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Document DEVICE REPORT2015 business quarter03
SAMSUNG ELECTRONICS Co., Ltd.
Interim Business Report
For the quarter ended September 30, 2015

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, Note on Forward-Looking Statements in preamble of II. Business Overview.

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Table of Contents
Certification ..................................................................................................................................................................... 3 I. Corporate Overview ..................................................................................................................................................... 4 II. Businesses Overview ............................................................................................................................................... 20 III. Financial Affairs........................................................................................................................................................ 58 IV. Auditor's Report ..................................................................................................................................................... 113 V. Management Discussion and Analysis.................................................................................................................. 115 VI. Corporate Governance .......................................................................................................................................... 116 VII. Information on Shareholders ............................................................................................................................... 126 VIII. Executives and Employees ................................................................................................................................. 132 IX. Affiliates and Subsidiaries .................................................................................................................................... 139 X. Related Party Transactions .................................................................................................................................... 166 XI. Other Information................................................................................................................................................... 170

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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 interim business report of Samsung Electronics Co., Ltd. for the nine-months ended September 30, 2015. 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. 11. 16

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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. following a resolution passed at 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/sec
D. The Company is not subject to Article 2 of the Framework Act on Small and Medium Enterprises.
E. Core Businesses
- The Company separately oversees three independent self-determining divisions (each a "Division"), CE (Consumer Electronics), IM (Information Technology & Mobile Communications), and DS (Device Solutions).
Products in each Division are presented below:

Division CE IM DS

Products TV, Monitor, Printer, Air Conditioner, Refrigerator, Washing Machine, Medical Devices, etc.
HHP, Network System, Computer, Digital Camera, etc. 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 157 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 enhanced value propositions.
TV is the core product of CE. The Company has maintained its market leadership position for the past nine (9) consecutive years by leveraging competitive advantages in hardware such as LCD/LED TVs as well as software driven product features within our Smart TV product portfolio.

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[IM Division]
The IM Division is at the forefront of mobile lifestyle innovation with consumer-friendly products such as the premium `GALAXY' series, while driving the paradigm shift in the market beyond mobile convergence to focus on software.
The IM Division is focused on meeting market demands by enhancing mobile product differentiation through seamless 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 the 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 customized logic products. The display business ("DP Business Unit"), through its Samsung Display subsidiary, manufactures and sells display panels ("DP"), including TFT-LCDs and OLEDs.
The Memory Business Unit produces differentiated products and has maintained the top position in the global memory market by continuously applying the latest advanced process technology ahead of the competition with each technological iteration. System LSI is leading the industry shift from PCs to mobile. The Company's DP Business Unit is leading the market with technological innovations and investment resulting in superior quality and cost competitiveness in TFT-LCDs and by increasing the application 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 of September 30, 2015, Samsung Group had a total of sixty-four (64) domestic affiliates, reduction of eight (8) affiliates (RAY, Samsung SGL Carbon Composite Materials, Samsung General Chemicals, Samsung Total Petrochemicals, Songdo Land Mark City, former Samsung C&T, Hanwha Thales, Hanwha Techwin) and addition of three (3) affiliates (Samsung Life Financial Service, HDC Shilla Duty Free, Core-Bridge Consulting) when compared to December 31, 2014. Among the Samsung Group's sixty four (64) domestic affiliates, sixteen (16) affiliates including Samsung Electronics are listed, and forty-eight (48) affiliates are unlisted.

[As of September 30, 2015]
No. of affiliates

Name of affiliates

Listed

Samsung C&T, Samsung Electronics, Samsung SDI, SEMCO, Samsung Heavy Industries, Hotel Shilla,

16

Samsung Card, Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Securities,

Samsung Fine Chemicals, Samsung Engineering, S1, Cheil Worldwide, Samsung SDS, CREDU

Unlisted

Samsung Lions, SERI, STECO, 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 Service, Samsung Fire & Marine Insurance Service,

Suwon Samsung Bluewings FC, S-Core, Human TSS,

48

S-1CRM, OpenHands, S-EnPol, Samsung Medison, Samsung Biologics, STM, Nuri Solution, Colombo Korea,

Miracom, Samsung Life Service, 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 Card Customer Service, Seoul Lakeside CC, Shilla Stay, Samoo Architects & Engineers,

HDC Shilla Duty Free LTD, Samsung Life Financial Service, CORE-BRIDGE CONSULTING

Total

64

 Cheil Industries merged with Samsung C&T and adopted Samsung C&T as the name of the new company.

 See IX. Affiliates and Subsidiaries for more details about domestic and overseas affiliates.

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G. Subsidiaries Subject to Consolidated Financial Statements

As of September 30, 2015, Samsung Electronics' consolidated subsidiaries totaled 157 with the addition of eight (8) newly established or acquired subsidiaries and the subtraction of nine (9) subsidiaries when compared to December 31, 2014. Below is the list of consolidated subsidiaries.

Name of Subsidiaries
Samsung Electronics America Inc. NexusDX Inc.
NeuroLogica Corp. Samsung Receivables Corporation
Quietside LLC SmartThings, Inc. Samsung Semiconductor Inc. Samsung Electronics Canada Inc.
PrinterOn Inc. PrinterOn America Corporation
RT SV CO-INVEST, LP Samsung Research America, Inc
Grandis, Inc. Samsung International Inc. Samsung Mexicana S.A. de C.V Samsung Austin Semiconductor LLC. Samsung Electronics Mexico S.A. De C.V.
SEMES America Inc. Samsung Electronics Digital Appliance Mexico, SA de CV
Samsung Electronics Latinoamerica Miami, Inc. Samsung Electronics Latinoamerica (Zona Libre)
Samsung Electronics Venezuela, C.A. Samsung Electronica Colombia S.A. Samsung Electronics Panama. S.A. Samsung Electronica da Amazonia Ltda. Samsung Electronics Argentina S.A. Samsung Electronics Chile Limitada Samsung Electronics Peru S.A.C.
SonoAce Deutschland GmbH Samsung Electronics (UK) Ltd.

Date of Establishment
1978.07 2009.07 2004.02 1998.03 2001.07 2012.04 1983.07 1980.07 2000.04 1986.04 2014.02 1988.10 2002.06 1983.10 1988.03 1996.02 1995.07 1998.10 2012.12 1995.05 1989.04 2010.05 1997.03 2012.07 1995.01 1996.06 2002.12 2010.04 2001.10 1995.07

Major business
Sale of electronic goods Medical equipment Medical equipment
Receivable management Sale of Air-conditioner Sale of smart-home devices Sale of semiconductors and
display panels Sale of electronic goods Sale of printing solutions Sale of printing solutions Investment in venture firms
R&D R&D Production of TVs and monitors Production of electronic goods Production of semiconductors Sale of electronic goods Semiconductor equipment Production of electronic goods Sale of electronic goods Sale of electronic goods Marketing and services Sale of electronic goods Consulting Production and sale of electronic goods Marketing and services Sale of electronic goods Sale of electronic goods Medical equipment Sale of electronic goods

Dec 31, 2014 Assets
10,697,787

(Unit: KRW million)

% ownership

Classified as major
subsidiary (Y/N)

Over 50%

Y

15,470 Over 50%

N

199,807 Over 50%

Y

3,527,023 Over 50%

Y

15,581 Over 50%

N

196,910 Over 50%

Y

7,577,935 Over 50%

Y

529,348 Over 50%

Y

7,271 Over 50%

N

22 Over 50%

N

13,046 Over 50%

N

238,690 Over 50%

Y

107,943 Over 50%

Y

33,506 Over 50%

N

871,462 Over 50%

Y

6,503,003 Over 50%

Y

795,138 Over 50%

Y

717 Over 50%

N

443,745 Over 50%

Y

126,017 Over 50%

Y

347,502 Over 50%

Y

8,344 Over 50%

N

287,792 Over 50%

Y

8,973 Over 50%

N

3,797,166 Over 50%

Y

52,003 Over 50%

N

262,414 Over 50%

Y

199,308 Over 50%

Y

113 Over 50%

N

1,235,239 Over 50%

Y

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Name of Subsidiaries
Samsung Electronics(London) Ltd. Samsung Electronics Holding GmbH Samsung Semiconductor Europe GmbH
Samsung Electronics GmbH Samsung Electronics Iberia, S.A. Samsung Electronics France S.A.S Samsung Electronics Hungarian Private Co. Ltd. Samsung Electronics Czech and Slovak s.r.o. Samsung Electronics Italia S.P.A. Samsung Electronics Europe Logistics B.V. Samsung Electronics Benelux B.V. Samsung Display Slovakia s.r.o. Samsung Electronics Romania LLC Samsung Electronics Polska, SP.Zo.o Samsung Electronics Portuguesa S.A. Samsung Electronics Nordic Aktiebolag Samsung Semiconductor Europe Ltd. Samsung Electronics Austria GmbH Samsung Electronics Switzerland GmbH Samsung Electronics Slovakia s.r.o Samsung Electronics Baltics SIA Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Poland Manufacturing SP.Zo.o Samsung Electronics Greece S.A. Samsung Nanoradio Design Center Samsung Denmark Research Center ApS Samsung France Research Center SARL Samsung Cambridge Solution Centre Limited
PrinterOn Europe Limited Samsung Electronics Overseas B.V.
Samsung Electronics Rus LLC Samsung Electronics Rus Company LLC
Samsung Electronics Ukraine LLC Samsung Electronics Ukraine Company LLC
Samsung R&D Institute Rus LLC

Date of Establishment
1999.01 1982.02 1987.12 1984.12 1989.01 1988.01 1989.10 2010.01 1991.04 1991.05 1995.07 2007.03 2007.09 1996.04 1982.09 1992.03 1997.04 2002.01 2013.05 2002.06 2001.10 2008.10 2010.02 2010.04 2004.02 2012.09 2012.10 2012.09 2013.11 1997.01 1999.03 2006.10 2004.01 2008.09 2011.11

Major business
Holding company Holding company Sale of semiconductors and
display panels Sale of electronic goods Sale of electronic goods Sale of electronic goods Production and sale of
electronic goods Sale of electronic goods Sale of electronic goods
Logistics Sale of electronic goods Display panel processing Sale of electronic goods Sale of electronic goods Sale of electronic goods Sale of electronic goods Sale of semiconductors and
display panels Sale of electronic goods Sale of electronic goods Production of TVs and monitors Sale of electronic goods
Holding company Production of home appliances
Sale of electronic goods R&D R&D R&D R&D
Sale of printing solutions Sale of electronic goods
Marketing Sale of electronic goods
Marketing Sale of electronic goods
R&D

Dec 31, 2014 Assets
7,515

% ownership
Over 50%

Classified as major
subsidiary (Y/N)
N

840,716 Over 50%

Y

1,186,942 Over 50%

Y

1,142,897 Over 50%

Y

665,617 Over 50%

Y

1,031,342 Over 50%

Y

1,287,972 Over 50%

Y

153,708 Over 50%

Y

759,637 Over 50%

Y

1,621,583 Over 50%

Y

1,207,723 Over 50%

Y

225,826 Over 50%

Y

153,259 Over 50%

Y

419,043 Over 50%

Y

136,282 Over 50%

Y

467,393 Over 50%

Y

104,308 Over 50%

Y

290,346 Over 50%

Y

133,921 Over 50%

Y

1,869,697 Over 50%

Y

52,840 Over 50%

N

7,022,746 Over 50%

Y

331,949 Over 50%

Y

84,289 Over 50%

Y

21,112 Over 50%

N

21,408 Over 50%

N

21,275 Over 50%

N

130,113 Over 50%

Y

45 Over 50%

N

176,271 Over 50%

Y

8,067 Over 50%

N

796,220 Over 50%

Y

3 Over 50%

N

254,000 Over 50%

Y

10,048 Over 50%

N

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Name of Subsidiaries
Samsung Electronics Kazakhstan LLP Samsung Electronics Central Eurasia LLP Samsung Electronics Caucasus Co., Ltd.
Samsung Electronics Rus Kaluga LLC Samsung Russia Service Centre LLC
Samsung Electronics West Africa Samsung Electronics East Africa Samsung Gulf Electronics Co., Ltd. Samsung Electronics Egypt S.A.E Samsung Electronics Israel Ltd. Samsung Electronics Tunisia S.A.R.L Samsung Electronics Pakistan(Private) Ltd. Samsung Electronics South Africa(Pty) Ltd. Samsung Electronics South Africa Production (pty) Ltd.
Samsung Electronics Turkey Samsung Semiconductor Israel R&D Center Ltd.
Samsung Electronics Levant Co.,Ltd. Samsung Electronics Morocco SARLAU
Samsung Japan Corporation Samsung R&D Institute Japan Co. Ltd Samsung Electronics Japan Co., Ltd. Samsung Electronics Display (M) Sdn. Bhd. Samsung Medison India Private Ltd. Samsung Electronics (M) Sdn. Bhd. Samsung Vina Electronics Co., Ltd.
Samsung Asia Private Ltd. Samsung India Electronics Private Ltd. Samsung R&D Institute India-Bangalore Private Ltd. Samsung Electronics Australia Pty. Ltd. Samsung Electronics New Zealand Limited
PT Samsung Electronics Indonesia PT Samsung Telecommunications Indonesia
Thai Samsung Electronics Co., Ltd. Samsung Electronics Philippines Corporation
Samsung Display Vietnam Co., Ltd (formerly Samsung Display Bac Ninh)

Date of Establishment
2006.07 2008.09 2014.10 2007.07 1997.11 2010.03 2011.12 1995.05 2012.07 2012.09 2012.09 2012.11 1994.06 2014.07 1984.12 2007.10 2009.07 2009.11 1975.12 1992.08 2008.09 1995.03 2009.01 1989.09 1995.01 2006.07 1995.08 2005.05 1987.11 2013.09 1991.08 2003.03 1988.10 1996.03 2014.07

Major business
Marketing
Sale of electronic goods
Marketing
Production of TVs
Service
Marketing
Marketing
Sale of electronic goods Production and sale of
electronic goods Marketing
Marketing
Marketing
Sale of electronic goods
Production of TV and monitors
Sale of electronic goods
R&D
Sale of electronic goods
Sale of electronic goods
Sale of electronic goods
R&D
Sale of electronic goods Production and sale of
electronic goods Medical equipment
Production of home appliances Production and sale of electronic goods Sale of electronic goods Production and sale of electronic goods R&D
Sale of electronic goods
Sale of electronic goods Production and sale of
electronic goods Sale of telecom systems and
services Production and sale of
electronic goods Sale of electronic goods
Display panel production

Dec 31, 2014 Assets
1,046

% ownership
Over 50%

Classified as major
subsidiary (Y/N)
N

154,438 Over 50%

Y

2,418 Over 50%

N

785,584 Over 50%

Y

29,243 Over 50%

N

59,933 Over 50%

N

32,929 Over 50%

N

921,338 Over 50%

Y

512,426 Over 50%

Y

4,724 Over 50%

N

2,129 Over 50%

N

1,943 Over 50%

N

712,489 Over 50%

Y

18,735 Over 50%

N

563,363 Over 50%

Y

30,036 Over 50%

N

508,983 Over 50%

Y

92,576 Over 50%

Y

831,649 Over 50%

Y

160,614 Over 50%

Y

612,675 Over 50%

Y

278,239 Over 50%

Y

32 Over 50%

N

129,214 Over 50%

Y

219,356 Over 50%

Y

3,110,433 Over 50%

Y

2,949,605 Over 50%

Y

190,104 Over 50%

Y

437,351 Over 50%

Y

70,253 Over 50%

N

806,451 Over 50%

Y

17,850 Over 50%

N

1,654,988 Over 50%

Y

126,256 Over 50%

Y

128,662 Over 50%

Y

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Name of Subsidiaries
Samsung Malaysia Electronics (SME) Sdn. Bhd. Samsung R&D Institute BanglaDesh
Samsung Electronics Vietnam Co., Ltd. Samsung Telecommunications Malaysia Sdn. Bhd. Samsung Electronics Vietnam THAINGUYEN Co., Ltd.
Samsung Display Dongguan Co., Ltd. Samsung Display TianJin Co., Ltd.
Samsung Electronics Hong Kong Co., Ltd. Suzhou Samsung Electronics Co., Ltd.
Samsung Suzhou Electronics Export Co., Ltd. Samsung (CHINA) Investment Co., Ltd.
Samsung Mobile R&D Center, China-Guangzhou Samsung Tianjin Mobile Development Center Samsung R&D Institute China-Shenzhen
(formerly Samsung Network R&D Center, China-Shenzhen) Samsung R&D Institute China-Xian
Samsung Electronics Suzhou Semiconductor Co., Ltd. SEMES (XIAN) Co., Ltd.
Samsung Electronics (Shandong) Digital Printing Co., Ltd. Samsung Electronics Huizhou Co., Ltd. Tianjin Samsung Electronics Co., Ltd. Samsung Electronics Taiwan Co., Ltd. Beijing Samsung Telecom R&D Center
Tianjin Samsung Telecom Technology Co., Ltd. Shanghai Samsung Semiconductor Co., Ltd.
Samsung Electronics Suzhou Computer Co., Ltd. Samsung Suzhou Module Co., Ltd
(formerly Samsung Display Suzhou Co., Ltd.) Samsung Suzhou LCD Co., Ltd
Shenzhen Samsung Electronics Telecommunication Co., Ltd. Samsung Electronics Shanghai Telecommunication Co., Ltd.
Samsung Semiconductor (China) R&D Co., Ltd. Samsung Electronics China R&D Center Samsung (China) Semiconductor Co., Ltd.
Samsung Electronics (Beijing) Service Company Ltd. Tianjin Samsung LED Co., Ltd.
Tianjin Samsung Opto-Electronics Co., Ltd.

Date of Establishment
2003.05 2010.08 2008.03 2009.08 2013.03 2001.11 2004.06 1988.09 1995.04 1995.04 1996.03 2010.01 2010.08 2013.03 2013.07 1994.12 2013.07 1993.03 1992.12 1993.04 1994.11 2000.09 2001.03 2001.10 2002.09 2002.09 2011.07 2002.02 2001.11 2003.04 2004.05 2012.09 2005.01 2009.05 1994.02

Major business
Sale of electronic goods R&D
Production of electronic goods Sale of telecom systems and services
Production of telecom products Display panel production Display panel production Sale of electronic goods
Production of home appliances Production of home appliances
Sale of electronic goods R&D R&D R&D R&D
Semiconductor processing Semiconductor equipment
Production of printers Production of electronic goods Production of TV and monitors
Sale of electronic goods R&D
Production of telecom products Sale of semiconductor and display
panels Production of electronic goods
Display panel processing Display panel production Sale of telecom products
Sale of telecom and network products
R&D R&D Semiconductor production Services LED production Camera/camcorder production

Dec 31, 2014 Assets
328,645

% ownership
Over 50%

Classified as major
subsidiary (Y/N)
Y

7,590 Over 50%

N

6,553,628 Over 50%

Y

1,170 Over 50%

N

3,957,700 Over 50%

Y

1,101,846 Over 50%

Y

836,806 Over 50%

Y

984,732 Over 50%

Y

689,430 Over 50%

Y

370,904 Over 50%

Y

9,603,679 Over 50%

Y

43,117 Over 50%

N

22,927 Over 50%

N

12.770 Over 50%

N

9.306 Over 50%

N

749,914 Over 50%

Y

538 Over 50%

N

777,128 Over 50%

Y

4,966,486 Over 50%

Y

933,487 Over 50%

Y

1,583,027 Over 50%

Y

55,424 Over 50%

N

2,316,054 Over 50%

Y

2,560,852 Over 50%

Y

812,755 Over 50%

Y

550,429 Over 50%

Y

1,831,794 Over 50%

Y

146,482 Over 50%

Y

124 Over 50%

N

20,548 Over 50%

N

30,629 Over 50%

N

6,765,278 Over 50%

Y

163,455 Over 50%

Y

411,558 Over 50%

Y

177,394 Over 50%

Y

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Name of Subsidiaries

Date of Establishment

Major business

Samsung Display SU Materials STECO SEMES
Samsung Electronics Service

2012.04 2011.08 1995.06 1993.01 1998.10

Display panel sales and production
Display panel component production
Semiconductor component production
Semiconductor/FPD manufacturing equipment
Electronics goods repair services

Samsung Electronics Sales

1996.07

Sales of electronic goods

Samsung Electronics Logitech

1998.04

Total logistics services

Samsung Medison SVIC #14 Venture Capital Union SVIC #20 Venture Capital Union SVIC #21 Venture Capital Union SVIC #22 Venture Capital Union SVIC #23 Venture Capital Union SVIC #26 Venture Capital Union SVIC #27 Venture Capital Union Simpress Comercio, Locacao e Servicos S.A.

1985.07 2009.05 2011.03 2011.11 2011.11 2012.10 2014.11 2014.09 2005.02

Medical equipment
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
Sale of printing solutions

Samsung Electronics HCMC CE Complex Co. Ltd,.

2015.02

Production of CE goods

Samsung Pay, Inc. (formerly LoopPay, Inc.)

2006.03

Develop and provide mobile payment services

Beijing Integrated Circuit Industry International Fund, L.P

2014.12

Investment in venture firms

SVIC #28 Venture Capital Union

2015.02

Investment in venture firms and new technologies

YESCO Electronics LLC

2007.10

LED display panel production and sales

SVIC #29 Venture Capital Union

2015.04

Investment in venture firms and new technologies

 Companies with over KRW75 billion in total assets as of December 31, 2014, are classified as major subsidiaries.

 See II. Businesses Overview for additional information about major business segments.

Dec 31, 2014 Assets
37,939,965

% ownership
Over 50%

Classified as major
subsidiary (Y/N)
Y

21,978 Over 50%

N

93,819 Over 50%

Y

692,721 Over 50%

Y

330,185 Over 50%

Y

603,933 Over 50%

Y

150,390 Over 50%

Y

326,260 Over 50%

Y

57,146 Over 50%

N

26,858 Over 50%

N

130,290 Over 50%

Y

145,501 Over 50%

Y

34,843 Over 50%

N

20,057 Over 50%

N

5,898 Over 50%

N

133,442 Over 50%

Y

0 Over 50%

N

16,821 Over 50%

N

0 Over 50%

N

0 Over 50%

N

37,701 Over 50%

N

0 Over 50%

N

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(Changes in Subsidiaries)

Europe/ AMER MEA/ Asia
CIS

China Domestic Total

Increase

Decrease

Dec 31, 2012

30

61

23

32

20 166

Dec 31, 2013

[Domestic: 2]

Secron, GES

[Americas: 7]

Newton Sub. Corp., mSpot, Inc., Deltapoint

Cardiac Diagnostics, Inc., Samsung Medison

America, Inc., Intellectual Keystone Technology

[Americas: 2]

LLC., Samsung Medison Brasil Ltda., Samsung

NeuroLogica Corp.,

Electronics Corporativo, SA de CV

Intellectual Keystone Technology LLC.

[Europe/MEA/CIS: 7]

[Europe/MEA/CIS: 1]

Samsung Telecoms (UK) Ltd., Samsung LCD

Samsung Electronics Switzerland GmbH

Netherlands R&D Center B.V, Samsung LCD

25

55

22

33

18

153

[Asia: 2] Samsung Electronics Vietnam THAINGUYEN Co., Ltd.,

Netherlands R&D Center (UK) Limited, General RF Modules AB, Samsung Medison

Samsung Electronics New Zealand Ltd.

France S.A.S., Samsung Opto-Electronics

[China: 3]

GmbH, Samsung Medison Italia S.r.l.

Samsung Network R&D Center China-Shenzhen,

[Asia: 3]

Samsung R&D Institute China-Xian, SEMES (XIAN) Co., Samsung Electronic Philippines Manufacturing

Ltd.

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.

Dec 31, 2014

[Domestic : 2]

SVIC #26 Venture Capital Union

[Domestic: 2]

SVIC #27 Venture Capital Union

Samsung Blue Wings, World Cyber Games

[America: 6]

[America: 1]

RT SV CO-INVEST, LP, Quietside LLC,

1397011 Ontario Ltd.

SmartThings, Inc., PrinterOn Inc., PrinterOn America [Europe: 2]

30

56

22

32

18 158 Corporation, 1397011 Ontario Ltd.

Samsung Medison Europe B.V

[Europe/MEA/CIS: 3]

Nanogen Recognomics GmbH

PrinterOn Europe Limited, Samsung Electronics South [Asia: 1]

Africa Production(pty) Ltd., Samsung Electronics Caucasus Medison Medical Systems India Private Ltd.

Co., Ltd.

[China: 1]

[Asia : 1]

Medison Medical Equipment Shanghai Co., Ltd..

Samsung Display Bac Ninh

[Domestic: 3]

Sep 30, 2015

32

55

23

30

17

157

[Domestic : 2] SVIC #28 Venture Capital Union SVIC #29 Venture Capital Union [America: 5] Simpress Comercio, Locacao e Servicos S.A., Samsung Pay, Inc. (formerly LooPay, Inc.), YESCO Electronics LLC, Paymate Global, Inc., Beijing Integrated Circuit Industry International Fund, L.P. [Asia: 1] Samsung Electronics HCMC CE Complex Co. Ltd.

RAY HI Pioneer Private Securities Investment Trust #1 SVIC #6 Venture Capital Union [America: 3] Samsung Telecommunications America LLC., Paymate Global, Inc., Nvelo, Inc. [China: 2] Samsung Electronics Hainan Fiberoptics Co.,Ltd Samsung Medison Shanghai Medical Instrument Co., Ltd [Europe: 1]

Nanoradio Hellas AE

 AMER = America; MEA = Middle East and Africa, CIS = Commonwealth of Independent States

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H. Credit Rating
The Company's credit rating is assessed by two external credit ratings agencies. As of September 30, 2015, 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 '13.08 '13.12 '14.08 '14.10

Securities Corporate bond Corporate bond Corporate bond Corporate bond

Ratings A+ A1 A+ A1

Credit Rating Agency S&P (USA)
Moody's (USA) S&P (USA)
Moody's (USA)

Rating Range (AAA ~ D) (Aaa ~ C) (AAA ~ D) (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)

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 2015.01.01 2015.02.23

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 shares from Corning Incorporated Acquired shares of SmartThings (100%), a subsidiary of SEA Merged with STA(Samsung Telecommunications America LLC), a subsidiary of SEA Acquired shares of LoopPay (100%), a subsidiary of SEA

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(Important Changes in Management Executives)
Following the annual general meeting of shareholders on March 16, 2012, of the three Executive Directors with expiring 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 expiring 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.
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 September 30, 2015, (the "Reporting Date"), the Company's BOD is comprised of four Executive Directors (OhHyun 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).

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(Changes in Organizational Structure)

In December 2012, following an organizational change, CE and IM businesses were upgraded to individual Division status, and the IT Solution business was divided into Printing Solution and Computer businesses. The Printing Solution business was incorporated into the CE Division and the Computer business was converted to a team unit and 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 reorganized into a team unit, and then was integrated with the Mobile business. No further changes have been made as of September 30, 2015.

[As of December 2012]

Before

Business organization

DMC Division (CE: Visual display, Digital appliances) (IM: Mobile, IT solution, Network, Digital imaging)
DS Division (Memory, SYS.LSI, LCD,LED)

After CE Division (Visual display, Digital appliances, Printing
solution, Medical devices) IM Division (Mobile, Network, Digital imaging)
DS Division (Memory, SYS.LSI, DP, LED)

Regional headquarters

Korea, North America, Latin America, Europe, CIS, Southwest Korea, North America, Latin America, Europe, CIS, Southwest Asia,

Asia, Southeast Asia, China, Middle East, Africa

Southeast Asia, China, Middle East, Africa

Americas(DS), Europe(DS), China(DS), Southeast Asia(DS), Americas(DS), Europe(DS), China(DS), Southeast Asia(DS), Japan

Japan(DS)

(DS)

[As of December 2013]

Business organization

Before CE Division (Visual display, Digital appliances, Printing
solution, Medical devices)
IM Division (Mobile, Network, Digital imaging)

DS Division (Memory, SYS.LSI, DP, LED)

After CE Division (Visual display, Digital appliances, Printing
solution, Medical devices) IM Division (Mobile, Network)
DS Division (Memory, SYS.LSI, DP, LED)

Regional headquarters

Korea, North America, Latin America, Europe, CIS, Southwest Korea, North America, Latin America, Europe, CIS, Southwest Asia,

Asia, Southeast Asia, China, Middle East, Africa

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)

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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 September 30, 2015, 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). As of September 30, 2015, the number of floating common stock is 129,312,651 shares and the number of floating preferred stock is 19,603,734 shares, excluding treasury shares (of 17,986,686 shares of common stock and 3,229,693 shares of preferred stock).

[As of September 30, 2015]

(Unit: shares)

Classification

Type of Stocks

Note

Common

Preferred

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 -

III. Number of shares decreased

8,310,000

1,060,000

9,370,000 -

1. Capital Reduction 2. Number of shares canceled 3. Redemption of redeemable shares

8,310,000
-

1,060,000
-

- -

9,370,000

Cancellation of treasury shares

- -

4. Others

-

-

- -

IV. Number of outstanding shares (II-III)

147,299,337

22,833,427

170,132,764 -

V. Treasury shares

17,986,686

3,229,693

21,216,379 -

VI. Number of floating shares (IV-V)

129,312,651

19,603,734

148,916,385 -

 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
During first three quarters of 2015, Samsung Electronics acquired 891,945 shares of common stock and 118,750 shares of preferred stock for its treasury to stabilize the Company's stock price in order to enhance shareholder value. As of September 30, 2015, the Company holds 17,986,686 shares of common stock and 3,229,693 shares of preferred stock as treasury shares. On Oct 29, 2015, the Company announced plans for a KRW 11.3 trillion share buyback program for purposes of enhancing shareholder return. A portion of the repurchased shares is planned to be cancelled. The buyback will be conducted in 3-4 stages. The first stage of the repurchase program, which will be approximately KRW 4.2 trillion, will begin on Oct 30, 2015 and be completed within three months.
 The buyback program is subject to change based on, among other things, value to shareholders, market conditions and alternative methods for greater shareholder return.

[As of September 30, 2015]
Acquisition method Intra-market direct acquisition (Within dividend related capital gains limit) Total

(Unit: Shares)

Share type
Common

Periodbeginning
shares
17,094,741

Acquisition (+)
891,945

Change
Disposal (-)
-

Cancellation (-)
-

Period-end shares
17,986,686

Preferred 3,110,943

118,750

-

- 3,229,693

Common 17,094,741

891,945

-

- 17,986,686

Preferred 3,110,943

118,750

-

- 3,229,693

C. Types of Registered Stock
The Company has two types of registered equity securities: 1) common stock; 2) non-voting and non-cumulative preferred stock.
The shareholders of preferred stock are entitled to dividend payments of an additional 1% of par value compared to shareholders of common stock. As of September 30, 2015, 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 17,986,686 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 116,806,074.

[As of September 30, 2015]

Classification

Number of shares

(Unit: Shares) Note

Number of outstanding shares (A)

Common Preferred

147,299,337 22,833,427 -

Shares with no voting rights (B)
Shares with no voting rights according to Articles of Incorporation (C)
Shares with limited voting rights under relevant laws (D)

Common Preferred Common Common

17,986,686 Treasury stock according to Korean Commercial Act

22,833,427 3,229,693 shares of preferred treasury stock included

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

27,393

Restricted by the Insurance Business Act: Shares held by Samsung Life Insurance in certain special accounts

Shares with voting rights (F = A - B - C - D)

Common Preferred

116,806,074 - -

 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 portion 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.
On Oct 29, 2015, the Company announced plans for a KRW 11.3 trillion share buyback program for purposes of enhancing shareholder return. The buyback will be conducted in 3-4 stages. A portion of the repurchased shares is planned to be cancelled. The first stage of the repurchase program, which will be approximately KRW 4.2 trillion, will begin on Oct 30, 2015 and be completed within three months.
 The buyback program is subject to change based on, among other things, value to shareholders, market conditions and alternative methods for greater shareholder return.

Dividends paid in the most recent three (3) fiscal years are as follows:

(Unit: Shares / %)

Classification

2015.3Q

2014

2013

Par value per share (won)

5,000

5,000

5,000

Net profit (million won)

15,452,161

23,082,499

29,821,215

EPS (won)

103,720

153,105

197,841

Total cash dividend (million won)

148,916

2,999,972

2,156,969

Total stock dividend (million won)

-

-

-

Dividend payout ratio (%)

1.0

13.0

7.2

Cash dividend yield (%)

Common Preferred

0.1

1.5

1.0

0.1

1.9

1.4

Stock dividend yield (%)

Common Preferred

-

-

-

-

-

-

Cash dividend per share (won)

Common Preferred

1,000 1,000

20,000 20,050

14,300 14,350

Stock dividend per share (share)

Common Preferred

-

-

-

-

-

-

 Interim dividends of 2015 and 2014 are KRW 148,916 million (KRW 1,000 per share) and KRW 75,408 million (KRW 500 per share), respectively.
 EPS denotes basic earnings per common share.  For further information relating to the calculation of basic EPS, see Earnings Per Share in 2. Note to Consolidated Financial
Statements in . Financial Affairs.

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II. Businesses Overview

1. Overview
Note on Forward-Looking Statements This 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 the Company's 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.
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.

A. Business Overview by Division
In addition to our headquarters in Korea, Samsung Electronics is comprised of 157 subsidiaries across the world responsible for sales and production. There are also 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 the CE and IM Divisions, and the component business is comprised of the 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 (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, Mobile APs, and other semiconductor and semiconductor-related products, 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>

Business Division

CE Division

DS Division

IM Division
Semiconductor (SubDivision)
DP Business Unit

Major Products TVs, Monitors, Printers, Air Conditioners, Refrigerators, Washing Machines, Medical Devices, etc.
HHPs, Network Systems, Computers, Digital Cameras, etc. DRAMs, NAND Flashes, Mobile APs, etc. TFT-LCDs, OLEDs, etc.

The Company maintains its corporate headquarter and seventeen (17) consolidated domestic subsidiaries in Korea.

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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 32 subsidiaries including SEA (New Jersey, United States) which is responsible for sales of set products such as HHPs, SAMEX (Tijuana, Mexico) which is responsible for manufacturing TVs, and SAS (Austin, United States) which is responsible for manufacturing semiconductor products.
In Europe, we operate 31 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 23 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 30 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 first public demonstration of a true television system in 1926 and subsequent mass production of Color TVs, technological developments have 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 (LCDs, PDPs), especially with the expansion of digital broadcasting (UK/US 1998~).
Flat panel TVs ("FPTVs") 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, further innovation led to the launch of OLED and UHD TVs with high resolution as the TV market continues to evolve.

In 2015, annual global TV shipment is expected to reach 231.69 million units, an increase 0.4% from the previous year. LCD-TV shipment (including LED-TVs) is expected to be around 230.07 million units with an increase of 2.3% yearover-year, while PDP-TV shipment is expected to decline by 95.6% to 0.29 million units from the previous year (Source: July `15 Display Search).

 Market Condition

The trend towards large-size and high-resolution screens is accelerating due to intensified competition between manufacturers. Accordingly, the 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 applications ("Apps") and implementing a premium category sales strategy. In 2012, the Company introduced a new market trend with the introduction of the Smart InteractionTM system based on voice commands and command gestures for convenient interaction with its proprietary Samsung Smart TVs. In 2013, the Company introduced a system that recommends TV programs based on the user's viewing history. In 2014, with the goal of enhancing the viewing experience of its Smart TVs, the Company focused on increasing its usability, securing access to content, and strengthening the platform. In 2015, the Company launched SUHD TVs based on semiconductor crystal technology that expresses different colors depending on the size when electric current or light is applied.

< Market Share of the CE Division's Main Product >

Product

2015.3Q

2014

2013

TV

21.2%

22.6%

21.6%

 2013 and 2014 market share data is from research agency Display Search (global market share in quantity). Market share as of

September 30, 2015 is the Company's estimation.

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 Business Condition
We have maintained the top position in the overall TV market, FPTVs, and LCD TVs (in terms of market share) for nine consecutive years since 2006. (Source: Dec '14 Display Search)
In 2009, we created the world's first LED TV (LED BLU, ultra-slim/ultra-light, eco-friendly). In the first quarter of 2010, we launched the world's first 3D Total Solution that provides 3D TV/BDP/glasses/BD Title all-in-one, taking the lead in the 3D TV market. We also launched the world's first App Store for our Smart TVs, "Samsung Apps", in 2010, and launched Smart Hub which enables "Your Video", "Social TV", "Search All", and "Web Browser" in 2011, firmly planting the image that "Smart TV = SAMSUNG". Furthermore, in 2012, we maintained our competitive advantage in the Smart TV market by developing exercise and education contents for families and reinforcing the "All Share" function that facilitates connection with other digital devices. In 2013, we released UHD TVs which offer superior image quality and resolution. In 2014, we continued to maintain our leadership in the industry by leading the premium market with our UHD and Curved TVs.

