Samsung C&T Corporation and Subsidiaries

Samsung C&T Corporation and Subsidiaries Consolidated Interim Financial Statements March 31, 2018 and 2017 Samsung C&T Corporation and Subsidiaries Index March 31, 2018 and 2017

Pages

Report on Review of Interim Financial Statements ………………………...... 1 - 2

Consolidated Interim Financial Statements

Consolidated Interim Statements of Financial Position …………………………………………….. 3 - 5

Consolidated Interim Statements of Comprehensive Income...... 6 - 8

Consolidated Interim Statements of Changes in Equity...... …………...... 9 - 10

Consolidated Interim Statements of Cash Flows…………………………………………………….. 11 - 12

Notes to the Consolidated Interim Financial Statements...... ……....……...... 13 - 104

Report on Review of Interim Financial Statements

(English Translation of a Report Originally Issued in Korean)

To the Shareholders and Board of Directors of Samsung C&T Corporation

Reviewed Financial Statements We have reviewed the accompanying consolidated interim financial statements of Samsung C&T Corporation (the “Company”) and its subsidiaries (collectively referred to as the “Group”). These financial statements consist of the consolidated interim statement of financial position of the Group as at March 31, 2018, and the related consolidated interim statements of comprehensive income, changes in equity and cash flows for the three-month periods ended March 31, 2018 and 2017, and a summary of significant accounting policies and other explanatory notes, expressed in Korean won.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to issue a report on these consolidated interim financial statements based on our review.

We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion Based on our review, nothing has come to our attention that causes us to believe the accompanying consolidated interim financial statements are not presented fairly, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.

Other Matters We have audited the consolidated statement of financial position of the Group as at December 31, 2017, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, in accordance with Korean Standards on Auditing. We expressed an unqualified opinion on those financial statements, not presented herein, in our audit report dated March 14, 2018. The consolidated statement of financial position as at December 31, 2017, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2017.

The accompanying consolidated interim financial statements as at March 31, 2018 and December 31, 2017, and for the three-month periods ended March 31, 2018 and 2017, have been translated into U.S. dollars solely for the convenience of the reader and have been translated on the basis set forth in Note 3 to the consolidated interim financial statements.

Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.

Seoul, Korea May 15, 2018

This report is effective as of May 15, 2018, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

2 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Financial Position March 31, 2018 and December 31, 2017

(in millions of Korean won and thousands of U.S. dollars (Note 3)) Notes March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 (Unaudited) (Unaudited) Assets Current assets Cash and cash equivalents 7 ￦ 3,031,753 ￦ 2,993,152 $ 2,842,713 $ 2,806,519 Short-term financial instruments 7 94,116 100,721 88,248 94,441 Financial assets at fair value through other comprehensive income 7,12 341 309 320 290 Trade receivables 7,8 4,099,924 4,992,459 3,844,280 4,681,162 Other current assets 7,8 2,991,311 2,628,872 2,804,793 2,464,953 Inventories 6 1,593,337 1,533,034 1,493,987 1,437,444 Total current assets 11,810,782 12,248,547 11,074,341 11,484,809 Assets held for sale 13, 14 49,627 71,956 46,533 67,470 Non-current assets Financial assets at fair value through profit or loss 7,12 24,063 24,439 22,563 22,915 Financial assets at fair value through other comprehensive income 7,12 23,167,032 23,204,424 21,722,486 21,757,547 Investments in associates and joint ventures 13 5,567,684 5,741,754 5,220,520 5,383,736 Property, plant and equipment 14 4,961,922 4,985,944 4,652,529 4,675,053 Investment properties 15 595,691 671,661 558,548 629,780 Biological assets 16 2,162 2,204 2,027 2,066 Intangible assets 14 1,279,677 1,311,472 1,199,884 1,229,697 Deferred tax assets 71,549 75,376 67,085 70,675 Other non-current assets 7,8 754,948 711,126 707,874 666,785 Total non-current assets 36,424,728 36,728,400 34,153,516 34,438,254 Total assets ￦ 48,285,137 ￦ 49,048,903 $ 45,274,390 $ 45,990,533

3 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Financial Position March 31, 2018 and December 31, 2017

(in millions of Korean won and thousands of U.S. dollars (Note 3)) Notes March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 (Unaudited) (Unaudited) Liabilities Current liabilities Trade payables 7 ￦ 1,790,309 ￦ 1,785,617 $ 1,678,677 $ 1,674,278 Short-term borrowings 7,17 1,652,544 2,093,310 1,549,502 1,962,785 Current portion of long-term borrowings 7,17 1,593,121 1,346,801 1,493,784 1,262,823 Current tax liabilities 88,764 51,744 83,230 48,516 Other current liabilities 5,7,10,19 9,098,492 9,180,834 8,531,169 8,608,378 Total current liabilities 14,223,230 14,458,306 13,336,362 13,556,780 Non-current liabilities Debentures and long-term borrowings 7,17 2,265,961 2,594,095 2,124,670 2,432,344 Net defined benefit liability 18 79,765 58,357 74,792 54,718 Deferred tax liabilities 6,290,961 6,295,263 5,898,698 5,902,732 Provisions 5,19 255,259 257,025 239,343 240,998 Other non-current liabilities 7,10 281,196 234,607 263,662 219,979 Total non-current liabilities 9,173,142 9,439,347 8,601,165 8,850,771 Total liabilities 23,396,372 23,897,653 21,937,527 22,407,551

4 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Financial Position March 31, 2018 and December 31, 2017

(in millions of Korean won and thousands of U.S. dollars (Note 3)) Notes March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 (Unaudited) (Unaudited) Equity Share capital 21 19,132 19,132 17,939 17,939 Consolidated capital surplus 10,468,265 10,468,265 9,815,532 9,815,532 Other components of equity 22 6,290,689 6,313,950 5,898,443 5,920,253 Consolidated retained earnings 5,642,643 5,755,405 5,290,804 5,396,535 Equity attributable to owners of the Parent Company 22,420,729 22,556,752 21,022,718 21,150,259 Non-controlling interests 1 2,468,036 2,594,498 2,314,145 2,432,723 Total equity 24,888,765 25,151,250 23,336,863 23,582,982 Total liabilities and equity ￦ 48,285,137 ￦ 49,048,903 $ 45,274,390 $ 45,990,533

The U.S. dollar figures are provided for information purposes only and do not form part of the consolidated interim financial statements. Refer to Note 3.

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

5 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Comprehensive Income Three-Month Periods Ended March 31, 2018 and 2017

Net sales 33 ￦ 7,476,322 ￦ 6,702,302 $ 6,969,889 $ 6,248,300 Cost of sales 25 6,548,597 5,824,907 6,105,006 5,430,338 Gross profit 927,725 877,395 864,883 817,962 Selling and administrative expenses 23,25 718,554 740,020 669,881 689,893 Operating profit 27,33 209,171 137,375 195,002 128,069 Other income 24 494,559 477,884 461,058 445,513 Other expenses 24 139,678 282,626 130,216 263,481 Financial income 28 38,568 90,452 35,955 84,325 Financial expenses 28 58,017 101,525 54,087 94,648 Share of profit of associates and joint ventures 13 5,958 12,068 5,555 11,250 Share of loss of associates and joint ventures 13 72,284 51,366 67,388 47,887 Profit before income tax 478,277 282,262 445,879 263,141 Income tax expense 29 115,167 94,621 107,365 88,210 Profit for the period ￦ 363,110 ￦ 187,641 $ 338,514 $ 174,931

6 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Comprehensive Income Three-Month Periods Ended March 31, 2018 and 2017

(in millions of Korean won and thousands of U.S. dollars, except earnings per share amounts (Note 3)) Three-month Period Ended March 31 Notes 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Other comprehensive income for the period, net of tax Items that may be subsequently reclassified to profit or loss Share of other comprehensive income of associates and joint ventures ￦ 2,533 ￦ (24,789) $ 2,361 $ (23,110) Exchange differences 11,261 (124,907) 10,498 (116,446) Cash flow hedge (10,879) (1,045) (10,142) (974) Items that will not be reclassified to profit or loss Gain (loss) on valuation of financial assets at fair value through other comprehensive income (27,644) 1,025,755 (25,771) 956,272 Remeasurements of the net defined benefit liabilities - 11 - 10 (24,729) 875,025 (23,054) 815,752 Total comprehensive income for the period ￦ 338,381 ￦ 1,062,666 $ 315,460 $ 990,683

7 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Comprehensive Income Three-Month Periods Ended March 31, 2018 and 2017

(in millions of Korean won and thousands of U.S. dollars, except earnings per share amounts (Note 3)) Three-month Period Ended March 31 Notes 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Profit for the period attributable to: Owners of the Parent Company ￦ 398,635 ￦ 214,169 $ 371,632 $ 199,662 Non-controlling interest 1 (35,525) (26,528) (33,118) (24,731) Total comprehensive income for the period attributable to: Owners of the Parent Company ￦ 375,291 ￦ 1,117,770 $ 349,870 $ 1,042,054 Non-controlling interest (36,910) (55,104) (34,410) (51,371)

Earnings per share: 30 Basic earnings per share ￦ 2,417 ￦ 1,298 $ 2.25 $ 1.21

The U.S. dollar figures are provided for information purposes only and do not form part of the consolidated interim financial statements. Refer to Note 3.

The above consolidated interim statements of comprehensive income should be read in conjunction with the accompanying notes.

8 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Changes in Equity Three-Month Periods Ended March 31, 2018 and 2017

(in millions of Korean won and thousands of U.S. dollars (Note 3))

Consolidated Consolidated Other Non- Consolidated Consolidated Other Non- Share capital retained components controlling Share capital retained components controlling Notes capital surplus earnings of equity interests Total capital surplus earnings of equity interests Total

Balance at January 1, 2017 \ 19,132 \ 10,468,265 \ 5,229,978 \ 2,584,211 \ 2,804,124 \21,105,710 $ 17,939 $ 9,815,533 4,903,870 $ 2,423,077 $ 2,629,277 $ 19,789,696 Cumulative effect of changes in accounting policy 35 - - (16,550) 551 - (15,999) - - (15,518) 516 - (15,002) Beginning balance after adjustments 19,132 10,468,265 5,213,428 2,584,762 2,804,124 21,089,711 17,939 9,815,533 4,888,352 2,423,593 2,629,277 19,774,694 Total comprehensive income: Profit for the period - - 214,170 - (26,528) 187,642 - - 200,816 - (24,874) 175,942 Changes in the fair value of financial assets at fair value through other comprehensive income 12 - - - 1,025,755 - 1,025,755 - - - 961,795 - 961,795 Reclassification from disposal of financial assets at fair value through other comprehensive income - - (1,105) 1,105 - - - - (1,036) 1,036 - - Share of other comprehensive income of associates and joint ventures 13 - - - (21,585) (3,204) (24,789) - - - (20,239) (3,004) (23,243) Exchange differences - - - (99,497) (25,410) (124,907) - - - (93,294) (23,825) (117,119) Cash flow hedge 20 - - - (1,083) 38 (1,045) - - - (1,015) 35 (980) Remeasurements of the net defined benefit liabilities - - 11 - - 11 - - 10 - - 10 Transactions with owners: Cash dividends - - (90,786) - (675) (91,461) - - (85,125) - (633) (85,758) Changes in the scope of consolidation - - - - (3,986) (3,986) - - - - (3,738) (3,738) Others - - (95) - (130) (225) - - (90) - (120) (210) Balance at March 31, 2017 (Unaudited) \ 19,132 \ 10,468,265 \ 5,335,623 \ 3,489,457 \ 2,744,229 \22,056,706 $ 17,939 $ 9,815,533 $ 5,002,927 $ 3,271,876 $ 2,573,118 $ 20,681,393

9 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Changes in Equity Three-Month Periods Ended March 31, 2018 and 2017

(in millions of Korean won and thousands of U.S. dollars (Note 3))

Balance at January 1, 2018 \ 19,132 \ 10,468,265 \ 5,755,405 \ 6,313,950 \ 2,594,498 \25,151,250 $ 17,939 $ 9,815,532 $ 5,396,535 $ 5,920,253 $ 2,432,722 $ 23,582,981 Cumulative effect of changes in accounting policy 35 - - (181,400) - (88,024) (269,424) - - (170,089) - (82,535) (252,624) Beginning balance after adjustments 19,132 10,468,265 5,574,005 6,313,950 2,506,474 24,881,826 17,939 9,815,532 5,226,446 5,920,253 2,350,187 23,330,357 Total comprehensive income: - Profit for the period - - 398,635 - (35,525) 363,110 - - 373,779 - (33,310) 340,469 Changes in the fair value of financial assets at fair value through other comprehensive income 12 - - - (27,644) - (27,644) - - - (25,920) - (25,920) Reclassification from disposal of financial assets at fair value through other comprehensive income - - (83) 83 - - - - (78) 78 - - Share of other comprehensive income of associates and joint ventures 13 - - - 2,631 (98) 2,533 - - - 2,467 (92) 2,375 Exchange differences - - - 12,642 (1,382) 11,260 - - - 11,854 (1,296) 10,558 Cash flow hedge 20 - - - (10,973) 94 (10,879) - - - (10,289) 88 (10,201) Transactions with owners: - Cash dividends - - (329,938) - (1,560) (331,498) - - (309,365) - (1,463) (310,828) Others - - 24 - 33 57 - - 22 - 31 53 Balance at March 31, 2018 (Unaudited) \ 19,132 \ 10,468,265 \ 5,642,643 \ 6,290,689 \ 2,468,036 \24,888,765 $ 17,939 $ 9,815,532 $ 5,290,804 $ 5,898,443 $ 2,314,145 $ 23,336,863

The U.S. dollar figures are provided for information purposes only and do not form part of the consolidated interim financial statements. Refer to Note 3.

The above consolidated interim statements of changes in equity should be read in conjunction with the accompanying notes.

10 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Cash flows Three-Month Periods Ended March 31, 2018 and 2017

(in millions of Korean won and thousands of U.S. dollars (Note 3)) Three-month period ended March 31 Notes 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Cash flows from operating activities Cash generated from operations 32 \ 496,996 \ 632,851 $ 466,007 $ 593,390 Interest received 59,385 37,800 55,682 35,443 Interest paid (46,709) (50,501) (43,797) (47,352) Dividends received 15,806 17,530 14,820 16,437 Income taxes paid (36,963) (51,483) (34,658) (48,273) Net cash inflow from operating activities 488,515 586,197 458,054 549,645

Cash flows from investing activities Disposal of assets held for sale 9,118 - 8,549 - Decrease in short-term financial instruments 6,190 274,118 5,804 257,026 Net decrease in short-term loans 8,431 - 7,906 - Disposal of financial assets at fair value through profit or loss 12 - 10,834 - 10,158 Disposal of financial assets at fair value through other comprehensive income 12 84 1,198 79 1,123 Disposal of investments in subsidiaries - 208 - 195 Disposal of investments in associates and joint ventures 13 1,295 20,204 1,215 18,944 Decrease in long-term receivables 2,307 12,772 2,164 11,976 Decrease in deposits 4,360 13,663 4,088 12,811 Disposal of property, plant and equipment 14 137,314 7,674 128,752 7,196 Disposal of intangible assets 14 984 6,038 923 5,661 Disposal of investment properties 108,547 527 101,779 494 Decrease in other non-current assets 828 415 776 389 Increase in short-term loans - (18,836) - (17,661) Acquisition of financial assets at fair value through profit or loss (104) (112) (98) (105) Acquisition of financial assets at fair value through other comprehensive income (86) (1,165) (81) (1,092) Acquisition of investments in associates and joint ventures 13 (10,712) (46,976) (10,044) (44,047) Increase in long-term receivables (11,992) (44,235) (11,245) (41,477) Increase in deposits (16,106) (7,497) (15,104) (7,028) Acquisition of property, plant and equipment 14 (146,819) (124,229) (137,664) (116,483) Acquisition of intangible assets 14 (15,282) (12,422) (14,329) (11,648) Increase in other non-current assets (1,979) (1,030) (1,855) (966) Net cash inflow from investing activities 76,378 91,149 71,615 85,466

11 Samsung C&T Corporation and Subsidiaries Consolidated Interim Statements of Cash flows Three-Month Periods Ended March 31, 2018 and 2017

(in millions of Korean won and thousands of U.S. dollars (Note 3)) Three-month Period Ended March 31 Notes 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited)

Cash flows from financing activities Increase in long-term borrowings 122,877 31,376 115,215 29,420 Net decrease in short-term borrowings (495,424) (101,405) (464,533) (95,082) Repayment of current portion of long-term borrowings (150,000) (758,371) (140,647) (711,084) Early redemption of long-term borrowings (6,200) (227,637) (5,813) (213,443) Dividends paid to the non-controlling interests (1,560) (675) (1,462) (633) Net decrease in other components of equity - (126) - (119) Net cash outflow from financing activities (530,307) (1,056,838) (497,240) (990,941) Net increase (decrease) in cash and cash equivalents 34,586 (379,492) 32,429 (355,830) Cash and cash equivalents at the beginning of the period 2,993,152 2,698,530 2,806,519 2,530,267 Effects of exchange rate changes on cash and cash equivalents 4,015 (133,039) 3,765 (124,743) Cash and cash equivalents at the end of the period \ 3,031,753 \ 2,185,999 $ 2,842,713 $ 2,049,694

The U.S. dollar figures are provided for information purposes only and do not form part of the consolidated interim financial statements. Refer to Note 3.

