SAMSUNG ELECTRONICS Co., Ltd.

2019 Business Report

For the year ended December 31, 2019

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 uncer tainties 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 .........................................................................................................................................................25
III. Financial Affairs..................................................................................................................................................................67
IV. Management Discussion and Analysis ..........................................................................................................................169
V. Auditor’s Report ................................................................................................................................................................183
VI. Corporate Governance ....................................................................................................................................................187
VII. Information on Shareholders.........................................................................................................................................204
VIII. Executives and Employees...........................................................................................................................................210
IX. Affiliates and Subsidiaries ..............................................................................................................................................221
X. Related Party Transactions..............................................................................................................................................249
XI. Other Information.............................................................................................................................................................253

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 Certification

Letter of Certification

We, Ki-nam Kim and Yoon-ho Choi, as CEO and executive of the company in charge of reporting, certify that
we have reviewed the annual business report of Samsung Electronics Co., Ltd. for the year ended December 31,
2019.

Based on our knowledge, this report does not contain any untrue statements of material facts or omit any
material facts; and it does not contain any statements that are intentionally misleading.

Based on our knowledge, the financial statements, and other financial information included in the report, are
fairly presented in all materials and respect 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 the Internal Controls over Financial Reporting, as defined in
Article 8 of the Act on External Audit of Stock Companies.

Date: Mar 30, 2020

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 I. Corporate Overview

1. Overview
A. Legal, commercial name:
- Samsung Electronics Co., Ltd.

B. Date of establishment:
- Samsung Electronics Co., Ltd. (“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.
- SEC changed its name from Samsung Electronics Industry Co., Ltd. to Samsung Electronics Co., Ltd. following a
resolution passed at the Annual General Meeting (AGM) 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: https:// 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 (defined below) consists of business divisions that operate independently: CE (Consumer Electronics);
IM (Information Technology & Mobile Communications); DS (Device Solutions); and Harman (Harman International
Industries, Inc. and its subsidiaries), which produces automotive electronics components.

Products in each Division are presented below:

Division Products
CE TVs, monitors, refrigerators, washing machines, air conditioners, etc.
IM HHPs, network systems, computers, etc.
DS DRAM, NAND flash, mobile APs, OLED smartphone panels, LCD TV panels, etc.
Harman Head units, infotainment systems, telematics, speakers, etc.

SEC is a global electronics firm comprised of the headquarters in Korea and 240 subsidiaries (collectively, “Samsung
Electronics” or the “Company”) across the world, including 9 regional headquarters for the CE and IM Divisions, 5
regional headquarters for the DS Division, and Harman’s subsidiaries.

[CE Division]
The CE Division is leading the global digital era by continuously offering new products featuring innovative technology,
unique designs, and enhanced value propositions.

TV is the core product of CE. The Company has maintained its position as the market leader for 14 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. We will continue to expand our market leadership based on our competitive edge in the
premium segment through our 8K QLED and ultra-large products to name a few.

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[IM Division]
The IM Division operates the Mobile Communication Business, which produces and sells smart mobile devices such as
smartphones, tablets, wearables, etc. For smartphones, a key product of the business, we have developed a lineup ranging
from low-end right through to premium models, and have achieved growth in both advanced and emerging markets with
the Galaxy series.

We will lead growth of the smartphone market and deliver exceptional user experiences by: 1) offering innovative
hardware features such as new form factors (based on flexible OLED technology), high-definition cameras, biometric
sensors, and battery charger technologies; 2) improving software capabilities of mobile payment service Samsung Pay and
AI platform Bixby; and 3) investing in future growth drivers such as Cloud, IoT, healthcare, AR, and VR. At the same
time, we will lead the global 5G market based on our end-to-end solutions, which encompass handsets, chipsets, as well as
our commercialization experience in initial 5G markets.

[DS Division]
The Memory Business, System LSI Business, Foundry Business, and Display Panel (“DP”) Business make up the DS
Division. The Memory Business manufactures and sells DRAM and NAND products; the System LSI Business designs
and sells mobile application processors (“mobile APs” or “APs”) and camera sensor chips; the Foundry Business is in
charge of consignment production of semiconductors; and the DP Business manufactures and sells display panels.

The Company constantly works to increase its influence on end-product manufacturers and create new demand through
technological breakthroughs and the development of high quality components as it has done with APs—which serve as the
brains of mobile products—and with memory components like DRAM via enhanced capacity and density.

The Memory Business has maintained its position at the top of the global memory market by sustaining cost
competitiveness and applying the latest advanced process technology in each technological iteration. The System LSI
Business has not been complacent, expanding its focus from mobile to include automotive chips, and will stay at the
forefront of the market by offering differentiated products such as APs and CISs and strengthening competitiveness via its
advanced manufacturing process technology. In 1H19, the Foundry Business introduced the world’s first 7-nano product
manufactured with EUV technology. Leveraging its capabilities, the business will gain market leadership by developing
next-generation technologies such as 4- and 5-nano EUV processes and the 3-nano GAA (gate all around) process in 2020.
We are expanding the business by diversifying our product portfolio, which includes CISs, DDIs, and PMICs.

In the Display division, the Company and its mobile panel business’s differentiated technology is a main factor behind the
increased adoption of OLED panels, while its release of products in new applications—such as foldable devices, laptops,
and automotives—has expanded the overall market. Meanwhile, the large panel business is focusing on premium products
such as high-definition, ultra-large, QD TVs and is enhancing its competitiveness through continuous improvements in
technology and productivity.

[Harman Division]
Harman designs and develops connected products and solutions for automakers, consumers, and companies worldwide
and is a global leader in the market for connected car systems, audio and visual products, professional solutions, and
connected services. Harman has established an internationally renowned brand and employs both internal development
and strategic acquisitions to expand its lineup of quality products.

☞ See 『II. Businesses Overview』, for more details about each Division.

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F. Affiliates
SEC is an affiliate of the Samsung Group as defined under Korea’s Monopoly Regulation and Fair Trade Act (“Samsung
Group”).

As of December 31, 2019, the Samsung Group had a total of 60 domestic affiliates following a reduction of 2 affiliates—
Saengbo Real Estate Trust Co., Ltd and Red Bend Software Inc.—since December 31, 2018. Among the Samsung
Group’s domestic affiliates, 16 affiliates (including Samsung Electronics) are listed and 44 are unlisted.

[As of Dec 31, 2019]

Type Number Affiliate

Samsung C&T; Samsung Electronics; Samsung SDI; Samsung Electro-Mechanics (Semco); Samsung Fire & Marine

Listed 16 Insurance; Samsung Heavy Industries; Samsung Life Insurance; Multicampus; Samsung Securities; Samsung SDS;
Samsung Card; Samsung Engineering; S1; Cheil Worldwide; Hotel Shilla; Samsung Biologics

Seoul Lakeside CC; Samwoo Architects & Engineers; CVnet Corporation; Samsung Bioepis; Samsung Display; Samsung
Corning Advanced Glass; SU Materials; STECO; SEMES; Samsung Electronics Service; Samsung Electronics Sales;
Samsung Electronics Logitech; Suwon Samsung Bluewings FC; Samsung Medison; Samsung Claim Adjustment Service;
Samsung Fire & Marine Insurance Service; Samsung Fire & Marine Insurance Financial Service; Samsung Electronics

Unlisted 44 Service CS; Samsung Futures; Samsung Asset Management; Samsung Life Service; Samsung SRA Asset Management;
Samsung Life Financial Service; SD Flex; Cheil Fashion Retail Co., Ltd.; Natural9*; Samsung Welstory; SECUI; STM; S-
Core; OpenHands; Miracom; Samsung Card Customer Service; Human TSS; S-1CRM; Shilla Stay; HDC Shilla Duty Free
Ltd; Samsung Economic Research Institute (SERI); Samsung Lions; Samsung Venture Investment Corporation; Samsung
Active Asset Management; Samsung Hedge Asset Management; Harman International Korea; SBTM

Total 60
Note: *Liquidated in December 2019 and was no longer an affiliate as of January 2020.
☞ 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 December 31, 2019, Samsung Electronics’ consolidated subsidiaries numbered 240 with the addition of 8
subsidiaries and reduction of 20 subsidiaries when compared to totals as of December 31, 2018. Below is the list of
consolidated subsidiaries.

(KRW mil)
Classified
Assets as
Date as major
Subsidiary Major business of Dec 31, Ownership
established subsidiary
2019
(Y/N)
Samsung Electronics America Inc. (SEA) Jul 1978 Electronic goods sales 34,704,039 Ov er 50% Y

NeuroLogica Corp. Feb 2004 Medical equipment 198,668 Ov er 50% Y

Dacor Holdings, Inc. Dec 1998 Holding company 70,283 Ov er 50% N

Dacor, Inc. Mar 1965 Home appliance production and sales 70,214 Ov er 50% N

Dacor Canada Co. Jun 2001 Home appliance sales 9 Ov er 50% N

Ev erythingDacor.com, Inc. Jun 2006 Home appliance sales 0 Ov er 50% N

Distinctiv e Appliances of California, Inc. Jun 2014 Home appliance sales 0 Ov er 50% N

Samsung HVAC America, LLC Jul 2001 Air conditioner sales 53,411 Ov er 50% N

SmartThings, Inc. Apr 2012 Smart-home-device sales 188,239 Ov er 50% Y

Samsung Oak Holdings, Inc. (SHI) Jun 2016 Holding company 396,858 Ov er 50% Y

Stellus Technologies, Inc. Nov 2015 Semiconductor system production and sales 22,442 Ov er 50% N

Joy ent, Inc. Mar 2005 Cloud serv ices 208,093 Ov er 50% Y

Prismv iew, LLC Oct 2007 LED display panel production and sales 91,430 Ov er 50% Y

Samsung Research America, Inc. (SRA) Oct 1988 R&D 807,624 Ov er 50% Y

Samsung Next LLC (SNX) Aug 2016 Holding company 115,785 Ov er 50% Y

Samsung Next Fund LLC (SNXF) Aug 2016 Venture firm and new technology investments 125,312 Ov er 50% Y

Viv Labs, Inc. Sep 2012 Artificial Intelligence serv ices 281,556 Ov er 50% Y

Samsung Semiconductor Inc. (SSI) Jul 1983 Semiconductor and display panel sales 9,194,190 Ov er 50% Y

Samsung Austin Semiconductor LLC. (SAS) Feb 1996 Semiconductor production 6,437,865 Ov er 50% Y

Samsung International Inc. (SII) Oct 1983 TV and monitor production 1,191,534 Ov er 50% Y

Samsung Mexicana S.A. de C.V (SAMEX) Mar 1988 Electronic goods production 55,259 Ov er 50% N

Samsung Electronics Home Appliances America, LLC (SEHA) Aug 2017 Home appliance production 663,997 Ov er 50% Y

SEMES America, Inc. Oct 1998 Semiconductor equipment 1,731 Ov er 50% N

Zhilabs Inc. Feb 2017 Netw ork solution sales 174 Ov er 50% N

Samsung Electronics Canada, Inc. (SECA) Jul 1980 Electronic goods sales 1,396,008 Ov er 50% Y

AdGear Technologies Inc. Aug 2010 Digital adv ertising platform 34,696 Ov er 50% N

SigMast Communic ations Inc. Jul 2009 Tex t messaging service development 4,933 Ov er 50% N

Samsung Electronics Mexico S.A. De C.V. (SEM) Jul 1995 Electronic goods sales 1,250,456 Ov er 50% Y
Samsung Electronics Digital Appliance Mexico, SA de CV
Dec 2012 Electronic goods production 521,891 Ov er 50% Y
(SEDAM)
Samsung Electronics Latinoamerica Miami, Inc. (SEMI) May 1995 Electronic goods sales 350,117 Ov er 50% Y

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Samsung Electronics Latinoamerica (Zona Libre)(SELA) Apr 1989 Electronic goods sales 487,605 Ov er 50% Y

Samsung Electronics Venezuela, C.A. (SEVEN) May 2010 Marketing and services 91 Ov er 50% N

Samsung Electronica Colombia S.A. (SAMCOL) Mar 1997 Electronic goods sales 567,003 Ov er 50% Y

Samsung Electronics Panama. S.A. (SEPA) Jul 2012 Consulting 1,981 Ov er 50% N

Samsung Electronica da Amazonia Ltda. (SEDA) Jan 1995 Electronic goods production and sales 7,058,719 Ov er 50% Y

Samsung Electronics Argentina S.A. (SEASA) Jun 1996 Marketing and services 46,405 Ov er 50% N

Samsung Electronics Chile Limitada (SECH) Dec 2002 Electronic goods sales 497,328 Ov er 50% Y

Samsung Electronics Peru S.A.C. (SEPR) Apr 2010 Electronic goods sales 310,900 Ov er 50% Y

Harman International Industries, Inc. Jan 1980 Holding company 15,780,810 Ov er 50% Y

Harman Becker Automotive Systems, Inc. Jun 1981 Audio product R&D, production, and sales 4,389,303 Ov er 50% Y

Harman Connected Services, Inc. Feb 2002 Connected service provider 2,081,187 Ov er 50% Y

Harman Connected Services Engineering Corp. Sep 2004 Connected service provider 620 Ov er 50% N

Harman Connected Services South America S.R.L. Apr 2015 Connected service provider 0 Ov er 50% N

Harman da Amazonia Industria Eletronica e Participacoes Ltda. Jul 2005 Audio product production and sales 53,652 Ov er 50% N

Harman de Mex ico S. de R.L. de C.V. Feb 1997 Audio product production 107,312 Ov er 50% Y

Harman do Brasil Industria Eletronica e Participacoes Ltda. Nov 1958 Audio product R&D and sales 253,503 Ov er 50% Y

Harman Financial Group, LLC Jun 2004 Management company 654,120 Ov er 50% Y

Harman International Industries Canada Ltd. May 2005 Audio product sales 78 Ov er 50% N

Harman International Mex ico, S. de R.L. de C.V. Dec 2014 Audio product sales 28,262 Ov er 50% N

Harman KG Holding, LLC Mar 2009 Holding company 0 Ov er 50% N

Harman Professional, Inc. Jul 2006 Audio product R&D and sales 1,097,748 Ov er 50% Y

RT SV Co-Inv est, LP Feb 2014 Venture firm inv estments 12,220 Ov er 50% N

Beijing Integrated Circuit Industry International Fund, L.P Dec 2014 Inv estment in v enture firms 27,097 Ov er 50% N

China Materialia New Materials 2016 Limited Partnership Sep 2017 Inv estment in v enture firms 3,391 Ov er 50% N

Samsung Electronics (UK) Ltd. (SEUK) Jul 1995 Electronic goods sales 2,644,358 Ov er 50% Y

Samsung Electronics (London) Ltd. (SEL) Jan 1999 Holding company 6,672 Ov er 50% N

Samsung Electronics Holding GmbH (SEHG) Feb 1982 Holding company 844,742 Ov er 50% Y

Samsung Semiconductor Europe GmbH (SSEG) Dec 1987 Semiconductor and display panel sales 853,543 Ov er 50% Y

Samsung Electronics GmbH (SEG) Dec 1984 Electronic goods sales 2,258,269 Ov er 50% Y

Samsung Electronics Iberia, S.A. (SESA) Jan 1989 Electronic goods sales 1,117,384 Ov er 50% Y

Samsung Electronics France S.A.S (SEF) Jan 1988 Electronic goods sales 1,738,061 Ov er 50% Y

Samsung Electronics Hungarian Private Co. Ltd. (SEH) Oct 1989 Electronic goods production and sales 2,109,654 Ov er 50% Y

Samsung Electronics Czech and Slovak s.r.o. (SECZ) Jan 2010 Electronic goods sales 244,072 Ov er 50% Y

Samsung Electronics Italia S.P.A. (SEI) Apr 1991 Electronic goods sales 1,310,500 Ov er 50% Y

Samsung Electronics Europe Logistics B.V. (SELS) May 1991 Logistics 2,027,213 Ov er 50% Y

Samsung Electronics Benelux B.V. (SEBN) Jul 1995 Electronic goods sales 1,914,864 Ov er 50% Y

Samsung Display Slovakia s.r.o. (SDSK) Mar 2007 Display panel processing 50,097 Ov er 50% N

Sam sung Electronics Business Report 8 / 261

Samsung Electronics Romania LLC (SEROM) Sep 2007 Electronic goods sales 290,743 Ov er 50% Y

Samsung Electronics Polska, SP.Zo.o (SEPOL) Apr 1996 Electronic goods sales 909,905 Ov er 50% Y

Samsung Electronics Portuguesa S.A. (SEP) Sep 1982 Electronic goods sales 212,856 Ov er 50% Y

Samsung Electronics Nordic Aktiebolag (SENA) Mar 1992 Electronic goods sales 1,246,502 Ov er 50% Y

Samsung Semiconductor Europe Limited (SSEL) Apr 1997 Semiconductor and display panel sales 93,207 Ov er 50% Y

Samsung Electronics Austria GmbH(SEAG) Jan 2002 Electronic goods sales 423,105 Ov er 50% Y

Samsung Electronics Switzerland GmbH(SESG) May 2013 Electronic goods sales 296,054 Ov er 50% Y

Samsung Electronics Slovakia s.r.o (SESK) Jun 2002 TV and monitor production 1,324,355 Ov er 50% Y

Samsung Electronics Baltics SIA(SEB) Oct 2001 Electronic goods sales 136,426 Ov er 50% Y

Samsung Electronics Europe Holding Cooperatief U.A. (SEEH) Oct 2008 Holding company 10,682,847 Ov er 50% Y

Samsung Electronics Poland Manufacturing SP.Zo.o (SEPM) Feb 2010 Home appliance production 423,582 Ov er 50% Y
Samsung Electronics Greece SMSA. (SEGR)
Apr 2010 Electronic goods sales 98,718 Ov er 50% Y
(Formerly Samsung Electronics Greece S.A.)
Samsung Electronics Air Conditioner Europe B.V. (SEACE) Apr 2017 Air conditioner sales 101,114 Ov er 50% Y

Samsung Nanoradio Design Center (SNDC) Feb 2004 R&D 27,519 Ov er 50% N

Samsung Denmark Research Center ApS(SDRC) Sep 2012 R&D 25,297 Ov er 50% N

Samsung Cambridge Solution Centre Limited (SCSC) Sep 2012 R&D 146,786 Ov er 50% Y

Zhilabs, S.L. Nov 2008 Netw ork solution R&D and sales 6,745 Ov er 50% N

Foodient Ltd. Mar 2012 R&D 615 Ov er 50% N

Samsung Electronics Overseas B.V. (SEO) Jan 1997 Electronic goods sales 138,325 Ov er 50% Y

Samsung Electronics Rus Company LLC(SERC) Oct 2006 Electronic goods sales 1,460,307 Ov er 50% Y

Samsung Electronics Ukraine Company LLC(SEUC) Sep 2008 Electronic goods sales 283,864 Ov er 50% Y

Samsung R&D Institute Rus LLC(SRR) Nov 2011 R&D 58,600 Ov er 50% N

Samsung Electronics Central Eurasia LLP(SECE) Sep 2008 Electronic goods sales 179,203 Ov er 50% Y

Samsung Electronics Caucasus Co. Ltd. (SECC) Oct 2014 Marketing 2,059 Ov er 50% N

Samsung Electronics Rus Kaluga LLC(SERK) Jul 2007 TV production 1,259,052 Ov er 50% Y

AKG Acoustics GmbH Mar 1947 Audio product production and sales 388,887 Ov er 50% Y

AMX UK Limited Mar 1993 Audio product sales 0 Ov er 50% N

Arcam Limited Jul 2004 Holding company 0 Ov er 50% N

A&R Cambridge Limited Dec 1993 Audio product sales 0 Ov er 50% N

Harman Audio Iberia Espana Sociedad Limitada (Formerly Duran
Nov 2012 Audio product sales 253 Ov er 50% N
Audio Iberia Espana S.L.)
Harman Automotiv e UK Limited Oct 2012 Audio product production 1,040,947 Ov er 50% Y

Harman Becker Automotive Systems GmbH Jul 1990 Audio product R&D, production, and sales 4,024,489 Ov er 50% Y

Harman Becker Automotive Systems Italy S.R.L. Dec 2005 Audio product sales 1,308 Ov er 50% N

Harman Becker Automotive Systems Manufacturing Kft Aug 1994 Audio product R&D and production 2,957,465 Ov er 50% Y

Harman Belgium SA Apr 1967 Audio product sales 2,786 Ov er 50% N

Harman Connected Services AB. Oct 1984 Connected service provider 23,739 Ov er 50% N

Harman Finland Oy Jul 1998 Connected service provider 2,194 Ov er 50% N

Sam sung Electronics Business Report 9 / 261

Harman Connected Services GmbH Dec 2005 Connected service provider 50,121 Ov er 50% N

Harman Connected Services Limited Dec 1992 Connected service provider 0 Ov er 50% N

Harman Connected Services Poland Sp.zoo Jun 2007 Connected service provider 10,263 Ov er 50% N

Harman Connected Services UK Ltd. Sep 2008 Connected service provider 67,264 Ov er 50% N

Harman Consumer Nederland B.V. Dec 1995 Audio product sales 447,732 Ov er 50% Y

Harman Deutschland GmbH Mar 1998 Audio product sales 16,296 Ov er 50% N

Harman Finance International GP S.a.r.l Apr 2015 Holding company 0 Ov er 50% N

Harman France SNC Nov 1995 Audio product sales 156,575 Ov er 50% Y

Harman Holding Gmbh & Co. KG Jun 2002 Management company 5,282,405 Ov er 50% Y

Harman Hungary Financing Ltd. Jun 2012 Financing company 43,454 Ov er 50% N

Harman Inc. & Co. KG Jun 2012 Holding company 4,148,456 Ov er 50% Y

Harman International Estonia OU May 2015 R&D 224 Ov er 50% N

Harman International Industries Limited Mar 1980 Audio product sales, etc. 241,193 Ov er 50% Y

Harman International Romania SRL Feb 2015 R&D 26,319 Ov er 50% N

Harman Finance International SCA Apr 2015 Financing company 471,168 Ov er 50% Y

Harman International s.r.o Feb 2015 Audio product production 20 Ov er 50% N

Harman Management GmbH Apr 2002 Holding company 0 Ov er 50% N

Harman Professional Kft Dec 2014 Audio product R&D and production 97,517 Ov er 50% Y

Martin Manufacturing (UK) Ltd May 1985 Audio product production 0 Ov er 50% N

Harman Professional Denmark ApS Jul 1987 Audio product R&D and sales 165,264 Ov er 50% Y

Red Bend Softw are Ltd. Aug 2004 Softw are design 0 Ov er 50% N

Red Bend Softw are SAS Oct 2002 Softw are design 8,088 Ov er 50% N

Studer Professional Audio GmbH Nov 2003 Audio product R&D and sales 27,928 Ov er 50% N

Harman Connected Services OOO Nov 1998 Connected service provider 13,875 Ov er 50% N

Harman RUS CIS LLC Aug 2011 Audio product sales 135,093 Ov er 50% Y

Samsung Electronics West Africa Ltd. (SEWA) Mar 2010 Marketing 32,923 Ov er 50% N

Samsung Electronics East Africa Ltd. (SEEA) Dec 2011 Marketing 26,929 Ov er 50% N

Samsung Gulf Electronics Co.,, Ltd. (SGE) May 1995 Electronic goods sales 1,288,180 Ov er 50% Y

Samsung Electronics Saudi Arabia Ltd. (SESAR) Nov 2019 Electronic goods sales 23,055 Ov er 50% N

Samsung Electronics Egypt S.A.E(SEEG) Jul 2012 Electronic goods production and sales 642,091 Ov er 50% Y

Samsung Electronics Israel Ltd. (SEIL) Sep 2012 Marketing 17,993 Ov er 50% N

Samsung Electronics Tunisia S.A.R.L(SETN) Sep 2012 Marketing 4,553 Ov er 50% N

Samsung Electronics Pakistan (Private) Ltd. (SEPAK) Nov 2012 Marketing 2,913 Ov er 50% N

Samsung Electronics South Africa (Pty) Ltd. (SSA) Jun 1994 Electronic goods sales 522,382 Ov er 50% Y

Samsung Electronics South Africa Production (pty) Ltd. (SSAP) Jul 2014 TV and monitor production 81,784 Ov er 50% Y

Samsung Electronics Turkey (SETK) Dec 1984 Electronic goods sales 566,676 Ov er 50% Y

Samsung Semiconductor Israel R&D Center, Ltd. (SIRC) Oct 2007 R&D 78,746 Ov er 50% Y

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Samsung Electronics Levant Co.,, Ltd. (SELV) Jul 2009 Electronic goods sales 484,098 Ov er 50% Y

Samsung Electronics Maghreb Arab (SEMAG) Nov 2009 Electronic goods sales 240,938 Ov er 50% Y

Corephotonics Ltd. Jan 2012 R&D 11,884 Ov er 50% N

Global Sy mphony Technology Group Private Ltd. Jan 2002 Holding company 42,327 Ov er 50% N

Harman Connected Services Morocco Apr 2012 Connected service provider 2,353 Ov er 50% N

Harman Industries Holdings Mauritius Ltd. Oct 2009 Holding company 85,666 Ov er 50% Y

Red Bend Ltd. Feb 1998 Audio product production 89,221 Ov er 50% Y

Samsung Japan Corporation (SJC) Dec 1975 Semiconductor and display panel sales 1,218,011 Ov er 50% Y

Samsung R&D Institute Japan Co., Ltd. (SRJ) Aug 1992 R&D 161,026 Ov er 50% Y

Samsung Electronics Japan Co.,, Ltd. (SEJ) Sep 2008 Electronic goods sales 976,240 Ov er 50% Y

Samsung Electronics Display (M) Sdn. Bhd. (SDMA) Mar 1995 Electronic goods production 25,824 Ov er 50% N

Samsung Electronics (M) Sdn. Bhd. (SEMA) Sep 1989 Home appliance production 189,418 Ov er 50% Y

Samsung Vina Electronics Co.,, Ltd. (SAVINA) Jan 1995 Electronic goods sales 292,458 Ov er 50% Y

Samsung Asia Priv ate Ltd. (SAPL) Jul 2006 Electronic goods sales 9,137,262 Ov er 50% Y

Samsung India Electronics Priv ate Ltd. (SIEL) Aug 1995 Electronic goods production and sales 7,042,872 Ov er 50% Y
Samsung R&D Institute India-Bangalore Priv ate Limited (SRI-
May 2005 R&D 383,411 Ov er 50% Y
Bangalore)
Samsung Nepal Services Pvt, Ltd (SNSL) Nov 2017 Serv ices 297 Ov er 50% N

Samsung Display Noida Private Limited (SDN) Jul 2019 Display panel production 5,276 Ov er 50% N

Samsung Electronics Australia Pty. Ltd. (SEAU) Nov 1987 Electronic goods sales 468,812 Ov er 50% Y

Samsung Electronics New Zealand Limited (SENZ) Sep 2013 Electronic goods sales 104,271 Ov er 50% Y

PT Samsung Electronics Indonesia (SEIN) Aug 1991 Electronic goods production and sales 1,014,085 Ov er 50% Y

PT Samsung Telecommunications Indonesia (STIN) Mar 2003 Electronic goods sales and services 1,075 Ov er 50% N

Thai Samsung Electronics Co.,, Ltd. (TSE) Oct 1988 Electronic goods production and sales 2,912,731 Ov er 50% Y

Laos Samsung Electronics Sole Co.,, Ltd (LSE) Sep 2016 Marketing 774 Ov er 50% N

Samsung Electronics Philippines Corporation (SEPCO) Mar 1996 Electronic goods sales 285,358 Ov er 50% Y

Samsung Display Vietnam Co.,, Ltd. (SDV) Jul 2014 Display panel production 7,267,124 Ov er 50% Y

Samsung Malaysia Electronics (SME) Sdn. Bhd. (SME) May 2003 Electronic goods sales 412,503 Ov er 50% Y

Samsung R&D Institute Bangladesh Limited (SRBD) Aug 2010 R&D 12,224 Ov er 50% N

Samsung Electronics Vietnam Co.,, Ltd. (SEV) Mar 2008 Electronic goods production 12,367,857 Ov er 50% Y

Samsung Electronics Vietnam THAINGUYEN Co.,, Ltd. (SEVT) Mar 2013 Telecom product production 13,847,934 Ov er 50% Y

Samsung Electronics HCMC CE Complex Co., Ltd. (SEHC) Feb 2015 Electronic goods production and sales 2,305,587 Ov er 50% Y

Harman Connected Services Corp. India Pvt. Ltd. Apr 2002 Connected service provider 356,371 Ov er 50% Y

Harman International (India) Priv ate Limited Jan 2009 Audio product R&D and sales 239,982 Ov er 50% Y

Harman International Industries PTY, Ltd. Dec 2014 Holding company 0 Ov er 50% N

Harman International Japan Co., Ltd. Jun 1991 Audio product R&D and sales 86,606 Ov er 50% Y

Harman Singapore Pte. Ltd. Aug 2007 Audio product sales 12,806 Ov er 50% N

Martin Professional Pte. Ltd. Jun 1995 Audio product sales 0 Ov er 50% N

Sam sung Electronics Business Report 11 / 261

Samsung Display Dongguan Co.,, Ltd. (SDD) Nov 2001 Display panel production 1,795,077 Ov er 50% Y

Samsung Display TianJin Co.,, Ltd. (SDT) Jun 2004 Display panel production 1,285,173 Ov er 50% Y

Samsung Electronics Hong Kong Co.,, Ltd. (SEHK) Sep 1988 Electronic goods sales 1,173,330 Ov er 50% Y

Suzhou Samsung Electronics Co.,, Ltd. (SSEC) Apr 1995 Home appliance production 524,526 Ov er 50% Y

Samsung Suzhou Electronics Export Co.,, Ltd. (SSEC-E) Apr 1995 Home appliance production 456,052 Ov er 50% Y

Samsung (CHINA) Inv estment Co.,, Ltd. (SCIC) Mar 1996 Electronic goods sales 14,637,222 Ov er 50% Y
Samsung Mobile R&D Center, China-Guangzhou (SRC-
Jan 2010 R&D 84,371 Ov er 50% Y
Guangzhou)
Samsung Tianjin Mobile Development Center (SRC-Tianjin) Aug 2010 R&D 15,889 Ov er 50% N

Samsung R&D Institute China-Shenzhen (SRC-Shenzhen) Mar 2013 R&D 29,785 Ov er 50% N

Samsung Electronics Suzhou Semiconductor Co.,, Ltd. (SESS) Dec 1994 Semiconductor processing 1,094,799 Ov er 50% Y

SEMES (XIAN) Co.,, Ltd. Jul 2013 Semiconductor equipment 1,760 Ov er 50% N

Samsung Electronics Huizhou Co.,, Ltd. (SEHZ) Dec 1992 Electronic goods production 1,364,967 Ov er 50% Y

Tianjin Samsung Electronics Co.,, Ltd. (TSEC) Apr 1993 TV and monitor production 615,753 Ov er 50% Y

Samsung Electronics Taiw an Co.,, Ltd. (SET) Nov 1994 Electronic goods sales 1,186,764 Ov er 50% Y

Beijing Samsung Telecom R&D Center (SRC-Beijing) Sep 2000 R&D 127,668 Ov er 50% Y

Tianjin Samsung Telecom Technology Co.,, Ltd. (TSTC) Mar 2001 Telecom product production 579,435 Ov er 50% Y

Shanghai Samsung Semiconductor Co.,, Ltd. (SSS) Oct 2001 Semiconductor and display panel sales 5,880,616 Ov er 50% Y

Samsung Electronics Suzhou Computer Co.,, Ltd. (SESC) Sep 2002 Electronic goods production 995,499 Ov er 50% Y

Samsung Suzhou Module Co.,, Ltd. (SSM) Sep 2002 Display panel production 1,069,463 Ov er 50% Y

Samsung Suzhou LCD Co.,, Ltd. (SSL) Jul 2011 Display panel production 1,808,262 Ov er 50% Y
Shenzhen Samsung Electronics Telecommunication Co.,, Ltd.
Feb 2002 Telecom product production 41,077 Ov er 50% N
(SSET)
Samsung Semiconductor (China) R&D Co.,, Ltd. (SSCR) Apr 2003 R&D 45,272 Ov er 50% N

Samsung Electronics China R&D Center (SRC-Nanjing) May 2004 R&D 65,312 Ov er 50% N

Samsung (China) Semic onductor Co.,, Ltd. (SCS) Sep 2012 Semiconductor production 12,370,070 Ov er 50% Y

Samsung Semiconductor Xian Co.,, Ltd. (SSCX) Apr 2016 Semiconductor and display panel sales 2,091,092 Ov er 50% Y

Tianjin Samsung LED Co.,, Ltd. (TSLED) May 2009 LED production 478,477 Ov er 50% Y

Harman (China) Technologies Co., Ltd. Mar 2011 Audio product production 157,446 Ov er 50% Y

Harman (Suzhou) Audio and Infotainment Sy stems Co., Ltd. Mar 2013 Audio product sales 7,918 Ov er 50% N

Harman Automotiv e Electronic Systems (Suzhou) Co., Ltd Sep 2006 Audio product R&D and production 253,125 Ov er 50% Y

Harman Commercial (Shanghai) Co., Ltd. Oct 2010 Audio product sales 943 Ov er 50% N

Harman Connected Services Solutions (Chengdu) Co., Ltd. Aug 2007 Connected service provider 17,274 Ov er 50% N

Harman Holding Limited May 2007 Audio product sales 501,276 Ov er 50% Y

Harman International (China) Holdings Co., Ltd Jun 2009 Audio product R&D and sales 531,409 Ov er 50% Y

Harman Technology (Shenzhen) Co., Ltd. Sep 2004 Audio product R&D and sales 46,032 Ov er 50% N

Samsung Display Apr 2012 Display panel production and sales 46,543,974 Ov er 50% Y

SU Materials Aug 2011 Display panel component production 32,160 Ov er 50% N

STECO Jun 1995 Semiconductor component production 169,173 Ov er 50% Y

Sam sung Electronics Business Report 12 / 261

 SEMES Jan 1993 Semiconductor/FPD manufacturing equipment 1,335,871 Ov er 50% Y

Samsung Electronics Service Oct 1998 Electronics goods repair services 445,898 Ov er 50% Y

Samsung Electronics Service CS Oct 2018 Customer management services 19,624 Ov er 50% N

Samsung Electronics Sales Jul 1996 Electronic goods sales 1,061,489 Ov er 50% Y

Samsung Electronics Logitech Apr 1998 Total logistics services 218,240 Ov er 50% Y

Samsung Medison Jul 1985 Medical equipment 361,483 Ov er 50% Y

Mirero Sy stem Jan 1994 Semiconductor software 27,232 Ov er 50% N

De facto
Dow oo Insy s Mar 2010 Display panel component production 26,129 N
Control
GF Co., Ltd. Oct 2015 Display panel component production 3,718 Ov er 50% N

Harman Korea Jan 2005 Softw are 18,542 Ov er 50% N

SVIC #21 Venture Capital Union Nov 2011 Venture firm and new technology investments 95,135 Ov er 50% Y

SVIC #22 Venture Capital Union Nov 2011 Venture firm and new technology investments 119,689 Ov er 50% Y

SVIC #26 Venture Capital Union Nov 2014 Venture firm and new technology investments 134,421 Ov er 50% Y

SVIC #27 Venture Capital Union Sep 2014 Venture firm and new technology investments 42,486 Ov er 50% N

SVIC #28 Venture Capital Union Feb 2015 Venture firm and new technology investments 322,277 Ov er 50% Y

SVIC #29 Venture Capital Union Apr 2015 Venture firm and new technology investments 57,285 Ov er 50% N

SVIC #32 Venture Capital Union Aug 2016 Venture firm and new technology investments 227,750 Ov er 50% Y

SVIC #33 Venture Capital Union Nov 2016 Venture firm and new technology investments 188,559 Ov er 50% Y

SVIC #37 Venture Capital Union Nov 2017 Venture firm and new technology investments 23,454 Ov er 50% N

SVIC #40 Venture Capital Union Jun 2018 Venture firm and new technology investments 14,581 Ov er 50% N

SVIC #42 Venture Capital Union Nov 2018 Venture firm and new technology investments 4,939 Ov er 50% N

SVIC #43 Venture Capital Union Dec 2018 Venture firm and new technology investments 2,632 Ov er 50% N

SVIC #45 Venture Capital Union May 2019 Venture firm and new technology investments 19,097 Ov er 50% N

SVIC #48 Venture Capital Union Dec 2019 Venture firm and new technology investments 51,038 Ov er 50% N

Priv ate Equity Fund for Semiconductor Growth Mar 2017 Semiconductor investments 75,397 Ov er 50% Y

Note: Companies with over KRW 75 billion in total assets as of December 31, 2019 are classified as major subsidiaries.
See『II. Businesses Overview』for additional information about major business segments.

Sam sung Electronics Business Report 13 / 261

(Changes in subsidiaries)

Europe/
Americas Asia China Domestic Total Increase Decrease
MEA/CIS

Dec 31,
44 53 23 29 20 169
2016

[Americas: 25]
Samsung Electronics Home Appliances America, LLC
Kngine, Inc.
AMX Holding Corporation
AMX LLC
Harman Becker Automotive Systems, Inc.
Harman Connected Services Inc.
Harman Connected Services Engineering Corp.
Harman Connected Services Holding Corp.
Harman Connected Services South America S.R.L.
Harman da Amazonia Industria Electronica e Partic ipacoes
Ltda.
Harman de Mex ico S. de R.L. de C.V.
Harman do Brasil Industria Electronic a e Partic ipacoes
Ltda.
Harman Financial Group, LLC
Harman International Industries Canada Ltd.
Harman International Industries, Inc.
Harman International Mex ico S de RL de CV
Harman Inv estment Group, LLC
[Americas: 6]
Harman KG Holding, LLC
Samsung Receiv ables Corporation
Harman Professional, Inc.
Tow erSec Inc.
Red Bend Softw are Inc.
Kngine, Inc.
S1NN USA, Inc.
PrinterOn Inc.
Southern Vision Sy stems, Inc
PrinterOn America Corporation
Tow erSec Inc.
Simpress Comercio, Locacao e Servicos S.A.
Triple Play Integration LLC
[Europe/CIS: 6]
China Materialia New Materials 2016 Limited Partnership
Samsung Electronics Rus LLC
[Europe/CIS/MEA: 62]
Samsung Electronics Ukraine LLC
Samsung Electronics Air Conditioner Europe B.V.
Surfkitchen Limited
Aditi Technologies Europe GmbH
AMX LLC (Russia)
AKG Acoustics GmbH
Dec 31, Martin Professional Ltd.
63 109 38 38 22 270 AMX GmbH
2017 PrinterOn Europe Limited
AMX UK Limited
[Asia: 2]
Duran Audio B.V.
VFX Sy stems PTY Ltd.
Duran Audio Iberia Espana S.L.
I.P.S.G. International Product Solution Group
Endeleo Limited
FTY. Ltd
Harman Automotiv e UK Limited
[China: 3]
Harman Becker Automotive Systems GmbH
Samsung Electronics (Shandong) Digital
Harman Becker Automotive Systems Italy S.R.L.
Printing Co., Ltd.
Harman Becker Automotive Systems Manufacturing Kft
Tianjin Samsung Opto-Electronics Co., Ltd.
Harman Belgium SA
Martin Trading Zhuhai Ltd.
Harman Connected Services AB.
[Domestic: 2]
Harman Connected Services Finland OY
SVIC #20 Venture Capital Union
Harman Connected Services GmbH
S-Printing Solution
Harman Connected Services Limited
Harman Connected Services Poland Sp.zoo
Harman Connected Services UK Ltd.
Harman Consumer Division Nordic A/S
Harman Consumer Finland OY
Harman Consumer Nederland B.V.
Harman Deutschland GmbH
Harman Finance International GP S.a.r.l
Harman France SNC
Harman Holding Gmbh & Co. KG
Harman Hungary Financing Ltd.
Harman Inc. & Co. KG
Harman International Estonia OU
Harman International Industries Limited
Harman International Romania SRL
Harman Finance International SCA
Harman International s.r.o
Harman International SNC
Harman Management GmbH
Harman Professional Kft

Sam sung Electronics Business Report 14 / 261

 Inspiration Matters Limited
Knight Image Limited
Martin Manufacturing (UK) Ltd
Harman Professional Denmark ApS
Harman Professional France SAS.
Harman Professional Germany GmbH
Martin Professional Ltd.
R&D International BVBA
Red Bend Softw are Ltd.
Red Bend Softw are SAS France,.
Studer Professional Audio GmbH
Surfkitchen Limited
AMX LLC (Russia)
Harman Connected Services OOO
Harman RUS CIS LLC
Broadsense Ltd.
Global Sy mphony Technology Group Private Ltd.
Harman Connected Services Morocco
Harman Industries Holdings Mauritius Ltd.
iOnRoad Ltd.
iOnRoad Technologies Ltd.
Red Bend Ltd.
Tow erSec Ltd.
Innoetics E.P.E.
ARCAM Ltd
A&R Cambridge Ltd
[Asia: 17]
AMX Products And Solutions Priv ate Limited
Harman Connected Services Technologies Pvt. Ltd.
Harman Connected Services Corp. India Pvt. Ltd.
Harman Connected Services Japan Co. Ltd.
Harman International (India) Priv ate Limited
Harman International Industries PTY, Ltd.
Harman International Japan Co. Ltd.
Harman International Singapore Pte. Ltd.
Harman Malay sia Sdn. Bhd.
Harman Professional Singapore Pte. Ltd
I.P.S.G. International Product Solution Group PTY. Ltd.
INSP India Softw are Dev elopment Pvt. Ltd.
Martin Professional Pte. Ltd.
Red Bend Softw are KK
Studer Japan, Ltd.
VFX Sy stems PTY Ltd.
Samsung Nepal Services Pvt, Ltd
[China: 12]
Harman (China) Technologies Co. Ltd.
Harman (Suzhou) Audio and Infotainment Sy stems Co. Ltd.
Harman Automotiv e Electronic Systems (Suzhou) Co. Ltd
Harman Commercial (Shanghai) Co. Ltd.
Harman Connected Services (Beijing) Solutions Co. Ltd.
Harman Connected Services (Chengdu) Solutions Co. Ltd.
Harman Connected Services Taiwan Inc.
Harman Holding Limited
Harman International (China) Holdings Co. Ltd
Harman Automotiv e Infotech (Dalian) Co. Ltd
Harman Technology (Shenzhen) Co. Ltd.
Martin Trading Zhuhai Ltd.
[Domestic: 4]
Priv ate Equity Fund for semiconductor growth
Harman International Korea
Red Bend Softw are Korea
SVIC #37 Venture Capital Union
[Americas: 8]
Nex usDX, Inc.
[Americas: 1] S1NN USA, Inc.
Zhilabs Inc. Samsung Pay, Inc.
[Europe/CIS: 1] Harman Connected Services Holding Corp.
Zhilabs, S.L. AMX LLC
Dec 31,
56 100 35 36 25 252 [Domestic: 4] AMX Holding Corporation
2018
SVIC #40 Venture Capital Union Southern Vision Sy stems, Inc
SVIC #42 Venture Capital Union Triple Play Integration LLC
SVIC #43 Venture Capital Union [Europe/CIS: 10]
Samsung Electronics Service CS Joy ent Ltd.
Aditi Technologies Europe GmbH
AMX GmbH

Sam sung Electronics Business Report 15 / 261

 Harman Professional Germany GmbH
Endeleo Limited
Harman Consumer Finland OY
Harman Consumer Division Nordic ApS
Inspiration Matters Limited
Knight Image Limited
R&D International BVBA
[Asia: 3]
Harman Malay sia Sdn. Bhd.
Harman Connected Servic es Technologies Pv t.
Ltd.
INSP India Softw are Dev elopment Pvt. Ltd.
[China: 2]
Harman Connected Services Taiwan Inc.
Harman Automotiv e InfoTech (Dalian) Co., Ltd.
[Domestic: 1]
SVIC #23 Venture Capital Union
[Americas: 2]
Harman Inv estment Group, LLC
Red Bend Softw are Inc.
[Europe/CIS/MEA: 9]
Samsung France Research Center SARL(SFRC)
Innoetics E.P.E.
Duran Audio B.V.
Harman International SNC
[Europe/CIS/MEA: 3] Harman Professional France SAS
Foodient Ltd. Broadsense Ltd.
Corephotonics Ltd. iOnRoad Ltd
Saudi Arabia Ltd. (SESAR) iOnRoad Technologies Ltd
[Asia: 1] Tow ersec Ltd.
Dec 31
54 94 30 34 28 240 Samsung Display Noida Private Limited(SDN) [Asia: 6]
2019
[Domestic: 4] Harman Connected Services Japan Co., Ltd.
SVIC #45 Venture Capital Union Red Bend Softw are Japan Co., Ltd.
SVIC #48 Venture Capital Union Studer Japan Ltd.
Dow oo Insy s Harman International Singapore Pte. Ltd.
GF Co., Ltd. AMX Products And Solutions Priv ate Limited
Samsung Medison India Private Ltd.(SMIN)
[China: 2]
Samsung Electronics (Beijing) Serv ic e Company
Limited (SBSC)
Harman Connected Services Solutions (Beijing)
Co., Ltd.
[Domestic: 1]
Red Bend Softw are Inc.
Note: MEA = Middle East and Africa; CIS = Commonwealth of Independent States.

Sam sung Electronics Business Report 16 / 261

H. Credit rating
SEC’s credit rating is assessed by two external credit ratings agencies. As of December 31, 2019, SEC’s credit ratings
were Aa3 and stable investment outlook as rated by Moody’s (US); and AA- and stable investment outlook as rated by
S&P (US).

Date Securities Ratings Credit rating agency Rating range Note

Feb 2017 Corporate bond A1 Moody’s (Aaa–C)
Jul 2017 Corporate bond AA- S&P (AAA–D)
Aug 2017 Corporate bond A1 Moody’s (Aaa–C)
Feb 2018 Corporate bond A1 Moody’s (Aaa–C)
Jun 2018 Corporate bond Aa3 Moody’s (Aaa–C) Annual
Jul 2018 Corporate bond AA- S&P (AAA–D) review
Nov 2018 Corporate bond Aa3 Moody’s (Aaa–C)
May 2019 Corporate bond Aa3 Moody’s (Aaa–C)
Jul 2019 Corporate bond AA- S&P (AAA–D)
Aug 2019 Corporate bond Aa3 Moody’s (Aaa–C)
See『III. Financial Affairs: Other Financial Information (List of issued debt securities)』for more information on corporate bonds

[Credit ratings definitions]

Moody’s Definition S&P Definition

Superior ability to repay debt Extremely strong ability to meet financial
Aaa AAA
obligations; lowest level of credit risk commitments; highest rating
High ability to repay debt obligations; Very strong capacity to meet financial
Aa1/Aa2/Aa3 AA+/AA/AA-
very low credit risk commitments
Investment Strong capacity to meet financial
Upper-medium ability to repay debt
grade A1/A2/A3 A+/A/A- commitments; susceptible to adverse
obligations; low credit risk
effects of changes in economic conditions
Medium ability to repay debt Adequate capacity to meet financial
Baa1/Baa2/Baa3 obligations; moderate credit risk, BBB+/BBB/BBB- commitments; relatively more susceptible to
speculative factors adverse economic conditions
Major ongoing uncertainties; exposure to
adverse business, financial, or economic
Ba1/Ba2/Ba3 Speculative; substantial credit risk BB+/BB/BB-
conditions can impair ability to meet
financial commitments
More vulnerable to nonpayment than those
rated BB; has capacity to meet financial
B1/B2/B3 Speculative; high credit risk B+/B/B- commitments but adverse financial or
economic conditions are likely to impair
ability to continue doing so
Vulnerable to nonpayment; dependent upon
Speculative
Caa Speculative; very high credit risk CCC favorable business, financial, and economic
grade
conditions
Highly speculative; likelihood of being Highly vulnerable to nonpayment; default
Ca in or near default; some prospect for CC has not yet occurred but expected to be a
recovery of principal and interest virtual certainty
Highly vulnerable to nonpayment; obligation
Typically in default; little prospect for
C C is expected to have lower ultimate recovery
recovery of principal or interest
vis-à-vis higher rated obligations
In default or in breach of imputed promises,
D upon the filing of a bankruptcy petition or
the taking of a similar action

Sam sung Electronics Business Report 17 / 261

2. Company history
(The information disclosed below outlines major changes to the Company such as asset transfers, M&As, and security offerings)

Jan 13, 1969 Samsung Electronics Manufacturing Incorporated

Jun 11, 1975 Listed on the Korea Stock Exchange
Feb 28, 1984 Renamed as Samsung Electronics
Nov 1, 1988 Merged with Samsung Semiconductor and Communications
Apr 1, 2012 Spun off the LCD division
Jan 1, 2015 SEA merged with Samsung Telecommunications America LLC (“STA”)
Feb 23, 2015 SEA acquired shares of LoopPay (100%)
Jan 28, 2016 Sold shares of Samsung Card (37.5%)
Jun 24, 2016 SEA acquired shares of Joyent (100%)
Sep 7, 2016 SEA acquired shares of Dacor (100%)
Oct 7, 2016 SEA acquired shares of Viv Labs (100%)
Nov 1, 2016 Spun-off printing solutions business (established S-Printing Solution Co., Ltd.)
Mar 10, 2017 SEA acquired shares of Harman International Industries, Inc. (100%)
Nov 1, 2017 Sold Printing Solution business
May 17, 2018 Sold shares of NexusDx, Inc.
Jan 28, 2019 SEBN acquired shares of Corephotonics
Jun 1, 2019 Acquired PLP (panel level package) business from Samsung Electro-Mechanics

(Company location changes)

The Company’s head office is located in 129, Samsung-ro, Yeongtong-gu, Suwon, Gyeonggi-do. There was no
change in the Company’s head office location during the reporting period.

(Important changes in management executives)

On March 13, 2015, Executive Director Oh-hyun Kwon and Independent Directors Han-joong Kim and Byeong-gi
Lee were reappointed at the AGM.

On March 11, 2016, Executive Directors Boo-keun Yoon, Jong-kyun Shin and Sang-hoon Lee were reappointed at the
AGM. Of the three Independent Executive Directors with expiring terms (In-ho Lee, Kwang-soo Song and Eun-mee
Kim), Eun-mee Kim retired, and In-ho Lee, Kwang-soo Song were reappointed. Jae-wan Bahk was newly appointed
as an Independent Director.

On October 27, 2016, Jae-yong Lee was newly appointed as Executive Director at the Extraordinary General Meeting
of Shareholders and Executive Director Sang-hoon Lee resigned.

Following the annual meeting on March 23, 2018, Sang-hoon Lee, Ki-nam Kim, Hyun-suk Kim, and Dong-jin Koh
were newly appointed as Executive Directors and Jeong Kim, Sun-uk Kim, Byung-gook Park were newly appointed
as Independent Directors. In addition, Executive Director Oh-hyun Kwon and Independent Directors Han-joong Kim
and Byeong-gi Lee retired as terms expired. Executive Directors Boo-keun Yoon and Jong-kyun Shin resigned.

On March 23, 2018, Executive Directors Ki-nam Kim, Hyun-suk Kim, and Dong-jin Koh were newly appointed as
CEOs.

On March 20, 2019, Independent Director Jae-wan Bahk was reappointed and Independent Directors Han-jo Kim and
Curie Ahn were newly appointed. Independent Directors In-ho Lee and Kwang-soo Song retired.

On October 26, 2019, Jae-yong Lee retired from his position of Executive Director.

On February 14, 2020, Sang-hoon Lee resigned from his position of Executive Director; and on March 18, 2020 at
the AGM, Jong-hee Han and Yoon-ho Choi were appointed as Executive Directors.

Sam sung Electronics Business Report 18 / 261

As of the reporting date on March 30, 2020, SEC’s Board consisted of five Executive Directors (Ki-nam Kim, Hyun-
suk Kim, Dong-jin Koh, Jong-hee Han, and Yoon-ho Choi) and six Independent Directors (Jae-wan Bahk, Sun-uk
Kim, Byung-gook Park, Jeong Kim, Curie Ahn, and Han-jo Kim).

(Changes in the major shareholder)

N/A

(Company name changes)

In 2015, Samsung Electronics KZ and Central Asia LLP, Samsung Electronics Morocco SARLAU, Samsung Display Bac
Ninh, Samsung Network R&D Center China-Shenzhen, Samsung Display Suzhou Co., Ltd., and LoopPay, Inc. changed
their names to Samsung Electronics Central Eurasia LLP, Samsung Electronics Maghreb Arab, Samsung Display Vietnam
Co., Ltd., Samsung R&D Institute China-Shenzhen, Samsung Suzhou Module Co., Ltd., and Samsung Pay, Inc.,
respectively.

In 2016, YESCO Electronics LLC changed its name to Prismview, LLC.

In 2017, Quietside LLC, NewNet Communication Technologies (Canada), Inc., Martin Professional ApS, Martin
Professional France SAS, Martin Professional GmbH, and Harman Neusoft Automotive Infotech (Dalian) Co. Ltd
changed their names to Samsung HVAC America, LLC, SigMast Communications Inc., Harman Professional Denmark
ApS, Harman Professional France SAS, Harman Professional Germany GmbH, and Harman Automotive InfoTech
(Dalian) Co., Ltd., respectively.

In 2018, Harman Consumer Division Nordic A/S, Harman Connected Services Finland OY, and Harman Professional
Singapore Pte. Ltd changed their names to Harman Consumer Division Nordic ApS, Harman Finland Oy, and
Harman Singapore Pte. Ltd., respectively.

In 2019, Samsung Electronics Greece S.A. changed its name to Samsung Electronics Greece S.M.S.A.

(Mergers and acquisitions)

In 2015, Samsung Electronics America, Inc. (SEA) merged with Samsung Telecommunications America LLC (STA)
and acquired LoopPay shares (100%). SEC sold shares of Samsung Electronics Hainan Fiberoptics (100%); and
Samsung Electronica da Amazonia Ltda. (SEDA) acquired shares of Simpress Comercio, Locacao e Servicos S.A.
(100%).

In 2016, SEA acquired shares in Joyent, Inc. (100%), Dacor Holdings, Inc. (100%), and Viv Labs, Inc. (100%). In the
same year, SEC spun off its printing solution business and established S-Printing Solution Co., Ltd., and then
completed the sale of the printing solutions business in 2017.

In 2017, SEA acquired full ownership of Harman International Industries, Inc.

In 2018, SEA merged with Samsung Pay, Inc.; and Harman Connected Services, Inc. merged with Harman Connected
Services Holding Corp. In the same year, SEA sold its full 100% stake in NexusDX, Inc.

In 2019, SEC acquired a PLP business from affiliate Samsung Electro-Mechanics. In the same year, Harman Becker
Automotive Systems Manufacturing Kft merged with Duran Audio B.V.; and Samsung (China) Investment Co., Ltd.
(SCIC) merged with Samsung Electronics (Beijing) Service Company Limited (SBSC).

(Important changes in the Company’s business)

N/A

Sam sung Electronics Business Report 19 / 261

(Changes in organizational structure)
In December 2015, the LED business was reorganized as a team unit; in November 2016, the Company spun off its
printing solutions business and established S-Printing Solution Co., Ltd., and then completed the sale of the printing
solutions business in November 2017; in June 2017, the System LSI business was divided into Foundry and System
LSI businesses.

[As of December 2015]

Before After
CE Division (Visual Display, Digital Appliances, Printing CE Division (Visual Display, Digital Appliances, Printing
Solutions, Medical Devices) Solutions, Medical Devices)
Business
organization IM Division (Mobile, Network) IM Division (Mobile, Network)

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

Korea, North America, Latin America, Europe, CIS, Southwest Korea, North America, Latin America, Europe, CIS, Southwest
Regional Asia, Southeast Asia, China, Middle East, Africa Asia, Southeast Asia, China, Middle East, Africa
headquarters Americas (DS), Europe (DS), China (DS), Southeast Asia (DS), Americas (DS), Europe (DS), China (DS), Southeast Asia (DS),
Japan (DS) Japan (DS)

[As of December 2016]

Before After
CE Division (Visual Display, Digital Appliances, Printing CE Division (Visual Display, Digital Appliances,
Solutions, Medical Devices) Medical Devices)
Business
organization IM Division (Mobile, Network) IM Division (Mobile, Network)

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

Korea, North America, Latin America, Europe, CIS, Southwest Korea, North America, Latin America, Europe, CIS,
Regional Asia, Southeast Asia, China, Middle East, Africa Southwest Asia, Southeast Asia, China, Middle East, Africa
headquarters Americas (DS), Europe (DS), China (DS), Southeast Asia (DS), Americas (DS), Europe (DS), China (DS), Southeast Asia
Japan (DS) (DS), Japan (DS)

[As of June 2017]

Before After
CE Division (Visual Display, Digital Appliances, CE Division (Visual Display, Digital Appliances,
Medical Devices) Medical Devices)
Business IM Division (Mobile, Network) IM Division (Mobile, Network)
organization
DS Division (Memory, SYS.LSI, DP) DS Division (Memory, SYS.LSI, Foundry, DP)

- Harman Division
Korea, North America, Latin America, Europe, CIS, Southwest Korea, North America, Latin America, Europe, CIS,
Regional Asia, Southeast Asia, China, Middle East, Africa Southwest Asia, Southeast Asia, China, Middle East, Africa
headquarters Americas (DS), Europe (DS), China (DS), Southeast Asia (DS), Americas (DS), Europe (DS), China (DS), Southeast Asia
Japan (DS) (DS), Japan (DS)

Note: From the first quarter of 2018, the Medical Device Business is excluded from the CE Division.

Sam sung Electronics Business Report 20 / 261

3. Changes in paid-in capital
No changes were reported during the past five consecutive years.

4. Stock information
A. Total number of shares
As of December 31, 2019 on a post-split basis, SEC’s issued shares on a cumulative basis totaled 7,780,466,850
registered common shares and 1,194,671,350 registered, non-voting preferred shares; and the Company had canceled
1,810,684,300 common shares and 371,784,650 preferred shares in accordance with resolutions of the Board of
Directors (“the Board”). As of the same date, issued shares and shares outstanding totaled 5,969,782,550 for common
shares and 822,886,700 for preferred shares.

[As of Dec 31, 2019]

Type of stocks
Classification Note
Common Preferred Total

I. Authorized shares 20,000,000,000 5,000,000,000 25,000,000,000 -

II. Issued shares (cumulative) 7,780,466,850 1,194,671,350 8,975,138,200 -

III. Decrease in number of shares (cumulative) 1,810,684,300 371,784,650 2,182,468,950 -

1. Capital reduction - - - -

2. Cancellation 1,810,684,300 371,784,650 2,182,468,950 Treasury shares

3. Redemption - - - -

4. Other - - - -

IV. Issued shares as of Dec 31, 2019 (II-III) 5,969,782,550 822,886,700 6,792,669,250 -

V. Treasury shares as of Dec 31, 2019 - - - -

VI. Outstanding shares as of Dec 31, 2019 (IV-V) 5,969,782,550 822,886,700 6,792,669,250 -
Note: Post-split basis. SEC conducted a 50:1 stock split effective fro m May 3, 2018, lowering par value of every co mmon and
preferred share from KRW 5,000 to KRW 100.

Sam sung Electronics Business Report 21 / 261

B. Treasury shares
In 2018, SEC completed the cancellation of all shares held in treasury as a part of its shareholder return policy.

[As of December 31, 2019] (Shares)

Change
Acquisition method Share type Period-start Period-end
Acquisition Disposal Cancellation
(+) (-) (-)
Common - - - - -
Intra-market direct acquisition
(within dividend related capital gains limit)
Preferred - - - - -

Common - - - - -
Total
Preferred - - - - -

C. Types of registered stock

SEC has two types of registered equity securities: 1) common stock; 2) non-voting and non-cumulative preferred stock.

The shareholders of preferred stock are entitled to dividend payments of an additional 1% of par value compared to
shareholders of common stock.

As of December 31, 2019, the number of issued non-cumulative and non-voting preferred stock totaled 822,886,700.

Sam sung Electronics Business Report 22 / 261

5. Voting shares
SEC has 5,969,782,550 issued shares of common stock, which represents 23.9% of the total number of authorized shares
of 25 billion (25,000,000,000). There are 822,886,700 issued shares of preferred stock with no voting rights and
598,026,259 shares of common stock with limited voting rights under relevant laws. Thus, the total number of shares with
full voting rights is 5,371,756,291.

[As of December 31, 2019]

Classification Share type Number of shares Note

Common 5,969,782,550 -
Number of issued shares (A)
Preferred 822,886,700 -

Shares with no voting rights (B) Common - -

Shares with no voting rights according

Preferred 822,886,700 -
to Articles of Incorporation (C)
Restricted by the Monopoly Regulation and Fair Trade Act:
Common 596,959,200 508,157,148 shares held by Samsung Life Insurance &
Shares with limited voting rights 88,802,052 shares held by Samsung Fire & Marine Insurance
under relevant laws (D)
Restricted by the Insurance Business Act: Shares held by
Common 1,067,059
Samsung Life Insurance in certain special accounts

Common 5,371,756,291 -
Shares with voting rights
(F = A - B - C - D)
Preferred - -

Note: Pursuant to Korea’s Monopoly Regulation and Fair Trade Act, shareholders with limited voting rights (D) can exercise
certain rights on some shares 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.

Sam sung Electronics Business Report 23 / 261

6. Dividends
As a part of the Company’s shareholder return policy, a portion of the profits have been returned to shareholders by way
of dividends, etc. The Company carefully considers strategic investments for sustainable growth, business performance,
and cash flows in determining the scale of cash dividends and other return activities.

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

Classification 2019 2018 2017

Par value per share* (KRW) 100 100 100

Net profit** ( KRW mil) 21,505,054 43,890,877 41,344,569

EPS*** (KRW) 3,166 6,461 5,997

Total cash dividend (KRW mil) 9,619,243 9,619,243 5,826,302

Total stock dividend (KRW mil) - - -

Dividend payout ratio (% ) 44.7 21.9 14.1

Common 2.6 3.7 1.7

Cash dividend yield (% )
Preferred 3.1 4.5 2.1

Common - - -
Stock dividend yield (% )
Preferred - - -

Common 1,416 1,416 850

Cash dividend per share (KRW)
Preferred 1,417 1,417 851

Common - - -
Stock dividend per share (share)
Preferred - - -
Note: Dividends in each of the first three quarters of 2018 and 2019 were KRW 2,404,605 million or KRW 354 per share.
*SEC conducted a 50:1 stock split effective from May 3, 2018, lowering par value of every common and preferred share from
KRW 5,000 to KRW 100. Information for 2017 is calculated on a post-split basis.
**Equity attributable to owners of the parent on a consolidated basis.
***Basic earnings per common share on a consolidated basis. For further information relating to the calculation of basic EPS,
see Earnings Per Share in『3. Note to Consolidated Financial Statements』in『Ⅲ. Financial Affairs』.

Sam sung Electronics Business Report 24 / 261

 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, DP, and Harman
• 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 240 subsidiaries across the world
responsible for sales and production. There are nine 9 regional headquarters for CE and IM Divisions, 5 regional
headquarters for the DS Division, and Harman’s subsidiaries.

The Company’s business divisions are organized in a two-pronged framework consisting of set (brand products) and
component businesses. The set business is comprised of the CE and IM Divisions, and the component business consists of
the Semiconductor and DP Business Units. The CE Division is responsible for the production and sales of TVs, monitors,
refrigerators, and washing machines; and the IM Division focuses on the production and sales of HHPs, which includes
smartphones, as well as network systems, and computers. The DS Division comprises the Semiconductor business which
manufactures and sells DRAMs, mobile APs, and other semiconductor-related products, and the DP Business, which
manufactures and sells OLED and TFT-LCD display panels for mobile devices, TVs, monitors, and laptops. The Harman
Division (acquired in 2017) manufactures and sells products such as Head units, infotainment systems, telematics, and
speakers.

<Major products, by business division>

Business division Major products

CE Division TVs, monitors, refrigerators, washing machines, air conditioners, etc.
IM Division HHPs, network systems, computers, etc.

DS Semiconductor DRAM, NAND Flash, Mobile AP, etc.

Division DP OLED smartphone panels, LCD TV panels, monitor panels, etc.
Harman Division Head units, infotainment systems, telematics, speakers, etc.

Sam sung Electronics Business Report 25 / 261

The Company maintains its corporate headquarters and 28 consolidated subsidiaries in Korea.

The Company’s corporate headquarters is divided along Divisions and/or Businesses, which are situated in Suwon, Gumi,
Giheung, Hwasung, Pyeongtaek, Gwangju, etc. The Company’s 28 unlisted domestic subsidiaries include Samsung
Display for display panel production, Samsung Electronics Sales for domestic retail sales, Samsung Electronics Service
for after-sales services, and Samsung Electronics Logitech for logistics.

We have 212 overseas subsidiaries for product manufacturing, sales, and R&D, with locations in the US, Europe, Asia,
and Africa.

We have 54 subsidiaries in North America, including SEA (New Jersey; responsible for the sales of set products including
TV and HHPs), SII (California; manufacturing TVs), SAS (Texas; manufacturing semiconductor products), and Harman
(Connecticut, Automotive component) in the US.

In Europe, we operate 66 subsidiaries. These include SEUK (UK), SEF (France), SEG (Germany), SEI (Italy) for sales of
set products; SESK (Slovakia) and SEH (Hungary) for manufacturing TVs, and SEPM (Poland) for manufacturing home
appliances such as refrigerators.

We have 30 subsidiaries in Asia (excluding China), including SAPL (Singapore), SEAU (Australia), SEPCO (Philippines),
and SME (Malaysia), which are responsible for regional sales. In addition, we operate numerous production sites
including SIEL (India) for HHPs among other products, SEV and SEVT (Vietnam) for HHPs, SEHC (Vietnam) for TVs,
and SDV (Vietnam) for DPs.

We operate 34 subsidiaries in China, including SCIC (Beijing) and SEHK (Hong Kong) for the sales of set products in
those regions; and SSS (Shanghai) and SSCX (Xian) for semiconductors and DPs sales. Production sites for set products
include SESC (Suzhou) and semiconductor production facilities are located in SCS (Xian) among others.

SEC also has 28 production and sales subsidiaries combined in CIS, the Middle East, and the Africa.

Sam sung Electronics Business Report 26 / 261

[CE Division]

 Industry overview
Since the first public demonstration of a true television system in 1926 and later mass production of color TVs,
technological developments have led to the creation of products such as the Trinitron CRT (1967) and flat CRT (1996). As
the penetration rate in major countries reached over 90%, the CRT TV business stagnated. The industry regained strong
growth momentum following the launch of flat panel TVs (“FPTVs”) like LCDs and PDPs, especially with the expansion
of digital broadcasting (UK/US 1998~). FPTVs replaced CRT sets on the back of their enhanced design, picture quality,
etc., combined with a sharp decline in prices.

The year 2010 saw the launch of 3D TVs, and the rise of internet video services along with increased consumer interest in
smart devices from 2011 to 2012 led to the birth of the smart TV market. The evolution continued with the launches of
UHD TVs, innovative products boasting significantly enhanced resolution and picture quality, a new form factor with
Curved TVs, followed by the commercialization of Quantum Dot TVs.

 Market condition
The market trend toward large, high-resolution screens is accelerating due to intensified competition between
manufacturers. Accordingly, market shares of major players with high-quality products and brand power are rising. In
addition, as consumer demand for high-resolution screens and slim designs increase, LED TVs, with eco-friendly LED
back light units—which increase brightness, contrast, and energy efficiency—have become the mainstream in the market.

In 2017, overall TV demand was 215.1 million units. By product, LCD-TVs sold 210 million units, for a market share of
over 99%. In 2018, overall TV demand increased 2.9% compared to the previous year, hovering around 221 million units.

Based on rising demand for high-definition, large-sized products in 2019, UHD TV demand increased 20% year-on-year
to 111.91 million units to account for about 53% of total TV demand. The market for ultra large-sized TVs (75-inch and
larger) grew approximately 88% year-on-year on the back of our efforts to create demand with our innovative products. In
2019, QLED demand increased about 105% year-on-year based on our dedication to improving product quality and on
rising demand for premium products (Source: Omdia, formerly IHS, 4Q19 data).

In 2020, market players will continue to strive for innovations in picture quality, sound, and form factor to create demand
for premium TVs. Competition in the 8K TV market, where the Company holds leadership, is expected to be especially
fierce as the market expands.

< Market share of the CE Division’s main product >

Product 2019 2018 2017

TV 30.9% 29.0% 26.5%

Note: Global market share in revenue; data from research firm Omdia, formerly IHS).

 Business condition
We have maintained the top position in the overall TV market for fourteen straight years since claiming the number one
spot in 2006.

In 2017, the Company created a new category by releasing QLED TVs, offering accurate color expression regardless of
brightness and allowing viewers to enjoy unsurpassed image quality. Furthermore, collaborating with renowned artists and
galleries, we introduced The Frame TV, a product that exhibits famous art or pictures as well as personal images,
transforming any living space into an aesthetically pleasing gallery. Moreover, our concept of ‘Screen Everywhere’
unlocks placement opportunities for displays.

Sam sung Electronics Business Report 27 / 261

In 2018, our strategic focus to strengthen premium leadership consisted of two pillars: QLED and ultra-large screens. We
aimed to elevate the viewer experience to another level by improving image quality even further by increasing contrast
ratio through our local dimming technology, allowing users to conveniently enjoy a wide variety of content on TV, and
improving connectivity via AI or IoT technologies.

In 2019, we solidified our leadership in the premium market with the introduction of the world’s first 8K TV to the global
market. Our QLED lineup, boasting improved picture quality, was well received by experts and consumers alike,
providing customers with even more choices via a wide range of sizes, from mid-sized to ultra-large. Also, our UHD
offerings expanded to the ultra-large segment, which contributed to our solid earnings.

In 2020, we will push forward with our premium TV strategy: for QLED, we will build on our leadership and expand
dominance in the premium market with ultra-large TVs based on the competitiveness of our substantially improved QLED
products and our broadened 8K lineup. Also, our UHD models for the mass market will come equipped with significant
improvements in in design and features, differentiating themselves from those of competitors.

[IM Division]

 Industry overview
The mobile phone industry started with first generation analogue phones in the early 1980s and evolved to second
generation digital ones, using technology such as CDMA and GSM, where users could send voice and text messages.
Third generation mobile communication standards such as WCDMA allowed users to send photos and videos. Today,
fourth generation LTE mobile communication technology with ultra-high-speed data transmission is becoming
commonplace and is used in 76% of phones sold in 2019 (Strategy Analytics, November 2019). Fifth generation mobile
communication services, which will lead innovation alongside the fourth industrial revolution, were successfully
commercialized in Korea and the US and are expanding to Europe and Australia. Sales of 5G smart phones are projected
to reach 160 million units in 2020 (Strategy Analytics, November 2019).

The smartphone industry has grown significantly since 2007. In 2019, the smartphone portion of total HHPs is expected to
reach 77%. The feature phone portion of the total remained flat at 23% led by demand markets in developing nations
(Strategy Analytics, December 2019). In 2020, the penetration rate of smartphones will reach 51%, slightly increasing
from 49% in 2019 (Strategy Analytics, December 2019).

Also, as the smartphone market shows high saturation, the importance of competitive software and services—such as
applications, UX, mobile payments, AI, and AR—is rising alongside that of competitive hardware, which includes high-
performance APs, AMOLED displays, multiple cameras, sensors, waterproof & dustproof features, and biometric
recognition.

 Market Condition
Smartphone shipments in 2020 are projected to decrease year-on-year to 1.37 billion units from 1.42 billion units due to
market saturation and a longer replacement cycle attributed to a lack of differentiated features (Strategy Analytics,
December 2019). Meanwhile, shipments of tablets are expected to remain flat at 160 million units as smartphones adopt
larger screens and replacement decreases (Strategy Analytics, November 2019).

< Market share of the IM Division’s main product >

Product 2019 2018 2017

HHP 17.5% 17.4% 19.5%
Note: Global market share in sales volume; data from research firm Strategy Analytics.

Sam sung Electronics Business Report 28 / 261

 Business condition

SEC has always been at forefront of the HHP market, and in particular, maintained leadership in the global market for
smartphones since 2011. To solidify our status in the overall mobile market, we are striving to improve our current
products—including tablets, wearables, and accessories—while growing businesses in areas with high potential, such as
the service, online, and B2B sectors.

For smartphones, we are establishing optimal portfolios for each region, accounting for varying market conditions and
offering a wide lineup ranging from mass-market to premium devices. We have been providing premium smartphones—
namely the S and Note series—and delivering differentiated user experiences that can meet customer needs via our
cutting-edge technology that includes large-screen AMOLED displays, Edge displays, Infinity Displays, triple cameras,
the S-pen, water- and dust-proofing, high-speed and wireless charging, wireless power sharing, and ultrasonic fingerprint-
on-display (FoD) among others. This year, we are securing early leadership in the 5G market with the release of the
world’s first 5G smartphone while also creating a new market through form factor innovations enabled by foldable
displays.

To respond to an ever-changing market as well as customer needs, we are strengthening product competitiveness by
introducing innovative features such as triple cameras, quad cameras, rotating cameras, infinity displays, and 5G even to
mid-range-and-below products.

We provide our smartphone users with a wider and more convenient experience via our other products, which include
premium tablets (Galaxy Tab S), wearable devices (smart watch, Bluetooth earphone), and accessories (wireless quick
charging stand).

Not content to dwell on our achievements in hardware, we have been focusing on delivering new and useful services like
Samsung Pay, Samsung Health, Bixby, and SmartThings. The new and improved Bixby provides users with another way
to increase convenience and personalize information and services.

To deliver a consistent and high-quality Multi-Device Experience, we are adding Bixby features to a suite of products,
including TVs, refrigerators, air conditioners, etc., and also strengthening strategic partnerships to expand our ecosystem.

As always, we will continue to invest in any field that has growth potential, with current targets including but not limited
to 5G, MEC, AI, IoT, cloud, AR, blockchain, and mobile B2B. Utilizing our superior R&D capabilities, we will keep
enhancing consumer experiences and expanding our leadership in the global arena.

[DS Division]
- Semiconductor
 Industry overview
In general, our Semiconductor business is divided into Memory (storage) and System LSI (logical processing). Memory
semiconductor is divided into RAM products (random access memory), ones that can be both written on and read) and
ROM products (read only memory).

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. ROM is nonvolatile and holds memory even when power is removed; it is
used in input/output system, IC cards, and more. For System LSI products, there are many categories for various
applications, with CPUs (central processing units) for PCs, mobile devices, and servers forming the largest market.
System LSI products are used in myriad areas, such as household electronics, networks, and games. The Company
manufactures mobile APs for smartphones and tablets, image sensors, and other customized products.

Growth in the semiconductor market is expected to be negatively impacted by slowing demand for mobile devices as the
smartphone market slows and the tablet market contracts. The memory market, however, is projected to enjoy continuous
growth, fueled by increasing shipments of high-density information storage devices. Also, we expect demand to grow
rapidly in newly emerging areas such as IoT and automotive applications. Supply and demand volatility is expected to
decrease as demand diversifies.

Sam sung Electronics Business Report 29 / 261

 Market condition
In the DRAM market, inventory corrections in 2019, mainly by data centers, was behind weak demand from some
customers, but a recovery is expected in 2020. Although external factors such as the US-China trade conflict tightened
export regulations add to uncertainty, we plan to expand our market share by gaining an early edge in the market for high-
density memory for new CPUs and by addressing expansion of the 5G smartphone market in a timely manner.

Overall NAND demand has been bolstered by rising demand for SSDs in the growing cloud services market and a trend
toward high density in the PC market alongside demand linked with the expansion of 5G and upcoming launches of new
game consoles. Declines in ASP due to a supply glut are expected to soften.

< Market share of the Semiconductor Business’ main product >

Product 2019 2018 2017

DRAM 43.7% 43.9% 45.8%
Note: Global market share in revenue; data from research firm DRAMeXchange.

 Business condition
In 2019, the Company developed the 3rd Generation 10nm-class DRAM—a world’s first—and is increasing supply of
HBM2, the second generation of high bandwidth memory, which supports AI and supercomputing. In V-NAND, where
we have technological advantages, we showcased 6th generation V-NAND and aim to adopt them in high-performance
SSDs to establish their foothold in the premium market.
We aim to expand the memory market by launching Smart SSD solutions for big data processing, 2nd generation Z-SSD,
and 4-bit server SSD, which boasts higher efficiency and reliability.

As the memory market is expected to keep growing, the Company will expand into differentiated products based on
advanced processes and address each market segment with diverse product lineups to maintain its position as the market’s
No.1 memory maker.