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[IM Division]

 Industry Overview
A mobile phone is one of the most ubiquitous electronics devices today. As of year-end 2014, the global penetration rate was 73%. In 2015, it is expected to reach 77%. (Source: Jul '15 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 1.26 billion units in 2014 to 1.5 billion units in 2015 with a growth of 16% year over year.

The tablet market is expected to decrease to 230 million units (4% negative growth YoY) shipped in 2015 from 240 million units in 2014. (Source: Strategy Analytics ­ Mobile: Jul `15, Smartphone /Tablet: Aug `15)

< Market share of the IM Division's Main Product >

Product

2015.3Q

2014

2013

HHP

21.9%

22.4%

26.8%

 Market share data of 2013, 2014, and as of September 30, 2015 are from research agency Strategy Analytics (global market share in quantity).

 Business Condition
The Company strengthened its 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 "No.1" status in terms of global smartphone market share through the success of its 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 strive 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. Memory semiconductor is divided into RAM products that can be written on and read, and ROM products that can only read. RAM is called volatile memory as the information is deleted when the power is turned off. It is used for temporary loading and storage of application programs.
There are various types of system LSI products for various applications. CPUs (Central Processing Units) 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 occur frequently. 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
Even as the overall DRAM market continues to experience oversupply, supply and demand conditions in the mobile segment is expected to improve slightly driven by demand for new products, but DRAM demand for other applications such as PCs is expected to remain weak. However, demand for the Company's high-end products are robust as other manufacturers are experiencing delays in developing high-performance and highly reliable products such as DDR4/LPDDR4 manufactured using the latest leading-edge processes. Demand for NAND is expected to increase as more NAND (in terms of gigabytes of installed memory) is included in new smartphones and the ever-increasing adoption of solid state drives("SSDs") continues, but supply is also expected to increase as competitors shift to finer processes.

< Market share of the Semiconductor Business' Main Product >

Product

2015.3Q

2014

2013

DRAM

44.9%

39.6%

36.7%

 Market share data of 2013, 2014, and as of September 30, 2015 are from research agency DRAMeXchange (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 mass-producing and adding the 3rd generation 48-layer vertical NAND, with technology that is one year ahead of competitors, to high-performance SSDs. The Company is also expanding high-quality 3bit products to maximize cost competitiveness.
In 2015, the 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.

A 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 large panel TFT-LCD market has grown rapidly from first mainly being used in laptops, then monitors, and then in TVs. However, the market growth rate has slowed recently due to the high penetration rate of LCD monitors and 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 OLED 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 require large-scale production to realize economies of scale. These types of businesses are generally sensitive to business fluctuations. Therefore, even if demand continuously increases, 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, demand for large-size panels is expected to be solid driven by the trend towards large-screen TVs and continued growth of UHD TVs. However, supply and demand conditions may change negatively due to risks associated with an increase in industry capacity and a decrease in demand from set makers.

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, and the demand from new product categories such as wearable and flexible devices, as well as automotive applications is also expected to increase.

The Company has been leading the large panel TFT-LCD market with our advanced technologies. It has also been a leader in the small to medium-size OLED market since successfully commercializing the world's first OLED products in 2007 and it continues to enjoy a sizeable market share in this segment. However, competition in the overall display industry continues to intensify.

< Market Share of the DP Business' Main Product >

Product

2015.3Q

2014

Display Panel

21.9%

20.9%

 Market share data of 2013, 2014, and as of September 30, 2015 are from research agency Display Search (global market share, large-size panel in amount).

2013 20.4%

 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 manufacturing 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 will strive to improve cost efficiency and maintain an appropriate level of

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inventory. Meanwhile, it will continue to monitor market conditions and respond appropriately.
For mobile, the Company plans to diversify products and continue to expand its customer base. In particular, the Company plans to solidify its leadership in the market by enhancing the technological sophistication of its flexible displays and increasing yield rates. The Company will strive to secure new growth engines by developing new applications such as transparent, mirror, head mount, and automotive displays.

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B. Financial Summary by Division

(Unit: KRW million, %)

Division

Classification Total sales

2015.3Q

Amount

Portion

84,299,333

23.2%

2014

Amount

Portion

124,916,892

25.3%

2013

Amount

Portion

125,088,762

22.4%

Internal sales

CE

Net sales

51,254,388 33,044,945

23.7% 22.4%

74,733,757 50,183,135

25.9% 24.3%

74,757,247 50,331,515

22.7% 22.0%

Operating profit

438,205

2.2%

1,184,325

4.7%

1,673,343

4.5%

Total asset

49,177,842

13.1%

43,116,374

12.8%

47,183,953

14.9%

Total sales

169,253,449

46.6%

236,438,979

47.9%

299,161,654

53.6%

Internal sales

IM

Net sales

90,700,242 78,553,207

42.0% 53.3%

124,674,435 111,764,544

43.3% 54.2%

160,344,435 138,817,219

48.7% 60.7%

Operating profit

7,908,699

39.0%

14,562,885

58.2%

24,957,741

67.8%

Total asset

103,331,740

27.6%

94,227,108

27.9%

86,132,881

27.1%

Total sales

64,753,973

17.8%

75,058,071

15.2%

70,908,145

12.7%

Semiconductor

Internal sales Net sales
Operating profit

30,375,730 34,378,243 9,990,399

14.1% 23.3% 49.3%

35,328,169 39,729,902 8,776,442

12.3% 19.3% 35.1%

33,471,566 37,436,579 6,887,978

10.2% 16.4% 18.7%

Total asset

98,951,159

26.5%

87,567,196

25.9%

76,224,096

24.0%

Total sales

41,162,726

11.3%

52,227,615

10.6%

61,294,886

11.0%

DS DP Business Unit

Internal sales Net sales
Operating profit

20,201,594 20,961,132 1,996,987

9.4% 14.2% 9.9%

26,500,446 25,727,169
660,181

9.2% 12.5% 2.6%

31,457,770 29,837,116 2,980,563

9.5% 13.0% 8.1%

Total asset

49,560,709

13.3%

46,826,533

13.8%

42,195,558

13.3%

Total sales

109,196,883

30.1%

131,459,756

26.6%

134,394,781

24.1%

Internal sales

53,911,422

25.0%

65,669,950

22.8%

66,633,875

20.2%

Total

Net sales

55,285,461

37.5%

65,789,806

31.9%

67,760,906

29.6%

Operating profit

11,910,394

58.8%

9,430,915

37.7%

10,000,665

27.2%

Total asset

174,294,625

46.6%

160,138,321

47.4%

145,872,686

45.9%

 Net sales reported here includes inter-divisional sales.

Cumulative net sales for 3Q 2015 were KRW 147,338 billion. By Division, CE reported net sales of KRW 33,045 billion (22.4%) and IM reported net sales of KRW 78,553 billion (53.3%). The DS Division contributed approximately 37.5% of net sales: KRW 34,378 billion (23.3%) by the Semiconductor Sub-Division and KRW 20,961 billion (14.2%) by the DP Business Unit.

Cumulative operating profit for 3Q 2015 was KRW 20,271 billion. The IM Division accounted for 39.0% with KRW 7,909 billion and the DS Division accounted for 58.8% with KRW 11,910 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 a 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

For the third quarter of 2015, the CE Division's revenue of KRW 33,045 billion accounted for 22.4% of the total net revenue; the IM Division accounted for 53.3% with KRW 78,553 billion; and the DS Division accounted for 37.5% with KRW 55,286 billion.

The Company's net revenue by Division as of September 30, 2015 are as follows:

Division

Major Products

CE

TV, monitor, printer, air conditioner, refrigerator, washing machine, medical equipment, etc.

IM

HHP, network system, computer, digital camera, etc.

Semiconductor DS DP Business Unit

DRAM, NAND flash, Mobile AP, etc. TFT-LCD, OLED, etc.

Sub-Total

Others

-

Total  Includes sales between Divisions (on consolidated basis).

(Unit: KRW 100 million, %)

Net Revenue

Portion

330,449 785,532 343,782 209,611 552,855 -195,456 1,473,380

22.4% 53.3% 23.3% 14.2% 37.5% -13.2% 100.0%

 See 5. Sales and Distribution for sales by each product.

B. Average Selling Price (ASP) Changes
In the third quarter of 2015, the ASP of TVs continued to decline from 2014. The ASP of HHPs has not changed materially from 2014. The ASP of memory products and display panels have declined compared to 2014.

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3. Key Raw Materials

(On consolidated basis as of September 30, 2015)

Division CE IM
DS

Type Raw materials Raw material
Raw material Raw material Raw material
Raw material Raw material Raw material Raw material

Item Display panel
Others Division Total Mobile display panel Baseband Chip
Others Division Total
Glass POL Window Others Division Total Others Total

Specific usage Color picture signaler
Color picture signaler CPU

Purchase price 40,996 114,754 155,750 29,759 22,849 236,700 289,308

Glass substrate for display

10,809

Polarizer plate

14,359

Tempered glass

13,135 119,008 157,311
214 602,584

(Unit: KRW 100 million, %)

Portion

Note (supplier)

26.3% CMI, AUO, etc.

73.7%

100.0%

10.3% Iljin Display, etc.

7.9% Qualcomm, etc.

81.8%

100.0%

6.9%

Corning Precision Materials, etc.

9.1%

Dongwoo FineChem, NITTO, etc.

8.3% BIEL, etc.

75.7%

100.0%

-

-

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 9% on average since 2014 due to oversupply from increased capacity and improved productivity. For the IM Division, since 2014, the price of mobile display panels have increased by 4%, and the price of baseband chips have decreased by 6%. For the DS Division, the price of raw materials continues to decrease. Also, since 2014, the price of semiconductor wafer has declined by 15% and the price of glass for display panels has declined by 28%.

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4. Production and Facilities

A. Production Capacity, Output, Utilization Rate

(Capacity)

Division

2015.3Q

Item

('15.1.1~ 9.30)

Quantity

CE

TV

IM

HHP

Memory DS
Display Panel
Global production capacity for major product categories

33,478 375,200 192,261,000
7,179

2014
Quantity 62,990 523,750
173,506,000 9,185

(Unit: 1,000)
2013
Quantity 53,102 556,600
116,909,000 8,260

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)

Division

Item

CE

TV

IM

HHP

Memory DS
Display Panel
Global output for major product categories

2015.3Q ('15.1.1~ 9.30)
Quantity
30,961 317,630 192,261,000
6,359

2014
Quantity 55,066 439,520
173,506,000 8,252

(Unit: 1,000)
2013
Quantity 47,527 499,480
116,909,000 7,340

During first three quarters of 2015, the CE Division's output of TVs was 30,961 thousand units (major production sites: Korea, China, Mexico, Brazil, and Hungary). The IM Division's output of HHPs was 317,630 thousand units (major production sites: Korea, China, Vietnam, and Brazil). The DS Division's memory output (1GB equivalent) was 192,261 million (major production sites: Korea and China). The DS Division's output of display panels was 6,359 thousand units (major production sites: Korea, China, and Slovakia).

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(Utilization Rate)

Division

Item

CE

TV

IM

HHP

2015.3Q Production capacity
33,478
375,200

2015.3Q Actual output
30,961
317,630

(Unit: 1,000)
Utilization Rate 92.5% 84.7%

In the third quarter of 2015, CE and IM utilization rates were calculated as actual output relative to production capacity. The utilization rates were 97.6% for TVs and 84.7% for HHPs.

Division DS

Item
Memory Display Panel

2015.3Q Potential Production Time
44,448
69,816

2015.3Q Actual Production Time
44,448
68,910

(Unit: hours) Utilization Rate
100.0% 98,7%

The DS Division operates memory and display panel production in three shifts (24 hours a day). Cumulative operating days in the third quarter of 2015 including holidays were 273 days. The utilization rate was calculated as actual hours [273 days (x) number of production lines (x) 24 hours] relative to production capacity.

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B. Production Facilities and Investment

(1) Key facilities for production and operation
The Company's operational activities 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 Seocho Suwon Gumi1 Gumi2 Giheung Onyang
Hwaseong Gwangju Cheonan
Asan North America
Europe China Southeast Asia Southwest Asia CIS Middle East Africa Latin America Americas Europe China Southeast Asia Japan

Location Seoul, Korea Suwon, Korea Gumi, Korea Gumi, Korea Yongin, Korea Asan, Korea Hwaseong, Korea Gwangju, Korea Cheonan, Korea Asan, Korea New Jersey, US London, UK Beijing, China Singapore, Singapore New Delhi, India Moscow, Russia Dubai, UAE Johannesburg, Republic of South Africa Sao Paolo, Brazil San Jose, US Eschborn, Germany Shanghai, China
Singapore Tokyo, Japan

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The Company's property, plant and equipment include land, buildings and structures, machinery and equipment, and construction in progress. As of September 30, 2015, their total book value is KRW 86,560 billion, which is an increase of KRW 5.687 trillion from year-end 2014. In the third quarter of 2015, new acquisitions of KRW 19,178 billion and depreciation of KRW 14,614 billion were recorded.

Classification

Book value

At 1 January 2014

Acquisition cost
Accumulated depreciation (Including accumulated impairment loss)

Land

Buildings and Machinery and Construction Structures Equipment in ­progress

7,710,352

17,598,547

37,751,890

15,832,307

7,710,352

26,474,937

127,603,897

15,832,307

(Unit: KRW million)

Others 1,979,854 5,664,513

Total 80,872,950 183,286,006

-

(8,876,390)

(89,852,007)

-

(3,684,659) (102,413,056)

Increase (Decrease)

General acquisition and capital expenditure Acquisition as a result of business combination Depreciation
Disposal/Discard

254,523 246 -
(20,972)

6,105,307 1,757
(1,149,941) (43,046)

18,482,779 3,498
(12,775,514) (141,442)

(6,460,794) 47 -
(39)

795,908 29,228 (688,574) (43,425)

Impairment

-

-

1,446

-

(449)

Others

(95,527)

(121,177)

1,510,765

(164,991)

207,865

Book value

7,848,622

22,391,447

44,833,422

9,206,530

2,280,407

Balance at 31 Dec 2014

Acquisition cost
Accumulated depreciation (Including accumulated impairment loss)

7,848,622

32,477,795

146,219,191

-

(10,086,348) (101,385,769)

9,206,530 -

6,516,450 (4,236,043)

 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.

19,177,723 34,776
(14,614,029) (248,924) 997 1,336,935
86,560,428 202,268,588
(115,708,160)

(2) CAPEX

During first three quarters of 2015, the Company invested KRW 19.2 trillion in CAPEX, including upgrading production lines of the Semiconductor Sub-Division and the DP Business Unit. The Company expects to increase its investments to reinforce its leadership in cutting-edge semiconductor technology and efficiently manage DP production lines.

[CAPEX by Division]

Business Semiconductor DP Business Unit
Other

Purpose
Establishment, addition, upgrade
Establishment, addition, upgrade
Other

Period Jan '15 ~ Sep '15 Jan '15 ~ Sep '15 Jan '15 ~ Sep '15

Assets Buildings, facilities Buildings, facilities Buildings, facilities

(Unit: KRW 100 million) Investment in 2015.1Q~3Q 112,194
29,413
50,170

Total

191,777

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5. Sales and Distribution

A. Sales
In the third quarter of 2015, the Company recorded KRW 147,338 billion of total revenue, a decline of 4.0% compared to the third quarter of the prior year. By Division, when compared to the third quarter of 2014, the CE Division's revenue decreased by 8.0%, the IM Division's revenue decreased by 8.1%, and the DS Division's revenue increased by 15.0%.
(Unit: KRW 100 million)

Division

Sales types

Product categories

2015.1Q~3Q

2014

2013

Goods

TV, monitor, printer, air

CE

Products Service

conditioner, refrigerator, washing machine, medical

Others

equipment

IM

Goods Products Service Others

HHP, Network System, Computer,
Digital camera

Semiconductor DS
DP Business Unit

Goods Products Service Others
Goods Products Service Others

DRAM, NAND Flash, Mobile AP
TFT-LCD, OLED

Division total

Others

Other revenue

-

Total  Includes internal sales between Divisions.

330,449

501,831

503,315

785,532

1,117,645

1,388,172

343,782

397,299

374,366

209,611
552,855 -195,456 1,473,380

257,272
657,898 -215,314 2,062,060

298,371
677,609 -282,169 2,286,927

 Sales by Major Product

Classification

2015.1Q~3Q

TV

Mobile Devices

Memory

Display Panel  Including internal sales between Divisions.

198,456 764,293 259,510 209,611

2014 324,486
1,074,149 293,244 257,272

(Unit: KRW 100 million)
2013 331,207
1,353,537 237,146 298,371

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 Sales by Type

Classification

2015.1Q~3Q

Products Service and other Sales
Total Other sales consists of royalty income and etc.

1,464,662 8,718
1,473,380

2014
2,036,716 25,344
2,062,060

(Unit: KRW 100 million)
2013 2,252,839 34,088 2,286,927

 Sales by Region (on a separate basis)

(Unit: KRW 100 million)

Classification
Korea Americas Europe Asia and Africa
China Total

2015.1Q~3Q
111,877 314,094 122,689 225,202 226,758 1,000,620

2014
153,247 433,940 208,982 298,140 283,946 1,378,255

2013
172,004 442,526 335,645 341,059 292,487 1,583,721

B. Sales Channels  Korea

Seller
Manufacturer (Facility)
 Overseas

Sales Channel

Retailer

Distributor (General Merchandise Store, Discount Store, Department Store, Home-Shopping, Internet)

Retailer

Cooperative Joint Market, Sales Shop, Open Stores

Telecommunication Service Provider (SKT, KT, LG U+)

Direct Sales

Consumer Consumer

Seller
Production Subsidiaries

Regional Sales Office Regional Distribution Office

 Sales Ratio by Channel

Sales Channel

Retailer

Dealer

Retailer

Distributor

Dealer

Retailer

Telecommunication Service Provider

Regional Sales Office

Dealer Distributor

Retailer

Retailer

Dealer

Retailer

Direct Sales

Consumer Consumer

Channel Ratio
 On a global basis

Wholesale 33%

Retail 24%

Special/direct sale 38%

Others 5%

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C. Sales Methods and Conditions  Domestic

Classification

Channel

Exclusive

Agency

Distributor

General Merchandise Store, Discount Store, Department Store,
Home Shopping, Internet

Special/direct sale

Corporate Clients, etc.

Collection

Incidental expense sharing

- Credit agreement (Cash, 30 day credit) - Case specific cost sharing as determined by mutual (Credit applied within 100% of collateral) agreement

Case specific and contract specific

- Case specific cost sharing as determined by mutual agreement

Case specific and contract specific

N/A

 Overseas

Classification

Channel

Retailer Dealer Distributor

Retail store
General merchandise store, Discount store, Department store
Direct sales to local distributors

B2B

Corporate Clients, etc.

Collection Case specific and contract specific Case specific and contract specific Case specific and contract specific Case specific and contract specific

Incidental expense sharing
- Case specific cost sharing as determined by mutual agreement - Case specific cost sharing as determined by mutual agreement - Case specific cost sharing as determined by mutual agreement
N/A

D. Sales Strategy
 Expand market leadership based on smart devices  Provide differentiated value to customers through brand, products, and service  Strengthen operational capabilities for customer/market  Enhance sales capabilities
E. Major Customers
During the first three quarters of 2015, 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 exposed to foreign currency volatility due to exchange positions of currencies, especially 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 conducted in the local currency or for the cash-in currency to be matched with the cash-out currency. The Company's foreign exchange risk management policy also defines foreign exchange risk, measuring period, ownership responsibilities, management procedures, hedging period and hedge ratio.
The Company prohibits all speculative foreign exchange transactions. The Company has established a global foreign exchange system to manage exposures related to receivables and payables denominated in foreign currencies.
(2) 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 September 30, 2015 and December 31, 2014, a price fluctuation in relation to marketable equity securities by 1% would result in changes in other comprehensive income (before income tax) of KRW 48,896 million and KRW 57,768 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

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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.
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 finance center. The Company normally enters into financial agreements that do not: require guarantees for payment, have restrictions on debt ratios or have acceleration provisions. The Company requires separate approval for contracts with such restrictive provisions.
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 its 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 operating 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.

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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, 2014. The Company has maintained "A+ " and "A1" credit ratings from S&P and Moody's, respectively.

The total liabilities to equity ratio as of September 30, 2015 and year-end 2014 are as follows:

Total liabilities Total equity Total liabilities to equity ratio

September 30, 2015 65,838,937 180,728,636 36.4%

(Unit: KRW million) December 31, 2014
62,334,770 168,088,188
37.1%

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E. Fair Value Measurement
- Carrying amounts and fair values of financial instruments by category as of September 30, 2015 and December 31, 2014 are as follows:

Classification
Financial assets Cash and cash equivalents

September 30, 2015

Carrying amount

Fair value

23,608,377

(1)

(Unit: KRW million)

December 31, 2014

Carrying amount

Fair value

16,840,766

(1)

Short-term financial instruments
Short-term available-for-sale financial assets
Trade and other receivables
Long-term available-for-sale financial assets(2)
Other

40,895,407 5,220,977 27,631,463 8,628,872 3,551,301

(1)
5,220,977
(1)
8,211,414 3,530,398

41,689,776 3,286,798 24,694,610 12,667,509 4,762,971

(1)
3,286,798
(1)
12,272,756 4,725,263

Total Financial assets

109,536,397

103,942,430

Financial liabilities Trade payables

9,842,913

(1)

7,914,704

(1)

Short-term borrowings

11,303,099

(1)

8,029,299

(1)

Other payables
Current portion of long-term borrowings
Debentures

7,672,000 46,910
1,458,885

(1) (1)
1,488,220

9,258,344 1,778,667 1,355,882

(1) (1)
1,377,113

Long-term borrowings

78,001

61,846

101,671

82,271

Long-term other payables

2,214,367

2,256,516

2,520,277

2,606,179

Other

8,861,788

(1)

11,474,129

(1)

Total Financial liabilities

41,477,963

42,432,973

1 Assets and liabilities whose carrying amounts are reasonable approximations of their fair value are excluded from the fair value disclosures.
2 Amount measured at cost (2015.3Q: KRW 417,458 million and 2014: KRW 394,753 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:

Assets

(In millions of Korean won)

Short-term available-for-sale financial assets Long-term available-for-sale financial assets1

Other

Liabilities

Other

Level 1
4,889,610
-
-

As of September 30, 2015

Level 2

Level 3

Total balance

5,220,977 33,379 66,160

3,288,425
840

5,220,977 8,211,414
67,000

44,643

-

44,643

December 31, 2014

Assets

(In millions of Korean won)

Level 1

Level 2

Level 3

Total balance

Short-term available-for-sale financial assets Long-term available-for-sale financial assets1

1,016,878 5,776,836

2,269,920 3,050,338

3,445,582

3,286,798 12,272,756

Other

-

45,898

102,513

148,411

Liabilities

Other

-

78,348

-

78,348

1 Amount measured at cost (September 30, 2015: KRW 417,458 million, December 31, 2014: KRW 394,753 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.
Level 1: Quoted market prices (unadjusted) for identical assets or liabilities Level 2: Fair valuation based on inputs that are observable in the market
(Other than quoted prices included within Level 1) Level 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: Quoted market prices or dealer quotes for similar instruments. The 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 The Company utilizes a present value method to discount future cash flows at a proper interest rate for
corporate bonds, government and public bonds, and bank debentures that are classified as Level 2 in the fair value hierarchy. The 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

Samsung Venture Investment

6,586

Coming Incorporated convertible preferred shares Derivatives Embedded derivatives (convertible bonds)

2,871,758 840

Valuation Technique
Discounted cash flow
Discounted cash flow
Trinomial model
Binomial model

Level 3 Inputs
Permanent growth rate Weighted average cost of capital Permanent growth rate Weighted average cost of capital Risk adjusted discount rate Price volatility
Discount rate Stock price volatility

(In millions of Korean won) Input Range
(Weighted Average)
-1.00% ~ 1.00% (0%) 7.76% ~ 9.76% (8.76%) -1.00% ~ 1.00% (0%) 7.74% ~ 9.74% (8.74%) 5.46% ~ 7.46% (6.46%) 29.8% ~ 35.8% (32.8%)
3.31% ~ 7.44% (5.22%) 15.84% ~ 22.28% (18.93%)

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- Changes in Level 3 Instruments:
(In millions of Korean won) Balance as of January 1
Purchases Disposals Amount recognized in profit or loss Amount recognized in other comprehensive income Other Balance as of September 30

2015.3Q
3,548,095 77,227
(123,798) (11,230)
(195,051) (5,978)
3,289,265

2014.3Q
493,378 2,498,800
(10,871) (14,518) 192,453 (41,731) 3,117,511

- 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
-
262 262

Equity 247,116
262 247,378

Unfavorable Changes Profit or Loss
-
(261) (261)

Equity (216,189)
(261) (216,450)

1 Changes in the fair value of convertible preferred shares have been calculated by increasing or decreasing the correlation between volatility (29.8% ~ 35.8%) 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%, which are relevant major variables that cannot be observed.

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8. Derivative Instruments and Put Options

The Company holds convertible bonds in several companies, including FTS.

(A) The value of derivative instruments as of September 30, 2015 is presented below:

(Unit: KRW million)

Asset

Liabilities

Valuation Gain

Valuation Loss

Put options

9,908

-

161

1,783

Total

9,908

-

161

 The option values were calculated using appropriate valuation methodologies, including the Black-Scholes model

1,783

The Company holds convertible preferred shares of Corning Incorporated and its value as of September 30, 2015 is as follows.

(Unit: KRW million)

Purchasing Price

Fair Value

Valuation Gain

Valuation Loss

Convertible Preferred Shares

2,434,320

 Fair value determined using Trinomial Tree model

2,871,758

437,438

-

(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.

(C) Currency forwards as of September 30, 2015 are as follows.

Currency forwards Total

Asset 65,997 65,997

Liabilities 44,605 44,605

Valuation Gain 57,039 57,039

(Unit: KRW million) Valuation Loss
20,446 20,446

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9. Major Contracts

Account

Item

Contents

Contract type

Patent cross-license agreement

Ericsson

Contract date

2014.01.25

Purpose and contents

Secure operational advantage through mutual patent licensing

Contract type

Patent cross-license agreement

Google

Contract date and period Purpose and contents

2014.01.25 / indefinite term 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

Cisco

Contract date

2014.01.23

Purpose and contents

Secure business freedom through mutual patent licensing

Global Foundries Inc.

Contract type Contract date Purpose and contents

Process technology license contract 2014.02.28 Expand customer base of 14nm process

Contract type

Patent license agreement

InterDigital

Contract date

2014.06.03

Purpose and contents

Secure business freedom through patent licensing

Contract type

Patent cross-license agreement

Sharp

Contract date

2015.01.01

Purpose and contents

Secure operational advantage through mutual patent licensing

Contract type

Settlement Agreement

Microsoft

Contract date

-

Purpose and contents

End dispute over royalty payment

 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 global IT industry and become a worldwide leader in industrial technology by creating and securing next-generation technology.

[R&D expenses]

(Unit: KRW million)

2015.3Q

Total R&D expenditure

Accounting

Capitalization of development expenses (intangible asset)
R&D costs (expenses)

R&D expenses/sales Ratio

11,101,697 858,982
10,242,715 7.5%

 On a consolidated basis (in conformity with K-IFRS)

2014.3Q 11,412,295 679,094
10,733,201 7.4%

2014 15,325,507 940,001
14,385,506 7.4%

2013 14,780,432 461,030
14,319,402 6.5%

As of September 30, 2015, the Company's R&D expenses were KRW 11,102 billion. The Company capitalized KRW 859 billion and recognized KRW 10,243 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 Company into 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), the UK (SRUK), Russia (SRR), Israel (SRIL and SIRC), India (SRI-Bangalore and SRI-Delhi), Japan (SRJ), China (SSCR, SRC-Beijing, SRC-Nanjing, SRC-Tianjin, and SRCGuangzhou) to carry out research activities for product development and basic technological research.

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 As of September 30, 2015  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 TV Service

 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)

 Region: Global  Launch: Feb '13

160lm/W middle power LED package
Smart Input Device

 Mass produced 160lm/W middle power, LED package

- Middle power LED package achieved luminance efficiency of 160 lumen per watt

 Region : Global

- First to mass produce industry-best middle power LED package

 Launch: Feb `13

 Promote the Company's image as a leader in middle power LED package technology and  Name: LM561B continue to secure LED market presence

 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

 Region: Global  Launch: Mar '13

HDD Broadcasting Multi-device (BD-F8500)

 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

 Region: Europe  Launch: Mar `13

BD Player (BD-F7500)

 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

 Region: Global  Launch: Mar `13

Mobile AP development

 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

Mass produce 10nm 128Gb NAND Flash
for mobile

 Mass produced high capacity 10nm 128Gb NAND Flash - Launched twice the capacity of 10nm 64Gb in Nov `12 - Equipped best capacity 20nm 64Gb NAND from May `12
 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 : Exynos 5 Octa
 Region : Global  Launch : Mar `13  Name : 128Gb NAND Flash

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Research Project

Research Results and Expected Effect

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

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

Develop high-resolution OLED panel

 Secure advantages in terms of resolution compare to competitors and strengthen market competitiveness by developing high-resolution technology
 Mass produce smartphone OLED panel

eFlash process

 Developed 45nm eFlash process as the first in the industry - Secured commercialization technology by developing smart card IC test chip - Reduced power consumption 25%, data reading time 50% - Plan to mass produce the first commercialized product in 2H14 - Applied to MCU product foundry/ASIC business
 Promote the Company's image as a leader of smart card IC technology and induce foundry/ASIC customers

In case applied to a product, name of the product and application
 Region : Global  Launch : Mar `13  Name : 960GB Server SSD
 Region : Global  Launch : Mar `13  Name : S3FT9KF
 Region : Global  Launch : Apr `13
 Region : Global  Launch: May `13  Name: 45nm eFlash

Develop

 Mass produced 55",65" UHD TV panel

ultra-large-size/ high  Strengthen market leadership and contribute to commercialization of UHD TV

resolution LCD TV panel by expanding UHD TV lineups

 Region : Global  Launch : Jun `13

Develop OLED TV panel (55")
Smart Interaction
Monitor (SC770)

 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

 Improved motion recognition - Improve motion sensitivity, Thumbs Up recognition
 Increased interactive voice response supported countries - Countries added: Canada/Switzerland/Spain  Countries supported: 9 (as of end-June)  US, UK, Korea, France, Germany, Australia, Canada, Switzerland, Spain
 Introduced built-in camera for OLED/UHD TV Reflected new developments on circuit/apparatus for OLED Design 5M pixels, support motion/face recognition (same spec as LED F8000)

 Region: Global  Launch: Jun `13  Applied products
- Motion recognition: TV with built-in camera - Interactive voice response: Models of LED 6400 or higher - Built-in camera: OLED TV KN55S9CAF, UHD TV 55/65 F9000

 Added Touch Monitor Line up in `13 - Introduced Touch Monitor to create a new market
 Reinforced user convenience - Secured absolute advantage over competitors by providing differentiated usability&design
 Optimum solution for using Touch - Fast Touch and 10 Points multi Touch possible by applying capacitive sensing Touch, Windows8 certification - Ergonomic sliding stand structure - Wide viewing range Panel and contrast range three times wider than plain monitor
 Premium design - Premium design with metallic materials - Narrow Bezel design that maximizes immersive experience when using Touch

 Region: America/Europe/etc.  Launch: Jun `13  Inch : 24"

Mass produce 3D vertical 128Gb
V-NAND Flash

 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

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Research Project
Open Cell Monitor (SC590)

Research Results and Expected Effect
 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

In case applied to a product, name of the product and application
 Region: Global  Launch: Aug `13  Inch : 27"

Wearable Display Watch

 Create new OLED Application market based on design differentiation  Develop 1.63" high-resolution Compact Design

 Region : Global  Launch : Sep `13

Mass produce Server
3D V-NAND based 960GB
high reliability SSD
Develop Flexible technology

 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
 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 : Sep `13  Name: 960GB 3D V-NAND SSD
 Region : Global  Launch : Oct `13

Develop ISOCELL Pixel technology

 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

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

LFD ME95C

 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"

Develop new smart card product

 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

High-resolution low power  Mass produce high-resolution Tablet panel

consumption

 Achieved low power consumption of tablet products and higher rate of production by

Tablet product technology enhancing transmissivity

 Region : Global  Launch : Feb `14

Mass produce 20nm 4GB
DDR3 DRAM for server

 Mass produce ultra-fine 20nm 4GB DDR3 DRAM as the first in the world - Applied independently developed high-density/high-speed/low-power consumption technology - Enhanced productivity by 30% compare to 25nm
 PC and server full line-up to be launched with 20nm 4GB DRAM - Enhance competitiveness by launching the whole line-up including mobile in the future

 Region : Global  Launch : Feb `14  Name : 4GB DDR3 DRAM

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Research Project

Research Results and Expected Effect

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

Develop new Mobile AP product
with HMP solution
UHD TV HU9000

 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
 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

Mass produce 2nd generation V-NAND based 1TB SSD for PC

 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

In case applied to a product, name of the product and application
 Region : Global  Launch : Mar `14  Name : S5K2P2
 Region : Global  Launch: Jan/Mar `14  Name : Exynos5250/ Exynos5422
 Region : Global  Launch: Mar `14  Inch : 55"/65"
 Region : Global  Launch : May `14  Name : 1TB, V-NAND SSD

Develop new ISOCELL Image sensor

 Develop 13 megapixel stacked ISOCELL image sensor - Smaller chip size and wider circuit range by applying stacked structure - Diversification of exposure with smart WDR function improves color in backlight

 Region : Global  Launch : Jun `14  Name : S5K3M2

Develop new Mobile AP product

 Launched new Exynos 5 Octa (5430) product - Increased power efficiency by applying 20nm low-power consumption HKMG process - Enhanced performance by applying HMP solution and can work individually depending on low power core needs - Enhanced low power consumption property by using automatic conversion to power save mode and mobile video compression technology - Support WQHD and WQXGA ultra high-resolution

 Region : Global  Launch : Jun `14  Name : Exynos 5430

UHD TV (UN105S9WAF)

 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

LFD

- Applied spec to respond to LFD Usage

- Reduced additional investment costs by sharing TV HU7K design

QMD

 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"

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Research Project
Bendable TV Nov
(UN78S9BAF)
Mass produce PC/server 32 layer 3bit 3D V-NAND
Mass produce mobile
20nm 8Gb LPDDR4 DRAM

Research Results and Expected Effect
 World's first Bendable UHD TV - Secured technology leadership  Design - Adopted Timeless Gallery Design - Becomes an aesthetic object when power is off

In case applied to a product, name of the product and application
 Region : Domestic  Launch : Nov `14  Inch: 78"

 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)

 Mass produced the world's first ultrafine 20nm 8Gb LPDDR4 DRAM

- Applied "highly integrated/ultrahigh speed/high-density" solution developed by the Company - Created the world's first 4GB market and took the lead  Led growth of the DRAM market by expanding 20nm DRAM lineup - Plan to take the lead in the market by expanding next-generation lineups(8/6/4Gb) in the

 Region : Global  Launch : Dec `14  Inch: 8Gb LPDDR4 DRAM

future

Launch new Mobile AP
product

 Industry's first 14nm FinFET process-based Mobile AP - Compared to 20nm process, 14nm process has enhanced performance by 20%, reduced power consumption by 30%, and improved productivity by 35%

 Region : Global  Launch : Jan `15  Name: Exynos 7 Octa

Launch new NFC product
Mass produce 10nm-class 128GB UFS for mobile
Launch SUHD TV
Mass produce NAND-based 10nm-class 512GB M.2 NVMe SSD for PC
HAV(WAA) WAM5500/ZA
Launch new
CMOS image sensor

 4th generation NFC solution with enhanced RF performance

- Compared to 3rd generation products, doubled card mode and enhanced reader mode by 20%  Region : Global

 Support mobile POS in smartphone environment

 Launch : Jan `15

 Applied 45nm embedded flash process

 Name: S3FWRN5P

- Reduced customers' product development and certification period

 Mass produced the world's first 128GB UFS memory for mobile - Performance was enhanced by 12 times compared to memory card and 2.7 times compared to eMMC  Lead the growth of the premium market by expanding the high-density memory market - Launched high-density line up with twice the density (128/64/32GB)

 Region : Global  Launch : Feb `15  Name: 128GB UFS
(Internal memory card)Lau

 Curved SUHD TV : Provide the ultimate immersive experience  S: Spectacular, Smart, Stylish, Superb  Design : Chamfer Design (Real Metal)

 Region : Global  Launch : Mar `15  Inch: 65"/78"/88"

 Mass produced world's first 512GB M.2 NVMe SSD for the next generation PC - Read speed of 2,260MB/s, 4 times faster than SATA SSD - Took the lead in the mobile workstation and slim PC markets  Led the premium market by expanding the ultra-high speed, high-density SSD market - Plan to target PC market in earnest by launching V- NAND based line ups in the future

 Region : Global  Launch : Apr `15  Name: 512GB
M.2 NVMe SSD (SM951 SSD)

 Ambient Audio Defined a new audio category with differentiated sound quality and sensible design (Blending, conventional design) - Provide the same sound quality through Wireless Audio 360 and Ring Radiator Tech - Expand multi-room audio usability through compatibility with TV/AV products - Provide sensible user experience by applying Analog Wheel - Easy to understand setting information through Voice AUI - Provide visual experience by applying OLED
 Industry's first 1.0um 16 mega-pixel mobile image sensor - Provide the same image quality with 1.12um pixels by applying ISOCELL - With camera module of under 5mm in height, mobile device design became slimmer - Compared to 1.12um pixel sensor, module height decreased by 20%

 Region : Americas  Launch : Aug `15
 Region : Global  Launch : Jul `15  Name: S5K3P3

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Research Project

Research Results and Expected Effect

Mass produce 3rd generation(48-layer)
256Gb 3D V-NAND
for SSD
Mass produce 20nm DRAM-based
12Gb LPDDR4 mobile DRAM
for mobile

 Mass produced world's first 3rd generation(48-layer) 3D V-NAND - Began mass producing 256Gb in earnest, which has twice the degree of integration than 128Gb - Took the lead in the PC, enterprise server, and datacenter SSD markets
 Led `popularization of Tera SSD' by expanding ultra-high-speed SSD line ups - Target the market by expanding 3rd generation V-NAND based line ups
 Mass produced world's first next generation 12Gb LPDDR4 DRAM for mobile - First to achieve 4,266Mbps, which is twice the speed of PC DRAM - Took the lead in not only mobile but also PC, consumer electronics, and automobile
markets  Led the premium DRAM market by taking the lead in the ultra-high-speed DRAM market - Plan to target the next generation DRAM market in the future by launching 6GB line ups

In case applied to a product, name of the product and application
 Region : Global  Launch : Aug `15  Name: 256Gb 3D V-NAND
(3G 48-layer)
 Region : Global  Launch : Sep `15  Name: 12Gb LPDDR4
Mobile DRAM (20nm DRAM)

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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)>

Number

Korea 32,507

US 35,718

Europe 14,834

China 9,099

Japan 6,814

(Unit: # of Patents) Others 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>

Korea US

`14 3,970 4,952

`13 2,762 4,676

`12 2,013 5,081

`11 1,610 4,894

`10 1,612 4,551

`09 1,485 3,611

(Unit: # of Patents)

`08

`07

4,740

10,974

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 for more details about Green Technology Certification.)

