ion Study at Samsung

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REPORT ON ORGANISATIONAL STUDY

AT

SAMSUNG INDIA ELECTRONICS PVT. LTD.

COCHIN

Report submitted to M G University in partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted By

LIJOMON WILSON

Reg. No. 11987

Under the guidance of

MR. JOSEPH .K .FRANCIS

MS. ASHALAKHSHMI .R.K

Company Guide

Faculty Guide

MARATHANASIOSCOLLEGE FOR ADVANCED STUDIES

Tiruvalla – 689 101, Kerala

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CERTIFICATE

This is to certify that this report, based on the organization study conducted by

LIJOMON WILSON, second semester MBA student of our college for 20 days

starting 3rd May 2010 at SAMSUNG INDIA ELECTRONICS PVT. LTD., Is a

bonafide record submitted in partial fulfillment of the requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA) of MAHATMA

GANDHI UNIVERSITY, KOTTAYAM.

Ms. Ashalekshmi .R.K Prof. Anil .G.S

Faculty Guide Head of Department – MBA

Rev. Dr. Abraham Mulamoottil Signature of the External Examiner Principal

MARATHANASIOSCOLLEGE

FOR ADVANCED STUDIES

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DECLARATION

I hereby declare that this project report entitled ―Organizational Study on

SAMSUNG INDIA ELECTRONICS PVT. LTD.‖ has been prepared by me during

the year 2009-2011, under the guidance of Ms. Ashalakshmi.R.K, Department of

Management Studies, MACFAST, Tiruvalla.

I also hereby declare that this project report has not been submitted to any other

University or institute for the award of any degree or diploma.

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ACKNOWLEDGMENT

I take this opportunity to spell my sincere gratitude to our beloved and highly esteemed institution MAR ATHANASIOS COLLEGE FOR ADVANCED STUDIES,TIRUVALLA. I express my grateful thanks to Ms.Ashalakshmi.R.K project guide MACFAST, for her invaluable support and guidance throughout this endeavor.

It is with deep sense of gratitude that I express my indebtedness to Dr.Abraham

Mulamootil Principal MACFAST, for his co-operation and immense support throughout my

study.

I extent my heartfelt thanks to Mr.Joseph.K.Francis ,Manager,Samsung India

ElectronicsPvt.Ltd,Cochin.for allowing me to do my project.

I express my heartfelt thanks to Mr.Joseph.K.Francis project guide,Samsung India

Electronics India Pvt.Ltd.I also extent my sincere thanks to all other office staffs.

I extent my heartfelt thanks to my family and friends without whose moral support and encouragement this project would not have been a reality.

Above all I bow my head in profound gratitude before God Almighty for his blessings showered on me to complete this project successfully.

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TABLE OF CONTENTS

1. INTRODUCTION

1.1 . Scope of the study 8

1.2.Objectives of the study 8

1.3.Research Methodology 9 1.4. Limitations 10 2. INDUSTRY PROFILE 2.1. Home Appliances 12 2.2. Mobile Phones 12 2.3. Laptops 16 2.4. Components 18

2.5. Major Players – Samsung And LG 18 3. PROFILE OF THE ORGANIZATION

3.1. Samsung Group 23

3.2. History 24

3.3. Affiliated Companies 26

3.4.Values And Philosophies 29

3.5. Samsung Electronics 31

3.6.Corporate Affaires 33

3.7. Components Business 33

3.8. Research And Development At Samsung 34

3.9.Ownership Structure 38

3.10. Awards And Recognitions 41

3.11. Corporate Social Responsibility 43 3.12. Samsung India Electronics Pvt. Ltd. 51 3.13. Samsung India Electronics Pvt. Ltd. –Hierarchy 52 3.14. Samsung India Electronics Pvt. Ltd. –Cochin Branch 54 3.15. Samsung India Electronics Pvt. Ltd. Cochin –Hierarchy 55 4. PRODUCT PROFILE

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4.2. Notebook PCs 68

4.3.Mobile Phones 68

4.4. Multimedia Players 69

4.5. Home Theater Systems 70

4.6. Camcoders 71

4.7. Digital cameras 72

4.8. Optical Disk Drives 73

4.9. Monitors 73

4.10. Printers 74

4.11. Market Share 75

4.12. Manufacturing Plants 75

5. DEPARTMENT STUDY

5.1. Human Resources Department 78

5.2. Finance Department 80

5.3. Logistics Department 81

5.4. Marketing Department 82

6. SWOT ANALYSIS

7. FINDINGS AND SUGGESTIONS 8. BIBLIOGRAPHY

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CHAPTER 1

INTRODUCTION

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1.1

INTRODUCTION.

The project is intended to access or to acquire the knowledge regarding the functional as well as the management aspects of the firm. The project is an Organizational Study of Samsung India Electronics Pvt. Ltd,Cochin. It is a branch of (For the state of Kerala) one of the largest Electronics company in India as well as in the world.

In the world of Electronics Industry,Samsung India Electronics Pvt Ltd.’ is a celebrity. Recognized all over India and abroad as a high-class manufacturer of quality Electronic products, the company is in constant pursuit of excellence through the earnest efforts of a core of efficient and a devoted workforce.

They believe that the key to maintaining relationships with employees, customers, etc. was to learn from each other, to enjoy a spirit of solidarity, and to understand and to empathize with their needs. Understanding their needs Samsung India led to broaden its horizon to include a holistic approach to best practices in the industry.

1.2

SCOPE OF THE STUDY.

The project work helps to understand the practical use of the Theoretical perspective. The MBA course so far has provided me only with theoretical knowledge regarding the various management phases and aspects. The Organizational Study at Samsung India Electronics Pvt Ltd, Cochin has provided me new views regarding its functions. It has brought me with the information about various aspects and has been of invaluable help and assistance to me.

The study is restricted to exploration of various functions under taken by each department. It provides a better understanding at functional level of each department i.e.Sales, Marketing, Commercial, Service,and Human Resources . This study confined to 20 days based on the primary data obtained from the organization and Secondary data sources include websites and brochures and books.

1.3 OBJECTIVES OF THE STUDY

The main objectives of the Organizational Study conducted at SAMSUNG INDIA

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 To acquire knowledge about the functional as well as the managerial aspects of the Company.

 To gain and acquire knowledge about the origin and History of the Company.  To understand and study the various departmental functions in the Organization.  To assess and evaluate the efficiency of the Organization.

 To observe the Organizational Structure, Hierarchies, Levels etc.

 To study about the Organizational Rules, Regulations and the Disciplines prevailing.  To acquire the knowledge related to the Strategic Planning of the Company at various

departments.