The above consolidated interim statements of cash flows should be read in conjunction with the accompanying notes.

12 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

1. General Information

These consolidated financial statements are prepared in accordance with Korean IFRS 1110 Consolidated Financial Statements. Samsung C&T Corporation (the “Company” or the “Parent Company”) has 118 subsidiaries, including Samsung BioLogics Co., Ltd. (collectively referred to as the “Group”) and 52 associates and joint ventures, including Samsung Bioepis Co., Ltd. that are subject to the equity method of accounting.

1.1 The Company

The Company was established on December 23, 1963, for the purpose of engaging in tourist facilities business, and its corporate headquarters are located in Olympic-ro, Songpa-gu, Seoul. The Company primarily engages in tourist facilities, golf course services, construction, civil engineering, plant building, housing, development business, technology services, landscaping, energy conservation, environment development, fashion, retail business of various merchandise, and project organizing businesses in global market.

The Company sold its building management business of the construction division to S-1 Corporation on January 10, 2014. The Company, with the approval from the Board of Directors on June 19, 2014, changed its company name from Samsung Everland Inc. to Cheil Industries Inc. on July 4, 2014, and was listed on the stock market on December 18, 2014.

For the diversification of the business portfolio and enhancement of core competitiveness, the Company, with the approval from the Board of Directors on May 26, 2015, and from the shareholders on July 17, 2015, merged with Samsung C&T Corporation on September 1, 2015. The Company newly issued 56,317,483 shares (54,690,043 shares of ordinary shares and 1,627,440 shares of preferred shares) as consideration of the acquisition, and the new shares were listed on September 15, 2015.

Meanwhile, the Company changed its name from Cheil Industries Inc. to Samsung C&T Corporation on September 2, 2015, as approved by the Board of Directors on May 26, 2015.

13 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

1.2 Subsidiaries

(a) General information of subsidiaries as at March 31, 2018, is as follows:

Number of shares Ownership Share capital Number of interest held by (in millions of outstanding the Group Ownership interest held by Subsidiaries Primary business Korean won) shares Samsung C&T Subsidiaries Total (%) Location subsidiaries

Seoul Lakeside Co., Ltd. Golf course service \ 1,176 117,600 117,600 - 117,600 100.00 Korea Samoo Architects & Engineers Architectural design 500 100,000 100,000 - 100,000 100.00 Korea Co., Ltd. service CVnet Corporation2 e-Business 3,200 6,400,000 2,569,155 - 2,569,155 40.14 Korea Production of steel Myodo Metal Co., Ltd. 3,811 1,080,000 1,080,000 - 1,080,000 100.00 Japan products Samsung C&T Japan Trading 42,104 5,000,000 5,000,000 - 5,000,000 100.00 Japan Corporation Samsung C&T America, Inc. Trading 52,259 105 105 - 105 100.00 U.S.A. Natural resources Samsung C&T America, Inc. Samsung Oil & Gas USA Corp. 78,895 83,889 75,500 8,389 83,889 100.00 U.S.A. development 10% Samsung Renewable Energy, Renewable energy 22,867 2,000 2,000 - 2,000 100.00 Canada Inc. development Samsung Green Repower, Renewable energy Samsung C&T America, Inc. 2,863 - - - - 100.00 U.S.A. LLC.1 development 100% SCNT Power Norte S. de R.L. Thermal power 9,378 112,683,150 112,683,150 - 112,683,150 100.00 Mexico de C.V. generation Samsung E&C America, Inc. Construction 104 100,000 100,000 - 100,000 100.00 U.S.A. Samsung Solar Construction, Renewable energy Samsung C&T America, Inc. 6 5,000 - 5,000 5,000 100.00 U.S.A. Inc. development 100% Production of steel Samsung C&T America, Inc. QSSC, S.A, de C.V. 8,616 93,758,250 56,254,950 18,751,650 75,006,600 80.00 Mexico products 20%

14 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Samsung C&T Oil & Gas Natural resources \ 59,630 1 1 - 1 100.00 U.S.A. Parallel Corp. development Natural resources Parallel Petroleum LLC.1 837,480 - - - - 51.00 U.S.A. PLL Holdings LLC. 61% development Renewable energy Samsung Renewable Energy, SRE GRW EPC GP, Inc.1 8 - - - - 100.00 Canada development Inc. 100% Samsung Renewable Energy, Renewable energy SRE GRW EPC LP1 11 - - - - 100.00 Canada Inc. 99.99%, development SRE GRW EPC GP, Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE SKW EPC GP, Inc.1 11 - - - - 100.00 Canada development Inc. 100% Samsung Renewable Energy, Renewable energy SRE SKW EPC LP1 11 - - - - 100.00 Canada Inc. 99.99%, development SRE SKW EPC GP, Inc. 0.01% Samsung C&T Canada Ltd. Construction - 1 1 - 1 100.00 Canada Natural resources Samsung C&T Oil & Gas PLL Holdings LLC.1 238,537 - - - - 83.61 U.S.A. development Parallel Corp. 83.61% Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE GRW LP Holdings LP1 27,954 - - - - 100.00 Canada development SRE Wind GP Holdings, Inc. 0.01% Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE SKW LP Holdings LP1 10,775 - - - - 100.00 Canada development SRE Wind GP Holdings, Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE WIND PA GP Inc.1 8 - - - - 100.00 Canada development Inc. 100%

15 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Samsung Renewable Energy, Renewable energy SRE WIND PA LP1 \ 11 - - - - 100.00 Canada Inc. 99.99%, development SRE Wind PA GP Inc. 0.01% Natural resources Samsung C&T Oil & Gas PLL E&P LLC.1 34,733 - - - - 90.00 U.S.A. development Parallel Corp. 90% Renewable energy Samsung Renewable Energy, SRE GRS Holdings GP Inc.1 6 - - - - 100.00 Canada development Inc. 100% Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE GRS Holdings LP1 3 - - - - 100.00 Canada development SRE GRS Holdings GP Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE K2 EPC GP Inc.1 6 - - - - 100.00 Canada development Inc. 100% Samsung Renewable Energy, Renewable energy SRE K2 EPC LP1 - - - - - 100.00 Canada Inc. 99.99%, development SRE K2 EPC GP Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE KS Holdings GP Inc.1 7 - - - - 100.00 Canada development Inc. 100% Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE KS Holdings LP1 515 - - - - 100.00 Canada development SRE KS Holdings GP, Inc. 0.01% Samsung Renewable Energy, SRE Belle River LP Holdings Renewable energy Inc. 99.99%, 32,706 - - - - 100.00 Canada LP1 development SRE Belle River GP Holdings Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE Armow EPC GP Inc.1 8 - - - - 100.00 Canada development Inc. 100%

16 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE Armow EPC LP1 \ 9 - - - - 100.00 Canada development SRE Armow EPC GP Inc. 0.01% Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE Armow LP Holdings LP1 42,318 - - - - 100.00 Canada development SRE Wind GP Holdings, Inc. 0.01% Samsung Renewable Energy, SRE North Kent 1 LP Holdings Renewable energy Inc. 99.99%, 19,873 - - - - 100.00 Canada LP1 development SRE North Kent 1 GP Holdings Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE Wind GP Holdings, Inc.1 124 - - - - 100.00 Canada development Inc. 100% Samsung Renewable Energy, SRE North Kent 2 LP Holdings Renewable energy Inc. 99.99%, 200 - - - - 100.00 Canada LP1 development SRE North Kent 2 GP Holdings Inc. 0.01% SRE Solar Development GP Renewable energy Samsung Renewable Energy, 9 - - - - 100.00 Canada Inc.1 development Inc. 100% Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE Solar Development LP1 277 - - - - 100.00 Canada development SRE Solar Development GP Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE Windsor Holdings GP Inc.1 9 - - - - 100.00 Canada development Inc. 100% SRE Southgate Holdings GP Renewable energy Samsung Renewable Energy, 12 - - - - 100.00 Canada Inc.1 development Inc. 100%

17 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

SRE Solar Construction Renewable energy Samsung Renewable Energy, \ 4 - - - - 100.00 Canada Management GP Inc.1 development Inc. 100% Samsung Renewable Energy, SRE Solar Construction Renewable energy Inc. 99.99%, 9 - - - - 100.00 Canada Management LP1 development SRE Solar Construction Management GP Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE Development GP Inc.1 3 - - - - 100.00 Canada development Inc. 100% Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE Development LP1 184 - - - - 100.00 Canada development SRE Solar Construction Management GP Inc. 0.01% Renewable energy Samsung Renewable Energy, SRE BRW EPC GP Inc.1 3 - - - - 100.00 Canada development Inc. 100% Samsung Renewable Energy, Renewable energy Inc. 99.99%, SRE BRW EPC LP1 9 - - - - 100.00 Canada development SRE Solar Construction Management GP Inc. 0.01% SRE North Kent 1 GP Holdings Renewable energy Samsung Renewable Energy, 20 - - - - 100.00 Canada Inc.1 development Inc. 100%% SRE North Kent 2 GP Holdings Renewable energy Samsung Renewable Energy, 4 - - - - 100.00 Canada Inc.1 development Inc. 100% SRE Belle River GP Holdings Renewable energy Samsung Renewable Energy, 17 - - - - 100.00 Canada Inc.1 development Inc. 100% Renewable energy Samsung Renewable Energy, SRE NK1 EPC GP Inc.1 3 - - - - 100.00 Canada development Inc. 100% Renewable energy Samsung Renewable Energy, SRE NK1 EPC LP1 9 - - - - 100.00 Canada development Inc. 99.99%,

18 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

SRE NK1 EPC GP Inc. 0.01% SRE Summerside Construction Renewable energy Samsung Renewable Energy, \ - - - - - 100.00 Canada GP Inc.1 development Inc. 100% Samsung Renewable Energy, SRE Summerside Construction Renewable energy Inc. 99.99%, 9 - - - - 100.00 Canada LP1 development SRE Summerside Construction GP Inc. 0.01% Renewable energy Samsung C&T America, Inc. Samsung Solar Energy LLC.1 2,564 - - - - 100.00 U.S.A. development 100% Renewable energy Samsung Solar Energy LLC. Samsung Solar Energy 1 LLC.1 2,555 - - - - 100.00 U.S.A. development 100% Samsung C&T Deutschland Trading 18,551 - - - - 100.00 Germany GmbH1 United Samsung C&T U.K. Ltd. Trading 59,415 27,950,000 27,950,000 - 27,950,000 100.00 Kingdom United Samsung C&T ECUK Limited Construction 57 33,000 33,000 - 33,000 100.00 Kingdom Industrial plant United Whessoe Engineering Limited - 138 138 - 138 100.00 engineering Kingdom Production of Samsung C&T Deutschland POSS-SLPC S.R.O.1 5,967 - - - - 70.00 Slovakia steel products GmbH 20%

Renewable energy Samsung C&T Deutschland Solluce Romania 1 B.V.1 33,517 - - - - 100.00 Netherlands development GmbH 20% Renewable energy Ecosolar OOD 6,647 13,868,610 13,868,610 - 13,868,610 100.00 Bulgaria development Renewable energy Ecoenergy Solar OOD 4,050 9,463,357 9,463,357 - 9,463,357 100.00 Bulgaria development

19 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Renewable energy Agriplam EOOD \ 1,315 26,577 26,577 - 26,577 100.00 Bulgaria development Renewable energy Fishtrade EOOD 3,260 27,249 27,249 - 27,249 100.00 Bulgaria development Renewable energy Manageproject EOOD 2,274 305,785 305,785 - 305,785 100.00 Bulgaria development Renewable energy Solar Park EOOD 3,514 160,647 160,647 - 160,647 100.00 Bulgaria development Renewable energy Veselinovo Energy OOD 246 98,429 98,429 - 98,429 100.00 Bulgaria development Samsung C&T Construction Construction 2 - - - - 100.00 Hungary Hungary Kft.1 Samsung C&T (KL) Sdn. Bhd. Construction 3,870 1,000,000 1,000,000 - 1,000,000 100.00 Malaysia Samsung C&T Malaysia Sdn. Trading 6,002 15,000,000 15,000,000 - 15,000,000 100.00 Malaysia Bhd. Samsung C&T Singapore Pte. Samsung Chemtech VINA1 Trading 3,554 - - - - 100.00 Vietnam Ltd. 48.33% Samsung C&T America, Inc. 24%, S-Print Inc.1 Production of textile 2,245 - - - - 80.00 Vietnam Samsung C&T Singapore Pte. Ltd. 16% Samsung C&T (Thailand) Co., Samsung C&T Hongkong Trading 126 409,600 180,000 54,000 234,000 57.13 Thailand Ltd. Limited 13.18% Wholesale and retail of Samsung C&T Singapore Pte. PT. Insam Batubara Energy 1,037 1,000,000 900,000 100,000 1,000,000 100.00 Indonesia coal Ltd. 10% Samsung C&T India Private Ltd. Construction 2,748 126,500,000 126,500,000 - 126,500,000 100.00 India Samsung C&T Corporation Trading 3,455 16,500,001 16,500,001 - 16,500,001 100.00 India India Private Ltd.