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(Environmental Regulation of Products)
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" system to reflect eco-friendly elements on products (reduced use of resources, energy and harmful substances, and the use of ecofriendly 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

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(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:

Greenhouse gas (Unit: tCO2e)

2014 6,775,019

2013 6,303,033

2012 6,004,674

Energy (Unit: TJ)

101,386

96,298

 62 workplaces, including domestic manufacturing facilities, company buildings, and company owned buildings.  Reported Greenhouse gas emission excludes ozone depletion substances (ODS).

91,330

The Company achieved its own greenhouse emission and energy consumption limit goal for 2014 through energ y-saving activities and by installing energy efficient equipment to meet greenhouse gas reduction. From 2015, in accordance with the Article 8 of the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits, the Company is an eligible business entity under the Act.
 See 9. Green Management in XI. Other Informationfor Green Technology Certifications.

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III. Financial Affairs
1. Consolidated Financial Statements

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In millions of Korean won, in thousands of U.S dollars (Note 2.3))

Assets Current assets Cash and cash equivalents Short-term financial instruments Short-term available-for-sale
financial assets Trade receivables Non-trade receivables Advances paid 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 associates and joint
ventures Property, plant and equipment Intangible assets Long-term prepaid expenses Deferred income tax assets Other non-current assets
Total assets

Notes

September 30, 2015 KRW

3

23,608,377

3

40,895,407

3

5,220,977

3

27,631,463

3

3,062,872

1,781,263

3,623,823

5

22,841,069

1,113,148

28

-

129,778,399

3, 4

8,628,872

6

5,406,135

7

86,560,428

8

5,560,298

4,249,552

4,522,873

1,861,016

246,567,573

December 31, 2014 KRW

September 30, 2015 USD

16,840,766 41,689,776
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

21,035,898 36,439,251
4,652,075
24,620,609 2,729,127 1,587,168 3,228,954
20,352,199 991,854 -
115,637,135

12,667,509
5,232,461
80,872,950 4,785,473 4,857,126 4,526,595 2,334,818
230,422,958

7,688,629
4,817,057
77,128,396 4,954,422 3,786,501 4,030,039 1,658,230
219,700,409

December 31, 2014 USD
15,005,717 37,147,062
2,928,653
22,003,769 3,154,154 1,772,688 2,981,932
15,430,507 1,599,536 575,155
102,599,173
11,287,198
4,662,307
72,060,653 4,264,025 4,327,871 4,033,356 2,080,406
205,314,989

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INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In millions of Korean won, in thousands of U.S dollars (Note 2.3))

Liabilities and Equity Current liabilities Trade 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

Notes

September 30, 2015 KRW

3 3, 9
3
3 3, 9, 10
12 28

9,842,913 11,303,099
8,943,659 1,314,436
902,629 9,801,498 1,712,186
46,910
8,885,694 275,371 -
53,028,395

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

3, 10 3, 9
3 11
12

1,458,885 78,001
2,433,972 1,012,175 5,242,795
692,508 1,892,206
65,838,937

December 31, 2014 KRW

September 30, 2015 USD

7,914,704 8,029,299 10,318,407 1,427,230 1,161,635 12,876,777 2,161,109
1,778,667
5,991,510 326,259 28,316
52,013,913

8,770,383 10,071,460
7,969,116 1,171,209
804,274 8,733,481 1,525,618
41,798
7,917,467 245,365 -
47,250,171

1,355,882 101,671
2,562,271 201,342
4,097,811 499,290
1,502,590
62,334,770

1,299,918 69,502
2,168,755 901,884
4,671,515 617,049
1,686,022
58,664,816

December 31, 2014 USD
7,052,281 7,154,389 9,194,065 1,271,712 1,035,058 11,473,663 1,925,624
1,584,855
5,338,647 290,708 25,231
46,346,233
1,208,139 90,592
2,283,074 179,403
3,651,294 444,885
1,338,861 55,542,481

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INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In millions of Korean won, in thousands of U.S dollars (Note 2.3))

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
Non-controlling interests
Total equity

Notes

September 30, 2015 KRW

14

119,467

14

778,047

4,403,893

15

181,889,556

16

(12,796,100)

28

-

174,394,863 6,333,773
180,728,636

Total liabilities and equity

246,567,573

December 31, 2014 KRW
119,467 778,047 4,403,893 169,529,604 (12,729,387)
80,101
162,181,725 5,906,463
168,088,188
230,422,958

September 30, 2015 USD
106,449 693,267 3,924,024 162,070,014 (11,401,776)
-
155,391,978 5,643,615
161,035,593
219,700,409

December 31, 2014 USD
106,449 693,267 3,924,024 151,056,861 (11,342,333)
71,373
144,509,641 5,262,867
149,772,508
205,314,989

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INTERIM CONSOLIDATED STATEMENTS OF INCOME

(In millions of Korean won, in thousands of U.S dollars (Note 2.3))

Notes

For the three-months ended September 30,

2015 KRW

2014 KRW

2015 USD

2014 USD

For the nine-months ended September 30,

2015 KRW

2014 KRW

2015 USD

2014 USD

Revenue Cost of sales
Gross profit Selling, general and administrative
expenses Operating profit Other non-operating income Other non-operating expense Share of profit of
associates and joint ventures Finance income Finance expense Profit before income tax Income tax expense Profit for the period Profit attributable to owners of the parent Profit attributable to non-controlling
interests Earnings per share for profit
attributable to the owners of the parent (in Korean Won, in US dollars)
- Basic - Diluted

17 17, 18
19 19 6 20 20 21
22

51,682,572 31,609,452 20,073,120
12,679,747 7,393,373 320,297 404,293 23,694 3,385,634 3,328,586 7,390,119 1,931,560 5,458,559 5,306,104 152,455
35,630 35,629

47,447,310 46,050,996 30,711,398 28,165,137
16,735,912 17,885,859

12,675,390 11,298,102

4,060,522 828,296 286,460

6,587,757 285,396 360,239

2,076

21,112

1,682,596 1,440,159 4,846,871
624,526 4,222,345 4,135,422

3,016,719 2,965,888 6,584,857 1,721,088 4,863,769 4,727,926

86,923 135,843

27,419 27,418

31.75 31.75

42,277,228 27,364,940 14,912,288
11,294,220
3,618,068 738,041 255,246
1,850
1,499,252 1,283,232 4,318,733
556,475 3,762,258 3,684,807
77,451

147,338,029 89,520,438 57,817,591
37,546,914
20,270,677 1,335,872 869,351
113,872
7,961,000 7,575,284 21,236,786 5,400,115 15,836,671 15,452,161
384,510

153,475,865 94,432,732 59,043,133
39,306,489
19,736,644 3,327,828 1,572,572
96,217
5,369,692 4,676,862 22,280,947 4,233,380 18,047,567 17,796,608
250,959

131,283,384 79,765,870 51,517,514
33,455,626
18,061,888 1,190,309 774,622
101,464
7,093,532 6,749,845 18,922,726 4,811,693 14,111,033 13,768,421
342,612

136,752,412 84,142,897 52,609,515
35,023,469
17,586,046 2,965,212 1,401,217
85,733
4,784,585 4,167,249 19,853,110 3,772,091 16,081,019 15,857,406
223,613

24.43 24.43

103,720 103,718

118,009 118,000

92.42 92.42

105.15 105.14

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INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions of Korean won, in thousands of U.S dollars (Note 2.3))

Notes

Profit for the period

Other comprehensive income

Items not to be reclassified

subsequently to profit or loss :

Remeasurements of the net defined

16

benefit liability, net of tax

Items to be reclassified

subsequently to profit or loss :

Changes in value of available-for-sale

16

financial assets, net of tax

Share of other comprehensive

16

income(loss) of associates and joint

ventures, net of tax

Foreign currency translation, net of tax 16

Other comprehensive income(loss)

for the period, net of tax

Total consolidated comprehensive

income for the period

Consolidated comprehensive income attributable to :
Owners of the parent Non-controlling interests

For the three-months ended September 30,

2015

2014

2015

2014

KRW

KRW

USD

USD

For the nine-months ended September 30,

2015

2014

2015

2014

KRW

KRW

USD

USD

5,458,559 4,222,345 4,863,769 3,762,258 15,836,671 18,047,567 14,111,033 16,081,019

(17,309)

(15,366)

(15,423)

(13,692)

(67,240)

(35,973)

(59,913)

(32,054)

(339,259) (292,853)

(1,729) 1,841,124 1,482,827 6,941,386

22,408 112,396 (173,415) 4,048,930

(302,292)
(1,541) 1,640,506 1,321,250 6,185,019

(260,942) (818,154) (562,797) (729,004) (501,472)

19,966

2,037

100,149 (154,519)

2,110,157 1,226,800

3,607,739 17,063,471

(61,509) (1,792,533) (2,452,812) 15,594,755

1,815

(54,807)

1,880,224 (1,597,211) 1,093,122 (2,185,544)

15,204,155 13,895,475

6,735,178 206,208

3,977,392 71,538

6,001,281 183,738

3,543,997 16,632,865 15,400,519 14,820,470 13,722,406

63,742

430,606

194,236

383,685

173,069

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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of Korean won)

2014 KRW

Preferred Common Share

Notes stock

stock

premium

Retained earnings

Other components
of equity

Equity attributable to owners of the
parent

Non-controlling interests

Total

Balance as at January 1, 2014 Profit for the period Changes in value of available-for-sale 16
financial assets, net of tax Share of other comprehensive loss of 16
associates and joint ventures, net of tax Foreign currency translation, net of tax 16 Remeasurements of net defined benefit 16 liability, net of tax
Total comprehensive income

Dividends

Capital transaction under common

control

Changes in consolidated entities

Disposal of treasury stock

16

Stock option

16

Others

Total transactions with owners

Balance as of September 30, 2014

119,467
-
-
-
119,467

778,047 -

4,403,893 148,600,282 17,796,608

-

-

(9,459,073) (586,312)

-

-

-

(61,138)

-

-

-

-

- (1,710,595)

-

(38,044)

-

- 17,796,608 (2,396,089)

-

- (2,157,011)

-

-
778,047

-

-

(158)

-
4,403,893

4,977 (2,152,034)
164,244,856

32,763 (9,436) 2,882 26,051
(11,829,111)

144,442,616 17,796,608 (586,312)
(61,138)
(1,710,595) (38,044)
15,400,519 (2,157,011)
(158) -
32,763 (9,436)
7,859 (2,125,983) 157,717,152

5,573,394 150,016,010 250,959 18,047,567
23,515 (562,797)

(371)

(61,509)

(81,938) 2,071
194,236 (16,312)

(1,792,533) (35,973)
15,594,755 (2,173,323)

(549)
378 -
(604) (17,087) 5,750,543

(707)
378 32,763 (9,436) 7,255 (2,143,070) 163,467,695

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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of US dollars (Note 2.3))

2014 USD

Preferred Common Share

Notes stock

stock premium

Retained earnings

Other components
of equity

Equity attributable to owners of the
parent

Non-controlling interests

Total

Balance as at January 1, 2014 Profit for the period Changes in value of available-for-sale 16
financial assets, net of tax
Share of other comprehensive loss of 16 associates and joint ventures, net of tax
Foreign currency translation, net of tax 16 Remeasurements of net defined benefit 16
liability, net of tax

Total comprehensive income

Dividends

Capital transaction under common

control

Changes in consolidated entities

Disposal of treasury stock

16

Stock option

16

Others

Total transactions with owners

Balance as of September 30, 2014

106,449 -
-

693,267 -
-

3,924,024 -
-

132,408,096 15,857,406
-

(8,428,368) -
(522,425)

-
-
-
-
106,449

-

-

-

(54,476)

-

-

-

-

- (1,524,201)

-

(33,899)

-

- 15,857,406 (2,135,001)

-

- (1,921,973)

-

-
693,267

-
3,924,024

-
4,435 (1,917,538) 146,347,964

(141)
29,193 (8,408) 2,568 23,212 (10,540,157)

128,703,468 15,857,406 (522,425)
(54,476)
(1,524,201) (33,899)
13,722,405
(1,921,973)
(141) -
29,193 (8,408)
7,003 (1,894,326) 140,531,547

4,966,091 223,613
20,953

133,669,559 16,081,019
(501,472)

(331)

(54,807)

(73,010) 1,845

(1,597,211) (32,054)

173,070 (14,535)

13,895,475 (1,936,508)

(489)
337 -
(538) (15,225) 5,123,936

(630)
337 29,193 (8,408) 6,465 (1,909,551) 145,655,483

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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of Korean won) 2015 KRW

Preferred Common Share

Notes stock

stock premium

Retained earnings

Other components
of equity

Accumulated other
comprehensive income
attributable to assets held-for-
sale

Equity attributable to owners of the parent

Noncontrolling
interests

Total

Balance as at January 1, 2015 Profit for the period Changes in value of available-for-sale 16
financial assets, net of tax Share of other comprehensive income 16
(loss) of associates and joint ventures, net of tax Foreign currency translation, net of tax 16 Remeasurements of net defined benefit 16 liability, net of tax
Reclassification to assets held-for-sale
Total comprehensive income (loss)

Dividends

Capital transaction under common

control

Changes in consolidated entities

Acquisition of treasury stock

16

Others

Total transactions with owners

Balance as of September 30, 2015

119,467 -
-

778,047 -
-

4,403,893 169,529,604 - 15,452,161

-

-

(12,729,387) (760,372)

-
-
-
-
-
119,467

-

-

-

55,943

-

-

- 2,036,691

-

-

-

(67,235)

-

-

-

(4,222)

-

- 15,452,161 1,260,805

-

- (3,073,480)

-

-
778,047

-

-

-
4,403,893

(18,729) (3,092,209)
181,889,556

(5,314)
(1,323,059)
855 (1,327,518) (12,796,100)

80,101 (28,972)

162,181,725 15,452,161
(789,344)

5,906,463 168,088,188 384,510 15,836,671
(28,810) (818,154)

(54,118)

1,825

(1,233) -
4,222 (80,101)
-

2,035,458 (67,235) -
16,632,865 (3,073,480)

-

(5,314)

-

-

- (1,323,059)

-

(17,874)

- (4,419,727)

- 174,394,863

212

2,037

74,699 (5) -
430,606 (1,564)

2,110,157 (67,240) -
17,063,471 (3,075,044)

(463)
(152) -
(1,117) (3,296) 6,333,773

(5,777)
(152) (1,323,059)
(18,991) (4,423,023) 180,728,636

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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands of US dollars (Note 2.3))

2015 USD

Preferred Common Share

Notes stock

stock premium

Retained earnings

Other components
of equity

Accumulated other
comprehensive income
attributable to assets held-for-
sale

Equity attributable to owners of the parent

Noncontrolling
interests

Total

Balance as at January 1, 2015

Profit for the period

Changes in value of available-for-sale

16

financial assets, net of tax

Share of other comprehensive income

16

(loss) of associates and joint

ventures, net of tax

Foreign currency translation, net of tax 16

Remeasurements of net defined benefit 16

liability, net of tax

Reclassification to assets held-for-sale

Total comprehensive income (loss)

Dividends

Capital transaction under common

control

Changes in consolidated entities

Acquisition of treasury stock

16

Others

Total transactions with owners

Balance as of September 30, 2015

106,449 -
-
-
-
-
106,449

693,267 -
-

3,924,024 151,056,861 (11,342,333)

- 13,768,421

-

-

-

(677,518)

-

-

49,847

-
-
-
-
693,267

-

- 1,814,764

-

-

(59,909)

-

-

- 13,768,421

- (2,738,579)

-

-

(3,762) 1,123,422
-
(4,735)

-
3,924,024

(16,689) (2,755,268)
162,070,014

(1,178,892)
762 (1,182,865)
(11,401,776)

71,373 -
(25,815)

144,509,641 13,768,421
(703,333)

5,262,867 342,612
(25,671)

149,772,508 14,111,033
(729,004)

(48,221)

1,626

(1,099)
-
3,762 (71,373)
-
-
-

1,813,665
(59,909)
14,820,470
(2,738,579)
(4,735) -
(1,178,892) (15,927)
(3,938,133) 155,391,978

189

1,815

66,559 (4) -
383,685 (1,394)

1,880,224 (59,913) -
15,204,155 (2,739,973)

(413)
(135) -
(995) (2,937) 5,643,615

(5,148)
(135) (1,178,892)
(16,922) (3,941,070) 161,035,593

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INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of Korean won, in thousands of U.S dollars (Note 2.3))

Cash flows from operating activities
Profit for the period Adjustments Changes in assets and liabilities arising from
operating activities
Cash flows from operating activities
Interest received
Interest paid
Dividend received
Income tax paid Net cash generated from operating activities

Notes
23 23

2015 KRW 15,836,671 21,499,982
(6,478,308)
30,858,345 1,740,947 (577,860) 227,915
(4,543,937)
27,705,410

2014 KRW 18,047,567 16,303,949
638,514
34,990,030 1,118,831 (341,456) 1,459,641
(5,657,246)
31,569,800

For the nine months ended
September 30,

2015

2014

USD 14,111,033

USD 16,081,019

19,157,243

14,527,394

(5,772,401)

568,939

27,495,875 1,551,245 (514,894) 203,080
(4,048,808)

31,177,352 996,918
(304,249) 1,300,592 (5,040,806)

24,686,498

28,129,807

Cash flows from investing activities Net increase in short-term financial
instruments Proceeds from disposal of short-term
available-for-sale financial assets Acquisition of short-term available-for-sale
financial assets Proceeds from disposal of long-term
financial instruments Acquisition of long-term financial
instruments Proceeds from disposal of long-term
available-for-sale financial assets Acquisition of long-term available-for-sale
financial assets Proceeds from disposal of associates and
joint ventures
Acquisition of associates and joint ventures
Disposal of property, plant and equipment
Purchases of property, plant and equipment Disposal of intangible assets
Purchases of intangible assets
Cash outflows from business combinations Others
Net cash used in investing activities

(1,141,287)
2,043,234
(861,548)
2,799,709
(132,323)
117,272
(102,712)
278,009 (137,917)
193,271 (20,116,206)
803 (1,113,338)
(411,445) 438,126
(18,146,352)

(6,524,466)
1,468,788
(2,253,454)
94,089
(3,248,187)
151,548
(5,940,674)
2,014,430 (653,567)
267,969 (14,478,346)
7,865 (951,358) (176,625)
202,918 (30,019,070)

(1,016,927)
1,820,594
(767,670)
2,494,640
(117,904)
104,493
(91,520)
247,716 (122,889)
172,211 (17,924,250)
716 (992,023) (366,612)
390,386 (16,169,039)

(5,813,529)
1,308,742
(2,007,907)
83,837
(2,894,249)
135,035
(5,293,350)
1,794,928 (582,351)
238,770 (12,900,717)
7,008 (847,694) (157,379)
180,807 (26,748,049)

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INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of Korean won, in thousands of U.S dollars (Note 2.3))

For the nine months ended September 30,

Notes

2015

2014

2015

2014

Cash flows from financing activities
Net increase 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 generated(used) in financing activities

KRW
3,234,626 (1,323,059)
190
(1,795,923) (3,074,851)
(26,185) (2,985,202)

KRW
3,474,181 -
27,582 1,739,653
(2,177,556) (2,162,416)
(760) 900,684

USD
2,882,166 (1,178,892)
169
(1,600,231) (2,739,801)
(23,332) (2,659,921)

USD
3,095,618 -
24,577 1,550,092
(1,940,279) (1,926,789)
(677) 802,542

Effect of exchange rate changes on cash and cash equivalents
Net increase(decrease) in cash and cash equivalents

193,755 6,767,611

(732,131) 1,719,283

172,643 6,030,181

(652,355) 1,531,945

Cash and cash equivalents Beginning of the period End of the period

16,840,766 23,608,377

16,284,780 18,004,063

15,005,717 21,035,898

14,510,314 16,042,259

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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 "Group") 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, communications system, and computers. The DS division includes products such as memory and system LSI in the semiconductor business ("Semiconductor"), and LCD and OLED panels in the display business ("DP"). SEC is domiciled in the Republic of Korea and the address of its registered office is Suwon, the Republic of Korea.

These interim consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards ("K-IFRS") 1110, Consolidated Financial Statements. SEC, as the controlling Company, consolidates its 157 subsidiaries including Samsung Display and Samsung Electronics America.

1.2 Consolidated Subsidiaries

(A) The consolidated subsidiaries as of September 30, 2015 are as follows:

Area Domestic

Subsidiaries Samsung Display (SDC) SU Materials STECO SEMES Samsung Electronics Service Samsung Electronics Sales Samsung Electronics Logitech Samsung Medison Samsung Venture Capital Union #14 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 Samsung Venture Capital Union #28 Samsung Venture Capital Union #29

Industry 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 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 Technology business, Venture capital investments Technology business, Venture capital investments Technology business, Venture capital investments

Ownership Percentage 1
84.8 50.0 70.0 91.5 99.3 100.0 100.0 68.5 99.0 99.0 99.0 99.0 99.0 99.0 99.0 99.0 99.0

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Area America Europe/CIS

Subsidiaries Samsung Electronics America (SEA) NexusDX (Nexus) Samsung Receivables (SRC) NeuroLogica Samsung Semiconductor (SSI) Samsung Electronics Canada (SECA) Samsung Research America (SRA) Grandis Samsung Mexicana (SAMEX) Samsung International (SII) Samsung Austin Semiconductor (SAS) Samsung Electronics Mexico (SEM) SEMES America (SEMESA) Samsung Electronics Digital Appliance Mexico
(SEDAM) Samsung Electronics Latinoamerica Miami
(SEMI) Samsung Electronics Latinoamerica (SELA) Samsung Electronics Venezuela (SEVEN) Samsung Electronica Colombia (SAMCOL) Samsung Electronics Panama (SEPA) Samsung Electronica da Amazonia (SEDA) Samsung Electronics Argentina (SEASA) Samsung Electronics Chile (SECH) Samsung Electronics Peru (SEPR) RT SV CO-INVEST (RT-SV) Quietside SmartThings PrinterOn PrinterOn America Simpress Samsung Pay(formerly LoopPay) YESCO Electronics Beijing Integrated Circuit Industry International
Fund (Beijing Fund) Samsung Electronics (UK) (SEUK) Samsung Electronics Holding (SEHG) Samsung Semiconductor Europe GmbH (SSEG) Samsung Electronics GmbH (SEG) Samsung Electronics Iberia (SESA) Samsung Electronics France (SEF) Samsung Electronics Hungarian (SEH) Samsung Electronics Czech and Slovak (SECZ) Samsung Electronics Italia (SEI) Samsung Electronics Europe Logistics (SELS) Samsung Electronics Benelux (SEBN) Samsung Display Slovakia (SDSK) Samsung Electronics Romania (SEROM) Samsung Electronics Overseas (SEO) Samsung Electronics Polska (SEPOL) Samsung Electronics Portuguesa (SEP) Samsung Electronics Nordic (SENA)

Industry Sale of electronic devices Medical equipment Credit management Medical equipment Sale of semiconductor/LCD Sale of electronic devices R&D R&D Manufacture of electronic devices Manufacture of TV/monitors Manufacture of semiconductor Sale of electronic devices Semiconductor equipment Manufacture of electronic devices
Sale of electronic devices
Sale of electronic devices Marketing and services Sale of electronic devices Consulting Manufacture and sale of electronic devices Marketing and services Sale of electronic devices Sale of electronic devices 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 printing solutions Develop and provide mobile payment service Manufacture and sale of LED displays Venture capital investments
Sale of electronic devices Holding Company Sale of semiconductor/LCD Sale of electronic devices Sale of electronic devices Sale of electronic devices Manufacture and sale of electronic devices Sale of electronic devices Sale of electronic devices Logistics Sale of electronic devices Toll processing of LCD Sale of electronic devices Sale of electronic devices Sale of electronic devices Sale of electronic devices Sale of electronic devices

Ownership Percentage 1
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
99.9 100.0
99.9
100.0
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
99.9 100.0 100.0 100.0 100.0 100.0 100.0 100.0 99.0
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

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Area Europe/CIS
Middle East and Africa

Subsidiaries 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) 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) Samsung Electronics West Africa (SEWA) Samsung Electronics East Africa (SEEA) Samsung Gulf Electronics (SGE) Samsung Electronics Egypt (SEEG) Samsung Electronics Israel (SEIL) Samsung Electronics Tunisia (SETN) Samsung Electronics Pakistan (SEPAK) Samsung Electronics South Africa (SSA) 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)

Industry Sale of semiconductor/LCD Sale of electronic devices Manufacture of TV/monitors Holding Company Manufacture of home appliances
Sale of electronic devices 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 TV Services Holding Company R&D R&D R&D Sale of electronic devices Sale of printing solutions Marketing Marketing Marketing Sale of electronic devices Manufacture and sale of electronic devices Marketing Marketing Marketing Sale of electronic devices Sale of electronic devices R&D
Sale of electronic devices Sale of electronic devices Manufacture of TV/monitors

Ownership Percentage 1
100.0 100.0 100.0 100.0 100.0
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
100.0 100.0 100.0

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Area
Asia (Except China)

Subsidiaries Samsung Japan (SJC) Samsung R&D Institute Japan (SRJ) 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)

Industry Sale of electronic devices R&D 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

China

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

Samsung Telecommunications Malaysia (STM) Samsung Electronics Vietnam THAINGUYEN
(SEVT) Samsung Medison India (SMIN) Samsung Electronics New Zealand (SENZ) Samsung Display Vietnam (SDV) Samsung Electronics HCMC CE Complex (SEHC)
Samsung Display Dongguan (SDD) Samsung Display Tianjin (SDT) Samsung Electronics Hong Kong (SEHK) 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 R&D Institute 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) Tianjin Samsung Telecom Technology (TSTC) Shanghai Samsung Semiconductor (SSS)

Communication system services Manufacture of communication equipment
Medical equipment Sale of electronic devices Manufacture of LCD Manufacture of CE Manufacture of LCD Manufacture of LCD Sale of electronic devices Manufacture of home appliances Manufacture of home appliances
Sale of electronic devices R&D
R&D
R&D
Toll processing of semiconductor Manufacture of printers
Manufacture of electronic devices Manufacture of TV/monitors Sale of electronic devices R&D Manufacture of communication equipment Sale of semiconductor/LCD

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
91.8 100.0 100.0 100.0 100.0 100.0 100.0
100.0 100.0 100.0 100.0 100.0 95.0 100.0 88.3 100.0
100.0 100.0
100.0
100.0
100.0 100.0
99.9 91.2 100.0 100.0 90.0 100.0

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Area
China (Cont.)

Subsidiaries Samsung Electronics Suzhou Computer (SESC) Samsung Suzhou Module (SSM) 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 (Beijing) Service (SBSC) Tianjin Samsung LED (TSLED) Tianjin Samsung Opto-Electronics (TSOE) Samsung R&D Institute China-Xian
(SRC-Xian) SEMES (Xian)

Industry Manufacture of electronic devices Toll processing of LCD Manufacture of LCD Manufacture of communication equipment
Sale of mobile communication and network equipment
R&D R&D Manufacture of semiconductor Services Manufacture of LED Manufacture of cameras/camcorders R&D
Semiconductor equipment

Percentage of ownership1 100.0 100.0 60.0 95.0
100.0
100.0 100.0 100.0 100.0 100.0
90.0 100.0
100.0

1 Ownership Percentage represents the Group's ownership of voting rights in each entity.

(B) A summary of financial data of major consolidated subsidiaries is as follows:

(1) 2015

(In millions of Korean won) Samsung Display (SDC) Samsung Electronics America (SEA) Samsung (China) Investment (SCIC) Samsung (China) Semiconductor (SCS) Samsung Electronics Vietnam (SEV) Samsung Semiconductor (SSI) Samsung Electronics Europe Holding
(SEEH) Samsung Electronics Vietnam
THAINGUYEN (SEVT) Samsung Electronics Huizhou (SEHZ) Samsung Austin Semiconductor (SAS) Samsung India Electronics (SIEL) Shanghai Samsung Semiconductor (SSS) Samsung Asia Private (SAPL) Samsung Electronica da Amazonia (SEDA) Tianjin Samsung Telecom Technology
(TSTC) Samsung Electronics Slovakia (SESK) Samsung Suzhou LCD (SSL) Samsung Electronics Europe Logistics (SELS) Thai Samsung Electronics (TSE) Samsung Electronics GmbH (SEG) Samsung Electronics Hungarian (SEH) Samsung Electronics Taiwan (SET) Samsung Display Dongguan (SDD) Samsung Electronics Benelux (SEBN) Samsung Electronics (UK) (SEUK)

As of September 30, 2015

Assets 39,387,793 16,668,150 12,984,718 9,938,158 9,174,677 8,807,260 7,556,858

Liabilities 6,661,459 9,401,585 11,008,507 6,812,170 1,794,180 4,759,144 5,710,968

7,208,895

4,926,024

6,653,751 6,563,152 3,831,053 3,567,332 3,410,963 3,150,270 2,603,905

2,017,743 3,099,668 2,378,295 2,994,996
652,167 1,145,890
690,336

2,299,479 2,223,677 2,203,302

712,117 997,044 1,699,855

1,908,402 1,903,777 1,599,160 1,597,998 1,313,721 1,307,028 1,306,598

409,313 1,754,422
547,240 1,300,474
435,884 298,486 911,304

For the three months ended

September 30, 2015

Net Income

Sales

(Loss)

7,117,283

773,364

8,911,077

(68,576)

3,318,502

141,357

825,268

77,346

5,118,744

585,546

5,849,751

11,195

-

1,227

5,456,766

373,456

4,969,806 832,923
2,100,563 3,947,122
340,453 1,171,639 1,750,439

199,595 23,246 97,730 36,688 (17,441) (7,403) 96,281

696,050 276,285 3,079,680

35,020 15,204 11,600

986,636 1,473,490
824,353 1,024,722 1,319,652
521,721 1,178,020

68,860 134,679 35,623
2,330 55,307
9,573 (11,759)

For the nine months ended

September 30, 2015

Net Income

Sales

(Loss)

20,054,143

1,713,347

25,546,201

89,782

9,208,543

88,981

1,728,586

85,570

14,110,473

1,524,364

14,809,510

31,900

-

12,079

14,646,759

1,207,986

13,963,990 2,117,895 5,830,237 10,073,341 1,091,804 4,324,964 5,298,631

662,844 60,770 221,651 98,939 (9,068) 244,289 285,486

2,290,874 776,696
9,013,251

105,984 89,504 373,861

3,036,786 4,287,618 2,153,078 3,398,670 3,406,445 1,626,405 3,285,295

192,790 81,462 77,291
1,775 71,068 37,141 100,579

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(2) 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)

As of December 31, 2014

Assets 37,939,965 10,697,787 9,603,679 7,577,935 7,022,746

Liabilities 6,728,991 5,409,749 7,830,941 3,883,673 5,062,988

6,765,278 6,553,628 6,503,003 5,321,014

3,911,166 1,251,667 3,375,099 4,573,413

4,966,486 3,957,700

1,258,635 3,042,402

3,797,166 3,110,433 2,949,605 2,560,852 2,316,054

1,330,302 671,729
1,776,936 2,120,738
789,395

1,869,697 1,831,794 1,654,988 1,621,583

405,089 768,230 307,109 1,524,468

1,583,027 1,287,972 1,235,239 1,207,723 1,142,897

1,299,330 323,972 964,058 245,237
1,082,420

For the three months ended

September 30, 2014

Net Income

Sales

(Loss)

6,043,529

66,017

3,145,802

(75,814)

3,395,069

(322,423)

4,681,030

47,138

-

1,971

189,080 3,886,424
668,145 4,550,285

(12,305) 166,292 22,956 (104,815)

3,827,484 2,480,192

265,450 206,799

1,825,010 312,590
1,632,698 3,616,584 2,809,188

155,794 (1,937) 107,337 39,079 322,878

844,881 258,731 1,018,159 2,994,163

43,607 38,822 58,042 104,646

1,179,554 687,212 893,598 511,153
1,600,627

18,664 6,686
31,684 17,769 141,822

For the nine months ended

September 30, 2014

Net Income

Sales

(Loss)

18,191,377

1,509,567

9,149,586

(220,435)

13,411,425

(576,120)

13,451,383

85,071

-

68,329

268,214 15,508,180 1,756,028 16,464,805

(7,785) 1,652,910
51,218 83,974

13,369,539 4,413,669

738,019 404,121

5,887,469 1,096,470 5,167,986 10,221,111 9,203,231

565,521 1,054,976
454,429 103,466 550,952

2,836,360 522,466
3,494,346 9,829,423

108,725 (47,802) 170,537 511,148

3,318,667 2,076,974 3,191,298 1,854,147 4,728,311

20,679 83,797 (187,648)
5,914 (77,947)

(C) Changes in scope of consolidation

A. Subsidiaries newly included in the consolidation for the nine months ended September 30, 2015:

Area Domestic America
Asia (Except China)

Subsidiary Samsung Venture Capital Union #28 Samsung Venture Capital Union #29 Simpress Samsung Pay(formerly LoopPay) YESCO Electronics Beijing Integrated Circuit Industry International Fund(Beijing Fund) Paymate Global
Samsung Electronics HCMC CE Complex (SEHC)

Description Incorporation Incorporation Acquisition of shares Acquisition of shares Acquisition of shares Acquisition of shares Acquisition of shares
Incorporation

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B. Subsidiaries excluded from the consolidation for the nine months ended September 30, 2015:

Area Domestic
America Europe/CIS
China

Subsidiary Ray High Pioneer Private Investment Trust #1 Samsung Venture Capital Union #6 Samsung Telecommunications America (STA) Paymate Global Nvelo Nanoradio Hellas Samsung Electronics Hainan Fiberoptics (SEHF) Samsung Medison Shanghai Medical Instrument (SMS1)

Description Disposal Liquidation Liquidation Merger1 Liquidation Liquidation Disposal Disposal Liquidation

1 Samsung Electronics America (SEA), a subsidiary of the Group, merged with Samsung Telecommunications America (STA) on January 1, 2015.