 To watch the various levels of work at each departments in Branch level..

1.4 RESEARCH METHODOLOGY

The study is descriptive innature .the data collection is mainly depends two sources-

The data can be broadly classified in to two. 1. Primary Data

2. Secondary Data

Primary Data

Primary data is first hand data collected the investigator himself. In this organization study report the primary data are mostly included. The primary data are collect by way of

a. Direct observations the hierarchy existing in the organization , organization structure, levels

,customer relationship maintenance, employer –employee relation

b. Unstructured interviews: interview with branch manager, finance manager c. Listening to the general talks by department heads.

Secondary Data

Secondary data are collected by some others for their use. It is second hand data some part of this report is collected from trade and company website. ,Prospectus ,journals etc.

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1.5 LIMITATIONS OF THE STUDY

Through the course of study, I found that it is virtually impossible to identify the core competence of an organization within a restricted time period. Since the complex people power is the principle instrument of an organization, many of factors, which are relevant for the study, could not be expressed fully. These are due to;

1.Time was a major limiting factor as many of the top managements and functional managers were

busy with their own routine work.

2.With a restricted period of 20 days it‘s impossible to meet all the Departmental Heads in the

Company.

3.This study was mainly based on the primary data obtained from the interviews with managers and

therefore chances of personal bias exist.

4.The top management was reluctant to disclose matters related to the internal affairs of the

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CHAPTER II

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2.1 HOME APPLIANCES

In recent years, with India, political stability, rapid economic development, foreign trade maintained rapid growth, Indian home appliance market is growing rapidly. 3 consecutive years, India ranks 30 emerging retail markets and the world‘s most attractive investment country in the first, so it also attracted the home appliance enterprises to develop markets in India. Of course, many countries in Southeast Asia, Thailand, Vietnam and other places in the home appliance export market more favorable to India, but India‘s growing market demand and the gradual emergence of economic power attracts the attention of financiers. According to export statistics information center, in February 2010, China‘s exports to India, TV, washer, washing machines, refrigerators, air conditioners and other products have appeared in the case of significant increase over the previous year. Among them, the air conditioner‘s export growth over 10 times, India has become the third largest exporter of air conditioning. It is noteworthy that the impact of home appliances and consumer electronics, consumer durables, because the Indian home appliances and electronics production capacity weak, lack of standards, the market is still in the initial stage, the product features do not ask. The Chinese. King Wei appliances Miss Yuan also said that the Indian domestic market products Distribution Issues and certainly not the same, the more expensive the better to sell. Indian market for household appliances is relatively high dependence on imported products. With India‘s rapid economic development, the Indian national living standards, consumption continued to increase, consumer electronics and home appliances on the growing demand for consumer durables, the market potential. Even during the financial crisis in 2009, Qi Di A Chinese company exports to India total sales of 500 thousand U.S. dollars of air-conditioning, as the crisis of low tide, pick up significantly this year, the Indian market. a large Indian home appliances market share of almost 75% are imported. Concern is subject to local refrigeration and air conditioning companies supporting imperfect, India, most of the refrigerators and air-conditioning compressor are sourcing from China Furher the Indian home appliance market needs quality, durability and style at a reasonable price.

2.2 MOBILE PHONES.

India is now the world‘s second largest mobile market after China with 261.09 million users. Unlike China where China Mobile which has 392 million subscribers the market in India is much more fragmented. Bharti Airtel the largest has 64 million subscribers .

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Rates here are amongst the lowest in the world. And Bharti alone reported average caller minutes at 505 per quarter.Growth which is not expected to slow down anytime soon is now moving to the rural areas. The auction for the 3G spectrum is on. It will have to happen soon otherwise WIMAX or another technology may surprise us.The ramifications and the changes mobile is bringing is visible everywhere. From kids in the streets of wealthier suburbs to small traders and service providers everywhere. Users are also increasingly savvy about features. Any large phone retailer or large mobile bazaar will have 100‘s if not 1000‘s of different models on display. It‘s almost overwhelming and all the more impressive that Nokia continues to have a huge share of market. Phone are not subsidized US style. You get what you pay for and there is a ready repair market..Then for most this is outrageously expensive. New low end mobiles are approaching the 1000 rupee price barrier . Prices for top end phones are running 40000 rupees. As a comparison one can get a new laptop here for the same money. The iPhone is available here for 24000 rupees. But the real demand for all in one phones with cameras, MP3‘s and radios built in. A study shows that almost 95% people are not using smart phones and other high end phones.Nokia of course leads the pack, but the surprise comes from Samsung. Samsung has overtaken Motorola in India‘s handset market (for the third place), as per the latest ORG figures.

Handset Market Share

 Nokia: 59.5%

 Sony: 8.1%

 Samsung: 7%

 Motorola: 5.9%

Nokia‘s success is mainly attributed to distribution deals they inked – of the estimated 79,000 retail outlets in India selling mobile phones, Nokia had a presence in 72,000 of them.At the same time, Nokia‘s market share has gone down in the past few months, as the other handset vendors are building up a strong retail presence across the country.

Today mobile phones have moved beyond their primary role of voice communications and have graduated to become an essential entertaining device for mobile users. We are in an era where users buy mobile phones not just to be in touch, today‘s youth use it to express their thoughts, for social networking, to show their interests, play games, read news, surf on the internet, listen to music, chat instantly with friends & families and even check their bank balances. There are various phone

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manufacturers providing handsets.However, Nokia is the dominant player on the GSM space, accounting for 63% of the installed base (phone‘s currently in use) while LG rules CDMA with 48% of installed base market share. On looking at urban India GSM/CDMA combined installed base, Nokia is at the top with 54% of installed base market followed by LG (14%). LG is second most used handset manufacturer India primarily due to its dominant position in the CDMA.

Phone manufacturer usage

India Urban Mobile Phone Users (N=5,775) Brands Installed base*

GSM CDMA Total (GSM + CDMA) LG 4.4% 47.6% 14.4% Motorola 7.8% 5.4% 7.2% Nokia 62.6% 24.3% 53.7% Samsung 9.0% 11.2% 9.5% Sony-Ericsson 8.9% 6.8%

* – Users currently using the phone model

On looking at the ability of manufacturers to gain market share via word of mouth, Nokia and Sony-Ericsson fare a lot better compared to the other three big manufacturers, with 2 out of 3 users for each of the two manufacturers mentioning they are likely to recommend their handset to their friends.