Growth in the System LSI business is being driven mainly by mobile products, including smartphones and tablet PCs, and
we are preparing for growth in new markets in IoT, wearables, and automotive applications. For SoCs, the mobile market
is likely to struggle due to lengthening smartphone replacement cycles, while AI, automotive, and 5G markets are
expected to grow.

For AP modem SoCs, we provide not only high-performance products, but also low-end to mid-range products. We are
leading the 5G market, backed by our development of the world’s first multi-mode modem that supports 2G, 3G, 4G, and
5G networks.

In the first half of 2019, the Foundry Business introduced the world’s first 7-nano EUV products. Building on this success,
the Company in 2020 aims to lead the market with timely launches of next-generation processes, such as 4- and 5-nano
EUV chips as well as 3-nano GAA chips. Moreover, we are also expanding our business by diversifying our production
portfolio, which already includes CISs, DDIs, PMICs, and more.

- DP

 Industry overview
Display refers to screens in electronic devices. Active matrix technology is most commonly used in displays, including
OLED (organic light emitting diode) panels and TFT-LCD (thin film transistor liquid crystal display).

OLED panels use organic materials, which offer sharp contrast and color, high color gamut, and fast response rates. Such
differentiating features provide advantages for use in smartphones where display features (multimedia contents, online
experience, etc.) are important, and as a result, OLED adoption in the smartphone market is growing rapidly.

Sam sung Electronics Business Report 30 / 261

The market had raised concerns over the production of high-resolution, durable panels, but we overcame various
technological challenges and advanced the business. OLED panels make up for the shortcomings of LCD panels, and they
can be adopted in other applications such as foldable, rollable, and automotive. Growth of the OLED market is widely
expected to keep accelerating.

A TFT-LCD panel is a liquid crystal based display that features a thinner and lighter profile while offering high resolution.
It has a wide range of potential applications in devices of all sizes and functionality, from portable mobile devices to
large-size TVs featuring bright, high-resolution images. The market for large-panel TFT-LCD grew rapidly as their use
moved from laptops initially to monitors and then to TVs. Recently however, high saturation has caused growth to slow.

 Market condition
For mobile OLED panels, adoption is projected to increase alongside expansion of the 5G smartphone market, however,
market uncertainties are expected to linger due to intensifying competition among panel businesses attributable to capacity
expansions within the industry.

In 2019, the market for smartphone display panels, our major product group, was 1.61 billion units, with TFT-LCD and
OLED totals at 1.12 billion and 0.48 billion units, respectively. In 2020, the market for smartphone OLED panels is
expected to reach around 0.61 billion units as OLED will become a mainstream product for smartphone applications
thanks to growth of the 5G smartphone market (Source: Omdia, formerly IHS; Small & Medium Displays; Smartphone
OLED panels; January 2020).

For large, LCD panels, supply and demand are likely to remain imbalanced due to oversupply in the industry amid stunted
demand. Meanwhile, we expect stable growth in the premium market for ultra-high-definition, ultra-large TVs, and curved
and gaming monitors.

< Market share of the DP Business’s main product >

Product 2019 2018 2017

Smartphone panels 43.6% 47.6% 43.8%

Note: Global market share in revenue; data from research firm Omdia, formerly IHS.
Table shows market share for smartphone panels in revenue; large-panel market share was 9.0% for 2019.

 Business condition

The Company has continued to stay atop the mobile OLED market in terms of market share since it successfully
commercialized OLED products in 2007, marking a world’s first. We diversified our product group to include displays for
foldable products, tablets, watches, laptops, and automotive applications, solidifying our position as the top player in the
OLED display market.

With both flexible and rigid OLED, our optimal smartphone product portfolio ranges from mass-market to premium
devices; and we are recognized as having best-in-class technology through our introduction of products with differentiated
technologies and designs.

OLED panels are expected to be increasingly adopted backed by advantages such as low power consumption and ultra-
thin design and propelled by accelerated growth of 5G communications. We are committed to improving the performance
of OLED panels as well as expanding our customer base by leveraging our differentiated technologies and designs.
Furthermore, we will focus on securing foldable-related technologies to spur popularization of this emerging product area;
and we will also cooperate with a wide range of customers to help perfect our new products.

For the LCD large panel business, the industry is likely to remain in oversupply amid stagnant demand. We will continue
striving to enhance profitability by increasing our portion of value-added panels, which include products for ultra-high-
definition 8K TVs and ultra-large-sized TVs, and by expanding sales of premium products such as curved and gaming
monitors.

Sam sung Electronics Business Report 31 / 261

[Harman Division]

 Industry overview
In 2019, global automobile production, which is closely related to automotive component business, decreased by 5–7%
year-on-year, but is expected to increase 1–2% annually by 2021 (LMC Global Production Projection, December 2019).

In the automotive industry, demand for connectivity and entertainment systems has been rising in the past few years, and
we expect it to keep rising as automakers seek to stay at the forefront of technology, particularly with the dual trends of
autonomous vehicles and shared mobility shaping the industry.

The audio industry (eg, connected homes, headphones, smart audio, etc.) is projected to grow 4% annually for consumer
audio until 2023 (Futuresource, November 2019). The professional audio market grew around 5–6% annually over the
last five years (AVIXA, Futuresource, Global Info & Arizton, June 2019).

Technological innovations (particularly in the connected home and smart audio spaces) have been a driving force behind a
considerable hike in demand. We anticipate that this growth will continue as technology continues to advance amid a
growing global economy.

 Market condition
The automotive and professional/consumer audio markets are highly competitive and growing rapidly.

In the connected car industry, there are numerous companies—eg, Alpine, Aptiv, Continental, Mitsubishi, and
Panasonic—that are cooperating with automotive manufacturers. Competition is expected to remain fierce between
dominant players and new entrants as consumers expect car makers to deliver the latest technology, including autonomous
driving.

Car audio systems is another segment where several major players (eg, Bose, Pioneer, and Panasonic) are competing
fiercely, which is expected to drive technological advances as each player introduces unique sound-management solutions.

The consumer audio market is rather fragmented and a handful of companies (Amazon, Beats, Bose, Ultimate Ears, etc.)
are showing early signs of dominance. We expect competition to remain intense as new players try to make inroads, given
the saturated market for connected homes and smart speakers.

The professional audio market, led by QSC and Yamaha, is segmented by product and has seen the entrance of numerous
companies offering a wide range of products and applications. We expect competition to keep intensifying as connected
homes and smart speakers gain popularity and on the entrance of new players from other industries such as the service
sector.

< Market share of Harman Business’s main product >

Product 2019 2018 2017

Head units 24.8% 18.8% 25.4%

Note: Head unit refers to a separate product besides display audio, telematics, and backseat organizers.
Company estimates based on Omdia, formerly IHS, and LMC data.

 Business condition
Harman is focused on continuing its strong performance in the automotive and professional/consumer audio markets. To
attain this, it will continue to seek growth through innovation, M&A activities, and sales of its globally renowned brands.

Harman is positioned to stay atop the automotive market and plans to continue to leverage its wide variety of brands to
outfit vehicles ranging from mass-market thorough to luxury models, while also maintaining the quality that is
synonymous with Harman brands. Additionally, Harman’s relentless pursuit of innovation in the audio and connectivity
spaces will help ensure the development of thriving relationships with automakers.

Sam sung Electronics Business Report 32 / 261

Additionally, Harman has continued to develop its Connected Services business with industry leading OTA (Over the Air)
and software servicing products.

The same factors that Harman relies on within the automotive market will also be used in the professional/consumer audio
market. Having won three Grammy Awards and two Academy Awards, Harman’s brands have earned a strong reputation
amongst everyday consumers and audiophiles alike. New offerings in up-and-coming segments such as connected
wireless and smart audio continue to help bring in new consumers and further enhance brand reputation. Through these
and other efforts, the Company is confident that Harman will maintain its role as a preeminent player in all areas of its
business.

Sam sung Electronics Business Report 33 / 261

B. Financial Summary, by Division
(KRW 100 mil)
2019 2018 2017
Division Classification Portion of Portion of Portion of
Amount Amount Amount
corresponding total corresponding total corresponding total
Sales 995,925 18.8% 951,876 16.9% 1,020,430 18.2%

Internal 548,363 18.2% 530,802 16.6% 574,416 17.8%

CE Net 447,562 19.4% 421,074 17.3% 446,013 18.6%

Operating profit 26,063 9.4% 20,232 3.4% 18,020 3.4%

Total asset 673,754 13.4% 473,545 10.0% 453,014 10.0%

Sales 2,239,591 42.2% 2,148,844 38.2% 2,260,042 40.2%

Internal 1,166,930 38.8% 1,142,067 35.8% 1,193,358 37.0%

IM Net 1,072,662 46.6% 1,006,777 41.3% 1,066,683 44.5%

Operating profit 92,725 33.4% 101,720 17.3% 118,273 22.0%

Total asset 1,432,804 28.5% 1,243,340 26.2% 1,114,418 24.5%

Sales 1,237,668 23.3% 1,657,625 29.4% 1,418,200 25.2%

Internal 588,277 19.6% 794,715 24.9% 675,644 21.0%

Semi-
Net 649,391 28.2% 862,910 35.4% 742,556 31.0%
conductor
Operating profit 140,163 50.5% 445,739 75.7% 352,041 65.6%

Total asset 1,791,177 35.6% 1,515,782 31.9% 1,316,593 29.0%

Sales 669,088 12.6% 693,495 12.3% 721,087 12.8%

Internal 358,548 11.9% 368,844 11.6% 376,434 11.7%

DS DP Net 310,539 13.5% 324,650 13.3% 344,654 14.4%

Operating profit 15,813 5.7% 26,198 4.4% 53,984 10.1%

Total asset 642,264 12.8% 641,543 13.5% 698,544 15.4%

Sales 1,931,419 36.4% 2,395,650 42.6% 2,187,817 38.9%

Internal 976,239 32.5% 1,209,994 37.9% 1,106,142 34.3%

Total DS Net 955,180 41.5% 1,185,656 48.6% 1,081,675 45.1%

Operating profit 155,817 56.1% 465,164 79.0% 403,279 75.2%

Total asset 2,451,438 48.8% 2,425,593 51.1% 2,272,502 50.0%

Sales 117,498 2.2% 109,711 1.9% 91,718 1.6%

Internal 16,727 0.6% 21,274 0.7% 20,692 0.6%
Harman Net 100,771 4.4% 88,437 3.6% 71,026 3.0%
Operating profit 3,223 1.2% 1,617 0.3% 574 0.1%
Total asset 156,091 3.1% 150,599 3.2% 146,767 3.2%
Note: Sales for each business unit includes intersegment sales.
Financial information for Harman is consolidated after the date of acquisition in 2017.

Sam sung Electronics Business Report 34 / 261

By Division, CE reported net sales of KRW 44,756.2 billion (19.4% of total net sales) and IM reported net sales of KRW
107,266.2 billion (46.6%). DS contributed approximately 41.5% of net sales: KRW 64,939.1 billion (28.2%) by the
semiconductor sub-division and KRW 31,053.9 billion (13.5%) by the DP Business Unit. The Harman Division reported
net sales of KRW 10,077.1 billion (4.4%).

The CE Division accounted for 9.4% of cumulative operating profit with KRW 2,606.3 billion; the IM Division accounted
for 33.4% with KRW 9,272.5 billion; and the DS Division accounted for 56.1% with KRW 15,581.7 billion. The Harman
Division posted an operating profit of KRW 322.3 billion.

 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 and cannot be directly allocated are
allocated to each Division based on an allocation standard (expense-to-sales ratio, pre-tax profit, etc.).

2. Key products and service

A. Revenue
SEC is involved in production and sales of set products, including TVs, refrigerators, washers, air conditioners, HHPs,
computers, and components such as semiconductors and display panels. Harman is in charge of production and sales of
infotainment and telematics.

The Company’s net revenue by Division as of December 31, 2019 is as follows:

(KRW 100 mil)
Division Major products Net revenue Portion
CE TVs, monitors, refrigerators, washing machines, air conditioners, etc. 447,562 19.4%
IM HHPs, network systems, computers, etc. 1,072,662 46.6%
Semiconductor DRAM, NAND flash, mobile APs, etc. 649,391 28.2%
DS
DP OLED smartphone panels, LCD TV panels, monitor panels, etc. 310,539 13.5%
DS total 955,180 41.5%
Harman Head units, infotainment systems, telematics, speakers, etc. 100,771 4.4%
Others - -272,166 -11.9%
Total 2,304,009 100.0%
Note: Net revenue includes sales between Divisions.

In 2019, the CE Division’s revenue of KRW 44,756.2 billion accounted for 19.4% of the total net revenue; the IM
Division accounted for 46.6% with KRW 107,266.2 billion; and the DS Division accounted for 41.5% with KRW
95,518.0 billion. The Harman division accounted for 4.4% with KRW 10,077.1 billion.

☞ See 『5. Sales and distribution』 for sales by each product.

B. Average selling price changes

In 2019, the ASP of TVs decreased 8.3% and that of HHPs declined 0.4% year-on-year. The ASP of memory products and
head units dropped a respective 60% and 16.3% year-on-year, whereas display panel ASP remained flat compared to last
year.

Sam sung Electronics Business Report 35 / 261

3. Key production materials
A. Key production materials
(KRW 100 mil)
Division Item Specific usage Purchase price Portion Note (supplier)

Display panel Color picture signaler 31,797 15.7% AUO, BOE, etc.

CE Others 170,193 84.3%

Div ision total 201,990 100.0%

Camera module Mobile phone camera 62,572 17.5% Semco, Power Logics, etc.

Base band chip CPU 29,791 8.4% Qualcomm, Spreadtrum, etc.

IM Mobile display panel Color picture signaler 26,483 7.4% BOE, China Star Optoelectronics, etc.

Others 237,711 66.7%

Div ision total 356,557 100.0%

FPCA Circuit 22,369 9.6% BH, CU-Tech, etc.

Window Tempered glass 20,356 8.8% Biel, Lens, etc.

Wafer Semiconductor disk 18,960 8.2% SUMCO, GW etc.

DS POL Polarizer plate 14,236 6.1% Dongw oo Fine-Chem, Samsung SDI, etc.

Chemical Disk processing 12,628 5.4% Dongw oo Fine-Chem, etc.

Others 144,040 61.9%

Div ision Total 232,589 100.0%

Sy stem-on-chip Chips for v ehicles 4,678 24.9% Nv idia, Renesas, etc.

Automotiv e memory chip Chips for v ehicles 3,998 21.3% Av net, Microchip, etc.
Harman
Others 10,127 53.9%

Div ision total 18,803 100.0%

Div ision total 472 -

Total 810,411 -
Note: On a consolidated basis.
Semco and Samsung SDI are subsidiaries.

For the CE Division, key materials include display panels for TVs and monitors, which are supplied by AUO and other
companies. For the IM Division, key materials include camera modules, baseband chips and Display panels for mobile
devices, which are supplied by Semco, Qualcomm, BOE and others.
For the DS Division, key materials include FPCAs, windows, wafers, POL, and chemicals, with suppliers including BH,
Biel, SUMCO, Samsung SDI, and Dongwoo Fine-Chem.
For the Harman division, key materials include SoC (system-on-chip) products and memory products for in-vehicle
solutions, which are supplied by Nvidia, Avnet, etc.

Sam sung Electronics Business Report 36 / 261

B. Production material price trends
The price of TV and monitor display panels, which are the major production materials for the CE Division, declined
approximately 25% year-on-year. For the IM Division, compared to last year, the price of camera modules, base band
chips, and mobile display panels increased approximately 44%, 1%, and 26%, respectively. For the DS Division, the
FPCA price remained flat year-on-year, while the price of windows for tempered glass decreased about 3%. Prices of
wafers for semiconductor disks increased 12% year-on-year. The price of POL for polarizing plates decreased
approximately 17% compared to 2018. For the Harman division, the prices of memory for vehicles and SoC products
have decreased by about 10% and 4% respectively, compared to levels in the previous year.

4. Production and facilities

A. Production capacity, output, utilization rate
(Capacity) (1,000 units)

Capacity
Division Item
2019 2018 2017
CE TV 41,425 40,158 44,639
IM HHP 346,960 397,497 415,200
Memory 988,104,000 711,023,000 530,590,000
DS
Display panel 8,236 9,167 8,723
Harman Head units 7,921 5,238 5,483
Note: Production capacity for major product categories on a consolidated basis.
Financial information for Harman is consolidated after the date of acquisition in 2017.

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)
Harman’s production capacity for Head units is calculated as follows:
the number of production (assembly and test) cells for each customer/product (x) the average production capacity per hour
by production cell (x) the average operation hours per day (x) the days of operation

(Output) (1,000 units)

Output
Division Item
2019 2018 2017
CE TV 40,389 37,217 39,450
IM HHP 318,635 346,605 393,693
Memory 988,104,000 711,023,000 530,590,000
DS
Display panel 6,567 7,599 7,798
Harman Head units 6,459 3,906 4,221
Note: Global output for major product categories.
Financial information for Harman is consolidated after the date of acquisition in 2017.

Sam sung Electronics Business Report 37 / 261

In 2019, the CE Division’s output of TVs was 40,389 thousand units (major production sites: China, Mexico, Brazil, and
Hungary). The IM Division’s output of HHPs was 318,635 thousand units (major production sites: Korea, Vietnam, and
Brazil). The DS Division’s memory output (1GB equivalent) was 988,104 million (major production sites: Korea and
China). The DS Division’s output of display panels was 6,567 thousand units (major production sites: Korea, China). The
Harman Division’s head unit output was 6,459 thousand units.

(Utilization rate)
(1,000 units)
2019
Division Item Utilization rate
Production capacity Output
CE TV 41,425 40,389 97.5%
IM HHP 346,960 318,635 91.8%

In 2019, CE and IM utilization rates were calculated as actual output relative to production capacity. The utilization rates
were 97.5% for TVs and 91.8% for HHPs.

(Hours)

2019
Division Item Utilization rate
Potential production time Actual production time
Memory 70,080 70,080 100.0%
DS
Display Panel 70,080 70,080 100.0%

The DS Division operates memory and display panel production in three shifts (24 hours a day). Cumulative operating
days in 2019 including holidays were 365 days. The utilization rate was calculated as actual hours [365 days (x) number
of production lines (x) 24 hours] relative to production capacity.

(1,000 units)
2019
Division Item Utilization rate
Production capacity Output
Harman Head units 7,921 6,459 81.5%

In 2019, Harman’s utilization rate was 81.5% and was calculated as actual output relative to production capacity.

Sam sung Electronics Business Report 38 / 261

B. Production facilities and investment
(Key facilities for production and operation)
The Company’s operational activities include manufacturing, development, marketing, and sales in Korea–operations in
Suwon, Gumi, Giheung, Onyang, Gwangju, nine regional headquarters under the CE and IM Divisions, five under the DS
Division in North America, Europe, and China, and Harman’s subsidiaries.

[Operations]

Region Operations Location

Suwon Suwon

Seocho Seoul

Woomyeon Seoul

Giheung Yongin

Hwaseong Hwaseong

Pyeongtaek Pyeongtaek
Korea
(12)
Cheonan Cheonan

Onyang Asan

Asan Asan

Gumi1 Gumi

Gumi2 Gumi

Gwangju Gwangju

North America New Jersey, US

Europe London, UK

China Beijing, China

Southeast Asia Singapore, Singapore

Overseas
(CE and IM Divisions - nine Southwest Asia New Delhi, India
regional headquarters)
CIS Moscow, Russia

Middle East Dubai, UAE

Africa Johannesburg, Republic of South Africa

Latin America Sao Paolo, Brazil

Americas San Jose, US

Europe Eschborn, Germany

Overseas
(DS Division - five regional China Shanghai, China
headquarters)
Southeast Asia Singapore, Singapore

Japan Tokyo, Japan

Harman North America HQ Connecticut, US

Note: Harman’s Connected Car business is mainly based in the US (Novi, MI), and its Lifestyle Audio business is located in Germany
(Garching). Its Professional Solutions business operates mainly in the US (Northridge, CA), and Connected Services business is
based in US (Mountain View, CA).

Sam sung Electronics Business Report 39 / 261

The Company’s property, plant and equipment include land, buildings and structures, machinery and equipment, and
construction in progress. As of December 31, 2019, their total book value was KRW 119,825.5 billion, which is an
increase of KRW 4,408.8 billion from year-end 2018.

(KRW mil)
Buildings and Machinery and Under Other tangible
Classification Land Total
structures equipment construction assets

Book v alue 93,463 293,459 638,162 97,051 32,032 1,154,167

- Acquisition cost 93,463 450,338 2,064,079 97,051 86,651 2,791,582
Jan 1, 2019
- Accumulated depreciation (including accumulated
impairment loss) - -156,879 -1,425,917 - -54,619 -1,637,415

General acquisition and capital expenditure 1,443 17,603 104,882 144,909 11,364 280,201
Acquisition from business combination 23 215 3,811 75 53 4,177
Change Depreciation -311 -26,584 -226,649 - -12,194 -265,738
Disposal/discard/impairment -979 -2,875 -2,658 -6 -837 -7,355
Others * 4,107 22,878 3,951 -2,729 4,596 32,803
Book v alue 97,746 304,696 521,499 239,300 35,014 1,198,255
- Acquisition cost 98,283 488,394 2,114,160 239,300 100,621 3,040,758
Dec 31, 2019
- Accumulated depreciation
(including accumulated impairment loss) -537 -183,698 -1,592,661 - -65,607 -1,842,503

Note: Market value of major tangible assets is omitted as objective assessment is difficult.
*Includes effects of changes in accounting methods, FX rates, and government subsidies.

(Capex)
The Company’s capex in 2019 was KRW 26.9 trillion, which included upgrading production lines of the Semiconductor
and DP Businesses. In 2020, we will make flexible investments based on market conditions, whereas investment to
embrace mid- to long-term demand in emerging businesses, which include system semiconductors, display, AI, and 5G,
will proceed as planned.

[Capex, by division]
(KRW 100 mil)
Business Purpose Period Assets Investment

Semiconductor Establishment, addition, upgrade January–December 2019 Buildings, facilities 225,649

DP Establishment, addition, upgrade January–December 2019 Buildings, facilities 21,870

Other Establishment, addition, upgrade January–December 2019 Buildings, facilities 21,429

Total 268,948

Sam sung Electronics Business Report 40 / 261

5. Sales and distribution
A. Sales
In 2019, the Company recorded KRW 230,400.9 billion of total revenue, a decrease of 5.5% year-on-year. By Division,
when compared to the previous year, revenue of the CE Division, IM Division, and Harman Division increased a
respective 6.3%, 6.5%, and 13.9% while that of DS decreased by 19.4%.

(KRW 100 mil)

Division Sales types Product categories 2019 2018 2017

Goods, products, TVs, monitors, refrigerators, washing

CE 447,562 421,074 446,013
services, other machines, air conditioners, etc.

Goods, products,
IM HHPs, Network systems, computers, etc. 1,072,662 1,006,777 1,066,683
services, other

Goods, products,
Semiconductor DRAM, NAND flash, mobile APs, etc. 649,391 862,910 742,556
services, other

DS
Goods, products, OLED smartphone panels, LCD TV panels,
DP 310,539 324,650 344,654
services, other monitor panels, etc.

DS total 955,180 1,185,656 1,081,675

Goods, products, Head units, infotainment systems,
Harman 100,771 88,437 71,026
services, other telematics, speakers, etc.
Others Other revenue - -272,166 -264,230 -269,643

Total 2,304,009 2,437,714 2,395,754

Note: Includes sales between Divisions.
Financial information for Harman is consolidated after the date of acquisition in 2017.

(1) Sales, by major product (on a consolidated basis)

(KRW 100 mil)
Classification 2019 2018 2017
Image devices 261,775 252,939 275,154
Mobile devices 1,023,318 965,194 1,036,218

Memory 502,163 723,753 603,036

Display panels 310,539 324,650 344,654
Note: Includes sales between Divisions on a consolidated basis.

Sam sung Electronics Business Report 41 / 261

(2) Sales, by type
(KRW 100 mil)

Classification 2019 2018 2017

Products 2,188,604 2,380,547 2,368,198

Services and other sales 115,405 57,167 27,556
Total 2,304,009 2,437,714 2,395,754
Note: Other sales consists of royalty income, etc.

(3) Sales, by region (on a separate basis)

(KRW 100 mil)

Classification 2019 2018 2017

Domestic 203,009 168,213 165,684

Americas 437,434 464,124 488,864
Europe 191,970 192,783 189,464
Asia and Africa 329,705 330,903 317,661
China 385,611 547,796 457,477
Total 1,547,729 1,703,819 1,619,150
Note: Domestic consumption and exports on a separate basis.

B. Sales channels
(1) Domestic

Seller Sales channel Consumer

Exclusive agencies

Manufacturer and Distributor (general merchandise stores, discount stores, department stores, home-shopping, internet, etc.)
Consumer
buyer Telecommunication service provider (SKT, KT, LG U+)
B2B and online channels

(2) Overseas

Seller Sales channel Consumer

Retailer
Dealer Retailer
Regional sales office
Distributor Dealer Retailer

Production Telecommunication service provider, automotive OEM

Consumer
subsidiaries Retailer
Regional sales
Regional distribution office Dealer Retailer
office
Distributor Dealer Retailer
Direct sales

(3) Sales ratio (global), by Channel

Channel Wholesale Retail Special/direct sales Others

Ratio 20% 28% 46% 6%

Sam sung Electronics Business Report 42 / 261

C. Sales methods and conditions
(1) Domestic

Classification Channel Collection Incidental expense sharing

Credit agreement (cash, 30 day credit) Case specific cost sharing as determined by mutual
Exclusive Retailer
(credit applied within 100% of collateral) agreement
General merchandise store,
Case specific cost sharing as determined by mutual
Distributor discount store, department store, Case specific and contract specific
agreement
home shopping, internet, etc.
Telecommunication
SKT, KT, LG U+ Case specific and contract specific N/A
service provider
B2B and online
Corporate clients, etc. Case specific and contract specific N/A
channels

(2) Overseas

Classification Channel Collection Incidental expense sharing

Case specific cost sharing as determined by mutual

Retailer Retail store Case specific and contract specific
agreement
General merchandise store, Case specific cost sharing as determined by mutual
Dealer Case specific and contract specific
discount store, department store agreement
Case specific cost sharing as determined by mutual
Distributor Direct sales to local distributors Case specific and contract specific
agreement

B2B Corporate clients, etc. Case specific and contract specific N/A

D. Sales strategy
- Expand market leadership based on premium products such as smart devices
- Provide differentiated value to customers through brand, products, and services
- Strengthen marketing activities to boost demand from customer/market

E. Major customers
In 2019, major customers included Apple, BestBuy, Deutsche Telekom, Huawei, and Verizon (in alphabetical order). Sales
to our five major customers accounted for approximately 13% of total sales.

6. Long-term contracts
As of December 31, 2019, there were no long-term contracts that have a significant impact on the Company’s financial
statement.

Sam sung Electronics Business Report 43 / 261

7. Financial risk management
A. Financial risk management policy
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 closely monitors each risk factor and operates corresponding
financial risk management policies and program. The Company’s use of derivative instruments for hedging specific risks
are included in this program.

The finance team mainly carries out the Company’s financial risk management. After implementing the global financial
risk management policies, the finance team periodically measures, evaluates, and hedges financial risks.

The Company manages global financial risks by operating local finance centers at each major region (United States,
United Kingdom, Singapore, China, Brazil, and Russia).

The Company’s assets that are under financial risk management are comprised of cash and cash equivalents, short-term
financial instruments, financial assets at amortized cost, trade receivables and other. The Company’s liabilities under
financial risk management are comprised of trade payables, borrowings, and other.

B. Major financial risks

(1) Market risk

(Foreign exchange risk)

The Company operates internationally and is exposed to foreign exchange risks as it conducts transactions in currencies
other than the functional currency of each entity. Major currencies that are exposed to foreign exchange risk include USD,
EUR, JPY, INR, and other.

The Company focuses on minimizing the impact of foreign exchange fluctuation by maintaining the equal amount of
assets and liabilities denominated in each foreign currency, irrespective of foreign exchange fluctuation considerations. To
prevent exchange position, the Company’s foreign exchange management policy requires normal business transactions,
including import and export, as well as financing transactions such as depositing and borrowing, to be in local currency or
for the cash-in currency to be matched up with the cash-out currency.

In order to effectively manage foreign exchange risk, the Company prohibits foreign exchange transactions, with the
exception of transactions made for hedging purposes, and periodically monitors and evaluates exchange risk.

As of December 31, 2019 and 2018, when currency rates change by 5%, the impact on profit or loss (before income tax
effects) arising from financial assets and liabilities denominated in foreign currencies other than functional currency are as
follows:

Dec 31, 2019 Dec 31, 2018

(KRW mil) Increase Decrease Increase Decrease

USD 163,062 (163,062) 344,488 (344,488)

EUR 127,507 (127,507) (4,381) 4,381
JPY (23,062) 23,062 (13,001) 13,001
INR 64,153 (64,153) 92,176 (92,176)

Sam sung Electronics Business Report 44 / 261

(Price risk)

The Company’s investment portfolio consists of direct and indirect investments in equity securities classified as financial
assets at fair value through other comprehensive income and financial assets at fair value through profit or loss, which is in
line with the Company’s strategy.

As of December 31, 2019, a price fluctuation in relation to marketable equity instruments (listed shares) by 1% would
result in changes in other comprehensive income (before income tax effects) of ￦ 41,055 million (December 31, 2018:
￦ 28,846 million), and in profit or loss (before income tax effects) of ￦ 1,630 million (December 31, 2018: ￦ 101
million).

(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 consolidated 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 Company’s position with regard to
interest rate risk exposure is mainly driven by its floating interest rate debt obligations and interest-bearing deposits. The
Company implemented policies and operates to minimize uncertainty arising from changes in interest rates and financial
expenses.

The Company maintains minimum external borrowings by facilitating cash pooling systems on a regional and global basis
to limit its exposure to the interest rate risk. The Company manages exposed interest rate risk via periodic monitoring and
handling risk factors on a timely basis.

As of December 31, 2019, changes in profit or loss (before income tax effects) as a result of a 1%p change in interest rates
on floating interest rate financial assets and liabilities are presented below:

Dec 31, 2019 Dec 31, 2018

(KRW mil) Increase Decrease Increase Decrease

Financial assets 70,183 (70,183) 64,704 (64,704)

Financial liabilities (2,118) 2,118 (91) 91
Net effect 68,065 (68,065) 64,613 (64,613)

(2) 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 sets and manages the client’s and counterparty’s credit limit, and evaluates their
financial credit rating on a periodic basis based on the client’s and counterparty’s financial conditions, default history and
other important factors. Adequate insurance coverage is maintained for trade receivables related to 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 Company transacts only with
banks which have strong international credit rating (S&P A and above), and all new transactions with financial institutions
with no prior transaction history are approved, managed and monitored by the Company’s finance team and the local
finance center. The Company generally enters into a financial agreement with no restrictions, such as debt ratio covenants,
provision of collateral, and loans or borrowings repayment. The Company requires separate approval for contracts with
restrictions.

As of December 31, 2019 and 2018, the Company estimates that its maximum exposure to credit risk is the carrying
amount of its financial assets, net of impairment losses.

Sam sung Electronics Business Report 45 / 261

(3) Liquidity risk
Due to the nature of the Company’s business that requires making large investments, maintaining adequate level of
liquidity risk is crucial. The Company maintains and manages adequate level of liquidity by periodically forecasting its
capital balances, estimating required cash, managing income and expenses, and other.

The Company manages its liquidity risk in advance by periodically forecasting projected cash flows. The Company
facilitates and utilizes a globally integrated finance structure including regional Cash Pooling and other to provide
liquidity support. Also, when abnormalities are identified, the Company maintains a liquidity management process that
provides additional financial support in cooperation with the local finance center. The Cash Pooling program allows
sharing of surplus funds among entities and contributes to minimizing liquidity risk and strengthening the Company’s
competitive position by reducing capital operation expenses and financial expenses.

In addition, the Company mitigates liquidity risk by contracting with financial institutions with respect to foreign trade
finance and other, and by providing payment guarantees to subsidiaries to secure required credit limit. For large scale
facility investments, liquidity risk is minimized by utilizing internal reserves and long-term borrowings according to the
capital injection schedule.

As of December 31, 2019 and 2018, the following table is an undiscounted cash flow analysis for financial liabilities
according to their remaining contractual maturity.

Dec 31, 2019

Less than 4–6 7–12 1–5 More than
(KRW mil) 3 months months months years 5 years

Financial liabilities \ 41,041,672 \ 655,089 \ 1,603,676 \ 4,241,964 \ 1,381,109

Dec 31, 2018

Less than 4–6 7–12 1–5 More than
(KRW mil) 3 months months months years 5 years

Financial liabilities \ 39,445,090 \ 628,582 \ 742,744 \ 3,547,498 \ 663,594

The table above shows the Company’s financial liabilities based on the remaining period at the consolidated statement of
financial position date until the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows.

The Company’s derivative financial liabilities of ￦ 63,496 million (December 31, 2018: ￦ 28,543 million) has been
included within the less than 3 months bucket. These are the Company’s trading portfolio of derivative instruments, on a
net settlement term, of which the contractual maturities are not essential for understanding its cash flows. These contracts
are managed on a net fair value basis rather than by maturity date. Net settled derivatives consist of forwards on currency
rates used by the Company to manage the exchange rate profile.

Derivatives that are settled on a gross basis by delivery of the underlying item, including derivatives for hedging, will be
settled within the next 31 months from the end of the reporting period. These derivative are not included in the table
above.

There is no maximum liquidity risk exposure from those other than the above financial liabilities (e.g., payment
guarantees for affiliated companies, performance bonds, and other) as of December 31, 2019 (December 31, 2018:
￦ 32,511 million).

Sam sung Electronics Business Report 46 / 261

(4) Capital risk
The purpose of capital management is to maintain a sound capital structure. The Company monitors capital on the basis of
the ratio of total liabilities to total equity. This ratio is calculated by dividing total liabilities by total equity in the
consolidated financial statements.

The Company’s capital risk management policy has not changed since the previous financial year. The Company has
maintained an AA- and Aa3 credit rating from S&P and Moody’s, respectively.

The total liabilities to equity ratios as of December 31, 2019 and 2018 are as follows:

(KRW mil)

Dec 31, 2019 Dec 31, 2018

Total liabilities 89,684,076 91,604,067

Total equity 262,880,421 247,753,177

Total liabilities to equity ratio 34.1% 37.0%

Sam sung Electronics Business Report 47 / 261

8. Derivative instruments and put options
The company holds convertible preferred shares of Corning Incorporated and its value as of December 31, 2019 is as
follows.

(KRW mil)

Purchasing price Fair value Valuation gain Valuation loss

Convertible preferred
2,434,320 3,969,983 1,535,663 -
shares
Note: Fair value is determined using Trinomial Tree model; valuation gains reflected in equity (under other components of equity).
Valuation conducted by Shinhan Accounting Corporation.

To manage foreign exchange risk, SEC’s subsidiaries hedge their foreign currency positions by trading currency forward
contracts of such currencies. Overseas subsidiaries buy or sell currency forwards through a bank in the purpose of trade.

As of December 31, 2019, the Company had 2,154 currency forward contracts involving 34 foreign currencies including
USD/EUR/JPY. Currency forwards as of December 31, 2019 were as follows.

(KRW mil)

Asset Liabilities Valuation gain Valuation loss

Currency forwards 62,418 69,842 766,522 739,171

The Company applies cash flow hedge accounting to hedge the foreign currency risk of forecasted transaction including
hedging the price risk associated with forecast inventory purchases. Details of derivative financial instruments that qualify
as cash flow hedges as of December 31, 2019 are as follows:

Dec 31, 2019 Dec 31, 2018

(KRW mil) Assets Liabilities Assets Liabilities
Currency forward exchange contracts
Current items 20,946 5,396 18,343 6,344
Non-current items 5,498 5,144 7,619 4,095
Total 26,444 10,540 25,962 10,439

During the year ending December 31, 2019, the Company recognizes the gains relating to the effective portion of changes
in fair value of derivatives that are designated and qualify as cash flow hedges in other comprehensive income, which
amount to KRW 1,811 million (after tax), and recognizes the gains relating to the ineffective portion in profit or loss,
which amount to KRW 975 million (before tax). Losses reclassified directly from other comprehensive income to profit or
loss amount to KRW 916 million (after tax), and gains reclassified from other comprehensive income to the carrying
amount of inventory amount to KRW 30,786 million (after tax).

Sam sung Electronics Business Report 48 / 261

9. Major contracts

Account Contract information Contents

Type Patent cross-license agreement

Ericsson Date Jan 25, 2014

Purpose and contents Eliminate risk of patent disputes and lawsuits through mutual patent licensing

Type Patent cross-license agreement

Date Jan 25, 2014 / indefinite term

Google
Purpose and contents Eliminate risk of patent disputes and lawsuits through mutual patent licensing

Others Permanent license contract (including patent applications in the next 10 years)

Type Patent cross-license agreement

Cisco Date Jan 23, 2014

Purpose and contents Eliminate risk of patent disputes and lawsuits through mutual patent licensing

Type Process technology license contract

Global Foundries
Date Feb 28, 2014
Inc.
Purpose and contents Expand customer base of 14nm process

Type Patent license agreement

InterDigital Date Jun 3, 2014

Purpose and contents Eliminate risk of patent disputes and lawsuits through patent licensing

Type Sales of printing solutions business

Date Sep 12, 2016

HP
Purpose and contents Concentrate on our core competencies and advance business structure

Others Transaction value: USD 1.05 billion

Type Cross licensing agreement (amendment to the existing agreement)

Date Jan 1, 2018–Dec 31, 2023

Qualcomm
Eliminate risk of patent disputes and lawsuits through mutual patent licensing and signing of
Purpose and contents
covenant not to sue
Others -

Type Withdrawal of lawsuit agreement

Apple Date Jun 26, 2018

Purpose and contents Withdraw from all lawsuits in the United States

Sam sung Electronics Business Report 49 / 261

 Others -

Type Patent license agreement

Date Oct 19, 2018

Nokia
Purpose and contents Eliminate risk of patent disputes and lawsuits through patent licensing

Others -

Type Cross licensing agreement

Date Feb 28, 2019

Huawei
Purpose and contents Eliminate risk of patent disputes and lawsuits through mutual patent licensing

Others -

Type Patent cross-license agreement

Date Feb 11, 2019

Microsoft
Purpose and contents Eliminate risk of patent disputes and lawsuits through mutual patent licensing

Others -

Type EMADA

Date Feb 27, 2019–Dec 31, 2019

Google
Licensing agreement for using Google apps (Play Store, YouTube, etc.) in 31 European
Purpose and contents
countries (EEA)
Others -

Type Technology licensing agreement

Date May 30, 2019

AMD
Purpose and contents Secure intellectual property for mobile products and other applications

Others -

Type Patent cross-license agreement

Date July 30, 2019

Sharp
Purpose and contents Eliminate risk of patent disputes and lawsuits through mutual patent licensing

Others -
Note: Information that may be referenced or used in other IP disputes, including contract amount, is excluded.

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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.

As of December 31, 2019, the Company’s R&D expenses were KRW 20,207.6 billion. Among this, KRW 19,907.2 billion
was recognized as expenditures, excluding KRW 14.7 billion of government subsidies and KRW 285.7 billion of
capitalized expenses.

[R&D expenses]
(KRW mil)
2019 2018 2017
Total R&D expenditure 20,207,612 18,662,029 16,805,637
(Government subsidies) -14,677 -11,645 -2,484
R&D expenditure 20,192,935 18,650,384 16,803,153
Capitalization of development
-285,699 -296,304 -447,541
Accounting expenses (intangible asset)
R&D costs (expenses) 19,907,236 18,354,080 16,355,612
R&D expenses/sales ratio* 8.8% 7.7% 7.0%
Note: Consolidated basis in conformity with K-IFRS.
*Calculated with the amount of the total R&D expenditure, which includes government subsidies.

B. R&D organization and operations

(Domestic)
The Company operates three levels of R&D organizations; a business unit development team under each Division that
develops market ready technologies with a 1–2 year outlook, a research institute under each business unit that develops
mid-to-long term technology with a 3–5 year outlook, and the Samsung Advanced Institute of Technology that develops
core technology as 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), Russia (SRR), Israel (SRIL and SIRC), India (SRI-
Bangalore and SRI-Delhi), Japan (SRJ), China (SSCR, SRC-Beijing, SRC-Nanjing, SRC-Tianjin, SRC-Guangzhou, and
SRC-Shenzhen), Bangladesh (SRBD) to carry out research activities for product development and basic technological
research.

The Company has established AI centers in Cambridge (United Kingdom), Moscow (Russia), Toronto (Canada), Montreal
(Canada), and New York (United States), so our global team of researchers can collaborate with international experts to
strengthen capabilities in AI technology.

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Note: As of Dec 31, 2019.
Refer to 『G. Subsidiaries subject to consolidation 』in 『I. Corporate Overv iew』for mo re details about overseas R&D
organizations.

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C. R&D results
CE Division
Research project Details
Visual Display
QLED TV □ Curved QLED TV (75")
Q8C □ Specs and Features
April 2017 - Design: Four side bezel-less; simple edge; metal back stainless silver stand (U-type); slim wall mount
- Concept: Produce four side bezel-less design QLED TV
- Image quality: Optimal brightness, expanded color volume, accurate image, better viewing angles and deeper black colors
- Optical cable and One Connect provides users with optimal convenience in terms of connectivity
QLED TV □ Flat QLED TV (49/55/65/75/82")
Q6F □ Specs and Features
April 2018 - Design: Three-sided bezel-less; simple stand; VESA wall mount
- Concept: Offer QLED image quality and value at a lower price
- Image quality: Color volume 100% ; optimal brightness
- Improved mobile/TV usability, Bixby functionality,Smart experience that exceeds simple entertainment
QLED TV □ Flat QLED TV (49/55/65/75/82")
Q6F □ Specs and Features
July 2018 - Design: Three-side bezel-less; simple stand; VESA wall mount
- Concept: Offer QLED image quality and value at a lower price
- Image quality: Color volume 100% ; optimal brightness
- Improved mobile/TV usability, Bixby functionality, Smart experience that exceeds simple entertainment
QLED TV □ Flat QLED 4K TV (49/55/65/75")
Q60T □ Specs and Features
February 2019 - Design: Super narrow bezel; minimalist design; simple stand
- Concept: Provide optimal 4K viewing experience, AI-based lifestyle, and improved user experience
- Image quality: Clear, life-like colors and optimal 4K viewing experience for all content thanks to AI-based upscaling
- AI: Optimal image and sound quality; and usability to the environment and user context without user input
- Bixby2.0: Voice Assistant; expanded user experience at home
- Universal Guide: Improved user satisfaction by expanding catalogue and content recommendations to tailor suggestions by
target segment
QLED TV □ Flat QLED 4K TV (55/65/75/82")
Q70D □ Specs and Features
February 2019 - Design: Four-side bezel-less; direct full array panels; simple stand; real metal
- Concept: Deliver QLED picture qualities with deep blacks via direct full array
- Image quality: Superior brightness and color volume of QLED; deeper blacks via direct full array; AI upscaling
- Features
- AI: Provides optimal image and sound quality, and usability to the environment and user context without user input
- Bixby2.0: Voice Assistant; expanded user experience at home
- Universal Guide: Improved user satisfaction by expanding catalogue and content recommendations to tailor suggestions by
target segment
QLED TV □ Flat QLED 8K TV
Q900Z □ Specs and Features
February 2019 - Design: Three-side bezel-less, 120Hz, premium picture quality (full direct L/D) QLC, Q Style 2.0 (OC); Q Smart; AI picture
quality;
materialized the epitome of beauty with sophisticated real metal design and high-end one solid metal bezel-less design
- Image quality: QLED quality; uses AI Technology offering a personalized picture quality that evolves to fit the user’s
environment
- Blends seamlessly with the surrounding environment with One Invisible Connection and Zero Gap WMT
QLED TV □ Flat QLED 4K TV; Life Style TV
LS03 □ 43/49/55/65"
April 2019 □ Specs and Features
- Design: Real frame look; No Gap Wall Mount; Invisible Cable
- Concept: Offer picture frame functionality along with high-definition QLED in The Frame; allow appreciation of artwork and TV
content with a single product
- Image quality: High-definition with vivid, rich colors and AI-based cutting-edge technology provides upscale experiences for
viewing both artwork and TV content.
QLED TV □ Flat QLED 4K TV (49/55/65/75/82")
Q70 □ Specs and Features
July 2019 - Design: Four-side bezel-less; direct full array panels; simple stand; real metal
- Concept: Deliver deep blacks and QLED image quality via direct full array
- Image quality: Superior brightness and color volume; deeper black color via direct full array; AI upscaling

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 CE Division
Research project Details
QLED TV □ Flat QLED 4K TV (55/65/75")
Q80R □ Specs and Features
August 2019 - Design: Four-side bezel-less; direct full array panels; Soft-T stand (W/W)/flat foot stand (North America); real metal
- Concept: Deliver QLED image quality and lifestyle experience via direct full array
- Image quality: Ultra-low light reflection, AI upscaling, and improved field of view deliver QLED image quality
QLED TV □ Flat QLED 4K TV (43/49/55")
LS01 □ Specs and Features
August 2019 - Design: Life Style TV, I-shape, metal floor stand
- Concept: Offer Lifestyle TV with maximized objet and non-TV experience via differentiated designs
- Image quality: Delivers QLED picture quality with clear and accurate life-like colors and AI upscaling experience
UHD TV □ Flat UHD TV (49/55/65")
MU7000 □ Specs and Features
February 2017 - Design: Slim unibody; real 360; bezel-less; screw-less; branch stand
- Image quality: UHD 120Hz; flat; local dimming
- Provide optimal convenience in terms of connectivity though One Connect mini
UHD TV □ UHD Curved TV (40/43/49/50/55/65/75")
MU6300 □ Specs and Features
MU6100 - Design: Minimalist design; V-shape stand
March 2017 - Image quality: Active crystal color (DCI 92% )
- New Smart features (Eden 2.0, Eden Mobile) provides users with easier and more convenient content experiences
UHD TV □ UHD Flat TV (40/49/55/65")
MU6400 □ Specs and Features
March 2017 - Design: Metal design; bolt-less clean back; ultimate slim design; Y-shape stand
- Image quality: Active crystal color (DCI 92% )
- New Smart features (Eden 2.0, Eden Mobile) provides users with easier and more convenient content experiences
UHD TV □ UHD Curved TV (49/55/65")
MU6500 □ Specs and Features
Mar 2017 - Design: Metal design; bolt-less clean back; ultimate slim design; Y-shape stand
- Image quality: Active crystal color (DCI 92% )
- New Smart features (Eden 2.0, Eden Mobile) provides users with easier and more convenient content experiences
UHD TV □ UHD Flat TV (49/55/58/75")
MU6100 □ Specs and Features
April 2017 - Design: Minimalism design; V-shape stand
- Image quality: Active crystal color (DCI 92% )
- New Smart features (Eden 2.0, Eden Mobile) provides users with easier and more convenient content experiences
UHD TV □ Lifestyle TV (55/65")
LS003 □ Specs and Features
May 2017 - Design: Frame edge design; No Gap Wall Mount
- Image quality: Active crystal color (DCI 92% ) paper look
- Art Mode on paper like PQ, Mobile control, Samsung Collection, Invisible Connection, Replaceable deco frame
UHD TV □ Economical UHD Flat TV (40/43/49/50/55/65/75")
MU6103 □ Specs and Features
July 2017 - Design: Minimalist design; V-shape stand
- Image quality: Active crystal color (DCI 92% )
- New Smart features (Eden 2.0, Eden Mobile) provides users with easier and more convenient content experiences
Does not support Bluetooth and Smart Controller, while MU6100 does
UHD TV □ Economical UHD Curved TV (49/55/65")
MU6303 □ Specs and Features
July 2017 - Design: Minimalist design; V-shape stand
- Image quality: Active crystal color (DCI 92% )
- New Smart features (Eden 2.0, Eden Mobile) provides users with easier and more convenient content experiences
Does not support Bluetooth and Smart Controller, while MU6300 does
UHD TV □ Lifestyle TV (43")
LS003 □ Specs and Features
December 2017 - Design: Frame edge design; No Gap Wall Mount
- Image quality: Active crystal color (DCI 92% ) paper look
- Art Mode on paper like PQ, Mobile control, Samsung Collection, Invisible Connection, Replaceable deco frame
UHD TV □ UHD Flat TV (40/43/49/50/55/65/75")
NU7100 □ Specs and Features
March 2018 - Design: Sleek 360°design; cable management; luminous bezel; simple stand
- Image quality: UHD 60Hz; HDR 10+
- Enhanced usability and convenience by boosting connectivity with other devices
(Universal Browse provides a suite of content regardless of live and app)

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 CE Division
Research project Details
UHD TV □ UHD Curved TV (49/55/65")
NU7300 □ Specs and Features
March 2018 - Design: Sleek 360°design; cable management; luminous bezel; simple stand
- Image quality: UHD 60Hz; HDR 10+
- Enhanced usability and convenience by boosting connectivity with other devices
(Universal Browse provides a suite of content regardless of live and app)
UHD TV □ UHD Flat TV (43/50/55/65")
NU7400 □ Specs and Features
March 2018 - Design: Sleek 360°design; cable management; front volume bezel; v-type center
stand
- Image quality: UHD 60Hz; HDR 10+; active crystal color
- Enhanced usability and convenience by boosting connectivity with other devices
(Universal Browse provides a suite of content regardless of live and app)
- Control peripheral devices via one remote or voice recognition (supports Bluetooth)
UHD TV □ UHD Curved TV (49/55/65")
NU7500 □ Specs and Features
March 2018 - Design: Sleek 360°design; cable management; front volume bezel; v-type center
stand
- Image quality: UHD 60Hz; HDR 10+; active crystal color
- Enhanced usability and convenience by boosting connectivity with other devices
(Universal Browse provides a suite of content regardless of live and app)
- Control peripheral devices via one remote or voice recognition (supports Bluetooth)
UHD TV □ Flat UHD TV (49/55/65/75/82")
NU8000 □ Specs and Features
March 2018 - Design: Three-sided bezel-less; cable management; T-type center stand; VESA wall mount
- Image quality: UHD 120Hz; flat; local dimming
- Provides the best gaming experience with improved performance on input lag and motion-related game quality
UHD TV □ Curved UHD TV (55/65")
NU8500 □ Specs and Features
March 2018 - Design: Three-sided bezel-less; fixed cable; T-type center stand; VESA wall mount
- Image quality: UHD 120Hz; curved; local dimming
- Provides the best gaming experience with improved input lag and motion-related game quality
UHD TV □ UHD Flat TV (43/58")
NU7100 □ Specs and Features
May 2018 - Design: Sleek 360°design; cable management; luminous bezel; simple stand
- Image quality: UHD 60Hz; HDR 10+
- Enhanced usability and convenience by boosting connectivity with other devices
(Universal Browse provides a suite of content regardless of live and app
UHD TV □ UHD Flat TV (43/50")
NU7400 □ Specs and Features
May 2018 - Design: Sleek 360°design; cable management; front volume bezel; v-type center stand
- Image quality: UHD 60Hz; HDR 10+; active crystal color
- Enhanced usability and convenience by boosting connectivity with other devices
(Universal Browse provides a suite of content regardless of live and app)
- Control peripheral devices via One Remote or voice recognition (supports Bluetooth)
UHD TV □ Lifestyle TV (55/65")
LS03NA □ Specs and Features
June 2018 - Design: frame edge design; No Gap Wall Mount
- Image quality: Active crystal color (DCI 92% ) Paper Look
- Art Mode on paper like PQ, Mobile control, Samsung Collection, Invisible Connection 2.0, Replaceable deco frame
UHD TV □ UHD Flat TV (43/50/55/65/75")
NU7090 □ Specs and Features
July 2018 - Design: Sleek 360° design; cable management; simple stand
- Image quality: UHD 60Hz; HDR 10+
- Enhanced Eden UI enables a convenient experience via content searches through both live TV or Apps
UHD TV □ Lifestyle TV (49/43")
LS03NA □ Specs and Features
August 2018 - Design: Frame Edge Design; Zero Gap WMT
- Image quality: Active crystal color (DCI 92% ) paper look
- Art Mode on Paper like PQ, Mobile control, Samsung Collection, Invisible Connection 2.0, Replaceable deco frame

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 CE Division
Research project Details
UHD TV □ UHD Flat TV (43/49/55/65/75")
RU7100 □ Specs and Features
February 2019 - Design: Sleek 360°design; cable management; luminous bezel; simple stand
- Image quality: Clearer viewing experience in UHD via our image quality improvement algorithm
- Improved searching of new services and customized contents—eg, TV Plus, iTunes, Airplay (new)
- IR blaster: Enhanced experience through convenience of One Remote
UHD TV □ UHD Curved TV (55/65")
RU7300 □ Specs and Features
February 2019 - Design: Sleek 360°design; cable management; luminous bezel; simple stand
- Image quality: Clearer viewing experience in UHD via our image quality improvement algorithm
- Improved searching of new services and customized contents—eg, TV Plus, iTunes, Airplay (new)
- IR blaster: Enhanced experience through convenience of One Remote
UHD TV □ UHD Flat TV (50/55/65")
RU7400 □ Specs and Features
February 2019 - Design: Sleek 360°design; cable management; front volume bezel; V-shape stand
- Image quality: UHD delivers abundant color of the original content via Dynamic Crystal Color
- AI: Optimal image quality, sound quality, and usability to the environment and user context without user input
- Bixby2.0: Voice Assistant, expanded user experience at home
- Universal Guide: Improved user satisfaction by expanding contents recommendation and catalogue to provide
recommendation by target segment
UHD TV □ UHD Flat TV (49/55/65")
RU8000 □ Specs and Features
March 2019 - Design: Super narrow bezel, minimal, simple stand
- Concept: 4K TV that offers clearer image quality of 120Hz and smart functions based on user lifestyle
- Image quality: Clear and accurate life-like colors and optimal 4K viewing experience of MR240
- AI: Optimal image quality, sound quality, and usability to the environment and user context without user input
- Bixby2.0: Voice Assistant, expanded user experience at home
- Universal Guide: Improved user satisfaction by expanding contents recommendation and catalogue to provide
recommendation by target segment
UHD TV □ UHD Flat TV (70")
NU6900 □ Specs and Features
November 2019 - Design: Slim design look, glossy black, simple stand
- Full LED (bar) panel, differentiated from existing Edge models
HD-TV □ Product concept
HF690 - Offer customized products and solutions by market segment
August 2017 - New Premium Smart Line-up (HF590/690) for 3- and 4-star hotels
- Platform: Kant-M (Tizen3.0)
□ Specs and Features
- Panel: Same specifications as M5500, 32"/43"/49"/55"
- Circuits platform: Kant-M (Tizen3.0)
 SMPS: Shares M5500 SMPS design
 HDMIx3, USBx2, RJ12, LAN, Opt, Comp/AV, RJP, BathSPK, LAN OUT
- Device design: Shares M5500 series design
- Swivel stand/box: Same features with 690 series of 2016
LFD □ Product concept
QMH - Introduce premium UHD line up
August 2017  UHD (high resolution) signage line-up
 Provide signage solutions through SoC application
- Improve size competitiveness of UHD line-ups
 Respond to the market’s needs for high-definition products by building full line-ups with diverse sizes
- Non-glare screen, 24/7 usage, same as QMF of 2016
 Apply required specifications for LFD usage
□ Specs and Features
- Inch: 49/55/65”
- Platform: Orsay → Tizen 3.0, removed DTS and DIVX
- Circuits: Integrated with platform for FHD/UHD models → Kant-M SoC
 Improved specification/features: SE13U (Scaler) → Kant-M (SoC)
- Panel: 24/7, V-PID, non-glare (haze 25% )

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 CE Division
Research project Details
LM □ Product concept
CJ89 - Offer unprecedented monitor size (32:9, 49”) in the B2B market and boost users’ work efficiency and cost efficiency
March 2018 - Address consumer pain points
- Enhance usability of Dual monitor by eliminating bezel intervention
- Apply latest I/F performance with USB-C
□ Specs and Features
- Inch: 49”
- Added USB-C and excluded gaming features from CHG9
- Removed QD sheet from panel embedded in CHG9
AV (HAV) □ Soundbar (One Body)
HW-N650 - Hole array
April 2018 - Optimized sound field for game players
- Automatic sound field adjustment for different videos
- One Experience with better interoperability
- One Remote, 360W (3.1ch) power, Bluetooth, HDMI In/Out, USB
AV (HAV) □ Soundbar (One Body)
HW-NW700 - One Body enabled by a built-in subwoofer
April 2018 - Automatic sound field adjustment for different videos
- One Experience with better interoperability
- One Remote, 210W(7ch) power, WiFi/Bluetooth, HDMI In/Out, USB
- Voice Interaction: 3PDA (Amazon)
LFD □ Product concept
QBN - Standalone signage QB lineup introduced in 2018
July 2018 - Mainstream lineup with UHD resolution and Tizen solution
 Strengthened competitiveness by applying the Tizen platform
 Improved cost competitiveness of the UHD lineup
□ Specs and Features
- Inch: 49/55/65/75”
- Panel: TV New Edge NU7.1K (note: optic sheet has been changed upgraded brightness)
 350nit (MOP → high DPP), glare panel
- Kant-M2e, Tizen 4.0 W/W common design
- SMPS: TV NU7.1K (note: AL cap has been changed to address MTBF lifespan issues)
LFD □ Product concept
QMN - Increased competitiveness and efficiency by applying B2C New Edge models to 2018 standalone products.
October 2018 - Increased R&D and production efficiency; reduced cost by increasing B2C commonality (NU7.1K)
 Reduced costs by increasing commonality of panel and bottom chassis
□ Specs and Features
- Inch:49/55/85/98”
- Common design for signage-specific specifications.
 Adopt common pivot function structure and IT standards
 Adopt common panels, instruments, SMPS, and speakers
- Increased commonality of TV NU7.1, BLU, and instruments
 Note: luminance increased by 450nit; optic sheet 450nit (MOP→DBEF complex sheet), non-glare panel
LCD Monitor □ Product concept
SR75 - Monitor that addresses user pain points
January 2019  Uses minimum installation space to allow user more freedom
 Built-in arm stand allows minimized installation space and cleaner appearance
- Frame design integrates well with the space
□ Specs and Features
- Inch: 27/32"
- Three-side bezel-less / built-in arm stand / frame design
- Supports high-resolution
 32" UHD (3840 X 2160)
 27" WQHD (2560 X 1440)
LCD Monitor □ Product concept
CRG5 - Secure market share by introducing a mid-range-and below- model in the FHD 24” segment, the most dominant segment in
March 2019 the gaming market
- Offer a more comfortable and immersive gaming image quality
- Add a design factor that applies gaming identity in the back
□ Specs and Features
- Inch: 49”
- Seamless scanning rate of 144Hz and soft movement without afterimage
- Offers seamless gaming screen without screen tearing by adjusting the Free-sync playback rate
- Optimal gaming mode for different games

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 CE Division
Research project Details
LCD Monitor □ Product concept
CRG9 - Lead the trend of curved, wide, high-definition, large-size monitor in the gaming market via 32:9 49" performance upgrade
March 2019 - Best flagship model adopted with 5K + HDR1000
□ Specs and Features
- Inch: 49”
- Offers more abundant and vivid colors enabled by QD technology
- Provides a more immersive experience via 32:9 Wide Curved Form Factor
- Addresses user pain points of dual monitors
- Improves usability and added convenience via features such as tilt, HAS, swivel
Sound Bar □ Product concept
SBQ70R - Offer realistic user experience and sound to match TV market trends
March 2019 - Increase sales attach rate by matching the design and color with our TV products
□ Specs and Features
- Improved TV sound and gaming experience via patent technologies (ATMOS and Acoustic beam)
- Provides sound field (AI sound, Game Pro) optimized for consumer contents
- Provides 3D virtual surround via hole array technology
LFD □ Product concept
QHR - Premium UHD line up with high brightness (700nit)
October 2019 - Also applied in B2B designs (QMR, QBR)
- Strengthened solution competitiveness by applying Tizen platform
□ Details
- Inch: 65/75”
- Panel: 700nit, 24/7, non-glare (same for QMR)
- Platform: Kant-M2e + SE18S (same for QMR)
- Landscape and pivot usage, IT-size
- WIFI and BT applied
LCD Monitor □ Product concept
UR55 - Maintain leadership in the UHD 27/28” market by introducing a new model with bezel-less design
December 2019 □ Details
- Inch: 28”
- Three-side bezel-less design offers immersive experience with seamless screen
- Offers vivid images without color distortion, via wide viewing angle and high color gamut
- HDR10 applied
Home appliances
Wind-FreeTM Gallery □ Floor-standing (56.9/62.6/75.5/81.8/92.5㎡)
floor-standing air conditioner □ Details
January 2019 - Developed next-gen wind-free platform with the highest level of energy efficiency (56.9 m2 single duct model achieved energy
efficiency grade 2)
- Equipped with wind-free panel 1.5 times larger than previous model and strong booster wind
- Booster purification: Filter with 99.95% dust collection efficiency
- Design resembling that of furniture, fits comfortably into the surroundings
Jet cordless vacuum □ Cordless vacuum (up to 200W suction)
January 2019 □ Details
- Washable multi-cyclone dust collector
- Prevents 99.999% of the fine dust from leaking out
- Equipped with a brush that removes dust and works as a mop
- LED display for monitoring
- Floor-standing for convenient storage
SBS refrigerator □ RS5000RC new SBS platform
February 2019 - Large capacity: 617 ℓ (2 door plumbing)
- Flex Zone → 0/1/3 degree mono
- Flat duct →Twin cooling look
- Horizontal hairline → improved quality and style
Air dresser clothing care □ Large size able to accommodate long dresses (24")
February 2019 □ Details
- Real Care (inner garment car, low noise)
- Real Purification (fine dust filter), Real Deodorization (odor-decomposing filter)
- Real Sterilization (jet steam), wrinkle care, Real Dehumidifying (dehumidifies the room even with the door closed)

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 CE Division
Research project Details
Pro Range oven □ Pro Range (36")
(February 2019) □ Details
- 22K BTU Dual Burner: 22K dual power burners offering intense heat, which cuts cooking time, and precise control when
needed
- Dual Fan Convection: Allows optimized even cooking with two fans
- Dual Infrared Broil Burner: Two infrared broil burner delivers even cooking
- Steam Cook: Brings the perfect texture to food, making the outside crispy and keeping the inside moist
- SmartHome & IoT
Bespoke Refrigerator □ T-TypeㆍSBSㆍKimchiㆍBMFㆍLadder 1Door (24" R/F/Kimchi)ㆍ18" New 1Door
(May 2019) □ Details
- Customers can configure designs in many ways
- Easy design changes
- Can set up combinations of fridge/freezer/kimchi refrigerators between similar models
- Kitchen FitTM model available
Wind-FreeTM wall-mount □ Wide air conditioner
wide air conditioner □ Details
(October 2019) - Secured cost competitiveness by developing new integrated QMD-based platform, strengthened product competitiveness
- 12% larger fans cools the air faster
- Wind-free ultra-energy-efficient technology saves up to 77% on electricity
- PM1.0 wind-free filtration system removing particles as small as ultra-fine dust

IM Division
Research project Details
Mobile
Galaxy S10 □ Galaxy S10eㆍS10ㆍS10+ㆍS10 5G (5.8/6.1/6.4/6.7")
(March 2019) □ Design: Full Front Punch Hole Infinity Display
(5G: April 2019) □ Details
- Platform (H/W, S/W): Makalu (Europe), SM8150 (North America), Android 9
- World’s first model using commercialized 5G technology
- Combination of triple cameras delivers zoom, tele, ultra wide function: wide (12M)+tele (12M)+ultra wide (16M)
- Supports HDR10+ video shooting on mobile for the first time in the world
- Dynamic AMOLED display delivers near-original colors, supports HDR
-On-screen fingerprint recognition sensor using ultrasound
Galaxy Note10 □ Galaxy Note10ㆍ10+ (6.3ㆍ6.8")
(July 2019) □ Design: Full Front Punch Hole Infinity Display
- Platform (H/W, S/W): Makalu (7nm), Android 9.0
- Upgraded S Pen
ㆍEnhanced usability with higher battery capacity and improved BT latency
ㆍOffers new feature using 6-axis sensor
- Quad camera supports high-resolution and maximum viewing angle shooting under wide range of illuminance
ㆍ Wide (12M ) + tele (12M ) + superwide (16M ) + ToF
Galaxy Fold □ Creating a new market and securing market share by developing world’s first in-foldable smart phone
(September 2019) - 7.3" QXGA+(1,536×2,152) 1.5R in-foldable display
- Secured standard technology by developing hinge for in-foldable phones, a world’s first (released Feb 2019)
□ Offers new user experience tailored to foldable smart phones
- Can use up to three apps with multi-active window function, offering unrivaled multitasking environment
- When folding or unfolding the phone, provides app using experience with smooth changes between screens with minimal
interruption
Network
5G S/W PKG □ S/W PKG to commercialize domestic 5G NR for the first time in the world
(SVR18.3) - Commercialized 5G NSA by using LTE network links in the Seoul and the capital area
(April 2019) - Supports 5G base station (3.5GHz, 28GHz, 39GHz 5G Massive MIMO)
□ Carriers that completed development: Korea (SK Telecom, KT, LG U+), Japan (KDDI), US (AT&T, Sprint, Verizon)
5G NR DU □ New dual CPU-based main card and first 5G SoC modem using channel card
(September 2019) □ Single HW can accommodate a combination of LTE, NR above, and NR below products, offering different channels at the
same time
□ Supports high-capacity, low power-consumption (including power saving) and virtualization/non-virtualization S/W structure
□ Carriers that completed development: Korea (SK Telecom, KT, LG U+), Japan (KDDI), US (AT&T, Sprint)

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 DS Division
Research project Details
Memory
V-NAND □ The world’s first mass production of 512GB eUFS SSD based on 64 layer V-NAND
512GB eUFS for mobile - Lead the high density memory market by mass producing 512Gb V-NAND
Based on 4th gen 64 layer - Provide the fastest solution with the biggest capacity
November 2017 □ Drive market growth by expanding the production of 4th generation 512Gb V-NAND
- Expand market leadership from smartphones and tablets to the SSDs
DRAM □The world’s first 2nd generation 10nm-class 8Gh DDR4 DRAM
10nm-class (1y) 8Gh DDR4 for - Offers 30% better productivity, 10% faster speed, and 15% improved energy efficiency compared to the 1x- nano DRAM
PCs and servers - Development of ‘Three innovative Technologies’ boosting product competitiveness
November 2017 □ Lead the market with the capability to mass-produce next-generation DRAMs
- Established a mass production system for DDR5/ LPDDR5/ HBM3/ GDDR6
Z-NAND □ Mass produced the world’s first 800GB NVMe Z-SSD for supercomputers
800GB NVMe Z-SSD for - 5 times the response time, 35 times the lifespan compared to NVMe SSD
supercomputers - Best-in-class regarding performance, durability, and reliability in its system
Based on 3rd gen 48 layer □ Expand market via introduction of 2nd generation Dual Port Z-SSD lineup
January 2018 - Target storage market, following early advancement into the HPC market.
V-NAND □ Mass produce the world’s first 30.72TB SAS SSD for next generation servers
30.72TB SAS SSD for servers - The only 2.5-inch 30.72TB via adoption of 512Gb V-NAND
Based on 4th gen 64 layer - 2 times the capacity, 2 times the random read speed compared to previous version
January 2018 □ Lead SAS market growth by expanding the ultra-high capacity lineup
- Expand into enterprise market, following data center market
V-NAND □ Mass produce the world’s first next-generation 8TB NF1 NVMe server SSDs
8TB NF1 NVMe SSD for server - Offer 8TB in NF1 size by adopting 512Gb V-NAND
Based on 4th gen 64 layer - Increased system storage capacity by three times via 8TB SSDs
May 2018 □ The industry’s only 8TB lineup that opened a NF1 market
- Expanded core product in the premium NVMe SSD market to 8TB SSDs
V-NAND □ Mass production of the world’s fastest PC SSD based on 5th generation V-NAND
PC 256GB SSD - Unprecedented mass production of VNAND stacked with 90 layers or more
Based on 5th gen 9x layer - 1.4 times faster than previous model with 30% improved productivity
June 2018 □ Lead growth of the storage market with ultra-high-speed and ultra-low-energy products
- Utilize 1Tb and QLC VNAND to create a new market for next-generation products
DRAM □ Mass produced world’s fastest and largest in capacity LPDDR4X DRAM
2nd gen 10-nano-class (1y) - Mass produced world’s first 2nd generation 10-nano-class (1y) 16Gb lineup
16Gb - 2 times the speed and productivity compared to the 20-nano DRAM
LPDDR4X DRAM for mobile □ Lead market growth by mass producing cutting-edge DRAM in Pyeongtaek line.
devices - Expand high-capacity market via mass producing ultra-fast, ultra-power efficient, and ultra-small 12GB chips
July 2018
V-NAND □ Mass produced world’s first PC SSD based on 1Tb 4-bit V-NAND
1Tb 4-bit SSD for PC - Industry’s first full-swing mass production of 64-layer cell stacked 1Tb 4-bit V-NAND
Based on 4th gen 64 layer - Same read and write speed with the 3-bit SSD
September 2018 □ Lead market growth by securing advantages in ultra-high capacity and cost competitiveness
- Secured capacity to create next-generation market via 1Tb and QLC V-NAND
DRAM □ Mass production of world’s fastest and largest in capacity 3DS DDR4 DRAM
1st gen10nm (1x) 256GB 3DS - The world’s first mass production of the ultra-high-performance, high- capacity DRAM
DDR4 for server - Capacity doubled, power efficiency improved by 30%
October 2018 □ Bolstered business capability by taking lead in the next-generation IT market
- Expanded demand for EUV-based DRAM by widening the premium lineup
V-NAND □ The world’s first mass production of next-generation smartphone memory, eUFS 3.0
5th gen (9x layer) 512Gb 3bit - Mass production of 9x layer 512Gb 3bit VNAND
eUFS for mobile - Read and write speeds increased twofold compared to eUFS 2.0
February 2019 □ Lead growth of the ultra-high-definition, next-generation mobile market
- Expanded the 1TB/256GB lineups following releases of 512/1286GB
DRAM □ Development of the world’s first most precise process 1znm 8Gb DDR4 DRAM
3rd gen10nm-level (1z) 8Gb - Ultra-high-speed, ultra-low-power solution for DDR5/LPDDR5
DDR4 - Increased productivity 20% compared to the 2nd generation (1ynm) DRAM
March 2019 □ Strengthened business capability by expanding premium DRAM lineup
- Increased production portion of next-generation DRAM lineup in the Pyeongtaek line
V-NAND □ Mass produced world’s fastest PC SSD based on 6th generation V-NAND
256Gb SSD for PC - Only company to mass produce single-stack structure 1xx-layer V-NAND
Based on 6th gen (1xx layers) - 1.2 times the speed, 20% improved productivity compared to the previous version
July 2019 □ Lead storage market growth with advantages on ultra-fast, ultra-power efficient characteristics
- Target automotive market in full-swing, following early advancement into server and mobile market

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 DS Division
Research project Details
DRAM □ Mass produced world’s highest speed and highest capacity 12Gb LPDDR5 for mobile
2nd gen 10-nano class (1y) - Provides next-generation mobile solution with better speed, capacity, and energy-efficiency
12Gb LPDDR5 for mobile - 1.3 times faster (5,500Mbps), contributed to introduction of 5G smartphone with 30% reduced power consumption
(July 2019) □ Continue to next-generation market by leading the creation of premium mobile DRAM market
- Industry’s first 12Gb LPDDR5-based lineup (6GB, 12GB)
V-NAND □ Mass produced world’s fastest and highest capacity 30.72TB NVMe SSD for servers
30.72TB NVMe SSD for server - Secure next-generation SSD solution by strengthening speed, capacity, and economic feasibility
Based on 5th gen (9x layers) - Introduce PCIe Gen4 SSD that delivers 2.2 times the speed (8GB/s) compared to the previous version
September 2019 □ Enhanced business status by leading premium SSD market growth
- The only model in the industry that provides three major SW solutions (Never Die SSD, FIP, ML)
Next-generation 12-stacked 3D- □ Developed 12-stacked 3DS TSV packaging technology for HBM DRAM with the highest capacity in the world
TSV 12GM HBM DRAM - Developed 12GM HBM DRAM for the first time in the world, offering the highest performance and capacity
packaging technology -1.5 times the capacity and improved system design using the same package as 8GB
for supercomputers □ Strengthened capabilities to lead the next-generation HPC DRAM market by making a breakthrough in packaging technology
(October 2019) - Plan to mass produce 24GB HBM—industry’s highest capacity—to meet customer’s needs
Mobile image sensor □ Ultra-small high-resolution image sensor, ISOCELL Fast 2L9
S5K2X7 - Autofocus, dual pixel technologies
October 2017 - Micro-manufacturing process reduced the size of the pixel to 1.2㎛ from 1.4㎛
- A single image sensor is capable of out-focusing
Mobile image sensor □ Ultra-small high-resolution image sensor, ISOCELL Slim 2X7
S5K2L9SX - Vivid and bright pictures enabled by TetraCell technology, which allows pixel self-adjustment
October 2017 - Ultra-small image sensor with the smallest ever pixel size (0.9㎛)
- DTI processing applied physical walls between pixels.
Mobile image sensor □ New 3-stack, DRAM-embedded ISOCELL Fast 2L3
S5K2L3 - Saves large quantity of images at high speed
February 2018 - Super-slow motion up to 960 frames per second
□ Auto focus enabled by dual pixel technology
- Precise and swift auto focus at any circumstance
- Combination of cutting edge technologies such as 3D noise reduction, HDR, etc.
Image sensor solution □ Total solution that provides functions of an image sensor and S/W algorithm
February 2018 - Eliminate S/W purchasing costs and reduce sensor/AP optimization time
- Dual camera capable of refocusing and low light shooting
Mobile image sensor □ Small pixel hypersensitive image sensor, ISOCELL Slim 3P9
S5K3P9 - Smaller chips and improved pixel efficiency and noise
May 2018 - Improved features such as autofocus image stabilization
□ Provides a turn-key solution named ‘Plug and Play’
- Provided with pre-optimized modules (AP, camera module, actuator, etc.) and S/W image tuning
- Provides VCX evaluation setting and shortens research period
Image sensor technology □ Image sensor improvement technology, ISOCELL Plus
June 2018 - Minimizes optical loss and light reflection/absorption by using higher metal barriers
- Improved low light sensitivity
Mobile image sensor □ 0.8um ultra-small pixel ISOCELL Bright GM1
S5KGM1 - 48 million ultra-high-definition image sensor
October 2018 - Realize high-sensitive effect via the Tetracell technology
□ Improves response to demand for high-definition, multi-cameras
- Offers high-quality images enabled by ultra-small pixels and Tetracell technology while also providing flexibility for slimmer
designs
Mobile image sensor □ 0.8um ultra-small pixel ISOCELL Bright GD1
S5KGD1 - 32 million high-definition image sensor
October 2018 - Realize high-sensitive effect via the Tetracell technology
- Supports HDR, enabling adequate brightness and abundant colors for both bright and dark areas
□ Improved response to demand for high-definition, multi-cameras
- Offers high-quality images enabled by ultra-small pixels and Tetracell technology while also providing flexibility for slimmer
designs
Mobile image sensor □ Ultra-small pixel image sensor ISOCELL Slim 3T2
S5K3T2 - High pixel optimized to bezel-less display
January 2019 - Most compact image sensor at 1/3.4” (20Mp)
- High-quality pictures in low-light settings thanks to the tetracell technology (front)
- High magnification mode (back) decreases module sizes and improves picture
quality

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 DS Division
Research project Details
Mobile image sensor □ Ultra-high definition image sensor ISOCELL Bright GW1
S5KGW1 - Highest-resolution mobile image sensor (64 megapixels)
May 2019 - Dynamic range improvement via DCG structure application
- Maximized Auto Focus function with super PD technology and Full-HD slow motion up to 480 frames per second
- Supports real-time HDR function for rich colors
Mobile image sensor □ ISOCELL Bright GM2
S5KGM2 - 0.8um 32 megapixel ultra-small high-definition image sensor
May 2019 - Maximized Auto Focus function with super PD technology and Full-HD slow motion up to 240 frames per second
Mobile Image Sensor □ ISOCELL Bright HMX
S5KHMX - World’s first 108 mega pixel mobile image sensor
Aug 2019 - Control the amount of light and improve color gamut with S/W by applying AI-ISO
- Video recording at a resolution up to 6k 30 fps
- Improve light sensitivity with ISOCELL Plus and Tetracell technology
Mobile Image Sensor □ ISOCELL Slim GH1
S5KGH1 - Smallest pixel among mobile image sensors (0.7um)
Sep 2019 - Convenient adoption for Full-Screen Display set due to small, thin module
- Supports high-resolution video taking and minimizes view angle loss
- Improve light sensitivity via ISOCELL Plus and Tetracell technology
Exynos 9 □ 10nm FinFET process based premium AP
February 2017 - Cutting-edge 10nm process based model, low power consumption, high performance
- Gygabit-class LTE modem-integrated chip
- Provide unrivalled performance such as 2nd generation custom CPU and next-generation GPU
Exynos 9 (9810) □ SC59810
January 2018 □ 3rd generation custom CPU and AP equipped with super-fast modem that supports Cat.18 6CA
- Single-core performance doubled and multi-core performance increased by 40% compared to the previous model
- Equipped with industry-first 6CA LTE modem that supports 1.2Gbps downlink
□ Deep learning processing capabilities and intelligent image processing
- Precise image analysis and enhanced face recognition
- High-resolution and brighter pictures in low light or motion
Exynos i (S111) □ S5JS100
August 2018 □ Low-power operation, strong security, and supports the latest NB-IoT standard
- Low-power data transmission mechanism that covers the standard distance (10 kilometers)
- Adopted with features such as encryption, decryption, physical copy prevention
- All-in-one chip that combines functions of a modem, CPU, RF, PMIC, GNSS
Exynos 9 (9820) □ SC59820
November 2018 □ Improved performance via NPU and AP improvements and adoption of 8CA
- NPU: AI processing speed improved sevenfold compared to the previous model
- AP: big-little (4+4) → big-middle-little (2+2+4)
Flexible operation depending on user environment; improved power efficiency
- Modem: Industry’s first adoption of 8CA technology; download speed up to 2Gbps
Exynos Auto V9 □ S5AHR80
January 2019 □ Automotive infotainment, Exynos Auto V9
- Controls 6 displays and 12 cameras simultaneously via Octa-core CPU
- Individually supports dashboard, CID, and HUD with 3 GPUs
- Recognizes audio, face, and motion with an NPU
- Strengthened safety by supporting ASIL-B standards
Exynos i (T100) □ S5JT100
May 2019 □ SoC with high energy efficiency and strong security exclusively for short-distance IoT
- Supports latest short-distance wireless communication, including Bluetooth 5.0 and Zigbee 3.0
- Encryption, decryption, physical copy prevention function for stronger data security
- Wider range of operating temperature (can function in temperatures as high as 125℃)
- 28nm process-based, enhancing electrical efficiency.
- Combines processor, memory, and communication functions
Exynos 980 □ Exynos 980
September 2019 □ One chip SoC that integrates 5G modems
- One chip integrating 5G modem and AP that supports sub-6GHz band width
- Supports latest communications features such as EN-DC, Wi-Fi 6
- Improved NPU function compared to previous generation and premium products
Exynos 990
□ Exynos 990
October 2019
□ SoC with enhanced AI performance with 2 embedded NPU cores
- AI performance of at least 10 TOPs delivers better image analysis and face recognition function
- Improved performance with 5th generation CPU and premium GPU
- Supports latest LPDDR DRAM and high-resolution camera of 50MP and higher

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 DS Division
Research project Details
Foundry
8-inch process □ Development of 8-inch process that best suits RF and fingerprint recognition products
RF/ fingerprint recognition - Diversify 8-inch foundry products by including RF or fingerprint sensor solutions on top of embedded flash memory chips,
March 2018 power semiconductors, display drivers, CMOS image sensors
- Boost product quality and customer convenience
7nm EUV process □ 7LPP (Low Power Plus) process applied with EUV technology
September 2018 (development) - Extreme ultraviolet (EUV) lithography technology
 13.6nm wavelength, 1/14 of ArF, enables advanced circuit pattern realization
 High performance and productivity enabled by reduction of multi-patterning process
- Delivers up to a 40% increase in area efficiency with 20% higher performance or up to 50% lower power consumption
compared to 10nm process
Ship eMRAM solution products □ Combined low-power process and next-generation embedded memory technology
(based on 28nm FD-SOI - Maximized power efficiency as the product uses low motion power and eliminates standby power and an erase cycle
process) - Supports record speed about 1000 times faster than the previous eFlash
Mar 2019 □ Embedded to system semiconductor by using minimum layers
- Reduced production costs thanks to a simpler design structure
□ Optimal for MCU/IoT/AI thanks to low-power and small size
5nm EUV process □ Developed 5nm EUV process with EUV lithography
Apr 2019 - 25% increase in logic area efficiency with 20% lower power consumption or 10% higher performance compared to 7nm by
optimizing cell architecture
- Previous 7nm customers can utilize the same IP in the 5nm EUV process
System LSI
Display driver IC □ New DDI, S6CT93P
Jan 2019 - Optimized to ultra-high-definition 8K TVs and increased performance efficiency
- Supports a smart equalizer to improve signal quality and development efficiency
5G modem total solution □ SA55100, S5M5500, S5M5800
Apr 2019 □ Commercialization of world’s first 5G modem solution for smartphones
- Exynos modem 5100, RF 5500, SM 5800
- Data transmission speed 1.7 times faster (compared to LTE)
- New RF/SM embedded; data transfer boasts improved power efficiency
5G modem □ SA55123
October 2019 □ 7-nano 5G modem, offering the highest-level performance in the industry
- Maximum 2 times the speed of previous model in sub-6GHz 5G environment
- High-performing 5G with optimal power consumption and chip area
- Maximum speed of 3.0Gbps in 4G network
- Supports global sub-6GHz/mmWave range
PDIC □ S2MM101
May 2019 □ PDIC for fast-charging TA, supporting USB PD
- Supports USB-PD 3.0 standard and fast-charging protocol
- Moisture detection; surge protection function
PDSE □ S3SSE8A
May 2019 □ World’s first all-in-one chip that combines the function of PDIC and SE
- Supports Type-C certification, filtering out uncertified products
- Provides high-tech security functions–stores security keys/certificates; supports encryption and decryption
Display panel
Hole in Display AMOLED for □ Maximized screen size via world’s first commercialization of Flexible Hole in Display
Galaxy S10 - One S10 6.1" 3K QHD+(3,040×1,440) Hole, Two S10+ 6.4" Holes
Mar 2019 □ Offers a comfortable display by significantly decreasing blue light
- Decreased blue light emission 42% from S9 (TUV Rheinland Eye Comfort Certification)
15.6” UHD AMOLED for NPC □ Developed world’s first 4K OLED display for NPC
May 2019 - 15.6" UHD (3,840 x 2,160), 16:9
- Blue light reduction, shorter response time, wide field of view allow vivid images
4K high-resolution AMOLED for □ Developed world’s first 4K mobile OLED display
smartphones - 6.5" UHD (1,644×3,840), 643ppi,16M Color
June 2019 - Can enjoy original cinematic movie ratio of 21:9
27” FHD 240Hz curved LCD for □ Developed world’s first 240Hz Curved LCD display
gaming monitors - 27" FHD (1920×1080), 16:9
June2019 - High refresh rate of 240Hz, supports G-sync, allowing uninterrupted gaming environment
- Curvature of 1500R, wide viewing angle allow highly-immersive gaming experience
Foldable AMOLED for Galaxy □ Display innovation by developing the world’s first foldable display
Fold - In-foldable AMOLED (radius: 1.5R)
Sep 2019 - 7.3" QXGA+ (1,536×2,152), 4:3
- Decreased display thickness by approximately 50% (compared to existing panels) by developing polymer composite material

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11. Other information
A. Intellectual property
Intellectual property activities are an integral part of our R&D strategies—SEC registered its first US patent in 1984 and
currently holds 180,035 patents around the world. The Company holds the highest number of its patents (cumulative
number) in the US and aims to address conflicts in the US more effectively.