2. Summary of Significant Accounting Policies
2.1 Basis of Presentation
The interim consolidated financial statements for the nine months ended September 30, 2015, have been prepared in accordance with K-IFRS 1034, Interim Financial Reporting. These interim consolidated financial statements have been prepared in accordance with the K-IFRS standards and interpretations effective or early adopted at the reporting date.
The Group applied the following amended and enacted standards for the annual period beginning on January 1, 2015:
Amendment to Korean IFRS 1019, Employee Benefits
According to the amendment of K-IFRS 1019, Employee Benefits, a practical expedient is allowed for a participant in a defined benefit plan when it receives contributions from employees or third parties. The adoption of this standard did not have a material impact on the interim consolidated financial statements.

2.2 Accounting Policies
Significant accounting policies and estimates adopted in the preparation of the interim consolidated financial statements are consistent with those adopted in the preparation of the annual consolidated financial statements for the year ended December 31, 2014, except changes in accounting policies applied in the financial year beginning on January 1, 2015 and as described below.
Income tax expense for the interim period is recognized based on management's best estimate of the weighted average annual effective income tax rate expected for the full financial year. The estimated average annual tax rate is applied to the pre-tax income.
An emission trading scheme came into effect in January 2015 and is accounted for in accordance with Section 33 of the Korean Generally Accepted Accounting Standard, Emission Rights and Liabilities. The emission permits granted by the government for no consideration are recognized at zero value, and emission permits purchased are stated at cost, less accumulated impairment losses. Reserves have been made in the Company's books for emission permits to be purchased that relate to emissions produced during the nine months ended September 30, 2015 that were in excess of government granted emission permits held by the Group, which was calculated using market rates in effect during the period.

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2.3 Convenience Translation into United States Dollar Amounts
The Company operates primarily in Korean won and its official accounting records are maintained in Korean won. The US dollar amounts provided in the financial statements represent supplementary information solely for the convenience of the reader. All Korean won amounts are expressed in US dollars at the rate of 1,122.29 to US $1, the average exchange rate for the nine month period ended in September 30, 2015. 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 U.S. dollars at this or at any other rate.
2.4 Critical Accounting Estimates and Assumptions
In preparing the interim consolidated financial statements, the management of SEC makes estimates and assumptions on matters which affect the application of policies and reported amounts of assets, liabilities, income and expenses. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates, by definition, seldom equal the related actual results.
Critical accounting estimates and assumptions made in the preparation of the interim consolidated financial statements are consistent with those made in the preparation of the annual consolidated financial statements for the year ended December 31, 2014, except for the estimation methodologies applied in deriving corporate income tax, emission rights and liabilities.

3. Financial Instruments by Category

Categorizations of financial assets and liabilities as of September 30, 2015 and December 31, 2014, are as follows:

(1) As of September 30, 2015 (In millions of Korean won)

Assets at fair value through profit and loss

Loans and receivables

Available-for-sale financial assets

Total

Assets

Cash and cash equivalents



Short-term financial instruments

Short-term available-for-sale financial assets

Trade receivables

Long-term available-for-sale financial assets

Other

Total



-  67,000 67,000 

23,608,377 40,895,407
27,631,463
3,484,301 95,619,548

 

-  5,220,977 8,628,872 13,849,849 

23,608,377 40,895,407 5,220,977 27,631,463 8,628,872 3,551,301 109,536,397

(In millions of Korean won)
Liabilities Trade payables Short-term borrowings Other payables Current portion of long-term liabilities Debentures Long-term borrowings Long-term other payables Other Total

Liabilities at fair

Financial liabilities

value through profit measured at amortized

and loss

cost

Other financial liabilities

Total



-



9,842,913 

- 

9,842,913

-

2,423,299

8,879,800

11,303,099

-

7,672,000

-

7,672,000

-

46,910

-

46,910

-

1,458,885

-

1,458,885

-

78,001

-

78,001

-

2,214,367

-

2,214,367

44,643

8,817,145

-

8,861,788



44,643

 32,553,520 

8,879,800  41,477,963

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(2) As of December 31, 2014
(In millions of Korean won)
Assets Cash and cash equivalents Short-term financial instruments Short-term available-for-sale financial assets Trade receivables Long-term available-for-sale financial assets Other Total
(In millions of Korean won)
Liabilities Trade payables Short-term borrowings Other payables Current portion of long-term liabilities Debentures Long-term borrowings Long-term other payables Other Total

Assets at fair value through profit or
loss

Loans and receivables

Available-for-sale financial assets

Total



-  16,840,766 

-  16,840,766

-

41,689,776

-

41,689,776

-

-

3,286,798

3,286,798

-

24,694,610

-

24,694,610

-

-

12,667,509

12,667,509

48,360

4,614,560

100,051

4,762,971



48,360  87,839,712  16,054,358  103,942,430

Liabilities at fair Financial liabilities

value through profit measured at

Other

and loss

amortized cost financial liabilities

Total



-  7,914,704 

- 

7,914,704

-

3,367,915

4,661,384

8,029,299

-

9,258,344

-

9,258,344

-

1,778,667

-

1,778,667

-

1,355,882

-

1,355,882

-

101,671

-

101,671

-

2,520,277

-

2,520,277

78,348

11,395,781

-

11,474,129



78,348  37,693,241 

4,661,384  42,432,973

4. Long-Term Available-for-Sale Financial Assets

(A) Details of long-term available-for-sale financial assets as of September 30, 2015 and December 31, 2014, are as follows:

(In millions of Korean won) Equity securities - Listed Equity securities - Non-listed Debt securities1 Total

September 30, 2015



4,889,610

3,593,869

145,393



8,628,872

December 31, 2014



5,776,836

3,746,393

3,144,280

 12,667,509

1 The maximum exposure to credit risk of available-for-sale debt securities is the carrying value at the reporting date.

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(B) Details of listed equity securities as of September 30, 2015 and December 31, 2014, are as follows:

(In millions of Korean won, number of shares and percentage)
Samsung SDI Samsung Heavy Industries Samsung Fine Chemicals Hotel Shilla Cheil Worldwide iMarket Korea SFA Wonik IPS ASML Rambus Seagate Technology Sharp SunEdison Semiconductor Wacom Other
Total

September 30, 2015

December 31, 2014

Number of Shares Owned 13,462,673 40,675,641 2,164,970 2,004,717 14,498,725 647,320 1,822,000 7,220,216 12,595,575 4,788,125 12,539,490 35,804,000 8,398,400

Percentage of Ownership (%)
19.6 17.6 8.4 5.1 12.6 1.8 10.2 9.0 2.8 4.1 4.2 2.1
5.0

Acquisition Cost



2,180,953

258,299

45,678

13,957

223,941

324

38,262

63,250

726,024

92,682

218,543

122,535

-

62,013

48,022

 4,094,483

Book Value (Market Value)
 1,460,700 500,310 87,140 230,542 263,877 19,031 81,990 65,992
1,317,038 67,489 671,034 48,894 36,857 38,716
 4,889,610

Book Value (Market Value)  1,561,670
811,479 70,795
183,231 249,378
18,384 90,462 100,722 1,506,664 58,368 916,597 88,292 49,510 36,084 35,200  5,776,836

Acquisition cost includes impairment loss on available-for-sale financial assets recognized due to the decline in realizable value below acquisition cost.
The difference between the acquisition cost and the current fair value, after income tax effects, is recorded within other components of equity (unrealized gains or losses on available-for-sale financial assets).

5. Inventories Inventories as of September 30, 2015 and December 31, 2014, are as follows:

(In millions of Korean won) Finished goods Work in process Raw materials and
supplies Materials in transit
Total

Gross Amount  7,285,098 6,542,848 8,254,137

September 30, 2015 Valuation Allowance  (174,987)  (385,295) (317,438)

Book Value
7,110,111 6,157,553 7,936,699

December 31, 2014

Gross Amount

Valuation Allowance

 6,011,078  (237,630)

5,018,416 6,244,161

(553,345) (287,155)

Book Value  5,773,448
4,465,071 5,957,006

1,636,706  23,718,789

-

1,636,706

 (877,720)  22,841,069

1,121,979  18,395,634

 (1,078,130)

1,121,979  17,317,504

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6. Investments in Associates and Joint Ventures

(A) Changes in investments in associates and joint ventures for the nine months ended September 30, 2015 and 2014, are as follows:

(In millions of Korean won)
Balance as of January 1 Acquisition Disposal Share of profit Other1 Balance as of September 30

September 30, 2015  5,232,461 137,917 (19,323) 113,872 (58,792)  5,406,135

September 30, 2014  6,422,292 655,067 (28,268) 96,217 (1,753,384)  5,391,924

1 Other consists of dividends, business combinations, and effects of changes in foreign currency exchange rates. And, due to decrease in shareholding ratio during the nine months ended September 30, 2014, the Group reclassified investment in Samsung SDI as available-for-sale financial assets.

(B) Major investments in associates and joint ventures as of September 30, 2015, are as follows:

(1) Investments in Associates
Investee Samsung Card Samsung Electro-Mechanics Samsung SDS

Nature of Relationship with Associate
Business alliance
Manufacture and supply electronic components including passive components, circuit boards, and modules Provide IT services including computer programming, system integration and management

Ownership Percentage1 (%)
37.5
23.7
22.6

Principal Business Location
Korea
Korea
Korea

1 Ownership Percentage represents the Group's ownership of common stock in each entity.

(2) Investments in joint ventures
Investee Samsung Corning Advanced Glass

Nature of Relationship with Joint Venture Manufacture and supply industrial glass devices

Ownership Percentage1 (%)
50.0

Principal Business Location
Korea

1 Ownership Percentage represents the Group's ownership of common stock in each entity. (C) Details of investments in associates and joint ventures as of September 30, 2015 and December 31, 2014, are as follows:

(1) Investments in Associates

(In millions of Korean won) Investee

Acquisition cost

September 30, 2015 Net asset value1

Book value

Samsung Card Samsung Electro-Mechanics Samsung SDS Other
Total



1,538,540

359,237

147,963

1,127,679



3,173,419



2,464,095

1,020,258

991,733

552,798



5,028,884

1 Company's portion of net asset value of associates is based on the Group's ownership percentage.



2,421,664

1,011,778

1,014,893

695,556



5,143,891

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(In millions of Korean won) Investee

Acquisition cost

December 31, 2014 Net asset value1

Samsung Card Samsung Electro-Mechanics Samsung SDS Other Total



1,538,540

359,237

147,963

1,012,517



3,058,257



2,393,185

1,038,184

928,548

483,413



4,843,330

1 Company's portion of net asset value of associates is based on the Group's ownership percentage.

(2) Investments in joint ventures

(In millions of Korean won) Investee

Acquisition cost

September 30, 2015 Net asset value1

Samsung Corning Advanced Glass Other Total



215,000



259,977



474,977



1 Company's portion of net asset value of associates is based on the Group's ownership percentage.

189,965 107,618 297,583

(In millions of Korean won) Investee

Acquisition cost

December 31, 2014 Net asset value1

Samsung Corning Advanced Glass Other Total



215,000



196,015

260,255

102,865



475,255



298,880

1 Company's portion of net asset value of joint ventures is based on the Group's ownership percentage.

Book value



2,354,026

1,040,404

951,776

623,480



4,969,686

Book value



189,899

72,345



262,244

Book value



195,930

66,845



262,775

(D) Details of changes in equity-method investments, including associates and joint ventures, are as follows:

(1) For the nine months ended September 30, 2015

(In millions of Korean won)

Balance as of January 1

Gain/loss on valuation

Other comprehensive
income/loss

Other1

Balance as of September 30

Samsung Card



Samsung Electro-Mechanics

Samsung SDS

Samsung Corning Advanced Glass

Other

Total



2,354,026  1,040,404
951,776 195,930 690,325 5,232,461 

96,536  1,616 70,380 (6,120) (48,540) 113,872 

14,321  (16,154)
1,470 89
2,311 2,037 

(43,219)  (14,088) (8,733)
123,805
57,765 

1 Other consists of acquisitions, disposals, dividends, and effects of changes in foreign currency exchange rates.

2,421,664 1,011,778 1,014,893
189,899 767,901 5,406,135

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(2) For the nine months ended September 30, 2014

(In millions of Korean won)

Balance as of January 1

Gain/loss on valuation

Other comprehensive
income/loss

Other1

Balance as of September 30

Samsung Card Samsung Electro-Mechanics Samsung SDI Samsung SDS Samsung Techwin Samsung Corning Advanced Glass Other
Total

 2,340,009  954,496
1,175,204 879,956 402,745 111,961 557,921
 6,422,292 

85,496  (13,253)
11,636 65,455 (4,377) (10,579) (38,161) 96,217 

(68,269)  (25,519)
32,795 (10,618)
18,063 (33)
(7,928) (61,509) 

(30,375)  (13,270) (1,219,635) (4,367) (6,762)
99,893 109,440 (1,065,076) 

1 Other consists of acquisitions, disposals, dividends, and effects of changes in foreign currency exchange rates.

2,326,861 902,454 930,426 409,669 201,242 621,272
5,391,924

(E) Summary of condensed financial information of major associates and joint ventures

(1) A summary of condensed financial information of major associates and dividends received from associates as of September 30, 2015 and December 31, 2014, and for the nine months ended September 30, 2015 and 2014, is as follows:

(In millions of Korean won) Investee

Samsung Card1

2015 Samsung Electro-
Mechanics

Samsung SDS

1. Condensed financial information Condensed statement of financial position
Current assets
Non-current assets Current liabilities Non-current liabilities Non-controlling interests Condensed statement of comprehensive income Revenue Profit from continuing operations2 Post-tax profit or loss from discontinued operations2 Other comprehensive income (loss)2 Total comprehensive income2

 19,284,457
12,713,538 -
2,456,493 257,733 38,240 295,973

 3,277,624 4,534,515 1,815,353 1,591,645 100,252
4,814,227 294,687
(266,830) (72,341) (44,484)

 3,613,473 2,482,667 1,230,883 306,509 170,549
5,748,700 308,105 6,523 314,628

2. Dividends from Associates Dividends



43,393



13,270



8,736

1 Samsung Card does not present current and non-current classifications of assets and liabilities in its statement of financial position. 2 Income (loss) attributable to owners of the parent.

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(In millions of Korean won) Investee

Samsung Card1

2014 Samsung Electro-
Mechanics

Samsung SDS

1. Condensed financial information Condensed statement of financial position
Current assets
Non-current assets Current liabilities Non-current liabilities Non-controlling interests Condensed statement of comprehensive income Revenue Profit from continuing operations2 Other comprehensive loss2 Total comprehensive income (loss)2

 17,736,627
11,346,281 -
2,421,895 378,239
(182,294) 195,945

 3,553,987 4,164,625 2,151,002 924,814 89,390
5,311,155 (55,161)
(112,371) (167,532)

 3,228,074 2,317,971 1,117,969 214,051 101,766
5,728,672 282,987 (46,942) 236,045

2. Dividends from Associates Dividends



30,375



13,270 

4,368

1 Samsung Card does not present current and non-current classifications of assets and liabilities in its statement of financial position. 2 Income (loss) attributable to owners of the parent

(2) A summary of the condensed financial information of major joint ventures and dividends received from joint ventures as of September 30, 2015 and December 31, 2014, and for the nine months ended September 30, 2015 and 2014, is as follows:

(In millions of Korean won)

Samsung Corning Advanced Glass

2015

2014

1. Condensed financial information Condensed statements of financial position Current assets
- Cash and cash equivalent Non-current assets Current liabilities
- Current financial liabilities1 Non-current liabilities Condensed statements of comprehensive income2 Revenue Depreciation and amortization Interest income Income tax expense Net loss from continuing operations Other comprehensive income (loss) Total comprehensive loss



227,929

15,931

188,861

33,479

15,672

3,381

200,676 1,412 865 (927)
(12,279) 179
(12,100)



228,312

14,696

200,105

34,719

18,718

1,669

190,632 436 574
(2,863) (21,195)
(65) (21,260)

2. Dividends from joint ventures

Dividends



-



-

1 Accounts payable, other payables, and provisions are excluded. 2 Amounts relate to the nine months ended September 30, 2015 and 2014.

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(3) Profit (loss) amounts attributable to owners of the parent from associates and joint ventures which are not individually material for the nine months ended September 30, 2015 and 2014, are as follows:

(In millions of Korean won) Investee

2015

Associates

Joint ventures

Associates

2014 Joint ventures

Income (loss) from continuing operations1 Other comprehensive income (loss) 1 Total comprehensive loss1

 (47,869)



(618)

 (48,487)



926
3,865 4,791

 (38,805)
(3,547)  (42,352)

 (12,700)
3,764  (8,936)

1 Income (loss) attributable to owners of the parent.

(F) Fair value of marketable investments in associates as of September 30, 2015 and December 31, 2014, is as follows:

(In millions of Korean won and number of shares)

September 30, 2015

Number of shares held

Market value

December 31, 2014 Market value

Samsung Card Samsung Electro-Mechanics Samsung SDS

43,393,170 17,693,084 17,472,110

 1,573,002 1,137,665 5,031,968

 1,917,978 967,812
5,128,064

7. Property, Plant and Equipment

(A) Changes in property, plant and equipment for the nine months ended September 30, 2015 and 2014, are as follows:

(In millions of Korean won)
Balance as of January 1 Acquisition and capital expenditures Business combinations Depreciation Disposals/scrap/impairment Other1 Balance as of September 30
1 Other includes effects of changes in foreign currency exchange rates.

2015



80,872,950

19,177,723

34,776

(14,614,029)

(247,927)

1,336,935



86,560,428

2014



75,496,388

14,460,046

940

(12,531,487)

(711,738)

(702,084)



76,012,065

(B) Allocation of depreciation of property, plant and equipment for the nine months ended September 30, 2015 and 2014, are as follows:

(In millions of Korean won)

2015

2014

Cost of sales Selling and administrative expenses Total



13,284,416



11,351,213

1,329,613

1,180,274



14,614,029



12,531,487

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8. Intangible Assets

(A) Changes in intangible assets for the nine months ended September 30, 2015 and 2014, are as follows:

(In millions of Korean won)
Balance as of January 1 Internally generated (development costs) External acquisitions Business combinations Amortization Disposals/scrap/impairment Other1 Balance as of September 30

2015 


4,785,473 858,982 254,356 374,224
(933,624) (75,986) 296,873
5,560,298

2014 


1 Other includes effects of changes in foreign currency exchange rates.

3,980,600 679,094 272,263 239,890
(845,103) (30,287) 388,295
4,684,752

(B) Allocation of amortization of intangible assets for the nine months ended September 30, 2015 and 2014, are as follows:

(In millions of Korean won)

2015

2014

Cost of sales Selling and administrative expenses Total 9. Borrowings



579,190



405,886

354,434

439,217



933,624



845,103

Details of the carrying amounts of borrowings as of September30, 2015 and December 31, 2014 are as follows:

(In millions of Korean won)

Financial Institutions

Annual Interest Rates (%) as of September 30, 2015

Short-term borrowings Collateralized borrowings1 Non-collateralized borrowings
Total

Woori Bank and others Citibank and others

0.3 ~ 13.8 0.1 ~ 14.6

September 30, 2015
 8,879,800 2,423,299
 11,303,099

December 31, 2014
 4,661,384 3,367,915
 8,029,299

Current portion of long-term borrowings Bank borrowings Financial lease liabilities2
Total

SMBC and others CSSD and others

1.1 ~ 18.8 1.1 ~ 15.7

 24,945 16,182
 41,127

 1,758,556 14,807
 1,773,363

Long-term borrowings Bank borrowings Financial lease liabilities2
Total

SMBC and others CSSD and others

1.1 ~ 19.8 1.1 ~ 15.7

1 Collateralized borrowings are secured by trade receivables. 2 Leased property, plant and equipment were pledged as collateral.



203



77,798



78,001



23,989 77,682 101,671

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10. Debentures

Details of the carrying amount of debentures as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean won)

September 30, 2015

December 31, 2014

Korean won denominated debentures (A) Foreign currency denominated debentures (B) Total



199,727

1,259,158

 1,458,885



199,515

1,156,367



1,355,882

(A) Details of Korean won denominated debentures as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean won) Unsecured debentures Less: Discounts Total

Issue Date Due Date 2011.11.17 2016.11.17

Annual Interest Rates (%) as of September 30, 2015
4.2

September 30, 2015 December 31, 2014

 200,000

 200,000

(273)

(485)

 199,727

 199,515

All the above debentures have been issued by Samsung Display and will be repaid upon maturity.

(B) Details of foreign currency denominated debentures as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean Won)
US dollar denominated straight bonds1 US dollar denominated unsecured bonds2 Less: Current Portion Less: Discounts Total

Annual Interest Rates (%) Issue Date Due Date as of September 30, 2015

September 30, 2015

1997.10.02 2027.10.01 2012.4.10 2017.4.10

7.7



77,643

(US$65 million)

1,194,500 1.8
(US$1,000 million)

(5,973)

(7,012)



1,259,158

December 31, 2014



71,448

(US$65 million) 1,099,200

(US$1,000 million)

(5,496)

(8,785)



1,156,367

1 US dollar denominated straight bonds are repaid annually for twenty years after a ten-year grace period from the date of issuance. Interest is paid semi-annually. 2 US dollar denominated unsecured bonds are issued by Samsung Electronics America, a subsidiary of the Group, and are repaid in full upon maturity. Interest is paid semi-annually.

11. Net Defined Benefit Liabilities

(A) Details of net defined benefit liabilities recognized on the consolidated statements of financial position as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean won)
Present value of funded defined benefit obligations Present value of unfunded defined benefit obligations Subtotal Fair value of plan assets Total

September 30, 2015



8,173,051

138,025

8,311,076

(7,298,901)



1,012,175

December 31, 2014



7,404,205

138,042

7,542,247

(7,340,905)



201,342

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(B) The amounts recognized in the consolidated statements of income for the nine months ended September 30, 2015 and 2014 are as follows:

(In millions of Korean won)

2015

2014

Current service cost Interest cost Past service cost Other Total



859,768



741,684

4,720

77,393

-

110,397

2,075

(34)



866,563



929,440

(C) The pension expenses related to defined benefit plans recognized on the consolidated statements of income for the nine months ended September 30, 2015 and 2014 are as follows:

(In millions of Korean won)

2015

2014

Cost of sales Selling and administrative expenses Total



375,371



388,346

491,192

541,094



866,563



929,440

12. Provisions

Changes in the provisions during the nine months ended September 30, 2015 are as follows:

(In millions of Korean won)

Warranty (A)

Royalty expenses (B)

Long-term incentives (C)

Bonus (D)

Other (E)

Total

Balance as of January 1, 2015 Charged to the statement of
income Payment Other1 Balance as of September 30,
2015

 1,829,068  3,917,792  730,464

1,358,330

1,036,211

170,288

(1,403,974) (3,222)
 1,780,202

(352,394) 265,306
 4,866,915

(210,509) -
 690,243

1 Other includes effects of changes in foreign currency exchange rates.



-

2,465,072

(270,133) -
2,194,939

 13,476  6,490,800

37,974

5,067,875

(6,083) 536
 45,903

(2,243,093) 262,620
 9,578,202

(A) The Group accrues warranty reserves for estimated costs of future service, repairs and recalls, based on historical experience and terms of warranty programs.

(B) The Group makes provisions for the estimated royalty expenses under negotiation with counterparties. The timing of payment depends on the settlement of the negotiation.

(C) The Group has a long-term incentive plan for its executives based on a three-year management performance criteria and has made a provision for the estimated incentive cost for the accrued period.
(D) The Group provides bonuses for its executives and employees, which are determined based on current-period performance. The estimated bonus cost for the accrued period has been recognized as a provision.
(E) The Group makes provisions for the estimated emission expense for the emission in excess of the permits held by the Group for the applicable years. Details of emission rights and liabilities as of September 30, 2015 are as follows:

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(1)Allocated amount of emission permits and estimated amount of emission for the next three years as of September 30, 2015 are as follows:

(In metric tons) Allocated emission permits Estimated volume of emission

2015 5,774,375 6,569,385

2016 5,662,429 7,328,034

2017 5,548,627 8,248,797

(2)Changes in the certified emission reductions as of September 30, 2015 are as follows:

(In millions of Korean won) Balance as of January 1 Acquisition Balance as of September 30

2015

 

5,100 5,100

(3)Changes in the provisions for emissions as of September 30, 2015 are as follows:

(In millions of Korean won) Balance as of January 1 Charged to the statement of income Balance as of September 30

2015

 

5,960 5,960

13. Commitments and Contingencies

(A) Guarantees Details of guarantees of debt provided by the Group as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean won)

September 30, 2015

December 31, 2014

Guarantees of debt for housing rental1



66,401



76,558

1 Represents the maximum amount of debt guarantee, which was provided for employees who took debt from financial institutions in order to finance employee housing rental.

As of September 30, 2015, the Group's investments in Pusan Newport are pledged as collateral against the investee's debt.

(B) Litigation
(1) 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 Group 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 Group and made a final judgment restating the total damages amount determined by a jury verdict. The Group appealed the decision on the amount of damages on March 7, 2014, and a hearing on the appeal was held on December 4, 2014. On May 18, 2015, the United States Court of Appeals for the Federal Circuit upheld the prior design infringement verdict, but reversed and remanded a previous decision related to a trademark finding. On June 17, 2015, the Group petitioned for an en banc rehearing regarding the design infringement, and on August 13, 2015, the Court of Appeals for the Federal Circuit dismissed the Group's request. The appellate court remanded the case to the district court, and the district court announced partial final judgment on the appeals on September 18, 2015. On October 19, 2015, the Group petitioned for an en banc rehearing since the immediate appeal had been dismissed on October 13, 2015. The final conclusion and the effect of the patent lawsuits with Apple are uncertain as at the reporting date.
In August 2014, the Group and Apple reached an agreement to withdraw from ongoing litigation in all regions other than the United States, and the Group has withdrawn all non-United States based lawsuits.

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Additionally, on May 5, 2014, the jury in another ongoing lawsuit determined that the Group partially infringed Apple's utility patent and should pay damages to Apple. On November 25, 2014, the first trial judgment was pronounced to confirm the jury's verdict. The Group appealed the decision on the damages and the appeal is currently on-going. On October 19, 2015, the Group requested an en banc hearing following the remand and reversal by the appellate court on September 17, 2015 of a first trial decision to deny a sales ban on the Company's products on August 27, 2014.
(2) The Group is involved in claims, disputes, and investigations conducted by regulatory bodies as of the reporting date, including civil claims from some overseas buyers for price-fixing related to the sale of TFT-LCD. Although the outflow of resources and timing of these matters are uncertain, the Group believes the outcome will not have a material impact on the financial condition of the Group.
(3) In addition, during the normal course of business with numerous companies, the Group has been involved in various claims, disputes, and investigations conducted by regulatory bodies. Although the outflow of resources and timing of these matters are uncertain, the Group believes the outcome will not have a material impact on the financial condition of the Group.
(C) Other commitments
The Group entered into a comprehensive business cooperation agreement with Corning Incorporated on October 23, 2013. The respective agreement includes ex-post settlement conditions based on the business performance of Samsung Corning Precision Materials which may result in future outflows of, or inflows to, the Group's resources. As of the reporting date, future inflows or outflows are uncertain and thus, its impact to the Group's financial statements cannot be estimated. The Group's management, however, believes future inflows or outflows will not have a material impact on the financial conditions of the Group.
14. Share Capital
The Group's total number of authorized shares is 500,000,000 shares (5,000 per share). The Group has issued 147,299,337 shares of common stock and 22,833,427 shares of preferred stock as of September 30, 2015, excluding retired shares. Due to the retirement of shares, the total par value of the shares issued is 850,664 million (common stock 736,497 million and preferred stock 114,167 million), which differs from paid-in capital of 897,514 million.

15. Retained Earnings (A) Retained earnings as of September 30, 2015 and December 31, 2014 consist of:

(In millions of Korean won)

September 30, 2015

Appropriated Unappropriated Total



131,539,595

50,349,961



181,889,556

December 31, 2014



119,947,785

49,581,819



169,529,604

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(B) On July 30, 2015, the Company declared cash dividends to shareholders of common stock and preferred stock as interim dividends for the six-months ended June 30, 2015.
Details of the interim dividends for the nine-months ended September 30, 2015 and 2014 are as follows:

(In millions of Korean won) Number of shares eligible for dividends Dividend rate (based on par value)
Dividend amount

Common stock Preferred stock
Common stock Preferred stock
Total

September 30, 2015

129,312,651

19,603,734

20%



129,313

19,603



148,916

September 30, 2014

130,962,651

19,853,734

10%



65,481

9,927



75,408

16. Other Components of Equity (A) Other components of equity as of September 30, 2015 and December 31, 2014 consist of:

(In millions of Korean won) Treasury stock Stock options Unrealized gains on available-for-sale financial assets Share of other comprehensive income of associates and joint ventures Foreign currency translation Remeasurements of net defined benefit liability Other Total

September 30, 2015



(9,752,372)

806

1,085,601

615,223

(2,530,196)

(2,064,027)

(151,135)



(12,796,100)

December 31, 2014



(8,429,313)

806

1,850,195

559,280

(4,566,887)

(1,996,792)

(146,676)



(12,729,387)

(B) The Group repurchases registered common stock and non-voting preferred stock and recognizes the repurchase amount in other components of equity. Such stock will be distributed upon exercise of stock options. Treasury stock as of September 30, 2015 and December 31, 2014 consists of the following:

(In millions of Korean won and number of shares)
Number of shares Acquisition cost

September 30, 2015

December 31, 2014

Common Stock

Preferred Stock

Common Stock

Preferred Stock

17,986,686  8,873,555

3,229,693  878,817

17,094,741  7,673,549

3,110,943  755,764

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17. Expenses by Nature Expenses by nature for the three and nine months ended September 30, 2015 and 2014 consist of the following:

(In millions of Korean won) Changes in finished goods and work
in process Raw materials and goods Wages and salaries Pension Depreciation Amortization Welfare Commission and service charges Other Total1

September 30, 2015

3 Months

9 Months



(1,406,662) 

(3,029,145) 

September 30, 2014

3 Months 196,927 

9 Months 770,729

20,841,438 4,587,111

57,616,337 13,793,828

19,768,884 4,409,601

62,216,017 13,326,624

311,100

921,394

287,956

975,262

5,103,838

14,614,029

4,326,214

12,531,487

318,966

933,624

312,151

845,103

987,832

2,878,007

838,033

2,598,983

2,209,595

6,289,172

1,941,816

6,417,942

11,335,981

33,050,106

11,305,206

34,057,074



44,289,199 

127,067,352

 43,386,788

 133,739,221

1 Expenses above are equal to the sum of cost of sales and selling and administrative expenses on the interim consolidated statements of income.

18. Selling and Administrative Expenses Selling and administrative expenses for the three and nine months ended September 30, 2015 and 2014 are as follows:

(In millions of Korean won)

September 30, 2015

3 Months

9 Months

September 30, 2014

3 Months

9 Months

1) Selling and administrative expenses Wages and salaries Pension Commission and service charges Depreciation Amortization Advertising Sales promotion Transportation Warranty Other
2) Research and development expenses Total expenses Capitalized expenses
Total

 1,372,254  4,070,527  1,309,046

74,435

207,898

69,470

2,209,595

6,289,172

1,941,816

181,608

527,978

170,368

56,682

197,964

100,314

1,033,184

2,733,017

849,261

1,795,875

5,176,128

2,020,609

920,651

2,539,462

927,563

758,418

2,178,845

724,495

861,118

3,383,208

1,222,763

 3,943,049 226,538
6,417,942 498,853 298,508
2,665,563 5,751,672 2,742,874 2,397,659 3,630,630

3,690,644 (274,717)

11,101,697 (858,982)

3,677,237 (337,552)

 12,679,747  37,546,914  12,675,390

11,412,295 (679,094)
 39,306,489

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19. Other Non-Operating Income and Expense
Details of other non-operating income and expense for the three and nine months ended September 30, 2015 and 2014 are as follows:

(In millions of Korean won)

September 30, 2015

3 Months

9 Months

September 30, 2014

3 Months

9 Months

Non-operating income Dividend income Rental income Gain on disposal of investments Gain on disposal of property, plant and equipment Gain on disposal of assets classified as held-for-sale Other Total
(In millions of Korean won)
Non-operating expense Loss on disposal of property, plant and equipment Donations Loss on disposal of assets classified as held for sale Other Total

 35,735 23,120 27,043 38,748 3,772
191,879  320,297

 146,235 70,256
220,652 103,151 211,568 584,010  1,335,872

 30,599 21,390 16,890 34,838 -
724,579  828,296

 1,381,208 67,246
142,103 162,585
1,574,686  3,327,828

September 30, 2015

3 Months

9 Months

September 30, 2014

3 Months

9 Months

 45,462 165,392 193,439
 404,293

 91,968 326,890 450,493
 869,351

 28,861 149,260 108,339
 286,460

 120,503 369,317 723,869 358,883
 1,572,572

20. Finance Income and Expense

(A) Details of finance income and expense for the three and nine months ended September 30, 2015 and 2014 are as follows:

(In millions of Korean won)

September 30, 2015

3 Months

9 Months

September 30, 2014

3 Months

9 Months

Finance income

Interest income:



Interest income from loans and receivables

Interest income from available-for-sale financial

assets

Foreign exchange differences

Gain on derivatives

Total



445,531  422,926
22,605
2,628,557 311,546
3,385,634 

1,314,685  1,241,037
73,648
5,887,792 758,523
7,961,000 

480,149  449,731
30,418
1,058,158 144,289
1,682,596 

1,343,255 1,283,582
59,673
3,603,871 422,566
5,369,692

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(In millions of Korean won)

September 30, 2015

3 Months

9 Months

September 30, 2014

3 Months

9 Months

Finance expense Interest expense:
Interest expense from financial liabilities measured at amortized cost
Other financial liabilities Foreign exchange differences Loss on derivatives
Total



205,234 

561,371 

154,360 

442,545

123,444

340,561

96,161

288,964

81,790

220,810

58,199

153,581

2,875,464

6,250,109

1,131,322

3,768,362

247,888

763,804

154,477

465,955



3,328,586 

7,575,284 

1,440,159 

4,676,862

(B) The Group recognizes foreign exchange gains and losses arising from foreign currency transactions and translation as finance income and expense.

21. Income Tax Expense
Income tax expense is recognized based on management's best estimate of the average annual income tax rate expected for the full financial year. The average annual tax rate expected as of September 30, 2015 to be effective for the year ended December 31, 2015 is 25.4%.