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Phone manufacturer usage

India Urban Mobile Phone Users (N=5,775)

Model Installed base*

Likely to Recommend** LG 57.6% Motorola 41.0% Nokia 68.6% Samsung 55.7% Sony-Ericsson 65.3%

* – Users currently using the phone model**Likely to recommend current phone manufacturer to

others

IDC India has published a report on growth of mobile sales in India (for 2009) and here are some of the relevant data points to track:

 The growth has more or less flat [owing to low sales figure in Q1] – in total, 101.54 million units of sales were registered.

 Local manufacturers (like Max ,Micromax, Spice etc..) have grabbed 17.5% market share [from 0.9%, a year back]

 Only 5 local manufacturers in 2008 and the number stands at 28 now!

 Nokia market share in India fell from 56.2% share in 2008 to 54.1% in 2009.

 Samsung Electronics Co. Ltd‘s share rose marginally to 9.7% from 9.5%.

 LG‘s share dropped from 7.2% to 6.4%,

 Of the local manufacturers, Micromax leads the race and holds a market share stands of 4.8%.

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2.3 LAPTOP

Besides the corporate sector, laptops have been in demand in the education sector, with schools and colleges encouraging their day-to-day use.Laptops sales have increased the most in the 18-36 years age group segment which includes students and home users.Size, weight, battery life and configuration are the most important factors consumers look at when they buy a laptop.

Laptop sales have accounted for a decline in the sales of desktop computers and are expected to take over 40 per cent of the overall PC sales in India by 2010.The laptop computer market in India grew significantly last year, contributing significantly to the overall PC market growth of 25.1 per cent. More than five lakh notebook PCs were sold in the quarter, a study by market analyst IDC India reported.Hewlett Packard (HP) retained the top slot with a market share of 37.8 per cent, while Lenovo occupied the second position and Acer third. Notebook PC sale in home and `Small Office and Home Office' (SOHO) segments grew by 166 per cent and made up 43 per cent of the total business. The next largest contributors were enterprise and education segments.

"Portability, rather than mobility has emerged as the `number one' driver for the sustained growth in notebook PC shipments in India," Kapil Dev Singh, Country Manager, IDC India, said.

Given the choice of portability, flexibility and ease of use and narrowing of price-performance gap that once existed between portables and desktops, consumers are almost overwhelmingly inclined to buy notebook PCs, he said.

Further, laptop sales recorded an year-on-year growth of 104 per cent in the northern states of the country, followed by southern states at 80 per cent. Meanwhile, the desktop PC shipments showed a growth of 10.9 per cent in the same quarter.

The laptop sales is growing at much faster rate than projected. India's personal computer market is undergoing a major transition. However, laptop computers cannot completely wipe out desktop computers, because both are designed to meet different needs or different consumer segments. According to a top official of HCL Info Systems, market share of laptops would be 35-40% in the next two years.

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Major Players

The major players in the laptop category are:

 Hewlett Packard (HP)  IBM  Toshiba  Compaq  Dell Computers  Sony  Samsung  LG Growth Drivers

 Indian Laptop market in now in sync with global market. It was in 2005 that sales of laptops surpassed the sales of desktop computers for the first time in India.

 The Laptop market is growing at a fast rate because of change in work life of consumers. As the need for "anytime anywhere" access to information is increasing, the sales of Laptops are also increasing.

 Other factors that are responsible for the hike in sales figure are reduction in prices and affordability. Laptops are now sold at approximately half the price at which they were sold two years ago. Laptops prices are now almost at par with the desktop computer prices.

 The third most important factor is duty free import of Laptops as a personal baggage that has helped a lot in increasing the penetration level of the product among the consumer

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2.4 COMPONENTS

As the demand for computer systems are growing at a higher rate the component market is also growing.The computer hardware market consists of the computers, storage, and other devices segments. The computers segment comprises desktops and laptops. Storage includes memory sticks, CD packs, hard disks and other data storage devices. The other devices segment includes computer peripherals, PDAs, organizers, calculators and Satellite navigation systems.

Highlights

* The global computer hardware market grew by 3.5% in 2008 to reach a value of $196.1 billion. * In 2013, the global computer hardware market is forecast to have a value of $239.1 billion, an increase of 22% since 2008.

* Sales of computers generated 53.5% of the global computer hardware market‘‘s total revenues. * The Americas account for 38.5% of the global computer hardware market‘‘s value.

2.5 SAMSUNG AND LG –MAJOR PLAYERS

Korea's major consumer electronics manufacturers show continued robust growth in the Indian market for home appliances.

According to a recent survey conducted by GfK Marketing Services, one of the world's top-five market research companies, LG Electronics Inc. was found to lead in India's five major home appliances categories; color televisions, refrigerators, washing machines, air conditioners and microwave ovens.

LG-brand air conditioners held a 41 percent market share, televisions 26.7 percent, refrigerators 29.4 percent, washing machines 35.1 percent and microwave ovens 38.9 percent.

Televisions rose 2.3 percent, while refrigerators and washing machines rose 3.4 percent and 2.7 percent respectively, from a year ago.

Samsung Electronics followed LG Electronics in the Indian home appliances market, with a 14.4 percent market share in color televisions, 16 percent in air conditioners and 18.6 percent in microwave ovens .

Although in India's optical machinery market Samsung Electronics was found to lead with its computer monitors and CD-ROM drives.

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Meanwhile, in the audio markets, the two electronic makers fell behind competitors such as Sony and Phillips. Sony and Phillips had a 42.8 percent and a 34.1 percent market share, respectively. Samsung and LG trailed with 11 percent and 5.7 percent, respectively, in India's audio market. The Indian branch of LG Electronics plans to achieve its goal of $10 billion in sales by 2010 with an investment of $150,000,000 .

On the other hand, Samsung Electronics said it will focus on increasing brand recognition and value though its high-end product lines rather than attaching itself to simple, numerical sales volume in the Indian market.

The company is restructuring its business segments in the Indian market to more concentrate on high value-added production.

India, as one of the four BRICs nations, along with Brazil, Russia and China, is running an average of 7 percent annual economic growth, mostly driven by a growing IT sector. Some experts predict that India will become the world's largest economy by 2035.

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CHAPTER III

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Type Public (Korean)

Industry Conglomerate

Founded 1938

Founder(s) Lee Byung-chul

Headquarters Samsung Town, Seoul, south Korea

Area served Worldwide

Key people Lee Kun Hee(Chairman and CEO)

Lee Soo-bin(President, CEO of Samsung Life Insurance)

Products List Electronics Shipbuilder Financial Chemical Retail Entertainment Flash memory Aviation Optical storage Mobile phones Smartphones Hard disk drive

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Revenue US$ 173.4 billion (2008)

Net income US$ 10.7 billion (2008)

Total assets US$ 252.5 billion (2008)

Total equity US$ 90.5 billion (2008)

Employees 276,000 (2008)

Subsidiaries

Samsung Electronics Samsung Heavy Industries Samsung C&Tetc.