<Number of patents registered in each country (as of December 31, 2019, cumulative)>

Korea US Europe China Japan Others

Number 36,787 71,718 33,073 16,513 10,051 11,893

In 2019, the Company invested KRW 20.2 trillion in R&D and registered 5,075 domestic and 8,729 US patents.

<Number of patent registrations per year>

(Unit: No. of patents)
2019 2018 2017

Korea 5,075 3,068 3,486

US 8,729 8,073 8,396

Note: Data for 2017 and 2018 revised on a consolidated basis.

These patents are mostly related to smartphones, smart TVs, 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. Additionally, the Company is focusing on
securing early patents in new technologies ahead of others, in order to protect opportunities and have the freedom to
operate when entering new businesses.

The Company has signed cross-licensing agreements with Google (signed in January 2014; permanent), Nokia (October
2018), Western Digital (December 2016; 2016–2024), Qualcomm (January 2018; 2018–2023), and Huawei (February
2019), and Sharp (July 2019) through which the Company has secured an extensive patent protection in mainstay
businesses as well as in the fields of new business.

The Company has also been focusing on securing design patents to protect its original design applied to smartphones and
TVs. In 2019, the Company acquired 598 US patents, in part for the aforementioned purposes.

B. Environmental regulations
The Company strictly abides by environmental regulations on products and in the workplace, as prescribed by law. In
addition, in accordance with “the low carbon green growth policy” of the Korean government, the Company reports “the
amount of CO2 emission and energy use” to the government and provides related information to stakeholders by
providing various reports, including the Samsung Sustainability Report.

☞ See 『11. 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 eco-
friendly materials) at the development stage, and operates a “waste electronics collection recycle system” in Europe,
North America, Korea, and India for collecting and recycling waste electronics. These activities are in line with domestic
and foreign environmental laws on electronics and are a differentiation factor for the Company and its products.

Relevant laws are as follows:

1. law on collection and· recycle of waste electronics (eg, EU WEEE Directive)

2. limit on the use of harmful substances (eg, EU RoHS Directive, REACH Regulation)

3. regulation on energy efficiency (eg, 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: Act on Allocation and Trading of Greenhouse Gas Emission,
Framework Act on Low Carbon, Green Growth

3. Others: Toxic Chemicals Control Act, Act on the Registration and Evaluation, etc. of Chemical Substances, 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:

2019 2018 2017

Greenhouse gas (tCO2e) 16,070,963 15,979,978 13,105,766

Energy (TJ) 241,448 236,727 212,489

Note: Data for 2017 and 2018 revised on a consolidated basis. See『11. Green Management』of『XI. Other Information』for parent-
based data.
Domestic manufacturing facilities, office buildings, buildings owned by the Company, leased buildings, etc.
Reported Greenhouse gas emission excludes ozone depletion substances (ODS).
Amounts may differ by third-party organization verification results.

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.

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 III. Financial Affairs
1. Consolidated financial statements

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In millions of Korean won, in thousands of US dollars (Note 2.28))

December 31, December 31, December 31, December 31,

Notes 2019 2018 2019 2018
KRW KRW USD USD

Assets
Current assets
Cash and cash equivalents 4, 6, 30 26,885,999 30,340,505 23,069,002 26,033,073
Short-term financial instruments 5, 6, 30 76,252,052 65,893,797 65,426,571 56,538,875
Short-term financial assets at
6, 30 3,914,216 2,703,693 3,358,516 2,319,851
amortized cost
Short-term financial assets at fair
6, 8, 30 1,727,436 2,001,948 1,482,192 1,717,732
value through profit or loss
Trade receivables 6, 7, 9, 30 35,131,343 33,867,733 30,143,757 29,059,541
Non-trade receivables 6, 9 4,179,120 3,080,733 3,585,812 2,643,362
Advance payments 1,426,833 1,361,807 1,224,266 1,168,472
Prepaid expenses 2,406,220 4,136,167 2,064,610 3,548,957
Inventories 10 26,766,464 28,984,704 22,966,437 24,869,754
Other current assets 6 2,695,577 2,326,337 2,312,887 1,996,067
Total current assets 181,385,260 174,697,424 155,634,050 149,895,684

Non-current assets
Financial assets at amortized cost 6, 30 - 238,309 - 204,476
Financial assets at fair value
through other comprehensive 6, 8, 30 8,920,712 7,301,351 7,654,241 6,264,780
income
Financial assets at fair value
6, 8, 30 1,049,004 775,427 900,077 665,340
through profit or loss
Investment in associates and joint
11 7,591,612 7,313,206 6,513,833 6,274,952
ventures
Property, plant and equipment 12 119,825,474 115,416,724 102,813,888 99,031,047
Intangible assets 13 20,703,504 14,891,598 17,764,234 12,777,442
Net defined benefit assets 16 589,832 562,356 506,094 482,518
Deferred income tax assets 27 4,505,049 5,468,002 3,865,469 4,691,711
Other non-current assets 5, 6 7,994,050 12,692,847 6,859,137 10,890,850
Total assets 352,564,497 339,357,244 302,511,023 291,178,800

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 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In millions of Korean won, in thousands of US dollars (Note 2.28))

December 31, December 31, December 31, December 31,

Notes 2019 2018 2019 2018
KRW KRW USD USD
Liabilities and Equity
Current liabilities
Trade payables 6, 30 8,718,222 8,479,916 7,480,499 7,276,025
Short-term borrowings 6, 7, 14, 30 14,393,468 13,586,660 12,350,032 11,657,766
Other payables 6, 30 12,002,513 10,711,536 10,298,520 9,190,823
Advances received 19 1,072,062 820,265 919,862 703,812
Withholdings 6 897,355 951,254 769,958 816,205
Accrued expenses 6, 19 19,359,624 20,339,687 16,611,144 17,452,068
Current income tax liabilities 1,387,773 8,720,050 1,190,751 7,482,067
Current portion of long-term
6, 14, 15, 30 846,090 33,386 725,971 28,646
liabilities
Provisions 17 4,068,627 4,384,038 3,491,005 3,761,637
Other current liabilities 6, 19 1,037,030 1,054,718 889,802 904,980
Total current liabilities 63,782,764 69,081,510 54,727,544 59,274,029

Non-current liabilities
Debentures 6, 15, 30 975,298 961,972 836,835 825,401
Long-term borrowings 6, 14, 30 2,197,181 85,085 1,885,248 73,006
Long-term other payables 6, 30 2,184,249 3,194,043 1,874,152 2,740,586
Net defined benefit liabilities 16 470,780 504,064 403,944 432,502
Deferred income tax liabilities 27 17,053,808 15,162,523 14,632,684 13,009,904
Long-term provisions 17 611,100 663,619 524,342 569,405
Other non-current liabilities 6, 19 2,408,896 1,951,251 2,066,906 1,674,233
Total liabilities 89,684,076 91,604,067 76,951,655 78,599,066

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 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In millions of Korean won, in thousands of US dollars (Note 2.28))

December 31, December 31, December 31, December 31,

Notes 2019 2018 2019 2018
KRW KRW USD USD
Equity attributable to owners of
the parent company
Preference shares 20 119,467 119,467 102,506 102,506
Ordinary shares 20 778,047 778,047 667,588 667,588
Share premium 4,403,893 4,403,893 3,778,674 3,778,674
Retained earnings 21 254,582,894 242,698,956 218,439,838 208,243,059
Other components of equity 22 (4,968,829) (7,931,370) (4,263,406) (6,805,356)
254,915,472 240,068,993 218,725,200 205,986,471
Non-controlling interests 7,964,949 7,684,184 6,834,168 6,593,263
Total equity 262,880,421 247,753,177 225,559,368 212,579,734

Total liabilities and equity 352,564,497 339,357,244 302,511,023 291,178,800

Sam sung Electronics Business Report 69 / 261

 CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

(In millions of Korean won, in thousands of US dollars (Note 2.28))

For the year ended December 31,

Notes 2019 2018 2019 2018
KRW KRW USD USD

Revenue 31 230,400,881 243,771,415 197,690,938 209,163,262

Cost of sales 23 147,239,549 132,394,411 126,335,995 113,598,417
Gross profit 83,161,332 111,377,004 71,354,943 95,564,845
Selling and administrative expenses 23, 24 55,392,823 52,490,335 47,528,721 45,038,298
Operating profit 27,768,509 58,886,669 23,826,222 50,526,547
Other non-operating income 25 1,778,666 1,485,037 1,526,149 1,274,207
Other non-operating expense 25 1,414,707 1,142,018 1,213,861 979,886
Share of net profit of associates and
11 412,960 539,845 354,332 463,203
joint ventures
Financial income 26 10,161,632 9,999,321 8,718,988 8,579,720
Financial expense 26 8,274,871 8,608,896 7,100,090 7,386,694
Profit before income tax 30,432,189 61,159,958 26,111,740 52,477,097
Income tax expense 27 8,693,324 16,815,101 7,459,135 14,427,866
Profit for the year 21,738,865 44,344,857 18,652,605 38,049,231
Profit attributable to owners of the
21,505,054 43,890,877 18,451,988 37,659,703
parent company
Profit attributable to non-controlling
233,811 453,980 200,617 389,528
interests
Earnings per share
28
(in Korean Won, in US dollars)
- Basic 3,166 6,461 2.72 5.54
- Diluted 3,166 6,461 2.72 5.54

Sam sung Electronics Business Report 70 / 261

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions of Korean won, in thousands of US dollars (Note 2.28))

For the year ended December 31,

Notes 2019 2018 2019 2018
KRW KRW USD USD

Profit for the year 21,738,865 44,344,857 18,652,605 38,049,231

Other comprehensive income (loss)
Items that will not be reclassified to profit or
loss subsequently:
Gain (loss) on valuation of financial assets at fair
value through other comprehensive income, net 8, 22 1,146,599 (235,865) 983,817 (202,380)
of tax
Share of other comprehensive loss of associates
11,22 (16,896) (10,631) (14,497) (9,122)
and joint ventures, net of tax
Remeasurement of net defined benefit liabilities
16, 22 (1,180,468) (410,151) (1,012,877) (351,922)
(assets), net of tax
Items that may be reclassified to profit or loss
subsequently:
Share of other comprehensive income of associates
11, 22 48,649 6,688 41,742 5,739
and joint ventures, net of tax
Foreign currency translation, net of tax 22 3,016,499 590,638 2,588,248 506,786
Gain on valuation of cash flow hedge derivatives 22 1,811 47,079 1,553 40,395
Other comprehensive income (loss) for the year,
3,016,194 (12,242) 2,587,986 (10,504)
net of tax
Total comprehensive income for the year 24,755,059 44,332,615 21,240,591 38,038,727
Comprehensive income attributable to:
Owners of the parent company 24,466,985 43,882,473 20,993,415 37,652,492
Non-controlling interests 288,074 450,142 247,176 386,235

Sam sung Electronics Business Report 71 / 261

 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of Korean won)

Equity
attributable to
Other owners of the Non-
Preference Ordinary Share Retained components parent controlling
2018 KRW Notes shares shares premium earnings of equity company interests Total

Balance as of January 1, 2018 119,467 778,047 4,403,893 215,811,200 (13,899,191) 207,213,416 7,278,012 214,491,428
Cumulative effect of changes in
- - - 246,529 (261,734) (15,205) - (15,205)
accounting policies
Restated total equity at the beginning
119,467 778,047 4,403,893 216,057,729 (14,160,925) 207,198,211 7,278,012 214,476,223
of the financial year
Profit for the year - - - 43,890,877 - 43,890,877 453,980 44,344,857
Gain (loss) on valuation of financial
assets at fair value through other 8, 22 - - - (3,007) (236,343) (239,350) 3,485 (235,865)
comprehensive income, net of tax
Share of other comprehensive income
(loss) of associates and joint ventures, 11, 22 - - - - (4,036) (4,036) 93 (3,943)
net of tax
Foreign currency translation, net of tax 22 - - - - 579,260 579,260 11,378 590,638
Remeasurement of net defined benefit
16, 22 - - - - (391,357) (391,357) (18,794) (410,151)
liabilities (assets), net of tax
Gain on valuation of cash flow hedge
22 - - - - 47,079 47,079 - 47,079
derivatives
Total comprehensive income (loss) - - - 43,887,870 (5,397) 43,882,473 450,142 44,332,615
Dividends 21 - - - (10,143,345) - (10,143,345) (50,657) (10,194,002)
Capital transaction under common
- - - - 1,719 1,719 7,991 9,710
control
Changes in consolidated entities - - - - - - 41 41
Acquisition of treasury shares 20 - - - - (875,111) (875,111) - (875,111)
Retirement of treasury shares 20 - - - (7,103,298) 7,103,298 - - -
Other - - - - 5,046 5,046 (1,345) 3,701
Total transactions with owners - - - (17,246,643) 6,234,952 (11,011,691) (43,970) (11,055,661)
Balance as of December 31, 2018 119,467 778,047 4,403,893 242,698,956 (7,931,370) 240,068,993 7,684,184 247,753,177

Sam sung Electronics Business Report 72 / 261

 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands of US dollars (Note 2.28))

Equity
attributable to
Other owners of the Non-
Preference Ordinary Share Retained components parent controlling
2018 USD Notes shares shares premium earnings of equity company interests Total

Balance as of January 1, 2018 102,506 667,588 3,778,674 185,172,550 (11,925,927) 177,795,391 6,244,755 184,040,146
Cumulative effect of changes in
- - - 211,529 (224,576) (13,047) - (13,047)
accounting policies
Restated total equity at the beginning
102,506 667,588 3,778,674 185,384,079 (12,150,503) 177,782,344 6,244,755 184,027,099
of the financial year
Profit for the year - - - 37,659,703 - 37,659,703 389,528 38,049,231
Gain (loss) on valuation of financial
assets at fair value through other - - - (2,581) (202,789) (205,370) 2,990 (202,380)
comprehensive income, net of tax
Share of other comprehensive income
(loss) of associates and joint ventures, - - - - (3,463) (3,463) 80 (3,383)
net of tax
Foreign currency translation, net of tax - - - - 497,023 497,023 9,763 506,786
Remeasurement of net defined benefit
- - - - (335,796) (335,796) (16,126) (351,922)
liabilities (assets), net of tax
Gain on valuation of cash flow hedge
- - - - 40,395 40,395 - 40,395
derivatives
Total comprehensive income (loss) - - - 37,657,122 (4,630) 37,652,492 386,235 38,038,727
Dividends - - - (8,703,297) - (8,703,297) (43,465) (8,746,762)
Capital transaction under common
- - - - 1,474 1,474 6,856 8,330
control
Changes in consolidated entities - - - - - - 35 35
Acquisition of treasury shares - - - - (750,872) (750,872) - (750,872)
Retirement of treasury shares - - - (6,094,845) 6,094,845 - - -
Other - - - - 4,330 4,330 (1,153) 3,177
Total transactions with owners - - - (14,798,142) 5,349,777 (9,448,365) (37,727) (9,486,092)
Balance as of December 31, 2018 102,506 667,588 3,778,674 208,243,059 (6,805,356) 205,986,471 6,593,263 212,579,734

Sam sung Electronics Business Report 73 / 261

 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of Korean won)

Equity
attributable to
Other owners of the Non-
Preference Ordinary Share Retained components parent controlling
2019 KRW Notes shares shares premium earnings of equity company interests Total

Balance as of January 1, 2019 119,467 778,047 4,403,893 242,698,956 (7,931,370) 240,068,993 7,684,184 247,753,177
Profit for the year - - - 21,505,054 - 21,505,054 233,811 21,738,865
Gain (loss) on valuation of financial
assets at fair value through other 8, 22 - - - (1,265) 1,111,264 1,109,999 36,600 1,146,599
comprehensive income, net of tax
Share of other comprehensive income
(loss) of associates and joint ventures, 11, 22 - - - (608) 31,477 30,869 884 31,753
net of tax
Foreign currency translation, net of tax 22 - - - - 2,966,973 2,966,973 49,526 3,016,499
Remeasurement of net defined benefit
16, 22 - - - - (1,147,721) (1,147,721) (32,747) (1,180,468)
liabilities (assets), net of tax
Gain on valuation of cash flow hedge
22 - - - - 1,811 1,811 - 1,811
derivatives
Total comprehensive income - - - 21,503,181 2,963,804 24,466,985 288,074 24,755,059
Dividends 21 - - - (9,619,243) - (9,619,243) (21,359) (9,640,602)
Capital transaction under common
- - - - (85) (85) 7,356 7,271
control
Changes in consolidated entities - - - - - - 5,730 5,730
Other - - - - (1,178) (1,178) 964 (214)
Total transactions with owners - - - (9,619,243) (1,263) (9,620,506) (7,309) (9,627,815)
Balance as of December 31, 2019 119,467 778,047 4,403,893 254,582,894 (4,968,829) 254,915,472 7,964,949 262,880,421

Sam sung Electronics Business Report 74 / 261

 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands of US dollars (Note 2.28))

Equity
attributable to
Other owners of the Non-
Preference Ordinary Share Retained components parent controlling
2019 USD Notes shares shares premium earnings of equity company interests Total

Balance as of January 1, 2019 102,506 667,588 3,778,674 208,243,059 (6,805,356) 205,986,471 6,593,263 212,579,734
Profit for the year - - - 18,451,988 - 18,451,988 200,617 18,652,605
Gain (loss) on valuation of financial
assets at fair value through other 8, 22 - - - (1,085) 953,498 952,413 31,404 983,817
comprehensive income, net of tax
Share of other comprehensive income
(loss) of associates and joint ventures, 11, 22 - - - (522) 27,009 26,487 758 27,245
net of tax
Foreign currency translation, net of tax 22 - - - - 2,545,753 2,545,753 42,495 2,588,248
Remeasurement of net defined benefit
16, 22 - - - - (984,779) (984,779) (28,098) (1,012,877)
liabilities (assets), net of tax
Gain on valuation of cash flow hedge
22 - - - - 1,553 1,553 - 1,553
derivatives
Total comprehensive income - - - 18,450,381 2,543,034 20,993,415 247,176 21,240,591
Dividends 21 - - - (8,253,602) - (8,253,602) (18,327) (8,271,929)
Capital transaction under common
- - - - (73) (73) 6,312 6,239
control
Changes in consolidated entities - - - - - - 4,917 4,917
Other - - - - (1,011) (1,011) 827 (184)
Total transactions with owners - - - (8,253,602) (1,084) (8,254,686) (6,271) (8,260,957)
Balance as of December 31, 2019 102,506 667,588 3,778,674 218,439,838 (4,263,406) 218,725,200 6,834,168 225,559,368

Sam sung Electronics Business Report 75 / 261

 CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of Korean won, in thousands of US dollars (Note 2.28))

For the year ended December 31,

Notes 2019 2018 2019 2018
KRW KRW USD USD

Cash flows from operating activities

Profit for the year 21,738,865 44,344,857 18,652,605 38,049,231
Adjustments 29 37,442,682 43,604,573 32,126,956 37,414,045
Changes in assets and liabilities arising from
29 (2,545,756) (9,924,366) (2,184,336) (8,515,406)
operating activities
Cash generated from operations 56,635,791 78,025,064 48,595,225 66,947,870
Interest received 2,306,401 1,788,520 1,978,962 1,534,604
Interest paid (579,979) (548,272) (497,640) (470,434)
Dividends received 241,801 215,992 207,473 185,328
Income tax paid (13,221,099) (12,449,441) (11,344,104) (10,681,998)
Net cash inflow from operating activities 45,382,915 67,031,863 38,939,916 57,515,370

Cash flows from investing activities

Net increase in short-term financial instruments (2,030,913) (12,368,298) (1,742,585) (10,612,375)
Net increase in short-term financial assets at
(818,089) (1,436,844) (701,945) (1,232,856)
amortized cost
Net decrease (increase) in short-term financial assets
374,982 (139,668) 321,746 (119,839)
at fair value through profit or loss
Disposal of long-term financial instruments 4,586,610 255,850 3,935,450 219,527
Acquisition of long-term financial instruments (12,725,465) (7,678,654) (10,918,835) (6,588,518)
Disposal of financial assets at amortized cost 694,584 - 595,974 -
Acquisition of financial assets at amortized cost (825,027) (158,716) (707,898) (136,183)
Disposal of financial assets at fair value through
1,575 16,211 1,351 13,910
other comprehensive income
Acquisition of financial assets at fair value through
(63,773) (456,134) (54,719) (391,377)
other comprehensive income
Disposal of financial assets at fair value through
64,321 80,138 55,189 68,761
profit or loss
Acquisition of financial assets at fair value through
(135,826) (193,848) (116,543) (166,327)
profit or loss
Disposal of investment in associates and joint
12,149 148 10,424 127
ventures
Acquisition of investment in associates and joint
(12,778) (51,226) (10,964) (43,953)
ventures
Disposal of property, plant and equipment 513,265 556,973 440,397 477,900
Acquisition of property, plant and equipment (25,367,756) (29,556,406) (21,766,303) (25,360,292)
Disposal of intangible assets 7,241 11,935 6,213 10,241
Acquisition of intangible assets (3,249,914) (1,020,517) (2,788,525) (875,635)
Cash outflow from business combinations (1,019,405) (99,108) (874,680) (85,038)
Cash inflow (outflow) from other investing activities 46,048 (2,289) 39,512 (1,965)
Net cash outflow from investing activities (39,948,171) (52,240,453) (34,276,741) (44,823,892)

Sam sung Electronics Business Report 76 / 261

 CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of Korean won, in thousands of US dollars (Note 2.28))

For the year ended December 31,

Notes 2019 2018 2019 2018
KRW KRW USD USD
Cash flows from financing activities
Net increase (decrease) in short-term borrowings 29 865,792 (2,046,470) 742,876 (1,755,933)
Acquisition of treasury shares - (875,111) - (750,872)
Proceeds from long-term borrowings 29 - 3,580 - 3,072
Repayment of debentures and long-term borrowings 29 (709,400) (1,986,597) (608,687) (1,704,560)
Dividends paid (9,639,202) (10,193,695) (8,270,727) (8,746,499)
Net increase (decrease) in non-controlling interests (1,700) 8,071 (1,459) 6,924
Net cash outflow from financing activities (9,484,510) (15,090,222) (8,137,997) (12,947,868)

Effect of exchange rate changes on cash and cash

595,260 94,187 510,751 80,816
equivalents
Net decrease in cash and cash equivalents (3,454,506) (204,625) (2,964,071) (175,574)

Cash and cash equivalents

Beginning of the year 30,340,505 30,545,130 26,033,073 26,208,647
End of the year 26,885,999 30,340,505 23,069,002 26,033,073

Sam sung Electronics Business Report 77 / 261

2. Notes to consolidated financial statements
1. General Information

1.1 Company Overview

Samsung Electronics Co., Ltd. (the “SEC”) was incorporated under the laws of the Republic of Korea in 1969 and listed its shares
on the Korea Stock Exchange in 1975. SEC and its subsidiaries (collectively referred to as the “Company”) operate four business
divisions: Consumer Electronics (“CE”), In formation Technology & Mobile Co mmunications (“IM”), Device Solutions (“DS”) and
Harman. The CE division includes digital TVs, monitors, air conditioners and refrigerators and the IM division includes mobile
phones, communication systems, and computers. The DS div ision includes products such as memory, foundry and system LSI in
the semiconductor business (“Semiconductor”), and OLED and LCD panels in the display business (“DP”). The Harman div ision
includes connected car systems, audio and visual products, enterprise automation solutions and connected services. The Co mpany is
domiciled in the Republic of Korea and the address of its registered office is Suwon, Republic of Korea.

These consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards
(“Korean IFRS”) 1110, Consolidated Financial Statements. SEC, as the controlling co mpany, consolidates its 240 subsidiaries
including Samsung Display Co., Ltd. and Samsung Electronics A merica, Inc. (SEA ) (refer to Note 1.2). The Co mpany also applies
the equity method of accounting for its 41 associates and joint ventures, including Samsung Electro-Mechanics Co., Ltd.

1.2 Consolidated Subsidiaries

(A) The consolidated subsidiaries as of December 31, 2019 are as follows:

Percentage of
Are a Subsidiaries Industry ownership (%)1
Samsung Electronics America, Inc. (SEA) Sale of electronic devices 100.0
NeuroLogica Corp. Manufacture and sale of medical equipment 100.0
Dacor Holdings, Inc. Holding company 100.0
Dacor, Inc. Manufacture and sale of home appliances 100.0
Dacor Canada Co. Sale of home appliances 100.0
EverythingDacor.com, Inc. Sale of home appliances 100.0
Distinctive Appliances of California, Inc. Sale of home appliances 100.0
Samsung HVAC America, LLC Sale of air conditioning products 100.0
SmartT hings, Inc. Sale of smart home electronics 100.0
Samsung Oak Holdings, Inc. (SHI) Holding company 100.0
America Stellus T echnologies, Inc. Manufacture and sale of semiconductor system 100.0
Joyent, Inc. Cloud services 100.0
Prismview, LLC Manufacture and sale of LED displays 100.0
Samsung Research America, Inc (SRA) R&D 100.0
Samsung Next LLC (SNX) Holding company 100.0
Samsung Next Fund LLC (SNXF) T echnology business, venture capital investments 100.0
Viv Labs, Inc. AI technology services 100.0
Samsung Semiconductor, Inc. (SSI) Sale of semiconductor and display panels 100.0
Samsung Austin Semiconductor LLC. (SAS) Manufacture of semiconductor system 100.0
Samsung International, Inc. (SII) Manufacture of CT V and monitors 100.0
Samsung Mexicana S.A. de C.V (SAMEX) Manufacture of electronic devices 100.0

1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.

Sam sung Electronics Business Report 78 / 261

 Percentage of
Are a Subsidiaries Industry ownership (%)1
Samsung Electronics Home Appliances America, LLC
Manufacture of home appliances 100.0
(SEHA)
SEMES America, Inc. Semiconductor equipment 100.0
Zhilabs Inc. Sale of network solutions 100.0
Samsung Electronics Canada, Inc. (SECA) Sale of electronic devices 100.0
AdGear T echnologies Inc. Digital advertising platforms 100.0
SigMast Communications Inc. Development of mobile communications software 100.0
Samsung Electronics Mexico S.A. De C.V. (SEM) Sale of electronic devices 100.0
Samsung Electronics Digital Appliance Mexico, SA de CV
Manufacture of electronic devices 100.0
(SEDAM)
Samsung Electronics Latinoamerica Miami, Inc. (SEMI) Sale of electronic devices 100.0
Samsung Electronics Latinoamerica (Zona Libre), S. A.
Sale of electronic devices 100.0
(SELA)
Samsung Electronics Venezuela, C.A. (SEVEN) Marketing and services 100.0
Samsung Electronica Colombia S.A. (SAMCOL) Sale of electronic devices 100.0
Samsung Electronics Panama. S.A. (SEPA) Consulting 100.0
Samsung Electronica da Amazonia Ltda. (SEDA) Manufacture and sale of electronic devices 100.0
Samsung Electronics Argentina S.A. (SEASA) Marketing and services 100.0
America Samsung Electronics Chile Limitada (SECH) Sale of electronic devices 100.0
Samsung Electronics Peru S.A.C. (SEPR) Sale of electronic devices 100.0
Harman International Industries, Inc. Holding company 100.0
Harman Becker Automotive Systems, Inc. Manufacture and sale of audio products, R&D 100.0
Harman Connected Services, Inc. Connected service provider 100.0
Harman Connected Services Engineering Corp. Connected service provider 100.0
Harman Connected Services South America S.R.L. Connected service provider 100.0
Harman da Amazonia Industria Eletronica e Participacoes
Manufacture and sale of audio products 100.0
Ltda.
Harman de Mexico, S. de R.L. de C.V. Manufacture of audio products 100.0
Harman do Brasil Industria Eletronica e Participacoes Ltda. Sale of audio products, R&D 100.0
Harman Financial Group LLC Management company 100.0
Harman International Industries Canada Ltd. Sale of audio products 100.0
Harman International Mexico, S. de R.L. de C.V. Sale of audio products 100.0
Harman KG Holding, LLC Holding company 100.0
Harman Professional, Inc. Sale of audio products, R&D 100.0
RT SV CO-INVEST , LP Venture capital investments 99.9
Beijing Integrated Circuit Industry International Fund, L.P Venture capital investments 61.4
China Materialia New Materials 2016 Limited Partnership Venture capital investments 99.0

1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.

Sam sung Electronics Business Report 79 / 261

 Percentage of
Are a Subsidiaries Industry ownership (%)1
Samsung Electronics (UK) Ltd. (SEUK) Sale of electronic devices 100.0
Samsung Electronics Ltd. (SEL) Holding company 100.0
Samsung Electronics Holding GmbH (SEHG) Holding company 100.0
Samsung Semiconductor Europe GmbH (SSEG) Sale of semiconductor and display panels 100.0
Samsung Electronics GmbH (SEG) Sale of electronic devices 100.0
Samsung Electronics Iberia, S.A. (SESA) Sale of electronic devices 100.0
Samsung Electronics France S.A.S (SEF) Sale of electronic devices 100.0
Samsung Electronics Hungarian Private Co. Ltd. (SEH) Manufacture and sale of electronic devices 100.0
Samsung Electronics Czech and Slovak s.r.o. (SECZ) Sale of electronic devices 100.0
Samsung Electronics Italia S.P.A. (SEI) Sale of electronic devices 100.0
Samsung Electronics Europe Logistics B.V. (SELS) Logistics 100.0
Samsung Electronics Benelux B.V. (SEBN) Sale of electronic devices 100.0
Samsung Display Slovakia s.r.o. (SDSK) T oll processing of display panels 100.0
Samsung Electronics Romania LLC (SEROM) Sale of electronic devices 100.0
Samsung Electronics Polska, SP.Zo.o (SEPOL) Sale of electronic devices 100.0
Samsung Electronics Portuguesa S.A. (SEP) Sale of electronic devices 100.0
Samsung Electronics Nordic Aktiebolag (SENA) Sale of electronic devices 100.0
Samsung Semiconductor Europe Limited (SSEL) Sale of semiconductor and display panels 100.0
Samsung Electronics Austria GmbH (SEAG) Sale of electronic devices 100.0
Samsung Electronics Switzerland GmbH (SESG) Sale of electronic devices 100.0
Samsung Electronics Slovakia s.r.o (SESK) Manufacture of CT V and monitors 100.0
Europe/CIS
Samsung Electronics Baltics SIA (SEB) Sale of electronic devices 100.0
Samsung Electronics Europe Holding Cooperatief U.A.
Holding company 100.0
(SEEH)
Samsung Electronics Poland Manufacturing SP.Zo.o
Manufacture of home appliances 100.0
(SEPM)
Samsung Electronics Greece S.M.S.A (SEGR) Sale of electronic devices 100.0
Samsung Electronics Air Conditioner Europe B.V.
Sale of air conditioning products 100.0
(SEACE)
Samsung Nanoradio Design Center (SNDC) R&D 100.0
Samsung Denmark Research Center ApS (SDRC) R&D 100.0
Samsung Cambridge Solution Centre Limited (SCSC) R&D 100.0
Zhilabs, S.L. Development and sale of network solutions 100.0
Foodient Ltd. R&D 100.0
Samsung Electronics Overseas B.V. (SEO) Sale of electronic devices 100.0
Samsung Electronics Rus Company LLC (SERC) Sale of electronic devices 100.0
Samsung Electronics Ukraine Company LLC (SEUC) Sale of electronic devices 100.0
Samsung R&D Institute Rus LLC (SRR) R&D 100.0
Samsung Electronics Central Eurasia LLP (SECE) Sale of electronic devices 100.0
Samsung Electronics Caucasus Co. Ltd (SECC) Marketing 100.0
Samsung Electronics Rus Kaluga LLC (SERK) Manufacture of CT V 100.0
AKG Acoustics GmbH Manufacture and sale of audio products 100.0
AMX UK Limited Sale of audio products 100.0

1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.

Sam sung Electronics Business Report 80 / 261

 Percentage of
Are a Subsidiaries Industry ownership (%)1
Arcam Limited Holding company 100.0
A&R Cambridge Limited Sale of audio products 100.0
Harman Audio Iberia Espana Sociedad Limitada Sale of audio products 100.0
Harman Automotive UK Limited Manufacture of audio products 100.0
Harman Becker Automotive Systems GmbH Manufacture and sale of audio products, R&D 100.0
Harman Becker Automotive Systems Italy S.R.L. Sale of audio products 100.0
Harman Becker Automotive Systems Manufacturing Kft Manufacture of audio products, R&D 100.0
Harman Belgium SA Sale of audio products 100.0
Harman Connected Services AB. Connected service provider 100.0
Harman Finland Oy Connected service provider 100.0
Harman Connected Services GmbH Connected service provider 100.0
Harman Connected Services Limited Connected service provider 100.0
Harman Connected Services Poland Sp.zoo Connected service provider 100.0
Harman Connected Services UK Ltd. Connected service provider 100.0
Harman Consumer Nederland B.V. Sale of audio products 100.0
Harman Deutschland GmbH Sale of audio products 100.0
Harman Finance International GP S.a.r.l Holding company 100.0
Europe/CIS Harman France SNC Sale of audio products 100.0
Harman Holding Gmbh & Co. KG Management company 100.0
Harman Hungary Financing Ltd. Financing company 100.0
Harman Inc. & Co. KG Holding company 100.0
Harman International Estonia OU R&D 100.0
Harman International Industries Limited Sale of audio products, etc. 100.0
Harman International Romania SRL R&D 100.0
Harman Finance International, SCA Financing company 100.0
Harman International s.r.o Manufacture of audio products 100.0
Harman Management GmbH Holding company 100.0
Harman Professional Kft Manufacture of audio products, R&D 100.0
Martin Manufacturing (UK) Ltd Manufacture of audio products 100.0
Harman Professional Denmark ApS Sale of audio products, R&D 100.0
Red Bend Software Ltd. Software design 100.0
Red Bend Software SAS Software design 100.0
Studer Professional Audio GmbH Sale of audio products, R&D 100.0
Harman Connected Services OOO Connected service provider 100.0
Harman RUS CIS LLC Sale of audio products 100.0

1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.

Sam sung Electronics Business Report 81 / 261

 Percentage of
Are a Subsidiaries Industry ownership (%)1
Samsung Electronics West Africa Ltd. (SEWA) Marketing 100.0
Samsung Electronics East Africa Ltd. (SEEA) Marketing 100.0
Samsung Gulf Electronics Co., Ltd. (SGE) Sale of electronic devices 100.0
Samsung Electronics Saudi Arabia Ltd. (SESAR) Sale of electronic devices 100.0
Samsung Electronics Egypt S.A.E (SEEG) Manufacture and sale of electronic devices 100.0
Samsung Electronics Israel Ltd. (SEIL) Marketing 100.0
Samsung Electronics T unisia S.A.R.L (SET N) Marketing 100.0
Samsung Electronics Pakistan (Private) Ltd. (SEPAK) Marketing 100.0
Samsung Electronics South Africa (Pty) Ltd. (SSA) Sale of electronic devices 100.0
Middle East Samsung Electronics South Africa Production (pty) Ltd.
Manufacture of CT V and monitors 100.0
and Africa (SSAP)
Samsung Electronics T urkey (SET K) Sale of electronic devices 100.0
Samsung Semiconductor Israel R&D Center, Ltd. (SIRC) R&D 100.0
Samsung Electronics Levant Co., Ltd. (SELV) Sale of electronic devices 100.0
Samsung Electronics Maghreb Arab (SEMAG) Sale of electronic devices 100.0
Corephotonics Ltd. R&D 100.0
Global Symphony T echnology Group Private Ltd. Holding company 100.0
Harman Connected Services Morocco Connected service provider 100.0
Harman Industries Holdings Mauritius Ltd. Holding company 100.0
Red Bend Ltd. Manufacture of audio products 100.0

1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.

Sam sung Electronics Business Report 82 / 261

 Percentage of
Are a Subsidiaries Industry ownership (%)1
Samsung Japan Corporation (SJC) Sale of semiconductor and display panels 100.0
Samsung R&D Institute Japan Co. Ltd. (SRJ) R&D 100.0
Samsung Electronics Japan Co., Ltd. (SEJ) Sale of electronic devices 100.0
Samsung Electronics Display (M) Sdn. Bhd. (SDMA) Manufacture of electronic devices 100.0
Samsung Electronics (M) Sdn. Bhd. (SEMA) Manufacture of home appliances 100.0
Samsung Vina Electronics Co., Ltd. (SAVINA) Sale of electronic devices 100.0
Samsung Asia Private Ltd. (SAPL) Sale of electronic devices 100.0
Samsung India Electronics Private Ltd. (SIEL) Manufacture and sale of electronic devices 100.0
Samsung R&D Institute India-Bangalore Private Limited
R&D 100.0
(SRI-Bangalore)
Samsung Nepal Services Pvt, Ltd (SNSL) Service 100.0
Samsung Display Noida Private Limited (SDN) Manufacture of display panels 100.0
Samsung Electronics Australia Pty. Ltd. (SEAU) Sale of electronic devices 100.0
Samsung Electronics New Zealand Limited (SENZ) Sale of electronic devices 100.0
PT Samsung Electronics Indonesia (SEIN) Manufacture and sale of electronic devices 100.0
Asia PT Samsung T elecommunications Indonesia (ST IN) Sale of electronic devices and services 100.0
(Excluding T hai Samsung Electronics Co., Ltd. (T SE) Manufacture and sale of electronic devices 91.8
China)
Laos Samsung Electronics Sole Co., Ltd (LSE) Marketing 100.0
Samsung Electronics Philippines Corporation (SEPCO) Sale of electronic devices 100.0
Samsung Display Vietnam Co., Ltd. (SDV) Manufacture of display panels 100.0
Samsung Malaysia Electronics (SME) Sdn. Bhd. (SME) Sale of electronic devices 100.0
Samsung R&D Institute BanglaDesh Limited (SRBD) R&D 100.0
Samsung Electronics Vietnam Co., Ltd. (SEV) Manufacture of electronic devices 100.0
Samsung Electronics Vietnam T HAINGUYEN Co., Ltd.
Manufacture of communication equipment 100.0
(SEVT )
Samsung Electronics HCMC CE Complex Co., Ltd.
Manufacture and sale of electronic devices 100.0
(SEHC)
Harman Connected Services Corp. India Pvt. Ltd. Connected service provider 100.0
Harman International (India) Private Limited Sale of audio products, R&D 100.0
Harman International Industries PT Y Ltd. Holding company 100.0
Harman International Japan Co., Ltd. Sale of audio products, R&D 100.0
Harman Singapore Pte. Ltd. Sale of audio products 100.0
Martin Professional Pte. Ltd. Sale of audio products 100.0

1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.

Sam sung Electronics Business Report 83 / 261

 Percentage of
Are a Subsidiaries Industry ownership (%)1
Samsung Display Dongguan Co., Ltd. (SDD) Manufacture of display panels 100.0
Samsung Display T ianjin Co., Ltd. (SDT ) Manufacture of display panels 95.0
Samsung Electronics Hong Kong Co., Ltd. (SEHK) Sale of electronic devices 100.0
Suzhou Samsung Electronics Co., Ltd. (SSEC) Manufacture of home appliances 88.3
Samsung Suzhou Electronics Export Co., Ltd. (SSEC-E) Manufacture of home appliances 100.0
Samsung (CHINA) Investment Co., Ltd. (SCIC) Sale of electronic devices 100.0
Samsung Mobile R&D Center China-Guangzhou (SRC-
R&D 100.0
Guangzhou)
Samsung T ianjin Mobile Development Center (SRC-
R&D 100.0
T ianjin)
Samsung R&D Institute China-Shenzhen (SRC-Shenzhen) R&D 100.0
Samsung Electronics Suzhou Semiconductor Co., Ltd.
T oll processing of semiconductors 100.0
(SESS)
SEMES (XIAN) Co., Ltd. Semiconductor equipment services 100.0
Samsung Electronics Huizhou Co., Ltd. (SEHZ) Manufacture of electronic devices 100.0
T ianjin Samsung Electronics Co., Ltd. (T SEC) Manufacture of CT V and monitors 91.2
Samsung Electronics T aiwan Co., Ltd. (SET ) Sale of electronic devices 100.0
Beijing Samsung T elecom R&D Center (SRC-Beijing) R&D 100.0
T ianjin Samsung T elecom T echnology Co., Ltd. (T ST C) Manufacture of communication equipment 90.0
China Shanghai Samsung Semiconductor Co., Ltd. (SSS) Sale of semiconductor and display panels 100.0
Samsung Electronics Suzhou Computer Co., Ltd. (SESC) Manufacture of electronic devices 100.0
Samsung Suzhou Module Co., Ltd. (SSM) Manufacture of display panels 100.0
Samsung Suzhou LCD Co., Ltd. (SSL) Manufacture of display panels 60.0
Shenzhen Samsung Electronics T elecommunication Co.,
Manufacture of communication equipment 100.0
Ltd. (SSET )
Samsung Semiconductor (China) R&D Co., Ltd. (SSCR) R&D 100.0
Samsung Electronics China R&D Center (SRC-Nanjing) R&D 100.0
Samsung (China) Semiconductor Co., Ltd. (SCS) Manufacture of semiconductors 100.0
Samsung SemiConductor Xian Co., Ltd. (SSCX) Sale of semiconductor and display panels 100.0
T ianjin Samsung LED Co., Ltd. (T SLED) Manufacture of LED 100.0
Harman (China) T echnologies Co., Ltd. Manufacture of audio products 100.0
Harman (Suzhou) Audio and Infotainment Systems Co.,
Sale of audio products 100.0
Ltd.
Harman Automotive Electronic Systems (Suzhou) Co., Ltd. Manufacture of audio products, R&D 100.0
Harman Commercial (Shanghai) Co., Ltd. Sale of audio products 100.0
Harman Connected Services Solutions (Chengdu) Co., Ltd. Connected service provider 100.0
Harman Holding Limited Sale of audio products 100.0
Harman International (China) Holdings Co., Ltd. Sale of audio products, R&D 100.0
Harman T echnology (Shenzhen) Co., Ltd. Sale of audio products, R&D 100.0

1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.

Sam sung Electronics Business Report 84 / 261

 Percentage of
Are a Subsidiaries Industry ownership (%)1
Samsung Display Co., Ltd. Manufacture and sale of display panels 84.8
SU Materials Manufacture of display panel components 50.0
ST ECO Co., Ltd. Manufacture of semiconductor components 70.0
Manufacture and sale of semiconductor and FPD
SEMES Co., Ltd. 91.5
equipment
Samsung Electronics Service Co., Ltd. Repair services for electronic devices 99.3
Samsung Electronics Service Customer Satisfaction
Call center services 100.0
Co., Ltd.
Samsung Electronics Sales Co., Ltd. Sale of electronic devices 100.0
Samsung Electronics Logitech Co., Ltd. General logistics agency 100.0
Samsung Medison Co., Ltd. Manufacture and sale of medical equipment 68.5
Mirero System Co., Ltd. Semiconductor S/W 99.9
Dowooinsys Co., Ltd. 2 Manufacture of display panel components 48.2
Gf Co., Ltd. Manufacture of display panel components 72.7
Harman International Korea, Inc. Software development and supply, etc. 100.0
Korea Samsung Venture Capital Union #21 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #22 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #26 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #27 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #28 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #29 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #32 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #33 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #37 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #40 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #42 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #43 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #45 T echnology business, venture capital investments 99.0
Samsung Venture Capital Union #48 T echnology business, venture capital investments 99.0
Growth type private equity trust specialized in
Investment in semiconductor industry 66.7
semiconductors

1
Ownership represents the Company’s ownership of the voting rights in each entity, including subsidiaries’ ownerships.
2
Classified as a subsidiary although the ownership is less than 50%, as the Company is considered to have a de facto control over the investee.

Sam sung Electronics Business Report 85 / 261

(B) A summary of financial data of major consolidated subsidiaries as of and for the years ended December 31, 2019 and 2018 is
as follows:

(1) 2019

(In millions of Korean won) 2019

Profit (loss) for the
Major subsidiaries1 Assets Liabilities S ales year

Samsung Display Co., Ltd. ￦ 46,543,974 ￦ 6,421,516 ￦ 27,088,475 ￦ 407,791

Samsung Electronics America, Inc. (SEA) 34,704,039 13,992,397 33,859,423 1,127,719
Harman and its subsidiaries2 15,609,084 5,791,272 10,075,626 104,459
Samsung (CHINA) Investment Co., Ltd. (SCIC) 14,637,222 11,701,871 3,098,948 581,115
Samsung Electronics Vietnam THAINGUYEN
13,847,934 2,075,180 32,831,993 2,305,089
Co., Ltd. (SEVT)
Samsung (China) Semiconductor Co., Ltd. (SCS) 12,370,070 2,678,742 5,445,396 537,037
Samsung Electronics Vietnam Co., Ltd. (SEV) 12,367,857 1,418,876 22,350,791 1,757,684
Samsung Electronics Europe Holding
10,682,847 7,662,042 - 21,915
Cooperatief U.A. (SEEH)
Samsung Semiconductor, Inc. (SSI) 9,194,190 3,795,273 16,473,214 211,312
Samsung Asia Private Ltd. (SAPL) 9,137,262 579,618 1,572,146 1,265,359
Samsung Display Vietnam Co., Ltd. (SDV) 7,267,124 4,587,477 16,613,123 601,469
Samsung Electronica da Amazonia Ltda.
7,058,719 1,594,907 7,252,673 887,298
(SEDA)
Samsung India Electronics Private Ltd. (SIEL) 7,042,872 3,588,241 12,902,906 448,678
Samsung Austin Semiconductor LLC. (SAS) 6,437,865 556,765 3,897,162 571,391
Shanghai Samsung Semiconductor Co., Ltd. 5,880,616 4,446,885 26,067,175 265,801
(SSS)
Thai Samsung Electronics Co., Ltd. (TSE) 2,912,731 450,833 3,921,248 144,087
Samsung Electronics (UK) Ltd. (SEUK) 2,644,358 1,877,903 4,730,414 104,741
Samsung Electronics HCM C CE Complex Co.,
2,305,587 1,035,533 4,934,278 373,325
Ltd. (SEHC)
Samsung Electronics GmbH (SEG) 2,258,269 2,199,561 5,597,323 4,729
Samsung Electronics Hungarian Private Co. Ltd.
2,109,654 416,160 2,915,812 106,704
(SEH)
Samsung SemiConductor Xian Co., Ltd. (SSCX) 2,091,092 1,954,875 4,283,163 53,160
Samsung Electronics Europe Logistics B.V.
2,027,213 1,891,221 12,540,817 6,531
(SELS)
Samsung Electronics Benelux B.V. (SEBN) 1,914,864 673,887 2,246,357 39,175
Samsung Suzhou LCD Co., Ltd. (SSL) 1,808,262 625,541 1,415,505 (4,414)
Samsung Display Dongguan Co., Ltd. (SDD) 1,795,077 444,552 3,995,696 158,122

1
The above summary of condensed financial information is based on separate financial statements of each subsidiary.
2
Consolidated financial data of an intermediate company that includes Harman International Industries, Inc. and its subsidiaries.

Sam sung Electronics Business Report 86 / 261

(2) 2018

(In millions of Korean won) 2018

Profit (loss) for
Major subsidiaries1 Assets Liabilities S ales the year

Samsung Display Co., Ltd. ￦ 47,162,963 ￦ 7,509,766 ￦ 28,653,512 ￦ 1,263,050

Samsung Electronics America, Inc. (SEA) 30,681,097 11,862,223 31,171,751 870,814
Samsung (CHINA) Investment Co., Ltd. (SCIC) 16,090,629 13,858,532 3,277,050 127,448
Harman and its subsidiaries2 15,059,925 5,550,558 8,817,792 41,359
Samsung Electronics Vietnam Co., Ltd. (SEV) 11,501,682 1,607,991 21,430,638 1,783,410
Samsung Electronics Vietnam THAINGUYEN
11,360,811 2,209,962 28,340,939 2,047,014
Co., Ltd. (SEVT)
Samsung (China) Semiconductor Co., Ltd. (SCS) 10,254,900 1,920,000 4,517,286 1,489,906
Samsung Semiconductor, Inc. (SSI) 9,306,621 4,288,544 29,592,773 62,872
Samsung Electronics Europe Holding
8,586,022 6,388,302 - 9,439
Cooperatief U.A. (SEEH)
Samsung Display Vietnam Co., Ltd. (SDV) 8,222,472 6,195,635 19,860,892 1,003,889
Samsung Asia Private Ltd. (SAPL) 7,630,154 592,916 1,665,436 1,111,559
Samsung Electronics Huizhou Co., Ltd. (SEHZ) 6,539,392 586,349 9,780,357 532,767
Samsung India Electronics Private Ltd. (SIEL) 6,410,825 3,438,807 11,045,500 309,632
Samsung Electronica da Amazonia Ltda.
6,207,458 1,610,607 6,978,086 778,124
(SEDA)
Samsung Austin Semiconductor LLC. (SAS) 5,642,117 511,596 3,643,739 434,766
Shanghai Samsung Semiconductor Co., Ltd.
5,400,549 4,227,922 30,379,218 286,956
(SSS)
Thai Samsung Electronics Co., Ltd. (TSE) 2,465,999 397,248 3,841,441 171,407
Samsung Electronics (UK) Ltd. (SEUK) 2,203,583 1,588,007 4,718,920 103,488
Samsung Electronics GmbH (SEG) 2,202,610 2,144,728 6,081,200 (3,490)
Samsung Electronics HCM C CE Complex Co., 2,042,669 1,174,936 4,223,111 334,803
Ltd. (SEHC)
Samsung Electronics Europe Logistics B.V.
1,904,358 1,778,710 12,797,660 19,347
(SELS)
Samsung Electronics Hungarian Private Co. Ltd.
1,894,922 280,245 2,551,008 90,956
(SEH)
Samsung Suzhou LCD Co., Ltd. (SSL) 1,845,330 679,207 1,601,925 31,743
Samsung Electronics France S.A.S (SEF) 1,761,117 1,412,971 3,746,624 59,956
Samsung Electronics Benelux B.V. (SEBN) 1,673,470 552,994 2,118,897 29,536

1
The above summary of condensed financial information is based on separate financial statements of each subsidiary.
2
Consolidated financial data of an intermediate company that includes Harman International Industries, Inc. and its subsidiaries.

Sam sung Electronics Business Report 87 / 261

(C) Changes in scope for consolidation

(1) Subsidiaries newly excluded from the consolidation for the year ended December 31, 2019:

Area Subsidiary Description

Harman Investment Group, LLC Liquidation
America
Red Bend Software Inc. Merger1
Samsung France Research Center SARL (SFRC) Liquidation
Innoetics E.P.E. Merger2
Europe/CIS Duran Audio B.V. Merger3
Harman International SNC Merger4
Harman Professional France SAS Merger5
Broadsense Ltd. Liquidation
iOnRoad Ltd Liquidation
Middle East/Africa
iOnRoad Technologies Ltd Merger6
Towersec Ltd. Merger7
Harman Connected Services Japan Co., Ltd. Merger8
Red Bend Software Japan Co., Ltd. Merger9
Asia Studer Japan Ltd. Merger10
(Excluding China) Harman International Singapore Pte. Ltd. Merger11
AMX Products And Solutions Private Limited Merger12
Samsung Medison India Private Ltd. (SMIN) Liquidation
Samsung Electronics (Beijing) Service Company Limited (SBSC) Merger13
China
Harman Connected Services Solutions (Beijing) Co., Ltd. Liquidation
Korea Red Bend Software Inc. Liquidation

1
For the year ended December 31, 2019, Red Bend Software Inc. merged into Harman International Industries, Inc., a subsidiary of the
Company.
2
For the year ended December 31, 2019, Innoetics E.P.E. merged into Samsung Electronics Greece S.M .S.A (SEGR), a subsidiary of the
Company.
3
For the year ended December 31, 2019, Duran Audio B.V. merged into Harman Becker Automotive Systems M anufacturing Kft, a subsidiary
of the Company.
4
For the year ended December 31, 2019, Harman International SNC merged into Harman France SNC, a subsidiary of the Company.
5
For the year ended December 31, 2019, Harman Professional France SAS merged into Harman France SNC, a subsidiary of the Company.
6
For the year ended December 31, 2019, iOnRoad Technologies Ltd merged into Red Bend Ltd., a subsidiary of the Company.
7
For the year ended December 31, 2019, Towersec Ltd. merged into Red Bend Ltd., a subsidiary of the Company.
8
For the year ended December 31, 2019, Harman Connected Services Japan Co., Ltd. merged into Harman International Japan Co., Ltd., a
subsidiary of the Company.
9
For the year ended December 31, 2019, Red Bend Software Japan Co., Ltd. merged into Harman International Japan Co., Ltd., a subsidiary of
the Company.
10
For the year ended December 31, 2019, Studer Japan Ltd. merged into Harman International Japan Co., Ltd., a subsidiary of the Company.
11
For the year ended December 31, 2019, Harman International Singapore Pte. Ltd. merged into Harman Singapore Pte. Ltd., a subsidiary of
the Company.
12
For the year ended December 31, 2019, AM X Products And Solutions Private Limited merged into Harman International (India) Private
Limited, a subsidiary of the Company.
13
For the year ended December 31, 2019, Samsung Electronics (Beijing) Service Company Limited (SBSC) merged into Samsung (CHINA)
Investment Co., Ltd (SCIC), a subsidiary of the Company.

Sam sung Electronics Business Report 88 / 261

 (2) Subsidiaries newly included in the consolidation for the year ended December 31, 2019:

Area Subsidiary Description

Europe/CIS Foodient Ltd. Acquisition of shares
Corephotonics Ltd. Acquisition of shares
Middle East/Africa
Samsung Electronics Saudi Arabia Ltd. (SESAR) Spin-off
Asia
Samsung Display Noida Private Limited (SDN) Incorporation
(Excluding China)
Samsung Venture Capital Union #45 Incorporation
Samsung Venture Capital Union #48 Incorporation
Korea
Dowooinsys Co., Ltd Acquisition of shares
Gf. Co., Ltd Acquisition of shares

2. Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of Presentation

The Co mpany maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language
(Hangul) in accordance with International Financial Report ing Standards as adopted by the Republic of Korea (“Korean IFRS”).
The accompanying consolidated financial statements have been condensed, restructured, and translated into English from the
Korean language financial statements.

Certain informat ion attached to the Korean language financial statements, but not required for a fair presentation of the Comp any’s
financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.

The consolidated financial statements of the Co mpany presented have been prepared in accordance with Ko rean IFRS. These are
the standards, subsequent amendments and related interpretations issued by the International Accounting Standards Board (IASB)
that have been adopted by the Republic of Korea.

Korean IFRS permits the use of crit ical accounting estimates in the preparation of the consolidated financial statements and requires
management judgments in applying accounting policies. The areas involving a h igher degree of judg ment or co mplexity, or areas
where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 3.

2.2 Changes in Accounting Policies and Disclosures

(A) New and amended standards adopted by the Company

The Co mpany applied the following amended and enacted standards for the first time fo r their annual period beginning on January
1, 2019:

- Enactment of Korean IFRS 1116 Leases

The Co mpany has applied Korean IFRS 1116 Leases on January 1, 2019, the date of initial applicat ion. In accordance with the
transitional provisions in Korean IFRS 1116 Leases, co mparative figures have not been restated. The impacts of the application of
Korean IFRS 1116 Leases on the consolidated financial statements are as follows.

Sam sung Electronics Business Report 89 / 261

The Co mpany recognized right-of-use assets and lease liabilities in relation to leases which had previously been classified as
‘operating leases’ under the principles of the previous Korean IFRS 1017 Leases. As a result of applying the standard, on January 1,
2019, the date of in itial application, right-of-use assets and lease liab ilities increased by ￦ 2,774,982 million and ￦ 2,344,756
million, respectively, and details of lease liabilities are as follows:

(In millions of Korean won)

Financial lease liabilities as of December 31, 2018 ￦ 61,189

Adjustments in operating lease agreements as of January 1, 2019 2,344,756
Operating lease agreements as of December 31, 2018 2,785,140
Discounted operating lease agreements as of January 1, 2019 2,528,731
(Adjustments) Short-term lease and low value assets over which application exemption is applied (183,975)
Lease liabilities as of January 1, 2019 ￦ 2,405,945

- Amendments to Korean IFRS 1019 Employee Benefits

The amend ments require that an entity shall calculate current service cost and net interest for the remainder of the reporting period
after a plan amend ment, curtailment or settlement based on updated actuarial assumptions from the date of the change. The
amend ments also require that a reduction in a surplus must be recognized in profit or loss even if that surplus was not previously
recognized because of the impact of the asset ceiling. The amend ment does not have a significant impact on the consolidated
financial statements.

- Amendments to Korean IFRS 1028 Investments in Associates and Joint Ventures

The amendments clarify that an entity shall apply Korean IFRS 1109 Financial Instruments to financial instruments in an associate
or joint venture to which the equity method is not applied. These include impairment of long-term interests that, in substance, form
part of the entity’s net investment in an associate or joint venture for wh ich Korean IFRS 1109 should take precedence. The
amendment does not have a significant impact on the consolidated financial statements.

- Enactment to Interpretation of Korean IFRS 2123 Uncertainty over Income Tax Treatments

The Interpretation exp lains how to recognize and measure deferred and current inco me tax assets and liabilit ies where there is
uncertainty over a tax treat ment, and includes guidance on how to determine whether each uncertain tax t reat ment is considered
separately or together. It also presents examples of circu mstances where a judgement or estimate is required to be reassessed. The
enactment does not have a significant impact on the consolidated financial statements.

(B) New and amended standards not yet adopted by the Company

The following are new and amended accounting standards issued that are not mandatory for the annual reporting p eriod
commencing January 1, 2019 and have not been early adopted by the Company.

- Amendments to Korean IFRS 1103 Business Combinations

To consider the integration of the required activities and assets as a business, the amended definition of a business requires an
acquisition to include an input and a substantive process that together significantly contribute to the ability to create outputs and
excludes economic benefits fro m the lower costs. An entity can apply a concentration test, an optional test, where substantially all
of the fair value of gross assets acquired is concentrated in a single asset or a g roup of similar assets, the assets acquired wou ld not
represent a business. These amend ments should be applied for annual periods beginning on or after January 1, 2020, and earlier
application is permitted.

Sam sung Electronics Business Report 90 / 261

2.3 Consolidation

The Co mpany prepares the consolidated financial statements in accordance with Ko rean IFRS 1110 Consolidated Financial
Statements.

(A) Subsidiaries

Subsidiaries are all entit ies (including special purpose entities) over which the Co mpany has control. The Co mpany controls the
corresponding investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. Consolidation of a subsidiary begins from the date the Company
obtains control of a subsidiary and ceases when the Company loses control of the subsidiary.

The Co mpany applies the acquisition method to account for business combinations. The consideration transferred is measured at the
fair values of the assets transferred, and identifiable assets acquired and liabilit ies and contingent liabilit ies assumed in a business
combination are in itially measured at their fair values at the acquisition date. The Co mpany recognizes any non-controlling int erest
in the acquiree on an acquisition-by-acquisition basis in the event of liquidation at the non-controlling interest’s proportionate share
of the recognized amounts of acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.

The excess of consideration transferred, amount of any non-controlling interest in the acquired entity and acquisition-date fair value
of any previous equity interest in the acquired entity over the fair value of the net identifiab le assets acquired is recoded as goodwill.
If those amounts are less than the fair value of the net identifiab le assets of the business acquired, the difference is recognized
directly in the profit or loss as a bargain purchase.

Balances of receivables and payables, income and expenses and unrealized gains or losses on transactions between the entities
within the Co mpany are eliminated. Accounting polies of subsidiaries are changed where necessary to ensure consistency with the
policies adopted by the Company.

(B) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as
transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid an d the
relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals of
non-controlling interests are also recorded in equity.

(C) Disposal of subsidiaries

If the Co mpany loses control of a subsidiary, any investment continuously retained in the subsidiary is re-measured at its fair value
at the date when control is lost and any resulting differences are recognized in profit or loss. Such fair value becomes the initial
carrying amount for the subsequent measurement of the retained interest accounted for as an associate, joint venture, or financial
asset. In addition, any amounts previously recognized in other co mprehensive income in respect of such entity are accounted for as
if the Co mpany had directly d isposed of the related assets or liabilities. As a result, the previously recognized other co mprehensive
income are reclassified into profit or loss or equity.

(D) Non-controlling interests

Each co mponent of profit or loss and other comprehensive income is attributed to owners of the parent and to non-controlling
interests. Total comprehensive income is attributed to owners of the parent and to non-controlling interests even if this results in a
negative balance of non-controlling interests.

Sam sung Electronics Business Report 91 / 261

(E) Associates

Associates are all entit ies over which the Co mpany has significant in fluence but does not have control, generally investees of which
fro m 20% to 50% of voting shares are owned by the Co mpany. Investments in associates are accounted for using the equity method
of accounting, after in itially being recognized at cost. Unrealized gains on transactions between the Co mpany and its associates are
eliminated to the extent of the Company’s interest in the associates. If the Company’s share of losses of an associate equals or
exceeds its interest in the associate (including long-term interests that, in substance, form part of the Co mpany’s net investment in
the associate), the Co mpany discontinues recognizing its share of further losses. After the Co mpany’s interest is reduced to zero,
additional losses are provided for, and a liab ility is recognized, only to the extent that the Co mpany has incurred leg al or
constructive obligations or made pay ments on behalf of the associate. If there is an objective ev idence of impairment fo r the
investment in the associate, the Company recognizes the difference between the recoverable amount of the associate and its
carrying amount as impairment loss. If an associate uses accounting policies other than those of the Company for like transactions
and events in similar circu mstances, if necessary, adjustments shall be made to make the associate’s accounting policies conform to
those of the Company when the associate’s financial statements are used by the entity in applying the equity method.

(F) Joint arrangements

A joint arrangement of which t wo or mo re parties have joint control is classified as either a jo int operation or a joint venture. A joint
operator has rights to the assets, and obligations for the liab ilities, relat ing to the joint operation and recognizes the assets, liab ilities,
revenues and expenses relating to its interest in a joint operation. A joint venturer has rights to the net assets relating to the joint
venture and accounts for that investment using the equity method.

2.4 Foreign Currency Translation

(A) Functional and presentation currency

Items included in the consolidated financial statements of each of the Co mpany’s entities are measured using the currency of the
primary economic environ ment in which each entity operates (the “functional currency”). The consolidated financial statements are
presented in Korean won, which is the parent company’s functional and presentation currency.

(B) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such
transactions and fro m the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognized in profit or loss. Exchange differences arising on non-monetary financial assets and liabilities such as equity
instruments at fair value through profit or loss and equity instruments at fair value through other comprehensive income are
recognized in profit or loss and other comprehensive income, respectively, as part of the fair value gain or loss.

(C) Translation into the presentation currency

The results and financial position of all the foreign entities that have a functional currency different fro m the presentation currency
of the Company are translated into the presentation currency as follows:

 Assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate at the
end of the reporting date.
 Income and expenses for each consolidated statement of profit or loss are translated at average exchange rates, unless this
average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the rate on the dates of the transactions.
 All resulting exchange differences are recognized in other comprehensive income.

Sam sung Electronics Business Report 92 / 261

2.5 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term investment assets with high
liquidity that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

2.6 Financial Assets

(A) Classification

Fro m January 1, 2018, an in itial application date for Ko rean IFRS 1109 Financial Instruments, the Co mpany classifies its financial
assets in the following measurement categories:

- Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss).
- Those to be measured at amortized cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash
flows.

For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income.
For investments in debt instruments, this will depend on the business model in which the investment is held. The Company
reclassifies debt investments only when its business model for managing those assets changes.

For investments in equity instruments that are not held for trad ing, classification will depend on whether the Co mpany has made an
irrevocable elect ion at the time of init ial recognition to account for the equity investment at fair value through other comprehensive
income. Changes in fair value of the investments in equity instruments that are not elected to be accounted for as other
comprehensive income are recognized in profit or loss.

(B) Measurement

At initial recognition, the Co mpany measures a financial asset, in the case of a financial asset not at fair value through profit or loss,
at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset or the issuance of the
financial liabilities. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Hybrid (co mbined) contracts with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payment of principal and interest.

a) Debt Instruments

Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow
characteristics of the asset. The Company classifies its debt instruments into one of the following three measurement categories:

① Financial assets measured at amortized cost.

Assets that are held for collect ion of contractual cash flows where those cash flows represent solely payments of principal and
interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is
not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income fro m
these financial assets is included in ‘financial income’ using the effective interest rate method.

Sam sung Electronics Business Report 93 / 261

② Financial assets measured at fair value through other comprehensive income

Assets that are held for collection of contractual cash flo ws and for selling the financial assets, where the assets’ cash flows
represent solely payments of principal and interest, are measured at fair value through other co mprehensive inco me. Movements in
the carrying amount are taken through other comprehensive income, except for the recognition of impairment loss (reversal of
impairment loss), interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial
asset is derecognized, the cumulat ive gain or loss previously recognized in other comprehensive income is reclassified fro m equity
to profit or loss. Interest income fro m these financial assets is included in ‘financial inco me’ using the effective interest rate method.
Foreign exchange gains and losses are presented in ‘financial inco me’ or ‘financial expenses’ and impairment losses are presented
in ‘other non-operating expenses’.

③ Financial assets measured at fair value through profit or loss

Assets that do not meet the criteria for amort ized cost or fair value through other co mprehensive inco me are measured at fair value
through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is
not part of a hedging relationship is recognized in profit or loss and presented in the consolidated statement of profit or loss within
‘other non-operating income’ or ‘other non-operating expenses’ in the year in which it arises.

b) Equity Instruments

The Co mpany subsequently measures all equity investments at fair value. Where the Co mpany’s management has elected to present
fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the derecognition of the investment. When the financial asset is derecognized, the
cumulat ive gain o r loss previously recognized in other co mp rehensive income is reclassified fro m equity to retained earnings.
Div idend inco me fro m such investments continue to be recognized in profit or loss as ‘other non-operating inco me’ when the right
to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘other non-operating income’ or
‘other non-operating expenses’ in the consolidated statement of profit or loss as applicable.

(C) Impairment

The Co mpany assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at
amort ized cost and fair value through other comprehensive inco me. The impairment methodology applied depends on whether there
has been a significant increase in credit risk. For trade receivables, the Co mpany applies the simplified approach, which req uires
expected lifetime losses to be recognized from initial recognition of the receivables.

(D) Recognition and Derecognition

Regular way purchases and sales of financial assets are recognized or derecognized on trade-date, the date on which the Company
commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows fro m the financial
assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
If a transfer does not result in derecognition because the Co mpany has retained substantially all the risks and rewards of o wnership
of the transferred asset, the Company continues to recognize the transferred asset in its entirety and recognizes a financial liability
for the consideration received. The Co mpany classified the financial liab ility as ‘borro wings’ in the consolidated statement of
financial position.

(E) Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount reported in the statements of financial position where there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the
liab ility simu ltaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the
normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

Sam sung Electronics Business Report 94 / 261

2.7 Trade Receivables

Trade receivables are amounts due from customers for inventories sold or services performed in the ordinary course of business. If
collection is expected in one year or less, they are classified as current assets. If co llect ion is expected beyond one year, they are
presented as non-current assets. Trade receivables are recognized in itially at fair value and subsequently measured at amort ized cost
using the effective interest method, less loss allowance.

2.8 Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the average cost method, except for
materials in transit. The cost of fin ished goods and work in p rogress comprises raw materials, direct labor, other direct costs and
related production overheads (based on normal operating capacity). It excludes costs of idle p lant and abnormal waste. Net
realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

Inventories are reduced for the estimated losses arising from excess, obsolescence, and decline in value. This reduction is
determined by estimating market value based on future customer demand. Loss on valuation of inventories is recorded as a part of
cost of sales.

2.9 Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Historical cost
includes expenditures that are directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s
carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flo w to the Company and the cost of the item can be measured reliably. The carry ing amount of those parts that
are replaced is derecognized and repairs and maintenance expenses are recognized in profit or loss in the period they are incurred.

Depreciat ion on tangible assets is calculated using the straight-line method to allocate the difference between their cost and their
residual values over their estimated useful lives. Land is not depreciated. Costs that are directly attributable to the acquisition,
construction or production of a qualify ing asset, including capitalized interest costs, form part of the cost of that asset and are
amortized over the estimated useful lives.

The Company’s policy is that property, plant and equipment should be depreciated over the following estimated useful lives:

Estimated useful lives

Buildings and structures 15, 30 years
M achinery and equipment 5 years
Other 5 years

The depreciation method, residual values and useful lives of property, plant and equipment are reviewed, and adjusted if appro priate,
at the end of each reporting period. An asset’s carrying amount is written down immed iately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparin g the
proceeds with the carrying amount and are recognized within the consolidated statement of profit or loss as part of ‘other non-
operating income’ or ‘other non-operating expenses’.