22. Earnings per Share (A) Basic earnings per share

Basic earnings per share for the three and nine months ended September 30, 2015 and 2014 are calculated as follows:

(1) Common stock
(In millions of Korean won and thousands of shares, except per share data)

September 30, 2015

3 Months

9 Months

September 30, 2014

3 Months

9 Months

Net income as reported on the statements of income Net income available for common stock Weighted-average number of common shares outstanding Basic earnings per share (in Korean won)

 5,306,104  15,452,161  4,135,422  17,796,608

4,607,382

13,417,361

3,590,812

15,453,185

129,313

129,362

130,963

130,949



35,630 

103,720 

27,419 

118,009

(2) Preferred stock
(In millions of Korean won and thousands of shares, except per share data)
Net income as reported on the statements of income Net income available for preferred stock Weighted-average number of preferred shares outstanding Basic earnings per preferred share (in Korean won)

September 30, 2015

3 Months

9 Months

 5,306,104 698,722

19,604



35,642

 15,452,161 2,034,800 19,611
 103,760

September 30, 2014

3 Months

9 Months

 4,135,422 544,610 19,854
 27,431

 17,796,608 2,343,423 19,854
 118,034

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(B) Diluted earnings per share

The Group has one category of potentially dilutive ordinary shares: stock options. Dilutive earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

Diluted earnings per share for the three and nine months ended September 30, 2015 and 2014 are calculated as follows:

(1) Common stock

(In millions of Korean won and thousands of shares, except per share data)

September 30, 2015

3 Months

9 Months

September 30, 2014

3 Months

9 Months

Net income available for common stock and common stock equivalents
Weighted-average number of shares of common stock and common stock equivalents
Diluted earnings per share (in Korean won)

 4,607,405  13,417,429  3,590,822  15,453,227

129,315  35,629

129,365  103,718

130,965  27,418

130,959  118,000

(2) Preferred stock
(In millions of Korean won and thousands of shares, except per share data)
Net income available for preferred stock and preferred stock equivalents
Weighted-average number of shares of preferred stock and preferred stock equivalents
Diluted earnings per preferred share (in Korean won)

September 30, 2015

3 Months

9 Months

 698,699

 2,034,732

September 30, 2014

3 Months

9 Months

 544,600

 2,343,381

19,604  35,641

19,611  103,756

19,854  27,431

19,854  118,032

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23. Cash Flows Generated from Operating Activities

Adjustments and changes in assets and liabilities arising from operating activities for the nine months ended September 30, 2015 and 2014 are as follows:

- Adjustments

(In millions of Korean won)

2015

2014

Adjustments for: Income tax expense Finance income Finance expense Pension Depreciation Amortization Bad debt expense Dividend income Gain on valuation of equity method Gain on disposal of property, plant and equipment Loss on disposal of property, plant and equipment Obsolescence and scrapping of inventories Gain on disposal of investments Gain on disposal of assets classified as held-for-sale Loss on disposal of assets classified as held-for-sale Other income/expense
Adjustments, total

 5,400,115 (2,704,801) 2,426,990 921,394 14,614,029 933,624 295,441 (146,235) (113,872) (103,151) 91,968 470,125 (220,652) (211,568) (153,425)
 21,499,982

 4,233,380 (2,722,916) 1,420,957 975,262 12,531,487 845,103 290,893 (1,381,208) (96,217) (162,585) 120,503 645,220 (142,103) 723,869 (977,696)
 16,303,949

- Changes in assets and liabilities arising from operating activities
(In millions of Korean won)
Changes in assets and liabilities : Increase in trade receivables Decrease in other receivables Decrease (Increase) in advances Decrease (Increase) in prepaid expenses Increase in inventories Increase in trade payables Increase (Decrease) in other payables Increase (Decrease) in advances received Decrease in withholdings Decrease in accrued expenses Increase in provisions Payment of severance benefits Other
Changes in net working capital, total

2015
 (1,475,321) 696,564 (14,879) 378,853
(5,620,212) 532,619
(571,847) (96,459)
(266,293) (3,218,994)
3,055,284 (355,656)
478,033  (6,478,308)

2014
 (538,733) 477,583 113,763
(2,704,279) (860,536) 2,549,339 1,323,115 558,201 (101,171)
(1,929,725) 1,323,833 (251,242) 678,366
 638,514

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24. Financial Risk Management
The Group's financial risk management focuses on minimizing market risk, credit risk, and liquidity risk arising from operating activities. To mitigate these risks, the Group implements and operates a financial risk policy and program that closely monitors and manages such risks.
The Group's financial risk management is mainly performed by the finance team. With the cooperation of the Group's divisions, domestic and foreign subsidiaries, the finance team periodically measures, evaluates and hedges financial risk and also establishes and implements the global financial risk management policy.
Also, financial risk management officers are dispatched to the regional headquarters of each area including the United States, England, Singapore, China, Japan, Brazil and Russia to operate the local finance center in accordance with global financial risk management.
The Group's financial assets that are under financial risk management are comprised of cash and cash equivalents, short-term financial instruments, available-for-sale financial assets, trade and other receivables and other financial assets. The Group's financial liabilities under financial risk management are comprised of trade and other payables, borrowings, debentures, and other financial liabilities.
(A) Market Risk
(1) Foreign Exchange Risk
The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States, European Union, South America, Japan and other Asian countries. Revenues and expenses arise from foreign currency transactions and exchange positions, and the most widely used currencies are the US Dollar, Eurozone Euro, Japanese Yen and Chinese Yuan.
Foreign exchange risk management of the Group is carried out by both SEC and its subsidiaries. To minimize foreign exchange risk arising from operating activities, the Group's foreign exchange management policy requires normal business transactions to be in local currency or for the cash-in currency to be matched up with the cash-out currency. The Group's foreign exchange risk management policy also defines foreign exchange risk, measuring period, controlling responsibilities, management procedures, hedging period and hedge ratio.
The Group limits all speculative foreign exchange transactions and operates a system to manage receivables and payables denominated in foreign currency. It evaluates, manages and reports foreign currency exposures.
(2) Price Risk
The Group's investment portfolio consists of direct and indirect investments in equity securities classified as available-for-sale, which is in line with the Group's strategy.
As of September 30, 2015 and December 31, 2014, a price fluctuation in relation to marketable equity securities by 1% would result in changes in other comprehensive income (before income tax) of 48,896 million and 57,768 million, respectively.
(3) Interest Rate Risk
Risk of changes in interest rates for floating interest rate financial instruments is defined as the risk that the fair value of components of the statement of financial position, and future cash flows of interest income (expenses) of a financial instrument, will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk mainly through interest bearing liabilities and assets. The Group's position with regard to interest rate risk exposure is mainly driven by its floating interest rate debt obligations and interest-bearing deposits. The Group implemented policies and operates to minimize uncertainty arising from changes in interest rates and finance costs.

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In order to mitigate the risks associated with changes in interest rates, the Group maintains minimum external borrowings by facilitating cash pooling systems on a regional and global basis. The Group manages exposure to interest rate risks via periodic monitoring and effectively managing risk factors on a timely basis.
(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 Group monitors and sets the client's and counterparty's credit limit on a periodic basis based on the client's and counterparty's financial conditions, default history and other important factors. Appropriate insurance coverage is maintained for accounts receivables generated by trading partners situated in higher risk countries.
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 Group transacts only with banks which have strong international credit rating (S&P long-term rating "A" and above), and all new transactions with financial institutions with no prior transaction history are approved, managed and monitored by the Group's finance team and the local finance center. The Group requires separate approval for contracts with restrictions.
The Group 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 Group, maintaining adequate levels of liquidity risk is critical. The Group strives to achieve this goal by periodically forecasting its capital balance, estimating required cash levels, and managing income and expenses.
The Group manages its liquidity risk by periodically forecasting projected cash flows. If material implications are identified, the Group works with the local finance center and provides liquidity support by utilizing a globally integrated finance structure, such as Cash Pooling. In addition, the Group maintains a liquidity management process which provides additional financial support by the local finance center and the Group. The Cash Pooling program allows sharing of surplus funds among entities and contributes to minimizing liquidity risk and strengthening the Group's competitive position by reducing capital operation expenses and financial expenses.
In addition, the Group mitigates liquidity risk by contracting with financial institutions with respect to bank overdrafts and foreign trade finance, and by providing payment guarantees to subsidiaries. For large scale facility investments, liquidity risk is minimized by utilizing internal reserves and long term borrowings according to the capital injection schedule.
(D) Capital Risk Management
The purpose of capital management is to maintain a sound capital structure. The Group monitors capital on the basis of the ratio of total liabilities to total equity. This ratio is calculated by dividing total liabilities by total equity in the consolidated financial statements.
The Group's capital risk management policy has not changed since the fiscal year ended December 31, 2014. As of September 30, 2015, the Group has maintained an "A+" and "A1" credit rating from S&P and Moody's, respectively, on its long term debt.

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The total liabilities to equity ratios as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean won)
Total liabilities Total equity Total liabilities to equity ratio

September 30, 2015
 65,838,937 180,728,636 36.4%

December 31, 2014
 62,334,770 168,088,188 37.1%

(E) Fair value estimation
(1) Carrying amounts and fair values of financial instruments by category as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean won)
Financial assets Cash and cash equivalents1 Short-term financial instruments1 Short-term available-for-sale financial assets Trade receivables1 Long-term available-for-sale financial assets2 Other
Total financial assets
Financial liabilities Trade payables1 Short-term borrowings1 Other payables1 Current portion of long-term liabilities1 Debentures Long-term borrowings Long-term other payables Other1
Total financial liabilities

September 30, 2015

Carrying amount

Fair value

December 31, 2014

Carrying amount

Fair value

 23,608,377  40,895,407 5,220,977 27,631,463 8,628,872 3,551,301
 109,536,397

-  16,840,766 

-

-

41,689,776

-

5,220,977

3,286,798

3,286,798

-

24,694,610

-

8,211,414

12,667,509

12,272,756

3,530,398

4,762,971

4,725,263

 103,942,430



9,842,913 

11,303,099

7,672,000

46,910

1,458,885

78,001

2,214,367

8,861,788



41,477,963

-  1,488,220 61,846 2,256,516


7,914,704  8,029,299 9,258,344 1,778,667 1,355,882
101,671 2,520,277 11,474,129 42,432,973

1,377,113 82,271 2,606,179 -

1 Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair value disclosures. 2 Amounts measured at cost (September 30, 2015: 417,458 million, December 31, 2014: 394,753 million) are excluded as the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed.

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(2) The following table presents the assets and liabilities, by level, that are measured at fair value:

(In millions of Korean won)
1) Assets Short-term available-for-sale financial assets Long-term available-for-sale financial assets1 Other
2) Liabilities
Other

Level 1

September 30, 2015

Level 2

Level 3

Total balance

 4,889,610
-

 5,220,977 33,379 66,160

 3,288,425
840

 5,220,977 8,211,414 67,000

 -

 44,643

 -

 44,643

(In millions of Korean won)
1) Assets Short-term available-for-sale financial assets Long-term available-for-sale financial assets1 Other
2) Liabilities
Other

Level 1

December 31, 2014

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

-

78,348

-

78,348

1 Amounts measured at cost (September 30, 2015: 417,458 million, December 31, 2014: 394,753 million) are 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.
 Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities  Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly  Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
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 Group 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.

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The Group performs the fair value measurements required for financial reporting purposes, including Level 3 fair values and discusses valuation processes and results at least once every quarter in line with the Group's quarterly reporting dates. The Group's policy is to recognize transfers between levels at the end of the reporting period, if corresponding events or changes in circumstances have occurred.
Specific valuation techniques used to value financial instruments include:
 Quoted market prices or dealer quotes for similar instruments  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 Group 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)

Classification

Fair Value

Long-term available-for-sale financial assets

Taewon Lighting

\ 17,094

Samsung Venture Investment Corning Incorporated convertible preferred shares Derivatives Embedded derivatives (convertible bonds)

6,586 2,871,758
840

Valuation Technique
Discounted cash flow Discounted cash flow
Trinomial model
Binomial model

Level 3 Inputs
Permanent growth rate Weighted average cost of capital Permanent growth rate Weighted average cost of capital Risk adjusted discount rate Price volatility
Discount rate Stock price volatility

Input Range (Weighted Average)
-1.00% ~ 1.00% (0%) 7.76% ~ 9.76% (8.76%) -1.00% ~ 1.00% (0%) 7.74% ~ 9.74% (8.74%) 5.46% ~ 7.46% (6.46%) 29.8% ~ 35.8% (32.8%)
3.31% ~ 7.44% (5.22%) 15.84% ~ 22.28% (18.93%)

(4) Changes in Level 3 instruments:
(In millions of Korean won)
Balance as of January 1 Purchases Disposals Amount recognized in profit or loss Amount recognized in other comprehensive income Other Balance as of September 30

September 30, 2015

\

3,548,095

77,227 (123,798)
(11,230)

(195,051)

(5,978)

\

3,289,265

September 30, 2014

\

493,378

2,498,800 (10,871) (14,518)

192,453

(41,731)

\

3,117,511

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(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 major financial instruments which are 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

\

-

\ 247,116

262

262

\

262

\ 247,378

Unfavorable Changes

Profit or Loss

Equity

\

-

\ (216,189)

(261)

(261)

\

(261)

\ (216,450)

1 Changes in fair value are calculated by increasing or decreasing the correlation between volatility (29.8%~35.8%) and discount rate for convertible preferred shares. 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 discount rate and volatility by 10%.

25. Segment Information

(A) Operating segment information

The Management Committee is responsible for making strategic decisions based on review of the Group's internal reporting. The Management Committee has determined the operating segments based on these reports.

The Management Committee reviews operating profits of each operating segment in order to assess performance and to make decisions about allocating resources to the segment. The operating segments are product based and include CE, IM, Semiconductor, DP and others.

Operating segment information was prepared after depreciation, amortization of intangible assets and the allocation of internal transaction adjustments. Total assets and liabilities of each operating segment are excluded from the disclosure as these have not been provided regularly to the Management Committee.

(1) For the nine months ended September 30, 2015

(In millions of Korean won)
Total segment revenue
Intercompany revenue
Net revenue2 Depreciation Amortization Operating profit

CE
84,299,333
(51,254,388)
33,044,945 460,308 76,117 438,205

IM
169,253,449
(90,700,242)
78,553,207 852,159 140,316
7,908,699

DS

Total1

Semiconductor

109,196,883

64,753,973

(53,911,422) (30,375,730)

55,285,461 12,824,193
566,295 11,910,394

34,378,243 9,271,232
459,094 9,990,399

Intercompany

elimination

within the

DP

Total1

Group

Consolidated

41,162,726 363,165,879 (215,827,850) 147,338,029

(20,201,594) (215,827,850)

215,827,850

-

20,961,132 3,384,729
97,075 1,996,987

147,338,029 14,614,029
933,624 20,270,677

- 147,338,029

-

14,614,029

-

933,624

-

20,270,677

1 Includes other amounts not included in specific operating segments. 2 Segment net revenue includes intersegment revenues.

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(2) For the three months ended September 30, 2015
DS

(In millions of

Korean won)

CE

Semi-

IM

Total1

conductor

Total segment revenue
Intercompany revenue
Net revenue2 Depreciation Amortization Operating profit

30,827,459
(19,242,367)
11,585,092 151,143 20,632 362,024

57,866,896
(31,255,601)
26,611,295 323,062 45,121
2,404,001

41,055,677 24,837,416

(20,746,233) (12,018,972)

20,309,444 4,468,168
206,687 4,653,904

12,818,444 3,242,521
170,002 3,657,889

1 Includes other amounts not included in specific operating segments. 2 Segment net revenue includes intersegment revenues.

DP
15,063,382
(7,575,305)
7,488,077 1,162,569
33,249 927,941

Total1

Intercompany elimination within the Group

Consolidated

129,928,744

(78,246,172) 51,682,572

(78,246,172)

78,246,172

-

51,682,572 5,103,838
318,966 7,393,373

-

51,682,572

-

5,103,838

-

318,966

-

7,393,373

(3) For the nine months ended September 30, 2014

(In millions of Korean won)
Total segment revenue
Intercompany revenue
Net revenue2 Depreciation Amortization Operating profit

CE
88,921,865
(53,005,877)
35,915,988 444,546 72,794
1,004,513

IM
180,415,490
(94,943,836)
85,471,654 552,221 138,126
12,601,764

DS

Semi-

Total1

conductor

DP

Total1

Intercompany elimination
within the Group

Consolidated

96,024,484 54,357,702 38,553,383 366,719,594

(213,243,729) 153,475,865

(47,948,414) (25,289,738) (19,872,808) (213,243,729)

213,243,729

-

48,076,070 11,018,437
394,232 6,295,992

29,067,964 7,736,673
296,337 6,074,097

18,680,575 3,195,519
86,665 187,880

153,475,865 12,531,487
845,103 19,736,644

- 153,475,865

-

12,531,487

-

845,103

-

19,736,644

1 Includes other amounts not included in specific operating segments. 2 Segment net revenue includes intersegment revenues.

(4) For the three months ended September 30, 2014
DS

(In millions of

Korean won)

CE

Semi-

IM

Total1

conductor

Total segment revenue
Intercompany revenue
Net revenue2 Depreciation Amortization Operating profit

29,440,211
(17,843,894)
11,596,317 146,442 24,655 46,179

51,069,111
(26,491,816)
24,577,295 193,609 46,511
1,750,723

32,768,424
(16,479,645)
16,288,779 3,765,499
157,752 2,331,290

18,964,059
(9,074,068)
9,889,991 2,729,683
124,487 2,263,497

1 Includes other amounts not included in specific operating segments. 2 Segment net revenue includes intersegment revenues.

DP
12,828,069
(6,573,334)
6,254,735 1,053,466
29,646 55,129

Total1

Intercompany elimination within the Group

Consolidated

113,821,900

(66,374,590)

47,447,310

(66,374,590)

66,374,590

-

47,447,310 4,326,214
312,151 4,060,522

-

47,447,310

-

4,326,214

-

312,151

-

4,060,522

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(B) Regional information

The regional segment information provided to the Management Committee for the reportable segments as of and for the three and nine months ended September 30, 2015 and 2014, is as follows:

(1) As of and for the nine months ended September 30, 2015

(In millions of Korean won)

Korea

America

Europe

Asia and Africa

China

Intercompany elimination
within the Group

Consolidated

Net segment revenue Non-current assets1

15,856,271 63,617,140

48,644,451 8,175,173

27,667,871 790,529

31,758,763 7,297,840

23,410,673 12,710,177

(470,133)

147,338,029 92,120,726

1 Total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint ventures.

(2) As of and for the three months ended September 30, 2015

(In millions of Korean won)

Korea

America

Europe

Asia and Africa

China

Intercompany elimination
within the Group

Consolidated

Net segment revenue Non-current assets1

5,437,509 63,617,140

17,337,009 8,175,173

9,788,950 790,529

10,465,717 7,297,840

8,653,387 12,710,177

(470,133)

51,682,572 92,120,726

1 Total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint ventures.

(3) As of and for the nine months ended September 30, 2014

(In millions of Korean won)

Korea

America

Europe

Asia and Africa

China

Intercompany elimination
within the Group

Consolidated

Net segment revenue Non-current assets1

16,270,185 60,478,871

48,433,424 7,206,280

31,545,843 906,949

31,631,619 3,515,095

25,594,794 9,118,247

(528,625)

153,475,865 80,696,817

1 Total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint ventures.

(4) As of and for the three months ended September 30, 2014

(In millions of Korean won)

Korea

America

Europe

Asia and Africa

China

Intercompany elimination
within the Group

Consolidated

Net segment revenue Non-current assets1

5,010,254 60,478,871

15,104,078 7,206,280

9,982,172 906,949

9,669,548 3,515,095

7,681,258 9,118,247

(528,625)

1 Total of non-current assets other than financial instruments, deferred tax assets, and investments in associates and joint ventures.

\ 47,447,310 80,696,817

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26. Related Party Transactions (A) Sale and purchase transactions

Sales and purchases with related parties for the nine months ended September 30, 2015 and 2014, are as follows:

(In millions of Korean won) Associates and Joint ventures
Other related parties

Name of Company1 Samsung SDS Samsung Electro-Mechanics Samsung Card Other Total (Associates and Joint Samsung C&T. 2
Samsung SDI Other Total (Other related parties)

Sales \21,475 9,042 5,036 209,427 244,980 4,401 33,955 87,332
\125,688

September 30, 2015

Disposal of fixed

assets

Purchases

\ -

\1,198,281

-

2,142,304

-

27,226

3,525

4,043,370

3,525

7,411,181

-

56,515

20

1,166,700

-

754,819

\ 20

\1,978,034

Purchase of fixed assets \ 142,574 2 231,508 374,084 578,764 23,722 231,682 \ 834,168

1 Transactions with separate entities that are related parties of the Group. 2 During the nine months ended September 30, 2015, Cheil Industries merged with Samsung C&T and adopted Samsung C&T as the name of the
new company.

(In millions of Korean won) Associates and Joint ventures
Other related parties

Name of Company1 Samsung SDS Samsung Electro-Mechanics Samsung Card Other Total (Associates and Joint Samsung C&T. 2
Samsung SDI Other Total (Other related parties)

Sales \ 23,858 25,487 6,574 344,575 400,494 5,259 49,695 191,589 \246,543

September 30, 2014

Disposal of fixed

assets

Purchases

\

-

\1,425,420

110

1,791,478

-

30,429

11,080 11,190

3,950,970 7,198,297

324,246

73,637 785,149

-

1,503,008

\324,246

\2,361,794

Purchase of fixed assets \ 165,878 169,049 328,931 663,858 312,696 354,004 81,602
\748,302

1 Transactions with separate entities that are related parties of the Group 2 During the nine months ended September 30, 2015, Cheil Industries merged with Samsung C&T and adopted Samsung C&T as the name of the
new company.

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(B) Balances of receivables and payables

Balances of receivables and payables arising from sales and purchases of goods and services as of September 30, 2015 and December 31, 2014, are as follows:

(In millions of Korean won) Associates and Joint ventures
Other related parties

Name of Company1
Samsung SDS Samsung Electro-Mechanics Samsung Card Other Total (Associates and Joint ventures) Samsung C&T2 Samsung SDI Other
Total (Other related parties)

September 30, 2015 Receivables
\ 4,085 451
13,174 65,247 82,957 204,139
919 24,433 \ 229,491

Payables \ 277,816 345,956 1,158,643 464,561 2,246,976 363,604 148,122 143,296
\ 655,022

1 Balances due from and to separate entities that are related parties of the Group. 2 During the nine months ended September 30, 2015, Cheil Industries merged with Samsung C&T and adopted Samsung C&T as the name of the
new company.

(In millions of Korean won) Associates and Joint ventures
Other related parties

Name of Company1
Samsung SDS Samsung Electro-Mechanics Samsung Card Other Total (Associates and Joint ventures) Samsung C&T2 Samsung SDI Other
Total (Other related parties)

December 31, 2014 Receivables
\ 3,353 1,431 5,431 82,873 93,088
187,108 4,771 18,052
\ 209,931

Payables \ 359,001 237,816 1,124,240 463,647 2,184,704 288,984 122,936 126,422 \ 538,342

1 Balances due from and to separate entities that are related parties of the Group. 2 During the nine months ended September 30, 2015, Cheil Industries merged with Samsung C&T and adopted Samsung C&T as the name of the
new company.

(C) The Group invested 137,917 million Korean won in associates and joint ventures including 133,600 million Korean won in Samsung Biologics during the nine months ended September 30, 2015 (655,067 million Korean won during the nine months ended September 30, 2014)

(D) Key management compensation

Key management includes directors (executive and non-executive) and members of the Executive Committee. The compensation paid or payable for employee services for the nine months ended September 30, 2015 and 2014 consists of:

(In millions of Korean won)

September 30, 2015

September 30,2014

Salaries and other short-term employee benefits Termination benefits Other long-term benefits

\

6,944

420

6,237

\

17,865

730

5,353

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27. Business Combination Significant business combinations for the nine months ended September 30, 2015 are as follow: Samsung Electronics America, the Group's subsidiary, acquired 100% of the equity shares of Samsung Pay, Inc. (formerly LoopPay) on February 23, 2015. (A) Overview of the acquired company

Name of the acquired company Headquarters location Representative director Industry
(B) Purchase price allocation
(In millions of Korean Won) I. Consideration transferred II. Identifiable assets and liabilities
Cash and cash equivalents Short-term financial instruments Trade and other receivables Property, plant and equipment Intangible assets Other assets Trade and other payables Deferred income tax liabilities Total net identifiable assets III. Goodwill (I ­ II)

LoopPay(currently Samsung Pay, Inc.) Burlington, MA. USA Will Graylin Mobile Payments Development and Services
Amount  275,325
3,042 57
17,559 122
20,293 22
(23,268) (5,220) 12,607  262,718

Had Samsung Pay (formerly LoopPay) been consolidated from January 1, 2015, revenues would increase by 85 million and net income would decrease by 2,151 million on the interim consolidated statement of income. The revenues and net loss contributed by Samsung Pay (formerly LoopPay) since the acquisition by SEA amount to 112 million and 13,790 million, respectively.

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28. Non-Current Assets Held-for-Sale (Sold Assets)

(A) Summary

(1) Sale of Samsung Techwin Co., Ltd.

During the year ended December 31, 2014, the management of the Group decided to sell all its shares in Samsung Techwin Co., Ltd. to Hanwha Corporation. The contract was entered into on November 26, 2014, and the transaction was completed in June 2015.

(2) Sale of Samsung General Chemicals Co., Ltd.

During the year ended December 31, 2014, the management of the Group decided to sell all its shares of Samsung General Chemicals Co., Ltd. to Hanwha Chemical and Hanwha Energy Corporation, and the transaction was completed in April 2015.

(3) Sale of Optical Materials Business

During the year ended December 31, 2014, the management of the Group decided to sell the Optical Materials business segment and accordingly, the related assets and liabilities are classified as held-for-sale. Since the business does not represent a separate major line of the Group, related profit or loss was not presented as profit or loss of discontinued operations. The contract was entered into on December 2, 2014, and the transaction was completed in March 2015.

(B) Details of assets and liabilities reclassified as held-for-sale, as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean Won) Assets held-for-sale
Trade receivables Inventories Other current assets Property, plant and equipment Investment Other non-current assets Total Liabilities held-for-sale Current liabilities Non-current liabilities Total

September 30, 2015



-

-

-

-

-

-

-

-

-



-

December 31, 2014



60,173

9,703

22,523

37,955

511,441

3,696

645,491

25,939

2,377



28,316

(C) Details of cumulative income or expense recognized in other comprehensive income relating to the sold assets classified as held-for-sale as of September 30, 2015 and December 31, 2014 are as follows:

(In millions of Korean Won)

September 30, 2015

December 31, 2014

Gain on valuation of available-for-sale securities Changes in equity under the equity-method Foreign exchange translation adjustment Total



-



24,750

-

54,118

-

1,233



-



80,101

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29. Events After the Reporting Period
(A) On October 29, 2015, the board of directors approved share buyback and retirement of common and preferred stocks. Estimated total number of shares to be repurchased is 3.47 million (common stock 2.23 million, preferred stock 1.24 million) and all repurchased shares will be cancelled after the buyback is completed. Period of Purchase will be ended on January 29, 2016.
(B) On October 30, 2015, the Group has authorized the sale of its entire stake in Samsung Fine Chemicals Co., LTD. to Lotte Chemical Corporation. The transaction is expected to be closed within the first half of 2016.

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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 (XI. Other Information) B. Allowance for Bad Debt
The allowances for bad debts over the past 3 years are as follows: Bad debt allowance by account

Period 2015.3Q
2014 2013

Account Trade receivables Short-term loans Other receivables
Advances Trade receivables (Long-term) Other receivables (Long-term)
Advances (Long-term) Long-term loans Total Trade receivables Short-term loans Other receivables Advances
Trade receivables (Long-term) Other receivables (Long-term)
Advances (Long-term) Long-term loans Total Trade receivables Short-term loans Other receivables Advances
Trade receivables (Long-term) Other receivables (Long-term)
Advances (Long-term) Long-term loans Total

Receivables Amount 28,012,685 8,490 3,098,359 1,784,980 27,678 178,011 306,524 190,954 33,607,681 24,972,069 9,650 3,549,692 1,993,788 35,944 9,419 176,949 176,232 30,923,743 25,256,002 33,382 2,907,221 1,932,530 36,229 24,384 76,429 152,005 30,418,182

Allowance Amount 381,223 79 35,487 3,717 269 1,731 793 1,426 424,724 277,459 118 9,817 4,318 329 77 793 1,246 294,157 267,470 271 19,819 4,342 205 227 792 36,727 329,853

(Unit: KRW million, %)
Allowance (%) 1.4% 0.9% 1.1% 0.2% 1.0% 1.0% 0.3% 0.7% 1.3% 1.1% 1.2% 0.3% 0.2% 0.9% 0.8% 0.4% 0.7% 1.0% 1.1% 0.8% 0.7% 0.2% 0.6% 0.9% 1.0% 24.2% 1.1%

 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)

1. Allowance for bad debts (beginning balance)
2. Net Bad Debt Expense (±)
 Bad Debt Expense (Write-off)
 Bad Debt Recovered
 Others
3. Bad debts expense 4. Allowance for bad debts
(Ending balance)

2015.3Q 294,157 4,380
4,524 144 -
134,947 424,724

2014 329,853 49,349
50,705 1,356
13,653 294,157

(Unit: KRW million) 2013 283,869 17,833
20,393 2,560
63,817 329,853

 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 Dispute or Conflict Receivable through utilization of third party collection agency Receivable under litigation Customer filed or in the process of filing bankruptcy

Rate of Allowance 25% 50% 75% 100%

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(3) Instruction: Write-off is recorded when trade receivables contain the following characteristics:  Objective proof of bad debts, such as bankruptcy, compulsory execution, discontinuance of business, debtor's death or disappearance  Legal action has failed or the right of collection is extinguished.  When the collection agency gives as notice that collection is not possible.  When the collateral is sold or insurance is received.  The collection expenses exceed the amount of receivables.

The outstanding period of trade receivables

Amount

Less than 6 months
27,841,103

6 months ~ 1 year
101,593

1 year ~ 3 years
82,913

More than 3 years

(Unit : KRW million) Total

14,754

28,040,363

Ratio

99.3%

0.4%

0.3%

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:

Division

Category

Finished Goods

Work In Process

CE

Raw Material

Material In Transit

Total

Finished Goods

Work In Process

IM

Raw Material

Material In Transit

Total

Finished Goods

SemiConductor

Work In Process Raw Material
Material In Transit

Total

Finished Goods

Work In Process

DS

DP

Raw Material

Material In Transit

Total

Finished Goods

Work In Process

DS Total

Raw Material

Material In Transit

Total

Finished Goods

Work In Process

Total

Raw Material

Material In Transit

Total Inventory Ratio (%)­ Total Assets
[Inventory ÷ Total Assets]

Inventory Turn-over [ Yearly CGS ÷{(Beginning of Inventory End of Inventory)÷2}]

2015.3Q 2,237,699 124,922 2,181,396 3,035,655 7,579,672 2,405,546 423,417 3,273,669 784,363 6,886,995 1,541,442 5,137,524 627,216 112,241 7,418,423 377,648 319,240 301,408 53,678 1,051,974 1,961,202 5,628,930 973,010 169,366 8,732,508 7,110,111 6,157,553 7,936,699 1,636,706 22,841,069
9.3%
6.3

2014 1,946,482 80,122 1,566,121 1,694,448 5,287,173 2,210,160 279,861 2,751,331 488,877 5,730,229 777,450 3,677,543 419,398 121,477 4,995,868 409,516 244,324 281,223 55,176 990,239 1,228,783 4,105,675 750,929 178,218 6,263,605 5,773,448 4,465,071 5,957,006 1,121,979 17,317,504
7.5%
7.0

(Unit: KRW million)

2013

Note

1,927,784

73,876

1,435,023

1,689,040

5,125,723

2,896,647

333,109

3,363,195

1,026,147

7,619,098

1,219,189

3,022,125

351,646

89,670

4,682,630

553,108

443,611

328,955

4,988

1,330,662

1,810,852

3,663,346

726,455

98,897

6,299,550

7,429,350

4,070,266

6,809,112

826,140

19,134,868

8.9%

7.5

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Inventory Counts
(1) Inspection Date  End of May and November (twice a year)  Performed check of the existence of inventories included in an accounting books and records on the inspection date
(2) Inspection Method  Internal warehouse: Closed & Total Inspection  Sample check in semiconductor and DP inventory, SVC materials
 Outside warehouse Performed check of the possession confirmation documents and sample tests at third party warehouse and Inventory in transit
 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 September 30th, 2015 is as follows:

Category Finished Goods Work In Process Raw Material Material In Transit
Total

Acquisition Cost 7,285,098
6,542,848
8,254,137
1,636,706
23,718,789

 Prepared on a consolidated basis

Inventory Valuation Reserve
174,987
385,295
317,438
0
877,720

Balance 7,110,111 6,157,553 7,936,699 1,636,706
22,841,069

(Unit : KRW million) Note

D. Fair Value Estimation Refer to 2- 3. Financial Instruments by Category and 2-24. Financial Risk Management in . Financial Affairs.

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IV. Auditor's Report
1. Introduction
Samil PwC has reviewed the interim consolidated/separate financial position of the Company as of September 30, 2015, and the related interim consolidated/separate statements of income and comprehensive income for the three and nine months ended September 30, 2015, and the interim consolidated/separate statements of changes in equity and cash flows for the nine months ended September 30, 2015. Nothing has come to attention that causes them to believe the accompanying interim consolidated/separate financial statements are not presented fairly, in all material respects, in accordance with the K-IFRS 1034, Interim Financial Reporting. Samil PwC also conducted audits on the consolidated/separate financial statement of financial position of the Company as of December 31, 2013 and 2014, and the related consolidated/separate statements of income, comprehensive income, changes in equity and cash flows for the year then ended and expressed an unqualified opinion on those financial statements. There are 157 subsidiaries as of September 30, 2015. Three subsidiaries have changed the auditor to PwC for the nine months ended September 30, 2015 and newly incorporated/acquired entities are in progress of appointing auditors.

Year end 30 September 2015 31 December 2014 31 December 2013

Group Auditor Samil PwC Samil PwC Samil PwC

Audit(Review) Opinion Not applicable Unqualified Unqualified

Remarks Not applicable Not applicable Not applicable

<Review plan for nine-month period ended September 30, 2015>

2015 1Q 2015 2Q 2015 3Q

Review Period

Pre-review Review
Pre-review Review
Pre-review Review

Planned dates 2015.03.09 ~ 2015.03.27 2015.04.07 ~ 2015.05.11 2015.06.08 ~ 2015.06.26 2015.07.07 ~ 2015.08.07 2015.09.07 ~ 2015.09.25 2015.10.07 ~ 2015.11.12

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[Audit Contract Description]

Fiscal Year

Group Auditor

Nine months ended September 30, 2015

Samil PwC

Year ended December 31, 2014

Samil PwC

Year ended December 31, 2013

Samil PwC

Description
- Review of the interim 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

(In millions of Korean won)
Compensation Total Hours

1,806

20,763

3,690

43,411

3,840

44,702

Samil PwC has performed non-audit services and has been paid KRW 503 million by the Company for the nine months ended September 30, 2015.

[Non-Audit Service Contract Description]

Fiscal Year

Contract Date

Nine months ended September 30, 2015

June 2014

Year ended December 31, 2014

September 2013
August 2013
October 2013

Non-audit Service Description Incorporation, M&A and Divestiture Advisory
Subtotal Incorporation, M&A and Divestiture Advisory
Tax Advisory Process Improvement Advisory
Others

(In millions of Korean won)

Period for Service
2015.01~2015.09

Compensation Note 503

503

2014.01~2014.12

1,161

2014.01~2014.12

533

2014.01~2014.12

996

297

Year ended December 31, 2013

November 2012
August 2012
June 2012

Subtotal Incorporation, M&A and Divestiture Advisory
Tax Advisory Process Improvement Advisory
Others Subtotal

2013.01~2013.12 2013.01~2013.12 2013.01~2013.12

2,987 2,466 2,272 1,896 1,573 8,207

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V. Management Discussion and Analysis
Pursuant to the reporting guidelines set forth by the Financial Supervisory Service of South Korea, the Management Discussion and Analysis section, reported in the annual Business Report, is not included in quarterly and half year reports.