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3.1 SAMSUNG GROUP

The Samsung Group is a multinational conglomerate corporation headquartered in

Samsung Town, Seoul, South Korea. It is the world's largest conglomerate by revenue with an

annual revenue of US $173.4 billion in 2008 and is South Korea's largest chaebol. The meaning of the Koreanhanja word Samsung is "tristar" or "three stars".

The Samsung Group is composed of numerous international affiliated businesses, most of them united under the Samsung brand including Samsung Electronics, the world's largest electronics company, Samsung Heavy Industries, the world's second largest shipbuilder and Samsung C&T, a major global construction company.

Samsung has been the world's most popular consumer electronics brand since 2005 and is

the best known South Korean brand in the world. Samsung Group accounts for more than 20% of South Korea's total exports and is the leader in many domestic industries, such as the financial, chemical, retail and entertainment industries. The company's strong influence in South Korea is visible throughout the nation, which has been referred to as the "Republic of Samsung".Samsung is the world's leading consumer electronics brand and one of the top twenty global brands.

Currently helmed by Lee Soo-bin, once the CEO of Samsung Life Insurance, it has been run by generations of one of the world's wealthiest families, formerly by chairman Lee Kun-Hee, the third son of the founder, Lee Byung-Chull.

Many major South Korean corporations such as CJ Corporation, Hansol Group, Shinsegae Group and Joong-AngIlbo daily newspaper were previously part of the Samsung Group. Though they are still controlled by ex-Chairman Lee Kun-hee's relatives, they are no longer officially Samsung affiliates. Some leading companies in South Korea, notably MP3 player manufacturer

iriverand search engine portal Naver, were established by ex-Samsung employees. A large number

of South Korean firms, particularly those in the electronics industry, are dependent on Samsung for the supply of vital components or raw materials such as semiconductor chips or LCD panels. This has led to continued allegations of price fixing and monopolistic practices. Samsung Group also owns the Sungkyunkwan University, a major private university in South Korea.

Samsung Group accounts for more than 20% of South Korea's total exports and in many domestic industries, Samsung Group is the sole monopoly dominating a single market, its revenue as large as some countries' total GDP. In 2006, Samsung Group would have been the 34th largest

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economy in the world if ranked, larger than that of Argentina. The company has a powerful influence on the country's economic development, politics, media and culture, being a major driving force behind the Miracle on the Han River; many businesses today use its international success as a role model.

3.2 HISTORY

In1938, Lee Byung-chull (1910–1987) of the large landowning family in the Uiryeong

county came to the nearby Daegu city and founded Samsung Sanghoe , a small trading company

with forty employees located in Su-dong (now Ingyo-dong). It dealt in greengrocery and dried fish produced in and around the city, and the noodles, ByeolpyoGuksu produced itselves. The company prospered and Lee moved its head office to Seoul in 1947. When the Korean War broke out, however, he was forced to leave Seoul and started a sugar refinery in Busan as a name of

CheilJedang. It was the first South Korea‘s sugar manufacturing facility. After the war, in 1954,

Lee founded CheilMojik and built the plant in Chimsan-dong, Daegu. It was the largest woolen mill ever in the country and the company took on an aspect of a major company.

Samsung diversified into many areas and Lee sought to establish Samsung as an industry leader

in a wide range of enterprises. The company started moving into businesses such as insurance, securities, and retail. South Korean President Park Chung-hee‘s regime during the 1960s and 1970s would prove a boon for Samsung. Park placed great importance on industrialization, and focused his economic development strategy on a handful of large domestic conglomerates, protecting them from competition and assisting them financially. Samsung was one of these companies. Park banned several foreign companies from selling consumer electronics in South Korea in order to protect Samsung from foreign competition and nurture an electronics manufacturing sector that was in its infancy.

In the late 1960s, Samsung Group began the electronics industry. It formed several electronics-related divisions, such as Samsung Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung Corning Co., and Samsung Semiconductor & Telecommunications Co., and made the facility in Suwon. Its first product was a black-and-white television set. In 1980, the company acquired Hangukjeonjatongsin in Gumi, and started to build telecommunications devices. Its early products were switchboards. The facility were developed into the telephone and fax manufacturing systems and became the centre of Samsung's mobile phone manufacturing. They

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have produced over 800 million mobile phones to date. The company grouped them together under Samsung Electronics Co., Ltd. in the 1980s.

In the late 1980s and early 1990s, Samsung Electronics invested heavily in research and development, investments that were pivotal in pushing the company to the forefront of the global electronics industry. ―By the 1980s Samsung was manufacturing, shipping, and selling a wide range of appliances and electronic products throughout the world‖. In 1982, it built a television assembly

plant in Portugal; in 1984, it built a $25 million plant in New York; and in 1987, it built another

$25 million facility in England.

The 1990s saw Samsung rise as an international corporation. Not only did it acquire a number of businesses abroad, but also began leading the way in certain electronic components.

Samsung's construction branch was awarded a contract to build one of the two Petronas Towers in Malaysia, Taipei 101 in Taiwan and the BurjKhalifa in United Arab Emirates (founded

by CallumCuirtis), which is the tallest structure ever constructed.In 1993 and in order to change the strategy from the imitating cost-leader to the role of a differentiator, Lee Kun-hee, Lee Byung-chull‘s successor, sold off ten of Samsung Group's subsidiaries, downsized the company, and merged other operations to concentrate on three industries: electronics, engineering, and chemicals. In 1996, the Samsung Group reacquired the Sungkyunkwan University foundation.

Compared to other major Korean companies, Samsung survived the Asian financial crisis of 1997-98 relatively unharmed. However, Samsung Motor, a $5 billion venture was sold to Renault at a significant loss. Additionally, Samsung manufactured a range of aircraft from 1980 to 1990s. The company was founded in 1999 as Korea Aerospace Industries (KAI), the result of merger between then three domestic major Aerospace divisions of Samsung Aerospace, Daewoo Heavy Industries and Hyundai Space and Aircraft Company (HYSA). Korea Aerospace Industries (KAI) - largest shareholders as of 2009 (Korea Development Bank 30.53%, Samsung Techwin 20.54%, Doosan (formerly known as Daewoo Heavy Industries) 20.54%, Hyundai Motor 20.54%). Most importantly, Samsung Electronics (SEC) has since come to dominate the group and the worldwide semiconductor business, even surpassing worldwide leader Intelin investments for the 2005 fiscal year. Samsung's brand strength has greatly improved in the last few years.Samsung became the largest producer of memory chips in the world in 1992, and is the world's second-largest chipmaker after Intel .From 1999 to 2002, Samsung conspired with Hynix Semiconductor, Infineon Technologies, Elpida Memory (Hitachi and NEC) and Micron Technology to fix the prices

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of DRAM chips sold to American computer makers. In 2005 Samsung agreed to plead guilty and to pay a $300 million fine, the second- largest criminal antitrust fine in the US history.