20 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Production of Samsung C&T Singapore Pte. MSSC Sdn.,Bhd. \ 4,928 44,974 31,482 13,492 44,974 100.00 Malaysia steel products Ltd. 30% Samsung C&T Singapore Pte. Trading 35,574 34,000,000 34,000,000 - 34,000,000 100.00 Singapore Ltd. Natural resources Samsung C&T Singapore Pte. S&G Bio Fuel Pte. Ltd. 45,922 46,312,500 23,400,000 5,850,000 29,250,000 63.16 Singapore development Ltd. 12.63% Natural resources PT Gandaerah Hendana 11,320 100,000,000 - 95,000,000 95,000,000 60.00 Indonesia S&G Bio Fuel Pte. Ltd. 95% development Natural resources PT Inecda 11,320 100,000,000 - 95,000,000 95,000,000 60.00 Indonesia S&G Bio Fuel Pte. Ltd. 95% development SAMSUNG C&T Mongolia Construction 1,215 - - - - 70.00 Mongolia LLC.1 Samsung C&T Eng.&Const. Construction 598 - - - - 100.00 Mongolia Mongolia LLC.1 S&Woo Construction Construction 239 9,400 3,760 - 3,760 40.00 Philippines Philippines, Inc.2 SAMOO DESIGNERS & Architectural design Samoo Architects & Engineers ENGINEERS INDIA 192 1,100,000 - 1,100,000 1,100,000 100.00 India service Co., Ltd. 100% PRIVATE LIMITED Samsung (Tianjin) International Samsung C&T Hongkong Trading 382 - - - - 100.00 China Trading Co., Ltd.1 Limited 100% Samsung Trading (Shanghai) Samsung C&T Hongkong Trading 498 - - - - 100.00 China Co., Ltd.1 Limited 100% Samsung C&T Hongkong Trading 47,849 61,483 61,483 - 61,483 100.00 Hong Kong Limited Samsung C&T Taiwan Co., Ltd. Trading 361 1,000,000 1,000,000 - 1,000,000 100.00 Taiwan Samsung Precision Stainless Production of Samsung C&T Hongkong 82,979 - - - - 100.00 China Steel (Pinghu) Co., Ltd.1 steel products Limited 45%

21 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Samsung C&T Co., Samsung C&T Hongkong Trading \ 466 - - - - 100.00 China (Guangzhou) Ltd.1 Limited 100% Samsung C&T (Shanghai) Co., Construction 11,066 - - - - 100.00 China Ltd.1 Samsung C&T (Xi'an) Co., Ltd.1 Construction 1,428 - - - - 100.00 China Samsung C&T Corporation Construction 2,658 - - - - 100.00 Saudi Arabia Saudi Arabia1 SAM Gulf Investment Limited Investment 12 38,912 38,912 - 38,912 100.00 Bahrain Samsung C&T Chile Copper Natural resources 12,918 11,535,517 11,535,517 - 11,535,517 100.00 Chile SpA development SCNT Power Kelar Inversiones Thermal power 42,705 100 100 - 100 100.00 Chile LTDA. generation Production of stainless Samsung C&T Deutschland S.C. Otelinox S.A. 56,148 33,078,479 - 31,179,053 31,179,053 94.26 Romania steel plates and poles GmbH 94.26% Samsung Corporation Rus Construction 6,303 - - - - 100.00 Russia LLC.1 Biopharmaceutical Samsung BioLogics Co., Ltd.3 165,413 66,165,000 28,742,466 - 28,742,466 43.44 Korea products manufacturing Manufacturing and Cheil Fashion Retail Co., Ltd. 10,000 2,000,000 2,000,000 - 2,000,000 100.00 Korea selling garments Manufacturing and Natural 9 Co., Ltd. 10,000 2,000,000 1,020,000 - 1,020,000 51.00 Korea selling garments Manufacturing and Cheil Industries Corp., USA 106 1 1 - 1 100.00 U.S.A. selling garments Manufacturing and Cheil Industries Italy S.R.L.1 8,813 - - - - 100.00 Italy selling garments Colombo Via della Spiga Manufacturing and Cheil Industries Italy S.R.L. 144 - - - - 100.00 Italy S.R.L.1 selling garments 100%

22 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Samsung Fashion Trading Manufacturing and \ 65,993 - - - - 100.00 China (Shanghai) Co., Ltd.1 selling garments Samsung Welstory Inc. Foodservice business 10,000 2,000,000 2,000,000 - 2,000,000 100.00 Korea Cheil Industries Inc. Vietnam Construction 1,143 - - - - 100.00 Vietnam Co., Ltd.1 Welstory Vietnam Co., Ltd.1 Foodservice business 10,007 - - - - 90.00 Vietnam Samsung Welstory Inc. 90% Samsung C&T Corporation UEM Construction JV Sdn. Construction 205 750,000 450,000 - 450,000 60.00 Malaysia Bhd. Shanghai Ever Hongjun Business Management Foodservice business 2,536 - - - - 85.00 China Samsung Welstory Inc. 85% Service Co., Ltd.1 Shanghai Welstory Food Foodservice business 4,861 - - - - 70.00 China Samsung Welstory Inc. 70% Company Limited1 Eight Seconds (Shanghai) Co., Samsung Fashion Trading Co., Selling garments 19,434 - - - - 100.00 China Ltd.1 Ltd. 100% Eight Seconds (Shanghai) Samsung Fashion Trading Co., Selling garments 10,525 - - - - 100.00 China Trading Co., Ltd.1 Ltd. 100%

1 No share has been issued in accordance with the local laws and regulations. 2 The Parent Company has de facto control to appoint or dismiss more than 50% of the members of Board of Directors although it has less than 50% ownership interest. 3 Considering that the Parent Company holds significantly more voting rights than any other vote holders, the other shareholdings are widely dispersed, and taking into account the participation rate of previous shareholders’ meetings, the Parent Company is deemed to have de facto control although it has less than 50% ownership interest.

23 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(b) Summarized financial information of subsidiaries as at and for the three-month period ended March 31, 2018, is as follows:

(In millions of Korean won)

Profit Total Total Total (loss) for comprehensive Subsidiaries assets liabilities Revenue the period income (loss)

Seoul Lakeside Co., Ltd. \ 613,156 \ 297,673 \ 5,330 \ (320) \ (320) Samoo Architects & Engineers Co., Ltd. 126,080 79,267 49,571 3,317 3,410 CVnet Corporation 31,612 14,293 9,881 (147) (147) Myodo Metal Co., Ltd. 102,881 95,297 34,681 1,126 1,603 Samsung C&T Japan Corporation 226,301 160,415 286,649 1,180 4,576 Samsung C&T America, Inc. 496,932 280,382 171,596 1,415 493 Samsung Oil & Gas USA Corp. 7,297 4,942 - (877) (863) Samsung Renewable Energy, Inc. 223,849 88,385 - (1,396) (1,292) Samsung Green Repower, LLC. 9,197 47 - - (9) SCNT Power Norte S. de R.L. de C.V. 49,559 39,865 - (417) (373) Samsung E&C America, Inc. 39,003 21,858 22,463 757 677 Samsung Solar Construction, Inc. 31 - - - - QSSC, S.A, de C.V. 72,086 61,443 38,183 866 816 Samsung C&T Oil & Gas Parallel Corp. 306,358 324,215 - (2,639) (1,560) Parallel Petroleum LLC. 471,457 43,918 20,353 7,494 4,860 SRE GRW EPC GP, Inc. - - - - - SRE GRW EPC LP 44 - - - (1) SRE SKW EPC GP, Inc. 2 - - - - SRE SKW EPC LP 35 - - - (1) Samsung C&T Canada Ltd. 166,018 222,112 41,312 (973) 489 PLL Holdings LLC. 521,528 254,319 - 253 1,367 SRE GRW LP Holdings LP 32,366 2 - (35) (588) SRE SKW LP Holdings LP 72,607 2 - 5,448 3,425 SRE WIND PA GP Inc. - 1 - - - SRE WIND PA LP 3,593 21 483 494 388 PLL E&P LLC. 16,808 3,492 672 191 126 SRE GRS Holdings GP Inc. 2 1 - - - SRE GRS Holdings LP 1,023 2 - 18 (13) SRE K2 EPC GP Inc. - - - - - SRE K2 EPC LP 789 - - 3 (21) SRE KS Holdings GP Inc. 4 1 - - -

24 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(In millions of Korean won)

Profit Total Total Total (loss) for comprehensive Subsidiaries assets liabilities Revenue the period income (loss)

SRE KS Holdings LP 1,403 2 - 2 (25) SRE Belle River LP Holdings LP 32,194 2 - - (138) SRE Armow EPC GP Inc. 2 - - - - SRE Armow EPC LP 1,039 - - 4 (27) SRE Armow LP Holdings LP 89,301 2 - 170 (1,582) SRE North Kent 1 LP Holdings LP 19,844 2 - - (100) SRE Wind GP Holdings, Inc. 108 5 - - (2) SRE North Kent 2 LP Holdings LP 201 2 - - - SRE Solar Development GP Inc. 3 1 - - - SRE Solar Development LP 192 4 - 1 (5) SRE Windsor Holdings GP Inc. 7 1 - - - SRE Windsor Holdings LP 6 1 - - - SRE Southgate Holdings GP Inc. 3 1 - - - SRE Southgate Holdings LP 1,219 2 - 5 (32) SRE Solar Construction Management GP Inc. 1 1 - - - SRE Solar Construction Management LP 58 4 - 25 24 SRE Development GP Inc. 1 - - - - SRE Development LP 7,763 527 - 28 (191) SRE BRW EPC GP Inc. 19 1 - - - SRE BRW EPC LP 3 1 - - - SRE North Kent 1 GP Holdings Inc. 16 1 - - - SRE North Kent 2 GP Holdings Inc. 1 - - - - SRE Belle River GP Holdings Inc. 11,420 5,633 292 310 137 SRE NK1 EPC GP Inc. - - - - - SRE NK1 EPC LP 534 290 - - (8) SRE Summerside Construction GP Inc. 2,563 - - (1) (1) SRE Summerside Construction LP 2,647 - - - (6) Samsung C&T Deutschland GmbH 462,785 187,750 166,270 11,900 16,173 Samsung C&T U.K. Ltd. 38,557 24,144 34,452 77 533 Samsung C&T ECUK Limited 97,764 176,833 44,469 2,770 (351)

Whessoe Engineering Limited 1,767 9,037 985 (1,151) (1,389)

POSS-SLPC S.R.O. 27,485 15,530 14,730 493 777

Solluce Romania 1 B.V. 32,991 288 - (18) (23)

25 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(In millions of Korean won)

Profit Total Total Total (loss) for comprehensive Subsidiaries assets liabilities Revenue the period income (loss)

Ecosolar OOD 29,842 22,035 944 1,133 1,269

Ecoenergy Solar OOD 19,288 14,659 611 735 809

Agriplam EOOD 7,711 6,164 278 305 301

Fishtrade EOOD 8,245 6,145 271 345 361

Manageproject EOOD 8,740 6,046 272 320 352

Solar Park EOOD 4,036 3,075 132 144 148

Veselinovo Energy OOD 6,064 5,265 301 301 282

Samsung C&T Construction Hungary Kft. 2,050 110 - (14) 35

Samsung C&T (KL) Sdn. Bhd. 127,098 126,109 69,524 9,891 9,589

Samsung C&T Malaysia Sdn. Bhd. 2,071 47 137 (238) (140)

Samsung Chemtech VINA 52,117 44,399 35,512 3,065 3,000

S-Print, Inc. 8,863 12,354 5,181 221 250

Samsung C&T (Thailand) Co., Ltd. 25,101 18,104 16,603 591 849

PT. Insam Batubara Energy 16 1,956 - - 9

Samsung C&T India Private Ltd. 163,086 167,396 105,667 751 843 Samsung C&T Corporation India Private Ltd. 1,782 2,074 636 (623) (618)

MSSC Sdn.,Bhd. 26,409 20,184 17,148 180 450

Samsung C&T Singapore Pte. Ltd. 190,971 175,290 267,746 (482) (512)

S&G Bio Fuel Pte. Ltd. 120,811 58,416 - (1,013) (492)

PT Gandaerah Hendana 25,853 27,730 8,731 2,149 1,875

PT Inecda 35,935 10,416 7,146 1,669 961

SAMSUNG C&T Mongolia LLC. 20,079 12,561 - (447) (274)

Samsung C&T Eng.&Const. Mongolia LLC. 38,058 28,114 2,088 83 303

S&Woo Construction Philippines, Inc. 9,380 7,921 - (206) (283) SAMOO DESIGNERS & ENGINEERS INDIA PRIVATE LIMITED 4,408 3,523 1,317 198 180 Samsung (Tianjin) International Trading Co., Ltd. 6,336 - - 21 246

Samsung Trading (Shanghai) Co., Ltd. 52,481 30,380 50,584 1,927 2,656

Samsung C&T Hongkong Limited 253,383 148,056 839,091 10,470 9,904

Samsung C&T Taiwan Co., Ltd. 5,008 199 342 125 216 Samsung Precision Stainless Steel (Pinghu) Co., Ltd. 84,353 12,138 16,690 1,762 4,276

Samsung C&T Co., (Guangzhou) Ltd. 692 10 - 2 26

Samsung C&T (Shanghai) Co., Ltd. 95,059 42,865 22,099 1,949 3,747

26 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(In millions of Korean won)

Profit Total Total Total (loss) for comprehensive Subsidiaries assets liabilities Revenue the period income (loss)

Samsung C&T (Xi'an) Co., Ltd. 32,673 27,971 22,833 1,609 1,729

Samsung C&T Corporation Saudi Arabia 68,244 434,625 18,502 (1,223) 428

SAM Gulf Investment Limited 11 64 - (2) (2)

Samsung C&T Chile Copper SpA 5,948 - - - (27)

SCNT Power Kelar Inversiones LTDA. 70,388 27,416 - 316 314

S.C. Otelinox S.A. 60,193 7,934 11,514 391 1,642

Samsung Corporation Rus LLC. 72,617 33,111 8,838 1,740 1,760

Samsung BioLogics Co., Ltd. 8,006,332 3,537,330 135,901 (2,047) (1,992)

Cheil Fashion Retail Co., Ltd. 3,227 1,274 4,963 (1,188) (1,188)

Natural 9 Co., Ltd. 2,404 514 151 (608) (608)

Cheil Industries Corp., USA 1,028 541 339 10 7

Cheil Industries Italy S.R.L. 16,600 7,126 10,281 (45) (87)

Colombo Via della Spiga S.R.L. 7,381 3,591 1,170 (83) 14 Samsung Fashion (Shanghai) Trading Co., Ltd. 109,014 60,128 46,232 4,348 5,266

Samsung Welstory Inc. 570,156 205,896 429,252 12,340 12,352

Cheil Industries Inc. Vietnam Co., Ltd. 3,227 1,736 - (172) (185)

Welstory Vietnam Co., Ltd. 30,416 18,306 24,141 120 (1,125) Samsung C&T Corporation UEM Construction JV Sdn. Bhd. 80,584 83,254 23,295 (425) (640) Shanghai Ever Hongjun Business Management Service Co., Ltd. 11,093 7,490 13,955 (156) (302)

Shanghai Welstory Food Company Limited 9,309 7,246 8,986 (584) (619)

Eight Seconds (Shanghai) Co., Ltd. 17,166 8,059 1,239 (338) (1,006) Eight Seconds (Shanghai) Trading Co., Ltd. 7,645 8,602 564 (1,707) (1,707)

1 Intercompany transactions, balances, and unrealized gains and losses on transactions between the Group companies are not eliminated in the summarized financial information above. Also, shares in controlled subsidiaries and associates, accounted for under the equity method which the controlled subsidiaries own, are recognized at acquisition cost.

27 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

1.3 Investments in Associates and Joint Ventures

General information of associates and joint ventures as at March 31, 2018, is as follows (Note 13):

Number of shares Ownership Share capital Number of interest held (in millions of outstanding Samsung by the Group Associates Primary business Korean won) shares C&T Subsidiaries Total (%) Location

Dongducheon Dream Power Co., Integrated thermal power \ 330,658 66,131,621 20,600,000 - 20,600,000 31.15 Korea Ltd. generation Sino-Singapore Tianjin Eco-City Investment and Development Co., Property development 48,274 - - - - 40.00 China Ltd.1 Qurayyah Investment Company1 Construction 1,608 - - - - 35.00 Saudi Arabia Songdo Landmark City Limited3 Property development 67,559 13,511,814 5,936,624 - 5,936,624 43.94 Korea Chongqing Shanxia Technology Cotton thread 77,223 - - - - 20.00 China Textile Co., Ltd.1,3 manufacturing Research and development Samsung Bioepis Co., Ltd.4 103,419 20,683,705 - 19,567,921 19,567,921 94.61 Korea on medicine and pharmacy

28 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Number of shares Ownership Share capital Number of interest held (in millions of outstanding Samsung by the Group Joint ventures Primary business Korean won) shares C&T Subsidiaries Total (%) Location

Natural resources Korea LNG Limited \ 14 12,000 2,400 - 2,400 20.00 Bermuda development Renewable energy SP Belle River LP1 64,734 - - - - 42.49 Canada development Internal combustion JSC Balkhash Thermal Power Plant2 383,810 6,417,058 3,208,530 - 3,208,530 50.01 Kazakhstan power plant Renewable energy LJG Green Source Energy Alpha development 29 - - - - 78.00 Romania S.R.L.1,2 (Solar energy generation)

1 No share has been issued in accordance with the local laws and regulations. 2 Excluded from the scope of consolidation as it is a joint venture under a contractual arrangement. 3 The investments in associates are classified as asset held for sale. 4 Although the Group holds 94.61% ownership interest of Samsung Bioepis Co., Ltd., it is classified as an associate since the Group is unable to secure enough voting right set by the shareholders agreement to make a resolution at shareholders’ meeting considering the potential voting right held by non-controlling interest (Biogen Therapeutics Inc.) (Note 21).