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VI. Corporate Governance

1. Board of Directors

A. Overview of Board of Directors
As of September 30, 2015, 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

Date

Agenda

Results

Jan 29, 2015
Feb 13, 2015
Mar 13, 2015 Apr 29, 2015 Jul 30, 2015 Aug 28, 2015

 Approval of FY2014 financial statements and annual business report
 Approval of FY2015 business plan  Application for Venture Capital Union  Reported Items  Report on the internal accounting management system  Assessment of the internal accounting management system  Report on the results of establishment of research committee for
environmental safety
 Decision to convene the 46th (FY2015) AGM  Decision of the 46th AGM agenda items
- report items: 1) FY2014 annual audit report 2) FY2014 annual business report - Item 1: Approval of FY2014 financial statements, including
balance sheet, income statement, and the statement of appropriation of retained earnings, etc. -Item 2: Appointment of Directors Item 2-1: Appointment of Independent Directors Item 2-1-1: Appointment of Han-Joong Kim as an Independent Director Item 2-1-1: Appointment of Byeong-Gi Lee as an Independent Director Item 2-2: Appointment of Executive Directors Item 2-3: Appointment of Audit Committee members - Item 3: Approval of remuneration limit for Directors  Donation  Reported Item  Report on the results of compliance review  Report on review on the suggestions from the advancement of corporate ecosystem research council
 Appointment of CEO and Directors  Appointment of BOD Committee members
 Approval of the 47th 1Q15 financial statements and business report  Donation to Sungkyunkwan University
 Approval of the (47th) 1H15 financial statements, business report, and interim dividend
 Application for property insurance  Approval of changes in large-scale goods and services
transactions in 2015
 Approval of purchase contract regarding assets of Samsung Fine Chemicals

Approved Approved Approved
Approved Approved
Approved
Approved Approved Approved Approved Approved Approved Approved Approved

In-Ho Lee
For For For

Independent directors

HanJoong Kim
For
For For

KwangSoo Song
For
For For

ByeongGi Lee
For
For For

Eun-Mee Kim
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

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

For

For

For

For

For

Absent

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C. The Committees of BOD (1) Composition of the BOD Committees as of September 30, 2015

Committee Name
Management Related Party Transactions Compensation
CSR

Members
4 Executive Directors
3 Independent Directors
3 Independent Directors
5 Independent Directors

Member Name
Oh-Hyun Kwon, Boo-Keun Yoon, Jong-Kyun Shin, Sang-Hoon Lee
In-Ho Lee, Han-Joong Kim, Kwang-Soo Song
Kwang-Soo Song, In-Ho Lee, Byeong-Gi Lee
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. Annual or mid to long-term management policy and strategy 2. Key management strategy 3. Business planning and restructuring 4. Establishment, relocation, and withdrawal of overseas branch and corporation 5. Initiating cooperation such as strategic partnership with foreign companies 6. Acquisition or disposal of domestic and overseas subsidiaries 7. Other major management matters 8. Establishment, relocation, and withdrawal of branches and operations 9. Appointment or dismissal of supervisors 10. Suspension or shutdown of production over 5% of the total production in the recent year 11. Licensing agreements and technology transfer, partnership in regards to technology of over 0.5% of the total equity 12. Acquisitions and transfers of patents related to new material and new technology of over 0.5% of the total equity 13. Collection and destruction of products corresponding to over 5% of the total sales in the recent business year 14. Contracting for over 5% of the total sales in the recent business year 15. Contracting or canceling of single sales agency and suppliers over 5% of the total sales in the recent business year 16. Set basic principles of organization management 17. Decision making on basic principles and any changes related to wages, bonus, and fringe benefits 18. Appointments, dismissals and changes of transfer agent 19. Closing of shareholder register and setting reference date 20. Establishing corporate guidelines for business and management related activities 21. Donations over KRW 50 billion per donation. Donation to related parties between KRW 1 billion and KRW 5 billion

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(B) Matters related to Finance
1. Acquisitions or disposals of equity investments with a value between 0.1% and/or less than 2.5% of the total equity 2. Direct overseas investments with a value of over 0.1% and/or less than 2.5% of the total equity 3. 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 4. New credit agreement contract (excluding extension of period) with a value of over 0.1% and/or less than 5% of
the total equity 5. 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. 6. Issuance of Corporate Bond 7. 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 8. 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
Management Committee

Date

Agenda

Jan 14, 2015

 Capital increase for regional office  Stake acquisition  Purchase of insurance

Jan 28, 2015

 Stake acquisition  Asset transfer

Feb 11, 2015  Stake acquisition

Mar 11, 2015

 Memory investment  Rental contract

Apr 29, 2015

 Appointment of the head of the Management Committee  Construction of semiconductor line  Construction of new research building  Donation  Purchase of liability insurance

May 13, 2015  Memory investment and capital increase for corporate entities

Jun 3, 2015

 Establishment of training institute  Closing of shareholder register for interim dividend

Jul 30, 2015 Sep 13, 2015

 Liquidation of a subsidiary  Asset disposal  Investment in establishment of Daegu-Samsung Creative
Economic Zone
 Fund raising regarding retired semiconductor workers  Purchase of Erection All Risks insurance policy  Rental contract regarding Samsung Materials Research
Complex  Consolidation of overseas corporate entities in Russia
through mergers

Voting Results
Approved Approved Approved
Approved Approved
Approved
Approved Approved
Approved Approved Approved Approved Approved
Approved
Approved Approved
Approved Approved Approved
Approved Approved Approved
Approved

Attendance/Voting Results of
Independent Directors
N/A (All comprised of executive directors)

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 The Related Party Transactions Committee

Date

Agenda

Jan 28, 2015

- Preliminary review on large-scale related party transactions 1) Application for Venture Capital Union - Report on 4Q14 related party transactions

Feb 13, - Preliminary review on large-scale related party transactions 2015 1) Donation

Apr 28, 2015
Jul 29, 2015
Aug 28, 2015

- Preliminary review on large-scale related party transactions 1) Donation to Sungkyunkwan University - Report on 1Q15 related party transactions
- Preliminary review of large-scale related party transactions 1) Application for property insurance 2) Approval of changes in large-scale goods and services
transactions in 2015 - Report on 2Q 15 related party transactions
- Preliminary review on large-scale related party transactions 1) Approval of purchase contract of Samsung Fine Chemicals
assets

Voting Results
N/A N/A N/A N/A N/A

Name of independent directors

In-Ho Lee (Attendance:
100%)

Han-Joong Kim (Attendance: 80%)

Kwang-Soo Song (Attendance: 100%)

For/against

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Absent)

-

-

-

-

-

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 The Compensation Committee

Date

Agenda

Feb 11, Preliminary review on remuneration limit 2015 for Directors

Voting Results
Approved

Name of Independent Directors

Kwang-Soo Song (Attendance: 100%)

In-Ho Lee (Attendance:
100%)

Byeong-Gi Lee (Attendance: 100%)

For/Against

For

For

For

 The CSR Committee

Date

Agenda

Voting Results

- Report on research results of the

-

Jan 29, Research Committee for

2015

Environmental Safety

Name of Independent Directors

Byeong-Gi Lee (Attendance:
100%)

In-Ho Lee (Attendance:
100%)

Han-Joong Kim (Attendance: 100%)
For/Against

Kwang-Soo Song
(Attendance: 100%)

-

-

-

-

Eun-Mee Kim
(Attendance: 100%)
-

- Appointment of the head of the

Approved

For

For

For

For

For

committee

Apr 29, 2015

- Operation of the 2nd term of the research committee for the

Approved

For

For

For

For

For

advancement of corporate system

Jul 30, - Report on corporate social

-

-

-

-

-

-

2015

contribution activities

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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, who 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 composition of the Board of Directors, as appointed by shareholders, is as follows:
[As of September 30, 2015]

Position

Name

Nominated by

Executive Director
Executive Director
Executive Director
Executive Director

Oh-Hyun Kwon Boo-Keun Yoon Jong-Kyun Shin Sang-Hoon Lee

Independent Director

In-Ho Lee

Independent Director

Han-Joong Kim

Independent Director

Kwang-Soo Song

Independent Director

Byeong-Gi Lee

Independent Director

Eun-Mee Kim

 As of September 30, 2015

BOD
BOD
BOD
BOD
Independent Director
Recommendation Committee
Independent Director
Recommendation Committee
Independent Director
Recommendation Committee
Independent Director
Recommendation Committee
Independent Director
Recommendation Committee

Responsibility
Chairman of BOD Head of DS Division Head of CE Division Head of IM Division Head of Corporate Management Office
Overall management of the Company
Overall management of the Company
Overall management of the Company
Overall management of the Company
Overall management of the Company

Transactions with the Company

Relation with the controlling shareholder

N/A

N/A

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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
The Company provides the independent directors with access to support staff so they are able to perform their duties professionally in the BOD and the Board committees. The support staff provides the Directors with reference materials corresponding to the meeting agendas well in advance so Directors will have the ample opportunity thoroughly review the topics to be discussed before the Board and committee meetings. If necessary, the Directors are provided with separate information sessions on any item on the agenda and they are also frequently provided updates on other key management issues. In addition, the support staff conducts internal education programs which allow Independent Directors to visit and conduct inspect domestic and overseas business sites and receive reports of the current state of business operation.

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2. Audit System

A. Profile of the member of the Audit Committee As of September 30, 2015, the Company operates an Audit Committee consisting of three (3) Independent Directors.

Name In-Ho Lee

Career
- Corporate Advisor, Shinhan Bank (2009-2011) - Chief Executive Officer, Shinhan Financial Group (2005-2009) - President & CEO, Shinhan Bank (1999-2003)

Han-Joong Kim

- Professor Emeritus, Yonsei University (2012~Present) - President, Yonsei University (2008-2012) - Professor, Dept. of Preventive Medicine & Public Health (1982-2012)

Kwang-Soo Song

- Advisor, Kim & Chang Law Office (2007-Present) - Prosecutor General, Supreme Prosecutors' Office (2003-2005) - Chief Prosecutor, Daegu High Prosecutors' Office (2002-2003)

Note Independent director Independent director Independent director

B. Audit Committee Independence
Pursuant to related laws and the Articles of Incorporation, the Company has prepared internal audit regulations which encompass composition, operation, authority, and responsibility of the Audit Committees to carry out audit related activities.
The Audit Committee is exclusively composed of Independent Directors appointed at the annual general shareholder meeting and includes audit and financial experts. Also, the Audit Committee satisfies requirements of relevant laws. (e.g., The stipulation that the role of head of the committee be held by an Independent Director.
The Audit Committee reviews accounting documents including financial statements and audit process related documents presented by the external auditor, and if needed, requests the external auditor to perform additional reviews on accounting books and records. To ensure the reliability of accounting related disclosures, the audit committee receives and reviews a report on internal accounting control systems prepared by internal accounting managers. In addition, the Committee attends the BOD meetings and other significant meetings. The Committee receives reports on deliberations of the Management Committee and on business performance from Directors and requests additional reviews and supplementation of data as needed.

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C. Major Activities of the Audit Committee

See the table below for major activities of the Audit Committee by reporting date.

Name

Date

Agenda

Voting Results

- 2014 financial and business reports

-

Jan 28,

- Report on 2014 internal accounting management system activities

-

2015 - Report on 4Q14 non-audit activities

-

- Report on 2014 audit activities

-

Audit Committee

Feb 13, 2015

- Review of the 2015 AGM agenda - Assessment of 2014 activities of internal compliance
system

-

Apr 28, - Report on 1Q15 financial statement and business report

-

2015 - Report on 1Q15 non-audit activities

-

Jul 29, 2015

- 1H 2015 financial statement and business report - Report on 2Q15 non-audit activities - Report on 2Q15 audit activities

-

Name of independent directors

In-Ho Lee (Attendance: 100%)

Han-Joong Kim (Attendance: 75%)

Kwang-Soo Song (Attendance: 100%)

For/Against

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Absent)

-

-

-

D. Compliance Officer

1. Compliance Officer

Name Age Academic Background Current Position

Career

2. Date of BOD resolution 3. Disqualifications 4. Others

Jae-wan Chi
58
Illinois, Urbana-Champaign(UIUC) Juris Doctor
Executive Vice President of the Samsung Electronics Global Legal Affairs & Compliance Team - Jan '04: Deputy vice president of Samsung SDI Corporate Management & Planning Dept. Corporate Legal Group - May '08: Deputy senior vice president of Samsung SDI Corporate Legal Group - Dec '11: Executive vice president of Samsung Electronics IP Center Licensing Team Jan 24, 2014
N/A
N/A

3. Voting Rights of Shareholders
A. Voting Method The Company has not adopted a concentrated voting system, voting in writing, or an electronic voting system.
B. Minority Shareholder Right No minority shareholder right was exercised during the reporting period.
C. Competition over Management Right No competition over management rights occurred during the reporting period.

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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 September 30, 2015]

Name

Relationship

Kun-Hee Lee
Kun-Hee Lee
Samsung C&T (formerly Samsung C&T)
Samsung C&T (formerly Cheil Industries)
Samsung Welfare Foundation
Samsung Foundation Of Culture
Ra-Hee Hong

Major shareholder
Major shareholder
Affiliate
Affiliate
Affiliate
Affiliate
Affiliate

Type of share
Common Preferred Common
Common
Common Common Common

Number of Shares owned

Beginning of period

End of period

# shares owned

%

# shares owned

%

4,985,464

3.38

4,985,464

3.38

(Unit: Shares, %) Note -

12,398

0.05

12,398

0.05

-

5,976,362

4.06

0

0.00

89,683

0.06

0 5,976,362
89,683

0.00 Merged with Cheil Industries

Changed the name after the 4.06 merger with the former
Samsung C&T

0.06

-

37,615

0.03

37,615

0.03

-

1,083,072

0.74

1,083,072

0.74

-

Jae-Yong Lee
Samsung Life Insurance
Samsung Life Insurance
Samsung Life Insurance
(special accounts)
Samsung Life Insurance
(special accounts)
Samsung Fire & Marine Insurance
Oh-Hyun Kwon

Affiliate Affiliate Affiliate Affiliate

Common Common Preferred Common

Affiliate Affiliate Affiliate

Preferred Common Common

840,403

0.57

10,622,814

7.21

879

0.00

486,926

0.33

52,332

0.23

1,856,370

1.26

3,000

0.00

840,403 10,622,814
879 493,293
45,086 1,856,370
3,000

0.57

-

7.21

-

0.00

-

0.33 Open market sales

0.20 Open market sales

1.26

-

0.00

-

Sang-Hoon Lee

Affiliate

Common

1,473

0.00

1,473

0.00

-

Common

25,983,182

17.64

25,989,549

17.64

-

Total

Preferred

65,609

0.29

58,363

0.26

-

 Note: According to the shareholder register, as at June 30, 2015, 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 of Korea

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[The major shareholder]

 Name of the major shareholder: Kun-Hee Lee
 Career (recent 5 years): Chairman of Samsung Electronics (2010.3 ~) Vice Chairman of the Federation of Korean Industries (1987 ~) Member of the International Olympic Committee (1996 ~)

- The major shareholder of record has not changed during the reporting period.

2. Ownership of shares

As at June 30, 2015, the date of Suspension of Entry in the Register of Shareholders, shareholders with over 5% voting shares, excluding the major shareholder, are as follows:

[As of June 30, 2015]

(Unit: Shares)

Classification

Name

Number of shares owned

Share ratio

Note

Shareholders with National Pension Service

12,064,074

8.19

over 5% voting

shares

Samsung Life Insurance

11,105,480

7.54

Employee Stock Ownership Association

-

-

 Note: According to the shareholder register, as at June 30, 2015.  The number of shares owned and share ratio of Samsung Life Insurance includes special accounts.

-

3. Minority Shareholders

[As of June 30, 2015]

(Unit: Person, Shares, %)

Shareholder

Shares owned

Classification

Note

# of shareholders

Portion

# of shares

Portion

Minority shareholder

115,972

99.93

82,230,608

55.83

Shareholders with total issued stocks

shares

less

than

1/100

of

Total

116,053

100.00

147,299,337

 Note: According to the shareholder register, as at June 30, 2015.  Based on the number of common stock with voting rights.

100.00

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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:

Preemptive Rights in the Articles of Incorporation

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;
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.

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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

December 31

Annual General Meetings of Shareholders

Within 3 months after the end of every business year

Shareholder register closing period

One month from January 1

Stock type

1,5,10,50,100,500,1000,10000(8 types)

Transfer agent

Korea Securities Depository(T: +82-2-3774-3000): 23, Yeouinaru-ro 4-gil, Yeongdeungpo-gu, Seoul, Korea

Shareholder benefit

n/a

Published on

Joongang Daily

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5. Stock Price and Stock Transactions

A. Domestic stock market

Type Highest

April `15 1,490,000

Stock price Lowest

1,366,000

Common stock

Average Highest (day)

1,443,318 381,798

Volume Lowest (day)

125,403

Monthly

4,966

Highest

1,166,000

Stock price Lowest

1,051,000

Preferred stock

Average Highest (day)

1,119,136 91,094

Volume Lowest (day)

7,659

Monthly

685

 Monthly trading volume in 1,000 shares

May 1,400,000 1,307,000 1,341,889
347,615 144,212
3,852 1,111,000 1,018,000 1,053,667
85,288 10,942
475

June 1,341,000 1,254,000 1,283,955
388,239 127,418
4,778 1,060,000
975,000 1,007,727
50,853 7,384
529

July 1,305,000

(Unit: KRW, Shares)

August

September

1,182,000

1,190,000

1,185,000

1,067,000

1,085,000

1,251,522

1,122,500

1,130,450

399,794

558,952

458,936

128,928

114,450

132,721

5,356

6,362

5,219

1,001,000

920,000

940,000

919,000

821,000

861,000

953,739

877,650

910,800

75,018

81,508

392,632

11,025

16,578

21,642

729

851

1,549

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B. Overseas stock market

 Name of stock exchange: London Stock Exchange (common stock)

Type Highest

April `15 681.50

May 653.00

June 599.50

July 582.50

(Unit: $, KRW, DR)

August

September

511.50

502.00

Stock price
Common stock

(Converted to KRW)
Lowest
(Converted to KRW)
Average

745,152 634.00 681,233 662.75

697,469 592.00 655,936 617.97

663,047 560.50 625,630 578.16

651,410 507.00 591,314 546.98

596,000 445.60 531,155 477.41

Highest (day)

124,206

68,441

86,564

92,544

126,153

Volume Lowest (day)

13,476

10,402

14,240

13,453

10,278

Monthly

821

769

742

746

834

 Monthly volume in 1,000 Depository Receipt (DR) shares.  Stock price converted to KRW is based on the closing price of the KRW/USD exchange rate of the applicable trading day.
Ratio: Common one (1) share equals DR two (2) shares

587,189 456.20 539,685 473.40 129,480 7,730
665

 Name of stock exchange: Luxembourg Stock Exchange (Preferred stock)

Type Highest

April `15 529.50

May 510.00

June 475.20

July 445.90

Preferred stock

Stock price

(Converted to KRW)
Lowest
(Converted to KRW)
Average

576,996 492.20 546,047 512.67

545,445 466.50 508,438 481.94

525,571 438.90 489,417 453.24

498,739 390.80 455,790 415.20

Highest (day)

61,134

13,986

35,559

23,651

Volume Lowest (day)

1,613

1,137

1,222

609

Monthly

244

106

170

136

 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

(Unit: USD, KRW, DR )

August

September

395.00

400.00

460,254

471,760

344.40

363.30

411,420

429,784

373.80

379.43

58,797

60,338

1,543

929

278

233

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VIII. Executives and Employees

1. Executives and Employees

A. Registered Executives

[As of September 30, 2015]

Name

Gender

Date of birth

Position

Registered executive

Full/ parttime

Responsibility

Major career

Number of shares owned
Common Preferred

Oh-

Hyun M 1952.10

CEO

Kwon

Chairman of BOD

Registered executive

Full time

Head of DS Division

Head of DS Division

3,000

0

Length of Service
43 mo.

Boo-

Keun M 1953.02

CEO

Yoon

Registered executive

Full time

Head of CE Head of CE

Division

Division

0

0

31 mo.

Jong-

Kyun M 1956.01

CEO

Shin

Registered executive

Full time

Head of IM Division

Head of IM
Division

0

0

31 mo.

SangHoon M Lee

1955.06

Executive Director

Registered executive

Full time

CFO, Head of Corporate
Management Office

Head of Corporate Management
Office

1,473

0

In-Ho Lee

M

1943.11

Independent Director

Registered executive

Part time

Overall management of the Company

President & CEO of Shinhan
Bank

0

0

HanJoong M Kim

1948.11

Independent Director

Registered executive

Part time

Overall management of the Company

President of Yonsei University

0

0

31 mo. 67 mo. 43 mo.

KwangSoo M Song

1950.01

Independent Director

Registered executive

Part time

Overall management of the Company

Advisor at Kim &
Chang Law Office

0

0

Professor of

ByeongGi Lee

M

1951.05

Independent Director

Registered executive

Part time

Overall management of the Company

Electrical Engineering
at Seoul National

0

0

University

Dean of

Graduate

EunMee Kim

F

1958.09

Independent Director

Registered executive

Part time

Overall management of the Company

School of International Studies at
Ewha

0

0

Womans

University

31 mo. 43mo. 31 mo.

(Unit: # of shares) Term expiration
2018.03.15 2016.03.14 2016.03.14 2016.03.14 2016.03.14 2018.03.15 2016.03.14 2018.03.15
2016.03.14

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B. Concurrent position with other companies

Concurrent office holder

Name Kwang-Soo Song

Position Independent director

Company

Name of company Doosan Corp.

Position Independent director

C. Employees

[As of September 30, 2015]

(Unit: KRW million)

Division CE

Gender Regular

M

16,902

No. of employees

Contractbased
442

Others -

Total 17,344

Average length of service (years)

Total Compensation

Average Compensation per employee

11.5

-

-

CE

F

3,277

315

-

3,592

6.8

-

-

IM

M

18,727

340

-

19,067

10.3

-

-

IM

F

7,342

217

-

7,559

7.7

-

-

DS

M

29,694

255

-

29,949

10.1

-

-

DS

F

13,031

310

-

13,341

9.3

-

-

Others

M

5,715

279

-

5,994

13.0

-

-

Others

F

1,374

337

-

1,711

7.7

-

-

Gender Total

M

71,038

1,316

-

72,354

10.7

4,679,407

64

Gender Total

F

25,024

1,179

-

26,203

8.4

1,148,735

43

Total

96,062

2,495

-

98,557

10.1

5,828,142

59

 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 99,400 (male: 72,862; female: 26,538)

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2. Remuneration for Directors

A. Summary on Total Remuneration

(1) Remuneration approved at the annual general meetings of shareholders

Executive Directors

Number of Persons 4

Amount Approved at Shareholders' Meeting
-

(Unit: KRW million)
Note -

Independent Directors

2

-

-

Audit Committee member or Auditor

3

-

-

Total

9

39,000

-

 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

Executive Directors

Number of Persons
4

Total amount of remuneration
10,017

Average remuneration per Director
2,504

(Unit: KRW million)
Note -

Independent Directors

2

132

66

-

Audit Committee member or Auditor

3

190

63

-

Total

9

10,339

-

-

 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.

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3. Remuneration for Individual Executive Directors

(1) Summary on Remuneration by Executive

(Unit: KRW million)

Name

position

Total amount of remuneration

Remuneration not included in total amount

Oh-Hyun Kwon

CEO

3,820

-

Boo-Keun Yoon

CEO

2,341

-

Jong-Kyun Shin

CEO

2,289

-

Sang-Hoon Lee

President

1,567

-

 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

CEO Oh-Hyun Kwon

Criteria and methodology
 Total compensation of KRW 3,820 million
­ Earned Income
· Salary: KRW 1,562 million (consists of monthly wage) · Bonus: KRW 2,233 million (consists of traditional holiday bonus, performance/Long-term
Incentive) · Profit from exercising stock option : n/a · Other earned income: KRW 24 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 · Performance Incentive: CEO decides the amount depending on each division's
performance; an amount equal to 0~200% of the monthly wage is paid in two installments over a year (Adjusted according to organization's 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.
­ 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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CEO Boo-Keun Yoon
CEO Jong-Kyun Shin
President Sang-Hoon Lee

 Total compensation of KRW 2,341 million
­ Earned Income
· Salary: KRW 1,296 million (consists of monthly wage) · Bonus: KRW 1,002 million (consists of traditional holiday bonus, performance/Long-term
Incentive) · Profit from exercising stock option : n/a · Other earned income: KRW 43 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 · Performance Incentive: CEO decides the amount depending on each division's
performance; an amount equal to 0~200% of the monthly wage is paid in two installments over a year (Adjusted according to organization's 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.
­ Other earned income: According to internal regulation for executive treatment (Board resolution)
· Consists of a special bonus (one-off) and fringe benefits  Total compensation of KRW 2,289 million
­ Earned Income
· Salary: KRW 1,296 million (consists of monthly wage) · Bonus: KRW 984 million (consists of traditional holiday bonus, performance/Long-term
Incentive) · Profit from exercising stock option : n/a · Other earned income: KRW 9 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 · Performance Incentive: CEO decides the amount depending on each division's
performance; an amount equal to 0~200% of the monthly wage is paid in two installments over a year (Adjusted according to organization's 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.
­ 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 1,567 million
­ Earned Income
· Salary: KRW 842 million (consists of monthly wage) · Bonus: KRW 668 million (consists of traditional holiday bonus, performance/Long-term
Incentive) · Profit from exercising stock option : n/a · Other earned income: KRW 56 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

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· Performance Incentive: CEO decides the amount depending on each division's performance; an amount equal to 0~200% of the monthly wage is paid in two installments over a year (Adjusted according to organization's 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.
­ 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 September 30, 2015, 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 September 30, 2015]
(Unit: KRW, shares)

Grantee Relationship

Date

Method

Type of stock

Grant

Changes Exercise

Unexercised Cancel

Exercise period

Exercise price

Young-Soo Kwak and

-

Dec 20, 2005

Treasury share

Common

10,000

5,000

'07.12.21~

0

5,000 '15.12.20

606,700

other 1

 As of September 30, 2015, the closing price was KRW 1,134,000. `Relationship' is as of the reporting date (September 30, 2015).

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IX. Affiliates and Subsidiaries
1. Affiliates & Subsidiaries

A. Affiliates
- Name of affiliated group: Samsung Group
As at September 30, 2015, Samsung Group had a total of sixty-four (64) domestic affiliates, where eight (8) affiliates (RAY, Samsung SGL Carbon Composite Materials, Samsung General Chemicals, Samsung Total Petrochemicals, Songdo Land Mark City, former Samsung C&T, Hanwha Techwin, Hanwha Thales) were excluded and three (3) affiliates (Samsung Life Financial Service, HDC Shilla Duty Free, Core-Bridge Consulting) were added. Among the Samsung Group's sixty four (64) domestic affiliates, sixteen (16) affiliates including Samsung Electronics are listed, and forty-eight (48) affiliates are unlisted.

[As of September 30, 2015]

Listed

No. of affiliates
16

Name of affiliates
Samsung C&T, Samsung Electronics, Samsung SDI, SEMCO, Samsung Heavy Industries, Hotel Shilla, Samsung Card, Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Securities, Samsung Fine Chemicals, Samsung Engineering, S1, Cheil Worldwide, Samsung SDS, CREDU

Unlisted

Samsung Lions, SERI, STECO, 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 Service, Samsung Fire & Marine Insurance Service,

Suwon Samsung Bluewings FC, S-Core, Human TSS,

48

S-1CRM, OpenHands, S-EnPol, Samsung Medison, Samsung Biologics, STM, Nuri Solution, Colombo Korea,

Miracom, Samsung Life Service, 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 Card Customer Service, Seoul Lakeside CC, Shilla Stay, Samoo Architects & Engineers,

HDC Shilla Duty Free LTD, Samsung Life Financial Service, CORE-BRIDGE CONSULTING

Total

64

 Cheil Industries merged with Samsung C&T and adopted Samsung C&T as the name of the new company.

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B. Ownership Status of Affiliates and Subsidiaries

1) Domestic

Investee Samsung

Investor

C&T Corp

Samsung Electronics

Samsung SDI

Samsung ElectroMechanics

Samsung Heavy
Industries

Hotel Shilla

Samsung Engineering

Cheil Worldwide

Samsung Fine
Chemicals

S1 Corpo ration

Samsung SDS

Hantok Chemicals

Samsung Lions

Samsung C&T Corporation

4.1

0.1

7.8

12.6

5.6

17.1

9.5

Samsung Electronics

19.6

23.7 17.6 5.1

12.6

8.4

22.6

27.5

Samsung SDI

4.8

0.4 0.1

13.1

14.7 11.0

15.0

Samsung ElectroMechanics

2.6

2.4

0.3

12.5

Samsung Heavy Industries

Cheil Worldwide

0.1

3.0

Samsung Fine Chemicals

50.0

Hotel Shilla

2.2

S1 Corporation

SERI

Samsung SDS

Samsung Life Insurance

0.0

7.5 0.2

0.1 3.4 7.9

0.0

0.2

0.0 6.1 0.0

Samsung Fire & Marine Insurance

1.4

1.3

1.1

1.0

Samsung Securities.

3.1

1.3

Samsung Card

1.3

3.0

1.9

SDC
Samsung BioLogics
Open Tide Korea
Total

8.8

12.9 19.7

23.8 24.1 17.4

22.0

28.4

31.1 21.3 39.7

50.0 67.5

 (% of Ownership; As of September 30, 2015; Based on Common shares)

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Investee Investor
Samsung C&T Corporation

SERI STECO
1.0

SEMES

Samsung Samsung

Electronics Electronics

Service

Sales

Suwon Samsung Bluewings
FC

Samsung Electronics Logitech

Samsung Display

Samsung Medison

Samsung BioLogics

Samsung BioEpis

Samsung Corning Advanced Glass

SU Materials

51.0

Samsung Electronics

29.8 70.0 91.5

99.3 100.0

100.0 84.8 68.5

46.8

Samsung SDI 29.6

15.2

Samsung ElectroMechanics

23.8

Samsung Heavy Industries

1.0

Cheil Worldwide

100.0

Samsung Fine Chemicals

Hotel Shilla

S1 Corporation

SERI

Samsung SDS

Samsung Life Insurance
Samsung Fire & Marine Insurance
Samsung Securities.

14.8

Samsung Card

SDC

Samsung BioLogics
Open Tide Korea

Total

100.0 70.0 91.5

99.3 100.0 100.0 100.0 100.0 68.5

50.0 50.0 91.2
97.8 91.2 50.0 50.0

 (% of Ownership; As of September 30, 2015; Based on Common shares)

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Investee Investor

CVnet

Seoul Samwoo Lakeside Architects &
CC Engineers

SD Flex

Colombo Korea

Natural9

Samsung Welstory

Daejung Offshore Wind
Power

Jeongah m Wind Power

SECUI

Human TSS

S-1CRM S-EnPol

Samsung C&T Corporation

40.1 100.0

100.0

100.0 51.0 100.0

8.7

Samsung Electronics

Samsung SDI

50.0

Samsung ElectroMechanics
Samsung Heavy Industries

50.1 50.0

Cheil Worldwide

Samsung Fine Chemicals

100.0

Hotel Shilla

S1 Corporation

100.0 93.4

SERI

Samsung SDS

9.4

Samsung Life Insurance
Samsung Fire & Marine Insurance
Samsung Securities.

Samsung Card

56.5

SDC
Samsung BioLogics
Open Tide Korea
Total

49.5 100.0 100.0 50.0 100.0 51.0 100.0

50.1 50.0 65.2 100.0 93.4 100.0

 (% of Ownership; As of September 30, 2015; Based on Common shares)

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Investee Investor

STM

CREDU

Open Tide Korea

S-Core

Open Hands

Miracom

Nuri Solution

Shilla Stay

HDC

CORE Samsung

Samsung

Shilla

BRIDGE

Life Saengbo Life

Duty Free LTD CONSULTING Insurance

Service

Samsung C&T Corporation

19.3

Samsung Electronics

Samsung SDI 71.8

Samsung ElectroMechanics
Samsung Heavy Industries

Cheil Worldwide

9.8

9.8

Samsung Fine Chemicals

Hotel Shilla

100.0

50.0

S1 Corporation

1.1

1.1

SERI

15.2

Samsung SDS
Samsung Life Insurance
Samsung Fire & Marine Insurance
Samsung Securities.
Samsung Card

47.2

70.2 94.8 100.0 100.0 100.0

0.0

70.2 50.0 99.8

SDC

Samsung BioLogics

Open Tide Korea

1.0

Total

71.8 62.4

81.1 94.8 100.0 100.0 100.0 100.0

50.0

82.1 19.3 50.0 99.8

 (% of Ownership; As of September 30, 2015; Based on Common shares)

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Investee Investor

Samsung SRA Asset Management

Samsung Life Financial
Service

Samsung Fire & Marine
Insurance

Samsung Claim
Adjustment Service

Samsung Fire & Marine
Insurance Service

Samsung Securitie

Samsung Card

Samsung C&T Corporation

Allat
30.0

Samsung Card
Customer Service

Samsung Asset
Management

Samsung Futures

Samsung Venture Investment

Samsung Electronics

37.5

16.3

Samsung SDI

16.3

Samsung ElectroMechanics
Samsung Heavy Industries

17.0 17.0

Cheil Worldwide

Samsung Fine Chemicals

Hotel Shilla

S1 Corporation

SERI

Samsung SDS
Samsung Life Insurance
Samsung Fire & Marine Insurance
Samsung Securities.
Samsung Card

100.0

100.0

15.0

11.2 34.4

100.0

100.0

8.0

30.0

100.0

98.7 100.0 16.7

SDC
Samsung BioLogics
Open Tide Korea
Total

100.0

100.0

15.0

100.0

100.0 19.2 71.9 60.0

100.0

98.7 100.0 83.3

 (% of Ownership; As of September 30, 2015; Based on Common shares)

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2) Overseas

Samsung C&T Corporation
Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation

Investor

Investee
MYODO METAL CO., LTD.
Samsung C&T Japan Corporation Samsung C&T America Inc. Samsung Finance Corporation. Samsung E&C America, INC. SAMSUNG OIL & GAS USA CORP Samsung Renewable Energy Inc. SCNT Power Norte S. De R.L. de C.V. QSSC, S.A. de C.V. Samsung C&T Oil & Gas Parallel Corp. Samsung C&T Automation Inc. Samsung C&T Canada Ltd. Samsung C&T Deutchland GmbH Samsung C&T U.K. Ltd. Xiod Distribution Samsung C&T ECUK Limited Whessoe Project Limited SCNT Investment Atlantic SPRL POSS-SLPC, s.r.o Solluce Romania 1 B.V. SAM investment Manzanilo.B.V Solluce Slovenia 1 B.V. Ecosolar OOD Ecoenergy Solar OOD Agirlplam EOOD Fishtrade EOOD Manageprojekt EOOD Solar Park EOOD Veselinovo Energy OOD Samsung C&T Construction Hungary Kft. Samsung C&T (KL) Sdn.,Bhd. Samsung C&T Malaysia SDN. BHD Erdsam Co., Ltd. Samsung Chemtech S-print Inc Cassava Investment Korea Pte. Ltd. P.T. Samsung Development Samsung Development (Thailand) Co., Ltd. Samsung C&T Thailand Co., Ltd Cheil Holding Inc. Samsung Const. Co. Phils.,Inc. Samsung Design Philippines Inc Samsugn Oil & Gas Australia PTY. LTD PT. INSAM BATUBARA ENERGY Samsung C&T India Pte., Ltd. Samsung C&T Corporation India Private Limited Malaysia Samsung Steel Center Sdn.Bhd Samsung C&T Singapore Pte., Ltd. S&G Biofuel PTE.LTD SAMSUNG C&T Mongolia LLC. Samsung C&T Eng.&Const. Mogolia LLC. Samsung C&T Hongkong Ltd. GUANGDONG XINGPU STEEL CENTER CO.,LTD Samsung C&T Taiwan Co., Ltd. Samsung Precision Stainless Steel(pinghu) Co.,Ltd. SAMSUNG C&T (SHANGHAI) CO., LTD. Samsung Nigeria Co., Ltd. LOBINAVE - Estaleiro Naval do Lobito, Limitada SAMSUNG C&T CORPORATION SAUDI ARABIA

Ownership
100.0
100.0 100.0 80.0 100.0 90.0 100.0 100.0 60.0 100.0 70.0 100.0 100.0 100.0 25.0 100.0 100.0 100.0 50.0 80.0 53.3 80.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 51.7 40.0 29.7 100.0 33.0 43.9 40.0 25.0 100.0 100.0 90.0 100.0 100.0 70.0 100.0 50.5 70.0 100.0 100.0 51.6 100.0 55.0 100.0 99.9 40.0 100.0

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Investor Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T Corporation Samsung C&T America Inc. Samsung C&T America Inc. Samsung C&T America Inc. Samsung C&T America Inc. Samsung C&T America Inc. Samsung C&T America Inc. Samsung C&T America Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Renewable Energy Inc. Samsung Green repower, LLC KINGSTON SOLAR GP INC. K2 Wind Ontario Inc. SP Armow Wind Ontario GP Inc Samsung C&T Oil & Gas Parallel Corp. Samsung C&T Oil & Gas Parallel Corp. SRE GRW EPC GP Inc. SRE SKW EPC GP Inc.