2.10 Borrowing Costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
are capitalized during the period of time that is required to comp lete and prepare the asset for its intended use. Investment income
earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they are incurred.

Sam sung Electronics Business Report 95 / 261

2.11 Intangible Assets

Goodwill rep resents the excess of the cost of an acquisition over the fair value of the Co mpany’s share of the net identifiable assets
of the acquired subsidiaries, associates, joint ventures and businesses at the date of acquisition. Goodwill on an acquisition of
subsidiaries’ businesses is included in intangible assets and goodwill on an acquisition of associates and joint ventures’ shares is
included in the investments in associates and joint ventures.

Intangible assets, except for goodwill, are in itially recognized at their h istorical cost and carried at cost less accumulated
amortization and accumulated impairment losses.

Internally generated development costs are the aggregate costs recognized after meet ing the asset recognition criteria, including
technical feasibility, and determined to have future economic benefits. Membership rights and certain trademarks are regard ed as
intangible assets with an indefinite useful life and not amortized because there is no foreseeable limit to the period over which the
assets are expected to be utilized. Ho wever, the Co mpany records impairment based on its reasonable estimat ion of the benefits
associated with the membership rights and assessment of impairment indicators, such as a decline in the market value. Intangible
assets with definite useful lives such as trademarks, licenses, and other intangible assets, are amort ized using the straight-line
method over their estimated useful lives.

The Company’s policy is that intangible assets should be amortized over the following estimated useful lives:

Estimated useful lives

Development costs 2 years
Trademarks, licenses and other intangible assets 3 - 25 years

2.12 Impairment of Non-Financial Assets

Goodwill or intangible assets with indefinite useful lives are not subject to amort ization and are tested annually for impairment.
Assets that are subject to amortizat ion are reviewed for impairment whenever events or changes in circu mstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Fo r
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of
the impairment at the end of each reporting period.

Sam sung Electronics Business Report 96 / 261

2.13 Financial Liabilities

(A) Classification and Measurement

The Co mpany shall classify all financial liabilities as financial liabilit ies measured subsequently at amortized cost, except fo r the
following:

- Financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be
subsequently measured at fair value.
- Financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing
involvement approach applies. Such financial liabilities are measured based on the methodology described in Note 2.6
Financial Assets.
- Financial guarantee contracts. After initial recognition, an issuer of such a contract shall subsequently measure it at the higher
of:
(a) The amount of the loss allowance determined on lifetime expected credit losses.
(b) The amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with
the principles of Korean IFRS 1115 Revenue from Contracts with Customers.
- Commitments to provide a loan at a below-market interest rate. An issuer of such a commitment shall subsequently measure it
at the higher of:
(a) The amount of the loss allowance determined on lifetime expected credit losses.
(b) The amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with
the principles of Korean IFRS 1115 Revenue from Contracts with Customers.
- Contingent consideration recognized by an acquirer in a business combination to which Korean IFRS 1103 Business
Combinations applies. Such contingent consideration shall subsequently be measured at fair value with changes recognized in
profit or loss.

(B) Derecognition

Financial liab ilities are removed fro m the consolidated statement of financial position when it is extinguished; for examp le, when
the obligation specified in the contract is discharged or cancelled or expired or when the terms of an existing financial liabilit y are
substantially mod ified. The difference between the carry ing amount of a financial liability ext inguished or transferred to an other
party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

2.14 Trade Payables

Trade payables are amounts due to suppliers fo r inventories purchased or services received in the ord inary course of business. If
payment is expected in one year or less, they are classified as current liabilities. If payment is expected beyond one year, they are
presented as non-current liabilit ies. Non-current trade payables are recognized init ially at fair value and subsequently measured at
amortized cost using the effective interest method.

2.15 Borrowings

Borro wings are recognized initially at fair value, net o f transaction costs, and are subsequently measured at amortized cost. Any
difference between cost and the redemption value is recognized in the consolidated statement of profit or loss over the period o f the
borrowings using the effective interest method. If the Co mpany has an indefinite right to defer payment for a period longer than 12
months after the end of the reporting date, such liabilit ies are recorded as non-current liab ilit ies, otherwise, they are record ed as
current liabilities.

Sam sung Electronics Business Report 97 / 261

2.16 Provisions and Contingent Liabilities

A provision is recognized when the Co mpany has a present legal or constructive obligation as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliab le estimate can be
made of the amount of the obligation. Provisions are not recognized for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the
provision due to passage of time is recognized as interest expense.

When it is p robable that an outflow of economic benefits will occur due to a p resent obligation resulting fro m a past event, and the
amount is reasonably estimab le, a corresponding provision is recognized in the consolidated financial statements. However, when
such outflow is dependent upon a future event that is not certain to occur, or cannot be reliably estimated, a disclosure regardin g the
contingent liability is made in the notes to the consolidated financial statements.

2.17 Employee Benefits

The Company has a variety of retirement pension plans including defined benefit and defined contribution plans.

A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate fund. The
Co mpany has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all
emp loyees the benefits relating to employee service in the current and prior periods. For defined contribution plans, the Company
pays contributions to annuity plans that are managed either publicly or p rivately on a mandatory, contractual or voluntary basis. The
Co mpany has no further future payment obligations once the contributions have been paid. The contributions are recognized as
emp loyee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a
reduction in the future payments is available.

A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amou nt of
pension benefit that an emp loyee will receive on retirement, usually dependent on one or more factors such as age, years of service
and compensation. The liability (asset) recognized in the consolidated statement of financial position in respect to defined benefit
pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The defined benefit obligation is calcu lated annually by independent actuaries using the projected unit credit method. The present
value of the defined benefit ob ligation is determined by d iscounting the estimated future cash outflows using interest rates of high-
quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity
approximating to the terms of the related pension obligation.

Actuarial gains and losses resulting fro m the changes in actuarial assumptions, and the differences between the previous actuarial
assumptions and what has actually occurred, are recognized in other co mprehensive income in the period in which they were
incurred. When plan amendments, curtailments and settlements occur, past service costs or gain or loss from settlement s are
immediately recognized in profit or loss.

2.18 Financial Guarantee Contract

Financial guarantee contracts are contracts that require the issuer to make specified pay ments to reimburse the holder for a loss it
incurs because a specified debtor fails to make payments when due.

The liability is init ially measured at fair value, and then subsequently at the higher of the following and recognized in the
consolidated statements of financial position within ‘other financial liabilities’:

- the amount determined in accordance with the expected credit loss model under Korean IFRS 1109 Financial Instruments and
- the amount initially recognized less, where appropriate, the cumulative amount of income recognized in accordance with
Korean IFRS 1115 Revenue from Contracts with Customers.

Sam sung Electronics Business Report 98 / 261

2.19 Current and Deferred Tax

The tax expense for the year comprises current and deferred tax. Current and deferred tax is recognized in profit or loss, except to
the extent that it relates to items recognized in other comprehensive income or d irect ly in equity. The tax expense is calculated on
the basis of the tax laws enacted or substantively enacted at the end of the reporting period.

Deferred tax is recognized for temporary d ifferences arising between the tax bases of assets and liabilities and their carrying
amounts as expected tax consequences at the recovery or settlement of the carrying amounts of the assets and liabilities. Ho wever,
deferred tax assets and liab ilities are not recognized if they arise fro m init ial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax
assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temp orary
differences can be utilized.

A deferred tax liability is recognized for taxab le temporary differences associated with investments in subsidiaries, associates, and
interests in joint ventures, except to the extent that the Company is able to control the timing of the reversal of the temp orary
difference and it is probable that the temporary d ifference will not reverse in the fo reseeable future. In addition, a deferred tax asset
is recognized for deductible temporary differences arising fro m such investments to the extent that it is probable the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be
utilized.

Deferred tax assets and liabilit ies are offset when there is a legally enforceable right to offset current tax assets against current tax
liab ilit ies and when the deferred income taxes assets and liabilit ies relate to income taxes lev ied by the same taxation authority on
either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.20 Derivative Instruments

The Co mpany initially recognizes rights and obligations fro m derivative contracts as assets and liab ilit ies at fair value. Gain o r loss
arising fro m these contracts are recognized in profit or loss. Qualified hedged amount fro m cash flow hedge and hedge of a net
investment in a foreign operation is deferred in equity.

The Co mpany applies cash flow hedge accounting to hedge the price risk associated with inventory purchase and other. The
effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other
comprehensive income, and the ineffective portion is recognized in financial income or expenses.

2.21 Dividend

Dividend is recognized as a liability when approved by the Company’s shareholders.

2.22 Share Capital

Ordinary shares and preference shares with no repayment obligations are classified as equity. When the Company or a subsidiary
acquires the Co mpany’s ordinary shares, the acquisition costs, including d irect transaction costs, are deducted fro m equity unt il the
redemption or reissuance as treasury shares. Consideration received on the issuance of treasury shares is credited to equity
attributable to owners of the parent company.

Sam sung Electronics Business Report 99 / 261

2.23 Revenue Recognition

Revenue mainly comp rises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of
the Co mpany’s activities. Revenue is shown net of value-added tax, returns, sales incentives and discounts and after eliminating
intercompany transactions.

The Co mpany applied Korean IFRS 1115 Revenue from Contracts with Customers to the annual period beginning January 1, 2018.
The Co mpany shall recognize revenue in accordance with Korean IFRS 1115 Revenue fro m Contracts with Customers by app lying
the follo wing 5 steps: ① Identify the contracts with the customers, ② Identify the separate performance obligations, ③
Determine the transaction price of the contract, ④ Allocate the transaction price to each of the separate performance obligations,
and ⑤ Recognize the revenue as each performance obligation is satisfied.

(A) Identification of performance obligations

The Co mpany exports various products and merchandise in accordance with Incoterms Group C trading conditions (Incoterms CIF
and other). According to Korean IFRS 1115 Revenue from Contracts with Customers since the seller provides the shipping service
after control of the product or merchandise has been transferred to the customer, the shipping service (including insurance) is
recognized as a separate performance obligation.

(B) A performance obligation is satisfied over time

The Co mpany delivers products to customers and installs them in accordance with the system air conditioner contracts awarded by
the Public Procurement Service. According to Korean IFRS 1115 Revenue from Contracts with Customers the Company can
recognize revenue over time if the Co mpany creates or enhances an asset (for examp le, work in progress) that the customer co ntrols
as the asset is created or enhanced. The Company recognizes the revenue from system air conditioner installat ion over time as the
customer controls the outcome of the service.

(C) Variable consideration

The Co mpany estimates an amount of variable consideration by using the expected value which the Company expects to better
predict the amount of consideration. The Co mpany recognizes variable consideration only to the extent that it is highly pro bable
that a significant reversal in the amount of cumu lative revenue recognized will not occur when the refund period has lapsed. The
refund liability is measured at the amount of consideration received for which the Company does not expect to be entitled. The
Co mpany has a right to recover the product from the customer where the customer exercises his right of return and recognizes an
asset and a corresponding adjustment to cost of sales. The asset is measured by reference to the former carrying amount of the
product less the costs to recover the products.

(D) Allocation of the transaction price

The transaction price in an arrangement must be allocated to each separate performance obligation based on the relative standalone
selling prices of the goods or services being provided to a customer. The Company determines the standalone selling price for each
separate performance obligation by using methods such as the ‘adjusted market assessment approach’.

2.24 Leases

A lease is a contract, whereby the lessor conveys to the lessee, the right to control the use of an identified asset for a period of time
in exchange for consideration.

At inception of a contract, the Company assesses whether the contract is, or contains, a lease. However, the Co mpany did not
reassess all contracts at init ial application o f Korean IFRS 1116 Leases because the Co mpany applied the pract ical exped ient to
contracts entered into before January 1, 2019.

Sam sung Electronics Business Report 100 / 261

For a contract that is, or contains, a lease, both lessee and lessor account for each lease component within the contract as a lease
separately fro m non-lease co mponents of the contract. In lessee accounting, however, the Co mpany does not account them
separately but instead applies the practical expedient to account for each lease component and any associated non-lease components
as a single lease component.

(A) Lessee accounting

The Co mpany recognizes a right-of-use asset representing its right to use the underlying leased asset and a lease liability
representing its obligation to make lease payments at the commencement date of the lease.

The right-of-use asset is measured at its cost less subsequent accumulated depreciation and accu mulated impairment loss with
adjustments reflected arising fro m remeasurements of the lease liab ility. The right-of-use asset is depreciated over the shorter of the
asset’s useful life and the lease term on a straight-line basis fro m the co mmencement date of the lease and is classified as ‘p roperty,
plant and equipment’ in the consolidated financial statements.

At the commencement date, the lease liability is measured at present value of the lease payments that are not paid at that date. When
measuring the present value, the lease payments are discounted using the interest rate implicit in the lease. If such implicit rate
cannot be readily determined, the Co mpany uses the Company’s incremental borrowing rate. The lease liab ility is subsequently
increased by the amount of interest expenses recognized on the lease liability and reduced by the lease payments made. Lease
liabilities are remeasured when the future lease payments are changed due to the following:

 Changes in an index or a rate

 Changes in amounts expected to be payable by the lessee under residual value guarantees
 Changes in the assessment of whether a purchase option or an option to renew is reasonably certain to be exercised, or
 Changes in the assessment of whether it is reasonably certain that an option to terminate the lease will not be exercised.

Lease liab ilities are classified as ‘current portion o f long-term liabilities’ o r ‘long-term borro wings’ in the consolidated financial
statements.

The Co mpany elected not to apply the requirements to short-term leases (i.e., a lease term of 12 months or less at the
commencement date) and low value assets (i.e. underlying assets below $ 5,000). In these cases, lease payments are charged to
profit or loss on a straight-line basis over the period of lease as a practical expedient.

(B) Lessor accounting

The accounting treatment as a lessor did not change significantly fro m the Korean IFRS 1116 Leases initially applied on January 1,
2019.

The Co mpany classifies a lease as a finance lease if it transfers substantially all the risks and rewards incidental to o wnership at the
inception of the lease. A lease other than a finance lease is classified as an operating lease. Lease income fro m operating leases is
recognized in income on a straight-line basis over the lease term. Init ial direct costs incurred by the lessor in negotiating and
arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense over the lease term
on the same basis as the lease income.

2.25 Government Grants

Govern ment g rants are recognized at their fair values when there is reasonable assurance that the grant will be received and the
Co mpany will co mp ly with the conditions attached to it. Govern ment grants relating to costs are deferred and recognized in the
consolidated statement of profit or loss over the period necessary to match them with the costs that they are intended to compensate.
Govern ment grants relating to assets are recognized in liab ilit ies as deferred income govern ment grants, depreciated over the
expected lives of the related assets, and are credited to the consolidated statement of profit or loss.

Sam sung Electronics Business Report 101 / 261

2.26 Earnings per Share

Basic earn ings per share is calculated by dividing net profit for the period available to ordinary shareholders by the weig hted-
average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by div iding the profit for the year attributable to owners of the parent co mpany fro m the
consolidated statements of profit or loss by the weighted-average number of o rdinary shares outstanding and potential d ilutive
shares. Potential dilutive shares are used in the calculation of dilutive earnings per share only when they have dilutive effects.

2.27 Reportable Segments

Reportable segments are disclosed in a manner consistent with the report ing provided to the chief operating decision-maker. The
chief operating decision-maker is responsible fo r making strategic decisions on resource allocation and assessing performance of
the reportable segments. The Management Co mmittee, wh ich makes strategic decisions, is regarded as the chief operating decision-
maker.

2.28 Convenience Translation into United States Dollar Amounts

The Co mpany operates primarily in Korean won and its official accounting records are maintained in Korean won. The US d ollar
amounts provided in the consolidated financial statements represent supplementary info rmation solely for the convenience of the
reader. All Korean won amounts are expressed in U.S. dollars at the rate of ￦ 1,165.46 to US $1, the average exchange rate for
the year ended December 31, 2019. Such presentation is not in accordance with generally accepted accounting principles, and
should not be construed as a representation that the Korean won amounts shown could be readily converted, realized or settled in
US dollars at this or at any other rate.

2.29 Approval of the Consolidated Financial Statements

These consolidated financial statements were approved by the Board of Directors on January 30, 2020.

3. Critical Accounting Estimates and Assumptions

The Co mpany makes estimates and assumptions concerning the future. The estimates and assumptions are continuously assessed,
considering historical experience and other factors, including expectations of future events that are believed to be reasonable under
the circu mstances. The resulting accounting estimates will, by definit ion, seldo m equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are addressed below.

(A) Revenue recognition

A refund liability and a right to the returned goods are recognized for the products expected to be returned at the time of sale.
Accumulated experience is used to estimate such returns at the time of sale at a portfo lio level (expected value method), an d the
Company’s revenue is affected by changes in expected return rate.

Sales of goods are recognized based on considerations specified in the contract, net of sales incentives, when control of the pro ducts
has transferred. The sales deduction, which affects the Company’s revenue, is reasonably estimated based on historical experience
and past contracts.

(B) Provision for warranty

The Co mpany recognizes provision for warranty on products sold. The Company accrues provision for warranty based on the best
estimate of amounts necessary to settle future and existing claims. The amounts are estimated based on past experience.

Sam sung Electronics Business Report 102 / 261

(C) Fair value of financial instruments

The fair value of financial instruments that are not traded in an active market is determined by using a variety of methods and
assumptions that are mainly based on market conditions existing at the end of each reporting period.

(D) Impairment of financial assets

The loss allowance for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses
judgement in making these assumptions and selecting the inputs to the impairment calcu lation based on the Co mpany’s past history,
existing market conditions as well as forward looking estimates at the end of each reporting period.

(E) Lease

In determining the lease term, the Co mpany considers all facts and circumstances that create an economic incentive to exercise an
extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in
the lease term if the lease is reasonably certain to be extended (or not terminated).

The lease term is reassessed if an option is actually exercised (or not exercised) or the Co mpany becomes obliged to exercise (or not
exercise) it. The assessment of reasonable certainty is only rev ised if a significant event or a significant change in circumstances
occurs, which affects this assessment, and that is within the control of the lessee.

(F) Net defined benefit liabilities (assets)

The net defined benefit liab ilities (assets) depend on a number of factors that are determined on an actuarial basis using a number of
assumptions including the discount rate. Any changes in these assumptions will impact the carry ing amount of the net defined
benefit liab ility. The Co mpany, in consideration of the interest rates of high-quality corporate bonds, determines the appropriate
discount rate at the end of each year. Th is is the interest rate that is used to determine the present value of estimated future cash
outflows expected to be required to settle the net defined benefit liabilities (assets). The principal actuarial assumptions associated
with the net defined benefit liabilities (assets) are based on the current market expectations.

(G) Impairment of goodwill and intangible assets that have an indefinite useful life

At the end of each reporting period, the Co mpany tests whether goodwill and intangible assets that have an indefinite useful life
have become impaired by co mparing the carrying amounts of assets or cash-generating units to the recoverable amounts. The
recoverable amounts of assets or cash-generating units have been determined based on value-in-use calcu lations, and these
calculations are based on estimates.

(H) Income taxes

Income taxes on the Co mpany’s taxable inco me fro m operating activit ies are subject to various tax laws and determinations of each
tax authority across various countries throughout the world. There is uncertainty in determining the eventual tax effects on the
taxab le inco me fro m operating activ ities. The Co mpany has recognized current tax and deferred tax at the end of the fiscal year
based on the best estimation of future taxes payable as a result of operating activities. However, the resulting deferred inco me tax
assets and liabilit ies may not equal the actual future taxes payable and such difference may impact the current tax and deferred
income tax assets and liabilities upon the determination of eventual tax effects.

Regarding taxes payable in Korea, if a certain portion of taxable inco me is not used for investments or for increases in wages or
dividends, in accordance with the Tax System For Recirculation of Corporate Income, the Co mpany is liab le to pay additional
income tax calculated based on Korean tax law. The current and deferred tax at the end of the fiscal year are based on the best
estimation of future taxes payable, which can differ fro m actual future taxes payable as a result of changes in investments, wages
and dividends, and thus results in additional uncertainty in measuring the final tax effects.

Sam sung Electronics Business Report 103 / 261

 The Co mpany assesses uncertainty over a tax treat ment in accordance with Korean IFRS 1012 Income Taxes. When the Company
concludes it is not probable that the taxation authority will accept an uncertain tax t reatment, the Co mpany will reflect the effect of
uncertainty for each uncertain tax treat ment by using either of the following methods, depending on which method the Co mpany
expects to better predict the resolution of the uncertainty:

- The most likely amount: the single most likely amount in a range of possible outcomes.
- The expected value: the sum of the probability-weighted amounts in a range of possible outcomes.

4. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term investment assets with high
liquidity that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Cash and cash equivalents as of December 31, 2019 and 2018 consist of the following:

(In millions of Korean won) December 31, 2019 December 31, 2018

Cash on hand ￦ 32,861 ￦ 46,929

Bank deposits and other 26,853,138 30,293,576
Total ￦ 26,885,999 ￦ 30,340,505

5. Financial Assets Subject to Withdrawal Restrictions

Financial instruments subject to withdrawal restrictions as of December 31, 2019 and 2018 consist of the following:

(In millions of Korean won) December 31, 2019 December 31, 2018

Short-term financial instruments ￦ 54,914 ￦ 63,064

Other non-current assets 633 6,325
Total ￦ 55,547 ￦ 69,389

Sam sung Electronics Business Report 104 / 261

6. Financial Instruments by Category

(A) Categorizations of financial assets and liabilities as of December 31, 2019 and 2018 are as follows:

(1) As of December 31, 2019

Financial assets Financial assets

Financial assets measured at fair value measured at fair
measured at through other value through Other financial
(In millions of Korean won) amortized cost comprehensive income profit or loss assets1 Total

Financial assets
Cash and cash equivalents ￦ 26,885,999 ￦ - ￦ - ￦ - ￦ 26,885,999
Short-term financial instruments 76,252,052 - - - 76,252,052
Trade receivables 35,131,343 - - - 35,131,343
Financial assets at amortized
3,914,216 - - - 3,914,216
cost
Financial assets at fair value
through other comprehensive - 8,920,712 - - 8,920,712
income
Financial assets at fair value - - 2,776,440 - 2,776,440
through profit or loss
Other 9,656,415 - 181,682 26,444 9,864,541
Total ￦ 151,840,025 ￦ 8,920,712 ￦ 2,958,122 ￦ 26,444 ￦ 163,745,303

1
Other financial assets include derivatives designated as hedging instruments, which are not subject to categorizations.

Financial liabilities Financial liabilities at

measured at fair value through Other financial
(In millions of Korean won) amortized cost profit or loss liabilities1 Total

Financial liabilities
Trade payables ￦ 8,718,222 ￦ - ￦ - ￦ 8,718,222
Short-term borrowings 2,659,107 - 11,734,361 14,393,468
Other payables 11,034,253 - - 11,034,253
Current portion of long-term liabilities 41,022 - 805,068 846,090
Debentures 975,298 - - 975,298
Long-term borrowings - - 2,197,181 2,197,181
Long-term other payables 1,820,611 2,316 - 1,822,927
Other 8,158,935 204,671 10,540 8,374,146
Total ￦ 33,407,448 ￦ 206,987 ￦ 14,747,150 ￦ 48,361,585

1
Other financial liabilities include collateralized borrowings, lease liabilities, and derivatives designated as hedging instruments, which are not
subject to categorizations.

Sam sung Electronics Business Report 105 / 261

 (2) As of December 31, 2018

Financial assets Financial assets

Financial assets measured at fair value measured at fair
measured at through other value through Other financial
(In millions of Korean won) amortized cost comprehensive income profit or loss assets1 Total

Financial assets
Cash and cash equivalents ￦ 30,340,505 ￦ - ￦ - ￦ - ￦ 30,340,505
Short-term financial instruments 65,893,797 - - - 65,893,797
Trade receivables 33,867,733 - - - 33,867,733
Financial assets at amortized 2,942,002 - - - 2,942,002
cost
Financial assets at fair value
through other comprehensive - 7,301,351 - - 7,301,351
income
Financial assets at fair value - - 2,777,375 - 2,777,375
through profit or loss
Other 9,229,044 - 58,127 25,962 9,313,133
Total ￦ 142,273,081 ￦ 7,301,351 ￦ 2,835,502 ￦ 25,962 ￦ 152,435,896

1
Other financial assets include derivatives designated as hedging instruments, which are not subject to categorizations.

Financial liabilities Financial liabilities at

measured at fair value through Other financial
(In millions of Korean won) amortized cost profit or loss liabilities1 Total

Financial liabilities
Trade payables ￦ 8,479,916 ￦ - ￦ - ￦ 8,479,916
Short-term borrowings 1,456,201 - 12,130,459 13,586,660
Other payables 9,779,287 - - 9,779,287
Current portion of long-term liabilities 33,386 - - 33,386
Debentures 961,972 - - 961,972
Long-term borrowings 85,085 - - 85,085
Long-term other payables 2,846,585 13,417 - 2,860,002
Other 8,789,800 32,284 10,439 8,832,523
Total ￦ 32,432,232 ￦ 45,701 ￦ 12,140,898 ￦ 44,618,831

1
Other financial liabilities include collateralized borrowings and derivatives designated as hedging instruments, which are not subject to
categorizations.

Sam sung Electronics Business Report 106 / 261

 (B) Net gains or net losses on each category of financial assets and liabilities for the years ended December 31, 2019 and 2018 are
as follows:

(1) 2019

Financial assets Financial assets

Financial assets measured at fair value measured at fair
measured at through other value through Other financial
(In millions of Korean won) amortized cost comprehensive income profit or loss assets Total

Financial assets
Gain on valuation ￦ - ￦ 1,146,599 ￦ - ￦ 4,735 ￦ 1,151,334
(other comprehensive income)
Gain (loss) on valuation/disposal (14,874) - 225,273 (59) 210,340
(profit or loss)
Reclassification from other
comprehensive income to profit - - - 3,830 3,830
or loss
Interest income 2,659,740 - 284 - 2,660,024
Foreign exchange differences (328,213) - - - (328,213)
(profit or loss)
Dividend income - 152,091 2,588 - 154,679
Impairment/reversal 188,530 - (5,398) - 183,132
(profit or loss)

Financial liabilities
Financial liabilities measured at fair
measured at value through profit Other financial
(In millions of Korean won) amortized cost or loss liabilities1 Total

Financial liabilities
Gain on valuation ￦ - ￦ - ￦ 20,277 ￦ 20,277
(other comprehensive loss)
Gain (loss) on valuation/disposal - (3,237) 1,033 (2,204)
(profit or loss)
Reclassification from other comprehensive - - 16,399 16,399
income to profit or loss
Interest expense (248,659) - (437,697) (686,356)
Foreign exchange differences 167,164 - 90,145 257,309
(profit or loss)

1
Other financial liabilities include collateralized borrowings, lease liabilities, and derivatives designated as hedging instruments, which are not
subject to categorizations.

Sam sung Electronics Business Report 107 / 261

 (2) 2018

Financial assets Financial assets

Financial assets measured at fair value measured at fair
measured at through other value through Other financial
(In millions of Korean won) amortized cost comprehensive income profit or loss assets Total

Financial assets
Gain (loss) on valuation ￦ - ￦ (235,865) ￦ - ￦ 39,622 ￦ (196,243)
(other comprehensive income)
Gain (loss) on valuation/disposal (14,768) - 211,151 13,260 209,643
(profit or loss)
Reclassification from other
comprehensive income to profit - - - (21,585) (21,585)
or loss
Interest income 2,296,841 - 298 - 2,297,139
Foreign exchange differences (406,081) - - - (406,081)
(profit or loss)
Dividend income - 130,056 1,323 - 131,379
Impairment/reversal 48,581 - - - 48,581
(profit or loss)

Financial liabilities Financial liabilities

measured at measured at fair value Other financial
(In millions of Korean won) amortized cost through profit or loss liabilities1 Total

Financial liabilities
Gain on valuation
￦ - ￦ - ￦ 14,608 ￦ 14,608
(other comprehensive loss)
Gain (loss) on valuation/disposal
- 80,389 (8,200) 72,189
(profit or loss)
Reclassification from other comprehensive
- - 7,958 7,958
income to profit or loss
Interest expense (289,993) - (384,624) (674,617)
Foreign exchange differences
(101,394) - 79,390 (22,004)
(profit or loss)

1
Other financial liabilities include collateralized borrowings and derivatives designated as hedging instruments, which are not subject to
categorizations.

Sam sung Electronics Business Report 108 / 261

7. Transfer of Financial Assets

Trade receivables of the Company have been discounted through factoring agreements with banks during the years ended
December 31, 2019 and 2018. Trade receivables provided as collaterals in such factoring transactions do not meet the requirements
for asset derecognition as risks and rewards are not substantially transferred in the event the debtor defaults due to a recourse
obligation, etc. Financial liabilit ies recognized in relation to these transactions are included as ‘short-term borro wings’ o n the
consolidated statement of financial position (refer to Note 14).

The following table presents a breakdown of discounted trade receivables as of December 31, 2019 and 2018:

(In millions of Korean won) December 31, 2019 December 31, 2018

Carrying amount of the discounted trade receivables1 ￦ 11,734,361 ￦ 12,130,459

Carrying amount of the related borrowings 11,734,361 12,130,459

1
The discounted trade receivables include intercompany balances.

8. Financial Assets at Fair Value

(A) Details of financial assets at fair value as of December 31, 2019 and 2018 are as follows:

(1) Financial assets at fair value through other comprehensive income

(In millions of Korean won) December 31, 2019 December 31, 2018

Non-current portion
Equity instruments ￦ 8,920,712 ￦ 7,301,351

(2) Financial assets at fair value through profit or loss

(In millions of Korean won) December 31, 2019 December 31, 2018

Current portion
Debt instruments ￦ 1,727,436 ￦ 2,001,948
Non-current portion
Equity instruments 704,155 453,642
Debt instruments 344,849 321,785
Subtotal 1,049,004 775,427
Total ￦ 2,776,440 ￦ 2,777,375

Sam sung Electronics Business Report 109 / 261

(B) Changes in financial assets at fair value for the years ended December 31, 2019 and 2018 are as follows:

(1) Financial assets at fair value through other comprehensive income

(In millions of Korean won) 2019 2018

Balance as of January 1 ￦ 7,301,351 ￦ 7,151,434

Acquisition 63,447 424,471
Disposal (950) (7,050)
Fair value gain (loss) 1,497,600 (312,601)
Other 59,264 45,097
Balance as of December 31 ￦ 8,920,712 ￦ 7,301,351

(2) Financial assets at fair value through profit or loss

(In millions of Korean won) 2019 2018

Balance as of January 1 ￦ 775,427 ￦ 600,746

Acquisition 138,125 178,048
Disposal (55,509) (64,576)
Fair value gain 200,533 65,361
Other (9,572) (4,152)
Balance as of December 31 ￦ 1,049,004 ￦ 775,427

(C) Changes in gain (loss) on valuation of financial assets at fair value through other comprehensive income for the years ended
December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Balance as of January 1 ￦ 2,165,131 ￦ 2,475,749

Fair value gain (loss) 1,497,600 (312,601)
Reclassification to retained earnings due to disposals 1,267 1,983
Balance as of December 31 3,663,998 2,165,131
Income tax effects on equity and non-controlling interests (1,090,468) (702,865)
Total ￦ 2,573,530 ￦ 1,462,266

Sam sung Electronics Business Report 110 / 261

 (D) Details of listed equity securities of financial assets at fair value as of December 31, 2019 and 2018 are as follows:
December 31, 2019 December 31, 2018
(In millions of Korean won, number Number of Percentage of Carrying amount Carrying amount
of shares and percentage) shares ownership1 (%) Acquisition cost (Market value) (Market value)

Samsung Heavy Industries 100,693,398 16.0 ￦ 735,488 ￦ 732,041 ￦ 746,138

Hotel Shilla 2,004,717 5.1 13,957 182,028 153,361
iM arket Korea 647,320 1.8 324 6,732 4,479
SFA Engineering 3,644,000 10.2 38,262 168,535 126,082
Wonik Holdings 3,518,342 4.6 30,821 19,210 12,349
Wonik IPS 3,701,872 7.5 32,428 132,712 74,408
ASM L 6,297,787 1.5 363,012 2,154,676 1,104,944
Wacom 8,398,400 5.0 62,013 39,765 38,795
BYD 52,264,808 1.9 528,665 412,935 433,838
Other 296,744 419,868 200,363
Total ￦ 2,101,714 ￦ 4,268,502 ￦ 2,894,757

1
Ownership represents the Company’s ownership of ordinary shares issued in each entity.

9. Trade and Non-Trade Receivables

(A) Trade and non-trade receivables as of December 31, 2019 and 2018 are as follows:

December 31, 2019 December 31, 2018

(In millions of Korean won) Trade Non-trade Trade Non-trade

Receivables \ 35,882,903 \ 4,584,259 \ 35,480,128 \ 3,335,428

Less: Loss allowance (340,410) (58,666) (571,564) (31,045)
Subtotal 35,542,493 4,525,593 34,908,564 3,304,383
Less: Non-current portion (411,150) (346,473) (1,040,831) (223,650)
Current portion \ 35,131,343 \ 4,179,120 \ 33,867,733 \ 3,080,733

(B) Movements in the loss allowance for receivables for the years ended December 31, 2019 and 2018 are as follows:

2019 2018
(In millions of Korean won) Trade Non-trade Trade Non-trade

Balance as of January 1 \ 571,564 \ 31,045 \ 639,223 \ 27,305

Reversal (183,380) (5,115) (48,320) (233)
Write-off (14,571) (539) (11,401) (885)
Other (33,203) 33,275 (7,938) 4,858
Balance as of December 31 \ 340,410 \ 58,666 \ 571,564 \ 31,045

Sam sung Electronics Business Report 111 / 261

 (C) The details of trade and non-trade receivables classified by past due date to measure expected credit losses as of December 31,
2019 and 2018 are as follows:

December 31, 2019 December 31, 2018

(In millions of Korean won) Trade Non-trade Trade Non-trade

Receivables not past due \ 33,215,136 \ 4,365,708 \ 32,311,659 \ 2,993,313

Past due1:
Less than 31 days overdue 1,830,749 106,313 2,390,409 148,309
31 days to 90 days overdue 323,640 20,343 278,705 33,714
Over 90 days overdue 513,378 91,895 499,355 160,092
Subtotal 2,667,767 218,551 3,168,469 342,115
Total \ 35,882,903 \ 4,584,259 \ 35,480,128 \ 3,335,428

1
The Company does not consider trade and non-trade receivables that are overdue for less than or equal to 31 days as impaired.

(D) The maximu m exposure to current credit risk is equivalent to the carrying amount of receivables as of December 31, 2019. The
Company has in place insurance contracts covering the Company’s major receivables.

10. Inventories

Details of inventories as of December 31, 2019 and 2018 are as follows:

December 31, 2019 December 31, 2018

Valuation Carrying Valuation Carrying
(In millions of Korean won) Gross amount allowance amount Gross amount allowance amount

Finished goods \ 8,460,621 \ (345,505) \ 8,115,116 \ 9,206,754 \ (370,656) \ 8,836,098

Work in process 10,424,880 (538,246) 9,886,634 11,862,033 (795,522) 11,066,511
Raw materials and supplies 8,288,265 (541,155) 7,747,110 8,658,212 (610,073) 8,048,139
M aterials in transit 1,017,604 - 1,017,604 1,033,956 - 1,033,956
Total \ 28,191,370 \(1,424,906) \ 26,766,464 \30,760,955 \(1,776,251) \28,984,704

The inventories recognized as expense for the year ended December 31, 2019, amount to ￦ 145,793,517 million (December 31,
2018: ￦ 131,502,320 million). The amount includes loss on valuation of inventories.

Sam sung Electronics Business Report 112 / 261

11. Investments in Associates and Joint Ventures

(A) Changes in investments in associates and joint ventures for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Balance as of January 1 \ 7,313,206 \ 6,802,351

Acquisition 12,822 51,226
Disposal (1,437) (148)
Share of profit 412,960 539,845
Other1 (145,939) (80,068)
Balance as of December 31 \ 7,591,612 \ 7,313,206

1
Other consists of dividends, impairment, reclassification, and the cumulative effect of changes in accounting policies.

(B) Major investments in associates and joint ventures as of December 31, 2019 are as follows:

(1) Investments in associates

Percentage of Principal
ownership1 business Reporting
Investee Nature of relationship (%) location period
Samsung Electro-M echanics M anufacture and supply of electronic components including
23.7 Korea December
Co., Ltd. passive components, circuit boards, and modules
Provide IT services including computer programming, system
Samsung SDS Co., Ltd. 22.6 Korea December
integration and management and logistical services
Samsung Biologics Co., Ltd. New business investment 31.5 Korea December
2 M anufacture and supply of electronics including secondary
Samsung SDI Co., Ltd. 19.6 Korea December
cell batteries
Cheil Worldwide Inc. Advertising agency 25.2 Korea December

1
Ownership represents the Company’s ownership of ordinary shares issued by each entity.
2
The Company’s ownership of ordinary shares outstanding is 20.6%.

(2) Investments in joint ventures

Principal
Percentage of business Reporting
Investee Nature of relationship ownership1 (%) location period
Samsung Corning
M anufacture and supply of industrial glass devices 50.0 Korea December
Advanced Glass, LLC

1
Ownership represents the Company’s ownership of ordinary shares issued by each entity.

Sam sung Electronics Business Report 113 / 261

(C) Details of investments in associates and joint ventures as of December 31, 2019 and 2018 are as follows:

(1) Investments in associates

(In millions of Korean won) December 31, 2019

Investee Acquisition cost Net asset value of equity shares1 Carrying amount

Samsung Electro-M echanics Co., Ltd. ￦ 359,237 ￦ 1,237,753 ￦ 1,152,734

Samsung SDS Co., Ltd. 147,963 1,478,586 1,499,571
Samsung Biologics Co., Ltd. 443,193 1,371,315 1,377,043
Samsung SDI Co., Ltd. 1,242,605 2,481,233 2,233,516
Cheil Worldwide Inc. 506,162 271,409 570,215
Other 550,404 373,606 523,794
Total ￦ 3,249,564 ￦ 7,213,902 ￦ 7,356,873

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

(In millions of Korean won) December 31, 2018

Investee Acquisition cost Net asset value of equity shares1 Carrying amount

Samsung Electro-M echanics Co., Ltd. ￦ 359,237 ￦ 1,127,805 ￦ 1,126,043

Samsung SDS Co., Ltd. 147,963 1,350,838 1,376,321
Samsung Biologics Co., Ltd. 443,193 1,308,650 1,308,546
Samsung SDI Co., Ltd. 1,242,605 2,402,697 2,197,335
Cheil Worldwide Inc. 506,162 253,062 549,165
Other 625,922 310,909 525,259
Total ￦ 3,325,082 ￦ 6,753,961 ￦ 7,082,669

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

(2) Investments in joint ventures

(In millions of Korean won) December 31, 2019

Investee Acquisition cost Net asset value of equity shares1 Carrying amount

Samsung Corning Advanced Glass, LLC ￦ 215,000 ￦ 173,746 ￦ 173,742

Other 259,994 66,848 60,997
Total ￦ 474,994 ￦ 240,594 ￦ 234,739

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

(In millions of Korean won) December 31, 2018

Investee Acquisition cost Net asset value of equity shares1 Carrying amount

Samsung Corning Advanced Glass, LLC ￦ 215,000 ￦ 173,503 ￦ 173,499

Other 259,994 65,443 57,038
Total ￦ 474,994 ￦ 238,946 ￦ 230,537

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

Sam sung Electronics Business Report 114 / 261

(D) Details of the valuation of investments in associates and joint ventures under the equity method are as follows:

(1) For the year ended December 31, 2019

S hare of other
Balance as of comprehensive Balance as of
(In millions of Korean won) January 1 S hare of profit income (loss) Other1 December 31

Samsung Electro-M echanics Co., Ltd. ￦ 1,126,043 ￦ 38,458 ￦ 5,926 ￦ (17,693) ￦ 1,152,734
Samsung SDS Co., Ltd. 1,376,321 166,385 (8,191) (34,944) 1,499,571
Samsung Biologics Co., Ltd. 1,308,546 64,571 3,926 - 1,377,043
Samsung SDI Co., Ltd. 2,197,335 34,279 15,365 (13,463) 2,233,516
Cheil Worldwide Inc. 549,165 42,049 1,360 (22,359) 570,215
Samsung Corning Advanced Glass, LLC 173,499 34 209 - 173,742
Other 582,297 67,184 13,802 (78,492) 584,791
Total ￦ 7,313,206 ￦ 412,960 ￦ 32,397 ￦ (166,951) ￦ 7,591,612

1
Other consists of acquisitions, disposals, dividends, impairment and reclassification.

(2) For the year ended December 31, 2018

S hare of other
Balance as of comprehensive Balance as of
(In millions of Korean won) January 1 S hare of profit income (loss) Other1 December 31

Samsung Electro-M echanics Co., Ltd. ￦ 991,579 ￦ 150,099 ￦ (1,648) ￦ (13,987) ￦ 1,126,043
Samsung SDS Co., Ltd. 1,282,205 142,290 (13,229) (34,945) 1,376,321
Samsung Biologics Co., Ltd. 1,254,937 72,059 (964) (17,486) 1,308,546
Samsung SDI Co., Ltd. 2,126,244 74,029 10,526 (13,464) 2,197,335
Cheil Worldwide Inc. 540,114 34,948 (3,828) (22,069) 549,165
Samsung Corning Advanced Glass, LLC 170,425 2,811 262 1 173,499
Other 436,847 63,609 8,060 73,781 582,297
Total ￦ 6,802,351 ￦ 539,845 ￦ (821) ￦ (28,169) ￦ 7,313,206

1
Other consists of acquisitions, disposals, dividends, impairment, reclassification and the cumulative effect of changes in accounting policies.

Sam sung Electronics Business Report 115 / 261

(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 December
31, 2019 and 2018, and for the years ended December 31, 2019 and 2018 is as follows:

2019
S amsung S amsung S amsung
Electro-Mechanics S amsung S DS Biologics S DI Cheil
(In millions of Korean won) Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Worldwide Inc.

Condensed financial information

Condensed statements of financial position:
Current assets ￦ 3,507,525 ￦ 6,383,847 ￦ 1,356,262 ￦ 5,181,415 ￦ 1,787,299
Non-current assets 5,166,724 2,637,389 4,555,365 14,670,682 504,347
Current liabilities 1,850,405 1,698,187 690,505 3,741,523 1,115,652
Non-current liabilities 1,393,746 597,891 866,668 3,450,229 219,178
Non-controlling interests 145,050 179,362 - 335,408 10,197
Condensed statements of comprehensive income:
Revenue ￦ 8,040,818 ￦ 10,719,632 ￦ 701,592 ￦ 10,097,426 ￦ 3,421,673
1
Profit from continuing operations 605,725 736,458 202,904 356,549 138,055
Loss from discontinued operation after
(91,428) - - - -
income tax1
Other comprehensive income (loss)1 26,270 (17,665) (3,919) 137,272 2,172
Total comprehensive income1 540,567 718,793 198,985 493,821 140,227
Details of adjustments from the carrying amount of investments in associates
Net assets (a) ￦ 5,285,048 ￦ 6,545,796 ￦ 4,354,454 ￦ 12,324,937 ￦ 946,619
Ownership percentage (b)2 23.4% 22.6% 31.5% 20.1% 28.7%
Net assets of equity shares (a x b) 1,237,753 1,478,586 1,371,315 2,481,233 271,409
Goodwill 7,081 26,801 3,645 - 298,779
Intercompany transactions and other3 (92,100) (5,816) 2,083 (247,717) 27
Carrying amount of associates 1,152,734 1,499,571 1,377,043 2,233,516 570,215
Dividends from associates
Dividends ￦ 17,693 ￦ 34,944 ￦ - ￦ 13,463 ￦ 22,359

1
Profit (loss) attributable to owners of the parent company.
2
Ownership percentage includes ordinary and preference shares.
3
Consists of unrealized gains and losses and other differences.

Sam sung Electronics Business Report 116 / 261

 2018
S amsung S amsung S amsung Cheil
Electro-Mechanics S amsung S DS Biologics Co., S DI Worldwide
(In millions of Korean won) Co., Ltd. Co., Ltd. Ltd. Co., Ltd. Inc.

Condensed financial information

Condensed statements of financial position:
Current assets ￦ 3,525,293 ￦ 5,881,776 ￦ 1,577,684 ￦ 5,519,342 ￦ 1,889,015
Non-current assets 5,119,621 2,132,073 4,402,725 13,830,379 378,586
Current liabilities 2,509,584 1,574,797 710,530 4,012,822 1,251,332
Non-current liabilities 1,188,833 290,501 1,114,410 3,111,680 123,476
Non-controlling interests 125,450 166,097 - 291,196 10,164
Condensed statements of comprehensive income:
Revenue ￦ 8,193,023 ￦10,034,219 ￦ 535,806 ￦ 9,158,272 ￦ 3,468,786
Profit or loss from continuing operations1 656,242 629,340 224,109 701,166 129,625
Other comprehensive income (loss)1 (26,415) (49,834) (2,967) 47,261 (11,256)
Total comprehensive income1 629,827 579,506 221,142 748,427 118,369
Details of adjustments from the carrying amount of investments in associates
Net assets (a) ￦ 4,821,047 ￦ 5,982,454 ￦ 4,155,469 ￦11,934,023 ￦ 882,629
2
Ownership percentage (b) 23.4% 22.6% 31.5% 20.1% 28.7%
Net assets of equity shares (a x b) 1,127,805 1,350,838 1,308,650 2,402,697 253,062
Goodwill 7,081 26,801 3,645 - 298,779
Intercompany transactions and other3 (8,843) (1,318) (3,749) (205,362) (2,676)
Carrying amount of associates 1,126,043 1,376,321 1,308,546 2,197,335 549,165
Dividends from associates
Dividends ￦ 13,270 ￦ 34,944 ￦ - ￦ 13,463 ￦ 22,069

1
Profit (loss) attributable to owners of the parent company.
2
Ownership percentage includes ordinary and preference shares.
3
Consists of unrealized gains and losses and other differences.

Sam sung Electronics Business Report 117 / 261

 (2) A summary of the condensed financial information of major joint ventures and dividends received from joint ventures as of
December 31, 2019 and 2018, and for the years ended December 31, 2019 and 2018 is as follows:

S amsung Corning Advanced Glass, LLC

(In millions of Korean won) 2019 2018

Condensed financial information

Condensed statements of financial position:
Current assets ￦ 164,870 ￦ 145,733
Cash and cash equivalent 35,553 19,047
Non-current assets 225,334 234,666
Current liabilities 40,567 33,393
Financial liabilities1 21,108 17,710
Non-current liabilities 2,146 -
Condensed statements of comprehensive income:
Revenue ￦ 244,202 ￦ 233,025
Depreciation and amortization 589 2,388
Interest income 687 428
Income tax expense (33) 296
Profit from continuing operations 2 68 5,601
Other comprehensive income2 - -
Total comprehensive income2 68 5,601
Details of adjustments from the carrying amount of investments in joint ventures
Net assets (a) ￦ 347,491 ￦ 347,006
Ownership percentage (b) 50.0% 50.0%
Net assets of equity shares (a x b) 173,746 173,503
Intercompany transactions and other3 (4) (4)
Carrying amount of joint ventures 173,742 173,499
Dividends from joint ventures
Dividends ￦ - ￦ -

1
Trade payables, other payables, and provisions are excluded.
2
Profit (loss) attributable to owners of the parent company.
3
Consists of unrealized gains and losses and other differences.

Sam sung Electronics Business Report 118 / 261

 (3) Profit (loss) attributable to owners of the parent company from associates and joint ventures which are not individually
material for the years ended December 31, 2019 and 2018 are as follows:

2019 2018
(In millions of Korean won) Associates Joint ventures Associates Joint ventures

Profit for the year ￦ 65,635 ￦ 1,549 ￦ 63,340 ￦ 1,379

Other comprehensive income 10,714 3,088 5,851 2,110
Total comprehensive income ￦ 76,349 ￦ 4,637 ￦ 69,191 ￦ 3,489

(F) Details of marketable investments in associates as of December 31, 2019 and 2018 are as follows:

December 31, 2019 December 31, 2018

(In millions of Korean won and number of shares) Number of shares Market value Market value

Samsung Electro-M echanics Co., Ltd. 17,693,084 ￦ 2,211,636 ￦ 1,831,234

Samsung SDS Co., Ltd. 17,472,110 3,398,325 3,564,310
Samsung Biologics Co., Ltd. 20,836,832 9,022,348 8,053,436
Samsung SDI Co., Ltd. 13,462,673 3,177,191 2,948,325
Cheil Worldwide Inc. 29,038,075 698,366 653,357

(G) Other matters

On July 12, 2018, the Korea Securities and Futures Co mmission determined a first measure following an investigation relating to
Samsung Biologics Co., Ltd., an associate of the Co mpany, and its accounting for its investment in Samsung Bioepis Co., Ltd, a
joint venture between Biogen Therapeutics Inc. and Samsung Biologics Co., Ltd. The first measure included a recommendation to
dismiss the director in charge, prosecution charges, and external auditor designation by the regulator, on the basis that the Joint
Venture Agreement was not disclosed in the notes to the financial statements. On November 14, 2018, the Korea Securities and
Futures Commission determined a second measure, which included a penalty of ￦ 8,000 million, a reco mmendation to dismiss the
CEO, a requirement to restate its financial statements, and further prosecution charges.

Consequently, Samsung Biolog ics Co., Ltd. filed a suit for cancellation of the aforementioned measures to the Seoul Admin istrative
Court to suspend the execution of these measures, and the respective court has pronounced a decision to suspend these measures
until the final rulings on January 22, 2019 and Feb ruary 19, 2019, relat ing to the second and first measures, respectively. The Korea
Securities and Futures Co mmission immediately appealed against the decision to suspend execution, but on May 13, 2019 and May
24, 2019, relating to the second and first measures, respectively, the Court dismissed the Korea Securities and Futures
Co mmission’s appeal. The Korea Securit ies and Futures Co mmission has re-appealed on May 23, 2019 and June 10, 2019, relating
to the second and first measures, respectively. On September 6, 2019 and October 11, 2019, the Court dismissed the Korea
Securities and Futures Commission’s re-appeal, relating to the second and first measures, respectively.

Although the future outcome of the administrative lit igation cannot be estimated, should Samsung Biologics Co., Ltd. be required to
restate its financial statements to amend its historical accounting treatment relating to its investment in Samsung Bioepis Co., Ltd.,
the Co mpany’s share of profit or loss relating to its equity method investment, the amount of investment in associates, and retained
earnings, for the years ended fro m December 31, 2015 and onwards, and the profit on disposal of investment for the year ended
December 31, 2016, may be impacted. Given the timing of co mpletion and the final result of the administrative litigation between
Samsung Bio logics Co., Ltd. and the Korea Securit ies and Futures Co mmission is uncertain and cannot currently be estimated, it is
not possible for the Company to recognize the effects of these proceedings in the current period consolidated financial statements.

Sam sung Electronics Business Report 119 / 261

12. Property, Plant and Equipment

(A) Changes in property, plant and equipment for the years ended December 31, 2019 and 2018 are as follows:

2019
Buildings and Machine ry Construction in
(In millions of Korean won) Land structure s and e quipme nt progre ss O the r Total

Balance as of January 1 ￦ 9,346,285 ￦ 29,345,910 ￦ 63,816,231 ￦ 9,705,056 ￦ 3,203,242 ￦115,416,724

Acquisition cost 9,346,285 45,033,843 206,407,913 9,705,056 8,665,069 279,158,166
Accumulated depreciation and
- (15,687,933) (142,591,682) - (5,461,827) (163,741,442)
impairment
Acquisitions and capital
144,291 1,760,347 10,488,174 14,490,901 1,136,367 28,020,080
expenditures1
Acquisitions through business
2,310 21,481 381,117 7,488 5,262 417,658
combinations
Depreciation (31,118) (2,658,371) (22,664,896) - (1,219,431) (26,573,816)
Disposals/scrap (97,930) (287,546) (180,627) (577) (75,218) (641,898)
Impairment - - (85,215) - (8,344) (93,559)
Other 2 410,716 2,287,799 395,152 (272,849) 459,467 3,280,285
Balance as of De ce mbe r 31 ￦ 9,774,554 ￦ 30,469,620 ￦ 52,149,936 ￦ 23,930,019 ￦ 3,501,345 ￦119,825,474
Acquisition cost ￦ 9,828,309 ￦ 48,839,439 ￦211,416,021 ￦ 23,930,019 ￦ 10,061,981 ￦304,075,769
Accumulated depreciation and
(53,755) (18,369,819) (159,266,085) - (6,560,636) (184,250,295)
impairment

1
The capitalized borrowing costs are ￦ 6,331 million and the interest rate used to calculate the borrowing costs eligible for capitalization is 2.1%.
2
Other includes the cumulative effect of changes in accounting policies, effects of changes in foreign currency exchange rates and effects of the
offset related to government grants.

2018
Buildings and Machine ry Construction in
(In millions of Korean won) Land structure s and e quipme nt progre ss O the r Total

Balance as of January 1 ￦ 9,409,276 ￦ 28,058,156 ￦ 57,915,798 ￦ 13,910,749 ￦ 2,371,669 ￦111,665,648

Acquisition cost 9,409,276 41,639,045 184,392,999 13,910,749 7,176,535 256,528,604
Accumulated depreciation and
- (13,580,889) (126,477,201) - (4,804,866) (144,862,956)
impairment
Acquisitions and capital
14,294 3,372,033 27,998,043 (3,920,447) 1,934,640 29,398,563
expenditures1
Depreciation - (2,049,753) (22,067,122) - (1,050,237) (25,167,112)
Disposals/scrap (87,895) (213,324) (106,860) (365) (39,059) (447,503)
Impairment - - (18,458) - (61) (18,519)
2
Other 10,610 178,798 94,830 (284,881) (13,710) (14,353)
Balance as of De ce mbe r 31 ￦ 9,346,285 ￦ 29,345,910 ￦ 63,816,231 ￦ 9,705,056 ￦ 3,203,242 ￦115,416,724
Acquisition cost ￦ 9,346,285 ￦ 45,033,843 ￦206,407,913 ￦ 9,705,056 ￦ 8,665,069 ￦279,158,166
Accumulated depreciation and
- (15,687,933) (142,591,682) - (5,461,827) (163,741,442)
impairment

1
The capitalized borrowing costs are ￦ 22,104 million and the interest rate used to calculate the borrowing costs eligible for capitalization is
0.9%.
2
Other includes effects of changes in foreign currency exchange rates and effects of the offset related to government grants.

Sam sung Electronics Business Report 120 / 261

 (B) Changes in right-of-use assets included in the property, plant and equipment for the year ended December 31, 2019 are as
follows:

2019
Buildings and Machine ry
(In millions of Korean won) Land Structure s and Equipme nt O the r Total

Balance as of January 1 1 ￦ - ￦ 37,185 ￦ 444 ￦ 6,984 ￦ 44,613

Acquisition 80,675 906,417 9,456 128,680 1,125,228
Depreciation (31,118) (593,725) (59,756) (101,182) (785,781)
Disposals/scrap (11,137) (67,468) (459) (10,593) (89,657)
Other 2 399,675 2,079,308 181,280 357,253 3,017,516
Balance as of De ce mbe r 31 ￦ 438,095 ￦ 2,361,717 ￦ 130,965 ￦ 381,142 ￦ 3,311,919

1
The beginning balance is the financial lease assets in accordance with the previous Korean IFRS 1017 Leases.
2
Other includes cumulative effects of changes in accounting policies and effects of changes in foreign currency exchange rates.

(C) Details of depreciation of property, plant and equipment for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Cost of sales ￦ 23,606,255 ￦ 22,956,102

Selling and administrative expenses and other 2,967,561 2,211,010
Total ￦ 26,573,816 ￦ 25,167,112

Sam sung Electronics Business Report 121 / 261

13. Intangible Assets

(A) Changes in intangible assets for the years ended December 31, 2019 and 2018 are as follows:

2019
Inte llectual De ve lopme nt
(In millions of Korean won) prope rty rights cost Me mbe rship Goodwill O the r Total

Balance as of January 1 ￦ 4,187,756 ￦ 704,734 ￦ 221,628 ￦ 5,833,678 ￦ 3,943,802 ￦ 14,891,598

Internally generated/developed - 285,699 - - - 285,699
External acquisitions 289,905 - 1,936 - 1,275,458 1,567,299
Acquisition through business
130,308 51,872 - 337,926 107,384 627,490
combinations
Amortization (305,056) (279,709) - - (2,439,057) (3,023,822)
Disposals/scrap (58,480) - (1,240) - (5,682) (65,402)
Impairment - - (972) (46,834) (895) (48,701)
Other 1 121,077 (21,822) 1,147 125,669 6,243,272 6,469,343
Balance as of De ce mbe r 31 ￦ 4,365,510 ￦ 740,774 ￦ 222,499 ￦ 6,250,439 ￦ 9,124,282 ￦ 20,703,504

1
Other includes effects of reclassification of licensed assets and changes in foreign currency exchange rates.

2018
Inte llectual De ve lopme nt
(In millions of Korean won) prope rty rights cost Me mbe rship Goodwill O the r Total

Balance as of January 1 ￦ 4,134,455 ￦ 830,384 ￦ 222,969 ￦ 5,703,138 ￦ 3,869,537 ￦ 14,760,483

Internally generated/developed - 296,304 - - - 296,304
External acquisitions 321,557 - - - 402,656 724,213
Acquisition through business
14,289 - - 45,997 7,725 68,011
combinations
Amortization (280,284) (421,954) - - (612,687) (1,314,925)
Disposals/scrap (47,013) - (1,050) - (9,051) (57,114)
Impairment - - (1,575) - - (1,575)
Other 1 44,752 - 1,284 84,543 285,622 416,201
Balance as of De ce mbe r 31 ￦ 4,187,756 ￦ 704,734 ￦ 221,628 ￦ 5,833,678 ￦ 3,943,802 ￦ 14,891,598

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

(B) Goodwill

Goodwill is allocated to each cash-generating unit. Details of goodwill as of December 31, 2019 and 2018 are as follows:

(In millions of Korean won) December 31, 2019 December 31, 2018

CE ￦ 520,814 ￦ 511,531
IM 674,327 662,443
Semiconductor 366,963 81,892
DP 133,540 80,299
Harman 4,545,802 4,493,787
Other 8,993 3,726
Total ￦ 6,250,439 ￦ 5,833,678

Sam sung Electronics Business Report 122 / 261

 Goodwill impairment reviews are performed annually, and the recoverable amounts of cash-generating units have been determined
based on value-in-use calculations, etc. These calculations use pre-tax cash flow p rojections based on financial budgets approved by
management covering a five-year period, etc. Perpetual cash flows beyond the five-year period are ext rapolated using a constant
growth rate assumption. The growth rate applied was capped at the long-term average growth rate for the industry .

As a result of an annual impairment review, the Co mpany recognized an impairment loss of ￦ 46,834 million for the goodwill of
Professional Solutions, a cash-generating unit of Harman. Principal assumptions used in the value-in-use calculations are as
follows:
Principal assumptions

Revenue growth rate 4.0 ~ 6.7%

Permanent growth rate 3.0%
Pre-tax discount rate 1 9.0%

1
Pre-tax discount rate is applied in estimated cash flows.

(C) Details of amortization of intangible assets for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Cost of sales ￦ 2,213,091 ￦ 643,047

Selling and administrative expenses and other 810,731 671,878
Total ￦ 3,023,822 ￦ 1,314,925

14. Borrowings

(A) Details of the carrying amounts of borrowings as of December 31, 2019 and 2018 are as follows:

Financial Annual interest rates (%)

(In millions of Korean won) institutions as of December 31, 2019 December 31, 2019 December 31, 20183

S hort-term borrowings
Collateralized borrowings1 Woori Bank and other 0.0 ~ 22.3 ￦ 11,734,361 ￦ 12,130,459
Non-collateralized borrowings Citibank and other 0.0 ~ 12.0 2,659,107 1,456,201
Total ￦ 14,393,468 ￦ 13,586,660
Current portion of long-term
borrowings
Bank borrowings Hana Bank and other 3.2 ~ 5.0 ￦ 35,376 ￦ 16,880
Lease liabilities2 CSSD and other 3.8 805,068 11,067
Total ￦ 840,444 ￦ 27,947
Long-term borrowings
Bank borrowings - - ￦ - ￦ 34,963
Lease liabilities2 CSSD and other 3.8 2,197,181 50,122
Total ￦ 2,197,181 ￦ 85,085

1
Collateralized borrowings are secured by trade receivables.
2
Interest expenses arising from the lease liabilities for the year ended December 31, 2019 amount to ￦ 103,240 million, which was calculated
using the weighted average incremental borrowing rate. The right-of-use assets are pledged as collateral to the lessor in the event of default.
Short-term lease payments, payments for leases of low-value assets and other not included in the measurement of lease liability for the year
ended December 31, 2019 amount to ￦ 233,467 million.
3
Lease liabilities as of December 31, 2018 represent financial lease liabilities in accordance with the previous Korean IFRS 1017 Leases (Refer
to Note 2).

Sam sung Electronics Business Report 123 / 261

 (B) Maturities of bank borrowings and lease liabilities outstanding as of December 31, 2019 are as follows:

(In millions of Korean won) Bank borrowings Lease liabilities

Repayment terms
2020 ￦ 35,376 ￦ 893,943
2021 - 593,366
2022 - 494,867
2023 - 393,403
2024 and thereafter - 935,373
Total ￦ 35,376 ￦ 3,310,952

15. Debentures

(A) Details of debentures as of December 31, 2019 and 2018 are as follows:

Annual interest rates (%)

(In millions of Korean won) Issue date Due date as of December 31, 2019 2019 2018

US dollar denominated ￦ 46,312 ￦ 50,315

1997.10.2 2027.10.1 7.7
straight bonds1 (US $ 40 million) (US $ 45 million)
US dollar denominated 463,120 447,240
2015.5.6 2025.5.15 4.2
debenture bonds2 (US $ 400 million) (US $ 400 million)
EURO denominated 454,100 447,352
2015.5.20 2022.5.27 2.0
debenture bonds3 (EUR € 350 million) (EUR € 350 million)
Less: Current portion (5,789) (5,591)
Less: Discounts (1,003) (1,208)
Add: Premium 18,558 23,864
Total ￦ 975,298 ￦ 961,972

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
Harman International Industries, Inc. a subsidiary of the Company, issued dollar denominated debenture bonds. Repayment of these debentures
is due on the date of maturity and interest is paid semi-annually.
3
Harman F inance International, SCA, a subsidiary of the Company, issued euro denominated debenture bonds. Repayment of these debentures is
due on the date of maturity and interest is paid annually.

(B) Maturities of debentures outstanding as of December 31, 2019 are as follows:

(In millions of Korean won) Debentures

Repayment terms
2020 ￦ 5,789
2021 5,789
2022 459,889
2023 5,789
2024 and thereafter 486,276
Total ￦ 963,532

Sam sung Electronics Business Report 124 / 261

16. Net Defined Benefit Liabilities (Assets)

(A) Details of net defined benefit liabilities (assets) recognized on the consolidated statements of financial position as of December
31, 2019 and 2018 are as follows:

(In millions of Korean won) December 31, 2019 December 31, 2018

Present value of funded defined benefit obligations ￦ 10,864,675 ￦ 8,443,465

Present value of unfunded defined benefit obligations 283,394 250,577
Subtotal 11,148,069 8,694,042
Fair value of plan assets (11,267,121) (8,752,334)
Net defined benefit liabilities (assets) ￦ (119,052) ￦ (58,292)

(B) The amounts related to defined benefit plans recognized in the consolidated statements of profit or loss for the years ended
December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Current service cost ￦ 930,471 ￦ 824,572

Net interest income (3,755) (22,781)
Past service cost 2,275 14,367
Other 7,629 (2,077)
Total ￦ 936,620 ￦ 814,081

(C) The amounts recognized as expense of defined contribution plans for the years ended December 31, 2019 and 2018 are
￦ 198,387 million and ￦ 144,712 million, respectively.

(D) The pension expenses related to defined benefit plans recognized in the consolidated statements of profit or loss for the years
ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Cost of sales ￦ 417,393 ￦ 349,709

Selling and administrative expenses and other 519,227 464,372
Total ￦ 936,620 ￦ 814,081

Sam sung Electronics Business Report 125 / 261

(E) Changes in the defined benefit obligations for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Balance as of January 1 ￦ 8,694,042 ￦ 7,536,936

Current service cost 930,471 824,572
Interest cost 283,065 281,795
Past service cost 2,275 14,367
Remeasurement:
Actuarial gains or losses arising from changes in demographic assumptions (7,041) (569)
Actuarial gains or losses arising from changes in financial assumptions 1,190,499 191,185
Other 326,369 226,438
Benefits paid (308,182) (361,488)
Other1 36,571 (19,194)
Balance as of December 31 ￦ 11,148,069 ￦ 8,694,042

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

(F) Changes in the fair value of plan assets for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Balance as of January 1 ￦ 8,752,334 ￦ 7,972,906

Interest income on plan assets 286,820 304,576
Remeasurements of plan assets (118,110) (159,077)
Contributions by employer 2,600,576 894,169
Benefits paid (283,778) (267,382)
Other1 29,279 7,142
Balance as of December 31 ￦ 11,267,121 ￦ 8,752,334

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

Expected contributions to post-employment benefit plans for the year ended December 31, 2020 are ￦ 1,181,545 million.

(G) Plan assets as of December 31, 2019 and 2018 consist of the following:

(In millions of Korean won) December 31, 2019 December 31, 2018

Principal guaranteed fixed income financial instruments and other ￦ 11,230,391 ￦ 8,720,784
Other 36,730 31,550
Total ￦ 11,267,121 ￦ 8,752,334

Plan assets are mostly invested in instruments which have a quoted price in active markets.

Sam sung Electronics Business Report 126 / 261

 (H) The principal actuarial assumptions as of December 31, 2019 and 2018 are as follows:

(In percentage) December 31, 2019 December 31, 2018

Discount rate 0.2 ~ 7.2 0.8 ~ 9.3

Salary growth rate (including the effects of inflation) 1.5 ~ 10.0 1.5 ~ 10.0

(I) The sensitivity analysis of the defined benefit obligations as of December 31, 2019 and 2018 to changes in the weighted
principal assumptions is as follows:

(In percentage) December 31, 2019 December 31, 2018

Discount rate
1%p increase 92 92
1%p decrease 110 110
S alary growth rate
1%p increase 110 109
1%p decrease 92 92

(J) The weighted average maturity of the defined benefit obligations is 9.03 years as of December 31, 2019.

17. Provisions

Changes in provisions for the year ended December 31, 2019 are as follows:

Royalty Long-term Other

(In millions of Korean won) Warranty (A) expenses (B) incentives (C) (D, E) Total

Balance as of January 1 ￦ 1,873,869 ￦ 1,134,379 ￦ 777,073 ￦ 1,262,336 ￦ 5,047,657

Charged to the consolidated
1,381,188 441,411 281,598 762,609 2,866,806
statement of profit or loss
Payment (1,507,690) (529,013) (271,223) (757,709) (3,065,635)
1
Other 43,640 6,671 5,822 (225,234) (169,101)
Balance as of December 31 ￦ 1,791,007 ￦ 1,053,448 ￦ 793,270 ￦ 1,042,002 ￦ 4,679,727

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

(A) The Company accrues warranty reserves for estimated costs of quality assurance, exchanges, repairs and recalls, and future
services based on historical experience and terms of warranty programs.

(B) The Company recognizes provisions for the estimated royalty expenses that are under negotiation with counterparties. The
timing and amount of payment depends on the settlement of the negotiation.

(C) The Company has a long-term incentive plan for its executives based on a three-year management performance criteria and
recognizes provisions for the estimated incentive cost for the accrued period.

(D) The Company records provisions for future expenses expected to be incurred for products that have been discontinued from
manufacturing and sales.

Sam sung Electronics Business Report 127 / 261

 (E) The Company makes provisions for the carrying amounts of emission rights held by the Company and the emission in excess
of the emission rights for the applicable years. Details of emission rights and liabilities as of December 31, 2019 are as
follows:

(1) Allocated amount of emission permits and estimated amount of emission as of December 31, 2019 are as follows:

(in ten thousands metric tons) December 31, 2019

Allocated emission permits 1,406

Estimated volume of emission 1,642

(2) Changes in the emission permits rights for the year ended December 31, 2019 are as follows:

(In millions of Korean won) 2019

Balance as of January 1 ￦ 31,647

Increase 7,140
Balance as of December 31 ￦ 38,787

(3) Changes in the provisions for emissions liabilities for the year ended December 31, 2019 are as follows:

(In millions of Korean won) 2019

Balance as of January 1 ￦ 99,960

Credited to the consolidated statement of profit or loss (81,546)
Submission -
Balance as of December 31 ￦ 18,414

18. Commitments and Contingencies

(A) Guarantees

Details of guarantees of debt provided by the Company as of December 31, 2019 and 2018 are as follows:

(In millions of Korean won) December 31, 2019 December 31, 2018

Guarantees of debt for housing rental ￦ - ￦ 32,511

(B) Litigations and other

(1) As of December 31, 2019, the Company is involved in claims, disputes, and investigations conducted by regulatory bodies,
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 Company believes the outcome will not have a material impact on
the consolidated financial position of the Company.

(2) In addition, the Company is involved in various claims, disputes, and investigations conducted by regulatory bodies, which
arose during the normal course of business with numerous companies. Although the outflow of resources and timing of these
matters are uncertain, the Company believes the outcome will not have a material impact on the consolidated financial
position of the Company.

Sam sung Electronics Business Report 128 / 261

 (C) Other commitments

(1)As of December 31, 2019, the Company has trade financing agreements, trade notes receivable discounting facilities, and
loan facilities with accounts receivable pledged as collateral with Woori Bank and 21 other financial institutions, with a
combined limit of up to ￦ 20,669,662 million. In addition, the Company has a trade financing agreement (up to
￦ 15,406,218 million) with Shinhan Bank and 19 other financial institutions and loan facilities with accounts receivable
pledged as collateral and other financial agreements (up to ￦ 2,188,111 million).

(2)As of December 31, 2019, unfulfilled agreements relating to the acquisition of property, plant and equipment amount to
￦ 5,836,229 million.

(3)As of December 31, 2019, the Company (the Lessor) has non-cancellable operating lease agreements related to real-estates,
and the future minimum lease payments amount to ￦ 91,602 million (￦ 56,044 million within one year, ￦ 30,891
million later than one year but not later than five years, ￦ 4,667 million later than five years). Lease income recognized
as a result of the respective operating lease agreements amount to ￦ 129,854 million for the year ended December 31,
2019.

19. Contract Liabilities

The Company has recognized the following contract liabilities related to contracts with customers:

(In millions of Korean won) December 31, 2019 December 31, 2018

Contract liabilities1 ￦ 9,240,401 ￦ 9,021,400

1
Contract liabilities are included in advances received, accrued expenses, other current liabilities and other.

The revenue recognized during the year ended December 31, 2019 in relation to carried-forward contract liabilities as of January 1,
2019 amounts to \ 627,510 million.

20. Share Capital

As of December 31, 2019, the Co mpany’s total number of authorized shares is 25,000,000,000 shares (￦ 100 per share). The
Co mpany has issued 5,969,782,550 shares of ordinary shares and 822,886,700 shares of preference shares as of December 31, 2019,
excluding ret ired shares. Due to the retirement of shares, the total par value of the shares issued is ￦ 679,267 million (ord inary
shares of ￦ 596,978 million and preference shares of ￦ 82,289 million), which does not agree with paid-in capit al of
￦ 897,514 million.

Changes in the number of shares outstanding for the years ended December 31, 2019 and 2018 are as follows:

(number of shares) Ordinary shares Preference shares

Balance as of January 1, 2018 119,688,369 16,530,409

Acquisition of treasury shares (292,718) (72,675)
Share split 1 5,850,386,899 806,428,966
Balance as of December 31, 2018 5,969,782,550 822,886,700
Balance as of December 31, 2019 5,969,782,550 822,886,700

1
During the year ended December 31, 2018, the Company’s number of shares has been changed by the share split.

Sam sung Electronics Business Report 129 / 261

21. Retained Earnings

(A) Retained earnings as of December 31, 2019 and 2018 consist of the following:

(In millions of Korean won) December 31, 2019 December 31, 2018

Discretionary reserve and other ￦ 168,322,868 ￦ 151,519,651

Unappropriated 86,260,026 91,179,305
Total ￦ 254,582,894 ￦ 242,698,956

(B) Details of interim and year-end dividends are as follows:

(1) Interim dividends (Record date: March 31, 2019 and 2018, June 30, 2019 and 2018, and September 30, 2019 and 2018)

(In millions of Korean won and number of shares) 2019 2018

Ordinary shares 5,969,782,550 119,395,651
Number of shares eligible for dividends1
Preference shares 822,886,700 16,457,734
1 st Dividend rate (based on par value) 354% 354%
quarter Ordinary shares ￦ 2,113,303 ￦ 2,113,303
Dividend amount Preference shares 291,302 291,302
Total ￦ 2,404,605 ￦ 2,404,605
Ordinary shares 5,969,782,550 5,969,782,550
Number of shares eligible for dividends
Preference shares 822,886,700 822,886,700
2nd Dividend rate (based on par value) 354% 354%
quarter Ordinary shares ￦ 2,113,303 ￦ 2,113,303
Dividend amount Preference shares 291,302 291,302
Total ￦ 2,404,605 ￦ 2,404,605
Ordinary shares 5,969,782,550 5,969,782,550
Number of shares eligible for dividends
Preference shares 822,886,700 822,886,700

3rd Dividend rate (based on par value) 354% 354%

quarter Ordinary shares ￦ 2,113,303 ￦ 2,113,303
Dividend amount Preference shares 291,302 291,302
Total ￦ 2,404,605 ￦ 2,404,605

1
During the year ended December 31, 2018, the Company’s number of shares has been changed by the share split.

(2) Year-end dividends (Record date: December 31, 2019 and 2018)

(In millions of Korean won and number of shares) 2019 2018

Ordinary shares 5,969,782,550 5,969,782,550
Number of shares eligible for dividends
Preference shares 822,886,700 822,886,700
Ordinary shares 354% 354%
Dividend rate (based on par value)
Preference shares 355% 355%
Ordinary shares ￦ 2,113,303 ￦ 2,113,303
Dividend amount Preference shares 292,125 292,125
Total ￦ 2,405,428 ￦ 2,405,428

Sam sung Electronics Business Report 130 / 261

22. Other Components of Equity

Other components of equity as of December 31, 2019 and 2018 consist of the following:

(In millions of Korean won) December 31, 2019 December 31, 2018

Gain on valuation of financial assets at fair value through other

￦ 2,573,530 ￦ 1,462,266
comprehensive income
Share of other comprehensive loss of associates and joint ventures (12,735) (44,212)
Foreign currency translation (5,645,769) (8,612,742)
Remeasurement of net defined benefit liabilities (assets) (1,944,284) (796,563)
Other 60,429 59,881
Total ￦ (4,968,829) ￦ (7,931,370)

23. Expenses by Nature

Expenses by nature for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Changes in finished goods, work in process, and other ￦ 1,900,859 ￦ (5,484,269)

Raw materials used, merchandise purchased, and other 83,443,554 79,808,215
Wages and salaries 22,453,030 22,727,468
Post-employment benefit 1,171,606 958,793
Depreciation 26,573,816 25,167,112
Amortization 3,023,822 1,314,925
Welfare 4,489,617 4,095,722
Utilities 4,451,765 4,335,464
Outsourcing 5,181,792 4,921,791
Advertising 4,614,525 3,998,491
Sales promotion expenses 6,678,078 7,113,183
Other 38,649,908 35,927,851
Total 1 ￦ 202,632,372 ￦ 184,884,746

1
Equal to the sum of cost of sales and selling and administrative expenses in the consolidated statements of profit or loss.