29 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

1.4 Changes in Scope of Consolidation

The consolidated subsidiaries have not changed since December 31, 2017.

1.5 Information about Non-Controlling Interest

Profit or loss allocated to non-controlling interests and accumulated non-controlling interests of subsidiaries that are material to the Group, is as follows:

Accumulated non-controlling interests of subsidiaries as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Samsung BioLogics Co., Ltd. \ 2,259,358 \ 2,387,321 Others 208,678 207,177 . \ 2,468,036 \ 2,594,498

Profit or loss attributed to the non-controlling interests for the three-month periods ended March 31, 2018 and 2017, is as follows:

(in millions of Korean won) 2018 2017

Samsung BioLogics Co., Ltd. \ (39,872) \ (30,626) Others 4,347 4,098 . \ (35,525) \ (26,528)

Dividends paid to the non-controlling interests for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Parallel Petroleum LLC. \ 1,464 \ 675 Others 96 - . \ 1,560 \ 675

Summarized financial information for each subsidiary with non-controlling interests that are material to the Group as at March 31, 2018 and December 31, 2017, and for the three-month periods ended March 31, 2018 and 2017, is as follows. The subsidiary’s financial information was prepared using equity method for their associates and joint ventures.

30 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Summarized Statement of Financial Position

(in millions of Korean won) Samsung BioLogics Co., Ltd. March 31, December 31, 2018 2017

Current assets \ 671,550 \ 619,850 Non-current assets 6,724,252 6,839,588 Current liabilities 2,342,137 2,288,508 Non-current liabilities 1,058,901 949,888 Equity 3,994,764 4,221,042

Summarized Statement of Comprehensive Income

(in millions of Korean won) Samsung BioLogics Co., Ltd. 2018 2017

Sales \ 135,901 \ 107,648 Loss for the period (70,496) (54,149) Other comprehensive income (118) (5,665) Total comprehensive loss (70,614) (59,814)

Summarized Statement of Cash Flows

(in millions of Korean won) Samsung BioLogics Co., Ltd. 2018 2017

Cash flows from operating activities \ (9,613) \ 114,858 Cash flows from investing activities (131,334) 102,206 Cash flows from financing activities 120,712 (280,044) Increase in cash and cash equivalents (20,235) (62,980) Cash and cash equivalents at the beginning of the period 358,088 230,338 Effects of exchange rate changes on cash and cash equivalents 76 - Cash and cash equivalents at the end of the period \ 337,929 \ 167,358

31 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

2. Significant Accounting Policies

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

2.1 Basis of Preparation

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

The Group’s condensed consolidated interim financial statements for the three-month period ended March 31, 2018, have been prepared in accordance with Korean IFRS 1034 Interim Financial Reporting. These condensed consolidated interim financial statements have been prepared in accordance with Korean IFRS which is effective or early adopted as at March 31, 2018.

(a) New and Amended Standards adopted by the Group

The Group has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2018.

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

When an investment in an associate or a joint venture is held by, or is held indirectly through, an entity that is a venture capital organization, or a mutual fund, unit trust and similar entities including investment-linked insurance funds, the entity may elect to measure that investment at fair value through profit or loss in accordance with Korean IFRS 1109. The amendment does not have a significant impact on the financial statements because the Group is not a venture capital organization.

- Amendment to Korean IFRS 1040 Transfers of Investment Property

Paragraph 57 of Korean IFRS 1040 clarifies that a transfer to, or from, investment property, including property under construction, can only be made if there has been a change in use that is supported by evidence, and provides a list of circumstances as examples. The Group does not expect the amendment to have a significant impact on the financial statements.

- Amendments to Korean IFRS 1102 Share-based Payment

Amendments to Korean IFRS 1102 clarify accounting for a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled. Amendments also clarify that the measurement approach should treat the terms and

32 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

conditions of a cash-settled award in the same way as for an equity-settled award. The amendment does not have a significant impact on the financial statements.

- Enactment of 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.

- Enactment of Korean IFRS 1115 Revenue from Contracts with Customers

The Group has elected to apply Korean IFRS 1115 Revenue from Contracts with Customers. In accordance with the transition provisions in Korean IFRS 1115, comparative figures have not been restated. The Group elected the modified retrospective approach, and recognized the cumulative impact of initially applying the revenue standard as an adjustment to retained earnings as at January 1 2018, the period of initial application. See Note 35 for further details on the impact of the application of the standard.

(b) New standards and interpretations not yet adopted by the Group

Certain new accounting standards and interpretations that have been published that are not mandatory for annual reporting period commencing January 1, 2018 and have not been early adopted by the Group are set out below.

- Enactment of Korean IFRS 1116 Leases

Korean IFRS 1116 Leases issued on May 22, 2017 is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted. This standard will replace Korean IFRS 1017 Leases. The Group will apply the standards for annual periods beginning on or after January 1, 2019.

Under the new standard, with implementation of a single lease model, lessee is required to recognize assets and liabilities for all lease which lease term is 12 months or more and underlying assets are not low value assets. A lessee is required to recognize a right-of-use asset and a lease liability representing its obligation to make lease payments.

The Group performed an impact assessment to identify potential financial effects of applying Korean IFRS 1116. The Group is analyzing the effects on the financial statements based on available information as at March 31, 2018 to identify effects on 2018 interim financial statements; however, it is difficult to provide reasonable estimates of financial effects until the analysis is complete.

33 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

2.2 Accounting Policies

Significant accounting policies and method of computation used in the preparation of the consolidated interim financial statements are consistent with those of the consolidated financial statements for the year ended December 31, 2017, except for the changes due to the application of amendment and enactments of standards described in Note 2.1 and the one described below.

2.2.1 Income tax expense

Income tax expense for the interim period is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate is applied to the pre-tax income.

2.2.2 Revenue recognition

From January 1, 2018, the Group has applied Korean IFRS 1115 Revenue from Contracts with Customers.

(a) Identify performance obligation

The Group recognizes (i) goods or services (or a bundle of goods or services) that are distinct at inception of contract, or (ii) a series of distinct goods or services that are substantially the same, including the way they transfer to the customers, as separate performance obligations.

(b) A performance obligation is satisfied over time

The contract revenue is recognized over time by measuring progress only if i) the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or ii) the Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

The Group recognizes performance obligations satisfied over time based on percentage of completion by input methods after excluding the effects of any inputs that do not depict the performance. In addition, if the Group may not be able to reasonably measure the outcome of a performance obligation, but the Group expects to recover the cost incurred in satisfying the performance obligation, the Group will recognize revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

Meanwhile, a faithful depiction of the Group’s performance might be to recognize revenue at an amount equal to the cost of a goods used to satisfy a performance obligation if the Group expects at contract inception that all of the following conditions would be met: i) the goods are not distinct; ii) the customer is expected to obtain control of the goods significantly before receiving services related to the goods; iii) the cost of the transferred goods is significant relative to the total expected 34 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

costs to completely satisfy the performance obligation; and iv) the Group procures the goods from a third party and is not significantly involved in designing and manufacturing the goods.

(d) Variable consideration

If the consideration promised in a contract includes a variable amount, the Group estimates the amount of consideration to which the Group will be entitled in exchange for transferring the promised goods or services to a customer. An amount of consideration can vary because of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties or other similar items. The promised consideration can also vary if an entity’s entitlement to the consideration is contingent on the occurrence or non-occurrence of a future event. For example, an amount of consideration would be variable if either a product was sold with a right of return or a fixed amount is promised as a performance bonus on achievement of a specified milestone.

(e) Incremental costs of obtaining a contract

The incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. The costs to obtain a contract will be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained. The Group reviews the incremental costs of obtaining a contract based on each incurred items and recognizes the capitalized costs as contract cost based on percentage of completion.

(f) Costs to fulfill a contract

If the costs incurred in fulfilling a contract with a customer are related directly to a contract or to an anticipated contract that the entity can specifically identify, generate or enhance resources of the entity that will be used in satisfying (or in continuing to satisfy) performance obligations in the future, and are expected to be recovered, the costs are recognized as assets. And, the costs are recognized as contract costs based on percentage of completion.

(g) Contract assets and contract liabilities

A contract asset is an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer, and a contract liability is an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer. The Group presents contract assets and liabilities arising from a contract in the statements of financial position at net amount by offsetting each other.

3. United States Dollar Amounts

The Company and its domestic subsidiaries operate primarily in Korean won and their official accounting records are maintained in Korean won. The U.S. dollar amounts, provided herein, represent supplementary information solely for the convenience of the reader. All Korean won

35 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

amounts, other than those in statements of comprehensive income, have been translated into U.S. dollars at the exchange rate of \ 1,066.50 to US$ 1, while Korean won amounts in the statements of comprehensive income have been translated into U.S. dollars at the exchange rate of \ 1,072.66 to US$ 1. Such presentation is not in accordance with generally accepted accounting principles in either the Republic of Korea or the United States, and should not be construed as a representation that the Korean won amounts shown could be readily converted, realized or settled in U.S. dollars at this or any other rate.

4. Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Group to make estimates and assumptions concerning the future. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results.

Significant accounting estimates and assumptions applied in the preparation of these consolidated interim financial statements are the same as those that applied to the consolidated financial statements for the year ended December 31, 2017, except for the estimates used to determine income tax expense.

Meanwhile, significant accounting estimates and assumptions related to construction contracts are addressed below. The accounting estimates and assumptions, and method of computation applied in the preparation of the consolidated interim financial statements are consistent with those applied in the preparation of the annual consolidated financial statements for the year ended December 31, 2017.

(a) Uncertainty of the estimated total contract revenue

Total contract revenue is measured based on the initial amount of revenue agreed in the contract. However, the measurement of contract revenue is affected by a variety of uncertainties that depend on the outcome of future event; for example, the amount of contract revenue may increase as a result of variations in contract work, claims and incentive payments, on the other hand, the amount of contract revenue may decrease as a result of penalties arising from delays caused by the Group in the completion of the contract. The change in contract revenue is recognized when it is probable that the customer will approve the increase in revenue due to the changes in contract work, or when it is probable that the Group will be able to satisfy the performance requirements, and the amount can be estimated reliably.

(b) Uncertainty of the estimated total contract revenue due to construction delay

36 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

delay are estimated based on historical experience in case the completion date is expected to be delayed.

Revenue from construction work is recognized by reference to the percentage of completion method. The stage of completion of a contract is determined in the proportion that contract costs incurred for work performed to date to the estimated total contract costs. Total contract costs are estimated based on future expectation of material costs, labor costs, construction period and others.

37 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

5. Construction Contracts

Details of recognized construction profit or loss for construction contracts for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Buildings \ 1,816,168 \ 1,345,466 Civil engineering 629,815 599,059 Plant 527,065 740,409 Landscaping 28,296 28,777 \ 3,001,344 \ 2,713,711

As at March 31, 2018, the Group’s remaining balance of construction contracts amounts to \ 28,884,826 million1.

The Group provides the certificates of payment from financial institutions to the customers or reserves certain amount for guarantees for bidding, performance, repayment of advance received and warranty relating to the construction contracts mentioned above, which are presented in the statement of financial position as guarantee deposits received. As at March 31, 2018, the Group has reserves of \ 339,748 million relating to the constructions in progress.

As at March 31, 2018, the Group has accumulated revenues1 and costs1 on the ongoing construction projects amounting to \ 28,186,858 million and \ 26,637,493 million, respectively. As at March 31, 2018, the total accumulated revenues1 and costs1 incurred on all construction projects, including those completed during the current period, are \ 33,870,505 million and \ 31,703,482 million, respectively.

1 The accumulated revenues and costs include the accumulated revenues and costs of the former Samsung C&T Corporation prior to the merger.

38 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

The account balances of outstanding construction contracts as at March 31, 2018 and December 31, 2017, are summarized as follows:

December 31, (in millions of Korean won) March 31, 2018 2017 Civil Buildings engineering Plant Landscaping Total Total

Receivables from construction contracts \ 1,123,780 \ 173,197 \ 165,305 \ 44,999 \ 1,507,281 \ 2,527,157 Due from customer for construction work1 633,057 447,461 420,195 16,151 1,516,864 1,243,382 Advance payments 202,615 198,092 79,254 - 479,961 461,057 Prepaid expenses 93,220 1,813 389 168 95,590 296,421 Guarantee deposits 95,510 122,282 121,955 1 339,748 313,027 Long-term loans 202,948 - - - 202,948 193,330 Short-term loans 192,276 - - - 192,276 196,551 Advances received1 178,996 329,637 84,147 1,948 594,728 544,706 Due to customer for contract work12 1,387,638 231,837 272,429 3,377 1,895,281 2,078,644

1 Contract assets before offsetting respective contract liabilities

2 Contract liabilities before offsetting respective contract assets

The Group is provided with payment guarantees amounting to \ 10,504,802 million (December 31, 2017: \ 10,378,068 million), \ 1,419,401 million (December 31, 2017: \ 1,577,175 million), \ 19,535 million (December 31, 2017: \ 17,485 million), and \ 24,449 million (December 31, 2017: \ 26,211 million) from financial institutions, Construction Guarantee Cooperative, Software Guarantee Cooperative, and Engineering Guarantee Cooperative, respectively, in relation to the construction performance and others.

As at March 31, 2018, construction sites are covered by construction work insurance amounting to \ 9,591,167 million with Samsung Fire & Marine Insurance Co., Ltd. and others.

The Group arranges housing finance for the members engaged in redevelopment and reconstruction projects that the Group manages. Advances on housing finance temporarily received but not executed amount to \ 1,185,072 million. The Group has provided a joint guarantee limit of \ 3,408,410 million (balance of \ 3,320,700 million) with regard to the housing finance in accordance with the agreements with the relevant financial institutions.

39 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

As at March 31, 2018, information of each contract1 where contract revenue for the three-month period ended March 31, 2018, is more than 5% of the previous year’s revenues, is as follows:

(in millions of Korean won) Trade receivables (receivables from Due from customers3 construction contracts) Percentage Accumulated Contract Contractual of Gross impairment Gross Provision for date due date completion amount loss amount impairment

2 Saudi RABIGH 2 IPP Nov. 2013 Jun. 2017 98.10% \ - \ - \ 51,202 \ - Turkey Kirikkale CCPP2 Oct. 2014 Jun. 2017 94.80% - - 29,023 -

Pyeong-taek P-PJT2 May. 2015 Feb. 2018 96.90% - - - -

Pyeong-taek FAB 1 Apr. 2017 Aug. 2018 69.00% - - - -

Qatar FAC D IWPP May. 2015 Jun. 2018 91.80% - - - - Vietnam SDC Module 3 May. 2016 Sep. 2018 82.60% - - 21,924 -

Saudi Riyadh Metro Oct. 2013 Oct. 2018 69.80% 30,119 - 13,204 - Garak Siyoung Complex 1 Oct. 2015 Dec. 2018 62.60% 34,840 - - - Australia Westconnex Stage 1b (M4 East) Jun. 2015 Mar. 2019 73.00% - - - - Singapore Changi Airport Pkg.1 Oct. 2015 Jul. 2019 71.00% 15,348 - 38,743 -

Algeria Naama Feb. 2014 Feb. 2020 63.40% - - 13,537 - Australia Westconnex Stage2 (M5 Main Tunnel) Nov. 2015 Mar. 2020 42.80% - - 22,097 - UAE nuclear power plant Mar. 2010 May 2020 86.70% 20,950 - - -

Algeria Mostaghanem Feb. 2014 Apr. 2021 33.60% - - 15,720 - Gangneung Anin coal-fired power plant Feb. 2014 Mar. 2022 5.80% 163,927 - 16,243 - Singapore Thomson East Coast Line T313 Mar. 2016 Feb. 2024 25.20% 35,668 - 5,887 - India Mumbai DAICEC(Overseas)2 Dec. 2013 Sep. 2017 49.60% 4,732 - 36,445 -

Malaysia KL118 Tower Nov. 2015 Dec. 2019 17.00% 24,931 - 7,437 -

1 Construction projects that are practically completed as at March 31, 2018, are excluded. 2 As at March 31, 2018, the contractual due dates have passed but the construction is still in process due to the customer’s request for additional construction works. The Group is continuing the negotiation with the customer in relation to the extension of contractual due date. 3 Due from customers is the amount before offsetting contract liabilities.