Investee Samsung C&T Chile Copper SpA SCNT Power Kelar Inversones Limitada SAMSUNG C&T do BRASIL CONSTRUCTORA LTDA. Samsung C&T Corporation Rus LLC KSI LLP JSC BALKHASH THERMAL POWER PLANT Samsung SDI America, Inc. Samsung SDI(Malaysia) Sdn, Bhd. Samsung SDI(Hong Kong) Ltd. Samsung SDI Brasil Ltda. Beijing Samsung Real Estate Co.. Ltd Cheil Industries Corp., USA CHEIL INDUSTRIES ITALY SRL Samsung Fashion Trading (Shanghai) Co. ,Ltd CHEIL INDUSTRIES INC. VIETNAM COMPANY LIMITED iMarket Asia Co., Ltd. Meadowland Distribution SAMSUNG OIL & GAS USA CORP Samsung Green repower, LLC Samsung Solar Construction Inc. QSSC, S.A. de C.V. Samsung C&T Automation Inc. S-print Inc SRE GRW EPC GP Inc. SRE GRW EPC LP SRE SKW EPC GP Inc. SRE SKW EPC LP SRE GRW LP Holdings LP SRE SKW LP Holdings LP SRE WIND PA GP INC. SRE WIND PA LP SRE GRS Holdings GP Inc. SRE GRS Holdings LP SRE K2 EPC GP Inc. SRE K2 EPC LP SRE K2 LP HOLDINGS LP SRE KS HOLDINGS GP INC. SRE KS HOLDINGS LP SOUTHGATE SOLAR GP INC. SOUTHGATE SOLAR LP WINDSOR SOLAR GP INC. WINDSOR SOLAR LP SRE Belle River LP Holdings LP SRE Armow EPC GP Inc. SRE Armow EPC LP SRE Armow LP Holdings LP SRE North Kent 1 LP H.LP SRE Wind GP Holding Inc. SP Ontario Wind Development LP Inc. SP Southgate Wind LP SRE North Kent 2 LP Holdings LP Mountsberg Solar GP Inc. Mountsberg Solar LP SOLAR PROJECTS SOLUTIONS,LLC KINGSTON SOLAR LP INC. K2 WIND ONTARIO LP SP Armow Wind Ontario LP PLL Holdings LLC PLL E&P LLC SRE GRW EPC LP SRE SKW EPC LP

Ownership 100.0 99.0 100.0 100.0 25.0 75.0 8.3 6.4 2.4 0.0 10.0 100.0 100.0 100.0 100.0 19.3 100.0 10.0 100.0 100.0 20.0 30.0 24.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 50.0 50.0 100.0 100.0 100.0 66.0 0.0 0.0 0.0 83.6 90.0 0.0 0.0

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Investor PLL Holdings LLC SRE GRW LP Holdings LP SRE SKW LP Holdings LP SRE WIND PA GP INC. SRE GRS Holdings GP Inc. SRE GRS Holdings GP Inc. SRE K2 EPC GP Inc. SRE K2 LP HOLDINGS LP SRE KS HOLDINGS GP INC. SRE KS HOLDINGS GP INC. SRE KS HOLDINGS LP SOUTHGATE SOLAR GP INC. WINDSOR SOLAR GP INC. SRE Belle River LP Holdings LP SP Belle River Wind GP Inc SRE Armow EPC GP Inc. SRE Armow LP Holdings LP SRE North Kent 1 LP H.LP SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SRE Wind GP Holding Inc. SP Ontario Wind Development GP Inc. South Kent Wind GP Inc. Grand Renewable Wind GP Inc. North Kent Wind 1 GP Inc SRE North Kent 2 LP Holdings LP North Kent Wind 2 GP Inc Mountsberg Solar GP Inc. Samsung C&T Deutchland GmbH Samsung C&T Deutchland GmbH Samsung C&T Deutchland GmbH Samsung C&T Deutchland GmbH Samsung C&T Deutchland GmbH Samsung C&T Deutchland GmbH Samsung C&T Deutchland GmbH Samsung C&T U.K. Ltd. Samsung C&T U.K. Ltd. Solluce Romania 1 B.V. Solluce Slovenia 1 B.V. Cassava Investment Korea Pte. Ltd. Cassava Investment Korea Pte. Ltd. Samsung C&T Thailand Co., Ltd Samsung C&T Thailand Co., Ltd Samsung C&T Thailand Co., Ltd Cheil Holding Inc. Samsung C&T Singapore Pte., Ltd. Samsung C&T Singapore Pte., Ltd. Samsung C&T Singapore Pte., Ltd.

Investee Parallel Petroleum LLC Grand Renewable Wind LP Inc. South Kent Wind LP Inc. SRE WIND PA LP Grand Renewable Solar GP Inc. SRE GRS Holdings LP SRE K2 EPC LP K2 WIND ONTARIO LP KINGSTON SOLAR GP INC. SRE KS HOLDINGS LP KINGSTON SOLAR LP INC. SOUTHGATE SOLAR LP WINDSOR SOLAR LP SP Belle River Wind LP SP Belle River Wind LP SRE Armow EPC LP SP Armow Wind Ontario LP North Kent Wind 1 LP K2 Wind Ontario Inc. SP Armow Wind Ontario GP Inc SP Southgate Wind GP SRE GRW LP Holdings LP SRE SKW LP Holdings LP SRE K2 LP HOLDINGS LP SRE Belle River LP Holdings LP SP Belle River Wind GP Inc SRE Armow LP Holdings LP SRE North Kent 1 LP H.LP SP Ontario Wind Development GP Inc. South Kent Wind GP Inc. Grand Renewable Wind GP Inc. North Kent Wind 1 GP Inc SRE North Kent 2 LP Holdings LP North Kent Wind 2 GP Inc SP Ontario Wind Development LP Inc. South Kent Wind LP Inc. Grand Renewable Wind LP Inc. North Kent Wind 1 LP North Kent Wind 2 LP North Kent Wind 2 LP Mountsberg Solar LP Samsung C&T Italia S.A.R.L SCNT Investment Atlantic SPRL POSS-SLPC, s.r.o Solluce Romania 1 B.V. Solluce Slovenia 1 B.V. S.C. Otelinox S.A KSI LLP Xiod Distribution Samsung Nigeria Co., Ltd. LJG GREEN SOURCE ENERGY ALPHA S.R.L. ZE Solar 1 D.O.O. PT. Cahaya Borneo Sukses Agrosindo PT. Cassava Borneo Sukses Plantation Samsung Development (Thailand) Co., Ltd. Samsung Engineering (Thailand) Co., Ltd. Cheil (Thailand) Ltd. Samsung Const. Co. Phils.,Inc. Samsung Chemtech S-print Inc Cassava Investment Korea Pte. Ltd.

Ownership 61.0 44.5 50.0 0.0 50.0 0.0 0.0 33.3 50.0 0.0 25.0 0.0 0.0 50.0 0.0 0.0 50.0 50.0 50.0 50.0 50.0 0.0 0.0 0.0 0.0 50.0 0.0 0.0 50.0 50.0 50.0 50.0 0.0 50.0 0.0 0.0 0.0 0.0 50.0 0.0 0.0 100.0 0.0 20.0 20.0 20.0 94.3 25.0 75.0 0.1 78.0 70.0 49.0 49.0 67.0 0.0 0.0 75.0 48.3 16.0 12.7

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Investor Samsung C&T Singapore Pte., Ltd. Samsung C&T Singapore Pte., Ltd. Samsung C&T Singapore Pte., Ltd. S&G Biofuel PTE.LTD S&G Biofuel PTE.LTD Samsung C&T Hongkong Ltd. Samsung C&T Hongkong Ltd. Samsung C&T Hongkong Ltd. Samsung C&T Hongkong Ltd. Samsung C&T Hongkong Ltd. Samsung C&T Hongkong Ltd. Samsung C&T Chile Copper SpA Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics

Investee PT. INSAM BATUBARA ENERGY Malaysia Samsung Steel Center Sdn.Bhd S&G Biofuel PTE.LTD PT. Gandaerah Hendana PT. Inecda Samsung C&T Thailand Co., Ltd SAMSUNG (TIANJIN) INTERNATIONAL TRADING CO., LTD SAMSUNG TRADING (SHANGHAI) CO., LTD SAMSUNG TRADING (SHENZHEN) CO., LTD Samsung Precision Stainless Steel(pinghu) Co.,Ltd. Samsung Corporation (Gaungzhou) Limited. PAMPA CAMARONES S.A. Samsung Japan Corporation Samsung R&D Institute Japan Co. Ltd Samsung Electronics America, Inc. Samsung Electronics Canada Inc. Samsung Electronics Mexico S.A. De C.V. Samsung Electronics (UK) Ltd. Samsung Electronics Ltd. Samsung Electronics Holding GmbH Samsung Electronics Iberia, S.A. Samsung Electronics France S.A.S Samsung Electronics Hungarian RT. Samsung Electronics Italia S.P.A. Samsung Electronics Europe Logistics B.V. Samsung Electronics Benelux B.V. Samsung Electronics Overseas B.V. Samsung Electronics Polska, SP.Zo.o Samsung Electronics Portuguesa S.A. Samsung Electronics Nordic Aktiebolag Samsung Electronics Austria GmbH Samsung Electronics Slovakia s.r.o Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Display (M) SDN.Bhd. Samsung Electronics(M) SDN.BHD. Samsung Vina Electronics Co., Ltd. Samsung Asia Private Ltd. Samsung India Electronics Private Ltd. Samsung R&D Institute India-Bangalore Private Limited Samsung Electronics Australia Pty. Ltd. PT Samsung Electronics Indonesia Thai Samsung Electronics Co., Ltd. Samsung Malaysia Electronics(SME) Sdn.Bhd. Samsung Electronics Hong Kong Co., Ltd. Suzhou Samsung Electronics Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung Electronics Suzhou Semiconductor Co., Ltd. Samsung Electronics (Shandong) Digital Printing Co., Ltd. Samsung Electronics Huizhou Co., Ltd. Tianjin Samsung Electronics Co., Ltd. Samsung Electronics Taiwan Co., Ltd. Tianjin Samsung Telecom Technology Co., Ltd. Shanghai Samsung Semiconductor Co., Ltd. Samsung Electronics Suzhou Computer Co., Ltd. Shenzhen Samsung Electronics Telecommunication Co., Ltd. Samsung Electronics Shanghai Telecommunication Co., Ltd. Samsung Semiconductor (China) R&D Co., Ltd. Samsung (China) Semiconductor Co., Ltd. Samsung Gulf Electronics Co., Ltd. Samsung Electronics Egypt S.A.E Samsung Electronics South Africa(Pty) Ltd.

Ownership 10.0 30.0 12.6 95.0 95.0 13.2 100.0 100.0 100.0 45.0 100.0 46.5 100.0 100.0 100.0 100.0 63.6 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 55.7 100.0 75.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 91.8 100.0 100.0 69.1 100.0 100.0 87.1 89.6 48.2 100.0 90.0 100.0 73.7 95.0 100.0 100.0 100.0 100.0 0.1 100.0

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Investor Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung BioEpis Samsung BioEpis Samsung Display Samsung Display Samsung Display Samsung Display Samsung Display Samsung Display Samsung Display Samsung Display SEMES SEMES Samsung Medison Samsung Medison Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Electronics America, Inc. Samsung Semiconductor, Inc. Samsung Semiconductor, Inc. Samsung Electronics Canada Inc. PrinterOn Corporation PrinterOn Corporation Samsung International, Inc. Samsung Electronics Mexico S.A. De C.V. Samsung Electronics (UK) Ltd. Samsung Electronics Holding GmbH Samsung Electronics Holding GmbH Samsung Electronics Hungarian RT. Samsung Electronics Hungarian RT. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V.

Investee Samsung Electronics Latinoamerica (Zona Libre) Samsung Electronica da Amazonia Ltda. Samsung Electronics Argentina S.A. Samsung Electronics Chile Limitada Samsung Electronics Rus Company LLC Samsung Electronics Rus Kaluga LLC Samsung Russia Service Centre LLC Samsung SDI Brasil Ltda. Tianjin Samsung LED Co., Ltd. Tianjin Samsung Opto-Electronics Co., Ltd. SAMSUNG BIOEPIS UK LIMITED Samsung Bioepis CH GmbH Intellectual Keystone Technology LLC Samsung Display Slovakia s.r.o. Samsung Display Vietnam Co., Ltd. Samsung Suzhou Module Co., Ltd. Samsung Suzhou LCD Co., Ltd. Samsung Display Dongguan Co., Ltd. Samsung Display Tianjin Co., Ltd. Novaled GmbH SEMES America, Inc. SEMES (XIAN) Co., Ltd. SonoAce Deutschland GmbH Samsung Medison India Private Ltd. NexusDX, Inc. NeuroLogica Corp. Samsung Receivables Corporation Quietside SmartThings Samsung Pay, Inc(Former LoopPay, Inc) YESCO Electronics LLC Samsung Semiconductor, Inc. Samsung Information Systems America, Inc. Samsung International, Inc. Grandis, Inc. Samsung Austin Semiconductor LLC. PrinterOn Corporation PrinterOn America Corporation PrinterOn Europe Limited Samsung Mexicana S.A. de C.V Samsung Electronics Digital Appliance Mexico, SA de CV Samsung Semiconductor Europe Limited Samsung Semiconductor Europe GmbH Samsung Electronics GmbH Samsung Electronics Czech and Slovak s.r.o. Samsung Electronics Slovakia s.r.o Samsung Electronics Mexico S.A. De C.V. SAMSUNG ELECTRONICS BALTICS SIA Samsung Electronics West Africa Samsung Electronics East Africa Samsung Electronics Egypt S.A.E Samsung Electronics Israel Ltd. Samsung Electronics Tunisia S.A.R.L Samsung Electronics Pakistan(Private) Ltd. Samsung Electronics South Africa Production (Propr Samsung Electronics Turkey Samsung Semiconductor Israel R&D Center,Ltd. Samsung Electronics Levant Co.,Ltd. Samsung Electronics Morocco SARLAU Samsung Electronics Venezuela, C.A. Samsung Electronica da Amazonia Ltda.

Ownership 100.0 87.0 98.0 4.1 100.0 100.0 100.0 0.1 100.0 82.0 100.0 100.0 41.9 100.0 100.0 100.0 60.0 100.0 95.0 9.9 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 30.0 44.3 36.4 100.0 100.0 100.0 99.9 100.0 99.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 13.0

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Investor Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Benelux B.V. Samsung Electronics Austria GmbH Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Display (M) SDN.Bhd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. Samsung Asia Private Ltd. PT Samsung Electronics Indonesia Samsung Electronics Hong Kong Co., Ltd. Suzhou Samsung Electronics Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung (CHINA) Investment Co., Ltd. Samsung Gulf Electronics Co., Ltd. Samsung Electronics Morocco SARLAU Samsung Electronics Latinoamerica (Zona Libre) Samsung Electronics Latinoamerica (Zona Libre) Samsung Electronics Latinoamerica (Zona Libre) Samsung Electronica da Amazonia Ltda. Samsung Electronica da Amazonia Ltda. Samsung Electronics KZ and Central Asia LLP Samsung SDI Samsung SDI Samsung SDI Samsung SDI

Investee Samsung Electronics Chile Limitada Samsung Electronics Peru S.A.C. Samsung Electronics Rus LLC Samsung Electronics Ukraine LLC Samsung Electronics Ukraine Company LLC Samsung R&D Institute Rus LLC Samsung Electronics Kazakhstan LLP Samsung Electronics KZ and Central Asia LLP Samsung Electronics Caucasus Co., Ltd Samsung Electronics Switzerland GmbH Samsung Electronics Czech and Slovak s.r.o. Samsung Electronics Romania LLC Porta Nuova Varesine Building 2 S.r.l. Samsung Electronics Poland Manufacturing SP.Zo.o Samsung Electronics Greece S.A. Samsung Nanoradio Design Center Samsung Denmark Research Center ApS Samsung France Research Center SARL Samsung Cambridge Solution Centre Limited Novaled GmbH Tianjin Samsung Electronics Co., Ltd. Samsung Electronics Japan Co., Ltd. Samsung Electronics Display (M) SDN.Bhd. Samsung Electronics New Zealand Limited Samsung Electronics Philippines Corporation Samsung R&D Institute BanglaDesh Samsung Electronics Vietnam Co., Ltd. Samsung Telecommunications Malaysia Sbn. Bhd. Samsung Electronics Vietnam THAINGUYEN Co., Ltd. Samsung Electronics HCMC CE Complex Co. Ltd,. Samsung SDI(Malaysia) Sdn, Bhd. Samsung Electro-Mechanics(Thailand) Co., Ltd. iMarket Asia Co., Ltd. PT Samsung Telecommunications Indonesia iMarket Asia Co., Ltd. Samsung Suzhou Electronics Export Co., Ltd. Suzhou Samsung Electronics Co., Ltd. Samsung Mobile R&D Center China-Guangzhou Samsung Mobile R&D Center China - Tianjin Samsung Network R&D Center China-Shenzhen Samsung R&D Institute China-Xian Samsung Electronics (Shandong) Digital Printing Co., Ltd. Samsung Electronics Huizhou Co., Ltd. Tianjin Samsung Electronics Co., Ltd. Beijing Samsung Telecom R&D Center Samsung Electronics Suzhou Computer Co., Ltd. Samsung R&D Institute China - Nanjing Samsung Electronics (Beijing) Service Company Limited Tianjin Samsung Opto-Electronics Co., Ltd. Samsung Electronics Egypt S.A.E Samsung Electronics Tunisia S.A.R.L Samsung Electronics Latinoamerica Miami, Inc. Samsung Electronica Colombia S.A. Samsung Electronics Panama. S.A Simpress Comercio, Locacao e Servicos S.A. Samsung Electronics Argentina S.A. Samsung Electronics Caucasus Co., Ltd Intellectual Keystone Technology LLC Samsung SDI Japan Co., Ltd. Samsung SDI America, Inc. Samsung SDI Hungary Rt.

Ownership 95.9 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 70.0 100.0 49.0 100.0 100.0 100.0 100.0 100.0 100.0 40.0 2.2 100.0 25.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 25.0 25.0 11.4 99.0 11.3 100.0 19.2 100.0 100.0 100.0 100.0 12.9 10.3 40.8 100.0 26.3 100.0 100.0 8.0 0.1 1.0 100.0 100.0 100.0 100.0 2.0 0.0 41.0 100.0 91.7 100.0

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Investor Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI Samsung SDI America, Inc. Samsung SDI America, Inc. Samsung SDI(Hong Kong) Ltd. Samsung SDI(Hong Kong) Ltd. Samsung SDI(Hong Kong) Ltd. Samsung SDI(Hong Kong) Ltd. Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Samsung Electro-Mechanics Japan Advanced Technology Co., Ltd. Samsung Electro-Mechanics America, Inc. Calamba Premier Realty Corporation Samsung Fire & Marine Insurance Samsung Fire & Marine Insurance Samsung Fire & Marine Insurance Samsung Fire & Marine Insurance Samsung Fire & Marine Insurance Samsung Fire & Marine Insurance Samsung Fire & Marine Insurance Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd.

Investee Samsung SDI Europe GmbH Samsung SDI Battery Systems GmbH Samsung SDI(Malaysia) Sdn, Bhd. Samsung SDI Vietnam Co., Ltd. Samsung SDI Energy Malaysia Sdn, Bhd. Samsung SDI(Hong Kong) Ltd. Samsung SDI China Co., Ltd. Samsung SDI-ARN (Xi'An) Power Battery Co., Ltd. Samsung SDI-Sungrow Energy Storage Battery Co., Lt Samsung SDI (Changchun) Power Battery Co., Ltd. Samsung SDI Brasil Ltda. Samsung Chemical U.S.A. Inc. Samsung Chemical Europe GmbH Samsung Chemical Hungary LLC Novaled GmbH Samsung Chemical (Thailand) Co., Ltd. Samsung Chemical Material Trading(Shanghai) Co.,Ltd. Tianjin Samsung Engineering Plastics Co., Ltd. Dongguan Samsung Engineering Plastics Co., Ltd. SAMSUNG SDI WUXI CO.,LTD. Samsung Chemical Electronic Materials (SuZhou) Co., Ltd. iMarket Asia Co., Ltd. Samsung SDI Mexico, S.A. de C.V. Samsung SDI Brasil Ltda. Shenzhen Samsung SDI Co., Ltd. Tianjin Samsung SDI Co., Ltd. Shanghai Samsung SVA Electronic Devices Co., Ltd. Samsung SDI Brasil Ltda. Samsung Electro-Machanics Japan Co., Ltd. Samsung Electro-Mechanics Japan Advanced Technology Co., Ltd. Samsung Electro-Mechanics America, Inc. SAMSUNG ELECTRO-MECHANICS GMBH Samsung Hungary Electro-Mechanics Private Limited Liability Company Samsung Electro-Mechanics(Thailand) Co., Ltd. Samsung Electro-Mechanics Philippines, Corp. Calamba Premier Realty Corporation Samsung Electro-Mechanics Pte Ltd. Samsung Electro-Mechanics Vietnam Co., Ltd. Dongguan Samsung Electro-Mechanics Co., Ltd. Tianjin Samsung Electro-Mechanics Co., Ltd. Samsung High-Tech Electro-Mechanics(Tianjin) Co., Ltd. Samsung Electro-Mechanics (Shenzhen) Co., Ltd. Kunshan Samsung Electro-Mechanics Co., Ltd. iMarket Asia Co., Ltd. Samsung Electro-Mechanics Nakhonratchasima Co., Ltd. Samsung Electro-Mechanics do Brasil Intermediacoes de Negocios Ltda. Batino Realty Corporation SAMSUNG FIRE & MARINE MANAGEMENT CORPORATION SAMAUNG FIRE & MARINE INSURANCE COMPANY OF EUROPE P.T. Asuransi Samsung Tugu Samsung Vina Insurance Co. Ltd. SAMSUNG REINSURANCE PTE. LTD Samsung Property and Casualty Insurance Co(China) Ltd. SAMSUNG FIRE & MARINE CONSULTORIA EM SEGUROS LTDA. Camellia Consulting Corporation Samsung Wind Energy,Inc Offshore 1 consulting Corporation Samsung heavy Industries Hamburg GmbH Samsung Heavy Industries India Pvt.Ltd. SAMSUNG HEAVY INDUSTRIES (M) SDN.BHD Samsung Heavy Industries(Ningbo) Co., Ltd

Ownership 100.0 100.0 68.6 100.0 100.0 97.6 100.0 50.0 65.0 50.0 45.0 100.0 100.0 100.0 50.1 59.4 100.0 100.0 100.0 100.0 100.0 8.7 100.0 40.4 80.0 80.0 60.3 14.5 100.0 100.0 100.0 100.0 100.0 75.0 100.0 39.8 100.0 100.0 100.0 81.7 95.0 100.0 100.0 8.7 100.0 100.0 100.0 100.0 100.0 70.0 75.0 100.0 100.0 100.0 100.0 100.0 51.0 100.0 100.0 100.0 100.0

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Investor Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Co.,Ltd. Offshore 1 consulting Corporation SAMSUNG HEAVY INDUSTRIES NIGERIA LIMITED Samsung Life Insurance Samsung Life Insurance Samsung Life Insurance Samsung Life Insurance Samsung Life Insurance Samsung Asset Management Samsung Asset Management Samsung Asset Management 30 GRESHAM STREET(JERSEY) LIMITED Samsung Chemical U.S.A. Inc. CHEIL INDUSTRIES ITALY SRL Samsung Chemical (Thailand) Co., Ltd. Samsung Welstory Samsung Welstory Credu PengTai Greater China Co., Ltd. PengTai Greater China Co., Ltd. PengTai Greater China Co., Ltd. PengTai China Co., Ltd. PengTai China Co., Ltd. PengTai Interactive Advertising Co.,Ltd. iMarket Asia Co., Ltd. Samsung Fine Chemicals Samsung Fine Chemicals Samsung Securities Samsung Securities Samsung Securities Samsung SDS Samsung SDS Samsung SDS Samsung SDS Samsung SDS Samsung SDS Samsung SDS Samsung SDS Miracom Samsung SDS America, Inc. Samsung SDS America, Inc. Samsung SDS America, Inc. Samsung SDS America, Inc. Samsung SDS America, Inc. Samsung SDS America, Inc. Samsung SDS Europe Ltd. Samsung SDS Europe Ltd. Samsung SDS Europe Ltd. Samsung SDS Europe Ltd. Samsung SDS Europe Ltd. Samsung SDS Europe Ltd. Samsung SDS Europe Ltd. Samsung SDS Europe Ltd. Samsung SDS Europe Ltd. Samsung SDS Global SCL Netherlands Cooperatief U.A Samsung SDS Global SCL Netherlands Cooperatief U.A

Investee Samsung Heavy Industries(Rongcheng) Co., Ltd Rongcheng Gaya Heavy Industries Co., Ltd Samsung Heavy Industries Trade(Shanghai) Co., Ltd SAMSUNG HEAVY INDUSTRIES NIGERIA LIMITED SANGSUNG HEAVY INDUSTRIES BRAZIL ASSESSORIA EM PRO SHI BRAZIL CONSTRUCTION AMEC Samsung Oil&Gas, LLC SHI - MCI FZE Porta Nuova Varesine Building 2 S.r.l. Samsung Life Investment (U.K.) Limited. 30 GRESHAM STREET(JERSEY) LIMITED THAI SAMSUNG LIFE INSURANCE CO., LTD. Beijing Samsung Real Estate Co.. Ltd Samsung Asset Management (New York), Inc. Samsung Private Equity Manager I Co., Ltd Samsung Asset Management (Hong Kong) Ltd. 30 GRESHAM STREET (SINGAPORE) LIMITED Stacom Mexico S.A. de C.V.. COLOMBO VIA DELLA SPIGA S.R.L Samsung Engineering (Thailand) Co., Ltd. WELSTORY VIETNAM COMPANY LIMITED Shanghai Ever-Hongjun Business Mgt Service Co.,LTD LANGUAGE TESTING INTERNATIONAL, INC PengTai China Co., Ltd. PengTai Taiwan Co., Ltd. PengTai Interactive Advertising Co.,Ltd. PengTai e-Commerce Co.,Ltd. PengTai Marketing Service Co., Ltd. MEDIALYTICS Inc. iMarket China Co., Ltd. Samsung Fine Chemicals Europe GmbH Samsung Fine Chemicals Trading (Shanghai) Co., Ltd Samsung Securities (America), Inc. Samsung Securities (Europe) Limited. Samsung Securities (Asia) Limited. iMarket Asia Co., Ltd. Samsung SDS America, Inc. Samsung SDS Europe Ltd. Samsung SDS Global SCL Netherlands Cooperatief U.A Samsung SDS Asia Pacific Pte. Ltd. Samsung SDS India PVt. Ltd. Samsung SDS China, Ltd. Samsung SDS Latin America Solucoes Em Tecnologia Ltda MIRACOM INC ASIA PACIFIC LTD SAMSUNG SDS LATIN AMERICA SOLUCOES EM TECNOLOGIA L Samsung SDS Mexico, S.A. DE C.V. Samsung SDS Global SCL Panama S. A. Samsung SDS Global SCL Chile Limitada Samsung SDS Global SCL Peru S.A.C. Samsung SDS Global SCL Colombia S.A.S. Samsung SDS Global SCL Hungary Kft. Samsung SDS Global SCL Slovakia, s.r.o. SAMSUNG SDS GSCL POLAND Samsung SDS Global SCL Netherlands Cooperatief U.A SAMSUNG SDS Global SCL Egypt Co. Ltd. Samsung SDS global SCL South Africa Samsung SDS Global SCL Transport and Logistics Joint Stock Company Samsung SDS Global Supply Chain Logistics Middle East DWC-LLC Samsung SDS Global SCL Rus Limited Liability Company SAMSUNG SDS GSCL POLAND Samsung SDS Global SCL Rus Limited Liability Company

Ownership 100.0 100.0 100.0 100.0 100.0 100.0 51.0 70.0 51.0 100.0 100.0 35.8 90.0 100.0 100.0 100.0 100.0 100.0 100.0 19.0 100.0 51.0 82.4 100.0 100.0 100.0 100.0 100.0 51.0 80.0 100.0 100.0 100.0 100.0 100.0 40.6 100.0 100.0 100.0 100.0 100.0 100.0 99.7 100.0 0.3 99.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 0.0 100.0 100.0 100.0 100.0 100.0 0.0 0.0

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Investor Samsung SDS Asia Pacific Pte. Ltd. Samsung SDS Asia Pacific Pte. Ltd. Samsung SDS Asia Pacific Pte. Ltd. Samsung SDS Asia Pacific Pte. Ltd. Samsung SDS Asia Pacific Pte. Ltd. Samsung SDS Asia Pacific Pte. Ltd. Samsung SDS Asia Pacific Pte. Ltd. Samsung SDS China, Ltd. Samsung SDS China, Ltd. MIRACOM INC ASIA PACIFIC LTD Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering Samsung Engineering America Inc. Samsung Engineering America Inc. Samsung Engineering (Malaysia) SDN. BHD. Samsung Engineering (Thailand) Co., Ltd. Samsung Engineering India Private Ltd. Samsung Saudi Arabia Company Limited. Muharraq Holding Company 1 Ltd. Muharraq Holding Company 2 Ltd. S1 Corporation S1 Corporation Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide

Investee Samsung SDS GSCL Vietnam Co Ltd PT. Samsung SDS Global SCL Indonesia Samsung SDS Global SCL Philippines Co., Ltd. Samsung SDS Global SCL Thailand Co.,Ltd Samsung SDS Global SCL Malaysia SDN.BHD. SAMSUNG SDS GLOBAL SCL AUSTRALIA PTY., LTD. Samsung SDS Global SCL Hong Kong Ltd Samsung SDS Global Development Center Xi'an Samsung SDS Global SCL Beijing Co., Ltd MIRACOM INC CHINA LTD Offshore 1 consulting Corporation Samsung Engineering America Inc. Samsung Engineering (Malaysia) SDN. BHD. PT Samsung Engineering Indonesia Co., Ltd. Samsung Engineering (Thailand) Co., Ltd. Samsung Engineering India Private Ltd. Samsung Engineering Vietnam Samsung Engineering Construction(Shanghai) Co., Lt Samsung Saudi Arabia Company Limited. Muharraq Wastewater Services Company W.L.L. Muharraq STP Company B.S.C. Muharraq Holding Company 1 Ltd. Samsung Ingenieria Minatitlan, S.A. De C.V. Samsung Engineering Trinidad Co., Ltd. Samsung Ingenieria Manzanillo, S.A. De C.V. Grupo Samsung Ingenieria Mexico, S.A. De C.V. Samsung Ingenieria Energia S.A. De C.V. Samsung Engineering Bolivia S.A Samsung Ingenieria DUBA S.A. de C.V. Samsung Engineering Kazakhstan LLP SEA Construction, LLC SEA Louisiana Construction, L.L.C. Muharraq Wastewater Services Company W.L.L. Samsung Chemical (Thailand) Co., Ltd. Samsung Saudi Arabia Company Limited. Samsung EPC Company Ltd. Muharraq Holding Company 2 Ltd. Muharraq STP Company B.S.C. SOCM LLC Samsung Beijing Security Systems Cheil USA Inc. Cheil Central America Inc. IRIS Worldwide Holdings Limited Cheil Europe Ltd. Cheil Germany GmbH Cheil France SAS Cheil Nordic AB Cheil India Pvt. Ltd. Cheil (Thailand) Ltd. Cheil Singapore Pte. Ltd. Cheil Vietnam Co. Ltd. Cheil Integrated Marketing Philippines, Inc. Cheil Malaysia SDN BHD Cheil China Cheil Hong Kong Ltd. Bravo Asia Limited Bravo Asia-Shanghai Cheil MEA FZ-LLC Cheil South Africa Pty., Ltd. CHEIL KENYA LIMITED Cheil Communications Nigeria Ltd.

