samsung Group affiliates to pay to the Creditors KRW 600 billion as additional penalty plus
interest for late payment. The decision was appealed to the Supreme Court of Korea. On January 29, 2015, the
Supreme Court ordered the Samsung Group affiliates to pay the Creditors KRW 600 billion as additional penalty plus
interest on the additional penalty amount (at a rate of 6% per annum). On January 11, 2011, the Seoul High Court ordered
Samsung Group affiliates to pay to the Creditors KRW 600 billion as additional penalty plus interest for late payment.
Compared to the January 2011 ruling, the penalty amount remained the same; however, interest rate on the additional
penalty increased by 1%, thus the total amount due to Creditors increased by ￦4 billion as a result of the Supreme
Court’s January 2015 decision.
8. Acquisition and Divestments
A. Acquisitions and divestments
[Samsung LED Merger]
ㆍ Type: Merger
ㆍ Purpose: Increase 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 a regularly scheduled meeting of the board of directors in lieu of
shareholder approval.)
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
Samsung Electronics 2014 Business Report
169 / 170
[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 Merger]
ㆍ Type: Merger
ㆍ Purpose: Increase 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 a regularly scheduled meeting of the board of directors in lieu of
shareholder approval.)
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 already held 100% ownership of
the equity.
B. Post Merger Financial Information
[Samsung LED]
(Unit: KRW million)
Year 2 (2012)
Predecessor
Company
Samsung
LED
Account
Forecast
Actual
Forecast Vs.
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), please refer to the Audited Financial Statement of Samsung LED.
Samsung Electronics 2014 Business Report
170 / 170
[Samsung Electronics Hainan Fiber Optics Korea]
(Unit: KRW million)
Year 1 (2012)
Predecessor
Company
Account
Forecast
SEHF-K
Actual
Reason for Difference
Forecast Vs.
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), separate financial results are difficult to determine as the business was incorporated into the IM Division.
9. Green Management
The Company is actively securing “Green Technology Certifications” to follow the Low Carbon Green Growth policy of
the Korean government.
(Green Technology Certification)
The Company is acquiring Green Technology Certifications in accordance with Clause 2, Article 32 of the Framework Act
on Low Carbon Green Growth. Green technology development is a part of our “Planet First” strategy, which strives to
conduct business activities in a manner that respect people and nature. Since the certification system was introduced in
2010, the Company has secured 37 valid Green Technology Certifications as of December 31, 2014. In addition, the
Company has acquired 22 ‘Green Technology’ product certificates (412 models), for commercialized products.
Meanwhile, the Company withdrew the application for its Giheung/Hwasung Campus to be re-certified as a Green
Company Campus, and as of April 5, 2013, the Giheung/Hwasung Campus designation as a Green Company Campus was
canceled.
Certified Green Technologies as of December 31, 2014 are as follows:
Division
DS
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.
8
Semiconductor
(Sub-Division)
3-bit NAND Flash semiconductor design technology, etc.
DP
Transparent LCD Display technology, etc.
Total
5
1
37
※ The data reported above is with respect to Samsung Electronics Co., Ltd. only.
※ See 『11. Other Information (B. Environmental regulations)』 in 『II. Businesses Overview』 for greenhouse gas emission and
energy use.
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