40 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

As at December 31, 2017, information of each contract1 where contract revenue for the year ended December 31, 2017, is more than 5% of the previous year’s revenues, is as follows:

(in millions of Korean won) Trade receivables (receivables from Due from customers construction contracts) Percentage Accumulated Contract Contractual of Gross impairment Gross Provision for date due date completion amount loss amount impairment

2 Saudi RABIGH 2 IPP Nov. 2013 Jun. 2017 96.10% \ - \ - \ 51,432 \ - Turkey Kirikkale CCPP2 Oct. 2014 Jun. 2017 90.40% - - 30,441 -

Pyeong-taek P-PJT May. 2015 Feb. 2018 96.40% - - 77,675 - Vietnam SDC Module 3 May. 2016 Sep. 2018 78.70% - - 11,943 -

Pyeong-taek FAB 1 Apr. 2017 Aug. 2018 69.00% - - - -

Qatar FAC D IWPP May. 2015 Jun. 2018 89.30% - - - -

Saudi Riyadh Metro Oct. 2013 Oct. 2018 65.50% - - 23,207 - Garak Siyoung Complex 1 Oct. 2015 Dec. 2018 53.60% - - - - Australia Westconnex Stage 1b (M4 East) Jun. 2015 Mar. 2019 63.70% - - 19,141 - Singapore Changi Airport Pkg.1 Oct. 2015 Jul. 2019 65.40% 33,769 - 20,612 -

Algeria Naama Feb. 2014 Feb. 2020 58.70% - - 27,930 - Australia Westconnex Stage2 (M5 Main Tunnel) Nov. 2015 Mar. 2020 35.00% - - 23,466 - UAE nuclear power plant Mar. 2010 May 2020 85.10% 688 - - -

Algeria Mostaghanem Feb. 2014 Apr. 2021 30.30% - - 15,446 - Gangneung Anin coal-fired power plant Feb. 2014 Mar. 2022 2.50% 37,884 - 12,970 - Singapore Thomson East Coast Line T313 Mar. 2016 Feb. 2024 21.40% 29,648 - 7,557 - India Mumbai DAICEC(Overseas)2 Dec. 2013 Sep. 2017 44.70% 6,935 - 25,716 -

Malaysia KL118 Tower Nov. 2015 Dec. 2019 14.50% 29,025 - - -

1 Construction projects that are practically completed as at December 31, 2017, are excluded. 2 As at December 31, 2017, the contractual due dates have passed but the construction is still in process due to the customer’s request for additional construction works. The Group is continuing the negotiation with the customer in relation to the extension of contractual due date.

41 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Details of major joint venture construction as at March 31, 2018, are as follows:

(in millions of Korean won) Total contract Amount of Percentage of amount the Group ownership Representative company

Hyundai Engineering & UAE nuclear power plant \ 6,738,088 \ 3,032,140 45.00% Construction Co., Ltd. Saudi Riyadh Metro 8,678,548 2,444,226 28.16% FCC Austrailia Westconnex Stage2 3,342,038 1,002,612 30.00% CPB (M5 Main Tunnel) Malaysia KL118 Tower 1,558,244 934,947 60.00% Samsung C&T Corporation Austrailia Westconnex Stage 2,349,739 783,168 33.33% CPB 1b (M4 East) Singapore Changi Airport 889,146 622,402 70.00% Samsung C&T Corporation Expansion Pkg.1 Shin-Kori nuclear power plant 1,148,127 585,545 51.00% Samsung C&T Corporation #5, 6 Canada Site C 1,131,405 565,703 50.00% Acciona S.A. Hong Kong Metro SCLC1109 915,975 549,585 60.00% Samsung C&T Corporation Hong Long Tung Chung New 920,496 451,043 49.00% BUILD KING Town reclamation Bujeon-Masan DoubleTrack 421,377 299,936 71.18% Samsung C&T Corporation Electric Railway Suseo-Pyeongtaek High-speed 304,716 274,244 90.00% Samsung C&T Corporation Railway Area 5 Hongkong 3RS C3202 371,855 260,298 70.00% Samsung C&T Corporation United Kingdom Mersey 743,163 247,696 33.33% FCC, S.A & Petroserv L Gateway Saudi Tadawul Tower PJT 374,859 224,916 60.00% Samsung C&T Corporation Hyundai Engineering & Singapore TuasFinger1 793,416 222,157 28.00% Construction Co., Ltd.

42 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Changes in the estimated total contract revenue and estimated total contract costs by construction types for contracts in progress for the three-month period ended March 31, 2018, and its impact on the Group’s profit or loss for the period and in the succeeding periods, changes in balances of due from customers for contract work, and provisions for construction losses are as follows:

Impact on Changes in Changes in profit or loss Changes in estimated estimated Impact on for the due from (to) Provision for total contract total contract profit or loss succeeding customers for construction Construction type revenue costs for the period period contract work losses

Buildings \ 1,745,984 \ 1,475,138 \ 139,903 \ 130,943 \ 139,903 \ 28,353

Civil engineering 140,120 140,038 (2,048) 2,130 (2,048) 33,323

Plant 79,353 59,851 11,437 8,065 11,437 23,990

Landscaping 569 254 852 (537) 852 -

\ 1,966,026 \ 1,675,281 \ 150,144 \ 140,601 \ 150,144 \ 85,666

Uncertainty of the estimated total contract revenue due to construction delay

The measurement of contract revenue is affected by the uncertainty of the occurrence of future events. The contract revenue can be decreased by the claims of liquidated damages when the completion of contract is delayed due to the Group’s fault. Therefore, the damage claims for the delay are estimated based on historical experience in case the completion date is expected to be delayed. The Group strives to minimize damage claims by requesting extension of the completion date from the customers, and by giving evidence that the construction delay is not attributable to the Group. The Group will also undertake measures not to bear the damage claims from the delay.

For the three-month period ended March 31, 2018, changes in provision for estimated warranty costs for the completed projects and provisions for construction losses from construction contracts are as follows:

Effect of Korean IFRS (in millions of Korean won) Beginning 1115 adoption Increase Decrease Ending

Provision for construction warranties \ 180,633 \ (640) \ 6,304 \ (4,583) \ 181,714 Provision for construction losses 119,142 - 1,343 (34,819) 85,666

43 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

6. Inventories

Inventories as at March 31, 2018 and December 31, 2017, consist of the following:

March 31, 2018 December 31, 2017 (in millions of Korean won) Acquisition Valuation Book Acquisition Valuation Book cost allowance amount cost allowance amount

Merchandise \ 658,797 \ (43,575) \ 615,222 \ 595,545 \ (42,082) \ 553,463 Finished goods 371,155 (36,617) 334,538 408,400 (45,081) 363,319 Raw materials 216,799 (8,091) 208,708 202,706 (7,986) 194,720 Land held for housing projects 63,991 (612) 63,379 62,827 (612) 62,215 Materials-in-transit 216,986 - 216,986 220,225 - 220,225 Semi-finished goods and work-in-progress 70,167 (1,029) 69,138 53,609 (7) 53,602 Others 86,017 (651) 85,366 86,168 (678) 85,490 \ 1,683,912 \ (90,575) \ 1,593,337 \ 1,629,480 \ (96,446) \ 1,533,034

7. Financial Instruments by Category

Details of financial instruments by category as at March 31, 2018, and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Financial assets at fair value through profit or loss \ 24,063 \ 24,439 Financial assets at fair value through other comprehensive income 23,167,373 23,204,733 Financial assets at amortized cost Cash and cash equivalents1 3,031,753 2,993,152 Short-term financial instruments 94,116 100,721 Trade receivables2 2,992,339 3,839,631 Other current assets 1,763,668 1,426,890 Other non-current assets3 681,834 670,322 Derivative instruments Held for trading 13,922 18,149 Hedging instruments 7,181 6,351 \ 31,776,249 \ 32,284,388

1 Cash and cash equivalents amounting to \ 840 million (December 31, 2017: \ 909 million) are subject to withdrawal restrictions in relation to termination of Mongolian railroad project. 2 Due from customer for contract work amounting to \ 1,050,613 million (December 31, 2017: \ 1,152,828 million) is excluded.

44 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

3 Bank deposits amounting to \ 97 million (December 31, 2017: \ 97 million) are subject to withdrawal restrictions in relation to the Group’s loan facility agreement.

(in millions of Korean won) March 31, 2018 December 31, 2017

Liabilities at amortized cost Trade payables \ 1,790,309 \ 1,785,617 Short-term borrowings 1,176,235 1,646,863 Current portion of long-term liabilities 1,593,121 1,346,801 Other current liabilities 4,210,409 3,820,107 Debentures and long-term borrowings 2,265,961 2,594,095 Other non-current liabilities 86,469 78,276 Derivative instruments Held for trading 1,974,443 1,948,372 Hedging instruments 4,438 8,788 Other liabilities Short-term borrowings 476,309 446,447 Financial guarantee liabilities 29,172 36,420 \ 13,606,866 \ 13,711,786

Fair value of financial instruments is the same as book amount, except for those which do not have market prices in active market and whose fair value cannot be reliably measured.

45 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

8. Trade Receivables and Other Assets

Trade receivables and other assets as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017 Provision for Gross amount impairment Net amount Net amount

Trade receivables Financial assets at amortized cost \ 3,141,488 \ (149,149) \ 2,992,339 \ 3,839,631 Due from customer for contract work 1,141,167 (33,582) 1,107,585 1,152,828 4,282,655 (182,731) 4,099,924 4,992,459 Other current assets Financial assets at amortized cost: Short-term loans 307,214 (102,792) 204,422 214,266 Current portion of long-term receivables (Note 9) 9,252 - 9,252 6,017 Non-trade receivables 869,496 (21,971) 847,525 559,119 Accrued income 221,312 (47,744) 173,568 167,659 Deposits 541,442 (12,538) 528,904 479,830 1,948,716 (185,045) 1,763,671 1,426,891 Derivative instruments 21,102 - 21,102 24,499 Advance payments 770,095 (26,080) 744,015 671,569 Prepaid expenses 283,916 (57,326) 226,590 271,172 Prepaid corporate income tax 195,907 - 195,907 191,665 Others 40,027 - 40,027 43,076 3,259,763 (268,451) 2,991,312 2,628,872 Other non-current assets Financial assets at amortized cost: Long-term receivables (Note 9) 676,715 (218,371) 458,344 454,262 Long-term financial instruments 528 - 528 533 Deposits 214,296 (1,806) 212,490 205,056 Overseas natural resources development 33,237 (22,765) 10,472 10,472 924,776 (242,942) 681,834 670,323 Others 73,114 - 73,114 40,803 997,890 (242,942) 754,948 711,126 \ 8,540,308 \ (694,124) \ 7,846,184 \ 8,332,457

46 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(in millions of Korean won) March 31, 2018 December 31, 2017 Provision for Gross amount impairment Net amount Net amount

Third party receivables \ 7,647,816 \ (686,517) \ 6,961,299 \ 7,447,572 Related party receivables 892,492 (7,607) 884,885 884,885 \ 8,540,308 \ (694,124) \ 7,846,184 \ 8,332,457

As at March 31, 2018, trade receivables amounting to \ 476,309 million (December 31, 2017: \ 446,447 million), which were transferred to financial institutions but have not matured yet, are recognized as trade receivables and collateralized borrowings, respectively, due to a recourse in the event the debtor fails to pay (Note 17).

The Group classifies its financial assets as at amortized cost only if both of the following criteria are met:  the asset is held within a business model with the objective of collecting the contractual cash flows, and  the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding

Changes in provision for impairment for the three-month period ended March 31, 2018, are as follows:

(in millions of Korean won) Effect of Korean IFRS Impairment January 1, 1109 loss / March 31, 2018 adoption reversal Write-off Others 1 2018

Trade receivables \ 180,528 \ - \ 1,435 \ (118) \ 886 \ 182,731 Other current assets Financial instruments: Short-term loans 97,459 - 5,334 - (1) 102,792 Non-trade receivables 21,970 - 54 - (53) 21,971 Accrued income 44,389 - 3,307 - 48 47,744 Deposits 13,161 - (623) - - 12,538 176,979 - 8,072 - (6) 185,045 Advance payments 26,336 - (252) - (4) 26,080 Prepaid expenses 173,756 (117,597) 962 - 205 57,326 377,071 (117,597) 8,782 - 195 268,451 Other non-current assets Financial instruments: Long-term receivables 219,018 - (635) - (12) 218,371 Deposits 875 - 931 - - 1,806 Overseas natural resources development 22,765 - - - - 22,765 242,658 - 296 - (12) 242,942 \ 800,257 \ (117,597) \ 10,513 \ (118) \ 1,069 \ 694,124

47 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

1 Others include exchange differences, consolidation adjustments and others.

(in millions of Korean won) Effect of Korean IFRS Impairment January 1, 1109 loss / March 31, 2017 adoption reversal Write-off Others 1 2017

Trade receivables \ 192,561 \ 12,059 \ 9,345 \ (22,114) \ (1,027) \ 190,824 Other current assets Financial instruments: Short-term loans 87,827 6,469 (1,483) - 1,009 93,822 Non-trade receivables 30,788 - 1,589 (1,696) (887) 29,794 Accrued income 41,831 1,211 4,219 - (230) 47,031 Deposits 6,472 - 3,605 - - 10,077 166,918 7,680 7,930 (1,696) (108) 180,724 Advance payments 25,926 - (655) - (107) 25,164 Prepaid expenses 159,555 - 740 - - 160,295 352,399 7,680 8,015 (1,696) (215) 366,183 Other non-current assets Financial instruments: Long-term receivables 285,735 1,766 (3,086) (20,000) (246) 264,169 Deposits 875 - - - - 875 Overseas natural resources development 22,765 - - - - 22,765 309,375 1,766 (3,086) (20,000) (246) 287,809 \ 854,335 \ 21,505 \ 14,274 \ (43,810) \ (1,488) \ 844,816

1 Others include exchange differences, consolidation adjustments and others.

Impairment losses from trade receivables and other receivables are included in selling and administrative expenses, and other operating expenses, respectively, in the consolidated statement of comprehensive income. Amounts charged to the provision account are generally written off when there is no expectation of recovering additional cash.

As at March 31, 2018 and December 31, 2017, fair values of trade receivables, other current assets and other non-current assets are equal to their book amount. The maximum exposure of trade and other receivables to credit risk is the book amount of each class of receivables mentioned above.

48 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

9. Long-Term Receivables

Details of long-term receivables (including current portion) as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Loans for others \ 34,801 \ 34,263 Loans for redevelopment and reconstruction projects 433,969 422,761 Other long-term receivables 13,463 18,195 Less: Present value discount (14,637) (14,940) 467,596 460,279 Less: Current portion of long-term receivables (9,252) (6,017) \ 458,344 \ 454,262

49 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

10. Other Liabilities

Details of other liabilities as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Other current liabilities Financial instruments at amortized cost: Non-trade payables \ 1,338,783 \ 1,007,924 Accrued expenses 849,169 790,655 Guarantee deposits received 857,925 857,617 Advances received related to housing business 1,185,072 1,163,912 4,230,949 3,820,108 Other financial instruments: Derivative instruments 1,958,341 1,957,159 Finance guarantee contract 29,172 36,420 1,987,513 1,993,579 Advances received 2,482,857 2,962,568 Withholdings 244,408 249,860 Provisions (Note 19) 108,646 122,191 Others 44,119 32,528 9,098,492 9,180,834 Other non-current liabilities Financial instruments at amortized cost: Long-term non-trade payables 85,914 77,736 Leasehold deposits received 555 530 86,469 78,266 Derivative instruments 641 - Long-term unearned revenue 38,954 1,209 Contingent liabilities 155,132 155,132 281,196 234,607 \ 9,379,688 \ 9,415,441

50 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

11. Contract Assets and Liabilities

As explained in Note 2, the Group has applied Korean IFRS 1115 Revenue from Contracts with Customers from January 1, 2018. See Note 35 for the impact of the changes in accounting policies on the financial statements.