Sam sung Electronics Business Report 131 / 261

24. Selling and Administrative Expenses

Selling and administrative expenses for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

S elling and administrative expenses

Wages and salaries ￦ 6,123,653 ￦ 6,188,748
Post-employment benefit 298,937 262,647
Commissions and service charges 5,513,083 5,754,750
Depreciation 1,571,473 1,008,805
Amortization 469,344 438,885
Advertising 4,614,525 3,998,491
Sales promotion expenses 6,678,078 7,113,183
Transportation 2,075,675 2,451,968
Warranty 2,968,421 2,776,508
Other 5,172,398 4,142,270
Subtotal 35,485,587 34,136,255
Research and development expenses
Total expenses 20,192,935 18,650,384
Capitalized expenses (285,699) (296,304)
Subtotal 19,907,236 18,354,080
Total ￦ 55,392,823 ￦ 52,490,335

25. Other Non-Operating Income and Expense

Details of other non-operating income and expenses for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Other non-operating income

Dividend income ￦ 154,679 ￦ 131,379
Rental income 153,357 140,875
Gain on disposal of investments 48,345 36,388
Gain on disposal of property, plant and equipment 304,091 387,070
Other 1,118,194 789,325
Total ￦ 1,778,666 ￦ 1,485,037

(In millions of Korean won) 2019 2018

Other non-operating expenses

Loss on disposal of property, plant and equipment ￦ 144,547 ￦ 90,714
Donations 357,747 310,321
Other 912,413 740,983
Total ￦ 1,414,707 ￦ 1,142,018

Sam sung Electronics Business Report 132 / 261

26. Financial Income and Expenses

Details of financial income and expenses for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Financial income
Interest income ￦ 2,660,024 ￦ 2,297,139
Interest income from financial assets measured at amortized cost 2,659,740 2,296,841
Interest income from financial assets measured at fair value through profit or
284 298
loss
Foreign exchange differences 6,769,000 6,695,690
Gains from derivatives 732,608 1,006,492
Total ￦ 10,161,632 ￦ 9,999,321

(In millions of Korean won) 2019 2018

Financial expenses
Interest expenses ￦ 686,356 ￦ 674,617
Interest expenses from financial liabilities measured at amortized cost 248,659 289,993
Other financial liabilities 437,697 384,624
Foreign exchange differences 6,852,409 7,149,831
Losses from derivatives 736,106 784,448
Total ￦ 8,274,871 ￦ 8,608,896

The Co mpany recognizes foreign exchange gains and losses arising from foreign currency transactions and translation as financial
income and expenses.

27. Income Tax Expense

(A) Income tax expense for the years ended December 31, 2019 and 2018 consists of the following:

(In millions of Korean won) 2019 2018

Current taxes
Current tax on profits for the year ￦ 5,913,635 ￦ 13,698,765
Adjustments in respect to prior years (177,616) (178,430)
Subtotal 5,736,019 13,520,335
Deferred taxes
Changes in deferred taxes arising from unused tax credits (26,114) (209,733)
Changes in temporary differences 2,934,705 3,346,409
Changes in deferred taxes arising from unused tax losses 47,616 152,492
Other 1,098 5,598
Subtotal 2,957,305 3,294,766
Items charged directly to equity - -
Income tax expense ￦ 8,693,324 ￦ 16,815,101

Sam sung Electronics Business Report 133 / 261

 (B) The tax on the Company’s profit before income tax differs from the theoretical amount that would arise using the weighted
average statutory tax rate applicable to profits of the Company as follows:

(In millions of Korean won) 2019 2018

Profit before income tax ￦ 30,432,189 ￦ 61,159,958

Tax calculated at weighted average of applicable tax rates1 8,996,445 16,232,873
Tax effects of:
Permanent differences 86,509 (307,185)
Temporary differences for which no deferred income tax was recognized 393,620 (1,964)
Tax credits and exemptions (3,195,793) (2,450,768)
Results of interest in subsidiaries, etc. 2,272,967 3,051,284
Impact of changes in tax rates 28,951 2,551
Other 110,625 288,310
Income tax expense ￦ 8,693,324 ￦ 16,815,101
1
The weighted average of statutory tax rates are applied to the respective profits of the Company applicable to each tax authority as of
December 31, 2019 and 2018.

(C) The movement in deferred income tax assets and liabilities resulting from the tax effect of temporary differences for the
years ended December 31, 2019 and 2018 are as follows:

(1) 2019

Te mporary diffe re nces De fe rre d income tax assets (liabilities)

Balance as of Incre ase Balance as of Balance as of Incre ase Balance as of
(In millions of Korean won) January 1 (De cre ase) De ce mbe r 31 January 1 (De cre ase) De ce mbe r 31

De fe rre d tax arising from te mporary differences

Revaluation of land ￦ (3,422,280) ￦ 4,476 ￦ (3,417,804) ￦ (941,127) ￦ 1,231 ￦ (939,896)
Investments in subsidiaries, associates and
(85,091,134) (11,306,065) (96,397,199) (14,315,226) (2,353,912) (16,669,138)
joint ventures1
Accumulated depreciation and other (3,999,764) (529,570) (4,529,334) (903,184) (79,372) (982,556)
Accrued income (278,778) 30,116 (248,662) (73,048) 11,716 (61,332)
Provisions, accrued expenses and other 11,733,192 518,455 12,251,647 3,239,039 43,708 3,282,747
Foreign currency translation (81,476) (16,453) (97,929) (22,158) (8,069) (30,227)
Asset impairment losses 1,528,707 262,022 1,790,729 421,608 70,724 492,332
Other 3,875,005 (1,622,321) 2,252,684 890,802 (620,731) 270,071
Subtotal ￦(75,736,528) ￦(12,659,340) ￦(88,395,868) ￦(11,703,294) ￦ (2,934,705) ￦(14,637,999)
De fe rre d tax arising from tax losses
Unused tax losses ￦ 4,692,966 ￦ (129,871) ￦ 4,563,095 ￦ 1,255,759 ￦ (47,616) ￦ 1,208,143
De fe rre d tax arising from tax cre dits
Unused tax credits 1,111,141 200,357 1,311,498 981,393 26,114 1,007,507
De fe rre d tax re cognized in e quity
Gain (loss) on valuation of financial assets at
fair value through other comprehensive ￦ (2,165,131) ￦ (763,419) ￦ (2,928,550) ￦ (550,422) ￦ (345,500) ￦ (895,922)
income and other
Remeasurement of net defined benefit
1,110,260 1,627,937 2,738,197 322,043 447,469 769,512
liabilities (assets)
Subtotal ￦ (1,054,871) ￦ 864,518 ￦ (190,353) ￦ (228,379) ￦ 101,969 ￦ (126,410)
Deferred tax assets ￦ 4,505,049
Deferred tax liabilities (17,053,808)
Total ￦(12,548,759)
1
Deferred tax assets were not recognized if it is probable that the temporary differences will not reverse in the foreseeable future for
investments in subsidiaries, associates and joint ventures.

Sam sung Electronics Business Report 134 / 261

 (2) 2018

Te mporary diffe re nces De fe rre d income tax assets (liabilities)

Balance as of Incre ase Balance as of Balance as of Incre ase Balance as of
(In millions of Korean won) January 1 (De cre ase) De ce mbe r 31 January 1 (De cre ase) De ce mbe r 31

De fe rre d tax arising from te mporary differences

Special reserves appropriated for tax
￦ (368) ￦ 368 ￦ - ￦ (101) ￦ 101 ￦ -
purposes
Revaluation of land (3,425,233) 2,953 (3,422,280) (941,939) 812 (941,127)
Investments in subsidiaries, associates and
(71,904,411) (13,186,723) (85,091,134) (11,158,371) (3,156,855) (14,315,226)
joint ventures1
Accumulated depreciation and other (3,554,202) (445,562) (3,999,764) (775,128) (128,056) (903,184)
Accrued income (192,154) (86,624) (278,778) (46,785) (26,263) (73,048)
Provisions, accrued expenses and other 12,712,144 (978,952) 11,733,192 3,401,425 (162,386) 3,239,039
Foreign currency translation (236,087) 154,611 (81,476) (62,883) 40,725 (22,158)
Asset impairment losses 1,632,105 (103,398) 1,528,707 461,264 (39,656) 421,608
Other 3,477,577 397,428 3,875,005 765,633 125,169 890,802
Subtotal ￦(61,490,629) ￦(14,245,899) ￦(75,736,528) ￦ (8,356,885) ￦ (3,346,409) ￦(11,703,294)
De fe rre d tax arising from tax losses
Unused tax losses ￦ 5,274,212 ￦ (581,246) ￦ 4,692,966 ￦ 1,408,251 ￦ (152,492) ￦ 1,255,759
De fe rre d tax arising from tax cre dits
Unused tax credits 900,637 210,504 1,111,141 771,660 209,733 981,393
De fe rre d tax re cognized in e quity
Gain (loss) on valuation of financial assets at
fair value through other comprehensive ￦ (2,475,749) ￦ 310,618 ￦ (2,165,131) ￦ (628,183) ￦ 77,761 ￦ (550,422)
income and other
Remeasurement of net defined benefit
534,129 576,131 1,110,260 156,063 165,980 322,043
liabilities (assets)
Subtotal ￦ (1,941,620) ￦ 886,749 ￦ (1,054,871) ￦ (472,120) ￦ 243,741 ￦ (228,379)
Deferred tax assets ￦ 5,468,002
Deferred tax liabilities (15,162,523)
Total ￦ (9,694,521)

1
Deferred tax assets were not recognized if it is probable that the temporary differences will not reverse in the foreseeable future for investments
in subsidiaries, associates and joint ventures.

The Co mpany periodically assesses its ability to recover deferred tax assets. In the event of a significant uncertainty regarding the
Co mpany’s ultimate ability to recover such assets, deferred tax assets are recognized only to the extent that it is probable that future
taxab le profit will be availab le against which the temporary differences can be utilized. Temporary differences whose deferred tax
effects were not recognized due to uncertainty regarding the ultimate realizability of such assets as of December 31, 2019 and 2018
are as follows:

(In millions of Korean won) 2019 2018

Unused tax losses ￦ 602,143 ￦ 357,466

Unused tax credits 281,152 56,382

Sam sung Electronics Business Report 135 / 261

 Expected expiry dates of unused tax losses and credits for which no deferred tax asset is recognized are as follows:

(In millions of Korean won) 2020 2021 2022 2023 and after

Unused tax losses ￦ - ￦ 1,302 ￦ 32,835 ￦ 568,006

Unused tax credits 119,090 36,311 92,558 33,193

(D) The liquidity analysis of deferred tax assets and liabilities for the years ended December 31, 2019 and 2018 is as follows:

(In millions of Korean won) December 31, 2019 December 31, 2018

Deferred tax assets

Deferred tax assets to be recovered within 12 months ￦ 3,125,687 ￦ 2,770,216
Deferred tax assets to be recovered after more than 12 months 1,379,362 2,697,786
Subtotal 4,505,049 5,468,002
Deferred tax liabilities
Deferred tax liabilities to be recovered after more than 12 months (17,053,808) (15,162,523)
Total ￦ (12,548,759) ￦ (9,694,521)

28. Earnings per Share

(A) Basic earnings per share

Basic earnings per share for the years ended December 31, 2019 and 2018 are calculated as follows:

(1) Ordinary shares

(In millions of Korean won, thousands of number of shares) 2019 2018

Profit for the year attributable to owners of the parent company ￦ 21,505,054 ￦ 43,890,877
Profit for the year available for ordinary shares 18,899,137 38,573,066
Weighted-average number of ordinary shares outstanding 5,969,783 5,970,448
Basic earnings per ordinary share (in Korean won) ￦ 3,166 ￦ 6,461

(2) Preference shares

(In millions of Korean won, thousands of number of shares) 2019 2018

Profit for the year attributable to owners of the parent company ￦ 21,505,054 ￦ 43,890,877
Profit for the year available for preference shares 2,605,917 5,317,811
Weighted-average number of preference shares outstanding 822,887 823,042
Basic earnings per preference share (in Korean won) ￦ 3,167 ￦ 6,461

(B) Diluted earnings per share

The Co mpany does not have dilut ive potential o rdinary shares and as a result, basic earnings per share and diluted earn ings per
share are the same for the years ended December 31, 2019 and 2018.

Sam sung Electronics Business Report 136 / 261

29. Cash Flows

(A) Adjustments and changes in assets and liabilities arising from operating activities for the years ended December 31, 2019 and
2018 are as follows:

(1) Adjustments

(In millions of Korean won) 2019 2018

Adjustments for:
Income tax expense ￦ 8,693,324 ￦ 16,815,101
Financial income (3,831,428) (3,688,038)
Financial expenses 2,034,518 2,092,633
Post-employment benefits 1,171,606 958,793
Depreciation 26,573,816 25,167,112
Amortization 3,023,822 1,314,925
Bad debt expenses (reversal) (183,380) (48,320)
Dividend income (154,679) (131,379)
Shares of profit from associates and joint ventures (412,960) (539,845)
Gain on disposal of property, plant and equipment (304,091) (387,070)
Loss on disposal of property, plant and equipment 144,547 90,714
Loss on valuation of inventories and other 785,215 1,948,360
Gain on disposal of investments (48,345) (36,388)
Other (49,283) 47,975
Total ￦ 37,442,682 ￦ 43,604,573

(2) Changes in assets and liabilities arising from operating activities

(In millions of Korean won) 2019 2018

Changes in assets and liabilities:

Decrease in trade receivables ￦ 2,587,519 ￦ 3,605,893
Decrease (increase) in non-trade receivables (758,928) 907,711
Decrease in advance payments 65,325 155,417
Increase in long-term and short-term prepaid expenses (65,086) (1,701,983)
Decrease (increase) in inventories 2,134,632 (5,979,475)
Decrease in trade payables (1,269,177) (533,609)
Decrease in long-term and short-term other payables (35,869) (1,881,303)
Increase (decrease) in advances received 440,597 (249,008)
Increase (decrease) in withholdings (165,535) 131,931
Increase (decrease) in accrued expenses (1,707,265) 501,536
Decrease in long-term and short-term provisions (198,829) (539,842)
Payment of post-employment benefits (543,864) (522,849)
Increase in plan assets (2,316,798) (626,787)
Other (712,478) (3,191,998)
Total ￦ (2,545,756) ￦ (9,924,366)

Sam sung Electronics Business Report 137 / 261

(B) The Company’s statements of cash flows are prepared using the indirect method. Significant transactions not affecting cash
flows for the years ended December 31, 2019 and 2018 are as follows:

(In millions of Korean won) 2019 2018

Valuation of financial assets at fair value through other comprehensive income ￦ 1,497,600 ￦ (312,601)
Valuation of investments in associates and joint ventures 32,397 (821)
Reclassification of construction in progress to property, plant and equipment 12,172,344 32,770,393
New lease contracts established 1,125,228 -
Reclassification of current portion of long-term borrowings 771,405 27,947
Reclassification of current portion of debentures 5,789 5,591

(C) The Company reported cash receipts and payments arising from transactions occurring frequently, of large gross amounts, and
with short-term maturities, such as short-term financial instruments, borrowings and other, on a net basis.

(D) For the year ended December 31, 2019, cash outflows from principal repayment (financial activities) and cash outflows due to
interest expenses (operating activities) in relation to the lease liabilities amount to ￦ 684,318 million and ￦ 103,240
million, respectively.

(E) Changes in liabilities arising from financing activities for the years ended December 31, 2019 and 2018 are as follows:

(1) 2019

Cash flows from Non-cash tranactions

As of financing New lease As of
(In millions of Korean won) January 1 activities Amortization contracts Other1 December 31

Short-term borrowings ￦ 13,586,660 ￦ 865,792 ￦ - ￦ - ￦ (58,984) ￦ 14,393,468

Debentures and long-term
1,080,443 (709,400) 3,520 1,125,228 2,518,778 4,018,569
borrowings
Total ￦ 14,667,103 ￦ 156,392 ￦ 3,520 ￦ 1,125,228 ￦ 2,459,794 ￦ 18,412,037

1
Other includes effects of changes in foreign currency exchange rates and the cumulative effect of changes in accounting policies.

(2) 2018

Cash flows from Non-cash tranactions

As of financing As of
(In millions of Korean won) January 1 activities Amortization Other1 December 31

Short-term borrowings ￦ 15,767,619 ￦ (2,046,470) ￦ - ￦ (134,489) ￦ 13,586,660

Debentures and long-term borrowings 3,046,426 (1,983,017) 824 16,210 1,080,443
Total ￦ 18,814,045 ￦ (4,029,487) ￦ 824 ￦ (118,279) ￦ 14,667,103

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

Sam sung Electronics Business Report 138 / 261

30. Financial Risk Management

The Co mpany’s financial risk management focuses on minimizing market risk, cred it risk, and liquidity risk arising fro m operating
activities. To mit igate these risks, the Co mpany closely monitors each risk factor and operates corresponding financial risk
management policies and program. The Co mpany’s use of derivative instruments for hedging specific risks are included in this
program.

The finance team mainly carries out the Company’s financial risk management. After imp lementing the global financial risk
management policies, the finance team periodically measures, evaluates, and hedges financial risks.

The Co mpany manages global financial risks by operating local finance centers at each major region (United States, United
Kingdom, Singapore, China, Brazil, and Russia).

The Co mpany’s assets that are under financial risk management are co mprised of cash and cash equivalents, short-term financial
instruments, financial assets at amortized cost, trade receivables and other. The Co mpany’s liabilit ies under financial risk
management are comprised of trade payables, borrowings, and other.

(A) Market risk

(1) Foreign exchange risk

The Co mpany operates internationally and is exposed to foreign exchange risks as it conducts transactions in currencies ot her
than the functional currency of each entity. Major currencies that are exposed to foreign exchange risk include USD, EUR, JPY,
INR, and other.

The Co mpany focuses on minimizing the impact of foreign exchange fluctuation by maintain ing the equal amount of assets and
liab ilit ies denominated in each foreign currency, irrespective of foreign exchange fluctuation considerations. To prevent
exchange position, the Co mpany’s foreign exchange management policy requires normal business transactions, including imp ort
and export, as well as financing transactions such as depositing and borrowing, to be in local currency or fo r the cash-in curren cy
to be matched up with the cash-out currency.

In order to effectively manage foreign exchange risk, the Co mpany prohibits foreign exchange transactions, with the exception of
transactions made for hedging purposes, and periodically monitors and evaluates exchange risk.

As of December 31, 2019 and 2018, when currency rates change by 5%, the impact on profit or loss (before income tax effects)
arising from financial assets and liabilities denominated in foreign currencies other than functional currency are as follows:

December 31, 2019 December 31, 2018

(In millions of Korean won) Increase Decrease Increase Decrease

USD \ 163,062 \ (163,062) \ 344,488 \ (344,488)

EUR 127,507 (127,507) (4,381) 4,381
JPY (23,062) 23,062 (13,001) 13,001
INR 64,153 (64,153) 92,176 (92,176)

(2) Price risk

The Co mpany’s investment portfolio consists of direct and indirect investments in equity securities classified as financial assets
at fair value through other comprehensive inco me and financial assets at fair value through profit or loss, which is in line with the
Company’s strategy.

Sam sung Electronics Business Report 139 / 261

 As of December 31, 2019, a price fluctuation in relation to marketable equity instruments (listed shares) by 1% would result in
changes in other comprehensive income (before inco me tax effects) of ￦ 41,055 million (December 31, 2018: ￦ 28,846
million), and in profit or loss (before income tax effects) of ￦ 1,630 million (December 31, 2018: ￦ 101 million).

(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 consolidated statement of financial position, and future cash flows of interest inco me (expenses) of a financial
instrument, will fluctuate because of changes in market interest rates. The Co mpany’s position with regard to interest rate risk
exposure is mainly driven by its floating interest rate debt obligations and interest-bearing deposits. The Company implemented
policies and operates to minimize uncertainty arising from changes in interest rates and financial expenses.

The Co mpany maintains min imu m external borrowings by facilitating cash pooling systems on a regional and global basis to
limit its exposure to the interest rate risk. The Co mpany manages exposed interest rate risk via periodic monitoring and handling
risk factors on a timely basis.

As of December 31, 2019, changes in profit or loss (before income tax effects) as a result of a 1%p change in interest rates on
floating interest rate financial assets and liabilities are presented below:

December 31, 2019 December 31, 2018

(In millions of Korean won) Increase Decrease Increase Decrease

Financial assets \ 70,183 \ (70,183) \ 64,704 \ (64,704)

Financial liabilities (2,118) 2,118 (91) 91
Net effect \ 68,065 \ (68,065) \ 64,613 \ (64,613)

(B) Credit risk

Cred it risk arises during the normal course of transactions and investing activities where clients or other parties fail to discharge an
obligation. The Co mpany sets and manages the client’s and counterparty’s credit limit, and evaluates their financial cred it rat ing on
a periodic basis based on the client’s and counterparty’s financial conditions, default history and other important factors. Adequate
insurance coverage is maintained for trade receivables related to trading partners situated in higher risk countries.

Cred it risk can arise fro m t ransactions with financial institutions which include financial instrument transactions such as cash and
cash equivalents, savings, and derivative instruments. To min imize such risk, the Co mpany transacts only with banks which have
strong international credit rat ing (S&P A and above), and all new transactions with financial institutions with no prior t ransaction
history are approved, managed and monitored by the Co mpany’s finance team and the local finance center. The Co mpany generally
enters into a financial agreement with no restrictions, such as debt ratio covenants, provision of collateral, and loans or borrowings
repayment. The Company requires separate approval for contracts with restrictions.

As of December 31, 2019 and 2018, the Co mpany estimates that its maximu m exposure to credit risk is the carrying amount of its
financial assets, net of impairment losses.

Sam sung Electronics Business Report 140 / 261

(C) Liquidity risk

Due to the nature of the Co mpany’s business that requires making large investments, maintaining adequate level o f liquidity risk is
crucial. The Co mpany maintains and manages adequate level of liquidity by periodically forecasting its capital balances, estimating
required cash, managing income and expenses, and other.

The Co mpany manages its liquidity risk in advance by periodically forecasting projected cash flows. The Co mpany facilitates and
utilizes a globally integrated finance structure including regional Cash Pooling and other to provide liqu idity support. Also, when
abnormalities are identified, the Co mpany maintains a liquid ity management process that provides additional financial support in
cooperation with the local finance center. The Cash Pooling program allows sharing of surplus funds among entities and contributes
to minimizing liquid ity risk and strengthening the Company’s competitive position by reducing capital operation expenses and
financial expenses.

In addition, the Co mpany mitigates liquidity risk by contracting with financial institutions with respect to foreign trade finance and
other, and by providing payment guarantees to subsidiaries to secure required credit limit . For large scale facility investments,
liquidity risk is minimized by utilizing internal reserves and long-term borrowings according to the capital injection schedule.

As of December 31, 2019 and 2018, the following table is an undiscounted cash flow analysis for financial liabilit ies according to
their remaining contractual maturity.

December 31, 2019

Less than 4-6 7 - 12 1-5 More than
(In millions of Korean won) 3 months months months years 5 years

Financial liabilities ￦ 41,041,672 ￦ 655,089 ￦ 1,603,676 ￦ 4,241,964 ￦ 1,381,109

December 31, 2018

Less than 4-6 7 - 12 1-5 More than
(In millions of Korean won) 3 months months months years 5 years

Financial liabilities ￦ 39,445,090 ￦ 628,582 ￦ 742,744 ￦ 3,547,498 ￦ 663,594

The table above shows the Company’s financial liab ilities based on the remaining period at the consolidated statement of financial
position date until the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

The Co mpany’s derivative financial liabilit ies of ￦ 63,496 million (December 31, 2018: ￦ 28,543 million) has been included
within the less than 3 months bucket. These are the Co mpany’s trading portfolio of derivative instruments, on a net settlement t erm,
of which the contractual maturit ies are not essential for understanding its cash flows. These contracts are managed on a net fair
value basis rather than by maturity date. Net settled derivatives consist of forwards on currency rates used by the Co mpany to
manage the exchange rate profile.

Derivatives that are settled on a gross basis by delivery of the underly ing item, including derivatives for hedging, will be settled
within the next 31 months from the end of the reporting period. These derivative are not included in the table above.

There is no maximu m liquid ity risk exposure fro m those other than the above financial liabilities (e.g., pay ment guarantees for
affiliated companies, performance bonds, and other) as of December 31, 2019 (December 31, 2018: ￦ 32,511 million).

Sam sung Electronics Business Report 141 / 261

(D) Derivative Financial Instruments

The Co mpany applies cash flow hedge accounting to hedge the foreign currency risk of forecasted transaction including hedging the
price risk associated with inventory. Details of derivative financial instruments that qualify as cash flow hedges as of December 31,
2019 are as follows:

December 31, 2019 December 31, 2018

(In millions of Korean won) Assets Liabilities Assets Liabilities

Currency forward exchange contracts

Current items ￦ 20,946 ￦ 5,396 ￦ 18,343 ￦ 6,344
Non-current items 5,498 5,144 7,619 4,095
Total ￦ 26,444 ￦ 10,540 ￦ 25,962 ￦ 10,439

For the year ended December 31, 2019, the Co mpany recognizes the gains relating to the effective portion of changes in fair value
of derivatives that are designated and qualify as cash flow hedges in other comprehensive inco me, wh ich amount to ￦ 1,811
million (after tax), and recognizes the gains relating to the ineffect ive portion in p rofit or loss, wh ich amount to ￦ 975 mi llion
(before tax). Losses reclassified d irectly fro m other comp rehensive income to profit or loss amount to ￦ 916 million (after tax),
and gains reclassified fro m other co mprehensive inco me to the carrying amount of inventory amount to ￦ 30,786 million (after
tax).

(E) Capital risk management

The purpose of capital management is to maintain a sound capital structure. The Co mpany monitors capital on the basis of the ratio
of total liabilities to total equity. This ratio is calculated by dividing total liabilit ies by total equity in the consolidated financial
statements.

The Co mpany’s capital risk management policy has not changed since the previous financial year. The Co mpany has maintain ed an
AA- and Aa3 credit rating from S&P and Moody’s, respectively.

The total liabilities to equity ratios as of December 31, 2019 and 2018 are as follows:

(In millions of Korean won) December 31, 2019 December 31, 2018

Total liabilities ￦ 89,684,076 ￦ 91,604,067

Total equity 262,880,421 247,753,177
Total liabilities to equity ratio 34.1% 37.0%

Sam sung Electronics Business Report 142 / 261

(F) Fair value estimation

(1) Carrying amounts and fair values of financial instruments by category as of December 31, 2019 and 2018 are as follows:

December 31, 2019 December 31, 2018

(In millions of Korean won) Carrying amount Fair value Carrying amount Fair value

Financial assets
Cash and cash equivalents ￦ 26,885,999 1
￦ 30,340,505 1

Short-term financial instruments 76,252,052 1

65,893,797 1

1 1
Short-term financial assets at amortized cost 3,914,216 2,703,693
Short-term financial assets at fair value
1,727,436 1,727,436 2,001,948 2,001,948
through profit or loss
Trade receivables 35,131,343 1
33,867,733 1

Financial assets at amortized cost - - 238,309 1

Financial assets at fair value through other

8,920,712 8,920,712 7,301,351 7,301,351
comprehensive income
Financial assets at fair value through profit
1,049,004 1,049,004 775,427 775,427
or loss
Other2 9,864,541 208,126 9,313,133 84,089
Total financial assets ￦ 163,745,303 ￦ 152,435,896

Financial liabilities
Trade payables ￦ 8,718,222 1 ￦ 8,479,916 1

1 1
Short-term borrowings 14,393,468 13,586,660
1 1
Other payables 11,034,253 9,779,287
3 1 1
Current portion of long-term liabilities 846,090 33,386
Debentures 975,298 1,013,245 961,972 964,182
Long-term borrowings3 2,197,181 1
85,085 1

Long-term other payables2 1,822,927 2,316 2,860,002 13,417

Other2 8,374,146 215,211 8,832,523 42,723
Total financial liabilities ￦ 48,361,585 ￦ 44,618,831

1
Assets and liabilities whose carrying amount is a reasonable approximation of fair value are excluded from the fair value disclosures.
2
Financial assets of ￦ 9,656,415 million (December 31, 2018: ￦ 9,229,044 million) and financial liabilities of ￦ 9,979,546 million
(December 31, 2018: ￦ 11,636,385 million) are excluded as the carrying amount is a reasonable approximation of fair value.
3
Lease liabilities, classified under the current portion of long-term liabilities and long-term borrowings, are excluded from the fair value
disclosures in accordance with Korean IFRS 1107 Financial Instruments: Disclosures.

Sam sung Electronics Business Report 143 / 261

 (2) Fair value hierarchy classifications of the financial instruments that are measured at fair value or its fair value is disclosed as
of December 31, 2019 and 2018 are as follows:

December 31, 2019

(In millions of Korean won) Level 1 Level 2 Level 3 Total

Financial assets
Financial assets at fair value through other
￦ 4,105,456 ￦ - ￦ 4,815,256 ￦ 8,920,712
comprehensive income
Financial assets at fair value through profit or loss 163,046 20,966 2,592,428 2,776,440
Other - 208,126 - 208,126
Financial liabilities
Debentures - 1,013,245 - 1,013,245
Long-term other payables - - 2,316 2,316
Other - 215,211 - 215,211

December 31, 2018

(In millions of Korean won) Level 1 Level 2 Level 3 Total

Financial assets
Financial assets at fair value through other ￦ 2,884,633 ￦ - ￦ 4,416,718 ￦ 7,301,351
comprehensive income
Financial assets at fair value through profit or loss 10,124 18,503 2,748,747 2,777,375
Other - 84,089 - 84,089
Financial liabilities
Debentures - 964,182 - 964,182
Long-term other payables - - 13,417 13,417
Other - 41,639 1,085 42,723

The levels of the fair value hierarchy and its application to financial assets and liabilities are described below.

ㆍ Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
ㆍ Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
ㆍ Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

The fair value of financial instruments traded in active markets is based on quoted market prices at the consolidated statement of
financial position date. A market is regarded as active if quoted prices are readily and regularly available fro m an exchange, d ealer,
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 Co mpany is the current bid price.
These instruments are included in Level 1. The instruments included in Level 1 are listed equity investments most of which are
classified as financial assets at fair value through other comprehensive income.

The fair value of financial instru ments that are not traded in an active market 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 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.

The Co mpany 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 Co mpany’s quarterly reporting dates. The
Co mpany’s policy is to recognize transfers between levels at the end of the reporting period, if corresponding events or changes in
circumstances have occurred.

Sam sung Electronics Business Report 144 / 261

Specific valuation techniques used to value financial instruments include:

ㆍ Quoted market prices or dealer quotes for similar instruments

ㆍ The fair value o f forward foreign exchange contracts is determined using forward exchange rates at the consolidated 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 remain ing financial instruments.
For trade and other receivables that are classified as current assets, the carrying amount approximates a reasonable estimate of fair
value.

(3) Valuation technique and the inputs

The Co mpany utilizes present value techniques to discount future cash flows using a proper interest rate for corporate bonds,
government and public bonds, bank debentures, and other that are classified as Level 2 in the fair value hierarchy.

The following table presents the valuation techniques and the inputs used for major financial instruments classified as Level 3.

(In millions of Korean won)

Input range
Classification Fair value Valuation technique Level 3 inputs (Weighted average)

Financial assets at fair value through other comprehensive income

Permanent growth rate -1.0% ~ 1.0% (0%)
M altani \ 9,551 Discounted cash flow
Weighted average cost of capital 9.8% ~ 11.8% (10.8%)
Permanent growth rate -1.0% ~ 1.0% (0%)
Samsung Venture Investment 12,754 Discounted cash flow
Weighted average cost of capital 16.6% ~ 18.6% (17.6%)
Corning incorporated Risk adjusted discount rate 4.5% ~ 6.5% (5.5%)
3,969,983 Trinomial model
convertible preference shares Price volatility 22.1% ~ 28.1% (25.1%)
Long-term other payables
Probability-weighted
Contingent financial liability 2,316 Applicable probability rate 50.0%
discounted cash flow

Sam sung Electronics Business Report 145 / 261

(4) Changes in financial instruments classified as Level 3 are as follows:

(In millions of Korean won) 2019 2018

Financial assets
Balance as of January 1 \ 7,165,466 \ 3,652,574
Acquisitions 3,592,512 5,257,894
Disposals (3,795,486) (4,750,207)
Amount recognized in profit or loss 53,381 88,284
Amount recognized in other comprehensive income 302,616 56,683
1
Other 89,195 2,860,238
Balance as of December 31 \ 7,407,684 \ 7,165,466

1
Other includes the cumulative effect of changes in accounting policies.

(In millions of Korean won) 2019 2018

Financial liabilities
Balance as of January 1 \ 14,502 \ 351,918
Settled (1,130) (322,920)
Amount recognized in profit or loss (11,655) (15,188)
Other 599 692
Balance as of December 31 \ 2,316 \ 14,502

(5) Sensitivity analysis for recurring fair value measurements classified as 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 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 income tax effects for other comprehensive income or
loss) fro m changes in inputs for major financial instruments which are classified as Level 3 and subject to sensitivity analysis, are as
follows:

(In millions of Korean won) Favorable changes Unfavorable changes

Classification Profit or loss Equity Profit or loss Equity

Financial assets at fair value through other

\ - \ 140,071 \ - \ (119,386)
comprehensive income1

1
For equity instruments, changes in fair value are calculated based on the correlation between growth rate (-1.0% ~ 1.0%), volatility (22.1% ~
28.1%) and discount rate, which are significant unobservable inputs.

Sam sung Electronics Business Report 146 / 261

31. Segment Information

(A) Segment information

The chief operating decision maker has been identified as the Management Co mmittee. The Co mpany determines reportable
segments based on the units reported to the Management Committee. The Management Co mmittee reviews operating profits of
each reportable segment in order to assess performance and to make strategic decisions regarding allocation of resources to the
segment.

The reportable segments are product-based and are identified based on the internal organization and revenue streams. As of the
reporting date, the reportable segments are comprised of CE, IM, Semiconductor, DP, Harman and other.

The segment information for each reporting period is prepared after the allocation of internal t ransaction adjustments such as
depreciation, amort izat ion of intangible assets and operating profits. Total assets and liab ilities of each reportable segmen t are
excluded from the disclosure as these have not been provided regularly to the Management Committee.

(1) For the year ended December 31, 2019

Intercompany
DS elimination
Semi- within the
( In millions of Korean won) CE IM Total 1 conductor DP Harman Total 1 Company Consolidated

Total segment revenue \ 99,592,549 \223,959,110 \193,141,859 \123,766,753 \ 66,908,763 \11,749,815 \531,113,681 \(300,712,800) \230,400,881

Intercompany revenue (54,836,319) (116,692,955) (97,623,857) (58,827,701) (35,854,834) (1,672,719) (300,712,800) 300,712,800 -

Net revenue2 44,756,230 107,266,155 95,518,002 64,939,052 31,053,929 10,077,096 230,400,881 - 230,400,881

Depreciation 530,719 1,215,268 23,584,306 17,017,054 6,533,810 337,609 26,573,816 - 26,573,816

Amortization 58,172 1,388,619 1,138,678 836,951 291,721 232,104 3,023,822 - 3,023,822

Operating profit 2,606,306 9,272,468 15,581,687 14,016,302 1,581,333 322,331 27,768,509 - 27,768,509

1
Includes amounts which do not specifically fall into the specific reportable segments presented above.
2
Segment net revenue includes intersegment revenues.

(2) For the year ended December 31, 2018

Intercompany
DS elimination
Semi- within the
( In millions of Korean won) CE IM Total 1 conductor DP Harman Total 1 Company Consolidated

Total segment revenue \ 95,187,648 \214,884,364 \ 239,564,995 \ 165,762,494 \ 69,349,454 \ 10,971,146 \ 563,005,328 \(319,233,913) \243,771,415

Intercompany revenue (53,080,243) (114,206,687) (120,999,436) (79,471,532) (36,884,435) (2,127,407) (319,233,913) 319,233,913 -

Net revenue2 42,107,405 100,677,677 118,565,559 86,290,962 32,465,019 8,843,739 243,771,415 - 243,771,415

Depreciation 537,903 1,168,036 22,863,124 16,304,757 6,445,672 235,149 25,167,112 - 25,167,112

Amortization 37,448 127,973 722,338 593,744 114,796 222,841 1,314,925 - 1,314,925

Operating profit 2,023,234 10,172,005 46,516,389 44,573,890 2,619,802 161,714 58,886,669 - 58,886,669

1
Includes amounts which do not specifically fall into the specific reportable segments presented above.
2
Segment net revenue includes intersegment revenues.

Sam sung Electronics Business Report 147 / 261

 (B) Regional information

The regional segment information as of and for the years ended December 31, 2019 and 2018 is as follows:

(1) As of and for the year ended December 31, 2019

Inte rcompany
Asia and e limination within
(In millions of Korean won) Kore a Ame rica Europe Africa China the Company Consolidated

Net segment revenue \ 34,180,362 \ 73,851,914 \ 42,713,958 \ 41,614,112 \ 38,040,535 \ - \ 230,400,881

Non-current assets 1
100,315,093 10,357,696 6,648,962 11,030,300 12,598,701 (421,774) 140,528,978

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 year ended December 31, 2018

Inte rcompany
Asia and e limination within
(In millions of Korean won) Kore a Ame rica Europe Africa China the Company Consolidated

Net segment revenue \ 33,923,275 \ 81,688,726 \ 42,959,049 \ 41,993,417 \ 43,206,948 \ - \ 243,771,415

Non-current assets1 94,001,678 9,914,464 5,954,399 11,611,679 9,294,129 (468,027) 130,308,322

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

Sam sung Electronics Business Report 148 / 261

32. Related Party Transactions

(A) Sale and purchase transactions

Sale and purchase transactions with related parties for the years ended December 31, 2019 and 2018, are as follows:
2019
(In millions of Disposal of Purchases of
Korean won) Name of Company1 S ales and other non-current assets Purchases and other non-current assets

Samsung SDS Co., Ltd. \ 85,415 \ - \ 2,018,871 \ 498,722

Samsung Electro-M echanics Co., Ltd. 48,874 - 2,214,388 16
Associates and Samsung SDI Co., Ltd. 93,634 16,106 626,320 80,886
joint ventures Cheil Worldwide Inc. 25,821 - 813,808 958
Other 914,634 2 10,482,459 245,683
Total (Associates and joint ventures) \ 1,168,378 \ 16,108 \ 16,155,846 \ 826,265
Samsung C&T Corporation \ 116,272 \ 17,367 \ 383,645 \ 4,208,197
Other related
Other 204,758 - 1,078,775 1,168,865
parties
Total (Other related parties) \ 321,030 \ 17,367 \ 1,462,420 \ 5,377,062
Samsung Engineering Co., Ltd. \ 5,675 \ - \ 81,169 \ 2,001,467
S-1 Corporation 18,270 - 406,685 29,153
Other2
Other 125,320 1,477 365,795 557,852
Total (Other) \ 149,265 \ 1,477 \ 853,649 \ 2,588,472
1
Transactions with separate entities that are related parties of the Company.
2
Although these entities are not related parties of the Company in accordance with Korean IFRS 1024 Related Party Disclosures, they belong
to the same large enterprise group in accordance with the M onopoly Regulation and Fair Trade Act.

2018
(In millions of Disposal of Purchases of
Korean won) Name of Company1 S ales and other non-current assets Purchases and other non-current assets

Samsung SDS Co., Ltd. \ 68,418 \ - \ 2,103,561 \ 425,415

Samsung Electro-M echanics Co., Ltd. 57,716 - 2,073,803 -
Associates and Samsung SDI Co., Ltd. 62,821 - 778,550 88,211
joint ventures Cheil Worldwide Inc. 25,533 - 906,348 3,258
Other 966,793 - 10,015,075 218,667
Total (Associates and joint ventures) \ 1,181,281 \ - \ 15,877,337 \ 735,551
Samsung C&T Corporation \ 94,153 \ 183 \ 319,206 \ 4,211,883
Other related
Other 165,329 - 1,016,536 966,846
parties
Total (Other related parties) \ 259,482 \ 183 \ 1,335,742 \ 5,178,729
Samsung Engineering Co., Ltd. \ 3,772 \ - \ 40,844 \ 1,701,154
S-1 Corporation 34,612 258 396,011 35,360
Other2
Other 140,968 - 343,065 385,086
Total (Other) \ 179,352 \ 258 \ 779,920 \ 2,121,600

1
Transactions with separate entities that are related parties of the Company.
2
Although these entities are not related parties of the Company in accordance with Korean IFRS 1024 Related Party Disclosures, they belong to
the same large enterprise group in accordance with the M onopoly Regulation and Fair Trade Act.

Sam sung Electronics Business Report 149 / 261

(B) Balances of receivables and payables

Balances of receivables due from and payables due to related parties as of December 31, 2019 and 2018 are as follows:

December 31, 2019

1
(In millions of Korean won) Name of Company Receivables and other Payables and other2

Samsung SDS Co., Ltd. \ 19,723 \ 636,169

Samsung Electro-M echanics Co., Ltd. 2,457 207,339
Samsung SDI Co., Ltd. 103,809 135,048
Associates and joint ventures
Cheil Worldwide Inc. 423 415,785
Other 177,491 997,632
Total (Associates and joint ventures) \ 303,903 \ 2,391,973
Samsung C&T Corporation \ 230,535 \ 1,215,575
Other related parties Other 18,884 170,130
Total (Other related parties) \ 249,419 \ 1,385,705
Samsung Engineering Co., Ltd. \ 2,734 \ 629,584
S-1 Corporation 1,464 50,498
Other3
Other 12,211 115,072
Total (Other) \ 16,409 \ 795,154
1
Balances due from and to separate entities that are related parties of the Company.
2
Lease liabilities are included in payables and other.
3
Although these entities are not related parties of the Company in accordance with Korean IFRS 1024 Related Party Disclosures, they belong to
the same large enterprise group in accordance with the M onopoly Regulation and Fair Trade Act.

December 31, 2018

1
(In millions of Korean won) Name of Company Receivables and other Payables and other

Samsung SDS Co., Ltd. \ 5,294 \ 490,611

Samsung Electro-M echanics Co., Ltd. 3,518 163,668
Samsung SDI Co., Ltd. 102,641 73,398
Associates and joint ventures
Cheil Worldwide Inc. 241 465,517
Other 282,849 1,067,439
Total (Associates and joint ventures) \ 394,543 \ 2,260,633
Samsung C&T Corporation \ 225,606 \ 1,725,547
Other related parties Other2 19,676 183,395
Total (Other related parties) \ 245,282 \ 1,908,942
Samsung Engineering Co., Ltd. \ 1,078 \ 581,153
S-1 Corporation 3,149 37,785
Other3
Other 4,696 47,502
Total (Other) \ 8,923 \ 666,440

1
Balances due from and to separate entities that are related parties of the Company.
2
As of December 31, 2018, there were no payables to Samsung Card relating to unsettled amounts from purchasing cards. The Company has a
purchasing card agreement with Samsung Card with a limit of \ 2,543,000 million as of December 31, 2018. For the year ended December
31, 2018, the amounts used and reimbursed were \ 3,724,851 million and \ 4,846,182 million, respectively.
3
Although these entities are not related parties of the Company in accordance with Korean IFRS 1024 Related Party Disclosures, they belong
to the same large enterprise group in accordance with the M onopoly Regulation and Fair Trade Act.

Sam sung Electronics Business Report 150 / 261

 (C) For the years ended December 31, 2019 and 2018, the Company invested \ 12,822 million and \ 51,226 million,
respectively, in associates and joint ventures, and the Company recovered \ 1,437 million and \ 148 million, respectively,
from associates and joint ventures. In addition, for the year ended December 31, 2019, the Company acquired the PLP
business of Samsung Electro-Mechanics Co., Ltd., an associate, at a price of \ 785,000 million. For the year ended
December 31, 2018, the Company invested \ 204,055 million in Samsung Heavy Industries Co., Ltd., one of the entities that
are not related parties of the Company in accordance with Korean IFRS 1024 Related Party Disclosures, but belongs to the
same large enterprise group in accordance with the Monopoly Regulation and Fair Trade Act.

(D) For the years ended December 31, 2019 and 2018, the Company declared dividends of \ 1,661,903 million and
\ 1,774,050 million, respectively, to related parties. Also, for the years ended December 31, 2019 and 2018, the Company
declared dividends of \ 125,744 million and \ 135,642 million, respectively, to entities that are not related parties of the
Company in accordance with Korean IFRS 1024 Related Party Disclosures, but belong to the same large enterprise group in
accordance with the Monopoly Regulation and Fair Trade Act. As of December 31, 2019 and 2018, there are no unpaid
dividends to these entities.

(E) For the year ended December 31, 2019, the Company has not entered into any lease agreement with its related parties, and
lease payments to the related party amount to \ 55,805 million.

(F) For the years ended December 31, 2019 and 2018, compensation to key management (executive directors) for their services is
recognized in expense as follows:

(In millions of Korean won) 2019 2018

Short-term employee benefits \ 9,821 \ 13,190

Post-employment benefits 1,321 1,406
Other long-term employee benefits 6,449 7,851

33. Information for Non-Controlling Interests

(A) Changes in accumulated non-controlling interests

The profit o r loss allocated to non-controlling interests and accumulated non-controlling interests of subsidiaries that are material to
the Company for the years ended December 31, 2019 and 2018 are as follows:

S amsung Display Co., Ltd. and its subsidiaries

(In millions of Korean won) December 31, 2019 December 31, 2018

Percentage of non-controlling interests 15.2% 15.2%

Balance as of January 1 \ 7,181,049 \ 6,776,468
Profit for the year 212,351 431,966
Dividends (3,797) (17,304)
Other 37,625 (10,081)
Balance as of December 31 \ 7,427,228 \ 7,181,049

Sam sung Electronics Business Report 151 / 261

(B) The summarized financial information for each subsidiary with non-controlling interests that are material to the Company
before intercompany eliminations for the years December 31, 2019 and 2018 are as follows:

(1) Summarized consolidated statements of financial position

S amsung Display Co., Ltd. and its subsidiaries

(In millions of Korean won) December 31, 2019 December 31, 2018

Current assets \ 23,388,388 \ 20,137,873

Non-current assets 30,343,285 34,344,308
Current liabilities 5,482,650 5,960,611
Non-current liabilities 3,687,057 5,265,108
Equity attributable to: 44,561,966 43,256,462
Owners of the parent company 44,021,178 42,736,122
Non-controlling interests 540,788 520,340

(2) Summarized consolidated statements of comprehensive income

S amsung Display Co., Ltd. and its subsidiaries

(In millions of Korean won) 2019 2018

Sales \ 30,957,776 \ 32,316,001

Profit for the year 1,139,753 2,238,291
Other comprehensive income (loss) 161,549 (57,236)
Total comprehensive income attributable to: 1,301,302 2,181,055
Owners of the parent company 1,285,056 2,163,050
Non-controlling interests 16,246 18,005

(3) Summarized consolidated statements of cash flows

S amsung Display Co., Ltd. and its subsidiaries

(In millions of Korean won) 2019 2018

Cash flows from operating activities \ 7,606,805 \ 9,648,365

Cash flows from investing activities (6,108,946) (4,718,475)
Cash flows from financing activities (1,503,785) (5,082,106)
Effect of exchange rate changes on cash and cash equivalents 2,435 10,472
Decrease in cash and cash equivalents (3,491) (141,744)
Cash and cash equivalents at beginning of the year 676,371 818,115
Cash and cash equivalents at end of year 672,880 676,371

Sam sung Electronics Business Report 152 / 261

34. Business Combinations

Significant business combinations for the year ended December 31, 2019 are as follows:

(A) Acquisition of Corephotonics Ltd.

Samsung Electronics Benelu x B.V. (SEBN), the Co mpany’s subsidiary, acquired 83.9% of the equity shares of Co rephotonics Ltd.
on January 28, 2019 and an additional 8.5% on March 4, 2019 to secure CIS optical technology and talent.

(1) Overview of the acquired company

Name of the acquired company Corephotonics Ltd.

Headquarter location Tel Aviv, Israel
Representative director David M endlovic
Industry Development of camera solutions

(2) Purchase price allocation

(In millions of Korean won)

I. Consideration transferred
Fair value of share equity prior to the merger1 ￦ 13,236
Fair value of additional consideration transferred 160,214
Total consideration transferred 173,450
II. Identifiable assets and liabilities
Cash and cash equivalents 6,069
Short-term financial instruments and other 19,354
Trade and other receivables 1,199
Property, plant and equipment 339
Intangible assets 100,598
Other assets 82
Other payables 236
Deferred tax liabilities 23,138
Other liabilities 3,475
Total net identifiable assets 100,792
2
III. Total identifiable assets recognized as non-controlling interest 77
IV. Goodwill (I – II+ III) ￦ 72,735

1
As of January 28, 2019, other expenses of ￦ 500 million were recognized in relation to the remeasurement of fair value of the 7.6% shares of
Corephotonics Ltd. held by Samsung Venture Capital Union #28, the Company’s subsidiary, prior to the business combination.
2
Non-controlling interest from the business combination is measured proportionately to the share of the fair value of Corephotonics Ltd.’s net
identifiable assets.

Had Corephotonics Ltd. been consolidated from January 1, 2019, the revenue and consolidated loss for the year would be ￦ 1,421
million and ￦ 22,811 million, respectively. The revenue and consolidated loss for the year contributed by Corephotonics Ltd.
since the acquisition, amount to ￦ 1,102 million and \ 18,201 million, respectively.

Sam sung Electronics Business Report 153 / 261

 (B) Acquisition of the PLP business

In accordance with the resolution of the Board of Directors on April 30, 2019, the Co mpany acquired Samsung Electro-Mechanics
Co., Ltd.’s PLP business for total consideration of \ 785,000 million on June 1, 2019 to strengthen its semiconductor
competitiveness through securing next-generation package technology.

(In millions of Korean won)

I. Fair value of consideration transferred \ 785,000

II. Identifiable assets and liabilities
Inventories 10,906
Property, plant and equipment 398,984
Intangible assets 182,171
Other assets 1,561
Other liabilities 15,363
Total net identifiable assets 578,259
III. Goodwill (I – II) \ 206,741

Had the PLP business been acquired on January 1, 2019, there would be no revenue transferred, and consolidated loss for the year
would be \ 179,316 million. The PLP business has not recorded any revenue since the acquisition. Consolidated loss for the year
contributed by the PLP business since the acquisition, amounts to \ 109,504 million.

Sam sung Electronics Business Report 154 / 261

3. Other financial information
A. Restatement of financial statements and other matters to note

(1) Restatement of financial statements: N/A

(2) Acquisition, divestment, asset transfer and transfer of business (separate only)
The major divestment and transfer of business transactions in the past three business years on a parent basis (separate
basis) are as follows. For information on the business combinations and divestitures of subsidiaries, please refer to the
notes on the business combination and assets held for sale (assets of disposal group) of the consolidated financial
statements.

[S-Printing Solution]

- Details on the Split

 Company Name: S-Printing Solution Corp.
 Location: 129 Samsung-ro, Yeongtong-gu, Suwon-si, Gyeonggi-do
 Purpose of split: To improve the competitiveness of S-Printing Solution
 Date of Approval: October 27, 2016 (at the extraordinary general meeting of shareholders)
 Date of split: November 1, 2016

- Details on the Sale

The Company agreed to sell the Printing Solutions business including shares of S-Printing Solution Corp to HP Inc
(location: Palo Alto, USA; CEO: Dion Weisler) for USD 1.05 billion on September 12, 2016, and completed the deal
on November 1, 2017.

- Details of the above statement can be found in the “Important Matters Report”, published in DART
(http://dart.fss.or.kr/).

[Harman International Industries, Inc. and its subsidiaries]

- To strengthen the Company’s automotive electronics and audio businesses, Samsung Electronics America, the
Company’s subsidiary, acquired 100% of the equity shares of Harman International Industries, Inc. (location:
Connecticut, USA; CEO: Dinesh Paliwal) and its subsidiaries on March 10, 2017.

- Details of the above statement can be found in the “Decision on Acquisition of Shares”, published in DART
(http://dart.fss.or.kr/).

[Corephotonics Ltd.]

- Samsung Electronics Benelux B.V. (SEBN), the Company’s subsidiary, acquired 83.9% of the equity shares of
Corephotonics Ltd.(location: Tel Aviv, Israel; CEO: David Mendlovic) on January 28, 2019 and an additional 8.5%
on March 4, 2019 to secure CIS optical technology and talent.

- Details of the above statement can be found in Section 3 ‘Notes to the Consolidated Financial Statements’ of
Ⅲ. Financial affairs

Sam sung Electronics Business Report 155 / 261

[PLP Business]

- Details of acquisition
In accordance to the resolution of the Board of Directors on April 30, 2019, the Company acquired Samsung Electro-
Mechanics Co., Ltd.(location: South Korea; CEO: Yun Tae Lee)’s PLP business at a price of KRW 785,000 million on
June 1, 2019 to strengthen its semiconductor competitiveness through securing next-generation package technology.

- Details of the above statement can be found in the “Business Acquisition from Related Parties”, published in DART
(http://dart.fss.or.kr/).
(KRW 100 mil)

Forecast Actual
Account 1st Year 2nd Year
1st Year 2nd Year
Actual Difference Actual Difference
Sales 101 219 - - - -
PLP Business Operating Income -1,273 -2,155 -1,095 14% - -
Net Income -1,273 -2,155 -1,095 14% - -

※ The first year forecast is our prediction for 7 month period from June 1 to December 31, 2019. Actual opeating
income for the 7 month period differs by 14% from the forecast due to several factors such as reduction in wages.
Difference of sales between forecast and actual is not included as all of PLP business’ sales are from
intra-company transaction.
(3) Information on the accounting treatment of the sales of assets and contingent liabilities relating to the asset backed
securities

Litigation

- The Company 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 Company believes the outcome will not have a
material impact on the financial condition of the Company.

- In addition, during the normal course of business with numerous companies, the Company has been involved in
various claims, disputes, and investigations conducted by regulatory bodies. Although the outflow of resources and
timing of these matters are uncertain, the Company believes the outcome will not have a material impact on the
financial condition of the Company.

Debt guarantee

- Domestic: Not applicable

Sam sung Electronics Business Report 156 / 261

 - Overseas:
(USD thousand)

Guarantee Transactions
Limit of
Company Relationship Creditor Expiry Beginning of
Increase Decrease End of period guarantee
date period
SEA Subsidiary BOA etc. 16-Dec-20 - - - - 1,328,000
SEM Subsidiary BBVA etc. 16-Dec-20 - - - - 485,000
SAMCOL Subsidiary Citibank etc. 16-Dec-20 85,662 4056 - 89,718 180,000
SEDA Subsidiary BRADESCO etc. 16-Dec-20 - - - - 639,000
SECH Subsidiary Santander etc. 16-Dec-20 - 17,256 - 17,256 142,000
SEPR Subsidiary BBVA etc. 16-Dec-20 58,710 31,877 - 90,587 230,000
SSA Subsidiary SCB etc. 16-Dec-20 - - - - 318,000
SEMAG Subsidiary SocGen etc. 16-Dec-20 - - - - 110,000
SETK Subsidiary BNP etc. 16-Dec-20 64,519 233 - 64,752 787,000
SECE Subsidiary Citibank etc. 13-Jun-20 - - - - 75,698
SEEG Subsidiary HSBC 08-Nov -20 - - - - 85,000
SEIN Subsidiary BNP etc. 16-Dec-20 - - - - 145,000
SJC Subsidiary Mizuho etc. 16-Dec-20 - - - - 896,633
SEUC Subsidiary Credit Agricole etc. 16-Dec-20 - - - - 150,000
SEDAM Subsidiary Citibank etc. 08-Nov -20 - - - - 322,000
SECA Subsidiary BoA 16-Dec-20 - - - - 70,000
SELA Subsidiary Citibank 16-Dec-20 - - - - 70,000
SEEH Subsidiary HSBC etc. 16-Dec-20 - - - - 703,000
SERK Subsidiary SocGen etc. 16-Dec-20 - - - - 220,000
SELV Subsidiary Citibank 16-Dec-20 - - - - 10,000
SAPL Subsidiary BOA etc. 08-Nov -20 - - - - 395,000
SEV Subsidiary SCB 08-Nov -20 - - - - 15,000
SAVINA Subsidiary HSBC etc. 08-Nov -20 - - - - 71,000
SET Subsidiary SCB 16-Dec-20 - - - - 30,000
SCIC Subsidiary HSBC etc. 08-Nov -20 - - - - 350,000
SME Subsidiary SCB 16-Dec-20 - - - - 110,000
SAMEX Subsidiary Citibank 16-Dec-20 - - - - 5,000
SEASA Subsidiary Citibank 08-Nov -20 - - - - 2,000
SSAP Subsidiary SCB 13-Jun-20 - - - - 30,000
SEHK Subsidiary HSBC 13-Jun-20 - - - - -
SEPM Subsidiary HSBC 13-Jun-20 7,712 - -7,712 - 35,000
SESAR Subsidiary HSBC 08-Nov -20 - - - - 50,000
AdGear Technologies Inc. Subsidiary BOA 13-Jun-20 - - - - 2,000
Harman International Industries, Inc. Subsidiary JP Morgan 08-Nov -20 - - - - 100,000
Harman International Japan Co., Ltd. Subsidiary MUFG 13-Jun-20 - - - - 25,000
Harman RUS CIS LLC Subsidiary SocGen 08-Nov -20 - - - - 15,000
Harman Holding Limited Subsidiary HSBC 08-Nov -20 - - - - 30,000
Harman do Brasil Industria Eletronica
Subsidiary
e Participacoes Ltda.
SOCGEN 08-Nov -20 - - - - 15,000
Harman da Amazonia Industria
Subsidiary
Eletronica e Participacoes Ltda.
Harman Finance International, SCA Subsidiary JP Morgan etc. 27-May -22 400,101 - -7,891 392,210 392,210
Total 616,703 53,422 -15,603 654,522 8,638,541

※ SEC requires Board approval for individual guarantees exceed ing 2.5% of total equity. When the guarantee amount is b etween
0.1% and/or less than 2.5%, the approval decision is delegated to the Management Committee.
※ SEC receives fees on the debt it guarantees depending on the maturity date of each debt guarantee, general loan interest rate, etc.
In 2019, the Company claimed approximately USD 238,000 in guarantee fee and, as of the reporting date, has not received the amount.

Refer to the notes to the consolidated financial statements for the information on contingent liabilities.

(4) Other matters requiring attention in relation to the use of the financial statements: N/A

Sam sung Electronics Business Report 157 / 261

B. Allowance for bad debt

The allowances for bad debt by account over the past 3 years are as follows:
(KRW mil)
Period Account Receivables amount Allowance amount Allowance (%)

Trade receivables 35,471,674 340,331 1.0%

Short-term loans 8,744 82 0.9%

Other receivables 4,237,479 58,359 1.4%

Advances 1,430,317 3,484 0.2%

2019 Trade receivables (long-term) 411,229 79 0.0%

Other receivables (long-term) 346,780 307 0.1%

Advances (long-term) 774,472 7,333 0.9%

Long-term loans 120,540 1,335 1.1%

Total 42,801,235 411,310 1.0%

Trade receivables 34,433,876 566,143 1.6%
Short-term loans 10,177 54 0.5%

Other receivables 3,111,442 30,708 1.0%

Advances 1,364,111 2,304 0.2%

2018 Trade receivables (long-term) 1,046,252 5,421 0.5%

Other receivables (long-term) 223,986 337 0.2%

Advances (long-term) 960,392 9,366 1.0%

Long-term loans 125,700 549 0.4%

Total 41,275,936 614,882 1.5%

Trade receivables 28,333,822 635,815 2.2%

Short-term loans 7,258 81 1.1%

Other receivables 4,135,935 26,975 0.7%

Advances 1,758,547 4,874 0.3%

2017 Trade receivables (long-term) 1,983,136 1,397 0.1%

Other receivables (long-term) 139,472 330 0.2%

Advances (long-term) 134,192 836 0.6%

Long-term loans 130,550 467 0.4%

Total 36,622,912 670,775 1.8%

※ Receivables amount represents the value after deducting present value discount account (consolidated)

Sam sung Electronics Business Report 158 / 261

Allowance for bad debt by year
(KRW mil)

2019 2018 2017

1. Allowance for bad debt
614,882 670,775 457,957
(beginning balance)

2. Net bad debt expense (①－②±③) 16,715 18,697 3,685

① Bad debt expense, etc (Write-off) 6,579 24,721 38,584

② Bad debt recovered 11,294 6,024 559

③ Others 21,430 - -34,340

3. Bad debts expense -186,857 -37,196 216,503

4. Allowance for bad debts

411,310 614,882 670,775
(Ending balance)
※ Based on consolidated financial statements.

The guideline for bad debt allowances for trade receivables

(1) Calculation of bad debt allowance

 Bad debt allowance is calculated using an expected credit loss impairment model which is based on write-off
experience rate and future expected bad debt amount.

(2) Calculation basis of write-off experience rate and future expected bad debt:

 Write-off experience rate for each aging group of receivables is calculated based on the actual rate of credit losses
to three-year average receivables balance.

 Future expected bad debt is determined taking into consideration cases of debtor bankruptcy, compulsory execution,
death, disappearance, credit information of debtor and forward-looking information.

[Bad debt allowance by circumstance]

Circumstance Rate of allowance

Dispute or conflict 25%
Receivable through utilization of third party collection agency 50%
Receivable under litigation 75%
Customer filed or in the process of filing bankruptcy 100%

Sam sung Electronics Business Report 159 / 261

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

The outstanding period of trade receivables

(KRW mil)

Less than 6 months ~ 1 year ~ More than

Total
6 months 1 year 3 years 3 years

Amount 35,649,343 28,117 169,258 36,185 35,882,903

Ratio 99.3% 0.1% 0.5% 0.1% 100.0%

※ Receivables amount on net present value (consolidated)

Sam sung Electronics Business Report 160 / 261

C. Inventory
- The inventory status by Division over the last three years is as follows:
( KRW mil)

Division Category 2019 2018 2017 Note

Finished goods 1,508,915 1,606,820 1,827,162
Work in process 138,003 112,043 110,179
CE Raw material 1,968,800 2,445,758 2,505,575
Material in transit 1,886,929 1,916,504 1,684,923
Total 5,502,647 6,081,125 6,127,839
Finished goods 2,426,034 2,525,787 2,327,139
Work in process 420,664 624,129 721,194
IM Raw material 3,228,906 3,305,566 4,541,940
Material in transit 810,599 715,361 867,103
Total 6,886,203 7,170,843 8,457,376
Finished goods 1,740,881 2,498,132 1,094,967
Work in process 8,772,850 9,378,528 5,179,312
Semi-
Raw material 1,332,267 863,607 659,223
conductor
Material in transit 66,033 22,697 39,312
Total 11,912,031 12,762,964 6,972,814
Finished goods 345,940 549,432 746,856
Work in process 488,468 559,960 638,268
DS DP Raw Material 634,990 720,622 849,786
Material in transit 22,214 82,677 133,038
Total 1,491,612 1,912,691 2,367,948
Finished goods 2,130,587 3,107,878 1,872,648
Work in process 9,302,907 10,297,065 6,256,420
DS
Raw material 1,991,422 1,741,613 1,708,632
total
Material in transit 89,044 48,306 64,934
Total 13,513,960 15,194,862 9,902,634
Finished goods 746,742 558,014 432,184
Work in process 90,249 87,751 77,696
Harman Raw material 372,231 363,432 322,649
Material in transit 145,329 141,524 140,939
Total 1,354,551 1,150,721 973,468
Finished goods 8,115,116 8,836,098 7,304,437
Work in process 9,886,634 11,066,511 7,113,901
Total Raw material 7,747,110 8,048,139 9,413,217
Material in transit 1,017,604 1,033,956 1,151,800
Total 26,766,464 28,984,704 24,983,355

Inventory ratio (% ) 7.6% 8.5% 8.3%

[Inventory ÷ Total Assets]

Inventory turnover (x)

[ Yearly COGS ÷ {(Beginning of inventory + End of 5.3 4.9 6.0
inventory)÷2}]

Sam sung Electronics Business Report 161 / 261

Inventory counts

(1) Inspection date

ㆍ End of May and November (twice a year)
ㆍ For the difference in inventories between the inspection date and at the end of the year, the Company checks
all the warehouse record during the period in order to confirm the existence of the inventories as of the date of
the financial statements.

(2) Inspection method

ㆍ Internal warehouse: Closed & Total Inspection
※ Sample check in semi-conductor and DP inventory, SVC materials
ㆍ Outside warehouse
Perform check for the possession confirmation documents and sample tests at the third party warehouse and Inventory
in transit
ㆍ External auditors join and observe the inspection and carry out sample tests to check the existence and completeness.
※ For the HQ, the most recent inventory inspection was conducted on May 31, June 1, and June 3, 2019, and the
subsidiaries conducted the inventory inspection during the same period.

Inventory aging and valuation

Inventories are stated at the lower of cost or net realizable value. Inventory as of December 31, 2019 was as follows:
(KRW mil)
Acquisition Inventory
Category Balance Note
cost valuation reserve
Finished goods 8,460,621 -345,505 8,115,116

Work in process 10,424,880 -538,246 9,886,634

Raw material 8,288,265 -541,155 7,747,110

Material in transit 1,017,604 - 1,017,604

Total 28,191,370 -1,424,906 26,766,464

※ Consolidated basis

D. Fair value estimation

Refer to 6. Financial Instruments by Category and 31. Financial Risk Management in 『Ⅲ. Financial Affairs』.

Sam sung Electronics Business Report 162 / 261

E. List of issued debt securities

Issued debt securities

(As of December 31, 2019) (KRW mil, %)
Type of Date of Total nominal Rating Maturity Payment Management
Issuing company Issuance method Interest rate
securities Issuance amount (rating institution) date status company
Corporate Partial
Samsung Electronics Public offering Oct 2,1997 115,780 7.7 AA-(S&P), Aa3(Moody's) Oct 1, 2027 Goldman Sachs et al.
bonds redemption
Harman International Corporate Baa1 (Moody's), J.P.Morgan
Public offering May 6, 2015 463,120 4.2 May 15, 2025 Unredeemed
Industries, Inc bonds A (S&P) et al.
Harman Finance International, Corporate Baa1 (Moody's), HSBC
Public offering May 20, 2015 454,100 2.0 May 27, 2022 Unredeemed
SCA bonds A (S&P) et al.
Commercial
SEMES Private placement Jan 8, 2019 20,000 2.7 A1 Apr 5, 2019 Redeemed -
paper
Commercial
SEMES Private placement Jan 23, 2019 25,000 2.7 A1 Apr 19, 2019 Redeemed -
paper
Commercial
SEMES Private placement Jan 30, 2019 40,000 2.7 A1 Apr 26, 2019 Redeemed -
paper
Commercial
SEMES Private placement Feb 1, 2019 10,000 2.7 A1 Apr 29, 2019 Redeemed -
paper
Commercial
SEMES Private placement Mar 6, 2019 10,000 2.7 A1 Jun 4, 2019 Redeemed -
paper
Commercial
SEMES Private placement Apr 4, 2019 10,000 2.7 A1 Jul 2, 2019 Redeemed -
paper
Commercial
SEMES Private placement Apr 11, 2019 25,000 2.7 A1 Jul 9, 2019 Redeemed -
paper
Commercial
SEMES Private placement Jun 25, 2019 50,000 2.2 A1 Sep 23, 2019 Redeemed -
paper
Commercial
SEMES Private placement Jul 9, 2019 30,000 2.2 A1 Oct 7, 2019 Redeemed -
paper
Commercial
SEMES Private placement Jul 11, 2019 20,000 2.2 A1 Oct 8, 2019 Redeemed -
paper
Commercial
SEMES Private placement Aug 13, 2019 15,000 1.9 A1 Nov 11, 2019 Redeemed -
paper
Commercial
SEMES Private placement Aug 27, 2019 30,000 1.9 A1 Nov 25, 2019 Redeemed -
paper
Commercial
SEMES Private placement Sep 11, 2019 25,000 2.0 A1 Dec 9, 2019 Redeemed -
paper
Commercial
SEMES Private placement Oct 7, 2019 25,000 2.0 A1 Jan 3, 2020 Unredeemed
paper
Commercial
SEMES Private placement Oct 7, 2019 20,000 2.0 A1 Jan 3, 2020 Unredeemed
paper

Sam sung Electronics Business Report 163 / 261

 Commercial
SEMES Private placement Oct 8, 2019 20,000 2.0 A1 Jan 6, 2020 Unredeemed
paper
Commercial
SEMES Private placement Nov 5, 2019 20,000 1.9 A1 Feb 3, 2020 Unredeemed
paper
Commercial
SEMES Private placement Nov 12, 2019 25,000 2.0 A1 Feb 10, 2020 Unredeemed
paper
Commercial
SEMES Private placement Nov 25, 2019 25,000 2.0 A1 Feb 21, 2020 Unredeemed
paper
Commercial
SEMES Private placement Nov 26, 2019 35,000 2.0 A1 Feb 24, 2020 Unredeemed
paper
Commercial
SEMES Private placement Dec 9, 2019 30,000 2.0 A1 Mar 6, 2020 Unredeemed
paper
Commercial
SEMES Private placement Dec 11, 2019 20,000 2.0 A1 Mar 10, 2020 Unredeemed
paper
Commercial
SEMES Private placement Dec 27, 2019 35,000 2.0 A1 Mar 26, 2020 Unredeemed
paper

Total - - - 1,598,000 - - - - -

※ The exchange rate as of the base date has been applied.

※ The rating institutions of Commercial paper are NICE Investors Service and Korea Ratings Corporation.

Sam sung Electronics Business Report 164 / 261

Details and Compliance of the Bond Management Contract (Samsung Electronics)

(Base Date of Preparation: December 31, 2019) (KRW mil, %)%

Settlement date of
Name of security Date of issuance Maturity date Issued amount Debenture management company
bond management contract

US$ 100,000,000 The Bank of New York Mellon

Oct 2, 1997 Oct 1, 2027 115,780 Oct 2, 1997
7.7% debenture Trust Company, N.A.

(Base Date of Implementation: December 31, 2019)

Contract details Not applicable

Financial ratios
Implementation status Not applicable

Contract details Less than 10% of net tangible assets

Constraint on collateral
Implementation status Compliant (there is no collateral for the relevant assets)

Certain requirements, such as transfer of obligations on the bond,

Contract details
must be satisfied to dispose all or most of an asset
Constraint on disposal of assets
Implementation status Compliant (disposed assets accounted for 0.2% of the total assets during 2019)

Contract Details Not applicable

Constraint on governance
Implementation Status Not applicable

Submission of implementation report Implementation status Not applicable

※ The date of the bond management contract was signed on the same day as the Fiscal Agency Agreement; accordingly, the Bank of New York Mellon Trust
Company, N.A. is under the authority of the Fiscal Agent.
※ The exchange rate as of the base date has been applied.
※ The net tangible assets subjected to the limitation of collaterals are production facilities and stocks owned by the Company.
※ The base date of implementation is the date when most recent financial statements were prepared, which are used to determine the status of implementation.
※ The constraint on Governance is as of the Reporting Date.

Sam sung Electronics Business Report 165 / 261

 Commercial Paper Balance

(Base Date: December 31, 2019) (KRW mil)

Above 10 days / Above 30 days / Above 90 days / Above 180 days Above 1 year Above 2 years /
Maturity Under 10 days Above 3 years Total
under 30 days under 90 days under 180 days / under 1 year / under 2 years under 3 years

Public - - - - - - - - -
Balance Private 65,000 - 190,000 - - - - - 255,000
Total 65,000 - 190,000 - - - - - 255,000

Short Term Bond Unredeemed Balance

N/A

(Base Date: December 31, 2019) (KRW mil)

Above 10 days / Above 30 days / Above 90 days / Above 180 days

Maturity Under 10 days Total Issue limit Balance limit
under 30 days under 90 days under 180 days / under 1 year

Public - - - - - - - -

Balance Private - - - - - - - -

Total - - - - - - - -

Sam sung Electronics Business Report 166 / 261

 Corporate Bond Unredeemed Balance

(Base Date: December 31, 2019) (KRW mil)

Above 1 year Above 2 years Above 3 years Above 4 years Above 5 years
Maturity Under 1 year Above 10 years Total
/ under 2 years / under 3 years / under 4 years / under 5 years / under 10 years

Public 5,789 5,789 459,889 5,789 5,789 480,487 - 963,532

Balance Private - - - - - - - -

Total 5,789 5,789 459,889 5,789 5,789 480,487 - 963,532

※ The exchange rate as of the base date has been applied.

- Corporate Bond Unredeemed Balance (Samsung Electronics)

(Base Date: December 31, 2019) (KRW mil)

Above 1 year Above 2 years Above 3 years Above 4 years Above 5 years
Maturity Under 1 year Above 10 years Total
/ under 2 years / under 3 years / under 4 years / under 5 years / under 10 years

Public 5,789 5,789 5,789 5,789 5,789 17,367 - 46,312

Unredeemed
balance
Total 5,789 5,789 5,789 5,789 5,789 17,367 - 46,312

※ The exchange rate as of the base date has been applied .

- Corporate Bond Unredeemed Balance (Harman)

(Base Date: December 31, 2019) (KRW mil)

Above 1 year Above 2 years Above 3 years Above 4 years Above 5 years
Maturity Under 1 year Above 10 years Total
/ under 2 years / under 3 years / under 4 years / under 5 years / under 10 years

Public - - 454,100 - - 463,120 - 917,220

Unredeemed
balance
Total - - 454,100 - - 463,120 - 917,220

Sam sung Electronics Business Report 167 / 261

※ The exchange rate as of the base date has been applied.

Hybrid Bond Outstanding Balance

N/A

(Base Date: December 31, 2019) (KRW mil)

Above 1 year Above 5 years Above 10 years Above 15 years Above 20 years
Maturity Under 1 year Above 30 years Total
/ under 5 years / under 10 years / under 15 years / under 20 years / under 30 years

Public - - - - - - - -

Unredeemed
Private - - - - - - - -
balance
Total - - - - - - - -

Contingent Convertible Bond Outstanding Balance

N/A

(Base Date: December 31, 2019) (KRW mil)

Above 1 year / Above 2 years Above 3 years Above 4 years Above 5 years Above 10 years Above 20 years Above 30
Maturity Under 1 year Total
under 2 years / under 3 years / under 4 years / under 5 years / under 6 years / under 20 years / under 30 years years

Public - - - - - - - - - -

Unredeemed
Private - - - - - - - - - -
balance

Total - - - - - - - - - -

Sam sung Electronics Business Report 168 / 261

 IV. Management Discussion and Analysis

1. Note on forward-looking statements

This annual report includes forward-looking statements that relate to future events and can be generally identified by
phrases containing words such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words
or phrases of similar meaning. These forward-looking statements are not guarantees of future performance and may
involve known and unknown risks, uncertainties and other factors that may affect our actual results, performance,
achievements or financial position, making them materially different from the actual future results, performance,
achievements or financial position expressed or implied by these forward-looking statements. Unless otherwise specified,
all data presented in this report is from our consolidated financial statements.

Uncertain events that could positively or negatively affect the Company’s management condition and financial
performance include, but are not limited to:

• 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, DP and Harman
• Other changes domestically and abroad that can affect management condition and financial performance

The Company assumes no obligation to revise or update this report to reflect risks or uncertainties that arise after the
reporting period.

2. Overview
The business environment remained challenging in 2019 as a slowdown in developed markets weighed on the global
economy, while uncertainties such as a US-China trade conflict intensified.

Despite the formidable economic conditions, the support of our shareholders and hard work of our employees enabled
Samsung Electronics in 2019 to achieve total revenue of 230 trillion won and operating profit of 28 trillion won on a
consolidated basis, and total revenue of 155 trillion won and operating profit of 14 trillion won on a parent basis.

Our financial structure remained sound—we recorded a debt ratio of 34.1%, capital adequacy ratio of 74.6%, and ROE of
8.5% on a consolidated basis. On a parent basis, the respective figures were 21.5%, 82.3%, and 8.8%. Our brand value in
2019 was evaluated at USD 61.1 billion (Interbrand; October 2019), up 2% from last year’s figure and maintaining its
position as the world’s sixth most valuable brand.

On the business side, we further strengthened profitability and cost competitiveness of the component business, extending
our capabilities in core technologies to include the world’s first mass production of 6th generation V-NAND. In addition,
we solidified our industry and market leadership by launching the Galaxy S10 and Note10 while expanding sales of ultra-
large QLED TVs.

In 2020, we expect the external environment to remain difficult: macro uncertainties such as trade conflicts, political
unrest, and COVID-19 are likely to persist, while intensifying competition for our main products amid a rapidly changing
paradigm in the IT industry will present numerous hurdles. As always, we plan to face challenges head on and use our
meticulous preparation to turn them into opportunities.