Ownership 51.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 49.0 100.0 100.0 100.0 81.0 100.0 100.0 100.0 95.0 64.8 4.6 45.0 99.9 100.0 99.9 100.0 100.0 99.9 100.0 100.0 100.0 100.0 0.3 40.6 5.0 75.0 100.0 79.7 100.0 100.0 100.0 100.0 71.1 100.0 100.0 100.0 100.0 100.0 100.0 100.0 90.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 99.0 99.0

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Investor Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Cheil Worldwide Hotel Shilla Hotel Shilla Hotel Shilla Hotel Shilla Hotel Shilla Hotel Shilla Hotel Shilla Cheil USA Inc. Cheil USA Inc. Cheil USA Inc. Cheil USA Inc. Samsung Hospitality America Inc. Cheil Europe Ltd. Cheil Europe Ltd. Cheil Europe Ltd. Cheil Europe Ltd. Cheil Germany GmbH Cheil (Thailand) Ltd. Cheil Singapore Pte. Ltd. Cheil Singapore Pte. Ltd. Cheil Integrated Marketing Philippines, Inc. Cheil Hong Kong Ltd. Cheil MEA FZ-LLC Cheil MEA FZ-LLC Cheil South Africa Pty., Ltd. Cheil South Africa Pty., Ltd. One Agency FZ LLC One Agency FZ LLC One Agency FZ LLC One Agency FZ LLC One Agency FZ LLC Cheil Rus LLC

Investee Cheil Jordan Cheil Ghana Limited Cheil Brazil Communications Ltda. Cheil Mexico Inc. SA de CV Cheil Chile SpA. Cheil Rus LLC Cheil Ukraine LLC Cheil Kazakhstan LLC Samsung Hospitality America Inc. SAMSUNG HOSPITALITY U.K. Limited Shilla Travel Retail Pte.Ltd SAMSUNG HOSPITALITY VIETNAM CO.,LTD SHILLA LIMITED Macao Samsung Shilla Business Service Beijing Co., Ltd. SHILLA LIMITED Hong Kong The Barbarian Group LLC McKinney Ventures LLC Cheil India Pvt. Ltd. Cheil Mexico Inc. SA de CV Samsung Hospitality Europe GmbH BEATTIE MCGUINNESS BUNGAY LIMITED Cheil Italia S.r.l CHEIL SPAIN S.L CHEIL BENELUX B.V. Cheil Austria GmbH Samsung Chemical (Thailand) Co., Ltd. PengTai Greater China Co., Ltd. PT. CHEIL WORLDWIDE INDONESIA Cheil Philippines Inc. PengTai Greater China Co., Ltd. One Agency FZ LLC One Agency Istanbul Advertisement, Communication &Production LLC CHEIL KENYA LIMITED Cheil Communications Nigeria Ltd. One Agency Istanbul Advertisement, Communication &Production LLC One Agency Interior Design LLC One Agency Printing LLC One Agency South Africa Pty., Ltd. One Agency Russia LLC One Agency Russia LLC

Ownership 100.0 100.0 100.0 98.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 0.0 2.0 100.0 75.0 100.0 100.0 100.0 100.0 0.0 95.0 100.0 30.0 3.1 100.0 0.0 1.0 1.0 100.0 100.0 100.0 100.0 99.9 0.1

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C. Related Statute & Regulation
Restrictions on cross-holdings within Samsung Group in accordance with the Monopoly Regulation and Fair Trade Act
(1) Date of announcement by authorities of companies deemed Samsung Group companies for the current year: April 1, 2015
(2) Summary of Regulation - Restriction of cross-holdings - Restriction of debt guarantee between affiliates - Restriction of voting rights at financial affiliates, including insurance - 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 Group status

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D. Equity Investments in other corporations (1) The total book value of equity investments in other corporations as of September 30, 2015 is KRW 46,279 billion

[As of September 30, 2015]

(Unit: 1,000 shares, KRW million, %)

Account

Name of Acquisition

Company

Date

Objective

Acquisition Cost

Listed
Listed Listed Unlisted

Samsung ElectroMechanics Samsung
Card Hanwha Techwin
STECO

1977.01
1988.12 1977.12 1995.06

Management
Management Management
Business

250
10,000 336
24,000

Beginning Balance

Increase/Decrease

Qty

Ownership (%)

17,693

23.69

Book Value

Acquisition/Disposal Valuation
Qty Amount

445,244

0

0

43,393

37.45 1,455,485

0

0

13,527

25.46 235,638 -13,527 -235,638

0

2,448

51.00 32,724 142

3,137

0

Ending Balance

Current Financial Stats

Qty

Ownership (%)

17,693

23.69

Book Value

Total Asset

Net Income (Loss)

445,244 7,718,612 508,912

43,393 0
2,590

37.45 1,455,485 17,736,627 656,025

0

0 3,601,728 -118,182

70.00 35,861

93,819 4,532

Unlisted SEMES 1992.12

Business

1,000 2,173

91.54 71,906

0

0 2,173

91.54 71,906 692,721 39,080

Unlisted SERI

1991.05 Management

320 3,576

29.80 24,942

0

Unlisted

Samsung SDS

1992.07 Management

6,160 17,472

22.58 560,827

0

Domestic* Unlisted

Samsung Lions

1986.08 Management

240

55

27.50

-102

0

Samsung

Unlisted Electronics 1998.01

Business

30,000 6,000

99.33 48,121

0

Service

Samsung Unlisted Electronics
Sales

2000.12

Business

3,100 1,767

100.00 247,523

0

Samsung Unlisted Electronics
Logitech

1999.04

Business

76 1,011

100.00

46,669

0

0 3,576

0 17,472

0

55

0 6,000

29.80 22.58 27.50

24,942 130,715

252

560,827 5,546,045 434,273

-102

61,737 -17,141

99.33 48,121 330,184 12,524

0 1,767

100.00 247,523 603,933 1,662

0 1,011

100.00 46,669 150,390 8,940

Unlisted

Samsung Display

2012.04

Business 16,009,547 221,969

84.78 18,509,307

0

 Domestic account noted here reflects approved for sales securities

0 221,969

84.78 18,509,307 37,939,965 1,698,239

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Account Unlisted

Name of Company
SVIC #6

Acquisition Date
2005.07

Objective Business

Acquisition Cost
26,800

Beginning Balance

Increase/Decrease

Qty

Ownership (%)

Book Value

Acquisition/Disposal Valuation
Qty Amount

0

99.00 2,277

0 -2,277

0

Ending Balance

Current Financial Stats

Qty

Ownership (%)

0

0.00

Book Value

Total Asset

0

42,633

Net Income (Loss)
458

Unlisted SVIC #14 2009.05 Business

18,000

0

99.00

0

0

0

0

99.00

0

57,146

2,434

Unlisted SVIC #21

2011.11

Business

19,800

2

99.00 150,634

0 6,633

0

2

99.00 157,267 130,290

-4,984

Unlisted SVIC #22

2011.11

Business

19,800

2

99.00 155,796

0

0

2

99.00 155,796 145,501

-43

Unlisted SVIC #26 2014.11 Business

19,800

0

99.00 19,800

0 45,441

0

0

99.00 65,241

20,057

-699

Unlisted SVIC #27 2014.09 Business

5,940

0

99.00 5,940

0 2,772

0

0

99.00

8,712

5,898

-483

Unlisted SVIC #28 2015.02 Business

7,425

0

Domestic* Unlisted

Samsung Medison

Unlisted

Samsung BioLogics

Unlisted Listed Listed

Intellectual Discovery
Samsung Heavy
Industries
Samsung Fine Chemicals

2011.02 2011.04 2011.05 1977.09 1995.05

Business Management Management Management Management

286,384 87,350 30,000 9,298 5,000 1,784
125 40,676 1,346 2,165

Listed Hotel Shilla 1979.12 Management

252 2,005

Listed

Cheil Worldwide

1988.09 Management

185 14,499

Listed

A-Tech Solution

2009.11 Management

26,348 1,592

 Domestic account noted here reflects approved for sales securities

0.00

0

0 27,225

0

0

68.45 477,648

0

45.65 412,065 3,601 133,600

0 87,350 0 12,899

15.71 5,241

0

0 1,784

17.61 811,479

0

-311,169 40,676

8.39 70,795

0

5.11 183,231

0

12.60 249,378

0

15.92 7,578

0

16,346 2,165 47,311 2,005 14,499 14,499 1,465 1,592

99.00 27,225

0

0

68.45 477,648 326,260

8,817

46.79 545,665 1,357,295 -83,939

15.71

5,241

44,353

-7,792

17.61 500,310 17,122,234 147,320

8.39 87,140 1,845,960 58,683

5.11 230,542 1,907,452 73,483

12.60 263,877 1,843,852 102,022

15.92

9,043 184,201

490

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Account Listed

Name of Company

Acquisition Date

Objective

Acquisition Cost

iMarket Korea 2000.12 Management

1,900

Beginning Balance

Increase/Decrease

Qty

Ownership (%)

647

1.80

Book Value

Acquisition/Disposal Valuation
Qty Amount

18,384

0

647

Ending Balance

Qty

Ownership (%)

Book Value

Current Financial Stats
Net Total Asset Income
(Loss)

647

1.80 19,031 1,090,486 44,140

Listed

KT Skylife

2001.12 Management

3,344 240

0.50

4,404

0

480 240

0.50

4,884 683,009 55,162

Listed Samsung SDI 1977.01 Management

304 13,463

19.58 1,561,670

0

-100,970 13,463

19.58 1,460,700 15,968,550 -80,314

Listed

Wonik IPS

Unlisted

Hanwha General Chemicals

Unlisted

SSLM

Unlisted Domestic* Unlisted

Kihyup Technology
Banking
Pusan Newport

2013.12 1988.07 2012.04 1995.01 1997.09

Business Management Management Management Management

Unlisted Unlisted

The Korea Economic Daily
Samsung Venture Investment

Unlisted Cyber Bank

1987.05 1999.11 2000.12

Management Management Management

31,625 3,610

1,500 3,017

52,296 4,378

5,000 1,000

590 1,135

150

72

4,900 980

8,000 1,083

4.48 50,361

0

-17,365 3,610

5.29 100,051 -3,017 -100,051

0

0

18.24

0

0

0 4,378

17.24

5,000

0

0 1,000

0.98

5,677

0

0.39

365

0

0 1,135

0

72

16.33

6,586

0

0 980

7.46

0

0

0 1,083

4.48 32,996 658,929 57,128

0.00

0 2,245,888 -23,537

12.16

0 177,022 -46,587

17.24

5,000

91,722

762

0.98

5,677 680,228 50,481

0.39

365 289,901 15,395

16.33

6,586

67,044 3,274

7.46

0

0

0

Unlisted FineChips

2001.12 Management

10

2

3.81

10

0

0

2

3.81

10

3,653

707

Unlisted SK Telink

2010.11 Management

4,357

15

1.13

4,357

0

0

15

1.13

4,357 253,332 16,093

Unlisted

Inkel

2006.11 Management

130

0

0.00

0

0

Unlisted

Yongpyong Resort

2007.05 Management

1,869 400

1.05

1,869

0

 Domestic account noted here reflects approved for sales securities

0

0

0 400

0.00

0 153,629

974

1.05

1,869 734,627 12,019

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Account
Unlisted Unlisted Unlisted

Name of Company
E-SCOM Sambo Computer Icube #1

Acquisition Date

Objective

Acquisition Cost

2007.12 Management

0

Beginning Balance

Increase/Decrease

Qty

Ownership (%)

0

0.01

Book Value

Acquisition/Disposal Valuation
Qty Amount

0

0

0

Ending Balance

Qty

Ownership (%)

Book Value

Current Financial Stats
Net Total Asset Income
(Loss)

0

0.01

0

14,329 -7,482

2012.09 Management

0

0

0.01

0

0

0

0

0.01

0

37,940 1,467

2009.12 Management

4,000

0

16.23

4,000

0

0

0

16.23

4,000

22,756 -1,648

Unlisted KT Wibro

2010.07 Management

60,000 600

24.2 60,000

0

Unlisted

Shinsung Eng & Construction

2010.07

Management

1

0

0.01

0

0

Unlisted Unlisted Domestic* Unlisted Unlisted Unlisted Unlisted

Woobang
Heehoon Design & Global
Daewoo Development
Daewoo Songdo Development
Zyle Motor Sales
Woojung Construction

2010.07 Management 2010.07 Management 2012.12 Management 2012.12 Management 2012.12 Management 2014.04 Withdrawal

0

1

0.00

0

2

0.02

0

0

0.02

0

9

0.02

0

1

0.00

0

5

0.35

0

0

0

0

0

0

0

0

0

0

0

0

Unlisted

Hyunjin

2014.04 Withdrawal

0

23

0.25

Unlisted Unlisted

Sungwon Construction
Inhee

2014.04 2014.04

Withdrawal Withdrawal

0

1

0.03

0

2

0.17

Unlisted

Samsung Solution

2014.04 Withdrawal

0

4

6.70

 Domestic account noted here reflects approved for sales securities

0

0

0

0

0

0

0

0

0 600

0

0

0

1

0

2

0

0

0

9

0

1

0

5

0

23

0

1

0

2

0

4

24.2 60,000 266,331 3,545

0.01

0

58,865

425

0.00

0 159,892 7,234

0.02

0

42,516 -8,168

0.02

0 143,190 -14,700

0.02

0 1,216,605 -7,984

0.00

0 292,265 3,083

0.35

0

23,920 -6,902

0.25

0

44,332 2,004

0.03

0

34,337 -1,733

0.17

0

11,239 -2,034

6.70

0

11,713

173

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Account
Unlisted Unlisted

Name of Company
STX Construction
Poonglim

Acquisition Date

Objective

Acquisition Cost

2014.04 Withdrawal

0

2014.05 Withdrawal

0

Beginning Balance

Increase/Decrease

Qty

Ownership (%)

0

0.01

Book Value

Acquisition/Disposal Valuation
Qty Amount

0

0

0

52

0.37

0

0

0

Ending Balance

Current Financial Stats

Qty

Ownership (%)

0

0.01

Book Value
0

Total Asset
199,475

Net Income (Loss)
-14,036

52

0.37

0 405,404 32,142

Unlisted

SamGong Development

2014.1

debt-equity swap

0

0

0.09

0

0

0

0

0.09

0 180,549

-4,186

Unlisted

JNT

Unlisted Unlisted

SV
Seoul Investment Partners

Unlisted Daishin Aju IB

2011.02 2011.02 2011.1
2011.08

Investment Investment Investment
Investment

1,800 1,850 1,550
258

0

24.00 3,360

0

14.85 3,403

0

19.38 2,872

0

3.00 1,898

0

-240

0

-215

0

-135

0

-325

0

0

24.00

3,120

14,579

417

0

0

14.85

3,188

19,433

-469

0

0

19.38

2,737

17,978

323

0

0

3.00

1,574

63,869

7,656

Domestic* Unlisted

TS

2011.11 Investment

Unlisted

IMM

2011.11 Investment

Unlisted

L&S

2012.07 Investment

Unlisted Taewon Electric 2012.04 Management

Unlisted

Pantech

2013.06 Business

1,700

0

760

0

848

0

16,544

45

53,000 53,000

20.32 7.60 7.46 15.00 10.03

2,682 3,294 2,848 17,094
0

0

0

-720

0

-75

0

0

0

0

0

0

0

0

0

45

0 53,000

20.32 7.60 7.46 15.00 10.03

2,682 2,574 2,773 17,094
0

13,470

-128

44,114

342

33,885

-5,301

64,677

1,478

279,464 -249,327

Unlisted KTCNP-GC 2013.12 Business

960

Unlisted Unlisted

Postech Technology Investment
High Pioneer Private
Investment Trust #1

2013.12 2011.09

Business Business

600 29,244

 Domestic account noted here reflects approved for sales securities

0

3.56

918

0

10.00

600

0 100.00 19,470

0 3,164 0 0 -19,470

0

0

3.56

4,082

24,289

-869

0

0

10.00

600 175,836

3,625

0

0

0.00

0 19,179

-303

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Account

Name of Acquisition Company Date

Objective

Acquisition Cost

Unlisted SECA 1992.08

Position Security

3,823

Beginning Balance

Increase/Decrease

Qty

Ownership (%)

0 100.00

Book Value

Acquisition/Disposal

Valuation

Qty

Amount

90,922

0

0

Ending Balance

Qty

Ownership Book

(%)

Value

Current Financial Stats

Total Asset

Net Income (Loss)

0

100.00 90,922 529,348

-515

Unlisted SEA

1978.07

Position Security

59,362

492

100.00 5,027,880

0 623,315

0

492

100.00 5,651,195 10,697,787 -80,403

Unlisted SELA

1989.04

Position Security

319

40

100.00 86,962

0

0

40

100.00 86,962 347,502

571

Unlisted SEM

1995.07

Position Security

3,032

3,837

63.58 165,638

0

0

3,837

63.58 165,638 795,138 -245,143

Unlisted SEASA 1996.06

Position Security

4,696

21,854

Unlisted SEDA

Unlisted Int'l* Unlisted
Unlisted

SECH
Nvelo, Inc. CMLA LLC

1994.01 2002.12 2012.12 2008.02

Position Security Position Security Position Security
Management

13,224 62,816,336

597

0

42,892

100

654

0

Unlisted SESA 1989.01

Position Security

3,276

8,021

Unlisted SENA Unlisted SEH Unlisted SEP Unlisted SEF Unlisted SEUK Unlisted SEHG

1992.03 1991.05 1982.09 1991.08 1995.07 1982.02

Position Security
Position Security
Position Security
Position Security
Position Security
Position Security

392 1,954
204 230 33,908 28,042

1,000 753
1,751 2,700 109,546
0

* International account noted here reflects approved for sales securities

98.00

6,779

0

87.04 577,483 14,389,373 70,137

4.10

597

0

100.00 42,892

-100 -42,892

25.00

4,115

0 -4,115

100.00 142,091

0

100.00 69,372

0

100.00 650,157

0

100.00 37,616

0

100.00 234,115

0

100.00 433,202

0

100.00 354,846

0

0

21,854

0 77,205,709

0

0

0

0

0

0

0

8,021

0

1,000

0

753

0

1,751

0

2,700

0 109,546

0

0

98.00

6,779

52,003

5,937

87.04 647,620 3,797,166 887,715

4.10

597 262,414 -8,240

0.00

0

1,774

225

0.00

0

0

0

100.00 142,091 665,617 19,153

100.00 69,372 467,393 39,396

100.00 650,157 1,287,972 109,549

100.00 37,616 136,282

6,198

100.00 234,115 1,031,342 44,771

100.00 433,202 1,235,239 72,231

100.00 354,846 840,716 84,393

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Account

Name of Company

Acquisition Date

Objective

Acquisition Cost

Beginning Balance

Qty

Ownership (%)

Book Value

Unlisted SEAG

2002.01

Position Security

40

0

Unlisted

SEI

1993.05

Position Security

862

677

Unlisted SEBN

1995.07

Position Security

236 530,589

Unlisted SELS

1991.05

Position Security

18,314 1,306

Unlisted SEPOL

1996.04

Position Security

5,462

106

Unlisted SSA

1998.12

Position Security

263 2,000

Unlisted Int'l*
Unlisted

SESK SEEH

2002.06 2008.01

Position Security
Position Security

8,976

0

4,214

0

Unlisted SEO

1997.01

Position Security

120

0

Unlisted SRSC

1997.11

Position Security

707

0

Unlisted Unlisted Unlisted Unlisted Unlisted

SERC SERK SEAU SEMA SGE

2006.01 2007.07 1987.11 1989.09 1995.05

Position Security
Position Security
Position Security
Position Security Position Security

24,877

0

4,600

0

392 53,200

4,378 16,247

827

0

* International account noted here reflects approved for sales securities

100.00

32,162

100.00 143,181

100.00 904,308

100.00

24,288

100.00

78,267

100.00

32,622

55.68 263,767

100.00 1,369,992

100.00 -10,043

100.00

8,211

100.00 100.00 100.00 100.00 100.00

180,079 204,555 111,964 153,602 32,836

Increase/Decrease

Acquisition/Disposal Valuation
Qty Amount

0

0

0

0

8,549

10,443

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Ending Balance

Qty

Ownership (%)

Book Value

0

100.00

32,162

677

100.00 143,181

539,138

100.00 914,751

1,306

100.00

24,288

106

100.00

78,267

2,000

100.00

32,622

0

55.68 263,767

0

100.00 1,369,992

0

100.00 -10,043

0 0 0 53,200 16,247 0

100.00

8,211

100.00 100.00 100.00 100.00 100.00

180,079 204,555 111,964 153,602 32,836

Current Financial Stats

Total Asset

Net Income (Loss)

290,346

9,100

759,637 107,593

1,207,723

30,404

1,621,583

38,209

419,043

38,817

712,489 -38,887

1,869,697 142,416

7,022,746

93,605

176,271

57

29,243 796,220 785,584 437,351 129,214 921,338

1,664 31,587 88,557 -48,132 28,018 -66,153

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Account

Name of Company

Acquisition Date

Objective

Acquisition Cost

Beginning Balance

Qty

Ownership (%)

Book Value

Unlisted SEEG

2012.07

Position Security

23

0

Unlisted SEIN

1991.08

Position Security

7,463

46

Unlisted SDMA

1995.03

Position Security

21,876 71,400

Unlisted SIEL

1995.08

Position Security

5,414 216,787

Unlisted SRI-B

2005.05

Position Security

7,358

17

Unlisted SAVINA

1995.01

Position Security

5,839

0

Unlisted TSE Int'l*
Unlisted STE

1988.01 1996.01

Position Security
Position Security

1,390 11,020 4,206 2,499

Unlisted SME

2003.05

Position Security

4,796 17,100

Unlisted SAPL

2006.07

Position Security

793 741,378

Unlisted Unlisted Unlisted Unlisted Unlisted

SEHK SET SESS SCIC SEHZ

1988.09 1994.11 1994.12 1996.03 1992.12

Position Security
Position Security
Position Security
Position Security
Position Security

349 274,250

456 27,270

18,875

0

23,253

0

792

0

* International account noted here reflects approved for sales securities

0.05

39

99.99 118,909

75.00 244,382

100.00

75,263

100.00

31,787

100.00

28,365

91.83 279,163

49.00

4,474

100.00

7,644

100.00 870,623

100.00 100.00 100.00 100.00 89.56

79,033 112,949 504,313 617,941 255,535

Increase/Decrease

Acquisition/Disposal Valuation
Qty Amount

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

135,755 110,860

0

0

0

0

0

0

0

0

0

0

0

Ending Balance

Qty

Ownership (%)

Book Value

0

0.05

39

46

99.99 118,909

71,400

75.00 244,382

216,787

100.00

75,263

17

100.00

31,787

0

100.00

28,365

11,020

91.83 279,163

2,499

49.00

4,474

17,100

100.00

7,644

877,133 274,250 27,270
0 0 0

100.00 981,483

100.00 100.00 100.00 100.00 89.56

79,033 112,949 504,313 617,941 255,535

Current Financial Stats

Total Asset

Net Income (Loss)

512,426

44,697

806,451 147,666

278,239

38,955

2,949,605 428,757

190,104

24,805

219,356

43,367

1,654,988 202,647

6,159

100

328,645

3,473

3,110,433 1,057,873

984,732 1,583,027
749,914 9,603,679 4,966,486

20,662 44,559 64,345 162,677 829,880

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Account

Name of Company

Acquisition Date

Objective

Acquisition Cost

Unlisted SSEC

1995.04

Position Security

32,128

Beginning Balance

Increase/Decrease

Qty

Ownership (%)

0

69.06

Book Value

Acquisition/Disposal Valuation
Qty Amount

130,551

0

0

Unlisted TSEC

1993.04

Position Security

15,064

0

48.20 138,101

0

0

Unlisted SSDP

1993.08

Position Security

4,446

0

87.10

65,319

0

0

Unlisted TSTC

2001.03

Position Security

10,813

0

90.00 490,041

0

0

Unlisted SSTC

2001.11

Position Security

15,799

0

100.00

-1,186

0 23,698

0

Unlisted SSET

2002.02

Position Security

6,009

0

95.00 121,624

0

0

Unlisted Int'l*

SESC

2002.09

Position Security

5,471

0

73.70

34,028

0

0

Unlisted SSS

2001.01

Position Security

1,200

0

100.00

19,189

0

0

Unlisted SEHF

2004.04

Position Security

17,204

0

100.00

53,869

0 -53,869

0

Unlisted SSCR

2006.09

Position Security

3,405

0

100.00

9,332

0

0

Unlisted TSOE

2010.04

Position Security

33,837

0

82.00

93,154

0

0

Unlisted TSLED

2012.04

Position Security

119,519

0

100.00 119,519

0

0

Unlisted SCS

2012.09

Position Security

111,770

0

100.00 2,712,096

0

0

Unlisted SJC

1975.12

Position Security

273 1,560

100.00 370,647

0

0

Unlisted SRJ

1992.08

Position Security

3,120

122

100.00 117,257

0

0

* International account noted here reflects approved for sales securities

Ending Balance

Qty

Ownership (%)

Book Value

0

69.06 130,551

Current Financial Stats

Total Asset

Net Income (Loss)

689,430

99,282

0

48.20 138,101 933,487 140,983

0

87.10

65,319 777,128 136,272

0

90.00 490,041 2,316,054 510,357

0

100.00

22,512

124

-3,478

0

95.00 121,624 146,482

13,509

0

73.70

34,028 812,755

66,091

0

100.00

19,189 2,560,852 125,239

0

0.00

0 108,183

-2,549

0 0 0 0 1,560 122

100.00

9,332

20,548

3,257

82.00

93,154 177,394

100.00 119,519 411,558

100.00 2,712,096 6,765,278

100.00 370,647 831,649

100.00 117,257 160,614

17,427 27,308 166,754 5,690 3,625

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Account

Name of Company

Acquisition Date

Objective

Acquisition Cost

Beginning Balance

Qty

Ownership (%)

Book Value

Increase/Decrease Acquisition/Disposal
Valuation Qty Amount

Unlisted TSST Japan 2004.03 Management

1,639

30

49.03

0

0

0

Ending Balance

Current Financial Stats

Qty

Ownership (%)

Book Value

Total Asset

Net Income (Loss)

30

49.03

0 234,785 -24,594

Unlisted

SDIB

1996.09 Management

3,110 586

0.08

0

0

Unlisted

Semiconductor Portal

2002.12 Management

38

0

1.21

10

0

Unlisted

FTS

2008.12 Management

1,952 116

41.50

563

0

0

586

0.08

0

0

1.21

0

116

41.5

0

29,290

10

1,255

563

2,371

2,294 3
-128

Unlisted Nanosys, Inc 2010.08 Management

4,774 1,747

1.49

2,387

0

Unlisted

ONE BLUE LLC

2011.07 Management

1,766

0

16.67

1,766

0

Unlisted TidalScale 2013.08 Management

1,112 2,882

18.98

1,112

0

0 1,747

0

0

0 2,882

1.51 16.67 8.87

2,387 1,766 1,112

23,134 36,941 7,734

861 860 -2,631

Int'l* Unlisted Mantis Vision

Unlisted

Argus Cyber Security

Unlisted

INEDA

2014.01 2015.09 2014.04

Business Business Business

1,594 301

356

0

3,181 3,918

3.53

1,594

53 386

0.00

0

10 356

5.55

3,181

2,182 2,216

0

355

0

10

0 6,100

2.94

1,980

0.39

356

6.50

5,397

4,969

-8,275

0

0

8,221 -15,439

Unlisted

Leman

2014.08 Business

1,019

17

3.91

1,019

0

0

17

3.91

1,019

6,563

-3,340

Unlisted

Alces

2014.09 Business

4,832 421

19.95

4,832

0

0

421

19.95

4,832

2,905

-1,937

Listed

SSL

2014.05 Business

37,553 2,426

5.84

49,511 -2,426 -49,511

0

0

0.00

0 1,301,673 -100,027

Listed

Rambus

2010.01 Business

185,363 4,788

4.19

58,368

0

9,121 4,788

4.11

67,489 620,811

27,650

Listed SEAGATE 2011.12 Business

788,454 12,539

3.80 916,597

0

* International account noted here reflects approved for sale securities * Based on separate financial statements
* Ownership percentage is calculated based on the number of common shares issued

-245,563 12,539

4.15 671,033 10,016,908 1,656,821

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X. Related Party Transactions

1. Credit Offerings for Affiliates and Subsidiaries

A. Details on Debt Guarantee (as at September 30, 2015)

- Domestic: N/A - Overseas:

(Unit: USD thousand)

Company Relationship

SEA

Subsidiary

Creditor SMBC, etc.

Guarantee Expiry Date
2017-04-10

Beginning of period
1,000,000

Transactions

Increase

Decrease End of period

0

0

1,000,000

Limit of Guarantee
2,425,000

SEM

Subsidiary

Santander, etc.

2016-08-19

348,280

0

291,634

56,646

676,000

SAMCOL

Subsidiary

Citibank, etc.

2016-06-13

67,533

1,579

0

69,112

126,000

SEDA SECH SEPR SSA

Subsidiary Subsidiary Subsidiary Subsidiary

HSBC, etc. Citibank, etc. BBVA, etc. Citibank, etc.

2016-06-13 2016-06-13 2016-06-13 2016-06-13

0 54,332 62,718 161,095

553 0
2,022 4,489

0 54,332
0 0

553 0
64,740 165,584

794,000 178,000 180,000 335,000

SEMRC

Subsidiary

SocGen, etc.

2015-12-16

5,824

0

5,788

36

110,000

SETK SECE SEEG

Subsidiary Subsidiary Subsidiary

BTMU, etc. Citibank, etc.
HSBC

2016-06-13 2016-07-21 2016-06-13

85,877 0 0

118,103 1,480 0

0

203,980

0

1,480

0

0

670,000 152,000 50,000

SEPCO

Subsidiary

Citibank, etc.

-

9,379

0

9,379

0

0

SEIN SJC SRJ SEUC

Subsidiary Subsidiary Subsidiary Subsidiary

BNP, etc. Mizuho Bank, etc.
SMBC Credit Agricole, etc.

2016-06-13 2016-05-31 2016-02-28 2016-06-13

0 211,882 20,928
0

0 74,109
0 0

0

0

0

285,991

53

20,875

0

0

161,000 890,000 21,000 175,000

SEDAM

Subsidiary

Citibank, etc.

2016-06-13

116,727

0

24,568

92,159

441,000

SECA

Subsidiary

Nova Scotia

2015-10-10

0

0

0

0

11,000

SELA SEEH SERK SELV

Subsidiary Subsidiary Subsidiary Subsidiary

Citibank HSBC, etc. BNP, etc.
Citibank

2015-12-16 2016-09-05 2016-06-28 2015-12-16

0

0

0

0

30,000

0

0

0

0

639,200

0

0

0

0

370,000

0

0

0

0

10,000

SAPL

Subsidiary

BOA, etc.

2016-06-13

0

0

0

0

411,000

SEV SAVINA
SET

Subsidiary Subsidiary Subsidiary

SCB SCB, etc.
SCB

2015-11-08 2016-06-13 2015-11-08

0

0

0

0

15,000

0

0

0

0

71,000

0

0

0

0

30,000

SCIC

Subsidiary

HSBC, etc.

2016-06-13

0

0

0

0

200,000

SME SAMEX SEASA SSAP

Subsidiary Subsidiary Subsidiary Subsidiary

SCB Citibank Citibank
SCB

2015-11-08 2015-12-16 2015-12-16 2015-11-08

0 0 0 7,779

0

0

0

0

0

0

0

0

0

0

1,344

6,435

120,000 5,000 1,000 20,000

Simpress

Subsidiary

BNP

2015-11-08

0

36,683

0

36,683

60,000

SEHK

Subsidiary

HSBC

2016-06-13

0

0

0

0

2,000

SEPM

Subsidiary

HSBC Total

2016-06-13

0 2,152,354

132,800 371,818

0 387,098

132,800 2,137,074

132,800 9,512,000

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Other than the guarantee obligations presented above, the Company provides payment guarantees of KRW 18,490 million (HUF 4.32 billion) to SEH (Samsung Electronics Hungarian) in Hungary to guarantee fulfillment of an investment incentive contract with the Hungarian government.
The Company requires BOD approval for individual guarantees exceeding 2.5% of total equity. When the guarantee amount is between 0.1% and/or less than 2.5%, the approval decision is delegated to the Management Committee.

B. Purchase and Sales of Securities

Company
Samsung Asset
Management

Relationship Securities Type

Affiliate

Beneficiary certificate

Purchase -

Total

-

Changes

Sale

Total

Profit & Loss

1,000,000 1,000,000

24,864

1,000,000 1,000,000

24,864

Balance

(Unit: KRW million) Note

- Asset management -

 Profit and loss from sales of securities is based on amount received from disposition and cost basis.

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2. Acquisitions and disposals of Assets with Affiliates and Subsidiaries

During first three quarters of 2015, 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.

Company
SCS
Samsung Fine Chemicals

Relationship
Affiliates
Affiliates

Purpose
Asset sale Asset purchase

SESS

Affiliates

Asset sale/purchase

SAS

Affiliates

Asset sale/purchase

Samsung Bioepis

Affiliates

Asset sale

SDC

Affiliates

Asset sale

SEV

Affiliates

Asset sale/purchase

TSTC

Affiliates

Asset purchase

STECO

Affiliates

Asset sale

SEIN

Affiliates

Asset sale/purchase

TSLED

Affiliates

Asset sale/purchase

TSOE

Affiliates

Asset sale/purchase

SESC

Affiliates

Asset purchase

SEVT

Affiliates

Asset sale

SIEL

Affiliates

Asset sale

SSKMT

Affiliates

Asset purchase

SEDAM

Affiliates

Asset sale

SCSC

Affiliates

Asset purchase

SEDA

Affiliates

Asset sale/purchase

 Transaction date: most recent transaction

Transaction Date
2015.09.30

Date based on
Date of sale

2015.09.16

Date of purchase

2015.09.25 2015.08.13 2015.03.09 2015.07.31 2015.09.25 2015.09.24 2015.09.30 2015.09.22 2015.07.08 2015.07.16 2015.07.14 2015.08.01 2015.02.02 2015.09.15 2015.08.01 2015.07.13 2015.04.29

Date of sale/purchase Date of sale/purchase
Date of sale Date of sale Date of sale/purchase Date of purchase Date of sale Date of sale/purchase Date of sale/purchase Date of sale/purchase Date of purchase Date of sale Date of sale Date of purchase Date of sale Date of purchase Date of sale/purchase

Asset
Machinery, etc.
Buildings/structures, etc
Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc. Machinery, etc.

(Unit: KRW million)
Amount
142,046
95,278
23,115 20,696 3,524 2,640 2,305 1,510
676 671 588 526 463 336 300 242 238 152 121

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3. Business Transactions with Affiliates and Subsidiaries

Company

Relationship

Type of Transaction

Date

Details

(Unit: KRW million) Amount

SEA

Subsidiary

Sales/Purchases

2015.01 - 2015.09

Purchase/sales of HHP and Home Appliance, etc.

21,446,861

SEHZ

Subsidiary

Sales/Purchases

2015.01 - 2015.09

Purchase/sales of HHP and CTV, etc.

10,439,629

SEVT

Subsidiary

Sales/Purchases

2015.01 - 2015.09

Purchases of HHP and Home Appliance, etc.

8,796,872

SEV

Subsidiary

Sales/Purchases

2015.01 - 2015.09

Purchases of HHP and Home Appliance, etc.

8,563,184

SSI

Subsidiary

Sales/Purchases 2015.01 - 2015.09

Purchase/sales of Semiconductor, etc.

11,566,812

During first three quarters of 2015, the Company conducted business transactions with the following subsidiaries: SEA (Samsung Electronics America, Inc.) and SSI (Samsung Semiconductor, Inc.).

4. Transactions with Stakeholders other than Affiliates and Subsidiaries

As at September 30, 2015, the Company's outstanding loan amount is KRW 121.7 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 10.8 billion for employees' loans from financial institutions relating to housing rental.

(Unit: KRW million)

Loans

Company

Relationship

Jangwon Tech, etc

Partner company

Account title

Beginning of period (January 1, 2015)

Short-term loans

34,321

Transaction

Increase

Decrease

135

3,735

End of period (September 30, 2015)
30,721

Dooil I&D, etc

Partner company and employee
Total

Long-term loans

81,534 115,855

25,503 25,638

16,092 19,827

90,945 121,666

 The amount shown above reflects the discounted present value of debts before accounting for impaired debts.

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XI. Other Information

1. Public Disclosure
- N/A
2. Summary of Results of Shareholder Meetings

Date

Agenda

1. Approval of Balance Sheet, Income Statement, and Statement of Appropriation of Retained Earnings (Draft), etc. for FY2014

FY2015 annual general meeting of shareholders ('15.3.13)

2. Appointment of Directors 2.1: Appointment of Independent Directors
2.1.1: Han-Joong Kim 2.1.2: Byeong-Gi Lee

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)

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

1. Approval of Balance Sheet, Income Statement, and Statement of Appropriation of Retained Earnings (Draft), etc. for FY2012

FY2013 annual general meeting of shareholders ('13.3.15)

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
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

Results Approved Approved
Approved Approved Approved Approved Approved
Approved

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3. Litigation
(1) 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 Group 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 Group and made a final judgment restating the total damages amount determined by a jury verdict. The Group appealed the decision on the amount of damages on March 7, 2014, and a hearing on the appeal was held on December 4, 2014. On May 18, 2015, the United States Court of Appeals for the Federal Circuit upheld the prior design infringement verdict, but reversed and remanded a previous decision related to a trademark finding. On June 17, 2015, the Group petitioned for an en banc rehearing regarding the design infringement, and on August 13, 2015, the Court of Appeals for the Federal Circuit dismissed the Group's request. The appellate court remanded the case to the district court, and the district court announced partial final judgment on the appeals on September 18, 2015. On October 19, 2015, the Group petitioned for an en banc rehearing since the immediate appeal had been dismissed on October 13, 2015. The final conclusion and the effect of the patent lawsuits with Apple are uncertain as at the reporting date.
In August 2014, the Group and Apple reached an agreement to withdraw from ongoing litigation in all regions other than the United States, and the Group has withdrawn all non-United States based lawsuits.
Additionally, on May 5, 2014, the jury in another ongoing lawsuit determined that the Group partially infringed Apple's utility patent and should pay damages to Apple. On November 25, 2014, the first trial judgment was pronounced to confirm the jury's verdict. The Group appealed the decision on the damages and the appeal is currently on-going. On October 19, 2015, the Group requested an en banc hearing following the remand and reversal by the appellate court on September 17, 2015 of a first trial decision to deny a sales ban on the Company's products on August 27, 2014.
(2) The Group is involved in claims, disputes, and investigations conducted by regulatory bodies at the reporting date, including civil claims from some overseas buyers for price-fixing related to the sale of TFT-LCD. Although the outflow of resources and timing of these matters are uncertain, the Group believes the outcome will not have a material impact on the financial condition of the Group.
(3) In addition, during the normal course of business with numerous companies, the Group has been involved in various claims, disputes, and investigations conducted by regulatory bodies. Although the outflow of resources and timing of these matters are uncertain, the Group believes the outcome will not have a material impact on the financial condition of the Group.
4. Guarantees
Refer to Commitments and Contingencies notes in the Separate and Consolidated Financial Statements

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5. Sanctions and Others
The Company is engaged in a lawsuit after being issued a corrective order and fine (KRW 14,126 million) on July 10, 2012 for violating Article 23 (Prohibition of Unfair Trade Practices) of the Monopoly Regulation and Fair Trade Act.
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.
Pursuant to the results of a joint inspection by the prosecutor's office and the Ministry of Employment and Labor conducted from June 16th through the 20th (2014), a current Executive Vice President of the Company and the Company were ordered and respectively paid a fine of KRW 2 million for violating the obligation of taking safety measures in accordance with the Occupational Safety and Health Act on July 29, 2015.
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.

7. Subsequent Events
(A) On October 29, 2015, the board of directors approved share buyback and cancellation of common and preferred stocks. Estimated total number of shares to be repurchased is 3.47 million (common stock 2.23 million, preferred stock 1.24 million) and all repurchased shares will be cancelled after the buyback is completed. Period of Purchase will be ended on January 29, 2016.
(B) On October 30, 2015, the Group has authorized the sale of its entire stake in Samsung Fine Chemicals Co., LTD. to Lotte Chemical Corporation. The transaction is expected to be closed within the first half of 2016.

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8. Acquisition and Divestments
There have been no significant acquisitions or divestment during reporting period. Please refer to the Business Combination and Non-current Assets Held-for-Sale (Sold Assets) notes in the Consolidated Financial Statements for acquisitions and divestments on a consolidated basis.

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 20 valid Green Technology Certifications as of September 30, 2015. In addition, the Company has acquired 34 `Green Technology' product certificates (264 models), for commercialized products.
Certified Green Technologies as of September 30, 2015 are as follows:

Division CE

Business

IM

DS

Semiconductor (Sub-Division)

Name of green technology and green projects
Low-power consumption SoC design technology for digital TVs, etc. Display power-saving technology that adapts to level of illumination of the
surroundings ; User-based wireless LAN power-saving automation technology, etc.
3-bit NAND Flash semiconductor design technology, etc.
Total

No. 13
4 3 20

 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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