The Group has recognized the following revenue-related contract assets and liabilities:

(in millions of Korean won) March 31, 2018 January 1, 2018

Contract assets relating to construction contracts – due from customers \ 1,516,864 \ 1,243,382 Assets recognized for costs incurred to fulfil contracts 140,116 129,832 Total contract assets \ 1,656,980 \ 1,373,214 Contract liabilities relating to construction contract – advance received for construction contract \ 594,728 \ 544,706 Contract liabilities relating to construction contract – due to customers 1,895,281 2,061,994 Contract liabilities relating to customer loyalty program - advance payments 18,285 17,926 Contract liabilities relating to subscription sales – advance payments and advance received 92,176 90,149 Total contract liabilities \ 2,600,470 \ 2,714,775

Contract assets and contract liabilities for the construction contracts change significantly depending on the progress. Unsatisfied contracts of the contract liabilities are expected to be recognized based on the percentage-of-completion until the contracts are terminated. Other contract liabilities are expected to be recognized as revenue when the performance obligations for customers are completed.

The costs incurred directly to fulfill construction with fixed-price, technology transfer and production of test goods were recognized as assets while indirect costs were recognized as selling and administrative expenses for the three-month period ended March 31, 2018. The assets recognized are amortized over the term of the specific contract it relates to, consistent with the pattern of recognition of the associated revenue.

The revenue amounting to \ 1,307,066 million was recognized in the current reporting period in relation to carried-forward contract liabilities.

51 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

12. Financial Assets Measured at Fair Value

(a) Financial Assets at Fair Value through Profit or Loss

The Group classifies the following financial assets at fair value through profit or loss:

 debt investments that do not qualify for measurement at either amortized cost or at fair value through other comprehensive income,  equity investments that are held for trading, and  equity investments for which the entity has not elected to recognize fair value gains and losses through other comprehensive income.

Changes in financial assets at fair value through profit or loss for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Beginning balance \ 24,439 \ 39,449 Acquisition 104 112 Disposal (104) (5,737) Exchange differences and others (376) (1,094) Loss on valuation - (8) Ending balance \ 24,063 \ 32,722

Details of financial assets at fair value through profit or loss as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Equity instruments Domestic listed equities \ 2,165 \ 2,165 Foreign non-listed equities 5,943 6,319 Debt instruments Beneficiary certificates 157 157 SOC shares 15,798 15,798 \ 24,063 \ 24,439

52 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Details of listed equity instruments measured at fair value through profit or loss as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of December 31, Korean won) March 31, 2018 2017 Number of Percentage shares of ownership Acquisition Market Book Book owned (%) cost value amount amount

Badaro No.19 Ship Investment Company 750,000 4.93 \ 3,023 \ 2,164 \ 2,164 \ 2,164 Sambu Construction Co.,Ltd. 182 - 9 1 1 1 \ 3,032 \ 2,165 \ 2,165 \ 2,165

Details of non-listed equity instruments and debt instruments measured at fair value through profit or loss as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of December 31, Korean won) March 31, 2018 2017 Number of Percentage Net asset shares of ownership Acquisition value Book Book owned (%) cost or fair value amount amount

ACWA GUC1 1,128,011 16.11 \ 9,106 \ 9,106 \ 9,106 \ 9,106 Smart Rail Co.,Ltd.1 1,000,000 8.70 6,692 6,692 6,692 6,692 POSCO INDIA CHENNAI STEEL PROCESSING CENTRE PVT.LTD. and others - - 2,084 6,100 6,100 6,476 \ 17,882 \ 21,898 \ 21,898 \ 22,274

1 Investments in ACWA GUC (acquisition cost: \9,106 million) and Smart Rail Co., Ltd. (acquisition cost: \6,692 million), which were classified as financial assets at fair value through profit or loss, are pledged as collateral against borrowings of investees.

The amounts recognized in profit or loss from financial assets at fair value through profit or loss for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Profit or loss related to equity instruments at fair value through profit or loss ￦ - ￦ 59 Profit or loss related to debt instruments at fair value through profit or loss 1,138 1,167 ￦ 1,138 ￦ 1,226

53 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(b) Financial Assets at Fair Value through Other Comprehensive Income

Financial assets at fair value through other comprehensive income comprise:

 equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value through other comprehensive income rather than profit or loss as these are strategic investments and the group considered this to be more relevant, and  debt securities where the contractual cash flows are solely principal and interest and the objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets.

Changes in equity and debt instruments at fair value through other comprehensive income for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Beginning balance \ 23,204,733 \ 17,459,780 Acquisition 86 212 Disposal (168) (1,250) Exchange differences and others 249 (652) Gain (loss) on valuation (37,527) 1,354,623 Ending balance \ 23,167,373 \ 18,812,713

Details of financial instruments at fair value through other comprehensive income as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Equity instruments Listed equities \ 22,846,498 \ 22,883,966 Non-listed equities 275,352 275,364 Equity contribution 44,707 44,588 Debt instruments 816 815 \ 23,167,373 \ 23,204,733 Current portion \ 341 \ 309 Non-current portion 23,167,032 23,204,424

54 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Details of listed equities, including preferred shares, measured at fair value through other comprehensive income as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of December 31, Korean won) March 31, 2018 2017 Number of Percentage shares of ownership Acquisition Market Book Book owned (%) cost value amount amount

Samsung Electronics Co., Ltd. 5,976,362 4.06 \ 6,484,353 \14,707,827 \14,707,827 \15,227,770 Samsung Life Insurance Co., Ltd. 38,688,000 19.34 34,819 4,487,808 4,487,808 4,816,656 Samsung SDS Co., Ltd. 13,215,822 17.08 3,396,466 3,376,643 3,376,643 2,643,164 Samsung Heavy Industries Co., Ltd. and others - - 199,916 274,368 274,220 196,376 \10,115,554 \22,846,646 \22,846,498 \22,883,966

Details of non-listed equities measured at fair value through other comprehensive income as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of December 31, Korean won) March 31, 2018 2017 Number of Percentage shares of ownership Acquisition Market Book Book owned (%) cost value amount amount

Domestic Companies HAN ALL Co., Ltd. 1,128,011 16.11 \ 11,280 \ 15,098 \ 15,098 \ 15,098 SECUI Co., Ltd. 1,000,000 8.70 500 13,709 13,709 13,709 The Korea Economic Daily 1,187,563 6.35 7,095 7,656 7,656 7,656 Samsung Economics Research Institute 120,000 1.00 903 903 903 903 OilhubKoreaYeosu Ltd. and others - - 43,228 40,368 40,368 40,353 63,006 77,734 77,734 77,719 Overseas Companies Korea Ras laffan LNG Ltd. 2,783,333 10.00 80,279 72,601 72,601 72,601 iMaketAsia Co., Ltd. 772,657 19.32 8,941 20,217 20,217 20,217 Samsung SDI (Hongkong) Limited 5,500,000 2.44 4,477 4,477 4,477 4,477 Beijing Samsung Real Estate Co., Ltd and others - - 103,782 100,323 100,323 100,350 197,479 197,618 197,618 197,645 Equity Contribution Korea Construction Financial 28,717 0.73 39,569 41,885 41,885 41,885 55 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Cooperative Others - - 2,515 2,822 2,822 2,703 42,084 44,707 44,707 44,588 \ 302,569 \ 320,059 \ 320,059 \ 319,952

Changes in gain or loss on valuation of equity instruments measured at fair value through other comprehensive income for the three-month period ended March 31, 2018, recorded as other component of equity, consist of the following:

Balance at Change for the Income tax Balance at (in millions of Korean won) January 1, 2018 period allocated March 31, 2018

Gain (loss) on valuation of financial assets at fair value \ 8,711,376 \ (37,527) \ 9,965 \ 8,683,814

Upon disposal of these equity investments, any balance in the accumulated other comprehensive income for these equity investments is reclassified to retained earnings and is not reclassified to profit or loss.

Dividend income recognized from financial assets at fair value through other comprehensive income for the three-month period ended March 31, 2018, amounts to \ 233,755 million (2017: \ 223,927 million).

As at March 31, 2018 and December 31, 2017, debt instruments at fair value through other comprehensive income are as follows and the contractual cash flows under the instruments solely represent payments of principal and interest.

(in millions of Korean won) March 31, 2018 December 31, 2017

Current portion Government bonds \ 341 \ 309 Non-current portion Government bonds 475 506 \ 816 \ 815

Upon disposal of these debt investments, any balance in the accumulated other comprehensive income for these debt investments is reclassified to profit or loss.

56 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

13. Investments in Associates and Joint Ventures

Details of investments in associates and joint ventures as at March 31, 2018 and December 31, 2017, are as follows (Note 1.3):

(in millions of Korean won) Percentage March 31, 2018 December 31, 2017 of Acquisition Book Acquisition Book

Location ownership(%) cost Net assets amount cost Net assets amount

Associates Dongducheon Dream Power Co., Ltd.2 Korea 31.15 \ 81,191 \ 69,321 \ 44,172 \ 81,191 \ 68,698 \ 43,548 Sino-Singapore Tianjin Eco-City Investment and Development Co., Ltd. China 40.00 10,968 12,865 10,630 10,968 12,424 10,189 Songdo Landmark City Limited 3 Korea 43.94 20,522 20,522 20,522 20,522 20,522 20,522 KST POWER NORTE S.A. DE C.V. Mexico 34.00 6,229 24,920 23,660 6,229 23,122 21,847 Chongqing Shanxia Technology Textile Co., Ltd.5 China 20.00 30,461 29,097 29,105 30,461 27,998 29,105 Samsung Bioepis Co., Ltd.4 Korea 94.61 5,208,496 287,698 4,674,841 5,208,496 465,298 4,882,445 Others5 363,325 593,158 357,960 363,325 558,052 359,652 5,721,192 1,037,581 5,160,890 5,721,192 1,176,114 5,367,308 Joint ventures Korea LNG Limited Bermuda 20.00 83,507 37,130 37,130 83,507 35,837 35,837 SP Belle River LP Canada 42.49 25,787 29,654 26,558 26,243 28,706 25,570 Others 463,198 411,680 392,733 453,287 358,548 362,666 572,492 478,464 456,421 563,037 423,091 424,073 6,293,684 1,516,045 5,617,311 6,284,229 1,599,205 5,791,381 Less : Asset held for sale Songdo Landmark City Limited3 Korea (20,522) (20,522) (20,522) (20,522) (20,522) (20,522) Chongqing Shanxia Technology Textile Co., Ltd.6 China (30,461) (29,097) (29,105) (30,461) (27,998) (29,105)

\6,242,701 \1,466,426 \5,567,684 \6,233,246 \1,550,685 \5,741,754

1 The investments in associates and joint ventures are all non-listed. 2 As at March 31, 2018, investments in Dongducheon Dream Power Co., Ltd., (acquisition cost: \ 81,191 million), are pledged as collateral to a financial institution against the borrowings (total borrowing limit of \ 1,285,000 million) of Dongducheon Dream Power Co., Ltd. (Note 31). In addition, the Group provides fund supplement commitment on expected working capital deficit of Dongducheon Dream Power Co., Ltd. up to \ 8,100 million. 3 The Group has entered into a contract to sell equity interests, receivables, and others of Songdo Landmark City Limited to joint venture partners and classified the investee as asset held for sale. 4 Samsung Bioepis Co., Ltd. is included in associates although the percentage of ownership is 94.61% since the Group holds no control considering the potential voting rights held by non-controlling interests (Biogen Therapeutics Inc.) (Note 20). 5 Investments in Gaziantep SPV (acquisition cost: \ 5,569 million), Rabigh 2 Investment company (acquisition cost: \ 373 million) and Qurayyah Investment Company (acquisition cost: \ 52,215 million), are pledged as collateral against borrowings of investees (Note 31).

57 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

6 The investment in the associate was classified as an asset held for sale since the Group plans to sell the equity interests to joint shareholders.

Changes in investments in associates and joint ventures for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Beginning balance \ 5,741,754 \ 5,699,709 Effect of Korean IFRS 1115 adoption (143,959) - Acquisition 10,712 46,976 Disposal and others (1,256) (19,702) Share of profit (33,378) (35,381) Others1 (6,189) (17,086) Ending balance \ 5,567,684 \ 5,674,516

1 Others include dividends, transfer, exchange differences, and others.

58 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Summarized financial information of major associates and joint ventures, including dividends received by the Group, as at and for the three-month period ended March 31, 2018, is as follows:

(in millions of Korean won) Summarized financial information Total Non- Profit (loss) Other comprehen- Current Non-current Current Non-current controlling for the comprehensive income Dividends assets assets liabilities liabilities interests Revenue period sive income (loss) received

Associates Dongducheon Dream Power Co., Ltd. \ 98,620 \1,442,187 \1,270,012 \ 72,734 \ \ 171,094 \ 7,573 \ - \ 7,573 \ - Sino-Singapore Tianjin Eco-City Investment and Development Co., Ltd. 33,045 2 886 - - - (42) - (42) -

KST POWER NORT E S.A. DE C.V. 74,559 474,468 61,118 414,616 - 31,849 4,557 - 4,557 - Chongqing Shanxia Technology Textile Co., Ltd. 352,193 87,577 293,497 790 - 34,216 47 - 47 - Samsung Bioepis Co., Ltd.1 610,235 640,777 586,831 360,078 - 75,442 (40,478) 9 (40,469) - Joint ventures Korea LNG Limited 967 184,764 4 79 - 12,496 12,050 7,039 19,089 2,355 SP Belle River LP 17,204 255,792 10,350 192,856 - 10,413 4,578 849 5,427 -

1 Based on consolidated financial information.

59 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Summarized financial information of major associates and joint ventures, including dividends received by the Group, as at December 31, 2017 and for the year ended December 31, 2017, is as follows:

Associates Dongducheon Dream Power Co., Ltd. \ 110,624 \1,460,293 \ 305,650 \1,068,987 \ - \ 728,561 \ (46,891) \ - \ (46,891) \ - Sino-Singapore Tianjin Eco-City Investment and Development Co., Ltd. 31,980 1 922 - - - 522 - 522 - KST POWER NORT E S.A. DE C.V. 69,017 477,226 61,715 416,521 120,151 16,152 - 16,152 - Chongqing Shanxia Technology Textile Co., Ltd. 339,239 89,645 286,495 2,398 - 118,890 721 - 721 - Samsung Bioepis Co., Ltd.1 608,052 631,088 510,873 236,438 - 312,330 (91,415) 701 (90,714) - Joint ventures Korea LNG Limited 670 178,598 3 83 - 34,640 32,446 (57,502) (25,056) 6,439 Southgate Solar LP ------553 SP Belle River LP 31,442 264,785 17,198 211,468 - 8,286 832 3,602 4,434 -

1 Based on consolidated financial information.

60 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Reconciliation of financial information to book amount of the major investments in associates and joint ventures as at March 31, 2018 and December 31, 2017, is as follows:

(in millions of Korean won) March 31, 2018 Difference between the cost Percentage of the investment of ownership Share in net and share in the Intergroup Net assets (%) assets investee’s equity transactions Book amount

Associates Dongducheon Dream Power Co., Ltd. 1 \ 198,061 31.15 \ 69,321 \ (1,175) \ (23,974) \ 44,172 Sino-Singapore Tianjin Eco-City Investment and Development Co., Ltd. 32,161 40.00 12,865 (2,235) - 10,630 KST POWER NORTE S.A. DE C.V. 73,294 34.00 24,920 - (1,260) 23,660 Chongqing Shanxia Technology Textile Co., Ltd. 145,483 20.00 29,097 - 8 29,105 Samsung Bioepis Co., Ltd. 304,103 94.61 287,698 4,409,456 (20,571) 4,676,583 Joint ventures Korea LNG Limited 185,648 20.00 37,130 - - 37,130 SP Belle River LP 69,790 42.49 29,654 - (3,096) 26,558

1 Since the disproportionate capital increase by external investor was classified as financial liabilities, the Group applied 35% of ownership interest when calculating share of profit or loss of the associate.