Sam sung Electronics Business Report 169 / 261

3. Financial position and performance (consolidated)
A. Financial position
(KRW mil)

Classification 2019 2018 Increase/decrease % change

Current assets 181,385,260 174,697,424 6,687,836 3.8%

- Cash and cash

26,885,999 30,340,505 -3,454,506 -11.4%
equivalents

- Short-term financial
76,252,052 65,893,797 10,358,255 15.7%
instruments

- Other current financial

5,641,652 4,705,641 936,011 19.9%
assets

- Trade and other

35,131,343 33,867,733 1,263,610 3.7%
receivables

- Inventories 26,766,464 28,984,704 -2,218,240 -7.7%

- Other current assets 10,707,750 10,905,044 -197,294 -1.8%

Non-current assets 171,179,237 164,659,820 6,519,417 4.0%

- Other non-current
9,969,716 8,315,087 1,654,629 19.9%
financial assets

- Associates and joint

7,591,612 7,313,206 278,406 3.8%
ventures

- Property, plant and

119,825,474 115,416,724 4,408,750 3.8%
equipment

- Intangible assets 20,703,504 14,891,598 5,811,906 39.0%

- Other non-current
13,088,931 18,723,205 -5,634,274 -30.1%
assets

Total assets 352,564,497 339,357,244 13,207,253 3.9%

Current liabilities 63,782,764 69,081,510 -5,298,746 -7.7%

Non-current liabilities 25,901,312 22,522,557 3,378,755 15.0%

Total liabilities 89,684,076 91,604,067 -1,919,991 -2.1%

Sam sung Electronics Business Report 170 / 261

 Classification 2019 2018 Increase/decrease % change

Equity attributable to
254,915,472 240,068,993 14,846,479 6.2%
owners of the parent

Non-controlling interest 7,964,949 7,684,184 280,765 3.7%

Total equity 262,880,421 247,753,177 15,127,244 6.1%

Total liabilities and equity 352,564,497 339,357,244 13,207,253 3.9%

Capital adequacy ratio 74.6% 73.0% 1.6% p

Debt-to-equity ratio 34.1% 37.0% -2.9% p

Inventory turnover 5.3 4.9 0.4

Note: Presented in accordance with K-IFRS.

Samsung Electronics’ total assets in 2019 were KRW 352.5645 trillion, an increase of KRW 13.2073 trillion (3.9%) from
the previous year. This includes an increase of KRW 10.3583 trillion in short-term financial instruments, KRW 4.4088
trillion in tangible assets caused by large-scale facility investment for the semiconductor and DP businesses.

Total liabilities were KRW 89.6841 trillion, a decrease of KRW 1.92 trillion (2.1%) from the previous year. This includes
a decrease of KRW 5.2987 trillion (7.7%) in current liabilities and an increase of KRW 3.3788 trillion (15.0%) in non-
current liabilities. The changes are attributable to a KRW 7.3323 trillion decrease in tax liability and a KRW 1.8913
trillion increase in deferred tax liabilities. In addition, in 2019, lease liabilities increased by KRW 2.9411 trillion due to
amendments in the accounting policy (K-IFRS 1116).

Total equity was KRW 262.8804 trillion, an increase of KRW 15.1272 trillion (6.1%) from the previous year. Retained
earnings increased by KRW 11.8839 trillion year-on-year from net income of KRW 21.7389 trillion and dividends of
KRW 9.6192 trillion. Other components of equity increased by KRW 2.9625 trillion due to factors such as the overseas
operations translation difference.

In terms of financial ratios, the Company maintained a sound financial structure as the capital adequacy ratio increased by
1.6%pts from the previous year to 74.6% and the debt-to-equity ratio decreased by 2.9%pts from the previous year to
34.1%.

Sam sung Electronics Business Report 171 / 261

B. Performance

(KRW mil)

Classification 2019 2018 Increase/decrease % change

Sales
230,400,881 243,771,415 -13,370,534 -5.5%

Cost of sales
147,239,549 132,394,411 14,845,138 11.2%

Gross profit
83,161,332 111,377,004 -28,215,672 -25.3%

Selling and administrative expenses

55,392,823 52,490,335 2,902,488 5.5%

Operating profit
27,768,509 58,886,669 -31,118,160 -52.8%

Other income
1,778,666 1,485,037 293,629 19.8%

Other expenses
1,414,707 1,142,018 272,689 23.9%

Gain on valuation using the equity method of accounting

412,960 539,845 -126,885 -23.5%

Financial income
10,161,632 9,999,321 162,311 1.6%

Financial expenses
8,274,871 8,608,896 -334,025 -3.9%

Income before income tax expense

30,432,189 61,159,958 -30,727,769 -50.2%

Income tax expense

8,693,324 16,815,101 -8,121,777 -48.3%

Net income
21,738,865 44,344,857 -22,605,992 -51.0%
Note: Presented in accordance with K-IFRS.

In 2019, revenue decreased year-on-year by KRW 13.3705 trillion (5.5%) to KRW 230.4009 trillion driven by waning
demand for components such as memory. Operating profit decreased by KRW 31.1182 trillion (52.8%) to KRW 27.7685
trillion.

Income before income taxes decreased year-on-year by KRW 30.7278 trillion (50.2%) to KRW 30.4322 trillion, and net
income decreased by KRW 22.606 trillion (51.0%) to KRW 21.7389 trillion.

ROE decreased by 10.7%pts year-on-year to 8.5% while net profit ratio decreased by 8.8%pts to 9.4%, however, we will
continue striving to maintain a sound financial structure.

Sam sung Electronics Business Report 172 / 261

[Performance by division]
(KRW mil)

2019 2018 Change

Classification Division Business
Amount Share Amount Share Amount (%)

CE 44,756,230 19.4% 42,107,405 17.3% 2,648,825 6.3%

IM 107,266,155 46.6% 100,677,677 41.3% 6,588,478 6.5%

Semi-
64,939,052 28.2% 86,290,962 35.4% -21,351,910 -24.7%
conductor
Revenue DS
DP 31,053,929 13.5% 32,465,019 13.3% -1,411,090 -4.3%

Total 95,518,002 41.5% 118,565,559 48.6% -23,047,557 -19.4%

Harman 10,077,096 4.4% 8,843,739 3.6% 1,233,357 13.9%

Overall revenue 230,400,881 100.0% 243,771,415 100.0% -13,370,534 -5.5%

CE 2,606,306 9.4% 2,023,234 3.4% 583,072 28.8%

IM 9,272,468 33.4% 10,172,005 17.3% -899,537 -8.8%

Semi-
14,016,302 50.5% 44,573,890 75.7% -30,557,588 -68.6%
conductor
Operating profit DS
DP 1,581,333 5.7% 2,619,802 4.4% -1,038,469 -39.6%

Total 15,581,687 56.1% 46,516,389 79.0% -30,934,702 -66.5%

Harman 322,331 1.2% 161,714 0.3% 160,617 99.3%

Overall operating profit 27,768,509 100.0% 58,886,669 100.0% -31,118,160 -52.8%

Note: Includes inter-divisional sales.

(CE Division)
The CE division’s revenue in 2019 increased by KRW 2.6488 trillion (6.3%) from the previous year to KRW 44.7562
trillion. Operating profit grew by KRW 0.5831 trillion (28.8%) to KRW 2.6063 trillion, the gains driven by an increase in
sales of premium products-including QLED and ultra-large TVs-and new lifestyle appliances, coupled with improved
profitability for refrigerators and washers.

CE continues to grow by focusing on strategic products: market-leading ultra-large QLED TVs featuring premium
technology, Bespoke refrigerators tailored to experience-oriented lifestyles, as well as large dryers, module-type air
purifiers, and garment care appliances.

In the TV business, we continue to extend the boundaries of the overall market with innovative products such as 8K ultra-
large TVs, our Lifestyle TVs The Frame, The Serif, and The Sero, as well as with microLED displays, soundbars, and
outdoor signage.

Sam sung Electronics Business Report 173 / 261

We remained atop the TV market, having captured the highest market share for a 14th consecutive year, by utilizing our
AI and IoT technologies and competitive designs to offer new audio/visual product experiences.

In 2020, we will keep executing our strategy in the premium TV market. For QLED, we aim to expand our market share
based on our even further enhanced picture quality and by upgrading TV experiences with our various ultra-large TVs.
Moreover, we also will increase competitiveness of our UHD models by improving their design and features.

In the home appliance business, we continue to add and increase conveniences in our consumers' lives with innovative
products and services based on highly-efficient, eco-friendly technologies that are a result of a deep understanding of
changing lifestyles. We are also creating new value with smart appliances that connect with other devices as well as a suite
of services based on Bixby and SmartThings.

In 2020, we will keep fortifying our status as a global brand in home appliances by expanding sales of premium products
like Bespoke refrigerators, which offer a new experience, and our Grande AI washing machine featuring upgraded AI
functionality, to name a few. Furthermore, we will focus on generating new demand by introducing even more innovative
and easy-to-use products that offer differentiated functions that reflect users' individual lifestyles.

(IM Division)
The IM division's revenue in 2019 was KRW 107.2662 trillion, an increase of KRW 6.5885 trillion (6.5%) compared to
the previous year, while operating profit decreased by KRW 0.8995 trillion (8.8%) to KRW 9.2725 trillion. Although
smartphone sales rose, operating profit declined due to intense competition in the mid-range-and-below segment.

Despite rapidly developing technologies and mounting global uncertainties, the IM Division achieved solid results by
adopting new technologies and strengthening our lineup, focusing mainly the Galaxy Series, our premium models.

Starting with the April 2019 launch of the Galaxy S10 5G, the world's first 5G smartphone, we quickly addressed the
initial stages of the 5G market by introducing a number of 5G models. In the second half of the year, we opened a new
chapter in the mobile experience by releasing an innovative form factor, the Galaxy Fold. In addition, we enhanced our
product competitiveness by revamping our mass-market lineup, mainly the A Series, a move that was well received by the
market and contributed to bolstering business efficiency.

In 2020, aiming to lead market changes amid fierce competition, we will differentiate our premium products by expanding
our 5G lineup and diversifying foldable designs. We will also quickly embrace state-of-the-art technologies to keep
strengthening competitiveness of our mass-market models. Moreover, we will offer new and innovative user experiences
by leading the convergence of technologies such as 5G, AI, and IoT with a wide range of smart devices that extend beyond
smartphones, wearables, PCs, and tablets.

(Semiconductor)
The semiconductor business's 2019 revenue decreased by KRW 21.3519 trillion (24.7%) from the previous year to KRW
64.9391 trillion due to soft component demand, including that for memory, and price declines amid an overall weak
business environment. Operating profit decreased by KRW 30.5576 trillion (68.6%) to KRW 14.0163 trillion year-on-year.

In the memory business, growth slowed slightly due to shrinking mobile demand caused by a sluggish smartphone market
and contracting tablet market. However, we expect demand to rebound with the creation of new markets in areas such as
IoT and automotives. Supply and demand are likely to show less volatility than they had previously, backed by a
diversifying demand base.

For DRAM, weakness in 2019 caused by inventory adjustments mainly at data centers is forecast to turn around, as
normalizing inventories in the industry contribute to an overall demand recovery in 2020. Although external factors,
including trade conflicts, are likely to exacerbate uncertainties, we will strive to increase our market share via timely
responses to the expansion of 5G smartphones and by securing an early foothold in the CPU high-capacity market.

Sam sung Electronics Business Report 174 / 261

For NAND, a trend toward high-capacity, high-performance chips for server SSD and mobile storage is expected to
continue and contribute to positive business conditions. As we expect the memory market to remain solid, we will
improve our performance by expanding sales of our differentiated products based on advanced node processes as well as
our high-performance, high-bandwidth products.

System LSI continues to grow, mainly led by demand from mobile products such as smartphones and tablets. We expect
demand to remain solid as new markets in IoT, wearable devices, and automotives expand.

For SoC products, growth will probably be limited by a lengthening replacement period of smartphones. That said,
demand in areas of new technologies, such as 5G, automotives, and AI, is expanding. We are leading 5G technology by
offering products for low-end to mid-range mobile devices through to high-performance AP-modem integrated chips,
while also developing a multi-mode modem that supports 2G through 5G networks. We will strive to keep providing
solutions that satisfy our customers' needs in image sensors, as shown in the introduction of the industry's first 100Mp
product, based on ISOCELL technology, which minimizes optical loss and light reflection.

In the first half of 2019, Foundry successfully showcased 7-nano EUV chips, a world first. In 2020, we will continue
development of advanced node processes including 4- and 5-nano as well as next generation GAA 3-nano technology in a
timely manner to lead the market.

(DP)
The DP division's sales and profitability worsened in 2019 as revenue decreased by KRW 1.4111 trillion (4.3%) from the
previous year to KRW 31.0539 trillion. Operating profit decreased as well, slipping KRW 1.0385 trillion (39.6%) from the
previous year to KRW 1.5813 trillion.

In mobile display, market uncertainties were aggravated by rising competition resulting from expanding capacity in the
industry. Yet, we solidified our position in the smartphone panel market by increasing our customer base thanks to our
continuous efforts to offer differentiated technology.

In 2020, amid accelerating penetration of 5G smartphones, we will continue to improve the basic features of OLED panels
as smartphone makers are likely to increasingly adopt the technology in their growing number of 5G models for
advantages such as power efficiency and ultra-thin design. We will also use our differentiated technology to expand our
customer base. Moreover, we will secure technologies needed to increase accessibility of foldable products and enhance
product quality through cooperation with our clients.

In large displays, we increased the sales portion of our value-added products and bolstered efforts to improve both yield
and cost efficiency amid intensifying competition in the industry.

In 2020, we expect market demand to be stagnant, while supply has potential to keep rising due to expansion of ultra-large
lines at Chinese players, among other uncertainties. Against this backdrop, we will drive growth by adopting advanced,
differentiated technology, marked by the introduction of premium products such as ultra-large, ultra-high resolution panels,
and by expanding sales of value-added products.

(Harman Division)
The Harman Division delivered improved revenue and profitability year-on-year, with revenue rising KRW 1.2334 trillion
(13.9%) to KRW 10.0771 trillion and operating profit increasing KRW 0.1606 trillion (99.3%) to KRW 0.3223 trillion.

Harman is working to continue its outstanding performance in automotive components and in the professional and
consumer audio markets. To do so, we constantly strive to enhance our competitiveness through innovations, strategic
mergers and acquisitions, and offerings of a variety of brands and product groups.

As a leader in the car component market, we will continue to supply the quality made famous by the Harman brand across
all segments, ranging from the mass-market through to and beyond premium models. In areas of automotive audio and
connectivity, we will seek co-prosperity with auto manufacturers by delivering endless innovation.

Sam sung Electronics Business Report 175 / 261

In the consumer audio market, Harman's innovative technologies have firmly established the brand's reputation among
consumers and music lovers. We will continue to launch products in promising areas, such as wireless smart speakers, to
deliver new user experiences, improving our performance and pushing our brand reputation even higher.

We expect the business environment in 2020 to remain clouded by external uncertainties and intense competition. We plan
to face such challenges head on and keep preparing thoroughly for the future, which includes improving our mainstay
businesses and building core capabilities in new areas such as AI and autonomous driving. Through these efforts, we will
achieve solid earnings and, in turn, contribute to enhancing shareholder value.

C. New and closed businesses

N/A

Sam sung Electronics Business Report 176 / 261

D. Changes in organizational structure
In December 2015, the LED business was reorganized as a team unit; in November 2016, the Company spun off its
printing solutions business and established S-Printing Solution Co., Ltd., and then completed the sale of the printing
solutions business in November 2017; in June 2017, the System LSI business was divided into Foundry and System
LSI businesses.

[As of December 2015]

Before After
CE Division (Visual Display, Digital Appliances, Printing Solution, CE Division (Visual Display, Digital Appliances, Printing
Medical Devices) Solutions, Medical Devices)
Business
organization IM Division (Mobile, Network) IM Division (Mobile, Network)

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

Korea, North America, Latin America, Europe, CIS, Southwest Korea, North America, Latin America, Europe, CIS, Southwest
Regional Asia, Southeast Asia, China, Middle East, Africa Asia, Southeast Asia, China, Middle East, Africa
headquarters Americas (DS), Europe (DS), China (DS), Southeast Asia (DS), Americas (DS), Europe (DS), China (DS), Southeast Asia (DS),
Japan (DS) Japan (DS)

[As of December 2016]

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

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

Korea, North America, Latin America, Europe, CIS, Southwest Korea, North America, Latin America, Europe, CIS,
Regional Asia, Southeast Asia, China, Middle East, Africa Southwest Asia, Southeast Asia, China, Middle East, Africa
headquarters Americas (DS), Europe (DS), China (DS), Southeast Asia (DS), Americas (DS), Europe (DS), China (DS), Southeast Asia
Japan (DS) (DS), Japan (DS)

[As of June 2017]

Before After
CE Division (Visual display, Digital appliances, CE Division (Visual display, Digital appliances,
Medical devices) Medical devices)

Business IM Division (Mobile, Network) IM Division (Mobile, Network)

organization
DS Division (Memory, SYS.LSI, DP) DS Division (Memory, SYS.LSI, Foundry, DP)

- Harman Division
Korea, North America, Latin America, Europe, CIS, Southwest Korea, North America, Latin America, Europe, CIS,
Regional Asia, Southeast Asia, China, Middle East, Africa Southwest Asia, Southeast Asia, China, Middle East, Africa
headquarters Americas (DS), Europe (DS), China (DS), Southeast Asia (DS), Americas (DS), Europe (DS), China (DS), Southeast Asia
Japan (DS) (DS), Japan (DS)
Note: From the first quarter of 2018, the Medical Device Business is excluded from the CE Division.

Sam sung Electronics Business Report 177 / 261

E. Foreign exchange risk
The Company experiences currency gains and losses based on the different functional currency of each entity due to
global operations. As such, the Company is exposed to foreign currency volatility from exchange positions of currencies,
especially related to the US dollar, Euro, Japanese yen and Indian rupee.
(KRW)
Currency 2019 2018 Change Change (%)
USD 1,157.80 1,118.10 39.70 3.60%
EUR 1,297.43 1,279.16 18.27 1.40%

JPY 10.63 10.13 0.50 4.90%

INR 16.23 15.99 0.24 1.50%

As of December 31, 2019, the foreign currency exposure to financial assets and liabilities of a 5% currency rate change
against the Korean won (before income tax) are presented below:

Dec 31, 2019 Dec 31, 2018

(KRW mil) Increase Decrease Increase Decrease

USD 163,062 -163,062 344,488 -344,488

EUR 127,507 -127,507 -4,381 4,381
JPY -23,062 23,062 -13,001 13,001
INR 64,153 -64,153 92,176 -92,176

To minimize foreign exchange risk arising from operating activities, the Company maintains the same level of equity and
liability in each currency regardless of foreign exchange fluctuations. 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 effectively manages its foreign exchange risk by regular monitoring foreign exchange rates and limits all
foreign exchange transactions besides the purpose of hedging risks.

F. Recognition of asset impairment loss

The Company conducts an annual review on asset impairment of CGUs (cash generating unit). The recoverable amount of
a CGU is based on the calculation of value in use, and the value in use is calculated using a BTCF (before tax cash flow)
assumption that based on the financial budget for the next five years approved by the management committee. In
calculating terminal-year cash flow for period that exceeds the term, assumption of fixed average growth (does not exceed
industry average) was used.

Impairment losses are recognized to the extent the carrying amount exceeds the recoverable amount of a CGU. The
recoverable amount is determined by choosing the greater figure between the use-value and fair-value, which deducts the
disposal amount per cost. Recognized impairment losses in 2019 reached KRW 93.6 billion for tangible assets and KRW
48.7 billion for intangible assets.

Refer to 『E. Equity Investments in other corporations』 of 『IX. Affiliates and Subsidiaries』 for more details about asset
impairment loss.

Sam sung Electronics Business Report 178 / 261

4. Liquidity, financing, and expenditure
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 provides liquidity support by utilizing its globally integrated finance structures, such as through cash
pooling by region. In addition, the Company maintains a liquidity management process which provides additional
financial support through local finance centers if abnormal signs are identified. 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 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.

A. Current status of liquidity

The Company has ample liquidity according to the liquidity assessment index of the global credit rating agency Moody’s.
The Company’s cash coverage (liquid funds/borrowings), which is a major liquidity index that Moody’s uses, corresponds
to the highest level, Aaa.

2019 2018

Cash coverage
591% 688%
(liquid funds/borrowings)
Note: Moody’s requires 400% or higher for an Aaa rating

As of December 31, 2019, the Company’s liquidity is presented below:

(KRW mil)
Classification 2019 2018 Change
Liquid funds

Cash and cash equivalents 26,885,999 30,340,505 -3,454,506

Short-term financial instruments 76,252,052 65,893,797 10,358,255

Short-term financial assets at amortized cost 3,914,216 2,703,693 1,210,523

Financial assets at fair value through profit or
1,727,436 2,001,948 -274,512
loss
Total financial assets 108,779,703 100,939,943 7,839,760

Borrowings
Short-term borrowings 14,393,468 13,586,660 806,808

Current portion of long-term liabilities 846,090 33,386 812,704

Debentures 975,298 961,972 13,326

Long-term borrowings 2,197,181 85,085 2,112,096

Total financial liabilities 18,412,037 14,667,103 3,744,934

Net cash (liquid funds – borrowings) 90,367,666 86,272,840 4,094,826

Sam sung Electronics Business Report 179 / 261

As of the end of 2019, the Company had KRW 108.7797 trillion of financial assets.

These liquid funds include: i) cash and cash equivalents; ii) short-term financial instruments; iii) short-term financial
assets at amortized cost; and iv) financial assets at fair value through other comprehensive income. This balance increased
by KRW 7.8398 trillion from KRW 100.9399 trillion at the end of the previous period.

The Company’s borrowings (including debentures) are KRW 18.4120 trillion, an increase of KRW 3.7449 trillion from
KRW 14.6671 trillion at the end of the previous year.

The Company’s liquidity includes an inflow of KRW 45.3829 trillion in cash flows from operating activities and an
outflow of KRW 25.3678 trillion in acquisition of tangible assets, KRW 8.1389 trillion in acquisition (disposal) of long-
term financial instruments, and KRW 9.6392 in dividends. The Company’s net cash (liquid funds – borrowings) in 2019 is
KRW 90.3677 trillion, which is an increase of KRW 4.0948 trillion from KRW 86.2728 trillion at the end of the previous
period.

B. Financing and expenditures

(Borrowings)
As of December 31, 2019, the Company’s borrowings (including debentures) are presented below:
(KRW mil)
Classification Creditor Annual interest rate (%) 2019 2018
Short-term borrowings

Collateralized borrowings Woori Bank, etc. 0.0~22.3 11,734,361 12,130,459

Non-collateralized borrowings CitiBank, etc. 0.0~12.0 2,659,107 1,456,201

Total short-term borrowings 14,393,468 13,586,660

Liquid long-term borrowings

Bank borrowings Hana Bank 3.2~5.0 35,376 16,880

Capital lease liabilities CSSD, etc. 3.8 805,068 11,067

Total liquid long-term borrowings 840,444 27,947

Long-term borrowings
Bank borrowings - - - 34,963

Capital lease liabilities CSSD, etc. 3.8 2,197,181 50,122

Total long-term borrowings 2,197,181 85,085

Sam sung Electronics Business Report 180 / 261

 (KRW mil)

Annual interest
Classification Issuance date Maturity date 2019 2018
rate (%)
Debentures
USD denominated 46,312 50,315
Oct 2, 1997 Oct 1, 2027 7.7
straight bonds (USD 40,000,000) (USD 45,000,000)
USD denominated 463,120 447,240
May 6, 2015 May 15, 2025 4.2
debenture bonds (USD 400,000,000) (USD 400,000,000)
EUR denominated 454,100 447,352
May 20, 2015 May 27, 2022 2.0
debenture bonds (EUR 350,000,000) (EUR 350,000,000)
Total 963,532 944,907
Premium on bonds payable (discount on bonds payable) 17,412 22,504
Deduction: Current debentures -5,646 -5,439
Non-current debentures 975,298 961,972

The Company’s short-term borrowing increases or decreases depending on the discount amount of trade receivables. In
2019, short-term borrowing increased by KRW 0.8658 trillion and decreased by KRW 0.7094 trillion of debenture and
long-term borrowing was repaid. In addition, lease liabilities increased by KRW 2.9411 trillion due to changes in
accounting policy (K-IFRS 1116).

(Plan for payment of borrowings)

The Company’s plan for payment of borrowings (including debentures) is presented below:
(KRW mil)
Year of payment Amount of payment
2020 15,328,576

2021 599,155

2022 954,756

2023 399,192

2024~ 1,421,649

Total 18,703,328
Note: Amount calculated excluding bond discount, premium on bonds payable, and present value of bonds payable discount.

(Compliance to bond management contract conditions)

The Company’s bonds are subject to conditions to protect investors such as constraint on collateral, constraint on disposal
of assets, etc., and the Company complies with these conditions.

5. Off-Balance Sheet Activities

- Refer to 『2. Notes to Consolidated Financial Statements』 in 『III. Financial Affairs』

Sam sung Electronics Business Report 181 / 261

6. Other information for investment decision making

A. Significant accounting policies and estimation

- The Company applied the following amended and enacted standards for the annual period beginning on January 1, 2018:

Korean IFRS 1109, Financial Instruments

The Company has applied Korean IFRS 1109, Financial Instruments, for the first time for their annual reporting period
commencing January 1, 2018. In accordance with the transitional provisions in Korean IFRS 1109, comparative figures
have not been restated. The application impacts of Korean IFRS 1109 refer to 『2. Notes to Consolidated Financial
Statements』in『III. Financial Affairs』

Korean IFRS 1115, Revenue from Contracts with Customers

The Company has applied Korean IFRS 1115, Revenue from Contracts with Customers, for the first time for their
annual reporting period commencing January 1, 2018. In accordance with the transitional provisions in Korean IFRS
1115, comparative figures have not been restated. The application impacts of Korean IFRS 1115 refer to 『2. Notes to
Consolidated Financial Statements』in『III. Financial Affairs』

Interpretation 2122 Foreign Currency Transaction and Advance Consideration

According to the enactment, the date of the transaction for the purpose of determining the exchange rate to use on initial
recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognizes the
non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. The
enactment does not have a significant impact on the financial statements.

B. Environment and employees

- Refer to 『5. Sanctions and others』 in 『XI. Other information』 for environmental sanctions or administrative actions.
- No significant changes in employee positions during this period.

C. Legal regulations

- Refer to 『5. Sanctions and others』 of 『XI. Other information』 for major legal regulations on the Company’s
businesses.

D. Derivatives and risk management policy

- To manage exchange rate risk, overseas companies enter into currency forwards which are denominated in the trading
currency of a foreign currency position as opposed to the companies’ reporting currencies. Overseas offices buy or sell
currency forwards to avert risk.

- Refer to 『8. Derivative Instruments and Put Options』 in 『II. Businesses Overview』 and 『2. Notes to Financial
Statements』 in 『III. Financial Affairs』 for Derivatives and risk management policy.

Sam sung Electronics Business Report 182 / 261

 V. Auditor’s Report

1. Introduction
Samil PwC conducted audits on the consolidated/separate financial statements of financial position of the Company as at
December 31, 2019, 2018 and 2017, and the related consolidated/separate statements of profit or loss, comprehensive
income, changes in equity and cash flows for the years then ended and expressed an unqualified opinion on those financial
statements.

There are 240 subsidiaries as at December 31, 2019. The newly acquired entities during 2019, FOODIENT LTD. and
Corephotonics Ltd. appointed PwC and E&Y, respectively, as the external auditor. The newly incorporated entities during
2019, Samsung Display Noida Private Limited (SDN) and Samsung Venture Capital Union SVIC No. 45 and No. 48
appointed PwC and KPMG, respectively, as the external auditor. The subsidiaries appointed the external auditors at their
own decision.

Period end Company Auditor Audit Opinion Emphasis of Matter Key Audit Matter(s)
1. Sales promotion activities related to the sale
of products.
2. Impairment of goodwill and intangible assets
Dec 31, 2019 Samil PwC Unqualified Not applicable
with indefinite useful lives.
3. Appropriateness of depreciation expense cut-
off on property, plant and equipment.
1. Sales promotion activities related to the sale
of products.
2. Impairment of goodwill and intangible assets
with indefinite useful lives.
Dec 31, 2018 Samil PwC Unqualified Not applicable
3. Appropriateness of depreciation expense cut-
off on property, plant and equipment
4. Impairment of investments in associates and
joint ventures.
Dec 31, 2017 Samil PwC Unqualified Not applicable Not applicable
※ Audit opinion on both separate and consolidated financial statements.

Sam sung Electronics Business Report 183 / 261

< Review and audit plan for the year ended December 31, 2019>

Review Period Planned Dates

Pre-review Mar 4, 2019 ~ Mar 22, 2019

2019 1Q
Review Apr 5, 2019 ~ May 13, 2019

Pre-review Jun 3, 2019 ~ Jun 21, 2019

2019 2Q
Review Jul 5, 2019 ~ Aug 13, 2019

Pre-review Sep 2, 2019 ~ Sep 20, 2019

2019 3Q
Review Oct 7, 2019 ~ Nov 12, 2019

April 15, 2019 – Jun 28, 2019

Audit of IT systems and automated internal controls Oct 7, 2019 – Nov 15, 2019
Dec 9, 2019 – Jan 10, 2020

Early substantive audit procedures (annual audit) Mar 4, 2019 – Dec 27, 2019

Audit of Internal Control over Financial Reporting (“ICFR”) Mar 4, 2019 – Feb 21, 2020

Update of early substantive audit procedures and audit of financial statements Jan 6, 2020 – Feb 21, 2020
※ Above schedule is for the review and audit of separate and consolidated financial statements and the audit of ICFR for the year
ended December 31, 2019.

[Audit Contract Description] (KRW mil)

Fiscal Period Group Auditor Description Compensation Total Hours

- Review of the interim separate/consolidated financial statements

Year ended
Samil PwC - Audit of separate/consolidated financial statements 6,481 69,021
Dec 31, 2019
- Audit of Internal Control over Financial Reporting (ICFR)

Year ended Dec - Review of the interim consolidated/separate financial statements

Samil PwC 4,400 50,401
31, 2018 - Audit on consolidated/separate financial statements

Year ended Dec - Review of the interim consolidated/separate financial statements

Samil PwC 4,030 46,576
31, 2017 - Audit on consolidated/separate financial statements

※ Total time spent for the year ended December 31, 2019 includes 67,639 hours of input time in respect of external audit
in accordance with Chapter 3 of Article 18 under the Act on External Audit of Stock Companies, and 1,382 hours of other
types of service.

Sam sung Electronics Business Report 184 / 261

[Non-Audit Service Contract Description] (KRW mil)

Fiscal Period Contract Date Non-audit Service Description Period for Service Compensation Note
SOC 2 certification and other advisory
Feb 2019 Feb – Sep 2019 258
services
Year ended
Oct 2019 Custom tax and other advisory services Oct – Dec 2019 127
Dec 31, 2019
Subtotal 385

Nov 2017 Tax advisory Jan ~ Mar 2018 194

Year ended Dec 2018 Tax advisory Dec 2018 149

Dec 31, 2018 Dec 2016 Custom tax advisory Jan ~ Dec 2018 253

Subtotal 596

Jan 2017 Tax advisory Jan ~ Dec 2017 196

Year ended
Dec 2016 Custom tax advisory Jan ~ Dec 2017 810
Dec 31, 2017
Subtotal 1,006

※ Samil PwC has performed non-audit services and has been paid KRW 385 million by the Company for the years ended
December 31, 2019 in return for the service.

[Details of internal audit committee’s discussion with Auditors]

No. Date Participants Method Details of discussion

Audit Committee: 3 members
- Audit plan for the year ended December 31, 2017
Company: Head of Audit Team and 4 Face-to- face
1 Apr 26, 2017 - Results of analytical procedures per for med over the
others meeting
quarterly financial statements
Auditor: Signing partner and 1 other
Audit Committee: 3 members
- Results of analytical procedures per for med over the
Company: Head of Audit Team and 4 Face-to- face
2 Jul 26, 2017 quarterly financial statements
others meeting
- Discussion of quarterly review focus areas
Auditor: Signing partner and 1 other
Audit Committee: 3 members - Results of analytical procedures per for med over the
Company: Head of Audit Team and 3 Face-to- face quarterly financial statements
3 Oct 30, 2017
others meeting - Discussion of quar terly review focus areas and other
Auditor: Signing partner and 1 other amendments of legislations.
Audit Committee: 3 members
Company: Head of Audit Team and 4 Face-to- face - Audit progress and final audit schedule
4 Jan 30, 2018
others meeting - Other required communications
Auditor: Signing partner and 1 other
Audit Committee: 3 members
- Audit plan for the year ended December 31, 2018
Company: Head of Audit Team and 4 Face-to- face
5 Apr 25, 2018 - Results of analytical procedures per for med over the
others meeting
quarterly financial statements
Auditor: Signing partner and 1 other
Audit Committee: 3 members
- Results of analytical procedures per for med over the
Company: Head of Audit Team and 4 Face-to- face
6 Jul 30, 2018 quarterly financial statements
others meeting
- Plan for the Key Audit Matters selection
Auditor: Signing partner and 1 other
Audit Committee: 3 members - Results of analytical procedures per for med over the
Company: Head of Audit Team and 4 Face-to- face quarterly financial statements
7 Oct 30, 2018
others meeting - Results of Key Audit Matters selection and planned
Auditor: Signing partner and 1 other audit procedures

Sam sung Electronics Business Report 185 / 261

 Audit Committee: 3 members - Progress of audit procedures relating to the Key Audi t
Company: Head of Audit Team and 3 Face-to- face Matters
8 Jan 30, 2019
others meeting - Progress status of other substantive audit procedures
Auditor: Signing partner and 1 other and reporting of the final audit schedule
Audit Committee: 3 members - Audit plan for the year ended December 31, 2019
Company: Head of Audit Team and 1 Face-to- face - Discussion of quarterly review focus areas
9 Apr 29, 2019
other meeting - Other required communications at the planning stage
Auditor: Signing partner and 1 other of the audit
- Annual audit plan and its progress
Audit Committee: 3 members - Plan for the Key Audit Matters selection
Company: Head of Audit Team and 1 Face-to- face - Progress of audit of Internal Control over Financial
10 Jul 30, 2019
other meeting Reporting
Auditor: Signing partner and 1 other - Discussion of quar terly review focus areas and other
required communications
- Results of Key Audit Matters selection and planned
audit procedures
Audit Committee: 3 members
Face-to- face - Progress of audit of Internal Control over Financial
11 Oct 28, 2019 Company: Head of Audit Team
meeting Reporting
Auditor: Signing partner and 1 other
- Discussion of quar terly review focus areas and other
required communications
- Key Audit Matters and others audit focus areas
Audit Committee: 3 members - Progress of audit of Internal Control over Financial
Face-to- face
12 Jan 28, 2020 Company: Head of Audit Team Reporting
meeting
Auditor: Signing partner and 1 other - Other required communications at the completion
stage of the audit

2. Regarding Internal Control

[Review and Audit opinion of Internal Control over Financial Reporting (ICFR)]

Fiscal Period Group Auditor Review Opinion Remarks

[Audit Opinion] The Company maintained, in all material respects, effective
Year ended internal control over financial reporting as of December 31, 2019, based on
Samil PwC Not applicable
Dec 31, 2019 Conceptual Framewor k for Designing and Operating Internal Control over
Financial Reporting.
[Review Opinion] Nothing has come to attention that causes them to believe
Year ended Dec
Samil PwC that management's repor t on the operations of the IACS is not presented Not applicable
31, 2018
fairly, in all material respects, in accordance with IACS standards.
[Review Opinion] Nothing has come to attention that causes them to believe
Year ended Dec
Samil PwC that management's repor t on the operations of the IACS is not presented Not applicable
31, 2017
fairly, in all material respects, in accordance with IACS standards.

Sam sung Electronics Business Report 186 / 261

 VI. Corporate Governance

1. Board of Directors
A. Overview
As of December 31, 2019, the Board of Directors consisted of 10 directors, 4 of whom are Executive Directors (Sang-
hoon Lee, Ki-nam Kim, Hyun-suk Kim, and Dong-jin Koh) and 6 Independent Directors (Jae-wan Bahk, Sun-uk Kim,
Byung-gook Park, Jeong Kim, Curie Ahn, and Han-jo Kim). The Board has appointed Mr. Sang-hoon Lee, former CFO,
as Chairman as he will be able to mediate the different opinions of Directors and is most qualified to manage Board
activities. The roles of Board Chairman and CEO have been separated to enhance the Board’s independence and
transparency.

The Board has six committees: Management Committee, Audit Committee, Independent Director Recommendation
Committee, Related Party Transactions Committee, Compensation Committee, and Governance Committee.

[As of Dec 31, 2019]

Classification Composition Members Head Role

- Make resolutions on matters provided for by
Sang-hoon Lee, Ki-nam Kim,
the relevant laws and regulations or the Articles
Four Executive Hyun-suk Kim, Dong-jin Koh
Sang-hoon Lee of Incorporation, matters delegated by a general
Directors
Board of Directors (Executive meeting of shareholders, as well as on important
Six Independent Jae-wan Bahk, Sun-uk Kim,
Director) matters concerning basic policies and execution
Directors Byung-gook Park, Jeong Kim,
of business.
Curie Ahn, Han-jo Kim
- Supervise management.
Ki-nam Kim - Deliberate and decide on matters related to
Management Three Executive Ki-nam Kim, Hyun-suk Kim,
(Executive finance, general management, and on
Committee Directors Dong-jin Koh
Director) matters specifically delegated by the Board.
Jae-wan Bahk - Review and audit matters concerning
Three Independent Jae-wan Bahk, Sun-uk Kim,
Audit Committee (Independent management of the Company, including the
Directors Han-jo Kim
Director) Company’s financial situation.
Independent - Assess the independence, diversity, and
Jeong Kim
Director Three Independent Jeong Kim, Byung-gook Park, ability of potential candidates for
(Independent
Recommendation Directors Curie Ahn Independent Director positions.
Director)
Committee - Recommend candidates.
Related Party Sun-uk Kim - Voluntarily comply with fair transaction
Three Independent Sun-uk Kim, Jae-wan Bahk,
Transactions (Independent regulations to enhance corporate
Directors Han-jo Kim
Committee Director) transparency.
- Ensure the objectivity and transparency of
Compensation Three Independent Jae-wan Bahk, Byung-gook
- the decision-making process for Director
Committee Directors Park, Jeong Kim
compensation.
Jae-wan Bahk, Sun-uk Kim, Jae-wan Bahk - Promote the Company’s corporate social
Governance Six Independent
Byung-gook Park, Jeong Kim, (Independent responsibility and act to enhance shareholder
Committee Directors
Curie Ahn, Han-jo Kim Director) value.
Note: Mar 20, 2019: Jae-wan Bahk was reappointed as Independent Director; Han-jo Kim and Curie Ahn were newly appointed as
Independent Directors; Independent Directors In-ho Lee and Kwang-soo Song retired.
Oct 26, 2019: Jae-yong Lee retired from his position of Executive Director.
Feb 14, 2020: Sang-hoon Lee resigned from his position of Executive Director.
Feb 20, 2020: Independent Director Byung-gook Park was appointed as the head of the compensation committee.
Feb 21, 2020: Independent Director Jae-wan Bahk was appointed as the Chairman of the Board.
Mar 18, 2020: Jong-hee Han and Yoon-ho Choi were newly appointed as Executive Directors at the AGM.
As of Mar 31, 2020, the Board has a total of 11 members, consisting of 5 Executive Directors (Ki-nam Kim, Hyun-suk Kim,
Dong-jin Koh, Jong-hee Han and Yoon-ho Choi) and 6 Independent Directors (Jae-wan Bahk, Sun-uk Kim, Byung-gook Park,
Jeong Kim, Curie Ahn, and Han-jo Kim).

Sam sung Electronics Business Report 187 / 261

B. Agendas considered and voting results (2019)

Executive Directors Independent Directors

Date Agenda Results Sang- Jae- Ki- Hyun Byung-

Dong-jin In-ho Kwang- Sun-uk Jae-wan Jeong
hoon yong nam -suk gook
Koh Lee soo Song Kim Bahk Kim
Lee Lee Kim Kim Park

Approv ed For Absent For For For For For For For For For
① Approv al of FY18 financial
statements and annual business report For
Approv ed For Absent For For For For For For For For
② Rev ision of internal accounting
management regulations
Approv ed For Absent For For For For For For For For For
③ Approv al of business plan for 2019
For For For For For For For
④ Lease contract with Samsung Display Approv ed For Absent For For
⑤ Purchase of research equipment and For
Approv ed For Absent For For For For For For For For
lease contract with Samsung SDI
Jan 31 ⑥ Approv al of the 2019 social contribution Approv ed For Absent For For For For For For For For For
matching fund
⑦ Charitable contribution to Samsung Approv ed For Absent For For For For For For For For For
Dream Scholarship Foundation
※ Reported items
① Report on the internal accounting
management system
② Assessment of the internal accounting
management system

① Decision to conv ene the 50th AGM Approv ed For Absent For For Absent For For For For For For
② Decisions on the 50th AGM agenda Approv ed For Absent For For Absent For For For For For For
items
- Reported Items:
1) FY18 annual audit report,
2) FY18 annual business report,
3) Assessment of the internal accounting
management system
- Item 1: Approv al of FY18 financial
statements, including balance sheet,
income statement, and the statement of
appropriation of retained earnings
(draft), etc.
Feb 26 - Item 2: Appointment of Directors
Item 2-1: Appointment of Independent
Directors
Item2-2: Appointment of Audit
Committee members
- Item 3: Approv al of remuneration limit for
Directors
③ Application for product liability
Approv ed For Absent For For Absent For For For For For For
insurance
④ Sponsoring the WorldSkills Approv ed For Absent For For Absent For For For For For For
Competition
⑤ Donation to Chung-nam Samsung Approv ed For Absent - For Absent For For For For For For
Institute
Note: Mar 20, 2019: Independent Directors In-ho Lee and Kwang-soo Song retired and Independent Director Jae-wan Bahk was
reappointed.
Feb 26, 2019: Director Ki-nam Kim did not exercise his voting right on the agenda of donation to Chung-nam Samsung Institute
as the donations is regarded as a transaction between a Director and Company under the Commercial Act and the Director has
special interest in the Company as the CEO.

Sam sung Electronics Business Report 188 / 261

 Executive Directors Independent Directors

Date Agenda Results Sang- Jae- Ki- Hyun Dong- Jae- Byung-
Sun-uk Jeong Curie Han-jo
hoon yong nam -suk jin wan gook
Kim Kim Ahn Kim
Lee Lee Kim Kim Koh Bahk Park
① Appointment of Board committee Approv ed For Absent For For For For For For For For For
Mar 20 members
② Setting remuneration of Directors Approv ed For Absent For For For For For For For For For

① Approv al of 1Q19 interim business Approv ed For Absent For For For For For For For For For
report and quarterly div idend
Approv ed For Absent For For For For For For For For For
② Application for New Technology
Business Inv estment Association
③ Acquisition of PLP business Approv ed For Absent For For For For For For For For For

Apr 30 ④ Group health insurance plan for Approv ed For Absent For For For For For For For For For
employ ees
Approv ed For Absent For For For For For For For For For
⑤ Charitable contributions

⑥ Donation to Korea Occupational Approv ed For Absent For For For For For For For For For
Safety and Health Agency
⑦ Donation to incentiv e fund for DS Approv ed For Absent For For For For For For For For For
Div ision’s suppliers

① Approv al of 1H19 half y ear Approv ed For Absent For For For For For For For For For
business report and quarterly
div idend
② Rev ision of audit committee Approv ed For Absent For For For For For For For For For
regulations
Jul 31
③ Package insurance policy for our Approv ed For Absent For For For For For For For For For
sites
④ Financial support for startup
program at Daegu, Gy eongbuk Approv ed For Absent For For For For For For For For For
Creativ e Economy Innovation
Center

① Approv al of 3Q19 interim business

report and quarterly div idend Approv ed For Retired For For For For For For For For For
Oct 31
② Pay ment of retirement pension
Approv ed For Retired For For For For For For For For For
plan

① Approv al of transaction with Approv ed For Retired For For For For For For For For For
affiliate company
Approv ed For Retired For For For For For For For For For
② Pay ment of retirement pension
plan
③ Approv al of business plan for 2020 Approv ed For Retired For For For For For For For For For
Nov 29 ④ Contribution to Community Chest
of Korea’s annual fundraising Approv ed For Retired For For For For For For For For For
campaign for 2020
※ Reported items
① Report on results of the
compliance review
Note: Mar 20, 2019: Independent Director Jae-wan Bahk was reappointed and Independent Directors Han-jo Kim and Curie A hn were
newly appointed.
Oct 26, 2019: Jae-Yong Lee retired from his position of Executive Director.
Feb 14, 2020: Sang-hoon Lee resigned from his position of Executive Director.

Sam sung Electronics Business Report 189 / 261

C. Committees
(1) Composition of Board Committees
[As of Dec 31, 2019]

Responsibilities and
Committee Composition Members Note
authorities
Executive Director Jong-hee Han, Yoon-
Three Executive Ki-nam Kim (head), Hyun-suk
Management ho Choi appointed as committee
Directors Kim, Dong-jin Koh
member (March 18, 2020)
Related Party Three Independent Sun-uk Kim (head), Jae-wan
-
Transactions Directors Bahk, Han-jo Kim
See below Independent Director Byung-gook Park
Three Independent Jae-wan Bahk, Byung-gook Park,
Compensation appointed as head of committee
Directors Jeong Kim
(February 20, 2020)
Jae-wan Bahk (head), Sun-uk
Six Independent
Governance Kim, Byung-gook Park, Jeong -
Directors
Kim, Curie Ahn, Han-jo Kim
Note: 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

- Responsibilities: The Management Committee deliberates and decides on matters specified by Board regulations and
resolutions or specifically delegated by the Board. The composition and operation of the management
committee are determined by the Board.
- Authorities:

(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
(provided that the value of transaction exceeds 0.1% of total equity)
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. Establishment of 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. Establishment of corporate guidelines for business and management related activities

Sam sung Electronics Business Report 190 / 261

 (B) Matters related to Finance

1. Acquisitions or disposals of equity investments with a value no less than 0.1% and less than 2.5% of the total equity
2. Direct overseas investments with a value no less than 0.1% and less than 2.5% of the total equity
3. New debt guarantee (excluding extension of period) or collateral issuance with a value no less than 0.1% and less
than 2.5% of the total equity
A. Collateral: Only in the case of providing collateral for others
B. Guarantee: Excludes performance guarantee (eg, bid, contract, defect, difference guarantee) and tax payment
guarantee
4. New credit agreement contract (excluding extension of period) with a value no less than 0.1% and 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 3 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 bonds
7. Acquisition and disposal of real estate with a value of over 0.1% of the total equity, provided that the transaction
is with a third party
8. Any matters that the CEO deems necessary and important for the business (eg, capex)

(C) All other matters except for those delegated to the Board and other committees in accordance with Board regulations

ii) Related Party Transactions Committee

- Responsibilities: Improve management transparency through the establishment of a voluntary compliance system
- Authorities:
1) Right to receive reports on related party transactions:
The Committee can request reports on related party transactions with affiliates
※ According to the Monopoly Regulation and Fair Trade Act, the Related Party Transactions committee is
permitted to conduct preliminary reviews and approves on related party transactions over KRW 5 billion and
other transactions that are deemed as significant
2) Right to order ex officio investigation of related party transactions
3) Right to propose corrective measures for related party transactions

iii) Compensation Committee

- Responsibilities: Provide transparent and objective decision making process related to remuneration of directors
- Authorities:
1) Propose remuneration limit of directors at AGM
2) Establish the director remuneration system
3) Other matters delegated by the Board

iv) Governance Committee

- Responsibilities: Fulfill corporate social responsibility and enhance shareholder value
- Authorities:
1) Matters related to corporate social responsibility
2) Matters related to shareholder value enhancement
- Preliminary review on shareholder return policies
- Activities for improving shareholders’ rights and interests
- Other important management matters that can significantly impact shareholder value
3) Establishment, composition, operation of organizations under the committee including research groups, councils,
etc.
4) Other matters delegated by the Board

Sam sung Electronics Business Report 191 / 261

(2) 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 (2019)

Director
(attendance)
Date Agenda Voting results Ki-nam Hyun-suk Dong-jin
Kim Kim Koh
(100%) (100%) (75%)
① Licensing agreement Approved For For For
Feb 15
② Merger of overseas subsidiary Approved For For For

① Liquidation of overseas subsidiary Approved For For For

Mar 8
② Closing of shareholder register for quarterly dividend Approved For For For

① Investment in memory business

Approved For For For
② Investment in Pyeongtaek complex Approved For For For
Apr 5
③ Investment in foundry business Approved For For For
Approved For For For
④ Liquidation of overseas subsidiary

Jun 7 ① Closing of shareholder register for quarterly dividend Approved For For Absent

Jul 5 ① Investment in foundry business Approved For For Absent

① Liquidation of overseas subsidiary Approved For For For

Aug 30
② Investment in foundry business Approved For For For

Oct 8 ① Establishment of overseas subsidiary Approved For For For

① Investment in memory business Approved For For For

Dec 6 ② Investment in memory at overseas subsidiary Approved For For For
Approved For For For
③ Investment in foundry business

 The Related Party Transactions Committee (2019)

Directors
Voting (attendance)
Date Agenda
Results In-ho Lee Kwang-soo Sun-uk Kim Jae-wan Han-jo Kim
(100%) Song (100%) (100%) Bahk (100%) (100%)

① Prior review on large-scale related party - - - -

transactions
1) Lease contract with Samsung Display
Jan 30 2) Purchase of research equipment and
lease contract with Samsung SDI N/A N/A
② Report on 4Q18 related party - - - - (newly (newly
transactions appointed) appointed)
① Prior review on large-scale related party - - - -
Feb 26 transactions
1) Application for product liability insurance

① Appointment of the head of the Related Approved For For For

Party Transactions Committee N/A N/A
Apr 29
② Prior review on large-scale related party - (retired) (retired) - - -
transactions

Sam sung Electronics Business Report 192 / 261

 1) Application for new technology business
investment association
2) Acquisition of PLP business
3) Group health insurance plan for
employees
4) Charitable contributions
③ Report on 1Q19 related party - - - -
transactions
① Prior review on large-scale related party
- - - -
transactions
Jul 30 1) Package insurance policy for our sites
② Report on 2Q19 related party
- - - -
transactions
① Prior review on large-scale related party
- - - -
transactions
Oct 28 1) Payment of retirement pension plan
- - - -
② Report on 3Q19 related party
transactions
① Prior review on large-scale related party
- - - -
transactions
Nov 29 1) Payment of retirement pension plan
2) Approval of 2020 large-scale product
and service transactions
Note: Mar 20, 2019: Independent Directors In-ho Lee and Kwang-soo Song retired and Independent Directors Jae-wan Bahk and
Han-jo Kim were appointed.
 The Compensation Committee (2019)

Directors
(attendance)
Voting
Date Agenda
Results Kwang-soo In-ho Lee Jeong Kim
Jae-wan Byung-gook
Song Bahk Park
(100%) (100%)
(100%) (N/A) (N/A )

Feb 25 Review on 2019 remuneration limit for Directors Approved For For For N/A N/A
(newly appointed) (newly appointed)
Note: Mar 20, 2019: Independent Directors Kwang-soo Song and In-ho Lee retired and Independent Directors Jae-wan Bahk and
Byung-gook Park were appointed.
Feb 20, 2020: Independent Director Byung-gook Park was appointed as the head of the Compensation Committee.
 The Governance Committee (2019)

Directors
(attendance)
Voting
Date Agenda Byung-gook
Results Jae-wan Bahk Sun-uk Kim Jeong Kim Curie Ahn Han-jo Kim
Park
(100%) (100%) (100%) (100%) (100%)
(100%)

Apr 30 Appointment of the head of the Committee Approved For For For For For For
※ Reporting Item
Jul 31 - - - - - - -
① Reporting on current status of IR
※ Reported Item
- - - - - - -
① Reporting on updates of IR activities
Oct 31
② Reporting on IR-Sustainability
roadshow investor meeting results
※ Reported Item - - - - - - -
Nov 29 ① Reporting on Company’s sustainable
management scheme
Note: Mar 20, 2019: Independent Directors In-ho Lee and Kwang-soo Song retired and Independent Directors Curie Ahn and
Han-jo Kim were appointed.

Sam sung Electronics Business Report 193 / 261

D. Director independence
(1) Appointment of Directors
The Board nominates Executive Director candidates and the Independent Director Recommendation Committee
nominates Independent Director candidates. Directors are then appointed at the general meeting.
A candidate for Director needs to meet the requirements of relevant laws and the Articles of Incorporation. Executive
Directors are appointed based on his or her expertise and leadership among a list of candidates that is constantly updated.
Independent Directors should have no material interests with the Company and its major shareholder, possess knowledge
and experience in IT, accounting, finance, law, economics, ESG, etc., and be able to fulfill the roles and responsibilities of
supervising management from an independent position. The company has not set separate standards with respect to the
independence of Directors besides the requirements in relevant laws and the Article of Incorporation.
Please refer to 『VIII. Executives and Employees』 for more information about the career of each Director.
The Board submits shareholders’ proposal for appointment of Directors at the 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 Dec 31, 2019]

Relationship
with the
Position Name Term Reasons for appointment Nominator Responsibility Company's
major
shareholders
Director Sang-hoon Lee, former CFO
(2013-2017), is an expert in finance
Executive Sang- Mar 2018–Mar and business management and can Chairman of the
The Board Related party
Director hoon Lee 2021 lead Board activities by effectively Board
coordinating opinions of Executive and
Independent Directors.
Director Ki-nam Kim has built expertise
based on his experience as the
president of Samsung Advanced
Executive Institute of Technology, head of the
Ki-nam Mar 2018–Mar Head of DS
Director memory business, and president of the The Board Related party
Kim 2021 Division
(CEO) semiconductor business. He will play a
critical role in solidifying leadership of
the component business despite
growing external uncertainty.
Director Hyun-suk Kim is an expert in
display R&D and played a crucial role
in positioning the company as the
Executive
Hyun-suk Mar 2018–Mar leader in the global TV market. He will Head of CE
Director The Board Related party
Kim 2021 use this successful experience in other Division
(CEO)
businesses such as the home
appliance business to create synergies
within the CE division.
Director Dong-jin Koh is an expert in
mobile R&D and has contributed in
Executive advancing our mobile business with the
Dong-jin Mar 2018–Mar Head of IM
Director galaxy lineup. He will play a critical role The Board Related party
Koh 2021 Division
(CEO) in becoming a first mover in the
stagnant yet competitive smartphone
market.

Sam sung Electronics Business Report 194 / 261

 Director Jae-wan Bahk is an expert in
finance and public sector with
Independent
Mar 2016–Mar abundant experience relative to state
Independent Jae-wan Director Overall
2022 affairs and policy design. He can None
Director Bahk Recommendation management
(second term) contribute to objective supervision of
Committee
the management and the Board’s
strategic decisions.
Director Sun-uk Kim is a legal expert
and has experience as a professor at a Independent
Independent Sun-uk Mar 2018–Mar school of law and the Legislation Director Overall
None
Director Kim 2021 Minister. She can present a new Recommendation management
perspective to the Board based on Committee
objective and juridical reasoning.
Director Byung-gook Park is a
Independent
professor at electrical engineering and
Independent Byung- Mar 2018–Mar Director Overall
an expert in flash memory. He will play None
Director gook Park 2021 Recommendation management
a crucial role in strengthening expertise
Committee
of the Board.
Director Jeong Kim is an IT expert and
Independent
an entrepreneur. He will contribute to
Independent Jeong Mar 2018–Mar Director Overall
the Board’s strategic decisions by None
Director Kim 2021 Recommendation management
utilizing his expertise, wide network,
Committee
and business capability.
Director Curie Ahn is a medical expert
who has been working for the
Independent
marginalized and public good. Director
Independent Mar 2019–Mar Director Overall
Curie Ahn Ahn will help address the increasingly None
Director 2022 Recommendation management
important ESG issues, improving social
Committee
communication and achieving
sustainable growth.
Director Han-jo Kim has built expertise
in finance and business management
through his experience as a President
of Korea Exchange Bank and now Independent
Independent Han-jo Mar 2019–Mar serves as the chairman of a social Director Overall
None
Director Kim 2022 contribution foundation. He will Recommendation management
contribute to the Company by providing Committee
valuable insight on overall business
issues and by utilizing expertise in
finance, co-growth, etc.
Note: Oct 26, 2019: Jae-yong Lee retired from his position of Executive Director.
Feb 14, 2020: Sang-hoon Lee resigned from his position of Executive Director.
Mar 18, 2020: Jong-hee Han and Yoon-ho Choi were newly appointed as Executive Directors at the AGM.
Relationship with Company's major shareholder is in accordance with Article 542-8 of the Commercial Act.

Sam sung Electronics Business Report 195 / 261

(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. As of the reporting date,
the committee is composed of three Independent Directors (Jeong Kim, Byung-gook Park, and Curie Ahn) 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.

Directors
(attendance)
Date Agenda Voting Results
Jeong Kim Jae-wan Byung-gook Curie Ahn
(100%) Bahk (100%) Park (100% ) (N/A)

① Appointment of head of Committee Approved For For For

Jan 31,
2019 ② Determination of deadline for recommendation of Approved For For For N/A
independent director candidates (newly
appointed)
Feb 25,
① Recommendation of independent director candidates Approved For - For
2019
Note: Mar 20, 2019: Independent Director Jae-wan Bahk’s term ended and Independent Director Curie Ahn was appointed.
Feb 25, 2019: Independent Director Jae-wan Bahk did not exercise his voting right on the agenda of recommending himself as a
Director Candidate.

(3) Expertise of Independent Directors

1) Support team for Independent Directors

- Support team: HR team of Corporate Management Office

- Number of responsible staff: Six

[As of Dec 31, 2019]

Number of Position
Team Key activities
Employees (Total years served/ years in the support team)
 Support operation of annual shareholders’
meeting, Board meetings, and Committee
Executive Vice President: 1 person meetings
(33 years and 10 months / 4 years and 5 months)  Support education for Independent Directors
Senior Vice President: 1 person and their activities
HR 6 (29 years and 1 month / 1 year)  Establish database on Director candidates
Vice President: 1 person (26 years and 10 months / 1 year)  Provide information for resolution process to
Senior Professional: 3 persons each Directors
(average: 13 years and 8 months / 2 years and 10 months)  Administrative work for meetings
 Record meeting agendas for the Board and
committee meetings

Sam sung Electronics Business Report 196 / 261

2) Education programs to provide updates on key management issues for Independent Directors

① Inspection of domestic and overseas business sites

Reasons for
Date Organizer Participants Education contents
absence
HR team and management team In-ho Lee, Han-joong Kim,
On-site inspection to check
May 2017 of the region where the inspection Kwang-soo Song, Byeong-gi Lee, N/A
business operations
takes place Jae-wan Bahk
HR team and management team In-ho Lee, Han-joong Kim,
On-site inspection to check
Jan 2018 of the region where the inspection Kwang-soo Song, Byeong-gi Lee, N/A
business operations
takes place Jae-wan Bahk
HR team and management team In-ho Lee, Kwang-soo Song, Sun-
On-site inspection to check
Aug 2018 of the region where the inspection uk Kim, Jae-wan Bahk, Byung- N/A
business operations
takes place gook Park, Jeong Kim
HR team and management team Jae-wan Bahk, Sun-uk Kim,
On-site inspection to check
Aug 2019 of the region where the inspection Byung-gook Park, Jeong Kim, N/A
business operations
takes place Curie Ahn, Han-jo Kim

② Orientation for newly appointed Independent Directors

Reasons for
Date Organizer Participants Education contents
absence
Sun-uk Kim, Byung-gook Key issues regarding Board activities
Mar 2018 HR team N/A
Park, Jeong Kim and management
HR team and relevant Sun-uk Kim, Byung-gook Key issues regarding Board activities
Apr 2018 N/A
management team Park, Jeong Kim and management
Key issues regarding Board activities
Mar 2019 HR team Curie Ahn, Han-jo Kim N/A
and management
HR team and relevant Key issues regarding Board activities
Apr 2019 Curie Ahn, Han-jo Kim N/A
management team and management
HR team and relevant Key issues regarding Board activities
Jul 2019 Curie Ahn, Han-jo Kim N/A
management team and management

③ Orientation for Independent Directors

Reasons for
Date Organizer Participants Education contents
absence
In-ho Lee, Kwang-soo
Song, Jae-wan Bahk, Sun-
Jan 2019 Support Team N/A Business plans for 2019
uk Kim, Byung-gook Park,
Jeong Kim
In-ho Lee, Kwang-soo
Song, Jae-wan Bahk, Sun- Briefing on 5G technology and tour of
Jan 2019 Network business N/A
uk Kim, Byung-gook Park, production lines
Jeong Kim

Sam sung Electronics Business Report 197 / 261

2. Audit System
A. Profiles of Audit Committee members
As of December 31, 2019, SEC operates an Audit Committee consisting of three Independent Directors. Directors Jae-
wan Bahk (head) and Han-jo Kim qualify as experts in finance in accordance with relevant regulations.

Accounting/financial expertise*
Name Major experience
Classification Relevant experience

 1996–present: Professor, Department of Public

Administration & Graduate School of Governance,
Sungkyunkwan University  1996–present: Professor of public
Jae-wan Bahk
 2016–present: Independent Director, Lotte Shopping Type 2** administration, Sungkyunkwan University
(Head)
 2011–2013: Minister of Strategy and Finance  1992: Gained Ph.D. in Financial Administration
 2010–2011: Minister of Employment and Labor
 2004–2008: Member of the 17th National Assembly

 2018–present: Professor Emeritus, School of Law, Ewha

Womans University
 1995–2018: Professor, Ewha Law School, Ewha Womans
Sun-uk Kim – –
University
 2010–2014: President, Ewha Womans University
 2005–2007: Minister of Government Legislation
 2015–2016: Vice Chairman, Hana Financial
Group
 2019–present: CEO/Rep Director, Hana Foundation
 2014–2015: President, Korea Exchange Bank
 2015–2019: CEO/Rep Director, Hana Nanum Foundation
Han-jo Kim  2015–2016: Vice Chairman, Hana Financial Group  2013–2014: President, KEB Capital
Type 4***
 2014–2015: President, Korea Exchange Bank  2012–2013: Head of Corporate Business
 2013–2014: President, KEB Capital Inc. Group, Korea Exchange Bank
 1999–2002, 2004–2005: Head of Branch,
Korea Exchange Bank
Note: *Defined in the Article 542-11 (2) 1 of the Commercial Act (Article 37-2 of the Enforcement Decree of the Commercial Act)
**Degree in accounting and/or finance
***Experience in financial institution/government organization/securities

B. Audit Committee independence

Pursuant to related laws and the Articles of Incorporation, SEC 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 recommended by the Board and appointed at the
general shareholder meeting. Currently, it includes financial experts Jae-wan Bahk (head) and Han-jo Kim and legal
expert Sun-uk Kim. Committee members do not have any relation to the Company's major shareholder that may
undermine the independence of the Committee. Also, the Audit Committee satisfies requirements of relevant laws (eg, the
stipulation that the role of head of the committee be held by an Independent Director).

Requirements Requirement status Applicable acts, etc.

Satisfied (the committee consists of three Article 415-2 (2) of the
- The audit committee shall consist of at least three directors.
Directors) Commercial Act,
- The ratio of independent directors shall exceed two thirds of the Satisfied (all members are independent Article 2 of the Company’s Audit
total number of members. directors) Committee Regulation
- At least one member of the committee shall be an accounting or Article 542-11 (2) of the
Satisfied (Jae-wan Bahk, Han-jo Kim)
financing expert. Commercial Act,

Sam sung Electronics Business Report 198 / 261

- The representative of the committee shall be an independent Article 3 of the Company’s Audit
Satisfied
director. Committee Regulation
Article 542-11 (3) of the
- Other conditions (related party of the major shareholder, etc.) Satisfied (n/a)
Commercial Act

[As of Dec 31, 2019]

Relationship
Relationship with the
Concurrent
Name Term Reasons for appointment Nominator with the Company's
largest/major positions
Company shareholders
Expertise in finance and
public sector and abundant
Independent
experience in state affairs
Independent Director Director
Jae-wan Bahk Mar 2019–Mar and policy design.
Recommendation N/A N/A Lotte Shopping,
(Head) 2022 He can contribute to the
Committee Co., Ltd
committee’s activities by
2016~
offering an objective
perspective.
Based on the legal expertise
and experience running
organizations in areas
Independent Director
Mar 2018–Mar including administration,
Sun-uk Kim Recommendation N/A N/A -
2021 finance, international affairs,
Committee
etc., she can carry out the
duties in an aboveboard
manner with strict standards.
An expert in finance with
broad experience, he offers
Independent Director
Mar 2019–Mar impartial judgement on
Han-jo Kim Recommendation N/A N/A -
2022 overall management
Committee
activities while carrying out
his duties
Note: Relationship with the Company and Company's major shareholder is in accordance with Article 542-8 of the Commercial Act.

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 Board 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.

Sam sung Electronics Business Report 199 / 261

C. Major activities of the Audit Committee (2019)

Directors
(attendance)
Voting
Date Agenda Kwang-soo Jae-wan
Results In-ho Lee Sun-uk Kim Han-jo Kim
Song Bahk
(100%) (100%) (100%) (100%)
(100%)

- Report on 2018 internal accounting management - - - -

system activities
- Approval of revisions of internal accounting Approved For For For
management regulations -
- - -
Jan 30 - Report on 2018 financial statement and business
N/A N/A
report -
- Report on 4Q18 non-audit activities - - (newly - (newly
- - - appointed) - appointed)
- Report on 4Q18 external contributions
- Report on 2018 audit activities - - - -
Feb 26 - Review of the 2018 AGM agenda - - - -
- Report on activities of internal compliance system - - - -
in 2018
- Appointment to head of the Audit Committee Approved For For For
- Report on 1Q19 interim business report - - - -
- Report on 1Q19 non-audit activities - - - -
- Inspection plans for 2019 internal accounting - - - -
management system activities
Apr 29
- Report on 1Q19 external contributions - - - -
- Evaluation plans for 2019 internal accounting - - - -
management system activities
- Plans for 2019 and 1Q19 review for external audit
activities - N/A N/A - - -
(retired) (retired)
- Report on 1H19 half year business report - - - -
- Report on 2Q19 non-audit activities - - - -
- Report on Inspection plans for 2Q19 internal - - - -
accounting management system activities - - - -
Jul 30 - Report on 2Q19 external contributions - - - -
- Report on revision of audit committee regulations
(proposal)
Approved For For For
- Approval of external auditor appointment regulation
- - - -
- Report on 1H19 audit activities
- Report on review of 2Q19 external audit activities - - - -
- Report on 3Q19 interim business report - - - -
- Report on 3Q19 non-audit activities - - - -
Oct 28 - Report on 3Q19 external contributions - - - -
- Report on review of 3Q19 external audit activities - - - -
- Determination of contract terms and conditions with Approved For For For
Nov 14
designated external auditor
Note: Mar 20, 2019: Independent Directors In-ho Lee and Kwang-soo Song retired and Independent Directors Jae-wan Bahk and
Han-jo Kim were appointed.

D. Education programs for the Audit Committee

In accordance with the working guide for internal accounting management system, we are conducting additional training
to ensure the expertise of the Audit Committee. Organized by external experts, finance team, and audit team, education on
changes to internal control, internal accounting management system is provided more than once a year.

Sam sung Electronics Business Report 200 / 261

E. Previous education sessions

Reasons for
Date Organizer Participants Education contents
absence
Audit team
Jae-wan Bahk
Finance team
Apr 29, 2019 Sun-uk Kim N/A Introduction materials
HR team
Han-jo Kim
External experts
Jae-wan Bahk
Internal accounting management
Jul 30, 2019 External experts Sun-uk Kim N/A
system
Han-jo Kim

F. Support team for the Audit Committee

[As of Dec 31, 2019]

Team Composition Service years on team Major tasks

Senior Vice President: 5 years and 8 months

1 Senior Vice President,
Audit team Senior Professionals: 1 year and 5 months Support the Audit Committee
3 Senior Professionals
(average)
Internal accounting 1 Vice President, Vice President: 1 year Support assessment of the
assessment support 1 Lawyer, Lawyer: 1 year internal accounting
group 1 Senior Professional Senior Professional: 1 year management system

G. Compliance Officer
[As of Dec 31, 2019]

Name Young-soo Kim

Age 51
Academic background Bachelor’s Degree in Law (Seoul National University)
Corporate Compliance Team leader at Samsung Electronics Legal Affairs Office (Mar 2018-
Current position current)
1. Compliance Officer - 2000–2012: Judge at the Seoul District Court, Suwon District Court, etc.
- Mar 2013: Vice president of Samsung Electronics Legal & Compliance Team
- Dec 2015: Vice president of Samsung Electronics Legal Team
Career - Mar 2018: Head of Compliance Team (Vice President) and Chief Privacy Officer of Samsung
Electronics Global Privacy Office
- Dec 2018: Head of Compliance Team (Senior Vice President) and Chief Privacy Officer of
Samsung Electronics Global Privacy Office
2. Date of Board resolution Mar 23, 2018
3. Disqualifications N/A
4. Others N/A
Note: Compliance officer meets the eligibility requirement (lawyer) stated in Article 542-13 (5) of the Commercial Act.
Jan 30, 2020: Duk-ho Ahn, Corporate Compliance Team leader, was appointed as the compliance officer through Board
resolution.

H. Major compliance activities

The Company conducts compliance assessments on a regular and ad-hoc basis and reflects the results in the Company’s
business activities to improve compliance of the Company and its employees.

Sam sung Electronics Business Report 201 / 261

 Date Assessment subject Assessment area Results

Compliance of marketing
Fair trade, business secret, etc.
organizations
Compliance of overseas 3rd party
Technology leak, product liability, etc.
January production customers
1Q19 Technology misappropriation, business
Patent process
secret, etc.
Violation of customers’ business
Business secret
secrets
March Compliance of subsidiaries Fair trade, business secret, etc.
Self-assessment on compliance of
Compliance programs
overseas subsidiaries
April
Technology misappropriation, business
Patent application process
secrets, etc. Overall result was
Business secrets, personal information satisfactory. Internal policies
2Q19 Compliance of subsidiaries
protection, etc. were followed in areas where
May
Regular assessment of domestic Potential business risks such as business there was room for
business activities secrets, intellectual property, etc. improvement.
Compliance of overseas third party
June Technology leaks, product liability, etc.
production customers
Self-assessment on compliance of
July Compliance programs
overseas research organizations
August Illegal use of software Use of unauthorized software
Technology misappropriation, business
Patent application process
secret, etc.
3Q19 Violation of customers’ business
Business secret
secrets
September
Compliance of overseas
Technology misappropriation
manufacturing organizations
Compliance of overseas third party
Technology leaks, product liability, etc.
production customers
Compliance of overseas
Business secret, personal information etc.
manufacturing organizations
Compliance of overseas research Business secret, compliance programs,
November
organizations etc.
4Q19
Compliance of overseas sales
Fair trade, Business secret etc.
organizations
Compliance of overseas third party
December Technology leaks, product liability etc.
production customers
Note: Assessment conducted in the final month of each quarter.
Each assessment was conducted on selected organizations.

I. Support team for the Compliance Officer

[As of Dec 31, 2019]

Team Composition Service years in the team (average) Major tasks

2 Vice Presidents
Vice Presidents (5 years and 5 months)
9 Principal professionals
Principal professionals (6 years and 8 months)
Compliance team, 14 Lawyers Supports activities of
Lawyers (3 years and 7 months)
etc. 20 Senior Professionals the Compliance Officer
Senior Professionals (5 years and 9 months)
6 Professionals
Professionals (2 years and 10 months)
(Total: 51)
Note: Service years refer to time performing work relevant to support activity.

Sam sung Electronics Business Report 202 / 261

3. Voting rights of shareholders
A. Voting method
On January 30, 2020, the Board resolved to adopt electronic voting to enhance convenience in exercising voting rights for
shareholders. E-voting was first introduced at the 51st AGM, held on March 18, 2020. The Company has not adopted a
cumulative voting system, voting in writing.

B. Minority shareholder rights

No minority shareholder rights were exercised during the reporting period.

C. Competition over management rights

No competition over management rights occurred during the reporting period.

Sam sung Electronics Business Report 203 / 261

 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 Dec 31, 2019]

Ownership
Type of
Name Relationship* Period start Period end Notes
share
Shares Stake (%) Shares Stake (%)

Kun-hee Lee Major shareholder Common 249,273,200 4.18 249,273,200 4.18 -

Major
Kun-hee Lee Preferred 619,900 0.08 619,900 0.08 -
shareholder

Samsung C&T Affiliate Common 298,818,100 5.01 298,818,100 5.01 -

Samsung Welfare Foundation Funded foundation Common 4,484,150 0.08 4,484,150 0.08 -

Samsung Foundation Of Culture Funded foundation Common 1,880,750 0.03 1,880,750 0.03 -

Spouse of the major

Ra-hee Hong Common 54,153,600 0.91 54,153,600 0.91 -
shareholder
Son of the major
Jae-yong Lee Common 42,020,150 0.70 42,020,150 0.70 -
shareholder

Samsung Life Insurance Affiliate Common 508,157,148 8.51 508,157,148 8.51 -

Samsung Life Insurance Affiliate Preferred 43,950 0.01 43,950 0.01 -

Samsung Life Insurance

Affiliate Common 19,048,733 0.32 18,286,593 0.31 Open market transactions
(special accounts)
Samsung Life Insurance
Affiliate Preferred 1,268,546 0.15 1,352,563 0.16 Open market transactions
(special accounts)

Samsung Fire & Marine Insurance Affiliate Common 88,802,052 1.49 88,802,052 1.49 -

Sang-hoon Lee Executive member Common 28,500 0.00 16,000 0.00 Open market transactions

Ki-nam Kim Executive member Common 175,000 0.00 200,000 0.00 Open market transactions

Hyun-suk Kim Executive member Common 99,750 0.00 99,750 0.00 -

Dong-jin Koh Executive member Common 50,000 0.00 75,000 0.00 Open market transactions

Curie Ahn Executive member Common 0 0.00 800 0.00 Open market transactions

Han-jo Kim Executive member Common 0 0.00 2,175 0.00 Open market transactions

Common 1,266,991,133 21.22 1,266,269,468 21.21 -

Total
Preferred 1,932,396 0.23 2,016,413 0.25 -

Note: Preferred shares and certain common shares do not carry full voting rights. For information on voting rights, please refer to
『Ⅰ. Corporate Overview-5. Voting Shares』
*In accordance with Article 3-1 of Enforcement Decree Of The Act On Corporate Governance Of Financial Companies.

Sam sung Electronics Business Report 204 / 261

[The major shareholder]

1) Name: Kun-hee Lee

2) Career (recent 5 years): Chairman of Samsung Electronics (March 2010–present)
Honorary member of the International Olympic Committee (2017–present)
Member of the International Olympic Committee (1996–2017)
3) The major shareholder of record has not changed during the reporting period.

2. Ownership of shares
As of December 30, 2019, the date of Suspension of Entry in the Register of Shareholders, shareholders with 5% and
above voting shares, excluding the major shareholder, were as follows:

[As of Dec 31, 2019]

Classification Name Number of shares owned Share ratio Note

National Pension Service 633,716,703 10.62% -

Shareholders with Samsung Life Insurance 526,443,741 8.82% -

over 5% voting
Based on the Report on Mass Holding of
shares BlackRock Fund Advisors 300,391,061 5.03%
Securities (disclosed on February 7, 2019)

Samsung C&T 298,818,100 5.01% -

Employee Stock Ownership Association - - -

Note: BlackRock Fund Advisors information as of January 28, 2019.
The number of shares owned and share ratio of Samsung Life Insurance includes special accounts.
For more information, please refer to『Ⅰ. Corporate Overview-5. Voting Shares』

3. Minority Shareholders
The number of shareholders based on common stock is as follows:

[As of Dec 31, 2019]

Shareholder Shares owned

Classification Note
Number of
Portion Number of shares Portion
shareholders

Minority
568,313 99.98% 3,702,860,049 62.03%
shareholder

Total 568,409 100.00% 5,969,782,550 100.00% -

Note: Shareholders with shares less than 1/100 of total issued stocks

Sam sung Electronics Business Report 205 / 261

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 shares are not subscribed for as a
result of waiver or loss of the preemptive right of the shareholders to subscribe for new shares, or if
fractional shares remain at the time of allocation of new shares, such shares may be disposed of by a
resolution of the Board of Directors in accordance with applicable laws and regulations.