In 1995, it built its first liquid-crystal display screen. Ten years later, Samsung grew to be the world's largest manufacturer of liquid-crystal display panels. Sony, which had not invested in large-size TFT-LCDs, contacted Samsung to cooperate. In 2006, S-LCD was established as a joint venture between Samsung and Sony in order to provide a stable supply of LCD panels for both manufacturers. S-LCD is owned by Samsung (50% plus 1 share) and Sony (50% minus 1 share) and operates its factories and facilities in Tangjung, South Korea.

Considered a strong competitor by its rivals, Samsung Electronics expanded production dramatically to become the world's largest manufacturer of DRAM chips, flash memory, optical storage drives and it aims to double sales and become the top manufacturer of 20 products globally by 2010. It is now the world's leading manufacturer of liquid crystal displays.

Samsung Electronics, which saw record profits and revenue in 2004 and 2005, overtook Sonyas one of the world's most popular consumer electronics brands, and is now ranked #19 in the world overall. Behind Nokia, Samsung is the world's second largest by volume producer of cell phones with a leading market share in the North America and Western Europe.

3.3 AFFILIATED COMPANIES

Samsung is comprised of companies that are setting new standards in a wide range of businesses, from consumer electronics to petrochemicals, from advertising to life insurance. They share a commitment to creating innovative, high quality products that are relied on every day by millions of people and businesses around the world.

Electronic industries

Samsung Electro-Mechanics Samsung SDI

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Samsung SDS Samsung Networks Samsung Techwin Samsung Mobile Display

Machinery & Heavy industries

Samsung Heavy Industries

Chemical Industries

Samsung Total Petrochemicals Samsung Petrochemicals Samsung Fine Chemicals Samsung BP Chemicals

Financial Services

Samsung Life Insurance

Samsung Fire & Marine Insurance Samsung Card

Samsung Securities

Samsung Investment Trust Management Samsung Venture Investment

Other affiliated companies

Samsung C&T Corporation Samsung Engineering Cheil Industries

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Samsung Everland

The Shilla Hotels & Resorts Cheil Worldwide

S1 Corporation

Samsung Medical Centre

Samsung Human Resources Development Centre Samsung Economics Research Institute

Samsung Lions

The Ho-Am Foundation

Samsung Foundation of Culture Samsung Welfare Foundation

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3.4 VALUES AND PHILOSOPHY

The Samsung Philosophy

At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating superior products and services that contribute to a better global society.

Every day, our people bring this philosophy to life. Our leaders search for the brightest talent from around the world, and give them the resources they need to be the best at what they do. The result is that all of our products—from memory chips that help businesses store vital knowledge to mobile phones that connect people across continents— have the power to enrich lives. And that‘s what making a better global society is all about.

Values

We believe that living by strong values is the key to good business. At Samsung, a rigorous code of

conduct and these core values are at the heart of every decision we make.

People

Quite simply, a company is its people. At Samsung, we‘re dedicated to giving our people a wealth of opportunities to reach their full potential.

Excellence

Everything we do at Samsung is driven by an unyielding passion for excellence—and an unfaltering commitment to develop the best products and services on the market.

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Change

In today‘s fast-paced global economy, change is constant and innovation is critical to a company‘s survival. As we have done for 70 years, we set our sights on the future, anticipating market needs and demands so we can steer our company toward long-term success.

Integrity

Operating in an ethical way is the foundation of our business. Everything we do is guided by a moral compass that ensures fairness, respect for all stakeholders and complete transparency.

Co-prosperity

A business cannot be successful unless it creates prosperity and opportunity for others. Samsung is dedicated to being a socially and environmentally responsible corporate citizen in every community where we operate around the globe.

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3.5 SAMSUNG ELECTRONICS

Type Public Korean

Industry Consumer Electronics Telecommunication Semiconductor

Founded 1969

Head Quarters Samsung Town, Seoul,South Korea

Area Searved Worldwide

Key people CEO: Lee Yoon Woo

Revenue $117.4 Billion

Net Income $8.33 Billion

Owners Kun Hee Lee & Affiliates – 17.57%

Treasury Stocks (of Samsun Electronics)13.07% National Pension Service 5.90%

(as of September31,2009

Employees Over 164,600

Parent Samsung Group

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Samsung Electronics is the world's largest electronics company with a revenue of $117.4

billion in 2009, headquartered in Samsung Town, Seoul, South Korea It is the largest South Korean

company and the flagship subsidiary of the Samsung Group.

Samsung Electronics is a prominent player in the global market for more than 60 products, including semiconductors such as DRAM, SDRAM and flash memory, hard drives, digital displays such as LCD displays, plasma displays and OLED displays, home electronics such as TVs, DVD players, Blu-ray players, home cinema systems, set-top boxes and projectors, mobile devices such as mobile phones, MP3 players, digital cameras and camcorders, computing products such as monitors, laptops, UMPCs, CD and DVD Drives, laser printers and fax machines and home appliances such as refrigerators, washing machines, microwaves, ovens, vacuum cleaners and air conditioners.

In 2005, Samsung surpassed Japanese rival Sony for the first time to be rated as the new leading and most popular consumer electronics brand in the world by Interbrand. In 2007, Samsung Electronics' handset division overtook American rival Motorola, making it the world's second-largest mobile phone maker. At the end of 2007, Samsung Electronics exceeded the $100 billion mark in annual sales for the first time in its history.

In 2009, Samsung overtook Siemens of Germany and Hewlett-Packard of the U.S. with a revenue of $117.4 billion to take the No.1 spot as the world's largest technology company.

History

Samsung Electronics was founded in 1969 in Suwon, South Korea as Samsung Electric Industries, originally manufacturing electronic appliances such as TVs, calculators, refrigerators, air conditioners and washers. By 1981, the company had manufactured over 10 million black and white TVs. In 1988, it merged with Samsung Semiconductor & Communications.