61 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(in millions of Korean won) December 31, 2017 Difference between the cost Percentage of the investment of ownership Share in net and share in the Intergroup Net assets (%) assets investee’s equity transactions Book amount

Associates Dongducheon Dream Power Co., Ltd. 1 \ 196,280 31.15 \ 68,698 \ (1,175) \ (23,975) \ 43,548 Sino-Singapore Tianjin Eco-City Investment and Development Co., Ltd. 31,059 40.00 12,424 (2,235) - 10,189 KST POWER NORTE S.A. DE C.V. 68,007 34.00 23,122 - (1,275) 21,847 Chongqing Shanxia Technology Textile Co., Ltd. 139,991 20.00 27,998 - 1,107 29,105 Samsung Bioepis Co., Ltd. 491,829 94.61 465,298 4,417,147 - 4,882,445 Joint ventures Korea LNG Limited 179,183 20.00 35,837 - - 35,837 SP Belle River LP 67,560 42.49 28,706 - (3,136) 25,570

62 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

14. Property, Plant and Equipment, and Intangible Assets

Changes in property, plant and equipment for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 Buildings and Animals& Construction in Land structures plants Others progress Total Beginning balance Acquisition cost ￦ 1,826,541 ￦ 2,361,047 ￦ 69,108 ￦ 1,952,215 ￦ 288,863 ￦ 6,497,774 Accumulated depreciation - (624,151) (6,429) (878,268) - (1,508,848) Beneficiary's share of construction cost - - - (2,982) - (2,982) 1,826,541 1,736,896 62,679 1,070,965 288,863 4,985,944 Changes during the period Acquisition - 7,819 504 40,451 92,026 140,800 Disposal and others (61,679) (21,028) (9) (7,442) - (90,158) Depreciation - (18,688) (595) (52,315) - (71,598) Transfer - 1,902 78 29,665 (37,160) (5,515) Others 1 375 3,128 (623) (421) (10) 2,449 1,765,237 1,710,029 62,034 1,080,903 343,719 4,961,922 Ending balance Acquisition cost 1,765,237 2,350,187 68,877 2,008,573 343,719 6,536,593 Accumulated depreciation - (640,158) (6,843) (924,754) - (1,571,755) Beneficiary's share of construction cost - - - (2,916) - (2,916) ￦ 1,765,237 ￦ 1,710,029 ￦ 62,034 ￦ 1,080,903 ￦ 343,719 ￦ 4,961,922

1 Others include exchange differences, changes in scope of consolidation and others.

63 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(in millions of Korean won) 2017 Buildings and Animals& Construction in Land structures plants Others progress Total Beginning balance Acquisition cost ￦ 2,232,229 ￦ 2,211,981 ￦ 72,042 ￦ 1,792,328 ￦ 287,496 ￦ 6,596,076 Accumulated depreciation - (575,226) (4,459) (731,932) - (1,311,617) Beneficiary's share of construction cost - - - (3,250) - (3,250) 2,232,229 1,636,755 67,583 1,057,146 287,496 5,281,209 Changes during the period Acquisition 41 3,081 250 18,186 198,196 219,754 Disposal and others (1,520) (4,421) (3) (7,718) - (13,662) Depreciation - (16,986) (612) (50,560) - (68,158) Transfer (384,166) (162,756) - (652) (27,620) (575,194) Others 1 (532) (9,188) (2,509) 11,784 (66,056) (66,501) 1,846,052 1,446,485 64,709 1,028,186 392,016 4,777,448 Ending balance Acquisition cost 1,846,052 2,022,052 69,615 1,784,875 392,016 6,114,610 Accumulated depreciation - (575,567) (4,906) (753,505) - (1,333,978) Beneficiary's share of construction cost - - - (3,184) - (3,184) ￦ 1,846,052 ￦ 1,446,485 ￦ 64,709 ￦ 1,028,186 ￦ 392,016 ￦ 4,777,448

1 Others include exchange differences, changes in scope of consolidation and others.

64 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Changes in intangible assets for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 Mineral Right to use Customer Orders on rights Memberships Software property Goodwill relationships Brands hand Others Total

Beginning balance ￦ 439,694 ￦ 52,995 ￦ 78,309 ￦ 5,374 ￦ 60,132 ￦ 48,452 ￦ 188,828 ￦ 380,803 ￦ 56,885 ￦1,311,472 Acquisition 9,437 22 1,674 - - - - - 6,911 18,044 Disposal - (866) (16) (2) - - - - - (884) Amortization (6,059) (3) (9,666) (273) - (1,372) (113) (25,951) (2,138) (45,575) Transfer - - 1,457 - (14) - - - (1,667) (224) Others 1 (738) 1 (112) (1) (56) - - - (2,250) (3,156) Ending balance ￦ 442,334 ￦ 52,149 ￦ 71,646 ￦ 5,098 ￦ 60,062 ￦ 47,080 ￦ 188,715 ￦ 354,852 ￦ 57,741 ￦1,279,677

1 Others include exchange differences, changes in scope of consolidation and others.

65 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(in millions of Korean won) 2017 Mineral Right to use Customer Orders on rights Memberships Software property Goodwill relationships Brands hand Others Total

Beginning balance ￦ 543,519 ￦ 81,307 ￦ 118,837 ￦ 7,116 ￦ 60,758 ￦ 53,939 ￦ 189,552 ￦ 484,608 ￦ 61,667 ￦1,601,303 Acquisition 7,218 38 2,283 - - - - - 2,884 12,423 Disposal - (3,407) (9) (2) - - - - (599) (4,017) Amortization (3,555) - (16,452) (287) - (1,372) (334) (25,951) (5,189) (53,140) Transfer 13,809 - 3,020 - - - - - (777) 16,052 Others 1 (76,345) (102) (126) (61) (380) (1) (44) - (493) (77,552) Ending balance ￦ 484,646 ￦ 77,836 ￦ 107,553 ￦ 6,766 ￦ 60,378 ￦ 52,566 ￦ 189,174 ￦ 458,657 ￦ 57,493 ￦1,495,069

1 Others include exchange differences, changes in scope of consolidation and others.

66 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Goodwill is monitored by the management at the operating segment level. The following is a summary of goodwill allocation for each operating segment (cash-generating unit or groups of cash-generating units) as at March 31, 2018 and December 31, 2017:

(in millions of Korean won) March 31, 2018 December 31, 2017

Fashion segment: acquisition of fashion business segment of Samsung SDI Co., Ltd. \ 56,262 \ 56,262 Others 3,800 3,870 \ 60,062 \ 60,132

The Group entered into a Collateral Trust Agreement with KB Real Estate Trust Co., Ltd., which the Group provided its land and building located in Yongin-si, Gyeonggi-do as trust property. Simultaneously, the Group pledged the primary beneficiary certificate of the trust property as collateral to Woori Bank in relation to the short-term borrowings.

15. Investment Properties

Changes in investment properties for the three-month periods ended March 31, 2018 and 2017, are as follows:

2018 2017 (in millions of Korean won) Land Building Total Land Building Total

Beginning balance ￦ 475,184 ￦ 196,477 ￦ 671,661 ￦ 88,197 ￦ 28,084 ￦ 116,281 Disposal (57,244) (17,508) (74,752) - (527) (527) Depreciation - (1,172) (1,172) - (215) (215) Transfer - - - 384,527 174,616 559,143 Others 1 - (46) (46) - (1,074) (1,074) Ending balance ￦ 417,940 ￦ 177,751 ￦ 595,691 ￦ 472,724 ￦ 200,884 ￦ 673,608

1 Others include adjustments due to exchange difference.

As at March 31, 2018, the Group provided land and buildings, which are located in Seocho-gu, Seoul, Republic of Korea, as collateral to Samsung Fire & Marine Insurance Co., Ltd. and Samsung Life Insurance Co., Ltd. for establishment of the right to collateral security according to lease agreements, with total secured amount of \ 31,037 million.

67 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

16. Biological Assets

Changes in biological assets for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Beginning balance \ 2,204 \ 2,505 Exchange differences (42) (167) Ending balance \ 2,162 \ 2,338

17. Debentures and Borrowings

Details of debentures and borrowings as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Current liabilities Short-term borrowings \ 1,652,544 \ 2,093,310 Current portion of long-term borrowings 573,546 327,319 Current portion of debentures 1,020,000 1,020,000 Less: Discount on debentures (425) (518) 3,245,665 3,440,111 Non-current liabilities Long-term borrowings 808,670 987,270 Debentures 1,460,000 1,610,000 Less: Discount on debentures (2,709) (3,174) 2,265,961 2,594,096 \ 5,511,626 \ 6,034,207

68 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Short-term borrowings as at March 31, 2018 and December 31, 2017, consist of the following:

(in millions of Korean won) Annual interest March 31, December 31, Creditors rate (%) 2018 2017

Samsung C&T and domestic subsidiaries Loans in local currency 1 Woori Bank and others 1.40 - 2.82 \ 171,223 \ 681,223 Loans in foreign currency SMBC and others 2.10 - 3.23 119,524 135,294 Banker’s usance Woori Bank and others L+0.4 - 1.6 39,125 38,810 Secured loans (Note 8) Woori Bank and others L+0.4 - 1.95 476,309 445,049 806,181 1,300,376 Foreign subsidiaries General loans Citibank and others 0.35 - 8.85 846,363 791,536 Secured loans (Note 8) - - - 1,398 846,363 792,934 \ 1,652,544 \ 2,093,310

1 In relation to the borrowings, the land and building of the Group are provided as collateral to Woori Bank (Note 14).

As at March 31, 2018, the Group has entered into bank overdraft facility agreements amounting to \ 158,500 million and credit facility agreements amounting to \ 818,000 million with 11 banks, including Woori Bank. Also, the Group has entered into credit agreements using its notes receivables which are guaranteed, as collateral for up to \ 154,000 million with four banks, including Shinhan Bank.

69 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Debentures as at March 31, 2018 and December 31, 2017, consist of the following:

(in millions of Korean won) Annual interest March 31, December 31, Issue date Maturity rate (%) 2018 2017 Non-guaranteed and publicly listed No. 101-2 Mar. 8, 2013 Mar. 8, 2018 - \ - \ 150,000 No. 102-1 July 23, 2013 July 22, 2018 3.64 50,000 50,000 No. 102-2 July 23, 2013 July 23, 2018 3.64 50,000 50,000 No. 103-2 Sep. 5, 2013 Sep. 5, 2018 3.71 120,000 120,000 No. 104-2 Mar. 7, 2014 Mar. 7, 2019 3.59 150,000 150,000 No. 105-2 Oct. 6, 2014 Oct. 6, 2019 2.69 150,000 150,000 No. 106-2 1 Apr. 25, 2013 Apr. 25, 2018 2.90 150,000 150,000 No. 107-2 1 Aug. 29, 2013 Aug. 29, 2018 3.52 350,000 350,000 No. 108-2 1 Apr. 3, 2014 Apr. 3, 2019 3.41 260,000 260,000 No. 109-1 Dec. 1, 2015 Dec. 1, 2018 2.24 100,000 100,000 No. 109-2 Dec. 1, 2015 Dec. 1, 2020 2.50 100,000 100,000 No. 110-1 June 16, 2016 June 16, 2019 1.74 200,000 200,000 No. 110-2 June 16, 2016 June 16, 2021 1.89 100,000 100,000 No. 111-1 Nov. 3, 2016 Nov. 3, 2019 1.99 210,000 210,000 No. 111-2 Nov. 3, 2016 Nov. 3, 2021 2.19 190,000 190,000 No. 112-1 Nov. 3, 2017 Nov. 3, 2020 2.59 150,000 150,000 No. 112-2 Nov. 3, 2017 Nov. 3, 2022 2.94 50,000 50,000 Private bonds Oct. 24, 2014 Oct. 24, 2019 3.48 50,000 50,000 Private bonds Dec. 21, 2017 Dec. 21, 2018 2.43 50,000 50,000 2,480,000 2,630,000 Less: Current portion of debentures (1,020,000) (1,020,000) \ 1,460,000 \ 1,610,000

1 Publicly listed debentures of former Cheil Industries Inc. (numbered from No. 42 to No. 44) were renamed as publicly listed debentures of Samsung C&T Corporation, numbered from No. 106 to No. 108, due to business combination and change of the Company’s name.

70 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Long-term borrowings (including foreign currency) as at March 31, 2018 and December 31, 2017, consist of the following:

(in millions of Korean won) Annual interest March 31, December 31, Creditors rate (%) 2018 2017

Denominated in Korean won Samsung C&T and domestic subsidiaries Korea Development Bank and others 2.86 - 3.57 \ 490,800 \ 380,800 (Facility loans) Korea Housing & Urban Guarantee Corporation - 7,537 7,537 (Working capital loans) Shinhan Bank and others 2.1 - 2.23 400,000 400,000 (Long-term commercial paper) 898,337 788,337 Less: Current portion of long-term borrowings (296,528) (49,028) 601,809 739,309

Denominated in foreign currency Samsung C&T and domestic subsidiaries Korea Energy Agency 0.75 - 5.00 31,976 32,064 (Condition loans) Citi Bank and others Libor + 0.70 105,844 106,330 (General borrowings) ~0.80 SMBC Libor + 0.70 163,175 163,924 (General borrowings) The Export-Import Bank of Korea and others 3.30 - 3.81 35,735 25,186 (Facility loans) Foreign subsidiaries SC Bank and others 0.80 - 8.89 147,149 198,748 (General borrowings) 483,879 526,252 Less: Current portion of long-term borrowings (277,018) (278,291) 206,861 247,961 \ 808,670 \ 987,270

71 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

The annual maturities of long-term debts outstanding (excluding current portion) as at March 31, 2018, are as follows:

(in millions of Korean won) Borrowings in Debentures Borrowings in foreign (Face value) Korean Won currencies Total

April 1, 2019 ~ March 31, 2020 \ 870,000 \ 320,579 \ 91,097 \ 1,281,676 April 1, 2020 ~ March 31, 2021 250,000 274,429 31,760 556,189 April 1, 2021 ~ March 31, 2022 290,000 379 16,206 306,585 After April 1, 2022 50,000 6,422 67,798 124,220 \ 1,460,000 \ 601,809 \ 206,861 \ 2,268,670

Long-term borrowings and debentures by currencies as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) Long-term borrowings Debentures March 31, December 31, March 31, December 31, 2018 2017 2018 2017

US Dollars \ 114,818 \ 160,152 \ - \ - Korean Won 601,809 739,309 1,457,291 1,606,826 Euro 64,214 62,610 - - Japanese Yen 8,408 6,641 - - Others 19,421 18,558 - - \ 808,670 \ 987,270 \ 1,457,291 \ 1,606,826

72 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

18. Net Defined Benefit Liabilities

Details of net defined benefit liabilities as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Defined benefit obligation \ 722,388 \ 748,931 Less: Plan assets (641,856) (689,776) Less: Contribution to National Pension Fund (767) (798) \ 79,765 \ 58,357

The Group under defined benefit plans is required to pay post-employment benefits to any employee who has provided one year or more of services as at reporting date, in accordance with the Group's policies on payment of post-employment benefits (in accordance with local regulations for overseas subsidiaries). Additionally, as at March 31, 2018, the Group is under contracts with Samsung Life Insurance Co., Ltd. and others for operations management and asset management of their defined benefit pension plans.

Details of defined benefit liabilities recognized in the consolidated statements of financial position as at March 31, 2018 and December 31, 2017, are determined as follows:

(in millions of Korean won) March 31, 2018 December 31, 2017

Present value of funded defined benefit obligations \ 722,388 \ 748,931 Fair value of plan assets1 (642,623) (690,574) Net defined benefit liabilities \ 79,765 \ 58,357

1 The amount includes contributions to the National Pension Fund of \ 767 million (December 31, 2017: \ 798 million).

73 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

The amounts recognized in the statements of comprehensive income for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Defined benefit plan \ 23,950 \ 24,283 Current service cost 6,106 5,361 Interest expense (5,520) (4,381) Return on plan assets (excluding amounts included in interest expenses/income) Defined contribution plan Post-employment benefits 1,215 636 Others 40,048 39,370 \ 65,799 \ 65,269

Details of allocation of expenses for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Cost of sales \ 21,159 \ 19,811 Selling and administrative expenses (post-employment benefits) 37,973 40,499 Selling and administrative expenses (research and development) 4,898 3,997 Other assets 1,769 962 \ 65,799 \ 65,269

74 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

19. Provisions

Changes in provisions for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 Construction warranties1 Restoring cost2 Others3 Total

January 1, 2018 \ 180,633 \ 43,369 \ 155,215 \ 379,217 Effect arising from adoption of Korean IFRS 1115 (640) - 3,223 2,583 Additional provisions 6,304 2,231 7,482 16,017 Used and reversal (4,356) - (15,625) (19,981) Exchange differences (227) (224) (400) (851) Other changes - (13,080) - (13,080) March 31, 2018 \ 181,714 \ 32,296 \ 149,895 \ 363,905 Current (Note 10) \ - \ - \ 108,646 \ 108,646 Non-current 181,714 32,296 41,249 255,259

1 The Group recognizes expenses, which are expected to be spent for future repairs, as a provision based on historical experience. 2 The Group recognizes amounts discounted at present value, which are expected to be spent for future dismantling and removing of the equipment of oil and gas subsidiaries or restoring the site, as a provision. 3 Others include provisions for product warranty and provisions reflecting risk of business.