2. Notwithstanding the above Paragraph 1, new shares may be allocated to persons other than
shareholders in the following cases:

a. If the Company issues new shares or causes underwriters to underwrite new shares by a resolution of
the Board of Directors in accordance with applicable laws and regulations including the Financial
Investment Services and Capital Markets Act;

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 applicable laws and
regulations including the Financial Investment Services and Capital Markets Act;

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 the Financial
Investment Services and Capital Markets Act;

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 20% of the total issued and outstanding shares to
domestic or foreign financial institutions for the purpose of obtaining financing urgently or to the relevant
Preemptive Rights in the
Articles of Incorporation partner company for the purpose of inducing 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
the Financial Investment Services and Capital Markets Act and other applicable laws and regulations.

☞ (Note) Paragraph 6, Article 8

In the case of rights issue, bonus issue or stock dividend, the holders of common shares shall be entitled to
common shares, and the holders of preferred shares shall be entitled to preferred shares, in proportion to their
respective shareholdings; provided that in the case of r ights issue and stock dividend the Company may, if
necessary, issue only one kind of shares, where all the shareholders shall be entitled to such kind of shares to be
issued.

☞ (Note) Article 11-3 (Public Offering)

1. The Company may issue new shares by public offering to the ex tent that the new shares do not exceed 20% of
the total number of issued and outstanding shares by a resolution of the Board of Directors, pur suant to Ar ticle
165-6, Paragraph 1, Item 3 of the Financial Investment Services and Capital Markets Act.

2. If the Company issues new shares by public offering, the type, quantity and issue price of the shares to be newly
issued shall be deter mined 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 the Financial Investment Services and Capital Markets Act
and other applicable laws and regulations.

☞ (Note) Article 11-4 (Stock Options)

Sam sung Electronics Business Report 206 / 261

 1. The Company may grant stock options to its officers and employees (including officers and employees of the
related companies as set for th in Article 542-3, Paragraph 1 of the Commercial Code; the same shall apply for
the purpose of this Ar ticle) by a special resolution of the general meeting of shareholders pursuant to Ar ticle 542-
3 of the Commercial Code, to the extent permitted by the Commercial Code; 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.

2. The person 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 officer s and employees who may not be entitled to stock options under the
relevant laws and regulations shall be excluded.

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 w ith the exercise of stock options shall be up to the extent
permitted by the relevant laws and regulations.

Preemptive Rights in the 5. The stock options may be exercised until an expiry date deter mined by a resolution of the general meeting of
Articles of Incorporation shareholders or the Board of Directors and such expiry date shall be determined within a period not exceeding
eight (8) years from the date when two (2) years have elapsed from the date of the general meeting of
shareholders or the date of the Board of Directors' meeting at which a resolution to grant such stock options is
adopted; 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.

6. The ter ms and conditions for stock options, such as the contents and exercise price thereof shall be deter mined
by a special resolution of the general meeting of shareholders or by a resolution of the Board of D irectors in
accordance with the relevant law s and regulations and the Ar ticles 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 D irectors' meeting under the relevant laws and regulations or the Ar ticles of Incorporation may be
determined by the Board of Directors or a committee authorized by the Board of Directors.

7. The Company may cancel the grant of stock options by a resolution of the Board of Director s in any of the
following cases:
a. In case the relevant officer or employee voluntarily retires from his/her office or leaves the Company after the
grant of stock options;
b. In case the relevant officer or employee causes substantial damages to the Company due to his/her w illful
misconduct or negligence;
c. In case any of the causes for cancellation set forth in the stock option agreement occurs.

Annual General
Settlement date Dec 31 Meetings of Within 3 months after the end of every business year
Shareholders
Shareholder register closing period One month from Jan 1
Stock type -
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
Note: With Act on Electronic Registration of Stocks, Bonds, etc. (“Electronic Securities Act”) taking effect Sep 16, 2019, rights
specified on stocks and subscription warrants are subject to mandatory electronic registration, therefore, “Stock types” are no
longer applicable.

Sam sung Electronics Business Report 207 / 261

 5. Stock price and stock transactions
A. Domestic stock market
(KRW)
Type Jul 2019 Aug 2019 Sep 2019 Oct 2019 Nov 2019 Dec 2019

High 47,300 45,200 49,500 51,300 53,700 56,700

Stock price Low 44,400 42,650 43,250 47,600 50,300 49,450

Average 46,215 43,840 47,295 49,881 52,224 53,508

Common
stock
High (day) 12,872,916 16,926,881 18,297,430 21,185,785 27,372,226 29,178,697

Volume Low (day) 4,717,226 5,017,381 7,006,280 4,406,531 6,225,196 6,882,771

Month 183,771,791 205,260,271 207,963,296 199,451,656 223,956,592 264,807,425

High 38,850 37,050 40,950 41,650 43,600 46,700

Stock price Low 36,750 35,400 36,200 38,900 40,850 40,900

Average 38,041 36,124 39,145 40,498 42,471 43,803

Preferred
stock
High (day) 1,729,492 2,139,235 2,815,902 2,465,552 4,426,145 3,214,033

Volume Low (day) 292,829 425,875 395,516 310,783 499,397 654,720

Month 18,705,891 26,638,774 24,165,113 24,246,554 29,148,605 31,817,107

Note: Stock price is based on the closing exchange rate of the applicable trading day.

Sam sung Electronics Business Report 208 / 261

B. Overseas stock market

□ Name of stock exchange: London Stock Exchange (common stock)

Type Jul 2019 Aug 2019 Sep 2019 Oct 2019 Nov 2019 Dec 2019

USD 1,007.00 963.00 1,033.00 1,107.00 1,152.00 1,217.00

High
KRW 1,185,843 1,138,170 1,232,472 1,299,839 1,348,301 1,413,180

Price USD 936.00 885.00 895.00 975.00 1,068.00 1,038.00

Low
KRW 1,095,494 1,078,727 1,084,651 1,168,245 1,259,492 1,225,255
Common
stock Average (USD) 979.48 904.36 991.50 1,049.65 1,113.52 1,137.45

High (day) 32,458 26,986 25,316 18,817 24,947 59,527

Volume Low (day) 4,992 6,589 6,186 3,885 5,141 1,113

Month 332,457 333,652 298,628 251,741 305,845 295,869

Note: Stock price in KRW is based on the closing exchange rate of the applicable trading day.
Conversion ratio between GDRs and original shares is 1:25.

□ Name of stock exchange: Luxembourg Stock Exchange (preferred stock)

Type Jul 2019 Aug 2019 Sep 2019 Oct 2019 Nov 2019 Dec 2019

USD 825.00 778.00 854.00 892.00 937.00 993.00

High
KRW 954,030 919,518 1,020,615 1,047,386 1,084,578 1,158,533

Price USD 777.00 720.00 738.00 793.00 869.00 849.00

Low
KRW 909,401 877,608 894,382 950,173 1,024,812 1,002,160
Preferred
stock Average (USD) 806.43 741.38 816.52 849.96 903.86 928.60

High (day) 3,178 3,023 4,316 3,848 27,113 3,375

Volume Low (day) 204 176 620 321 165 39

Month 28,322 24,283 31,130 24,929 66,316 27,551

Note: Stock price in KRW is based on the closing exchange rate of the applicable trading day.
Conversion ratio between GDRs and original shares is 1:25.

Sam sung Electronics Business Report 209 / 261

 VIII. Executives and Employees
1. Executives and employees
A. Registered Executives
[As of Dec 31, 2019] ( Shares)

Number of shares
Full/ Relationship with Length of
Date of owned Term
Name Gender Position part- Responsibility Major career the major service
birth expiration
time Common Preferred shareholder* (months)

- Bachelor's degree in
Economics from
Sang-hoon Jun Chairman of Ky ungbook University Ex ecutive Mar 22,
M Ex ecutive Director Full time the Board - Former head of 16,000 0 78
Lee 1955 member 2021
Corporate Management
Office
- Doctor’s degree in
Ki-nam Apr Head of DS Electrical Engineering Ex ecutive Mar 22,
M CEO Full time 200,000 0 22
Kim 1958 Div ision from UCLA member 2021
- Head of DS Div ision
- Master’s degree in
Electrical Engineering
Hy un-suk Jan Head of CE Ex ecutive Mar 22,
M CEO Full time from Portland State 99,750 0 22
Kim 1961 Div ision member 2021
Univ ersity
- Head of CE Div ision
- Master’s degree in
Dong-jin Mar Head of IM Technology Policy from Ex ecutive Mar 22,
M CEO Full time 75,000 0 22
Koh 1961 Div ision Univ ersity of Sussex member 2021
- Head of IM Div ision
- Doctor’s degree in Public
Policy from Harv ard
Univ ersity
Jae-w an Jan Independent Ov erall Ex ecutive Mar 10,
M Part time - Professor of Public 0 0 46
Bahk 1955 Director management member 2022
Administration at
Sungky unkwan
Univ ersity **
- Doctor’s degree in
Administrativ e Law from
Sun-uk Dec Independent Ov erall Univ ersity of Konstanz Ex ecutive Mar 22,
F Part time 0 0 22
Kim 1952 Director management - Professor Emeritus at member 2021
Ew ha Womans
Univ ersity
- Doctor’s degree in
Electrical Engineering
By ung- Apr Independent Ov erall from Stanford Univ ersity Ex ecutive Mar 22,
M Part time 0 0 22
gook Park 1959 Director management - Professor of Electrical member 2021
Engineering at Seoul
National Univ ersity
- Doctor’s degree in
Reliability
Aug Independent Ov erall Engineering from the Ex ecutive Mar 22,
Jeong Kim M Part time 0 0 22
1960 Director management Univ ersity of Maryland member 2021
- President of Kisw e
Mobile
- Doctor’s degree in
Medicine from Seoul
Mar Independent Ov erall National Univ ersity Ex ecutive Mar 19,
Curie Ahn F Part time 800 0 10
1955 Director management - Professor at the Div ision member 2022
of Nephrology of Seoul
National Univ ersity

Sam sung Electronics Business Report 210 / 261

 - Bachelor’s degree in
French language and
Jul Independent Ov erall Literature from Yonsei Ex ecutive Mar 19,
Han-jo Kim M Part time 2,175 0 10
1956 Director management Univ ersity member 2022
- Chairman of Hana
Nanum Foundation
Note: Oct 26, 2019: Jae-yong Lee retired from his position of Executive Director.
Feb 14, 2020: Sang-hoon Lee resigned from his position of Executive Director.
Mar 18, 2020: Jong-hee Han and Yoon-ho Choi were appointed as Executive Directors at the AGM.
*In accordance with Article 3-1 of Enforcement Decree Of The Act On Corporate Governance Of Financial Companies.
** Retired as of February 28, 2020.

B. Concurrent positions with other companies

[As of Dec 31, 2019]

Concurrent office holder Company

Name Position Name of company Position Period

Jae-wan Bahk Independent Director Lotte Shopping Co., Ltd Independent director 2016–present

Jeong Kim Independent Director Kiswe Mobile President 2013–present

C. Employees
[As of Dec 31, 2019]
(KRW mil)
Number of employees* Average Non-affiliated
Average
length Total
Division Gender compensation
Contract of service compensation Male Female Total
Regular Others Total per employee**
-based (years)

CE M 9,997 67 - 10,064 15.4 - -

CE F 2,069 17 - 2,086 10.4 - -

IM M 20,060 185 - 20,245 13.3 - -

IM F 7,374 30 - 7,404 11.1 - -

DS M 38,926 145 - 39,071 10.9 - -

DS F 15,495 14 - 15,509 10.9 - -

17,647 9,248 26,895
Others M 8,401 142 - 8,543 14.6 - -

Others F 2,283 52 - 2,335 10.7 - -

Gender M 77,384 539 - 77,923 12.5 8,808,664 116
Total
Gender
F 27,221 113 - 27,334 10.9 2,113,751 83
Total
Total 104,605 652 - 105,257 12.1 10,922,415 108
Note: 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.
*Parent basis; represents employees of domestic headquarters in Korea, including employees on leave and excluding four
Executive Directors and six Independent Directors.
**Calculated based on average number of employees: 101,546 employees (male: 76,157, female: 25,389).

Sam sung Electronics Business Report 211 / 261

D. Non-registered Executives
[As of Dec 31, 2019]
(KRW mil)

Number of employees Average compensation per

Classification Total compensation Note
employee
Non-registered
887 547,236 617 -
Executives
Note: Number of employees only includes those non-registered executives who are active and the amount of compensation is
calculated based on the earned income payment record submitted to the district tax office in accordance with Article 20 of the
Income Tax Law.
A total of 167 non-registered executives were excluded as they did not earn domestic income (eg, expatriates).

2. Remuneration for directors

A. Summary on total remuneration

<Remuneration of directors and auditors>

(1) Remuneration approved at the annual general meetings of shareholders

(KRW mil)
Amount approved at
Number of persons Note
shareholders’ meeting
Executive Directors 5 - -

Independent Directors 3 - -

Audit Committee members or Auditor 3 - -

Total 11 46,500 -
Note: As of the day of AGM, as approved on the occasion

(2) Remuneration Paid

[Remuneration paid for directors and auditors]

( KRW mil)
Number Total amount of Average remuneration per
Note
of persons* remuneration** Director***
10 12,923 1,292 -
Note: There are no recognized expenses (compensation expenses) in this term from granting stock options.
*As of the reporting date.
**Based on the Income Tax Law that incumbent or retired executive directors, independent directors, and members of audit
committee in the fiscal year received 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 person was calculated by dividing total remuneration by the number of persons as of the
reporting date.

Sam sung Electronics Business Report 212 / 261

[Remuneration paid, by Director type]

( KRW mil)
Number Total amount of Average remuneration per
of persons* remuneration** Director***
Registered Directors
(excluding Independent Directors and Audit Committee 4 12,017 3,004
members)
Independent Directors
3 528 176
(excluding Audit Committee members)
Audit Committee members 3 378 126

Auditor - - -
Note: There are no recognized expenses (compensation expenses) in this term from granting stock options.
*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 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 person was calculated by dividing total remuneration by the number of persons as of the
reporting date.

(3) Criteria and methodology

Type Criteria and methodology

• Salary: In accordance with internal regulations for executive treatment (Board resolution), remuneration is
determined based on position, responsibilities, and performance results.
• Traditional holiday bonus: 100% of monthly wage
• Target achievement incentive: Paid biannual basis within the range of 0–200% of monthly wage, and CEO
Registered Directors
decides the amount according to the level of target achieved. (Adjusted according to division performance.)
(excluding Independent
• Performance incentive: When performance exceeds the Company’s goal; CEO decides the amount based on
Directors and Audit
20% profit. Paid once a year within 0–50% of salary. (Adjusted according to individual performance.)
Committee members)
• 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.
• Fringe benefits: Medical services, checkups, group accident insurance are provided in line with the internal
regulations for executive treatment (Board resolution)
• Salary: In accordance with internal regulations for independent director treatment, remuneration is determined
Independent Directors
based on responsibilities, etc.
(excluding Audit Committee
• Fringe benefits: Medical services, checkups, group accident insurance are provided in line with the internal
members)
regulations for independent director treatment
• Salary: In accordance with internal regulations for independent director treatment, remuneration is determined
based on responsibilities, etc.
Audit Committee members
• Fringe benefits: Medical services, checkups, group accident insurance are provided in line with the internal
regulations for independent director treatment
Note: No bonus based on performance for Independent Directors including members of the audit committee.

Sam sung Electronics Business Report 213 / 261

< Remuneration for individual Executive Directors >
(1) Summary on Remuneration by Executive
( KRW mil)
Total amount of Remuneration not included
Name Position
remuneration in total amount

Ki-nam Kim Executive Director 3,451 -

Hyun-suk Kim Executive Director 2,578 -

Dong-jin Koh Executive Director 2,828 -

Sang-hoon Lee Director 3,135 -

Note: Remuneration fo r reg istered executives is the total remuneration which includes remuneration they received as non-registered
executives.

(2) Criteria and methodology

( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulation for executive treatment (Board resolution),
remuneration is deter mined based on his position (vice chair man), responsibilities, and
Salary 1,370
perfor mance results. He was paid KR W 114 million per month from January to
December.
- Traditional holiday bonus: 100% of monthly wage
- Target achievement incentive: Paid biannual basis within the range of 0–200% of monthly
wage, and CEO decides the amount according to the level of target achieved.
(Adjusted according to division performance.)
- Performance incentive: When performance exceeds the Company’s goal; CEO
decides the amount based on 20% profit. Paid once a year within 0–50% of salary.
(Adjusted according to individual performance.)
- Long-term incentive: Calculated within the director remuneration limit, based on the
Bonus 1,959 average salary of 3 years, using ROE, stock performance, and EBIT margin as
Earned criteria. Paid over the course of 3 years.
Income ※ Quantitative indicators suggest that the Company achieved a ROE of 12.6% , EBIT
Ki-nam Kim margin of 13.9% , and stock performance of 18% over 2014–2016; and that the DS
(CEO) division achieved sales of KRW 95.5 trillion and operating profit of KRW 15.6 trillion in
2019. Qualitative indicators include solid performance in the DS division, excellent
leadership in memory market, and contributions to enhancing future competitiveness
with aggressive investments in the non-memory business including System LSI and
Foundry. The amount of the bonus was determined based on the indicators.
Profit from
exercising
- n/a
stock
option
- Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
122 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulation for executive treatment (Board resolution),
Earned
Salary 913 remuneration is deter mined based on his position (president), responsibilities, and
Income
perfor mance results. He was paid KR W 76 million per month from January to

Sam sung Electronics Business Report 214 / 261

 December.

- Traditional holiday bonus: 100% of monthly wage

- Target achievement incentive: Paid biannual basis within the range of 0–200% of monthly
wage, and CEO decides the amount according to the level of target achieved.
(Adjusted according to division performance.)
- Performance incentive: When performance exceeds the Company’s goal; CEO
decides the amount based on 20% profit. Paid once a year within 0–50% of salary.
Hyun-suk (Adjusted according to individual performance.)
Kim - Long-term incentive: Calculated within the director remuneration limit, based on the
(CEO) Bonus 1,568 average salary of 3 years, using ROE, stock performance, and EBIT margin as
criteria. Paid over the course of 3 years.
※ Quantitative indicators suggest that the Company achieved ROE of 12.6% , EBIT
margin of 13.9% , and stock performance of 18% in 2014–2016; and that the CE
division achieved sales of KRW 44.8 trillion and operating profit of KRW 2.6 trillion in
2019. Qualitative indicators include strengthening product leadership in the market by
launching innovative products such as QLED TVs and Bespoke refrigerators despite a
challenging environment and enhancing profitability via improving operational
structure. The amount of the bonus was determined based on the indicators.
Profit from
exercising
- n/a
stock
option
- Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
97 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulation for executive treatment (Board resolution),
remuneration is deter mined based on his position (president), responsibilities, and
Salary 1,170
perfor mance results. He was paid KR W 98 million per month from January to
December.
- Traditional holiday bonus: 100% of monthly wage
- Target achievement incentive: Paid biannual basis within the range of 0–200% of monthly
wage, and CEO decides the amount according to the level of target achieved.
(Adjusted according to division performance.)
- Performance incentive: When performance exceeds the Company’s goal; CEO
decides the amount based on 20% profit. Paid once a year within 0–50% of salary.
(Adjusted according to individual performance.)
- Long-term incentive: Calculated within the director remuneration limit, based on the
Dong-jin
Earned average salary of 3 years, using ROE, stock performance, and EBIT margin as
Koh Bonus 1,557
Income criteria. Paid over the course of 3 years.
(CEO)
※ Quantitative indicators suggest that the Company achieved ROE of 12.6% , EBIT
margin of 13.9% , and stock performance of 18% in 2014–2016; and that the IM
division achieved sales of KRW 107.3 trillion and operating profit of KRW 9.3 trillion in
2019. Qualitative indicators include maintaining solid sales figure in the IM division by
strengthening the mobile product lineup and increasing network equipment sales. In
addition, he contributed to strengthening technology leadership in the market via the
commercialization of world’s first 5G mobile and communication equipment which
ushered in the 5G era. The amount of bonus was determined based on the indicators.
Profit from
exercising
- n/a
stock
option

Sam sung Electronics Business Report 215 / 261

 - Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
101 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulation for executive treatment (Board resolution),
remuneration is deter mined based on his position (president), responsibilities, and
Salary 778
perfor mance results. He was paid KR W 65 million per month from January to
December.
- Traditional holiday bonus: 100% of monthly wage
- Target Achievement Incentive: Paid biannual basis within the range of 0–200% of monthly
wage, and CEO decides the amount according to the level of target achieved.
(Adjusted according to division performance.)
- Performance Incentive: When performance exceeds the Company’s goal; CEO
decides the amount based on 20% profit. Paid once a year within 0–50% of salary.
(Adjusted according to individual performance.)
- Long-term incentive: Calculated within the director remuneration limit, based on the
Bonus 2,221
average salary of 3 years, using ROE, stock performance, and EBIT margin as
Earned
criteria. Paid over the course of 3 years.
Sang-hoon Income
※ Quantitative indicators suggest that the Company achieved ROE of 12.6% , EBIT
Lee margin of 13.9% , and stock performance of 18% in 2014–2016; and that the Company
(Director) achieved sales of KRW 230.4 trillion and operating profit of KRW 27.8 trillion in 2019.
Qualitative indicators include increasing transparency of the Board and enhancing
shareholder value as the Chairman of the Board. The amount of the bonus was
determined based on the indicators.
Profit from
exercising
- n/a
stock
option
- Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
136 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

< Remuneration for five highest-paid Executive Directors (KRW 500 million or more >

(1) Summary on remuneration by Executive

( KRW mil)
Total amount of Remuneration not included
Name position
remuneration in total amount

Oh-hyun Kwon Chairman 4,637 -

Jong-kyun Shin Vice Chairman 3,851

Boo-keun Yoon Vice Chairman 3,843

Ki-nam Kim CEO 3,451

Sang-hoon Lee Director 3,135

Sam sung Electronics Business Report 216 / 261

(2) Criteria and methodology
( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulation for executive treatment (Board resolution),
remuneration is deter mined based on position (chair man), responsibilities, and
Salary 1,249
perfor mance results. He was paid KR W 104 million per month from January to
December.
- Traditional holiday bonus: 100% of monthly wage
- Target achievement incentive: Paid biannual basis within the range of 0–200% of
monthly wage, and CEO decides the amount according to the level of target
achieved. (Adjusted according to division performance.)
- Performance incentive: When performance exceeds the Company’s goal;
CEO decides the amount based on 20% profit. Paid once a year within 0–
50% of salary. (Adjusted according to individual performance.)
- Long-term incentive: Calculated within the director remuneration limit, based
Bonus 3,269
on the average salary of 3 years, using ROE, stock performance, and EBIT
Earned
margin as criteria. Paid over the course of 3 years.
Income
Oh-hyun ※ Quantitative indicators suggest that the Company achieved ROE of 12.6% , EBIT
Kwon margin of 13.9% , and stock performance of 18% in 2014–2016; and that the Company
achieved sales of KRW 230.4 trillion and operating profit of KRW 27.8 trillion in 2019.
Qualitative indicators include identifying future technologies and new business areas,
presenting mid-to-long term business direction, and nurturing the next generation
executives. The amount of bonus was determined based on the indicators.
Profit from
exercising
- n/a
stock
option
- Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
119 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulations for executive treatment (Board resolution),
remuneration is deter mined based on his position (vice chair man), responsibilities, and
Salary 1,037
perfor mance results. He was paid KR W 86 million per month from January to
December.
- Traditional holiday bonus: 100% of monthly wage
- Target achievement incentive: Paid biannual basis within the range of 0–200% of monthly
wage, and CEO decides the amount according to the level of target achieved.
(Adjusted according to division performance.)
- Performance incentive: When performance exceeds the Company’s goal; CEO
Jong-kyun Earned decides the amount based on 20% profit. Paid once a year within 0–50% of salary.
Shin Income (Adjusted according to individual performance.)
- Long-term incentive: Calculated within the director remuneration limit, based on the
Bonus 2,681
average salary of 3 years, using ROE, stock performance, and EBIT margin as
criteria. Paid over the course of 3 years.
※ Quantitative indicators suggest that the Company achieved ROE of 12.6% , EBIT
margin of 13.9% , and stock performance of 18% in 2014–2016; and that the Company
achieved sales of KRW 230.4 trillion and operating profit of KRW 27.8 trillion in 2019.
Qualitative indicators include passing on management insights, identifying the next
generation executives, and enhancing the competency of Company’s human resource
as the person responsible for HR development. The amount of the bonus was

Sam sung Electronics Business Report 217 / 261

 determined based on the indicators.

Profit from
exercising
- n/a
stock
option
- Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
133 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulations for executive treatment (Board resolution),
remuneration is deter mined based on position (executive vice president),
Salary 1,037
responsibilities, and per formance results. He was paid KR W 86 million per month from
January to December.
- Traditional holiday bonus: 100% of monthly wage
- Target achievement incentive: Paid biannual basis within the range of 0–200% of monthly
wage, and CEO decides the amount according to the level of target achieved.
(Adjusted according to division performance.)
- Performance incentive: When performance exceeds the Company’s goal; CEO
decides the amount based on 20% profit. Paid once a year within 0–50% of salary.
(Adjusted according to individual performance.)
- Long-term incentive: Calculated within the director remuneration limit, based on the
Bonus 2,681 average salary of 3 years, using ROE, stock performance, and EBIT margin as
Earned criteria. Paid over the course of 3 years.
Income ※ Quantitative indicators suggest that the Company achieved ROE of 12.6% , EBIT
Boo-keun margin of 13.9% , and stock performance of 18% in 2014–2016; and that the Company
Yoon achieved sales of KRW 230.4 trillion and operating profit of KRW 27.8 trillion in 2019.
Qualitative indicators include acting as the Company’s spokesperson in major events
hosted by government and economic organizations as the person responsible for
Corporate Relations. He also contributed to management by identifying external risks
for the business. The amount of the bonus was determined based on the indicators.
Profit from
exercising
- n/a
stock
option
- Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
125 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulation for executive treatment (Board resolution),
remuneration is deter mined based on his position (vice chair man), responsibilities, and
Salary 1,370
perfor mance results. He was paid KR W 114 million per month from January to
Earned
Ki-nam Kim December.
Income
- Traditional holiday bonus: 100% of monthly wage
Bonus 1,959 - Target achievement incentive: Paid biannual basis within the range of 0–200% of monthly
wage, and CEO decides the amount according to the level of target achieved.

Sam sung Electronics Business Report 218 / 261

 (Adjusted according to division performance.)
- Performance incentive: When performance exceeds the Company’s goal; CEO
decides the amount based on 20% profit. Paid once a year within 0–50% of salary.
(Adjusted according to individual performance.)
- Long-term incentive: Calculated within the director remuneration limit, based on the
average salary of 3 years, using ROE, stock performance, and EBIT margin as
criteria. Paid over the course of 3 years.
※ Quantitative indicators suggest that the Company achieved a ROE of 12.6% , EBIT
margin of 13.9% , and stock performance of 18% over 2014–2016; and that the DS
division achieved sales of KRW 95.5 trillion and operating profit of KRW 15.6 trillion in
2019. Qualitative indicators include solid performance in the DS division, excellent
leadership in memory market, and contributions to enhancing future competitiveness
with aggressive investments in the non-memory business including System LSI and
Foundry. The amount of the bonus was determined based on the indicators.
Profit from
exercising
- n/a
stock
option
- Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
122 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

( KRW mil)
Type of
Name Total amount Criteria and methodology
remuneration
In accordance with internal regulations for executive treatment (Board resolution),
remuneration is deter mined based on position (president), responsibilities, and
Salary 778
perfor mance results. He was paid KR W 65 million per month from January to
December.
- Traditional holiday bonus: 100% of monthly wage
- Target Achievement Incentive: Paid biannual basis within the range of 0–200% of monthly
wage, and CEO decides the amount according to the level of target achieved.
(Adjusted according to division performance.)
- Performance Incentive: When performance exceeds the Company’s goal; CEO
decides the amount based on 20% profit. Paid once a year within 0–50% of salary.
(Adjusted according to individual performance.)
- Long-term incentive: Calculated within the director remuneration limit, based on the
Bonus 2,221
average salary of 3 years, using ROE, stock performance, and EBIT margin as
Earned
criteria. Paid over the course of 3 years.
Income
Sang-hoon ※ Quantitative indicators suggest that the Company achieved ROE of 12.6% , EBIT
Lee margin of 13.9% , and stock performance of 18% in 2014–2016; and that the Company
achieved sales of KRW 230.4 trillion and operating profit of KRW 27.8 trillion in 2019.
Qualitative indicators include increasing the transparency of the board of directors and
enhancing shareholder value as the Chairman of the Board. The amount of bonus was
determined based on the indicators.
Profit from
exercising
- n/a
stock
option
- Fringe benefits: Medical services, checkups, vehicle, group accident insurance are
Other
136 provided in line with the internal regulations for executive treatment (Board
Income
resolution)
Retirement Income - n/a

Other Income - n/a

Sam sung Electronics Business Report 219 / 261

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 Board or Audit Committee members during
the reporting period.

(2) Status of stock options granted to non-registered Executives

As of December 31, 2019, there was no accumulated-basis unexercised stock option.

Sam sung Electronics Business Report 220 / 261

 IX. Affiliates and Subsidiaries

1. Affiliates & subsidiaries

- Name of affiliated group: Samsung

As of December 31, 2019, Samsung Group had a total of sixty domestic affiliates. Among the Samsung Group’s sixty
domestic affiliates, sixteen affiliates including Samsung Electronics are listed, and forty-four affiliates are unlisted.

[As of December 31, 2019]

No. of
Name of affiliates
affiliates

Samsung C&T; Samsung Electronics; Samsung SDI; Semco; Samsung Fire & Marine Insurance; Samsung
Listed 16 Heavy Industries; Samsung Life Insurance; Multicampus; Samsung Securities; Samsung SDS; Samsung
Card; Samsung Engineering; S1; Cheil Worldwide; Hotel Shilla; Samsung Biologics

Seoul Lakeside CC; Samwoo Architects & Engineers; CVnet Corporation; Samsung Bioepis; Samsung
Display; Samsung Corning Advanced Glass; SU Materials; STECO; SEMES; Samsung Electronics Service;
Samsung Electronics Sales; Samsung Electronics Logitech; Suwon Samsung Bluewings FC; Samsung
Medison; Samsung Claim Adjustment Service; Samsung Fire & Marine Insurance Service; Samsung Fire &
Marine Insurance Financial Service; Samsung Electronics Service CS; Samsung Futures; Samsung Asset
Unlisted 44 Management; Samsung Life Service; Samsung SRA Asset Management; Samsung Life Financial Service;
SD Flex; Cheil Fashion Retail Co., Ltd.; Natural9*; Samsung Welstory; SECUI; STM; S-Core; OpenHands;
Miracom; Samsung Card Customer Service; Human TSS; S-1CRM; Shilla Stay; HDC Shilla Duty Free LTD;
Samsung Economic Research Institute (SERI); Samsung Lions; Samsung Venture Investment Corporation;
Samsung Active Asset Management; Samsung Hedge Asset Management; Harman International Korea;
SBTM

Total 60
Note: *Liquidated in December 2019 and was no longer an affiliate as of January 2020.

Sam sung Electronics Business Report 221 / 261

2. Ownership status of affiliates and subsidiaries
[Domestic]

Samsung S1
Inv estee Samsung Samsung Samsung Hotel Samsung Cheil Samsung Samsung
Semco Heav y Corpo SERI STECO
Inv estor C&T Corp Electronics SDI Shilla Engineering Worldw ide SDS Lions
Industries ration

Samsung C&T
Corporation 5.0 0.1 7.0 17.1 1.0
Samsung
Electronics 19.6 23.7 16.0 5.1 25.2 22.6 29.8 70.0

Samsung SDI 0.4 0.1 11.7 11.0 29.6

Samsung Electro-
mechanics 2.2 23.8
Samsung Heavy
Industries 1.0
Cheil
Worldw ide 0.1 67.5

Hotel Shilla

S1 Corporation

SERI

Samsung SDS

Samsung Life
Insurance 0.1 8.8 0.1 0.2 3.2 7.7 0.1 0.1 5.4 0.1 14.8
Samsung Fire &
Marine Insurance 1.5 0.2 1.0
Samsung
Securities. 3.1 1.3

Samsung Card 1.3 3.0 1.9

SDC

Samsung
BioLogics
Samsung Asset
Management

Miracom

Samsung
Eelectronics
Serv ice
Harman
International
Industries, Inc.

Total 0.1 15.3 19.7 23.9 22.0 17.3 19.0 28.4 20.6 39.8 67.5 100 70.0

Note: Percent of ownership as of December 31, 2019 based on common shares

Sam sung Electronics Business Report 222 / 261

 Inv estee Suw on Samsung
Samsung Samsung Samsung Seoul
Samsung Samsung Samsung Samsung Samsung Corning SU
SEMES Electronics Electronics Electronics CVnet Lakeside
Bluew ings Display Medison BioLogics BioEpis Adv anced Materials
Inv estor Serv ice Sales Logitech CC
FC Glass
Samsung C&T
Corporation 43.4 40.1 100

Samsung
Electronics 91.5 99.3 100 100 84.8 68.5 31.5

Samsung SDI 15.2

Samsung
Electro-
mechanics

Samsung Heavy
Industries

Cheil
Worldw ide 100

Hotel Shilla

S1
Corporation

SERI

Samsung
SDS 9.4

Samsung Life
Insurance 0.1
Samsung Fire &
Marine
Insurance

Samsung
Securities.

Samsung
Card

SDC 50.0 50.0

Samsung
BioLogics 50.0
Samsung
Asset
Management

Miracom

Samsung
Eelectronics
Serv ice
Harman
International
Industries, Inc.

Total 91.5 99.3 100 100 100 100 68.5 75.0 50.0 50.0 50.0 49.5 100

Note: Percent of ownership as of December 31, 2019 based on common shares

Sam sung Electronics Business Report 223 / 261

 Samw oo Cheil
Inv estee Samsung Serv ice Human MULTI Open
Architects & SD Flex Fashion SECUI S-1CRM STM S-Core
Inv estor Welstory CS TSS CAMPUS Hands
Engineers Retail
Samsung C&T
Corporation 100 100 100 8.7
Samsung
Electronics

Samsung SDI
50.0 100
Samsung Electro-
mechanics

Samsung Heavy
Industries

Cheil
Worldw ide 5.2

Hotel Shilla

S1 Corporation
100 100 0.6

SERI
15.2

Samsung SDS
56.5 47.2 81.8 100
Samsung Life
Insurance

Samsung Fire &

Marine Insurance

Samsung
Securities.

Samsung Card

SDC

Samsung
BioLogics

Samsung Asset
Management

Miracom
0.5
Samsung
Eelectronics
100
Serv ice
Harman
International
Industries, Inc.

Total
100 50.0 100 100 100 65.2 100 100 100 62.4 88.1 100
Note: Percent of ownership as of December 31, 2019 based on common shares

Sam sung Electronics Business Report 224 / 261

 HDC Samsung Samsung Samsung Samsung Samsung Samsung
Samsung Samsung Fire & Fire &
Inv estee Shilla Shilla SRA Asset Life Fire & Claim
Miracom SBTM Life Life Marine Marine
Inv estor Stay Duty Free Managem Financial Marine Adjustmen Insurance
Insurance Serv ice Financial
LTD ent Serv ice Insurance t Serv ice Serv ice Serv ice
Samsung C&T
Corporation 19.3
Samsung
Electronics

Samsung SDI

Samsung Electro-
mechanics

Samsung Heavy
Industries

Cheil
Worldw ide 5.4

Hotel Shilla
100 50.0 100

S1 Corporation
0.6

SERI

Samsung SDS
83.6
Samsung Life
Insurance 99.8 100 100 15.0
Samsung Fire &
Marine Insurance 100 100 100
Samsung
Securities.

Samsung Card

SDC

Samsung
BioLogics

Samsung Asset
Management

Miracom

Samsung
Eelectronics
Serv ice
Harman
International
Industries, Inc.

Total 89.6 100 50.0 100 19.3 99.8 100 100 15.0 100 100 100
Note: Percent of ownership as of December 31, 2019 based on common shares

Sam sung Electronics Business Report 225 / 261

 Samsung Samsung Samsung Samsung Samsung Harman
Inv estee Samsung Samsung Card Samsung
Asset Venture Activ e Asset Hedge Asset International
Inv estor Securities Card Customer Futures
Management Inv estment Management Management Korea
Serv ice
Samsung C&T
Corporation 16.7
Samsung
Electronics 16.3

Samsung SDI
16.3
Samsung Electro-
mechanics 17.0
Samsung Heavy
Industries 17.0

Cheil Worldw ide

Hotel Shilla

S1 Corporation

SERI

Samsung SDS

Samsung Life
Insurance 29.5 71.9 100
Samsung Fire &
Marine Insurance

Samsung
Securities. 100 16.7

Samsung Card
100

SDC

Samsung
BioLogics

Samsung Asset
Management 100 100

Miracom

Samsung
Eelectronics
Serv ice
Harman
International
Industries, Inc. 100

Total 29.5 71.9 100 100 100 100 100 100 100
Note: Percent of ownership as of December 31, 2019 based on common shares

Sam sung Electronics Business Report 226 / 261

[Overseas]

Investor Investee Ownership

Samw oo Architects & Engineers SAMOO HU Designer and Engineering Services Limited 100.0
Samw oo Architects & Engineers SAMOO DESIGNERS & ENGINEERS INDIA PRIVATE LIMITED 100.0
Samw oo Architects & Engineers SAMOO (KL) SDN. BHD. 100.0
Samsung C&T America Inc. Meadow land Distribution 100.0
Samsung C&T America Inc. Samsung Green repower, LLC 100.0
Samsung C&T America Inc. Samsung Solar Construction Inc. 100.0
Samsung C&T America Inc. QSSC, S.A. de C.V. 20.0
Samsung C&T America Inc. Samsung Solar Energy LLC 100.0
Samsung C&T America Inc. S-print Inc 24.0
Samsung Renewable Energy Inc. SP Armow Wind Ontario LP 50.0
Samsung Renewable Energy Inc. SRE GRW EPC GP Inc. 100.0
Samsung Renewable Energy Inc. SRE GRW EPC LP 100.0
Samsung Renewable Energy Inc. SRE SKW EPC GP Inc. 100.0
Samsung Renewable Energy Inc. SRE SKW EPC LP 100.0
Samsung Renewable Energy Inc. SRE WIND PA GP INC. 100.0
Samsung Renewable Energy Inc. SRE WIND PA LP 100.0
Samsung Renewable Energy Inc. SRE GRS Holdings GP Inc. 100.0
Samsung Renewable Energy Inc. SRE GRS Holdings LP 100.0
Samsung Renewable Energy Inc. SRE K2 EPC GP Inc. 100.0
Samsung Renewable Energy Inc. SRE K2 EPC LP 100.0
Samsung Renewable Energy Inc. SRE KS HOLDINGS GP INC. 100.0
Samsung Renewable Energy Inc. SRE KS HOLDINGS LP 100.0
Samsung Renewable Energy Inc. SP Belle Riv er Wind LP 42.5
Samsung Renewable Energy Inc. SRE Armow EPC GP Inc. 100.0
Samsung Renewable Energy Inc. SRE Armow EPC LP 100.0
Samsung Renewable Energy Inc. North Kent Wind 1 LP 35.0
Samsung Renewable Energy Inc. SRE Wind GP Holding Inc. 100.0
Samsung Renewable Energy Inc. South Kent Wind LP Inc. 50.0
Samsung Renewable Energy Inc. Grand Renew able Wind LP Inc. 45.0
Samsung Renewable Energy Inc. SRE North Kent 2 LP Holdings LP 100.0
Samsung Renewable Energy Inc. SRE Solar Dev elopment GP Inc. 100.0
Samsung Renewable Energy Inc. SRE Solar Dev elopment LP 100.0
Samsung Renewable Energy Inc. SRE Windsor Holdings GP Inc. 100.0
Samsung Renewable Energy Inc. SRE Southgate Holdings GP Inc. 100.0
Samsung Renewable Energy Inc. SRE Solar Construction Management GP Inc. 100.0
Samsung Renewable Energy Inc. SRE Solar Construction Management LP 100.0
Samsung Renewable Energy Inc. SRE DEVELOPMENT GP INC. 100.0
Samsung Renewable Energy Inc. SRE DEVELOPMENT LP 100.0
Samsung Renewable Energy Inc. SRE BRW EPC GP INC. 100.0
Samsung Renewable Energy Inc. SRE BRW EPC LP 100.0
Samsung Renewable Energy Inc. SRE North Kent 1 GP Holdings Inc 100.0
Samsung Renewable Energy Inc. SRE North Kent 2 GP Holdings Inc 100.0
Samsung Renewable Energy Inc. SRE Belle Riv er GP Holdings Inc 100.0
Samsung Renewable Energy Inc. SRE NK1 EPC GP Inc 100.0
Samsung Renewable Energy Inc. SRE NK1 EPC LP 100.0
Samsung Renewable Energy Inc. SRE Summerside Construction GP Inc. 100.0
Samsung Renewable Energy Inc. SRE Summerside Construction LP 100.0
Samsung Green repower, LLC SOLAR PROJECTS SOLUTIONS,LLC 50.0
SP Armow Wind Ontario GP Inc SP Armow Wind Ontario LP 0.0
Samsung C&T Oil & Gas Parallel Corp. PLL Holdings LLC 83.6
Samsung C&T Oil & Gas Parallel Corp. PLL E&P LLC 90.0
SRE GRW EPC GP Inc. SRE GRW EPC LP 0.0
SRE SKW EPC GP Inc. SRE SKW EPC LP 0.0
PLL Holdings LLC Parallel Petroleum LLC 61.0
SRE WIND PA GP INC. SRE WIND PA LP 0.0
SRE GRS Holdings GP Inc. Grand Renew able Solar GP Inc. 50.0
SRE GRS Holdings GP Inc. SRE GRS Holdings LP 0.0
SRE K2 EPC GP Inc. SRE K2 EPC LP 0.0
SRE KS HOLDINGS GP INC. KINGSTON SOLAR GP INC. 50.0

Sam sung Electronics Business Report 227 / 261

 Investor Investee Ownership
SRE KS HOLDINGS GP INC. SRE KS HOLDINGS LP 0.0
SP Belle Riv er Wind GP Inc SP Belle Riv er Wind LP 0.0
SRE Armow EPC GP Inc. SRE Armow EPC LP 0.0
SRE Wind GP Holding Inc. SP Armow Wind Ontario GP Inc 50.0
SRE Wind GP Holding Inc. South Kent Wind GP Inc. 50.0
SRE Wind GP Holding Inc. Grand Renew able Wind GP Inc. 50.0
South Kent Wind GP Inc. South Kent Wind LP Inc. 0.0
Grand Renew able Wind GP Inc. Grand Renew able Wind LP Inc. 0.0
North Kent Wind 1 GP Inc North Kent Wind 1 LP 0.0
SRE Solar Dev elopment GP Inc. SRE Solar Dev elopment LP 0.0
SRE Solar Construction Management GP Inc. SRE Solar Construction Management LP 0.0
SRE DEVELOPMENT GP INC. SRE DEVELOPMENT LP 0.0
SRE BRW EPC GP INC. SRE BRW EPC LP 0.0
SRE North Kent 1 GP Holdings Inc North Kent Wind 1 GP Inc 50.0
SRE North Kent 2 GP Holdings Inc SRE North Kent 2 LP Holdings LP 0.0
SRE Belle Riv er GP Holdings Inc SP Belle Riv er Wind GP Inc 50.0
SRE NK1 EPC GP Inc SRE NK1 EPC LP 0.0
SRE Summerside Construction GP Inc. SRE Summerside Construction LP 0.0
Samsung Solar Energy LLC Samsung Solar Energy 1 LLC 100.0
Samsung Solar Energy LLC Samsung Solar Energy 2 LLC 100.0
Samsung Solar Energy LLC Samsung Solar Energy 3, LLC 100.0
Samsung Solar Energy 1 LLC CS SOLAR LLC 50.0
Samsung Solar Energy 3, LLC SST SOLAR, LLC 50.0
Samsung C&T Deutschland GmbH POSS-SLPC, S.R.O 20.0
Samsung C&T Deutschland GmbH Solluce Romania 1 B.V. 20.0
Samsung C&T Deutschland GmbH S.C. Otelinox S.A 94.3
Solluce Romania 1 B.V. LJG GREEN SOURCE ENERGY ALPHA S.R.L. 78.0
Cheil Holding Inc. Samsung Const. Co. Phils.,Inc. 75.0
Samsung C&T Singapore Pte., Ltd. Samsung Chemtech Vina LLC 48.3
Samsung C&T Singapore Pte., Ltd. S-print Inc 16.0
Samsung C&T Singapore Pte., Ltd. PT. INSAM BATUBARA ENERGY 10.0
Samsung C&T Singapore Pte., Ltd. Malay sia Samsung Steel Center Sdn.Bhd 30.0
Samsung C&T Singapore Pte., Ltd. S&G Biofuel PTE.LTD 12.6
S&G Biofuel PTE.LTD PT. Gandaerah Hendana 95.0
S&G Biofuel PTE.LTD PT. Inecda 95.0
Samsung C&T Hongkong Ltd. Samsung C&T Thailand Co., Ltd 13.2
Samsung C&T Hongkong Ltd. SAMSUNG (TIANJIN) INTERNATIONAL TRADING CO., LTD 100.0
Samsung C&T Hongkong Ltd. SAMSUNG TRADING (SHANGHAI) CO., LTD 100.0
Samsung C&T Hongkong Ltd. Samsung Precision Stainless Steel(pinghu) Co.,Ltd. 45.0
Samsung Electronics Samsung Japan Corporation 100.0
Samsung Electronics Samsung R&D Institute Japan Co. Ltd. 100.0
Samsung Electronics Samsung Electronics America, Inc. 100.0
Samsung Electronics Samsung Electronics Canada, Inc. 100.0
Samsung Electronics Samsung Electronics Mexico S.A. De C.V. 63.6
Samsung Electronics Samsung Electronics (UK) Ltd. 100.0
Samsung Electronics Samsung Electronics Ltd. 100.0
Samsung Electronics Samsung Electronics Holding GmbH 100.0
Samsung Electronics Samsung Electronics Iberia, S.A. 100.0
Samsung Electronics Samsung Electronics France S.A.S 100.0
Samsung Electronics Samsung Electronics Hungarian Private Co. Ltd. 100.0
Samsung Electronics Samsung Electronics Italia S.P.A. 100.0
Samsung Electronics Samsung Electronics Europe Logistics B.V. 100.0
Samsung Electronics Samsung Electronics Benelux B.V. 100.0
Samsung Electronics Samsung Electronics Overseas B.V. 100.0
Samsung Electronics Samsung Electronics Polska, SP.Zo.o 100.0
Samsung Electronics Samsung Electronics Portuguesa S.A. 100.0
Samsung Electronics Samsung Electronics Nordic Aktiebolag 100.0
Samsung Electronics Samsung Electronics Austria GmbH 100.0
Samsung Electronics Samsung Electronics Slovakia s.r.o 55.7
Samsung Electronics Samsung Electronics Europe Holding Cooperatief U.A. 100.0
Samsung Electronics Samsung Electronics Display (M) Sdn. Bhd. 75.0

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 Investor Investee Ownership
Samsung Electronics Samsung Electronics (M) Sdn. Bhd. 100.0
Samsung Electronics Samsung Vina Electronics Co., Ltd. 100.0
Samsung Electronics Samsung Asia Priv ate Ltd. 100.0
Samsung Electronics Samsung India Electronics Priv ate Ltd. 100.0
Samsung Electronics Samsung R&D Institute India-Bangalore Priv ate Limited 100.0
Samsung Electronics Samsung Electronics Australia Pty. Ltd. 100.0
Samsung Electronics PT Samsung Electronics Indonesia 100.0
Samsung Electronics Thai Samsung Electronics Co., Ltd. 91.8
Samsung Electronics Samsung Malaysia Electronics (SME) Sdn. Bhd. 100.0
Samsung Electronics Samsung Electronics Hong Kong Co., Ltd. 100.0
Samsung Electronics Suzhou Samsung Electronics Co., Ltd. 69.1
Samsung Electronics Samsung (CHINA) Inv estment Co., Ltd. 100.0
Samsung Electronics Samsung Electronics Suzhou Semiconductor Co., Ltd. 100.0
Samsung Electronics Samsung Electronics Huizhou Co., Ltd. 89.6
Samsung Electronics Tianjin Samsung Electronics Co., Ltd. 48.2
Samsung Electronics Samsung Electronics Taiw an Co., Ltd. 100.0
Samsung Electronics Tianjin Samsung Telecom Technology Co., Ltd. 90.0
Samsung Electronics Shanghai Samsung Semiconductor Co., Ltd. 100.0
Samsung Electronics Samsung Electronics Suzhou Computer Co., Ltd. 73.7
Samsung Electronics Shenzhen Samsung Electronics Telecommunication Co., Ltd. 100.0
Samsung Electronics Samsung Semiconductor (China) R&D Co., Ltd. 100.0
Samsung Electronics Samsung (China) Semic onductor Co., Ltd. 100.0
Samsung Electronics Samsung SemiConductor Xian Co., Ltd. 100.0
Samsung Electronics Samsung Gulf Electronics Co., Ltd. 100.0
Samsung Electronics Samsung Electronics Egypt S.A.E 0.1
Samsung Electronics Samsung Electronics South Africa(Pty ) Ltd. 100.0
Samsung Electronics Samsung Electronics Latinoamerica(Zona Libre), S. A. 100.0
Samsung Electronics Samsung Electronica da Amazonia Ltda. 87.0
Samsung Electronics Samsung Electronics Argentina S.A. 98.0
Samsung Electronics Samsung Electronics Chile Limitada 4.1
Samsung Electronics Samsung Electronics Rus Company LLC 100.0
Samsung Electronics Samsung Electronics Rus Kaluga LLC 100.0
Samsung Electronics Tianjin Samsung LED Co., Ltd. 100.0
Samsung BioEpis SAMSUNG BIOEPIS UK LIMITED 100.0
Samsung BioEpis Samsung Bioepis NL B.V. 100.0
Samsung BioEpis Samsung Bioepis CH GmbH 100.0
Samsung BioEpis SAMSUNG BIOEPIS AU PTY LTD 100.0
Samsung BioEpis SAMSUNG BIOEPIS NZ LIMITED 100.0
Samsung BioEpis SAMSUNG BIOEPIS IL LTD 100.0
Samsung BioEpis SAMSUNG BIOEPIS BR PHARMACEUTICAL LTDA 100.0
Samsung Display Intellectual Key stone Technology LLC 41.9
Samsung Display Samsung Display Slovakia, s.r.o. 100.0
Samsung Display Samsung Display Vietnam Co., Ltd. 100.0
Samsung Display Samsung Display Noida Private Limited 100.0
Samsung Display Samsung Suzhou Module Co., Ltd. 100.0
Samsung Display Samsung Suzhou LCD Co., Ltd. 60.0
Samsung Display Samsung Display Dongguan Co., Ltd. 100.0
Samsung Display Samsung Display Tianjin Co., Ltd. 95.0
Samsung Display Nov aled GmbH 9.9
SEMES SEMES America, Inc. 100.0
SEMES SEMES (XIAN) Co., Ltd. 100.0
Samsung Electronics America, Inc. NeuroLogica Corp. 100.0
Samsung Electronics America, Inc. Dacor Holdings, Inc. 100.0
Samsung Electronics America, Inc. Samsung HVAC America, LLC 100.0
Samsung Electronics America, Inc. SmartThings, Inc. 100.0
Samsung Electronics America, Inc. Samsung Oak Holdings, Inc. 100.0
Samsung Electronics America, Inc. Joy ent, Inc. 100.0
Samsung Electronics America, Inc. Prismv iew, LLC 100.0
Samsung Electronics America, Inc. Samsung Semiconductor, Inc. 100.0
Samsung Electronics America, Inc. Samsung Research America, Inc 100.0
Samsung Electronics America, Inc. Samsung Electronics Home Appliances America, LLC 100.0

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 Investor Investee Ownership
Samsung Electronics America, Inc. Samsung International, Inc. 100.0
Samsung Electronics America, Inc. Harman International Industries, Inc. 100.0
Dacor Holdings, Inc. Dacor, Inc. 100.0
Dacor Holdings, Inc. Ev erythingDacor.com, Inc. 100.0
Dacor Holdings, Inc. Distinctiv e Appliances of California, Inc. 100.0
Dacor, Inc. Dacor Canada Co. 100.0
Samsung Oak Holdings, Inc. Stellus Technologies, Inc. 100.0
Samsung Semiconductor, Inc. Samsung Austin Semiconductor LLC. 100.0
Samsung Electronics Canada, Inc. AdGear Technologies Inc. 100.0
Samsung Electronics Canada, Inc. SigMast Communic ations Inc. 100.0
Samsung Research America, Inc SAMSUNG NEXT LLC 100.0
Samsung Research America, Inc Viv Labs, Inc. 100.0
SAMSUNG NEXT LLC SAMSUNG NEXT FUND LLC 100.0
Samsung International, Inc. Samsung Mexicana S.A. de C.V 100.0
Samsung Electronics Mexico S.A. De C.V. Samsung Electronics Digital Appliance Mexico, SA de CV 100.0
Harman International Industries, Inc. Harman International Japan Co., Ltd. 100.0
Harman International Industries, Inc. Harman International Industries Canada Ltd. 100.0
Harman International Industries, Inc. Harman Becker Automotive Systems, Inc. 100.0
Harman International Industries, Inc. Harman Professional, Inc. 100.0
Harman International Industries, Inc. Harman Connected Services, Inc. 100.0
Harman International Industries, Inc. Harman Financial Group LLC 100.0
Harman International Industries, Inc. Harman Belgium SA 100.0
Harman International Industries, Inc. Harman France SNC 100.0
Harman International Industries, Inc. Red Bend Softw are SAS 100.0
Harman International Industries, Inc. Harman Inc. & Co. KG 66.0
Harman International Industries, Inc. Harman KG Holding, LLC 100.0
Harman International Industries, Inc. Harman Becker Automotive Systems Italy S.R.L. 100.0
Harman International Industries, Inc. Harman Finance International, SCA 100.0
Harman International Industries, Inc. Harman Finance International GP S.a.r.l 100.0
Harman International Industries, Inc. Harman Industries Holdings Mauritius Ltd. 100.0
Harman International Industries, Inc. Harman International Mex ico, S. de R.L. de C.V. 99.9
Harman Becker Automotive Systems, Inc. Harman International Estonia OU 100.0
Harman Professional, Inc. AMX UK Limited 100.0
Harman Professional, Inc. Harman Singapore Pte. Ltd. 100.0
Harman Professional, Inc. Harman da Amazonia Industria Eletronica e Participacoes Ltda. 0.0
Harman Professional, Inc. Harman do Brasil Industria Eletronica e Participacoes Ltda. 0.0
Harman Connected Services, Inc. Harman Connected Services Engineering Corp. 100.0
Harman Connected Services, Inc. Harman Connected Services South America S.R.L. 100.0
Harman Connected Services, Inc. Harman Connected Services AB. 100.0
Harman Connected Services, Inc. Harman Connected Services UK Ltd. 100.0
Harman Connected Services, Inc. Harman Connected Services Corp. India Pvt. Ltd. 1.6
Harman Connected Services, Inc. Global Sy mphony Technology Group Private Ltd. 100.0
Harman Financial Group LLC Harman International (India) Priv ate Limited 0.0
Harman Financial Group LLC Harman International Mex ico, S. de R.L. de C.V. 0.1
Harman Financial Group LLC Harman de Mex ico, S. de R.L. de C.V. 0.0
Samsung Electronics (UK) Ltd. Samsung Semiconductor Europe Limited 100.0
Samsung Electronics Holding GmbH Samsung Semiconductor Europe GmbH 100.0
Samsung Electronics Holding GmbH Samsung Electronics GmbH 100.0
Samsung Electronics Hungarian Private Co. Ltd. Samsung Electronics Czech and Slovak s.r.o. 31.4
Samsung Electronics Hungarian Private Co. Ltd. Samsung Electronics Slovakia s.r.o 44.3
Samsung Electronics Benelux B.V. Samsung Electronics Mexico S.A. De C.V. 36.4
Samsung Electronics Benelux B.V. SAMSUNG ELECTRONICS BALTICS SIA 100.0
Samsung Electronics Benelux B.V. Samsung Electronics West Africa Ltd. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics East Africa Ltd. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Saudi Arabia Ltd. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Egypt S.A.E 99.9
Samsung Electronics Benelux B.V. Samsung Electronics Israel Ltd. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Tunisia S.A.R.L 99.0
Samsung Electronics Benelux B.V. Samsung Electronics Pakistan(Priv ate) Ltd. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics South Africa Production (pty) Ltd. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Turkey 100.0

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Samsung Electronics Benelux B.V. Samsung Semiconductor Israel R&D Center, Ltd. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Levant Co.,Ltd. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Maghreb Arab 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Venezuela, C.A. 100.0
Samsung Electronics Benelux B.V. Samsung Electronica da Amazonia Ltda. 13.0
Samsung Electronics Benelux B.V. Samsung Electronics Chile Limitada 95.9
Samsung Electronics Benelux B.V. Samsung Electronics Peru S.A.C. 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Ukraine Company LLC 100.0
Samsung Electronics Benelux B.V. Samsung R&D Institute Rus LLC 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Central Eurasia LLP 100.0
Samsung Electronics Benelux B.V. Samsung Electronics Caucasus Co. Ltd 100.0
Samsung Electronics Benelux B.V. Corephotonics Ltd. 100.0
Zhilabs, S.L. Zhilabs Inc. 100.0
Samsung Electronics Nordic Aktiebolag Samsung Nanoradio Design Center 100.0
AKG Acoustics Gmbh Harman Professional Denmark ApS 100.0
AKG Acoustics Gmbh Studer Professional Audio GmbH 100.0
Harman Professional Denmark ApS Martin Professional Japan Ltd. 40.0
Harman Professional Denmark ApS Harman International s.r.o 100.0
Harman Professional Denmark ApS Martin Professional Pte. Ltd. 100.0
Harman Becker Automotive Systems GmbH Harman International Romania SRL 0.0
Harman Holding Gmbh & Co. KG Harman Becker Automotive Systems GmbH 100.0
Harman Holding Gmbh & Co. KG Harman Deutschland GmbH 100.0
Harman Holding Gmbh & Co. KG Harman Becker Automotive Systems Manufacturing Kft 100.0
Harman Holding Gmbh & Co. KG Harman RUS CIS LLC 100.0
Harman Inc. & Co. KG Harman Holding Gmbh & Co. KG 100.0
Harman Inc. & Co. KG Harman Management Gmbh 100.0
Harman Inc. & Co. KG Harman Hungary Financing Ltd. 100.0
Harman Connected Services GmbH Harman Connected Services OOO 100.0
Harman KG Holding, LLC Harman Inc. & Co. KG 34.0
Harman Becker Automotive Systems Manufacturing Kft Harman Professional Kft 100.0
Harman Becker Automotive Systems Manufacturing Kft Harman Consumer Nederland B.V. 100.0
Harman Becker Automotive Systems Manufacturing Kft Harman International Romania SRL 100.0
Harman Becker Automotive Systems Manufacturing Kft Red Bend Ltd. 100.0
Harman Becker Automotive Systems Manufacturing Kft Harman do Brasil Industria Eletronica e Participacoes Ltda. 100.0
Harman Hungary Financing Ltd. Harman International Industries Limited 100.0
Harman Finance International GP S.a.r.l Harman Finance International, SCA 0.0
Harman Consumer Nederland B.V. AKG Acoustics Gmbh 100.0
Harman Consumer Nederland B.V. Harman Audio Iberia España Sociedad Limitada 100.0
Harman Consumer Nederland B.V. Harman Holding Limited 100.0
Harman Audio Iberia España Sociedad Limitada Harman France SNC 0.0
Harman Connected Services AB. Harman Finland Oy 100.0
Harman Connected Services AB. Harman Connected Services GmbH 100.0
Harman Connected Services AB. Harman Connected Services Poland Sp.zoo 100.0
Harman Connected Services AB. Harman Connected Services Solutions (Chengdu) Co., Ltd. 100.0
Harman Automotiv e UK Limited Harman de Mex ico, S. de R.L. de C.V. 100.0
Harman International Industries Limited Harman Automotiv e UK Limited 100.0
Harman International Industries Limited Martin Manufacturing (UK) Ltd 100.0
Harman International Industries Limited Harman Connected Services Limited 100.0
Harman International Industries Limited Arcam Limited 100.0
Harman International Industries Limited Harman International Industries PTY Ltd. 100.0
Harman Connected Services UK Ltd. Harman Connected Services Morocco 100.0
Arcam Limited A&R Cambridge Limited 100.0
Samsung Electronics Austria GmbH Samsung Electronics Switzerland GmbH 100.0
Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Czech and Slovak s.r.o. 68.6
Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Romania LLC 100.0
Samsung Electronics Europe Holding Cooperatief U.A. Zhilabs, S.L. 100.0
Samsung Electronics Europe Holding Cooperatief U.A. Porta Nuov a Varesine Building 2 S.r.l. 49.0
Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Poland Manufacturing SP.Zo.o 100.0
Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Greece S.M.S.A 100.0
Samsung Electronics Europe Holding Cooperatief U.A. Samsung Electronics Air Conditioner Europe B.V. 100.0
Samsung Electronics Europe Holding Cooperatief U.A. FOODIENT LTD. 100.0

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Samsung Electronics Europe Holding Cooperatief U.A. Samsung Denmark Research Center ApS 100.0
Samsung Electronics Europe Holding Cooperatief U.A. Samsung Cambridge Solution Centre Limited 100.0
Samsung Electronics Europe Holding Cooperatief U.A. Nov aled GmbH 40.0
Samsung Asia Priv ate Ltd. Samsung Electronics Japan Co., Ltd. 100.0
Samsung Asia Priv ate Ltd. Samsung Electronics Display (M) Sdn. Bhd. 25.0
Samsung Asia Priv ate Ltd. Samsung Electronics New Zealand Limited 100.0
Samsung Asia Priv ate Ltd. Samsung Electronics Philippines Corporation 100.0
Samsung Asia Priv ate Ltd. Samsung R&D Institute BanglaDesh Limited 100.0
Samsung Asia Priv ate Ltd. Samsung Electronics Vietnam Co., Ltd. 100.0
Samsung Asia Priv ate Ltd. Samsung Electronics Vietnam THAINGUYEN Co., Ltd. 100.0
Samsung Asia Priv ate Ltd. Samsung Electronics HCMC CE Complex Co., Ltd. 100.0
Samsung Asia Priv ate Ltd. Samsung Electro-Mechanics(Thailand) Co., Ltd. 25.0
Samsung Asia Priv ate Ltd. iMarket Asia Co., Ltd. 11.4
Samsung India Electronics Priv ate Ltd. Samsung Nepal Services Pvt, Ltd 100.0
PT Samsung Electronics Indonesia PT Samsung Telecommunications Indonesia 100.0
Thai Samsung Electronics Co., Ltd. Laos Samsung Electronics Sole Co., Ltd 100.0
Samsung Electronics Hong Kong Co., Ltd. iMarket Asia Co., Ltd. 11.3
Suzhou Samsung Electronics Co., Ltd. Samsung Suzhou Electronics Export Co., Ltd. 100.0
Samsung (CHINA) Inv estment Co., Ltd. Suzhou Samsung Electronics Co., Ltd. 19.2
Samsung (CHINA) Inv estment Co., Ltd. Samsung Mobile R&D Center China-Guangzhou 100.0
Samsung (CHINA) Inv estment Co., Ltd. Samsung Tianjin Mobile Development Center 100.0
Samsung (CHINA) Inv estment Co., Ltd. Samsung R&D Institute China-Shenzhen 100.0
Samsung (CHINA) Inv estment Co., Ltd. Samsung Electronics Huizhou Co., Ltd. 10.4
Samsung (CHINA) Inv estment Co., Ltd. Tianjin Samsung Electronics Co., Ltd. 43.1
Samsung (CHINA) Inv estment Co., Ltd. Beijing Samsung Telecom R&D Center 100.0
Samsung (CHINA) Inv estment Co., Ltd. Samsung Electronics Suzhou Computer Co., Ltd. 26.3
Samsung (CHINA) Inv estment Co., Ltd. Samsung Electronics China R&D Center 100.0
Harman International (China) Holdings Co., Ltd. Harman (Suzhou) Audio and Infotainment Sy stems Co., Ltd. 100.0
Harman International (China) Holdings Co., Ltd. Harman Technology (Shenzhen) Co., Ltd. 100.0
Harman International (China) Holdings Co., Ltd. Harman (China) Technologies Co., Ltd. 100.0
Harman Holding Limited Harman Commercial (Shanghai) Co., Ltd. 100.0
Harman Holding Limited Harman International (China) Holdings Co., Ltd. 100.0
Harman Holding Limited Harman Automotiv e Electronic Systems (Suzhou) Co., Ltd. 100.0
Samsung Gulf Electronics Co., Ltd. Samsung Electronics Egypt S.A.E 0.1
Samsung Electronics Maghreb Arab Samsung Electronics Tunisia S.A.R.L 1.0
Harman Industries Holdings Mauritius Ltd. Harman International (India) Priv ate Limited 100.0
Global Sy mphony Technology Group Private Ltd. Harman Connected Services Corp. India Pvt. Ltd. 98.4
Red Bend Ltd. Red Bend Softw are Ltd. 100.0
Samsung Electronics Latinoamerica(Zona Libre), S. A. Samsung Electronics Latinoamerica Miami, Inc. 100.0
Samsung Electronics Latinoamerica(Zona Libre), S. A. Samsung Electronica Colombia S.A. 100.0
Samsung Electronics Latinoamerica(Zona Libre), S. A. Samsung Electronics Panama. S.A. 100.0
Samsung Electronica da Amazonia Ltda. Samsung Electronics Argentina S.A. 2.0
Harman do Brasil Industria Eletronica e Participacoes Ltda. Harman da Amazonia Industria Eletronica e Participacoes Ltda. 100.0
Samsung Electronics Central Eurasia LLP Samsung Electronics Caucasus Co. Ltd 0.0
Samsung SDI Intellectual Key stone Technology LLC 41.0
Samsung SDI Samsung SDI Japan Co., Ltd. 89.2
Samsung SDI Samsung SDI America, Inc. 91.7
Samsung SDI Samsung SDI Hungary., Zrt. 100.0
Samsung SDI Samsung SDI Europe GmbH 100.0
Samsung SDI Samsung SDI Battery Sy stems GmbH 100.0
Samsung SDI Samsung SDI Vietnam Co., Ltd. 100.0
Samsung SDI Samsung SDI Energy Malaysia Sdn, Bhd. 100.0
Samsung SDI Samsung SDI India Priv ate Limited 100.0
Samsung SDI Samsung SDI(Hong Kong) Ltd. 97.6
Samsung SDI Samsung SDI China Co., Ltd. 100.0
Samsung SDI Samsung SDI-ARN (Xi'An) Power Battery Co., Ltd. 65.0
Samsung SDI Samsung SDI (Changchun) Power Battery Co., Ltd. 50.0
Samsung SDI Samsung SDI (Tianjin) Battery Co., Ltd. 80.0
Samsung SDI Nov aled GmbH 50.1
Samsung SDI SAMSUNG SDI WUXI CO.,LTD. 100.0
Samsung SDI Samsung SDI(Wux i) Battery Systems Co., Ltd. 50.0

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 Investor Investee Ownership
Samsung SDI iMarket Asia Co., Ltd. 8.7
Samsung SDI(Hong Kong) Ltd. Samsung SDI India Priv ate Limited 0.0
Samsung SDI(Hong Kong) Ltd. Tianjin Samsung SDI Co., Ltd. 80.0
Samsung Electro-Mechanics Samsung Electro-Machanics Japan Co., Ltd. 100.0
Samsung Electro-Mechanics Samsung Electro-Mechanics America, Inc. 100.0
Samsung Electro-Mechanics Samsung Electro-Mechanics GmbH 100.0
Samsung Electro-Mechanics Samsung Electro-Mechanics(Thailand) Co., Ltd. 75.0
Samsung Electro-Mechanics Samsung Electro-Mechanics Philippines, Corp. 100.0
Samsung Electro-Mechanics Calamba Premier Realty Corporation 39.8
Samsung Electro-Mechanics Samsung Electro-Mechanics Pte Ltd. 100.0
Samsung Electro-Mechanics Samsung Electro-Mechanics Vietnam Co., Ltd. 100.0
Samsung Electro-Mechanics Samsung Electro-Mechanics Softw are India Bangalore Private Limited 99.9
Samsung Electro-Mechanics Dongguan Samsung Electro-Mechanic s Co., Ltd. 100.0
Samsung Electro-Mechanics Tianjin Samsung Electro-Mechanics Co., Ltd. 81.8
Samsung Electro-Mechanics Samsung High-Tech Electro-Mechanic s(Tianjin) Co., Ltd. 95.0
Samsung Electro-Mechanics Samsung Electro-Mechanics (Shenzhen) Co., Ltd. 100.0
Samsung Electro-Mechanics Kunshan Samsung Electro-Mechanics Co., Ltd. 100.0
Samsung Electro-Mechanics iMarket Asia Co., Ltd. 8.7
Calamba Premier Realty Corporation Batino Realty Corporation 100.0
Samsung Electro-Mechanics Pte Ltd. Samsung Electro-Mechanics Softw are India Bangalore Private Limited 0.1
Samsung Fire & Marine Insurance Samsung Fire & Marine Management Corporation 100.0
Samsung Fire & Marine Insurance SAMSUNG FIRE & MARINE INSURANCE COMPANY OF EUROPE LTD. 100.0
Samsung Fire & Marine Insurance PT. Asuransi Samsung Tugu 70.0
Samsung Fire & Marine Insurance SAMSUNG VINA INSURANCE COMPANY LIMITED 75.0
Samsung Fire & Marine Insurance Samsung Reinsurance Pte. Ltd. 100.0
Samsung Fire & Marine Insurance Samsung Property & Casualty Insurance Company(China), Ltd 100.0
Samsung Fire & Marine Insurance Samsung Fire & Marine Insurance Management Middle East Limited 100.0
Samsung Heavy Industries Co.,Ltd. Camellia Consulting Corporation 100.0
Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries India Pvt.Ltd. 100.0
Samsung Heavy Industries Co.,Ltd. SAMSUNG HEAVY INDUSTRIES (M) SDN.BHD 100.0
Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries(Ningbo) Co., Ltd 100.0
Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries(Rongcheng) Co., Ltd 100.0
Samsung Heavy Industries Co.,Ltd. Rongcheng Gaya Heavy Industries Co., Ltd 100.0
Samsung Heavy Industries Co.,Ltd. SAMSUNG HEAVY INDUSTRIES NIGERIA LIMITED 100.0
Samsung Heavy Industries Co.,Ltd. Samsung Heavy Industries Mozambique LDA 100.0
SAMSUNG HEAVY INDUSTRIES NIGERIA LIMITED SHI - MCI FZE 70.0
Samsung Life Insurance Porta Nuov a Varesine Building 2 S.r.l. 51.0
Samsung Life Insurance THAI SAMSUNG LIFE INSURANCE CO., LTD. 48.9
Samsung Life Insurance Beijing Samsung Real Estate Co.. Ltd 90.0
Samsung Asset Management Samsung Asset Management (New York), Inc. 100.0
Samsung Asset Management Samsung Global SME Private Equity Manager Fund Co., Ltd. 100.0
Samsung Asset Management Samsung Asset Management(London) Ltd. 100.0
Samsung Asset Management Samsung Private Equity Manager I Co., Ltd. 100.0
Samsung Asset Management Samsung Asset Management (Hong Kong) Ltd. 100.0
Samsung Asset Management (Hong Kong) Ltd. Samsung Asset Management (Beijing) Ltd. 100.0
CHEIL INDUSTRIES ITALY SRL COLOMBO VIA DELLA SPIGA S.R.L 100.0
Samsung C&T Corporation MYODO METAL CO., LTD. 100.0
Samsung C&T Corporation Samsung C&T Japan Corporation 100.0
Samsung C&T Corporation Samsung C&T America Inc. 100.0
Samsung C&T Corporation Samsung E&C America, INC. 100.0
Samsung C&T Corporation Samsung Renewable Energy Inc. 100.0
Samsung C&T Corporation QSSC, S.A. de C.V. 60.0
Samsung C&T Corporation Samsung C&T Oil & Gas Parallel Corp. 100.0
Samsung C&T Corporation Samsung C&T Canada Ltd. 100.0
Samsung C&T Corporation Samsung C&T Deutschland GmbH 100.0
Samsung C&T Corporation Samsung C&T U.K. Ltd. 100.0
Samsung C&T Corporation Samsung C&T ECUK Limited 100.0
Samsung C&T Corporation Whessoe engineering Limited 100.0
Samsung C&T Corporation POSS-SLPC, S.R.O 50.0
Samsung C&T Corporation Solluce Romania 1 B.V. 80.0
Samsung C&T Corporation SAM inv estment Manzanilo.B.V 53.3

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Samsung C&T Corporation Samsung C&T (KL) Sdn.,Bhd. 100.0
Samsung C&T Corporation Samsung C&T Malaysia SDN. BHD 100.0
Samsung C&T Corporation Erdsam Co., Ltd. 100.0
Samsung C&T Corporation Samsung Chemtech Vina LLC 51.7
Samsung C&T Corporation S-print Inc 40.0
Samsung C&T Corporation Samsung C&T Thailand Co., Ltd 43.9
Samsung C&T Corporation Cheil Holding Inc. 40.0
Samsung C&T Corporation Samsung Const. Co. Phils.,Inc. 25.0
Samsung C&T Corporation PT. INSAM BATUBARA ENERGY 90.0
Samsung C&T Corporation Samsung E&C India Private Limited 100.0
Samsung C&T Corporation Samsung C&T Corporation India Private Limited 100.0
Samsung C&T Corporation Malay sia Samsung Steel Center Sdn.Bhd 70.0
Samsung C&T Corporation Samsung C&T Singapore Pte., Ltd. 100.0
Samsung C&T Corporation S&G Biofuel PTE.LTD 50.5
Samsung C&T Corporation SAMSUNG C&T Mongolia LLC. 70.0
Samsung C&T Corporation Samsung C&T Eng.&Const. Mongolia LLC. 100.0
Samsung C&T Corporation S&WOO CONSTRUCTION PHILIPPINES,INC. 100.0
Samsung C&T Corporation Samsung C&T Hongkong Ltd. 100.0
Samsung C&T Corporation Samsung C&T Taiwan Co., Ltd. 100.0
Samsung C&T Corporation Samsung Precision Stainless Steel(pinghu) Co.,Ltd. 55.0
Samsung C&T Corporation SAMSUNG C&T (SHANGHAI) CO., LTD. 100.0
Samsung C&T Corporation Samsung C&T (Xi'an) Co., Ltd. 100.0
Samsung C&T Corporation SAMSUNG C&T CORPORATION SAUDI ARABIA 100.0
Samsung C&T Corporation SAM Gulf Inv estment Limited 100.0
Samsung C&T Corporation Samsung C&T Chile Copper SpA 100.0
Samsung C&T Corporation SCNT Power Kelar Inversiones Limitada 100.0
Samsung C&T Corporation Samsung C&T Corporation Rus LLC 100.0
Samsung C&T Corporation Samsung SDI America, Inc. 8.3
Samsung C&T Corporation Samsung SDI(Hong Kong) Ltd. 2.4
Samsung C&T Corporation Beijing Samsung Real Estate Co.. Ltd 10.0
Samsung C&T Corporation Cheil Industries Corp., USA 100.0
Samsung C&T Corporation CHEIL INDUSTRIES ITALY SRL 100.0
Samsung C&T Corporation Samsung Fashion Trading Co. ,Ltd 100.0
Samsung C&T Corporation CHEIL INDUSTRIES INC. VIETNAM COMPANY LIMITED 100.0
Samsung C&T Corporation Samsung C&T Corporation UEM Construction JV Sdn Bhd 60.0
Samsung C&T Corporation iMarket Asia Co., Ltd. 19.3
Samsung Welstory WELSTORY VIETNAM COMPANY LIMITED 90.0
Samsung Welstory Shanghai Ev er-Hongjun Business Mgt Service Co.,LTD 85.0
Samsung Welstory Shanghai Welstory Food Company Limited 81.6
MULTICAMPUS LANGUAGE TESTING INTERNATIONAL, INC. 82.4
Pengtai Greater China Company Limited PENGTAI CHINA CO.,LTD. 100.0
Pengtai Greater China Company Limited PengTai Taiwan Co., Ltd. 100.0
Pengtai Greater China Company Limited PENGTAI INTERACTIVE ADVERTISING CO.,LTD 100.0
PENGTAI CHINA CO.,LTD. PENGTAI E-COMMERCE CO.,LTD 100.0
PENGTAI CHINA CO.,LTD. PENGTAI MARKETING SERVICE CO.,LTD. 100.0
PENGTAI INTERACTIVE ADVERTISING CO.,LTD Medialy tics Inc. 51.0
PENGTAI INTERACTIVE ADVERTISING CO.,LTD Beijing Pengtai Baozun E-commerce Co., Ltd. 51.0
iMarket Asia Co., Ltd. iMarket China Co., Ltd. 80.0
Samsung Securities Samsung Securities (America), Inc. 100.0
Samsung Securities Samsung Securities (Europe) Limited. 100.0
Samsung Securities Samsung Securities (Asia) Limited. 100.0
Samsung SDS iMarket Asia Co., Ltd. 40.6
Samsung SDS Samsung SDS Global SCL America, Inc. 100.0
Samsung SDS SAMSUNG SDS GSCL CANADA., LTD. 100.0
Samsung SDS Samsung SDS America, Inc. 100.0
Samsung SDS Neo EXpress Transportation (NEXT), Inc. 51.0
Samsung SDS Samsung SDS Europe Ltd. 100.0
Samsung SDS Samsung SDS Global SCL Hungary Kft. 100.0
Samsung SDS Samsung SDS Global SCL Slovakia, s.r.o. 100.0
Samsung SDS Samsung SDS Global SCL Poland Sp. Z.o.o. 100.0
Samsung SDS Samsung GSCL Sweden AB 100.0