Market ascendance

Samsung is a top rated electronic & IT brand. In 2006, Business Week rated Samsung as 20th on the Top 100 global brands and the Number 2 in the electronics industry.Business Week also ranked Samsung as #20 in a ranking of the "Top 100 Most Innovative Companies" in a special report published April 24, 2006. In January 2007, BrandFinance ranked the company as the number 1 global brand in electronics.

The semiconductor division of Samsung Electronics is the world's largest memory chip and second largest semiconductor manufacturer worldwide. In particular this has been the case for DRAM and SRAM for over a decade. From 1999 to 2002, Samsung conspired with Hynix Semiconductor, Infineon Technologies, Elpida Memory (Hitachi and NEC) and Micron

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Technology to fix the prices of DRAM chips sold to American computer makers. In 2005 Samsung agreed to plead guilty and to pay a $300 million fine, the second-largest criminal antitrust fine in the US history.

In 2007, Samsung became the world's second largest mobile phone manufacturer, surpassing Motorola, and behind Nokia.

3.6 CORPORATE AFFAIRS

Samsung Electronics focuses on four areas: Digital Media, Semiconductor Telecommunication Network, and LCD Digital Appliance. The main growing business areas related to LCD, Digital Media and Semiconductor at 2006.As of 2009 Samsung Print was established as a separate entity to focus on B2B sales and has released a broad range of Multifunctional Devices and printers.

As with all major Print equipment manufacturers Samsung have developed and released supporting management software and utilities. The main Print-Management software has been released as SyncthruWebAdmin Service.

The Digital Media business area covers computer devices such as laptop computers and laser printers; digital displays such as televisions and computer monitors; and consumer entertainment devices such as DVD players, MP3 players and digital camcorders; and home appliances as refrigerators, air conditioners, air purifiers, washers, microwave ovens, and vacuum cleaners.

The Semiconductor business area includes semiconductor chips such as SDRAM, SRAM, NANDflash memory; smart cards; Mobile Application Processors; Mobile TV receivers; RF transceivers; CMOS Image Sensors, Smart CardIC, MP3 IC, DVD/BD/HD-DVD Player SOC and multi-chip package (MCP); and storage devices such as optical disc drives and hard disk drives. The Telecommunication Network business area includes multi-service DSLAMs and fax machines; cellular devices such as mobile phones, PDA phones, and hybrid devices called Mobile Intelligent Terminals (MITs); and satellite receivers.

The LCD business area focuses on producing TFT-LCD/ LED panels for laptops, desktop monitors, and televisions.

3.7 COMPONENT BUSINESS

Samsung's Component Business leads the world's memory and LCD markets in product and technology development. Samsung‘s component business is divided into semiconductors and LCD. The Semiconductor business consists of the Memory Division which enjoys a global number

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1 position, the System LSI Division, which has experienced huge growth in the market and the Storage Systems Division. In a fast-paced electronic components industry, marked by intense competition and market volatility, clearly differentiated products from each of these divisions have helped spur continued growth.

Samsung's Memory Division designs and manufactures integrated circuits for storing digital information. It is the market leader in dynamic random access memory (DRAM), static random access memory (SRAM), NAND flash memory and Solid State Drives (SSDs). In addition, the Division has been setting an aggressive pace for developing new memory devices and multichip packages, as well as pioneering fusion memories and commercializing nanotechnology.

The System LSI Division designs and manufactures logic and analog integrated circuit devices. It is comprised of 3 major areas of business concentration - mobile solutions, home & media solutions, and ASIC & foundry services. The Division focuses its efforts in five strategic products areas - display driver IC (DDI), CMOS image sensor (CIS), mobile application processor (AP), smart card IC and media player SoC. System LSI holds the number one market share in DDI, Navigational AP and MP3 SoC.

The Storage Systems Division is a leading producer of high-capacity, high-performance hard disk drives for notebook and desktop PCs, as well as digital camcorders, MP4 players and a wide range of other consumer electronics and mobile devices. Just recently, it introduced a new line-up of ultra-compact, high-capacity external hard drives. It has made significant advances in hard disk drive technologies leading to lighter, quieter and more energy-efficient drives.

Samsung's LCD business produces panels for TVs, digital information displays (DIDs), notebook PCs and desktop monitors. It is the market leader in developing next-generation, premium products such as ultra-slim, edge-lit LED-backlit LCD panels, and is at the forefront of creating new markets with advancements in LED-backlit panel design and 240Hz LCD technology. The Division also is leading the LCD industry in its transition to the 16:9 widescreen aspect ratio, as well as in the introduction of high-value-added products such as 20-inch and larger slim-panel monitors and super-bright DID panels.

3.8 R&D at Samsung

Innovation is crucial to Samsung's business. As new technologies are being constantly introduced to the market, speed is essential for remain competitive in today's digital era, and new markets have to be pioneered continuously.Through the interplay of creative, imaginative people; a global R&D network; an organization that encourages collaboration and cooperation among

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business partners all along the supply chain; and a strong commitment to ongoing investment, Samsung has put R&D at the heart of everything

People

One of Samsung's strongest assets is their team of talented researchers and engineers. More than a quarter of all Samsung employees—42,000 people—work everyday in research and development, and expected that number to surpass 50,000 by 2010. At and among samsung‘s42 research facilities around the world, they collaborate on strategic technologies for the future and original technologies designed to forge new market trends and set new standards for excellence.

Organization

Samsung's R&D organization has three layers. The Samsung Advanced Institute of Technology (SAIT), Samsung's technology competitiveness in core business areas, identifies growth engines for the future, and oversees the securing and management of technology. The R&D centers of each business focus on technology that is expected to deliver the most promising long-term results. Division product development teams are responsible for commercializing products scheduled to hit the market within one or two years.

Investment

A critical way that Samsung responds to the highly uncertain business environment and the increasingly competitive marketplace is through samsung‘scommitment to R&D. Each year we invest at least 9% of our sales revenue in R&D activities. Samsung is committed to leading technology standardization and securing intellectual property rights.

Global R&D Network

Innovation is a global enterprise at Samsung. Their research and development network spans six Samsung centers in Korea and 18 more in nine other countries, including the United States, the United Kingdom, Russia, Israel, India, Japan and China, as well as other research centers and universities. Closely linked, these centers are tasked with hiring top-notch local talent, investigating the latest local technology trends, and bringing to life those technologies that offer the greatest benefits

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R&D Areas and Center Name

Center Name R&D Areas

Samsung Information Systems America, Inc. (SISA)

Strategic parts and components, core technologies

Dallas Telecom Laboratory (DTL) Technologies and products for next-generation telecommunications systems

Samsung Electronics Research Institute (SERI)

Mobile phones and digital TV software

Moscow Samsung Research Center (SRC)

Optics, software algorithms and other new technologies

Samsung Electronics India Software Operations (SISO)

System software for digital products, protocols for wired/wireless networks and handsets

Samsung Telecom Research Israel (STRI)

Hebrew software for mobile phones

Beijing Samsung Telecommunication (BST)

Mobile telecommunications standardization and commercialization for China

Samsung Semiconductor China R&D (SSCR)

Semiconductor packages and solutions

Samsung Electronics (China)R&D Center (SCRC)

Software, digital TVs and MP3 players for China

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R&D Areas and Center Name

Center Name R&D Areas

Core next-generation parts and components, digital technologies

Samsung Poland R&D Center (SPRC) STB SW Platform Dev., EU STB/DTV commercialization

Samsung India Software Center (SISC) S/W Platform and Application Design, Graphic design

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3.9 OWNERSHIP STRUCTURE

As of the end of December, 2009, the number of total shares outstanding of Samsung Electronics is 170,132,764.

Ownership structure of Samsung Electronics as of the end of December,2009

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LIST OF MAJOR SHAREHOLDERS

Name Relationship Class of Stock

Number of Shareholdings End of Quarter

Number of

Shares % of Total

* Samsung Life's ownership includes shares in special accounts

Kun-Hee Lee Major

shareholder

Common

stock 4,985,464 3.38

Kun-Hee Lee Major

shareholder Preferred Stock 12,398 0.05 Samsung Corporation Affiliate Common stock 5,917,362 4.02 Samsung Welfare Foundation Affiliate Common stock 89,683 0.06 Samsung Foundation of Culture Affiliate Common stock 37,615 0.03

Ra-Hee Hong Family

member

Common

stock 1,083,072 0.74

Jae-Yong Lee Family member

Common

stock 840,403 0.57

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Name Relationship Class of Stock Number of Shareholdings End of Quarter Number of Shares % of Total Insurance stock Samsung Life Insurance Affiliate Preferred Stock 21,704 0.10

Samsung Fire & Marine Insurance Affiliate Common stock 1,856,370 1.26 Samsung Securities Affiliate Common stock 0 0.00 Samsung Securities Affiliate Preferred Stock 0 0.00

Yoon-Woo Lee BOD member Common

stock 10,000 0.01

Gee-Sung Choi BOD member Common

stock 12,000 0.01

Ju-Hwa Yoon BOD member Common

stock 11,499 0.01

Sang-Hoon Lee BOD member Common

stock 2,473 0.00

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Name Relationship Class of Stock Number of Shareholdings End of Quarter Number of Shares % of Total stock Chae-Woong

Lee BOD member

Common stock 50 0.00 Total Common stock 25,863,662 17.56 Preferred stock 34,102 0.15 Total 25,897,764 15.22 [AS ON DECEMBER 31 ,2009]

3.10 AWARDS AND RECOGNITIONS

EISA Green TV Award (August 2009)

The European Imaging & Sound Association (EISA) named the Samsung‘s UE40B7000 LED television as winner of the European Green Television 2009-2010 award.

The Samsung LED TV was selected the best green TV based on outstanding environmental performance in energy, material safety, packaging and transportation efficiency as well as its performance and technology.

Carbon Disclosure Leadership Index (September 2009)

Samsung Electronics was recognized as the first in Asia and 10th out of top 50 global companies listed in the Carbon Disclosure Leadership Index (CDLI) 2009 evaluated by the Carbon

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Disclosure Project (CDP). The CDP publishes the annual Global 500 Report which evaluates the constituent companies within the FTSE Global 500 Index on their climate change disclosure practices.

Wisconsin Award for Voluntary Recycling Achievement (September 2009)

Samsung created and sponsored the largest, single day collection event in the US in 2009, generating nearly 1 million lbs of e-waste. Recognition was given to Samsung by Senator Miller, and Dane County Executive Director Kathleen Faulk.

Dow Jones Sustainability Index(September 2009)

Samsung Electronics is listed in the Dow Jones Sustainability World Indexes (DJSI World) for 2009.

Recognition for E-Waste Recycling - Lucerne County, PA (June 2009)

Samsung was awarded recognition by Lucerne County Officials for sponsoring the largest rural collection event in the US, collecting more than 500,000 lbs of e-waste during the weekend event.

ETBC Recycling Score Card (June 2009)

Samsung Electronics ranked first on the TV Companies Score Card for 2009. The Electronics TakeBack Coalition (ETBC) is a coalition of NGOs to promote green design and responsible recycling in the electronics industry.

The 1st LOHAS Awards Korea (April 2009)

The Korea LOHAS association awarded Samsung‘s LED TV lineup for the grand prize and Hauzen Bubble washing machine for the best prize in the living category.

Energy Star Excellence Award (March 2009)

The US Environmental Protection Agency (EPA) awarded Samsung Electronics the Energy Star Excellence Award for significantly expanding its offerings of Energy Star qualified products for 2009.

CES Eco-design Innovation Award (January 2009)

The CES awarded Samsung‘s LED TV (LN46B6000) and Washing Machine (WF448) its CES Eco-Design and Sustainable Technology Innovations Award.

Greenpeace Green Electronics Survey (December 2008)

Greenpeace selected Samsung‘s SGH-F268 as the best green mobile phone of the year in its Green Electronics Survey for 2008.

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3.11 CORPORATE SOCIAL RESPONSIBILITY

SAMSUNG’S GLOBAL CODE OF CONDUCT

Samsung Electronics aims to be a 'world leading company' devoting human resources and technology to create superior products and services, thereby contributing to a better global society.

To achieve this goal, They share and pursue Samsung Values of  People,

 Excellence,  Change,  Integrity,  Co-prosperity

and the 7 Factors of World Leading Company of  Dream,

 Vision & Goal,

 Creativity & Challenge,  Insight & Good Sense,  Technology & Information,  Trust & Credibility,

 Speed & Velocity,  Change & Innovation

to be instilled in the individual employees and the organization.

Furthermore, they follow thisGlobal Code of Conductfor Samsung Electronics employees in order to comply with laws and ethical practices as well as to express our concrete commitment to social responsibility. ThisGlobal Code of Conductwill be the guiding standard for everyone in Samsung Electronics, outlining conducts and value judgments in all business activities.

- We endeavor, with a sense of urgent awareness of the fact that we cannot survive without innovation, to achieve future competitiveness in Speedy response to the changes of environment and customer's demands, by maintaining the sustained attitude of Change & Innovation towards our Dream, Vision & Goal.