Sam sung Electronics Business Report 234 / 261

 Investor Investee Ownership
Samsung SDS Samsung SDS Global SCL France SAS 100.0
Samsung SDS Samsung SDS Global SCL Greece Societe Anonyme 100.0
Samsung SDS Samsung SDS Global SCL Baltics, SIA 100.0
Samsung SDS Samsung SDS Global SCL Italy S.R.L. A Socio Unico 100.0
Samsung SDS Samsung SDS Global Supply Chain Logistics Spain S.L.U 100.0
Samsung SDS Samsung SDS Global SCL Netherlands Cooperatief U.A 100.0
Samsung SDS Samsung SDS Global SCL Germany GmbH 100.0
Samsung SDS Samsung SDS Global SCL Austria GmbH 100.0
Samsung SDS Samsung SDS GSCL Romania SRL 100.0
Samsung SDS Samsung SDS Asia Pacific Pte. Ltd. 100.0
Samsung SDS Samsung Data Sy stems India Private Limited 100.0
Samsung SDS Samsung SDS India Priv ate Limited 100.0
Samsung SDS VASCO SUPPLY CHAIN SOLUTIONS PRIVATE LIMITED 51.0
Samsung SDS Samsung SDS Vietnam Co., Ltd. 100.0
Samsung SDS PT. Samsung SDS Global SCL Indonesia 100.0
Samsung SDS Samsung SDS Global SCL Philippines Co., Ltd. 100.0
Samsung SDS Samsung SDS Global SCL Thailand Co.,Ltd 100.0
Samsung SDS Samsung SDS Global SCL Malaysia SDN.BHD. 100.0
Samsung SDS SAMSUNG SDS GLOBAL SCL AUSTRALIA PTY., LTD. 100.0
Samsung SDS SDS-ACUTECH CO., LTD 50.0
Samsung SDS ALS SDS Joint Stock Company 51.0
Samsung SDS SDS-MP LOGISTICS JOINT STOCK COMPANY 51.0
Samsung SDS Samsung SDS (Beijing) Co., Ltd. 100.0
Samsung SDS Samsung IT Services (Beijing) Co., Ltd. 100.0
Samsung SDS Samsung SDS Global SCL Hong Kong Ltd 100.0
Samsung SDS SDS Kerry (Shanghai) Supply Chain Solutions Limited 50.0
Samsung SDS SAMSUNG SDS Global SCL Egypt Co. Ltd. 100.0
Samsung SDS Samsung SDS Global SCL South Africa (PTY) Ltd. 100.0
Samsung SDS Samsung SDS Global SCL Transport and Logistics Joint Stock Company 100.0
Samsung SDS Samsung SDS Global Supply Chain Logistics Middle East DWC-LLC 100.0
Samsung SDS Samsung SDS Latin America Solucoes Em Tecnologia Ltda 99.7
Samsung SDS SAMSUNG SDS GLOBAL SCL LATIN AMÉRICA LOGÍSTICA LTD 99.7
Samsung SDS Inte-SDS Logistics, S.A de C.V. 51.0
Samsung SDS Samsung SDS Global SCL Rus Limited Liability Company 100.0
Miracom MIRACOM INC ASIA PACIFIC LIMITED 100.0
Samsung SDS Global SCL America, Inc. Samsung SDS Latin America Solucoes Em Tecnologia Ltda 0.3
Samsung SDS Global SCL America, Inc. Samsung SDS Mexico, S.A. DE C.V. 99.0
Samsung SDS Global SCL America, Inc. Samsung SDS Global SCL Panama S. A. 100.0
Samsung SDS Global SCL America, Inc. Samsung SDS Global SCL Chile Limitada 100.0
Samsung SDS Global SCL America, Inc. Samsung SDS Global SCL Peru S.A.C. 100.0
Samsung SDS Global SCL America, Inc. Samsung SDS Global SCL Colombia S.A.S. 100.0
Samsung SDS Global SCL America, Inc. SAMSUNG SDS GLOBAL SCL LATIN AMÉRICA LOGÍSTICA LTD 0.3
Samsung SDS Europe Ltd. Samsung SDS Global SCL Netherlands Cooperatief U.A 0.0
Samsung SDS Global SCL Netherlands Cooperatief U.A Samsung SDS Global SCL Poland Sp. Z.o.o. 0.0
Samsung SDS Global SCL Netherlands Cooperatief U.A Samsung SDS Global SCL Greece Societe Anonyme 0.0
Samsung SDS Global SCL Netherlands Cooperatief U.A Samsung SDS GSCL Romania SRL 0.0
Samsung SDS Global SCL Netherlands Cooperatief U.A Samsung SDS Global SCL Rus Limited Liability Company 0.0
Samsung SDS (Beijing) Co., Ltd. Samsung SDS Global SCL Beijing Co., Ltd 100.0
Samsung IT Services (Beijing) Co., Ltd. Samsung SDS Global Dev elopment Center Xi'an 100.0
Samsung Engineering Samsung Engineering America Inc. 100.0
Samsung Engineering Samsung Engineering Hungary Ltd. 100.0
Samsung Engineering Samsung Engineering Italy S.R.L. 100.0
Samsung Engineering Samsung Engineering (Malaysia) SDN. BHD. 100.0
Samsung Engineering PT Samsung Engineering Indonesia Co., Ltd. 100.0
Samsung Engineering Samsung Engineering (Thailand) Co., Ltd. 81.0
Samsung Engineering Samsung Engineering India Private Limited 100.0
Samsung Engineering Samsung Engineering Vietnam Co., Ltd. 100.0
Samsung Engineering Samsung Engineering Construction(Shanghai) Co., Ltd 100.0
Samsung Engineering Samsung Engineering Construction Xi' an Co., Ltd. 100.0
Samsung Engineering Samsung Saudi Arabia Co., Ltd. 100.0
Samsung Engineering Muharraq Wastew ater Services Company W.L.L. 99.8

Sam sung Electronics Business Report 235 / 261

 Investor Investee Ownership
Samsung Engineering Muharraq STP Company B.S.C. 6.6
Samsung Engineering Muharraq Holding Company 1 Ltd. 65.0
Samsung Engineering Samsung Ingenieria Mexico Construccion Y Operacion S.A. De C.V. 99.9
Samsung Engineering Samsung Engineering Trinidad Co., Ltd. 100.0
Samsung Engineering Samsung Ingenieria Manzanillo, S.A. De C.V. 99.9
Samsung Engineering Grupo Samsung Ingenieria Mexico, S.A. De C.V. 100.0
Samsung Engineering Samsung Ingenieria Energia S.A. De C.V. 100.0
Samsung Engineering Samsung Engineering Bolivia S.A 100.0
Samsung Engineering Samsung Ingenieria DUBA S.A. de C.V. 100.0
Samsung Engineering Samsung Engineering Kazakhstan L.L.P. 100.0
Samsung Engineering America Inc. SEA Construction, LLC 100.0
Samsung Engineering America Inc. SEA Louisiana Construction, L.L.C. 100.0
Samsung Engineering Malaysia Sdn. Bhd. Muharraq Wastew ater Services Company W.L.L. 0.3
Samsung Engineering India Pvt., Ltd. Samsung Saudi Arabia Co., Ltd. 0.0
Samsung Saudi Arabia Co., Ltd. Samsung EPC Company Ltd. 75.0
Muharraq Holding Company 1 Ltd. Muharraq Holding Company 2 Ltd. 100.0
Muharraq Holding Company 2 Ltd. Muharraq STP Company B.S.C. 89.9
S1 Corporation S-1 CORPORATION HUNGARY LLC 100.0
S1 Corporation SOCM LLC 100.0
S1 Corporation S-1 CORPORATION VIETNAM CO., LTD 100.0
S1 Corporation Samsung Beijing Security Systems 100.0
Cheil Worldw ide Cheil USA Inc. 100.0
Cheil Worldw ide Cheil Central America Inc. 100.0
Cheil Worldw ide IRIS Worldw ide Holdings Limited 100.0
Cheil Worldw ide CHEIL EUROPE LIMITED 100.0
Cheil Worldw ide Cheil Germany GmbH 100.0
Cheil Worldw ide Cheil France SAS 100.0
Cheil Worldw ide CHEIL SPAIN S.L 100.0
Cheil Worldw ide Cheil Benelux B.V. 100.0
Cheil Worldw ide Cheil Nordic AB 100.0
Cheil Worldw ide Cheil India Priv ate Limited 100.0
Cheil Worldw ide Cheil (Thailand) Ltd. 100.0
Cheil Worldw ide Cheil Singapore Pte. Ltd. 100.0
Cheil Worldw ide CHEIL VIETNAM COMPANY LIMITED 99.0
Cheil Worldw ide Cheil Integrated Marketing Philippines, Inc. 100.0
Cheil Worldw ide CHEIL MALAYSIA SDN. BHD. 100.0
Cheil Worldw ide CHEIL CHINA 100.0
Cheil Worldw ide Cheil Hong Kong Ltd. 100.0
Cheil Worldw ide Cheil MEA FZ-LLC 100.0
Cheil Worldw ide Cheil South Africa (Pty ) Ltd 100.0
Cheil Worldw ide CHEIL KENYA LIMITED 99.0
Cheil Worldw ide Cheil Communications Nigeria Ltd. 99.0
Cheil Worldw ide Cheil Worldw ide Inc./Jordan LLC. 100.0
Cheil Worldw ide Cheil Ghana Limited 100.0
Cheil Worldw ide Cheil Brasil Comunicacoes Ltda. 100.0
Cheil Worldw ide Cheil Mex ico, S.A. de C.V. 98.0
Cheil Worldw ide Cheil Chile SpA. 100.0
Cheil Worldw ide Cheil Peru S.A.C. 100.0
Cheil Worldw ide CHEIL ARGENTINA S.A. 98.0
Cheil Worldw ide Cheil Rus LLC 100.0
Cheil Worldw ide Cheil Ukraine LLC 100.0
Cheil Worldw ide Cheil Kazakhstan LLC 100.0
Hotel Shilla Samsung Hospitality America Inc. 100.0
Hotel Shilla Shilla Trav el Retail Pte. Ltd. 100.0
Hotel Shilla Samsung Shilla Business Service Beijing Co., Ltd. 100.0
Hotel Shilla Shilla Trav el Retail Hong Kong Limited 100.0
Hotel Shilla Shilla Trav el Retail Taiw an Limited 64.0
HDC Shilla Duty Free LTD HDC SHILLA (SHANGHAI) CO., LTD 100.0
SBTM Samsung Hospitality U.K. Inc. 100.0
SBTM Samsung Hospitality Europe GmbH 100.0
SBTM SAMSUNG HOSPITALITY ROMANIA SRL 100.0

Sam sung Electronics Business Report 236 / 261

 Investor Investee Ownership
SBTM Samsung Hospitality Vietnam Co., Ltd. 99.0
SBTM Samsung Hospitality Philippines Inc. 100.0
SBTM Samsung Hospitality India Private Limited 100.0
Iris Americas, Inc. Iris (USA) Inc. 100.0
Iris Americas, Inc. Iris Atlanta, Inc. 100.0
Iris Americas, Inc. Iris Ex perience, Inc. 100.0
Iris Americas, Inc. Iris Latin America, Inc. 100.0
Iris Americas, Inc. Iris Worldw ide San Diego, Inc. 100.0
Iris Americas, Inc. 89 Degrees, Inc. 75.0
Iris Latin America, Inc. Irisnation Latina No.2, S. de R.L. de C.V. 0.0
Iris Latin America, Inc. Irisnation Latina, S. de R.L. de C.V. 0.0
Iris Canada Holdings Ltd Pricing Solutions Ltd 100.0
Cheil USA Inc. The Barbarian Group LLC 100.0
Cheil USA Inc. McKinney Ventures LLC 100.0
Cheil USA Inc. Cheil India Priv ate Limited 0.0
Cheil USA Inc. Cheil Mex ico, S.A. de C.V. 2.0
IRIS Worldw ide Holdings Limited Iris Nation Worldw ide Limited 100.0
IRIS Worldw ide Holdings Limited Josh & James Limited 100.0
Iris Nation Worldw ide Limited Iris Americas, Inc. 100.0
Iris Nation Worldw ide Limited Irisnation Latina No.2, S. de R.L. de C.V. 100.0
Iris Nation Worldw ide Limited Irisnation Latina, S. de R.L. de C.V. 100.0
Iris Nation Worldw ide Limited Iris Canada Holdings Ltd 100.0
Iris Nation Worldw ide Limited Iris London Limited 100.0
Iris Nation Worldw ide Limited Iris Promotional Marketing Ltd 100.0
Iris Nation Worldw ide Limited Iris Ventures 1 Limited 98.6
Iris Nation Worldw ide Limited Founded Partners Limited 100.0
Iris Nation Worldw ide Limited Iris Products (Worldw ide) Limited 100.0
Iris Nation Worldw ide Limited Iris Korea Limited 100.0
Iris Nation Worldw ide Limited Iris PR Limited 100.0
Iris Nation Worldw ide Limited Iris Concise Limited 100.0
Iris Nation Worldw ide Limited Iris Digital Limited 100.0
Iris Nation Worldw ide Limited Iris Amsterdam B.V. 100.0
Iris Nation Worldw ide Limited Dataly tics Limited 100.0
Iris Nation Worldw ide Limited Iris Ventures (Worldw ide) Limited 100.0
Iris Nation Worldw ide Limited Iris Culture Limited 100.0
Iris Nation Worldw ide Limited Concise Consultants Limited 100.0
Iris Nation Worldw ide Limited Atom42 Ltd 100.0
Iris Nation Worldw ide Limited WDMP Limited 49.0
Iris Nation Worldw ide Limited Pricing Solutions (UK) Limited 100.0
Iris Nation Worldw ide Limited Iris Serv ices Limited Dooel Skopje 100.0
Iris Nation Worldw ide Limited Irisnation Singapore Pte. ltd. 100.0
Iris Nation Worldw ide Limited Iris Worldw ide Integrated Marketing Private Limited 100.0
Iris Nation Worldw ide Limited Iris Sy dney PTY Ltd 100.0
Iris Nation Worldw ide Limited Iris Worldw ide (Thailand) Limited 100.0
Iris Nation Worldw ide Limited Iris Beijing Adv ertising Company Limited 100.0
Iris Nation Worldw ide Limited Irisnation Hong Kong Limited 100.0
Iris London Limited Iris Partners LLP 100.0
Iris Promotional Marketing Ltd Holdings BR185 Limited 100.0
Iris Ventures 1 Limited Iris Germany GmbH 100.0
Founded Partners Limited Founded, Inc. 100.0
Iris Ventures (Worldw ide) Limited Fix ers Group B.V. 49.0
Iris Germany GmbH Pepper NA, Inc. 100.0
Iris Germany GmbH Pepper Technologies Pte. Ltd. 100.0
CHEIL EUROPE LIMITED Beattie McGuinness Bungay Limited 100.0
CHEIL EUROPE LIMITED Cheil Italia S.r.l 100.0
Cheil Germany GmbH Cheil Austria GmbH 100.0
Cheil Germany GmbH Centrade Integrated SRL 80.0
Centrade Integrated SRL Centrade Cheil HU Kft. 100.0
Centrade Integrated SRL Centrade Cheil Adriatic D.O.O. 100.0
Cheil India Priv ate Limited Ex perience Commerce Software Priv ate Limited 100.0
Cheil Singapore Pte. Ltd. Pengtai Greater China Company Limited 95.7

Sam sung Electronics Business Report 237 / 261

 Investor Investee Ownership
Cheil Singapore Pte. Ltd. PT. CHEIL WORLDWIDE INDONESIA 100.0
Cheil Integrated Marketing Philippines, Inc. Cheil Philippines Inc. 30.0
Cheil Hong Kong Ltd. Pengtai Greater China Company Limited 3.1
Samsung Shilla Business Service Beijing Co., Ltd. Tianjin Samsung International Travel Servic e Co., Ltd 100.0
Shilla Trav el Retail Hong Kong Limited Shilla Retail Limited 100.0
Cheil MEA FZ-LLC One Agency FZ-LLC 100.0
Cheil MEA FZ-LLC One RX Project Management Design and Production Limited Company 0.0
Cheil South Africa (Pty ) Ltd CHEIL KENYA LIMITED 1.0
Cheil South Africa (Pty ) Ltd Cheil Communications Nigeria Ltd. 1.0
One Agency FZ-LLC One RX India Priv ate Limited 100.0
One Agency FZ-LLC One RX Project Management Design and Production Limited Company 100.0
One Agency FZ-LLC ONE RX INTERIOR DECORATION L.L.C 100.0
One Agency FZ-LLC ONE AGENCY PRINTING L.L.C 100.0
One Agency FZ-LLC One Agency South Africa (Pty) Ltd 100.0
ONE RX INTERIOR DECORATION L.L.C One RX India Priv ate Limited 0.0
Holdings BR185 Limited Brazil 185 Participacoes Ltda 100.0
Brazil 185 Participacoes Ltda Iris Router Marketing Ltda 100.0
Cheil Brasil Comunicacoes Ltda. CHEIL ARGENTINA S.A. 2.0

※ Percent of ownership as of December 31, 2019 based on common shares

Sam sung Electronics Business Report 238 / 261

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:
May 15, 2019

(2) Summary of Regulation

- Restriction on cross-holdings
- Restriction on debt guarantee between affiliates
- Restriction on affiliate voting rights of financial & insurance companies
- Decision making of board committee and public disclosure of large-scale inter-affiliate transactions
- Public disclosure of important matters of unlisted companies
- Other public disclosures related to Group status

D. Concurrent position with other affiliates

[As of December 31, 2019]

Concurrent position
Name
Name of company Position Full/part time
Dong-soo Jun Samsung Medison CEO Full time
Samsung Electronics Logitech Auditor Part time
Weon-jin Choi Samsung Electronics Sales Auditor Part time
Samsung Electronics Service Auditor Part time
Tae-yang Yoon SEMES Non-Executive director Part time
Sung-woo Shin STECO Auditor Part time
Sung-won Son Samsung Medison Auditor Part time
Dong-woo Lee SEMES Auditor Part time
Won-joon Lee SERI Auditor Part time
Khi-jae Cho Samsung Display Auditor Part time
Byeong-seong Kim Samsung Medison Executive director Full time
Seung-won Lee STECO Non-Executive director Part time
Bang-young Song Samsung Venture Investment Auditor Part time
Se-yeon Jang SEMES Non-Executive director Part time

Sam sung Electronics Business Report 239 / 261

E. Equity investments in other corporations
(1) The total book value of equity investments in other corporations as of December 31, 2019 is KRW 57,781 billion (for the purpose of business operations, etc.)
[As of December 31, 2019] (1,000 shares, KRW million, %)

Beginning Balance Increase/Decrease Ending Balance Current Financial Stats

Acquisition Acquisition
Account Name of Company Objective
Date Cost
Acquisition/Disposal Net
Owner Book Owner
Qty Valuation Qty Book Value Total Asset Income
ship (% ) Value Qty Amount ship (% )
(Loss)
Samsung Electro-
Listed 1977.01 Business 250 17,693 23.7 445,244 17,693 23.7 445,244 8,674,248 528,049
Mechanics

Unlisted STECO 1995.06 Management 24,000 2,590 70.0 35,861 2,590 70 35,861 169,173 8,337

Unlisted SEMES 1992.12 Management 1,000 2,173 91.5 71,906 2,173 91.5 71,906 1,335,871 31,409

Unlisted SERI 1991.05 Business 320 3,576 29.8 24,942 3,576 29.8 24,942 128,925 225

Listed Samsung SDS 1992.07 Business 6,160 17,472 22.6 560,827 17,472 22.6 560,827 9,021,236 750,449

Samsung
Unlisted 1998.01 Management 30,000 6,000 99.3 48,121 6,000 99.3 48,121 445,898 1,364
Electronics Service

Samsung
Unlisted 2000.12 Management 3,100 1,767 100.0 247,523 1,767 100 247,523 1,061,489 4,755
Electronics Sales
Samsung
Unlisted Electronics 1999.04 Management 76 1,011 100.0 46,669 1,011 100 46,669 218,240 10,899
Logitech

Unlisted Samsung Display 2012.04 Management 16,009,547 221,969 84.8 18,509,307 221,969 84.8 18,509,307 46,543,974 407,791

Unlisted SVIC #21 2011.11 Management 19,800 1 99.0 83,506 -0 -7,524 1 99.0 75,982 95,135 19,691

Unlisted SVIC #22 2011.11 Management 19,800 1 99.0 129,066 -0 -14,850 1 99.0 114,216 119,689 2,131

Unlisted SVIC #26 2014.11 Management 19,800 2 99.0 167,181 -0 -2,970 2 99.0 164,211 134,421 -63,401

Unlisted SVIC #27 2014.09 Management 5,940 0 99.0 31,739 0 5,861 0 99.0 37,600 42,486 3,873

※ Account noted here reflects approved for sales securities

Sam sung Electronics Business Report 240 / 261

 Beginning Balance Increase/Decrease Ending Balance Current Financial Stats
Acquisition Acquisition
Account Name of Company Objective Net
Date Cost Owner Acquisition/Disposal Owner
Qty Book Value Valuation Qty Book Value Total Asset Income
ship (% ) Qty Amount ship (% )
(Loss)

Unlisted SVIC #28 2015.02 Management 7,425 2 99 169,831 -0 -11,839 2 99 157,992 322,277 107,724

Unlisted SVIC #32 2016.08 Management 19,800 1 99 140,080 1 43,397 2 99 183,477 227,750 46,897

Unlisted SVIC #33 2016.11 Management 4,950 1 99 133,497 1 21,802 2 99 155,299 188,559 26,412

Unlisted SVIC #42 2018.11 Management 4,950 0 99 4,950 0 950 0 99 5,900 4,939 -1,232

Unlisted SVIC #45 2019.05 Management 19,800 - - - 0 20,790 0 99 20,790 19,097 -3,169

Unlisted Samsung Medison 2011.02 Management 286,384 87,350 68.5 351,792 -25,007 87,350 68.5 326,785 361,483 8,975

Listed Samsung BioLogics 2011.04 Business 30,000 20,837 31.5 443,193 20,837 31.5 443,193 5,911,627 202,904

Intellectual
Unlisted 2011.05 Business 5,000 357 15.7 1,922 357 10.7 1,922 48,746 8,366
Discovery
Samsung Heavy
Listed 1977.09 Business 125 100,693 16 746,138 -14,097 100,693 16 732,041 13,600,084 -1,315,353
Industries

Listed Hotel Shilla 1979.12 Business 252 2,005 5.1 153,361 28,667 2,005 5.1 182,028 3,527,281 169,428

Listed Cheil Worldwide 1988.09 Business 185 29,038 25.2 491,599 29,038 25.2 491,599 2,252,767 139,453

Listed A-Tech Solution 2009.11 Business 26,348 1,592 15.9 12,418 -685 1,592 15.9 11,733 188,964 1,546

Listed iMarket Korea 2000.12 Business 1,900 647 1.8 4,479 2,253 647 1.8 6,732 1,096,877 25,788

Listed KT Skylife 2001.12 Business 3,344 240 0.5 2,760 -667 240 0.5 2,093 848,276 56,008

Listed Samsung SDI 1977.01 Business 304 13,463 19.6 1,242,605 13,463 19.6 1,242,605 19,852,096 402,366

Listed Wonik IPS 2016.04 Business 16,214 1,851 4.5 37,204 29,152 1,851 3.8 66,356 899,162 42,863

Listed Wonik Holdings 2013.12 Business 15,411 1,759 2.3 6,175 3,430 1,759 2.3 9,605 1,225,200 48,982

※ Account noted here reflects approved for sales securities

Sam sung Electronics Business Report 241 / 261

 Beginning Balance Increase/Decrease Ending Balance Current Financial Stats
Acquisition Acquisition
Account Name of Company Objective
Date Cost Net
Owner Book Acquisition/Disposal Ownership
Qty Valuation Qty Book Value Total Asset Income
ship (% ) Value Qty Amount (% )
(Loss)

Listed Dongjin Semichem 2017.11 Business 48,277 2,468 4.8 18,040 23,297 2,468 4.8 41,337 840,711 58,693

Listed Soulbrain 2017.11 Business 55,618 835 4.8 39,709 30,691 835 4.8 70,400 1,159,460 119,291

Korea Business
Unlisted 1995.01 Business 5,000 1,000 17.2 5,231 -1,900 1,000 17.2 3,331 84,819 1,273
Banking

The Korea Economic

Unlisted 1987.05 Business 150 72 0.4 365 72 0.4 365 499,201 38,510
Daily

Samsung Venture
Unlisted 1999.11 Business 4,900 980 16.3 7,313 5,441 980 16.3 12,754 133,153 11,589
Investment

Unlisted Cyber Bank 2000.12 Business 8,000 1,083 7.5 0 1,083 7.5 0 0 0

Unlisted FineChips 2001.12 Business 10 2 3.8 10 2 3.2 10 9,575 2,084

Unlisted Inkel 2006.11 Business 130 0 0 0 0 0 0 87,056 -15,730

Listed Yongpyong Resort 2007.05 Business 1,869 400 0.8 2,436 -36 400 0.8 2,400 849,936 -13,792

Unlisted Sambo Computer 2012.09 Withdrawal 0 0 0 0 0 0 0 42,868 5,560

Unlisted Icube #1 2009.12 Business 4,000 0 16.2 1,614 0 -1,614 0 0 0 - -

Shinsung Eng &

Unlisted 2010.07 Withdrawal 1 0 0 0 0 0 0 231,008 -19,693
Construction

Unlisted Woobang 2010.07 Withdrawal 0 1 0 0 1 0 0 593,687 17,822

Unlisted Daewoo Development 2012.12 Withdrawal 0 0 0 0 0 0 0 268,251 10,610

Daewoo Songdo
Unlisted 2012.12 Withdrawal 0 9 0 0 9 0 0 19,367 -350
Development
※ Account noted here reflects approved for sales securities

Sam sung Electronics Business Report 242 / 261

 Beginning Balance Increase/Decrease Ending Balance Current Financial Stats
Name of Acquisition Acquisition
Account Objective
Company Date Cost Acquisition/Disposal Net
Owner Book Owner Book
Qty Valuation Qty Total Asset Income
ship (% ) Value Qty Amount ship (% ) Value
(Loss)
Zyle Motor
Unlisted 2012.12 Withdrawal 0 1 0 0 1 0 0 224,257 2,247
Sales
Sungwon
Unlisted 2014.04 Withdrawal 0 1 0 0 1 0 0 27,744 -627
Construction

Unlisted Inhee 2014.04 Withdrawal 0 2 0.2 0 -2 0 0.1 0 2,972 -6,039

Unlisted Poonglim 2014.05 Withdrawal 0 1 0.4 0 -1 -0 - - - - -

Unlisted B&B Systems 2019.12 Withdrawal 61 - - - 12 61 12 3.5 61 761 -3,016

Semiconductor
Unlisted 2017.03 Business 500 50,000,000 66.7 50,000 50,000,000 66.7 50,000 75,397 134
Growth Fund

Unlisted JNT 2011.02 Business 1,800 0 24 1,758 0 24 1,758 4,839 -359

Unlisted SV 2011.02 Business 1,850 0 14.9 0 - - - - -

Seoul
Unlisted Investment 2011.1 Business 1,550 0 19.4 1,925 -0 -1,925 - - - - -
Partners

Unlisted Daishin Aju IB 2011.08 Business 258 0 3 681 0 3 681 13,151 -1,667

Unlisted TS 2011.11 Business 1,700 0 20.5 306 -0 -306 0 20.5 0 3,807 265

Unlisted L&S 2012.07 Business 848 0 7.5 1,681 -0 -1,297 0 7.5 384 5,259 6,706

Unlisted Maltani Corp. 2012.04 Business 16,544 45 15 12,358 -2,807 45 15 9,551 74,750 2,087

Unlisted Pantech 2013.06 Business 53,000 53,000 10 0 53,000 10 0 58,926 -254

Unlisted KTCNP-GC 2013.12 Business 960 0 3.6 2,996 -0 -1,180 0 3.6 1,816 120,821 -116,522

POSCO Social
Unlisted 2013.12 Business 600 0 10 440 -0 -200 0 10 240 2,353 989
Enterprise Fund
※ Account noted here reflects approved for sales securities

Sam sung Electronics Business Report 243 / 261

 Beginning Balance Increase/Decrease Ending Balance Current Financial Stats
Name of Acquisition Acquisition
Account Objective
Company Date Cost Net
Ownership Acquisition/Disposal Ownership
Qty Book Value Valuation Qty Book Value Total Asset Income
(% ) Qty Amount (% )
(Loss)
AI Research
Unlisted 2016.07 Business 3,000 600 14.3 3,000 600 14.3 3,000 15,273 -1,810
Institute

Position
Unlisted SECA 1992.08 3,823 0 100 90,922 0 100 90,922 1,396,008 34,228
Security
Position
Unlisted SEA 1978.07 59,362 492 100 17,053,807 0 112,750 492 100 17,166,557 34,704,039 1,127,719
Security

Position
Unlisted SELA 1989.04 319 40 100 86,962 40 100 86,962 489,412 28,864
Security
Position
Unlisted SEM 1995.07 3,032 3,837 63.6 165,638 3,837 63.6 165,638 1,250,456 91,050
Security

Position
Unlisted SEASA 1996.06 4,696 21,854 98 6,779 21,854 98 6,779 46,405 10,088
Security

Position
Unlisted SEDA 1994.01 13,224 77,205,709 87 647,620 77,205,709 87 647,620 7,058,719 887,298
Security
Position
Unlisted SECH 2002.12 597 0 4.1 597 0 4.1 597 497,328 25,835
Security

Position
Unlisted SESA 1989.01 3,276 8,021 100 142,091 8,021 100 142,091 1,117,384 36,853
Security
Position
Unlisted SENA 1992.03 392 1,000 100 69,372 1,000 100 69,372 1,246,502 52,822
Security

Position
Unlisted SEH 1991.05 1,954 753 100 650,157 753 100 650,157 2,109,654 106,704
Security
Position
Unlisted SEP 1982.09 204 1,751 100 37,616 1,751 100 37,616 212,856 6,957
Security

Position
Unlisted SEF 1991.08 230 2,700 100 234,115 2,700 100 234,115 1,738,061 53,708
Security

Position
Unlisted SEUK 1995.07 33,908 109,546 100 433,202 109,546 100 433,202 2,644,358 104,741
Security

Position
Unlisted SEHG 1982.02 28,042 0 100 354,846 0 100 354,846 844,742 82,940
Security
※ Account noted here reflects approved for sales securities

Sam sung Electronics Business Report 244 / 261

 Current Financial
Beginning Balance Increase/Decrease Ending Balance
Stats
Name of Acquisition Acquisition
Account Objective
Company Date Cost Acquisition/Disposal Net
Ownership Book Ownership
Qty Valuation Qty Book Value Total Asset Income
(% ) Value Qty Amount (% )
(Loss)
Position
Unlisted SEAG 2002.01 40 0 100 32,162 0 100 32,162 423,105 20,229
Security

Position
Unlisted SEI 1993.05 862 677 100 143,181 677 100 143,181 1,310,500 46,911
Security

Position
Unlisted SEBN 1995.07 236 539,138 100 914,751 539,138 100 914,751 1,914,864 39,175
Security

Position
Unlisted SELS 1991.05 18,314 1,306 100 24,288 1,306 100 24,288 2,027,213 6,531
Security

Position
Unlisted SEPOL 1996.04 5,462 106 100 78,267 106 100 78,267 909,905 47,279
Security

Position
Unlisted SSA 1998.12 263 2,000 100 32,622 2,000 100 32,622 522,382 37,925
Security

Position
Unlisted SESK 2002.06 8,976 0 55.7 263,767 0 55.7 263,767 1,324,355 67,631
Security

Position
Unlisted SEEH 2008.01 4,214 0 100 1,369,992 0 100 1,369,992 10,682,847 21,915
Security
Position
Unlisted SEO 1997.01 120 0 100 -10,043 0 100 -10,043 138,325 -208
Security

Position
Unlisted SERC 2006.01 24,877 0 100 188,290 0 100 188,290 1,460,307 76,385
Security
Position
Unlisted SERK 2007.07 4,600 0 100 204,555 0 100 204,555 1,259,052 160,049
Security

Position
Unlisted SEAU 1987.11 392 53,200 100 111,964 53,200 100 111,964 468,812 32,001
Security
Position
Unlisted SEMA 1989.09 4,378 16,247 100 103,402 16,247 100 103,402 189,418 19,563
Security

Position
Unlisted SGE 1995.05 827 0 100 32,836 0 100 32,836 1,017,534 -28,436
Security
Position
Unlisted SEEG 2012.07 23 0 0.1 39 0 0.1 39 642,091 98,488
Security
※ Account noted here reflects approved for sales securities

Sam sung Electronics Business Report 245 / 261

 Current Financial
Beginning Balance Increase/Decrease Ending Balance
Stats
Name of Acquisition Acquisition
Account Objective
Company Date Cost Acquisition/Disposal
Ownership Book Ownership Book Net Income
Qty Valuation Qty Total Asset
(% ) Value Qty Amount (% ) Value (Loss)

Position
Unlisted SEIN 1991.08 7,463 46 100 118,909 46 100 118,909 1,014,085 14,243
Security
Position
Unlisted SDMA 1995.03 21,876 71,400 75 18,741 71,400 75 18,741 25,824 208
Security
Position
Unlisted SIEL 1995.08 5,414 216,787 100 75,263 216,787 100 75,263 7,042,872 448,678
Security
Position
Unlisted SRI-B 2005.05 7,358 17 100 31,787 17 100 31,787 383,411 35,605
Security
Position
Unlisted SAVINA 1995.01 5,839 0 100 28,365 0 100 28,365 292,458 31,012
Security
Position
Unlisted TSE 1988.01 1,390 11,020 91.8 279,163 11,020 91.8 279,163 2,912,731 144,087
Security
Position
Unlisted STE 1996.01 4,206 2 49 0 2 49 0 6,609 0
Security
Position
Unlisted SME 2003.05 4,796 17,100 100 7,644 17,100 100 7,644 412,503 24,249
Security
Position
Unlisted SAPL 2006.07 793 877,133 100 981,483 877,133 100 981,483 9,137,262 1,265,359
Security
Position
Unlisted SEHK 1988.09 349 274,250 100 79,033 274,250 100 79,033 1,173,330 35,374
Security
Position
Unlisted SET 1994.11 456 27,270 100 112,949 27,270 100 112,949 1,186,764 27,757
Security
Position
Unlisted SESS 1994.12 18,875 0 100 504,313 0 100 504,313 1,094,799 74,005
Security
Position
Unlisted SCIC 1996.03 23,253 0 100 640,452 0 100 640,452 14,637,222 581,115
Security
Position
Unlisted SEHZ 1992.12 792 0 89.6 255,535 0 89.6 255,535 1,364,967 -52,492
Security
Position
Unlisted SSEC 1995.04 32,128 0 69.1 130,551 0 69.1 130,551 524,526 15,130
Security
Position
Unlisted TSEC 1993.04 15,064 0 48.2 138,101 0 48.2 138,101 615,753 27,297
Security
※ Account noted here reflects approved for sales securitie

Sam sung Electronics Business Report 246 / 261

 Current Financial
Beginning Balance Increase/Decrease Ending Balance
Stats
Name of Acquisition Acquisition
Account Objective
Company Date Cost Acquisition/Disposal
Ownership Ownership Net Income
Qty Book Value Valuation Qty Book Value Total Asset
(% ) Qty Amount (% ) (Loss)

Position
Unlisted TSTC 2001.03 10,813 0 90 490,041 -229,949 0 90 260,092 579,435 -120,883
Security
Position
Unlisted SSET 2002.02 6,009 0 100 41,182 0 100 41,182 41,077 -1,074
Security
Position
Unlisted SESC 2002.09 5,471 0 73.7 34,028 0 73.7 34,028 995,499 51,745
Security
Position
Unlisted SSS 2001.01 1,200 0 100 19,189 0 100 19,189 5,880,616 265,801
Security
Position
Unlisted SSCR 2006.09 3,405 0 100 9,332 0 100 9,332 45,272 2,516
Security
Position
Unlisted TSLED 2012.04 119,519 0 100 119,519 0 100 119,519 478,477 27,720
Security
Position
Unlisted SCS 2012.09 111,770 0 100 4,577,360 0 698,400 0 100 5,275,760 12,370,070 537,037
Security
Position
Unlisted SSCX 2016.04 1,141 0 100 1,141 0 100 1,141 2,091,092 53,160
Security
Position
Unlisted SJC 1975.12 273 1,560 100 253,108 1,560 100 253,108 1,218,011 3,923
Security
Position
Unlisted SRJ 1992.08 3,120 122 100 117,257 122 100 117,257 161,026 2,610
Security

Unlisted TSST Japan 2004.03 Business 1,639 30 49 0 30 49 0 226 -46

Semiconductor
Unlisted 2002.12 Business 38 0 1.2 10 0 1.2 10 1,922 56
Portal

Unlisted Nanosys 2010.08 Business 4,774 1,747 1.4 2,387 1,747 1.3 2,387 19,705 -11,793

Unlisted One-Blue 2011.07 Business 1,766 0 16.7 1,766 0 16.7 1,766 30,238 650

Unlisted TidalScale 2013.08 Business 1,112 2,882 8.3 1,112 2,882 4.3 1,112 4,507 -10,773

Unlisted Sentiance 2012.12 Business 3,422 7 7.5 3,422 7 7.2 3,422 5,516 -7,504

※ Account noted here reflects approved for sales securities

Sam sung Electronics Business Report 247 / 261

 Current Financial
Beginning Balance Increase/Decrease Ending Balance
Stats
Name of Acquisition Acquisition
Account Objective
Company Date Cost Net
Ownership Acquisition/Disposal Ownership Book Total
Qty Book Value Valuation Qty Income
(% ) Qty Amount (% ) Value Asset
(Loss)

Unlisted Mantis Vision 2014.01 Business 1,594 355 2.1 1,980 355 2.1 1,980 31,758 -20,478

Unlisted Leman 2014.08 Business 1,019 17 3.4 1,019 17 3.4 1,019 1,681 -2,959

Unlisted Alces 2014.09 Business 4,832 421 18.5 0 -421 - - - - -

Unlisted Keyssa 2016.01 Business 3,332 1,235 2.1 3,332 1,235 1.9 3,332 8,400 -15,959

Unlisted Zyomed 2016.01 Business 2,044 1,464 2.9 2,044 1,464 2.9 2,044 17,218 -690

Unlisted SensiFree 2016.01 Business 2,111 490 17.9 2,111 176 666 9.5 2,111 657 -2,407

Unlisted Unispectral 2016.02 Business 1,112 2,308 7.9 2,130 2,308 7.9 2,130 3,887 -3,828

Unlisted Quobyte 2016.04 Business 2,865 729 11.8 2,865 729 11.8 2,865 1,229 -772

Unlisted Afero 2016.05 Business 5,685 723 5.5 5,685 723 5.5 5,685 2,392 -11,917

Unlisted Graphcore 2016.06 Business 3,494 3,000 4.5 3,494 9,000 12,000 3.7 3,494 240,463 -98,055

Unlisted Soundhound 2016.12 Business 7,059 306 1.1 7,059 306 1.1 7,059 119,637 -38,507

Unlisted Aimotive 2017.12 Business 3,302 2 3.2 3,302 2 3.2 3,302 42,488 -8,610

Unlisted Fasetto 2019.01 Business 6,701 - - - 338 6,701 338 3.5 6,701 271,548 -14,256

※ Based on separate financial statements

※ Ownership percentage is calculated based on the number of common shares issued
※ Financial stats of Sungwon Construction is as of December 31 2016, financial stats of Daewoo Songdo Development and M antis Vision are as of December 31 2017,
financial stats of M antis Vision, SensiFree, Soundhound are as of Decebmer 31 2018, due to difficulties of obtaining the most recent financial data.
※ Discounted cash flow method and the net asset evaluation method are used to estimate recoverable amount of Samsung M edison and TSTC shares,and book value exceeding the recoverable
amount was recognized as valuation loss of 254,956 million won

248 / 261
 X. Related Party Transactions

1. Credit offerings for affiliates and subsidiaries

A. Details on debt guarantee (as of December 31, 2019)

- Domestic: N/A
- Overseas:

(USD thousand)
Limit of Guarantee Transactions
Guarantee Guarantee Interest
Company Relationship Creditor Beginning End of Beginning Increase/ End of
start date expiry date Rate (%)
of period period of period decrease period
SEA Subsidiary BOA etc. 28-Mar-19 16-Dec-20 1,423,000 1,328,000 0 0 0
SEM Subsidiary BBVA etc. 14-Jun-19 16-Dec-20 546,000 485,000 0 0 0
SAMCOL Subsidiary Citibank etc. 24-Oct-19 16-Dec-20 168,000 180,000 85,662 4,056 89,718 5.6%
SEDA Subsidiary BRADESCO etc. 14-Jun-19 16-Dec-20 769,000 639,000 0 0 0
SECH Subsidiary Santander etc. 01-Jun-19 16-Dec-20 178,000 142,000 0 17,256 17,256 1.8%
SEPR Subsidiary BBVA etc. 14-Jun-19 16-Dec-20 180,000 230,000 58,710 31,877 90,587 1.9%
SSA Subsidiary SCB etc. 09-Nov -19 16-Dec-20 323,000 318,000 0 0 0
SEMAG Subsidiary SocGen etc. 14-Jun-19 16-Dec-20 110,000 110,000 0 0 0
SETK Subsidiary BNP etc. 19-Jul-19 16-Dec-20 822,000 787,000 64,519 233 64,752 11.5%
SECE Subsidiary Citibank etc. 14-Jun-19 13-Jun-20 75,612 75,698 0 0 0
SEEG Subsidiary HSBC 14-Jun-19 08-Nov -20 50,000 85,000 0 0 0
SEIN Subsidiary BNP etc. 26-Apr-19 16-Dec-20 186,000 145,000 0 0 0
SJC Subsidiary Mizuho etc. 14-Jun-19 16-Dec-20 892,874 896,633 0 0 0
SEUC Subsidiary Credit Agricole etc. 14-Jun-19 16-Dec-20 150,000 150,000 0 0 0
SEDAM Subsidiary Citibank etc. 09-Nov -19 08-Nov -20 371,000 322,000 0 0 0
SECA Subsidiary BoA 17-Dec-19 16-Dec-20 0 70,000 0 0 0
SELA Subsidiary Citibank 14-Jun-19 16-Dec-20 50,000 70,000 0 0 0
SEEH Subsidiary HSBC etc. 14-Jun-19 16-Dec-20 697,288 703,000 0 0 0
SERK Subsidiary SocGen etc. 17-Dec-19 16-Dec-20 245,000 220,000 0 0 0
SELV Subsidiary Citibank 14-Jun-19 16-Dec-20 10,000 10,000 0 0 0
SAPL Subsidiary BOA etc. 09-Nov -19 08-Nov -20 411,000 395,000 0 0 0
SEV Subsidiary SCB 14-Jun-19 08-Nov -20 15,000 15,000 0 0 0
SAVINA Subsidiary HSBC etc. 09-Nov -19 08-Nov -20 71,000 71,000 0 0 0
SET Subsidiary SCB 14-Jun-19 16-Dec-20 30,000 30,000 0 0 0
SCIC Subsidiary HSBC etc. 09-Nov -19 08-Nov -20 350,000 350,000 0 0 0
SME Subsidiary SCB 17-Dec-19 16-Dec-20 110,000 110,000 0 0 0
SAMEX Subsidiary Citibank 17-Dec-19 16-Dec-20 5,000 5,000 0 0 0
SEASA Subsidiary Citibank 09-Nov -19 08-Nov -20 1,000 2,000 0 0 0
SSAP Subsidiary SCB 14-Jun-19 13-Jun-20 30,000 30,000 0 0 0
SEHK Subsidiary HSBC 14-Jun-19 13-Jun-20 2000 0 0 0 0
SEPM Subsidiary HSBC 31-Dec-19 13-Jun-20 7,712 35,000 7,712 -7,712 0
SESAR Subsidiary HSBC 09-Nov -19 08-Nov -20 0 50,000 0 0 0
AdGear
Technologies Subsidiary BOA 14-Jun-19 13-Jun-20 2,000 2,000 0 0 0
Inc.

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 Harman
International Subsidiary JP Morgan 09-Nov -19 08-Nov -20 0 100,000 0 0 0
Industries, Inc.
Harman
International Subsidiary MUFG 14-Jun-19 13-Jun-20 0 25,000 0 0 0
Japan Co., Ltd.
Harman RUS
Subsidiary SocGen 09-Nov -19 08-Nov -20 0 15,000 0 0 0
CIS LLC
Harman Holding
Subsidiary HSBC 09-Nov -19 08-Nov -20 0 30,000 0 0 0
Limited
Harman do
Brasil Industria
Eletronica e
Participacoes
Ltda.
Harman da Subsidiary SocGen 09-Nov -19 08-Nov -20 0 15,000 0 0 0
Amazonia
Industria
Eletronica e
Participacoes
Ltda.
Harman
Finance
Subsidiary JP Morgan, etc. 27-May -2015 27-May -22 400,101 392,210 400,101 -7,891 392,210 2.0%
International,
SCA
Total 8,681,587 8,638,541 616,703 37,819 654,522
Note: SEC requires Board approval for individual guarantees that equal or exceed 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.
SEC receives fees on the debt it guarantees depending on the maturity date of each debt guarantee, general loan interest rate, etc.
In 2019, the Company claimed approximately USD 238 thousand in guarantee fees and, as of December 31, 2019, has yet to receive
the amount.

B. Purchase and sales of securities

N/A

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2. Acquisitions and disposals of assets with affiliates and subsidiaries
(KRW mil)

Gain or loss
Company Relationship Transaction type Transaction date* Date basis Asset Amount**
on disposal
Samsung
Electro- Affiliates Business acquisition Jun 1, 2019 Date of acquisition Machinery, etc. 785,000 -
Mechanics

SCS Affiliates Asset sale/purchase Dec 31, 2019 Date of sale/purchase Machinery, etc. 399,043 197,700

Samsung SDI Affiliates Asset sale Aug 23, 2019 Date of sale Machinery, etc. 16,106 3,278

SAS Affiliates Asset sale Dec 6, 2019 Date of sale Machinery, etc. 12,807 3,086

SESS Affiliates Asset sale/purchase Nov 5, 2019 Date of sale/purchase Machinery, etc. 10,404 449

SSI Affiliates Asset purchase Nov 30, 2019 Date of purchase Machinery, etc. 3,678 -

SEHZ Affiliates Asset purchase Dec 9, 2019 Date of purchase Machinery, etc. 2,688 -

SEV Affiliates Asset sale/purchase Dec 4, 2019 Date of sale/purchase Machinery, etc. 1,188 348

TSTC Affiliates Asset purchase Mar 5, 2019 Date of purchase Machinery, etc. 1,188 -

SEVT Affiliates Asset sale/purchase Dec 1, 2019 Date of sale/purchase Machinery, etc. 1,064 44

TSEC Affiliates Asset purchase Oct 25, 2019 Date of purchase Machinery, etc. 775 -

SEHC Affiliates Asset sale Nov 15, 2019 Date of sale Machinery, etc. 650 23

SESK Affiliates Asset sale/purchase Oct 1, 2019 Date of sale/purchase Machinery, etc. 261 7

TSE Affiliates Asset sale Nov 27, 2019 Date of sale Machinery, etc. 155 42

SIEL Affiliates Asset sale Aug 22, 2019 Date of sale Machinery, etc. 107 7

SEIN Affiliates Asset sale Aug 22, 2019 Date of sale Machinery, etc. 107 7

STECO Co.,
Affiliates Asset sale Dec 30, 2019 Date of sale Machinery, etc. 103 103
Ltd.
Note: On a Parent basis
Acquisitions and disposals of assets listed above are not subject to a resolution of the Board with the exception of transactions
with Samsung Electro-Mechanics and Samsung SDI.
*Most recent transaction.
**Properly calculated by an appropriate method based upon market value assessment. Transaction was made under normal
conditions (eg, terms of cash payment within the 15th, 30th of the following month of transaction).

In 2019, the Company acquired Samsung Electro-Mechanics’ PLP business and sold assets to affiliates including Samsung
China Semiconductor LLC. (SCS) to increase production capacity of such affiliates. Also, the Company acquired assets
including facility equipment from affiliates to improve efficiency of domestic production.

251 / 261
3. Business Transactions with Affiliates and Subsidiaries
(KRW mil)

Company Relationship Type of transaction Date Details Amount

Sales/purchases of HHP and

SEA Subsidiary Sales/purchases Jan 2019–Dec 2019 26,118,096
home appliance, etc.

SEVT Subsidiary Sales/purchases Jan 2019–Dec 2019 Sales/purchases of HHP, etc. 25,508,681

SSS Subsidiary Sales/purchases Jan 2019–Dec 2019 Sales/purchases of HHP, etc. 18,494,615

SEV Subsidiary Sales/purchases Jan 2019–Dec 2019 Sales/purchases of HHP, etc. 18,342,471

Sales/purchases of
SSI Subsidiary Sales/purchases Jan 2019–Dec 2019 13,998,666
semiconductors, etc.
Sales/purchases of HHP and
SEHZ Subsidiary Sales/purchases Jan 2019–Dec 2019 8,132,819
TV, etc.
Sales/purchases of HHP and
SIEL Subsidiary Sales/purchases Jan 2019–Dec 2019 7,833,285
home appliance, etc.
Note: On a parent basis
Transactions worth 5% and above of revenue of the current business year are subject to public disclosure

During 2019, SEC conducted purchase and sales transactions with Samsung Electronics America, Inc. (SEA), etc.

4. Transactions with Stakeholders other than Affiliates and Subsidiaries

(KRW mil)

Loans

Company Relationship Transaction

Account title
Beginning of period End of period
Change
(Jan 1, 2019) (Dec 31, 2019)

SEST Co., Ltd., etc. Partner company Short-term loans 30,887 2,846 33,733

Bumjin I&D, etc. Partner company and employee Long-term loans 91,527 -5,233 86,294

Total 122,414 -2,387 120,027

Note: On a parent basis.
The amount shown above reflects the discounted present value of debts before accounting for impaired debts (impairment
losses).

As of December 31, 2019, the Company’s outstanding loan amount is KRW 120.027 billion related to support for supplier
companies for product competitiveness and mutual development as well as home loan and educational expenses for
employee welfare.

252 / 261
 XI. Other Information

1. Changes in public disclosure

- N/A

2. Results of shareholder meetings

[As of Dec 31, 2019]

Date Agenda Results

1. Approval of Balance Sheet, Income S tatement, and Statement of Appropriation of Retained Approved
Earnings (draft), etc. for 2018
2. Appointment of Directors/Committee Members
2.1: Independent Directors
2.1.1: Jae-wan Bahk Approved
The 50th AGM (Mar 20, 2019) 2.1.2: Han-jo Kim Approved
2.1.3: Curie Ahn Approved
2.2: Audit Committee
2.2.1: Jae-wan Bahk Approved
2.2.2: Han-jo Kim Approved
3. Approval of remuneration limit for Directors Approved
1. Approval of Balance Sheet, Income S tatement, and Statement of Appropriation of Retained Approved
Earnings (draft), etc. for 2017
2. Appointment of Directors/Committee Members
2.1: Independent Directors
2.1.1: Jeong Kim Approved
2.1.2: Sun-uk Kim Approved
2.1.3: Byung-gook Park Approved
2.2: Executive Directors
The 49th AGM (Mar 23, 2018)
2.2.1: Sang-hoon Lee Approved
2.2.2: Ki-nam Kim Approved
2.2.3: Hyun-suk Kim Approved
2.2.4: Dong-jin Koh Approved
2.3: Audit Committee
2.3.1: Sun-uk Kim Approved
3. Approval of remuneration limit for Directors Approved
4. Approval of a stock split and amendments to relevant Articles of Incorporation Approved
1. Approval of Balance Sheet, Income Statement, and Statement Of Appropriation Of Retained Approved
The 48th AGM (Mar 24, 2017) Earnings (draft), etc. for 2016
2. Approval of remuneration limit for Directors Approved

3. Litigation
(1) The Company 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 Company believes the outcome will not have a
material impact on the financial condition of the Company.

(2) In addition, during the normal course of business with numerous companies, the Company has been involved in
various claims, disputes, and investigations conducted by regulatory bodies. Although the outflow of resources and
timing of these matters are uncertain, the Company believes the outcome will not have a material impact on the
financial condition of the Company.

253 / 261
4. Guarantees
- Domestic: Not applicable
- Overseas:
(USD thousand)
Guarantee Transactions
Limit of
Company Relationship Creditor Expiry Beginning of End of
Increase Decrease guarantee
date period period
SEA Subsidiary BOA etc. 16-Dec-20 - - - - 1,328,000
SEM Subsidiary BBVA etc. 16-Dec-20 - - - - 485,000
SAMCOL Subsidiary Citibank etc. 16-Dec-20 85,662 4,056 - 89,718 180,000
SEDA Subsidiary BRADESCO etc. 16-Dec-20 - - - - 639,000
SECH Subsidiary Santander etc. 16-Dec-20 - 17,256 - 17,256 142,000
SEPR Subsidiary BBVA etc. 16-Dec-20 58,710 31,877 - 90,587 230,000
SSA Subsidiary SCB etc. 16-Dec-20 - - - - 318,000
SEMAG Subsidiary SocGen etc. 16-Dec-20 - - - - 110,000
SETK Subsidiary BNP etc. 16-Dec-20 64,519 233 - 64,752 787,000
SECE Subsidiary Citibank etc. 13-Jun-20 - - - - 75,698
SEEG Subsidiary HSBC 08-Nov -20 - - - - 85,000
SEIN Subsidiary BNP etc. 16-Dec-20 - - - - 145,000
SJC Subsidiary Mizuho etc. 16-Dec-20 - - - - 896,633
SEUC Subsidiary Credit Agricole etc. 16-Dec-20 - - - - 150,000
SEDAM Subsidiary Citibank etc. 08-Nov -20 - - - - 322,000
SECA Subsidiary BoA 16-Dec-20 - - - - 70,000
SELA Subsidiary Citibank 16-Dec-20 - - - - 70,000
SEEH Subsidiary HSBC etc. 16-Dec-20 - - - - 703,000
SERK Subsidiary SocGen etc. 16-Dec-20 - - - - 220,000
SELV Subsidiary Citibank 16-Dec-20 - - - - 10,000
SAPL Subsidiary BOA etc. 08-Nov -20 - - - - 395,000
SEV Subsidiary SCB 08-Nov -20 - - - - 15,000
SAVINA Subsidiary HSBC etc. 08-Nov -20 - - - - 71,000
SET Subsidiary SCB 16-Dec-20 - - - - 30,000
SCIC Subsidiary HSBC etc. 08-Nov -20 - - - - 350,000
SME Subsidiary SCB 16-Dec-20 - - - - 110,000
SAMEX Subsidiary Citibank 16-Dec-20 - - - - 5,000
SEASA Subsidiary Citibank 08-Nov -20 - - - - 2,000
SSAP Subsidiary SCB 13-Jun-20 - - - - 30,000
SEHK Subsidiary HSBC 13-Jun-20 - - - - -
SEPM Subsidiary HSBC 13-Jun-20 7,712 - 7,712 - 35,000
SESAR Subsidiary HSBC 08-Nov -20 - - - - 50,000
AdGear Technologies Inc. Subsidiary BOA 13-Jun-20 - - - - 2,000
Harman International Industries, Inc. Subsidiary JP Morgan 08-Nov -20 - - - - 100,000
Harman International Japan Co., Ltd. Subsidiary MUFG 13-Jun-20 - - - - 25,000
Harman RUS CIS LLC Subsidiary SocGen 08-Nov -20 - - - - 15,000
Harman Holding Limited Subsidiary HSBC 08-Nov -20 - - - - 30,000
Harman do Brasil Industria Eletronica
Subsidiary
e Participacoes Ltda.
SOCGEN 08-Nov -20 - - - - 15,000
Harman da Amazonia Industria
Subsidiary
Eletronica e Participacoes Ltda.
Harman Finance International, SCA Subsidiary JP Morgan etc. 27-May -22 400,101 - 7,891 392,210 392,210
Total 616,703 53,422 15,603 654,522 8,638,541

※ SEC requires Board approval for individual guarantees exceed ing 2.5% of total equity. When the guarantee amount is b etween
0.1% and/or less than 2.5%, the approval decision is delegated to the Management Committee.
※ SEC receives fees on the debt it guarantees depending on the maturity date of each debt guarantee, general loan interest rate, etc.
In 2019, the Company claimed approximately USD 238,000 in guarantee fee and, as of the reporting date, has not received the amount.

254 / 261
5. Sanctions and others
Pursuant to the results of a Process Safety Management (PSM) inspection on the Giheung and Hwasung sites by the
Ministry of Employment and Labor conducted from December 5 through December 9, 2016, the Company was ordered to
pay a fine of KRW 3.5 million for violating the obligation of implementing safety measures in accordance with the Article
49-2 (7) of Occupational Safety and Health Act (Submission of Process Safety Reports) on December 14, 2016 and has
subsequently paid the fine.
Pursuant to the results of a Process Safety Management (PSM) inspection on the Pyeongtaek site by the Ministry of
Employment and Labor conducted from June 20 through June 22, 2018, the Company was ordered to pay a fine of KRW
4.8 million for violating Article 49-2 (7) of Occupational Safety and Health Act (Submission of Process Safety Reports)
on June 25, 2018 and has subsequently paid the fine.
Pursuant to the results of a the 2nd Process Safety Management (PSM) inspection on the Pyeongtaek site (P1-2) by the
Ministry of Employment and Labor over September 10 through September 13, 2018, the Company was ordered to pay a
fine of KRW 10 million for violating Article 48 (1) of Occupational Safety and Health Act (Submission of hazard
prevention and risk control plan) on January 3, 2019 and has subsequently paid the fine.
In order to comply with relevant laws, the Company established a PSM innovation organization and a PSM management
system which manages activities related to approval, design, 12 key tasks, expertise improvement, etc. We also foster on-
site process safety experts and conduct voluntary process safety evaluation.

With regards to CO2 leak accident at the Gi-heung plant on September 4, 2018, pursuant to the results of a special
investigation by the Ministry of Employment and Labor conducted from October 10 through November 9, 2018, the
Company was ordered to pay a fine of KRW 515 million for violating Article 36-1 and 36-4 of Occupational Safety and
Health Act on November 16, 2018 and has subsequently paid the fine.
The Company was also fined KRW 2 million by the Yong-in Fire Station for violating Article 20-7 of the Act On Fire
Prevention And Installation, Maintenance, And Safety Control Of Fire-Fighting Systems on November 28, 2018 and a fine
of KRW 2 million for violating Article 25-2 of the same act on December 12, 2018, and has subsequently paid the fines.

Pursuant to the results of a special investigation by the Yong-in Fire Station conducted from November 27 through
December 6, 2018, the Company was ordered to pay a fine of KRW 0.5 million for violating Article 20-6 of the
Occupational Safety and Health Act on January 18, 2019 and has subsequently paid the fine.

The Company was fined KRW 1 million on October 23, 2018, as two of our paramedics (years of service: 11, 5) violated
Article 49 of the Emergency Medical Service Act and has subsequently paid the fine. The Company was also fined KRW
0.5 million on the same date as one of our employees (years of service: 6) violated Article 20-6 of the Act on Fire
Prevention and Installation, Maintenance, And Safety Control Of Fire-Fighting Systems, and has subsequently paid the
fine.
To prevent recurrence and strengthen compliance, the Company has built a legal safety assessment evaluation system and
conducts regular assessment.

On November 28, 2019, following the investigation on MSDS warning signs compliance at Gwang-ju office by the
Ministry of Employment and Labor, the Company was ordered to pay a fine of KRW 1.4 million for violating Article 41
Paragraph 3 (Preparation, Keeping, etc. of Material Safety Data Sheets) of Occupational Safety and Health Act, and has
subsequently paid the fine. We conducted a company-wide investigation on the handling space of chemical substances and
implemented relevant improvement measures. In addition, we are improving the prior evaluation process on new G-EHS
chemical substances and providing education for supervisors in departments handling chemical substances.

With regards to an optic cable auction by SK Broadband on May 2009 and November 2010, the Company was subject to a
correction order and ordered to pay a fine of KRW 520 million for violating Restrictions on Improper Concerted Acts in
accordance with Article 19 (Paragraph 1.3 and 1.8) of Monopoly Regulation and Fair Trade Act on February 6, 2018 and
has subsequently paid the fine.

On October 4, 2018 the Company was subject to a correction order and ordered to pay a fine of KRW 488 million for
violating the Prohibition, etc. against Unfair Labeling or Advertising in accordance with Article 3 (Paragraph 1.2) of Act
on Fair Labeling and Advertising and Article 3 (Paragraph 2) of the Enforcement Decree Of The Act On Fair Labeling
And Advertising and has subsequently paid the fine. The Company is currently in litigation to cancel the order.

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Regarding matters related to Milk Music, on August 23, 2019, the Company was subject to correction measures and
ordered to pay a fine of KRW 0.5 million by the Fair Trade Commission for violating Duty to Provide Online Completion
Service in accordance to Article 5 Paragraph 4 and Cybermall Operators’ Indication Duty in accordance to Article 10
Paragraph 1 of the Act on the Consumer Protection in Electronic Commerce, etc.; and the Company subsequently paid the
fine. To ensure compliance with relevant regulations, the Company has strengthened internal management standard and
provides preventive education to employees to prevent unfair trade practices and advertising.

The Fair Trade Commission filed a complaint against Chairman Kun-hee Lee on November 21, 2018 for omitting Samoo
Architects & Engineers and Seoyoung Engineering from Samsung affiliates when submitting required materials in 2014
under Article 14-4 of the Monopoly Regulation and Fair Trade Act. The prosecution filed a summary indictment and
Chairman Kun-hee Lee was ordered to pay a fine of KRW 100 million by the Seoul Central District Court on April 18,
2019, and the fine was subsequently paid.

Special prosecutor investigating an influence-peddling scandal involving South Korea’s president has indicted five of the
Company’s executives (Jae-yong Lee, Vice Chairman, Gee-sung Choi, former Vice Chairman, Choong-ki Chang, former
President, Sang-jin Park, former President, and Seong-soo Hwang, former Senior Vice President) on allegations of
violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (embezzlement) on February 28, 2017.
The Seoul Central District Court found them partially guilty on the charges on August 25, 2017, and sentenced Vice
Chairman Jae-yong Lee to five years in jail, former Vice Chairman Gee-sung Choi to four years in jail, former President
Choong-ki Chang to four years in jail. Former President Sang-jin Park received a three-year jail term, suspended for five
years, and former Senior Vice President Seong-soo Hwang was sentenced to two and a half years, suspended for four
years. On February 5, 2018, the Seoul High Court reversed the first trial judgment and Vice Chairman Jae-yong Lee was
suspended for four years and former Vice Chairman Gee-sung Choi, former President Choong-ki Chang, former President
Sang-jin Park, and former Senior Vice President Seong-soo Hwang were suspended for two years each.
On August 29, 2019, the Supreme Court rejected part of the lower court’s ruling on bribery and violation of the Act on the
Aggravated Punishment (embezzlement), and ordered a retrial to the Seoul High Court.
A retrial is currently in process, and the Company will check on future developments of the court proceedings and
relevant matters.

Seoul Central District Court on December 17, 2019 handed down a fine and sentences on allegations that employees of
SEC and its subsidiary Samsung Electronics Service colluded with employees of a partner company, devising and
executing a union busting strategy in violation of Article 81, 90, etc. of the Trade Union and Labor Relations Adjustment
Act.

Samsung Electronics Service was ordered to pay a fine of KRW 74 million. For SEC, the court ordered prison terms for:
the Company’s Chairman of the Board (37 service years) of 1 year and 6 months; Executive Vice President A (28 service
years) of 1 year and 6 months; former Executive Vice President B of 1 year and 6 months and a 3-year suspended
sentence; Executive Vice President C (33 service years) of 1 year and a 2-year suspended sentence; former Executive Vice
President D of 1 year and 6 months and a 3-year suspended sentence; Senior Vice President E (31 service years) of 1 year;
Senior Vice President F (23 service years) of 1 year and 6 months and a 3-year suspended sentence ; Vice President G (25
service years) of 1 year and a 3-year suspended sentence; Vice President H (16 service years) of 1 year and a 2-year
suspended sentence; For Samsung Electronics Service, the court ordered prison terms for: former CEO (4 service years)
of 1 year and 6 months; Senior Vice President I (9 service years) of 1 year and 2 months; Vice President J (21 service
years) of 1 year and a 2-year suspended sentence. Samsung Electronics and some of the employees previously charged
were pronounced innocent.
An appeal against the decision has been filed. The Company will check on future developments of the court proceedings
and relevant matters.

On December 9, 2019, the Seoul Central District Court ruled on allegations that an SEC executive ordered executives and
employees of Samsung Biologics and Samsung Bioepis to hide/destroy evidence related to the alleged fraudulent
accounting. For violating Article 30, 31-1, and 155-1 of the Criminal Act, Executive Vice President K (27 service years)
was sentenced to 1 years and 6 months in prison; Executive Vice President L (31 service years) was sentenced to 1 year
and 6 months in prison and a 3-year suspended sentence; Executive Vice President M (9 service years) was sentenced to 2
years in prison; Vice President N (16 service years) was sentenced to 1 year and 6 months in prison and a 3-year

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suspended sentence; Vice President O (10 service years) was sentenced to 1 year and 6 months in prison and a 3-year
suspended sentence.
The appeal against the decision has been filed. The Company will check on future developments of the court proceedings
and relevant matters.

The Company (including Samsung Display) has joint responsibility for reimbursement of liabilities that Samsung Display
accrued before the separation.

For information on the Company’s commitments and contingencies, refer to Commitments and Contingencies notes in the
Consolidated Financial Statements.

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 2019.

7. Use of Direct Financing Fund

N/A

8. External Contributions

Date of Board
Contribution Amount Details
approval
- The fund consists of voluntary contributions by employees
Management plans for the and matching funds by SEC. The Company’s matching fund
Social Contribution Fund for KRW 12.59 billion amounts to KRW 12.59 billion in 2017.
2017 - The fund will be used for supporting volunteer work at home
and abroad, and for social contributions in different regions. March 24, 2017.

EUR 1.35 million - The contribution was made to support the Organizing
Sponsoring the WorldSkills
(approximately KRW Committee of WorldSkills International in WordSkills Kazan
Competition
1.63 billion) 2017 as the top sponsor.
- The contribution was made to support the Foundation’s
Ho-Am Foundation KRW 4.0 billion
activities such as the Ho-Am Award.
- The contribution was made to support the development of
Korea Press Foundation KRW 1.7 billion
journalism, such as funding Samsung Journalism Award
Samsung Welfare - Support learning for junior high school students from
KRW 24.0 billion April 27, 2017.
Foundation underprivileged family
Samsung Life Public Welfare
KRW 37.7 billion - Support the operation of Samsung Medical Center
Foundation
- The contribution was made to support Samsung
Sungkyunkwan University KRW 15.0 billion
Scholarship.
Korea Disaster Relief - The contribution was made to support and help Pohang
KRW 3.0 billion
Association residents recover from the earthquake.
- The contribution was made to fulfil corporate social November 24, 2017.
Community Chest Of Korea KRW 20.1 billion responsibility by participating in the annual campaign
designed to help the marginalized.
Management plans for the - The Social Contribution Fund consists of voluntary contributions of
KRW 12.21 billion January 31, 2018.
Social Contribution Fund for employees and matching funds raised by SEC. SEC plans to

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2018 contribute KRW 12.21 billion in matching funds in 2018.
- The contribution will be used for domestic and overseas volunteer
programs as well as and local social contribution activities.
Samsung Dream - The contribution was made to support education of low-income high
KRW 1.12 billion
Scholarship Foundation school students.
Donation to Chung-nam
KRW 2.742 billion - The contribution was made to improve education of the region. February 23, 2018.
Samsung Institute
Donation of Electronics to
Approximately - Electronics were donated to about 1,500 social welfare centers to
celebrate Samsung’s 80th March 23, 2018.
KRW 7.5 billion celebrate the 80th anniversary of Samsung.
anniversary
Samsung Welfare - The contribution was made to support education of low-
KRW 19.5 billion
Foundation income middle school students.
Samsung Life Public Welfare - The contribution was made to support the Samsung
KRW 41.5 billion
Foundation Medical Center.
April 26, 2018.
- The contribution was made to support the Foundation’s
Ho-Am Foundation KRW 4.0 billion
activities such as the Ho-Am Award.
- The contribution was made to support Samsung
Sungkyunkwan University KRW 15.0 billion
Scholarship.
- The contribution was made to support small- and mid-sized
Smart Factory KRW 60.0 billion enterprises strengthen manufacturing competitiveness, foster talent, July 31, 2018.
and achieve sustainable growth.
- The contribution was made to provide quality software education and
Samsung Software Academy
KRW 499.6 billion support job seekers foster capabilities expected by companies. October 31, 2018.
For Youth
(Date: Dec 2018–Jun 2024)
Donation to Heemang 2019 - The contribution was made to Community Chest of Korea to fulfill
KRW 25.2 billion
Nanum Campaign corporate social responsibilities and help the marginalized.
Performance incentive to - The contribution was provided to 89 suppliers of the DS division to November 30, 2018.
Approximately
secondary suppliers of the prevent work accidents, improve productivity, and promote co-
KRW 4.32 billion
DS division prosperity of the Company and its partner companies.
- The Social Contribution Fund consists of voluntary contributions of
Management plans for employees and matching funds raised by SEC. SEC plans to
Social Contribution Fund for KRW 11.73 billion contribute KRW 11.73 billion in matching funds for 2019.
2019 - The contribution will be used for domestic and overseas volunteer January 31, 2019.
programs as well as and local social contribution activities.
Samsung Dream - The contribution was made to support education of low-income high
KRW 1.12 billion
Scholarship Foundation school students.
EUR 1.5 million - The contribution was made to support the Organizing Committee of
Sponsoring the WorldSkills
(approximately KRW WorldSkills International in WordSkills Kazan 2019 as the top
Competition
1.95 billion) sponsor. February 26, 2019.
Donation to Chung-nam
KRW 2.991 billion - The contribution was made to improve education of the region.
Samsung Institute
Contribution to the Korea
- The fund is for building an electronics industry health and safety
Occupational Safety & KRW 31.0 billion
center and establishing health and safety infrastructure.
Health Agency
- The contribution was provided to 296 primary and April 30, 2019.
Performance incentive to secondary suppliers of the DS division to prevent work
KRW 77.45 billion
suppliers of the DS division accidents, improve productivity, and promote co-prosperity
of the Company and its partner companies.

Financial support for startup KRW 12.0 billion - Vitalize startup ecosystem and contribute to job creation to July 31, 2019.

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program at Daegu, nurture startups in Korea
Gyeongbuk Creative - Donation to Daegu Gyeongbuk University Start-up
Innovation Center ※ Daegu Gyeongbuk University Start-up established a fund
with the donation from Samsung Electronics.
- The contribution was made to Community Chest of Korea to
Donation to Heemang 2020
KRW 31.0 billion fulfill corporate social responsibilities and help the November 29, 2019.
Nanum Campaign
marginalized.
Note: External contributions are based on the resolution of Board

9. Subsequent events
N/A

10. Acquisition and divestments

The major divestment and transfer of business transactions in the past three business years on a parent basis (separate
basis) are as follows. For information on the business combinations and divestitures of subsidiaries, please refer to the
notes on the business combination and assets held for sale (assets of disposal group) of the consolidated financial
statements.

[S-Printing Solution]

(1) Details of the Split

 Company Name: S-Printing Solution Corp.

 Location: 129 Samsung-ro, Yeongtong-gu, Suwon-si, Gyeonggi-do
 Purpose of split: S-Printing Solution competitiveness improvement
 Date of approval: October 27, 2016 (temporary shareholders’ meeting)
 Date of split: November 1, 2016

(2) Details of the sale

The Company on September 12, 2016 agreed to sell the Printing Solutions business including shares of S-Printing
Solution Corp to HP Inc. (location: Palo Alto, USA; CEO: Dion Weisler) for USD 1.05 billion and completed the deal
on November 1, 2017.

Details of the above statement can be found in the “Important Matters Report“, published in DART
(http://dart.fss.or.kr/).

Please refer to the Management Combination and Non-current Assets Held-for-Sale (Assets of disposal group) notes in
the Consolidated Financial Statements for acquisition and divestments on the consolidation basis.

[PLP Business]

(1) Details of acquisition

In accordance to the resolution of the Board of Directors on April 30, 2019, the Company acquired Samsung Electro-
Mechanics Co., Ltd.(location: South Korea; CEO: Yun Tae Lee)’s PLP business at a price of KRW 785,000 million on
June 1, 2019 to strengthen its semiconductor competitiveness through securing next-generation package technology.

Details of the above statement can be found in the “Business Acquisition from Related Parties”, published in DART
(http://dart.fss.or.kr/).

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 (KRW 100 mil)
Forecast Actual
Account 1st Year 2nd Year
1st Year 2nd Year
Actual Difference Actual Difference
Sales 101 219 - - - -
PLP Business Operating Income -1,273 -2,155 -1,095 14% - -
Net Income -1,273 -2,155 -1,095 14% - -
Note: The first year forecast is our prediction for 7 month period from June 1 to December 31, 2019.
Actual operating income for the 7 month period differs by 14% from the forecast due to several factors such as
reduction in wages.
Difference of sales between forecast and actual is not included as all of PLP business’ sales are from intra-
company transaction.

11. 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 9 valid Green Technology Certifications as of December 31, 2019. In addition, the
Company has acquired 43 ‘Green Technology’ product certificates for 322 models of commercialized products.

Certified Green Technologies as of December 31, 2019 are as follows:

Division Name of green technology and green projects No.

CE Monitor standby power reduction technology, etc. 8

IM Power reduction technology for wireless LAN based on user pattern, etc. 1

Total 9
Note: The data reported above is with respect to Samsung Electronics Co., Ltd. only.

(Designation of Green Enterprise)

The Company strives to fulfill its responsibility as an eco-friendly enterprise by reducing pollutants, conserving resources
and energy, establishing/utilizing a green management system, etc. Our business sites in Suwon, Giheung, and Hwasung
have been designated as green enterprises in accordance with Article 16-2 of the Support for Environmental Technology
and Environmental Industry Act.

(Greenhouse gas emission and energy consumption management)

The Company is a “controlled entity” according to Article 42 of Korea’s “Framework Act on Low Carbon, Green
Growth.” Thus, the Company has been reporting the amount of greenhouse gas emission and energy consumption,
verified by a third-party, to the authorities and disclosing it to stakeholders according to Article 44 of the same Act since
May 2011.

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The reported amount of greenhouse gas emission and energy use are provided below:

2019 2018 2017

Greenhouse gas (tCO2e) 11,115,004 10,775,372 8,589,071

Energy (TJ) 160,709 153,681 130,834

Note: On a parent basis.

Domestic manufacturing facilities, office buildings, buildings owned by the Company, leased buildings, etc.
Reported Greenhouse gas emission excludes ozone depletion substances (ODS).
Amounts may differ by third-party organization verification results.

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.

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