- We cultivate Creativity & Challenge, acknowledging that future competitiveness depends on the development of Technology & Information ahead of competitors.

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- We aspire to become qualified experts in our field with Insight to foresee the future, and the Good Sense to identify and take advantage of opportunities.

- We create an open culture where senior staff lead and junior staff are encouraged to make decisions and act proactively with a sense of ownership, based on the mutual respect of

individuality and Trust & Credibility.

- We pursue co-prosperity by maintaining relationships of Trust with shareholders and business partners, and facilitating sound management thought mutual cooperation

THE SAMSUNG PRINCIPLE



Principle 1. We comply with laws and ethical standards



Principle 2. We maintain a clean organizational culture



Principle 3. We respect customers, shareholders and employees



Principle 4. We care for the environment, health, and safety



Principle 5. We are a socially responsible corporate citizen

Vision 2020

As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future."

This new vision reflects Samsung Electronics‘ commitment to inspiring its communities by leveraging Samsung's three key strengths: ―New Technology,‖ ―Innovative Products,‖ and ―Creative Solutions.‖ -- and to promoting new value for Samsung's core networks -- Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all.

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As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the world‘s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management: ―Creativity,‖ ―Partnership,‖ and ―Talent.‖ Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new territories, including health, medicine, and biotechnology. Samsung is committed to being a creative leader in new markets and becoming a truly No. 1 business going forward.

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SOCIAL PERFORMANCE

"For the Betterment of All" is the founding ideal at Samsung Electronics. To realize it in the community, in-house community service teams carry out professional community share-care programs, while employees volunteer at various social services and activities.

 social commitment

 social contribution activities

 type and field of social contribution activities Social commitment

Based on a commitment to the community and an ethical mindset, Samsung Electronics contributes to the well being of society by helping to improve the quality of people‘s lives and serving cross border community services worldwide. All employees, who have the ―Betterment for All‖ firmly imprinted in their minds, demonstrate what a people-oriented company can do for the society. Therefore, all dedicated employees of the Company seek co-prosperity abided by self-discipline and ethical performance along with the Company‘s managerial ideal.

charter for social contribution

 We take part in the well-being of society with all activities based on humanity and social ethics.

 We do our utmost to heighten the quality of people‘s lives and to usher more affluence and happiness in our society.

 We activate cross-cultural exchanges with global communities and preserve global ecology to make the world a more pleasant and healthy place.

 We devote ourselves to volunteering in social welfare services and share our benefits with society.

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social contribution activities

Samsung Welfare Foundation takes part in contributing to society as a way to return corporate benefits to society. Since 1993, when ―returning corporate benefits to society‖ was set as one of the key managerial policies, Delegate social contribution Activities have been intensified. The social activities, which had been centered on the Samsung Welfare Foundation in general, were spread across the company and all employees are now encouraged to participate in various social activities home and abroad. Since 1995, when Samsung Electronics announced the new focus on social activities in three areas: the disabled, environment preservation, and informatization for society, the activities have continued to grow.

Also the Company has poured energy into supporting youth, culture and arts activities, academic exchanges, and scholarships. In 1995, Samsung Electronics revamped the community service teams to create a Community Service Volunteer Team. This reorganization was designed to help employees participate in the volunteer services that best suit their interests. In 2006 we established the volunteer council and expanded the corresponding organization as a part of sharing management expansion and operates by arranging organizations by establishing eight volunteer service centers at the each plant.

Since 1998, the Company has run computer classes for the blind, provided a scholarship for the children of disabled households, and volunteered good-will services for the needy. Each unit provides meals to undernourished children in the community where they work, which has resulted in closer bonds with people in the community. Recently, the Company has held ―Student Science Knowledge Olympics‖ jointly with science institutes to broaden students‘ scientific knowledge. To help increase students‘ creative thinking faculties, ―Creativity Olympiad‖ has been held jointly with the Patent Office of Korea. The Company has developed a new-concept ―Customer Volunteering Social Program‖ that is carried out by employees and customers together.

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POLICY AND GOALS

The 1992 Rio Declaration on Environment and Development highlighted the need to regulate greenhouse gas (GHG) emissions which have a direct impact on climate change. Under the ground-breaking Kyoto Protocol, signatory countries are required to reduce their combined GHG emissions by 5.2% from 1990 levels between 2008 and 2012.

Samsung Electronics recognizes that governments as well as companies have responsibilities to address the global challenges posed by climate change. Samsung Electronics supports global mandatory cuts of greenhouse gas emissions of at least 50% by 2050 (from 1990 levels) and mandatory domestic cuts by industrialized countries of at least 30% as a group by 2020. The company also calls for global greenhouse gas emissions to peak by 2015.

To date, the company has focused on its direct impacts; reducing CO2 emissions during manufacturing processes via a range of energy-saving initiatives and improving the energy efficiency of its products. Future plans will expand Samsung Electronics' GHG emission reduction efforts to cover additional direct impact areas such as logistics and indirect sources where possible. Samsung Electronics has participated in several voluntary government-led initiatives on climate change in Korea, where 60% of our workforce and the majority of our operations are based. These include:

 Pilot CO2 emission trading program supported by the Korea Energy Management Corp (KEMCO)

 National Korean Greenhouse Gas Register (trial project)

 Voluntary agreements to reduce energy consumption in all Samsung Electronics workplaces in Korea via the Catch CO2 Project

 Agreement on Response to Climate Change and Reduction of Greenhouse Gases with KEMCO

Reduction Goals for emissions of GHGs

Samsung Electronics sets reduction targets for emissions of GHGs in terms of targets in absolute emissions and relative emissions.

 Reduction target for absolute GHG emissions

: The company will reduce the total emissions of GHGs from its global manufacturing sites by 2% by 2011, from a baseline year of 2008.

 Reduction target for GHG emissions per basic unit

: The company will reduce GHG emissions per basic unit globally by 36% by 2011, from a baseline year of 2008.

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SUSTAINABILITY REPORTS

SUSTAINABLE DEVELOPMENT AT SANSUNG ELECTRONICS

Integrating corporate management and sustainable development is an issue of increasing importance in the business world, amid increasing expectations for social and environmental responsibility. In response , Samsung has been improving the process of collecting stakeholders ideas and setting up corporate wide vision and strategies for sustainable development.

Samsung has designated economic, environmental, and social responsibilities as the key elements of their sustainable management. They are committed to continuing to identify their various stakeholders, build positive relationships with them, and ultimately enhance their value for both the company and the stakeholders