(in millions of Korean won) 2017 Construction warranties1 Restoring cost2 Others3 Total

January 1, 2017 \ 176,855 \ 43,078 \ 114,268 \ 334,201 Additional provisions 7,682 3,338 25,262 36,282 Used and reversal (5,034) (426) (14,544) (20,004) Exchange differences (3,047) (3,383) (4,743) (11,173) Other changes - - (4,800) (4,800) March 31, 2017 \ 176,456 \ 42,607 \ 115,443 \ 334,506 Current (Note 10) \ - \ - \ 51,562 \ 51,562 Non-current 176,456 42,607 63,881 282,944

75 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

20. Contingencies and Commitments

As at March 31, 2018, the Group has agreements with several financial institutions, including Woori Bank, for the guarantees of letters of credit related to the Group’s export and import, totaling USD 608,109 thousand, for the guarantee of the performance of export contracts amounting to USD 376,528 thousand and for the guarantee of various trade finance with a limit of USD 2,310,194 thousand. The receivables from export transactions sold to financial institutions, which amount to USD 490,893 thousand, are not yet due as at March 31, 2018.

As at March 31, 2018, the Group has provided a note amounting to \ 500 million, and 21 blank checks and notes as collateral to related institutions for borrowings, performance guarantees, construction payment guarantees, and others.

As at March 31, 2018, the Group is contingently liable for loan guarantees, principally for foreign associates and joint ventures amounting to USD 165,417 thousand (Note 31). The Group provides performance guarantees on the construction contracts of its foreign operations limited to USD 180,626 thousand, and the Group provides guarantees for the performance of other construction companies’ projects amounting to \ 269,455 million. Conversely, other construction companies provide guarantees for the performance of the Group’s projects amounting to \ 1,035,563 million.

As at March 31, 2018, the Group has short-term export insurance with Korea Trade Insurance Corporation. The certificates issued by Korea Trade Insurance Corporation (insured amount of \111,059 million) relating to guarantees provided by financial institutions are pledged as collateral.

As at March 31, 2018, the Group has been named as the defendant in certain lawsuits brought against it in the normal course of business. The aggregate amount of 195 claims brought against the Group, is approximately \ 388,319 million and USD 490,100 thousand. The Group also files 90 counterclaims amounting to \ 457,237 million and USD 1,013,251 thousand. The Group's management believes that the ultimate resolution of these cases will not have a material adverse effect on the operations or financial position of the Group.

As at March 31, 2018, the Group has 1,364 forward exchange contracts amounting to USD 539,276 thousand, JPY 93,476 thousand, EUR 45,511 thousand, SGD 1,729 thousand, GBP 57 thousand, KWD 8 thousand, CNY 478 thousand, and SEK 1,645 thousand and, and 11 interest rate swap contracts with financial institutions whose contracts amount to \ 400,000 million, USD 48,125 thousand and EUR 19,578 thousand. These forward exchange contracts and interest rate swap contracts are intended to hedge foreign exchange risk and interest risk exposures of the Group. In addition, the Group has entered into two currency swap contracts with contract prices amounting to USD 99,244 thousand and 155 commodity futures contracts with financial institutions with contract prices amounting to USD 176,955 thousand. For the three-month period ended March 31, 2018, realized gains and losses from the contracts mentioned above, included in ‘foreign exchange gain and loss’, amount to approximately \ 24,113 million and \ 18,093 million, respectively.

76 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

As at March 31, 2018, details of gain (loss) on valuation of derivative instruments are as follows:

(in millions of Korean won) Other Gain on Loss on comprehensive valuation valuation income

Currency forward contracts \ 3,022 \ (3,198) \ (83) Interest swap contracts - - (147) Currency swaps contracts 11 (497) (94) Commodity futures contracts 9,687 (3,761) -

As at March 31, 2018, the Group has corporate purchase card agreements and collateral loan agreements using the trade receivables with a limit of \ 351,000 million with financial institutions, including Woori Bank.

On February 14, 2012, the Group entered into a share purchase agreement with JSC Samruk-Energy to purchase its shares related to the construction of and business investment in the coal-fired electrical power plant located in Kazakhstan. On August 31, 2016, the Group exercised the put option against JSC Samruk-Energy to re-sell the shares purchased from JSC Samruk-Energy considering the uncertainty of the investment (exercise price amount to USD 192,452 thousand). In addition, on August 31, 2016, the Group notified the customer for contract work of a contract termination considering the uncertainty of the business. The Group is continuing the negotiation with the customer in relation to the termination of contract, and the outcome cannot be estimated reliably.

On April 30, 2015, the former Samsung C&T Corporation sold 22.99% of equity shares of Hanwha General Chemicals Co., Ltd. (formerly Samsung General Chemical Co., Ltd.) to Hanwha Chemical Co., Ltd. and Hanwha Energy Corporation (collectively “Acquirers”). According to the Share Purchase Agreement, the Group has the right to receive additional proceeds depending on the subsequent operating performance of Hanwha Total Petrochemical Co., Ltd. (formerly Samsung Total Petrochemical Co., Ltd.). The Group also has a priority right to request the Acquirers to purchase the remaining equity shares when Hanwha General Chemicals Co., Ltd. is publically listed. However, if Hanwha General Chemicals Co., Ltd. is not listed within 6 years (7 years if requested by Acquirers) from the closing date of the transaction, the Group and the Acquirers have the right to exercise put option and call option, respectively, on the remaining equity shares. In addition, the Acquirers have the right of first refusal when the Group attempts to dispose of the remaining equity shares. Also, if the Acquirers attempt to dispose of the equity shares of Hanwha General Chemicals Co., Ltd., the Group and the Acquirers respectively have tag-along right and drag-along right.

77 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

In accordance with the joint venture agreement between Biogen Therapeutics Inc. and the Group, Biogen Therapeutics Inc. has an option to purchase additional shares of Samsung BioEpis Co., Ltd. that would allow Biogen Therapeutics Inc. to increase its ownership interest up to 49.99%. The exercise price of the option is a sum of the acquisition price of the investment (49.9% of the amount invested in biosimilar development less the amounts already invested in Biogen Therapeutics Inc.) and the cumulative interests on the investment (interests calculated based on return on equity according to the agreement). The fair value of the option can vary significantly depending on the market condition and the exercisability of the option. In relation to this contract that may be settled in the Group’s own equity instruments, the Group recognizes option liability of \ 1,933,562 million as at March 31, 2018. However, if Biogen Therapeutics Inc. does not exercise the option until its maturity, the Group’s assessment on the existence of control over Samsung Bioepis Co., Ltd. may be changed.

The Group has entered into agreements for long-term borrowings with financial institutions. If the Group fails to meet conditions specified below, the Group could lose benefit of time which could lead to early redemption of the borrowings.

Financial institution Condition Description The Group shall remain as an affiliate of Samsung Group and Kookmin Bank Retainment of control current major shareholders shall hold control over the Group Retain Component The proportion of shares held by Samsung Group and the SMBC ratio of shareholders Group shall remain over 50% and 30%, respectively

In relation to the land lease agreement with Incheon Metropolitan City (“Incheon”), the Group receives exemption of rent from Incheon since the Group fulfilled the requirements set by the Public Property Management Ordinance of Incheon. The Group recognizes the fair value of exempt rent as intangible assets, and at the same time, the Group recognizes the same amount of government grants as deduct of the carrying amount of the asset. Details of the lease agreement are as follows:

(a) Period

With the total lease period of 50 years, the initial lease period is 20 years from April 28, 2011, and can be extended on a 10-year basis.

(b) Exemption requirement

In order to remain qualified for rent exemption in accordance with Article 32 of Shared Assets Management Act of Incheon Metropolitan City, the Group has to meet certain requirements such as it shall maintain foreign direct investment of USD 20 million for the first 5 years of the lease period, and for the period thereafter the Group shall remain as foreign investment enterprise with employees over 300.

78 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Lease agreements

(a) Operating lease- The Group as a lessee

As at March 31, 2018, the Group has entered into operating lease agreements related to the domestic headquarters buildings and details are as follows:

Lessor Lessee Leased Premises

Headquarters of ALPADOHM CITY CO.,LTD. Alpharium Tower I, II construction segment Headquarters of trading Korean Veterans Association Korva Tower segment Headquarters of fashion Military Mutual Aid Military Mutual Aid Association segment Association Building SAMSUNG ENGINEERING Headquarters of Global Engineering

CO.,LTD construction segment Center Headquarters of East Central Tower NongHyup Bank1 construction segment Building

1 As at March 31,2018, the Group has entered into lease agreement on East Central Tower Building (the “Building”) with NongHyup Bank, a trust agent of Inmark Professional Investment Type Real Estate Investment Company 10. The agreement will expire on February 26, 2028. The Group and Mirae Asset Daewoo Co., Ltd. possess the right of first refusal on the Building, which gives the Group and Mirae Asset Daewoo Co., Ltd. the preference right to purchase the building or sell the Building to a third party. When the rights of the Group and Mirae Asset Co., Ltd compete, the right of Mirae Asset Co., Ltd has priority.

If the building is not sold until the expiration of the agreement, the agreement will be extended for 10 years.

The total of future minimum lease payments to be payable to the lessor and sublessor according to the lease agreements of the Building as at March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Within one year \ 65,865 \ 40,994 Later than one year but not later than five years 218,085 174,335 Later than five years but not later than ten years 87,655 - \ 371,605 \ 215,329

79 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

The estimated future rent revenue that could be earned by sublease contract of the Building as at March 31, 2018 and 2017 are as follows:

(in millions of Korean won) 2018 2017

Within one year \ 11,745 \ - Later than one year but not later than five years 26,193 - \ 37,938 \ -

(b) Operating lease- The Group as a lessor

The Group has entered into an operating lease agreement with Samsung Fire & Marine Insurance Co., Ltd (a lessee) for Samsung Town Building B (leased premises). The future minimum lease payments expected to be received in relation to the operating lease agreement for the leases premises as at March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Within one year \ 30,875 \ 30,875 Later than one year but not later than five years 78,591 109,466 \ 109,466 \ 140,341

21. Share Capital

The Group is authorized to issue 500 million shares with a par value of \ 100 per share. As at March 31, 2018, 189,690,043 shares of ordinary share and 1,627,440 shares of preferred share are issued and outstanding.

On September 14, 2015, the Group issued 56,317,483 shares (54,690,043 shares of ordinary share and 1,627,440 shares of preferred share) of new share for the merger with the former Samsung C&T Corporation.

As authorized in its Articles of Incorporation, the Group is able to issue convertible bonds which can be converted into ordinary shares and preferred shares of the Group, and bonds with warrants which grant the right to purchase new preferred shares to the amount of \ 850 billion each. As at March 31, 2018, there are no convertible bonds and bonds with warrants issued under these terms.

Details of treasury shares as at March 31, 2018 and December 31, 2017, are as follows:

March 31, 2018 December 31, 2017 (in millions of Korean won, Preferred Ordinary Preferred Ordinary except number of shares) share share share share

Number of shares 159,849 26,225,503 159,849 26,225,503 Acquisition cost \ 16,978 \ 1,895,517 \ 16,978 \ 1,895,517

80 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

22. Other Components of Equity

Other components of equity as at March 31, 2018 and December 31, 2017, consist of:

(in millions of Korean won) March 31, 2018 December 31, 2017

Treasury shares (Note 21) \ (1,912,495) \ (1,912,495) Other capital adjustments (245,045) (245,045) Financial assets at fair value through other comprehensive income (Note 12) 8,683,815 8,711,376 Share of other comprehensive income of associates and joint ventures 31,358 27,441 Share of other comprehensive loss of associates and joint ventures (94,145) (92,859) Exchange differences (172,539) (185,181) Gain (loss) on valuation of derivative instruments, net (Note 20) (260) 10,714 \ 6,290,689 \ 6,313,951

23. Selling and Administrative Expenses

Selling and administrative expenses for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Salaries and others \ 234,951 \ 213,073 Welfare 27,221 27,945 Depreciation 39,374 45,493 Travel 10,565 11,031 Commission 186,583 210,511 Rent 54,872 56,506 Freight 65,232 66,545 Taxes and dues (6,083) 11,866 Advertising 9,581 12,290 Research and development 22,981 24,275 Impairment loss (Note 8) 1,371 (12,784) Computational service fee 11,710 13,168 Sales promotion cost 9,050 10,415 Others 51,146 49,686 \ 718,554 \ 740,020

81 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

24. Other Income and Expenses

Other income and expenses for the three-month periods ended March 31, 2018 and 2017, consist of:

(in millions of Korean won) 2018 2017

Other income Share of profit of associates and joint ventures \ 33,030 \ 32,535 Dividend income 234,998 223,996 Foreign exchange gain 47,434 92,517 Gain on translation of foreign currency 35,219 76,704 Gain on disposal of investments 19,985 6,278 Gain on disposal of property, plant and equipment 48,624 525 Gain on disposal of investment properties 45,976 - Gain on disposal of intangible assets 125 2,034 Reversal of provision for impairment (Note 8) 1,151 6,584 Gain on insurance settlement 9 60 Others 28,008 36,651 \ 494,559 \ 477,884 Other expenses Share of loss of associates and joint ventures \ 82 \ 3,829 Foreign exchange loss 45,023 101,372 Loss on translation of foreign currency 30,570 103,173 Loss on valuation of financial assets at fair value through profit or loss - 8 Loss on disposal of investments 104 899 Loss on disposal of property, plant and equipment 1,582 6,513 Loss on disposal of intangible assets 24 14 Loss on disposal of trade receivables 6,281 3,858 Donations 2,309 4,318 Other impairment loss (Note 8) 10,293 12,143 Others 43,410 46,499 \ 139,678 \ 282,626

82 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

25. Breakdown of Expenses by Nature

Expenses recorded by nature as cost of sales, selling and administrative expenses in the consolidated statements of comprehensive income for the three-month periods ended March 31, 2018 and 2017, consist of:

(in millions of Korean won) 2018 2017

Changes in finished goods and work-in-process \ 3,955,834 \ 3,559,045 Construction outsourcing 1,502,804 1,117,302 Employee benefit expenses 666,095 655,476 Commission 318,361 418,232 Freight 66,067 68,463 Research and development 22,981 24,275 Heavy construction equipment usage 50,399 43,176 Rent 84,662 98,010 Taxes and dues 33,342 42,223 Depreciation and amortization 137,808 111,528 Insurance 12,827 17,950 Outsourcing fee 115,236 118,365 Others 300,734 290,882 \ 7,267,150 \ 6,564,927

26. Employee Benefits

Employee benefits for the three-month periods ended March 31, 2018 and 2017, consist of:

(in millions of Korean won) 2018 2017

Wages and salaries \ 516,760 \ 506,633 Welfare 90,203 88,533 Post-employment benefits 59,132 60,310 \ 666,095 \ 655,476

83 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

27. Adjusted Operating Profit and Loss

Details of adjusted operating profit that are voluntarily classified based on the Group’s own criteria by adjusting other income or expense items reflecting the operating performance of the Group from items that are not included within operating profit in the consolidated statements of comprehensive income for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017

Operating profit in the consolidated statement of \ 209,171 \ 137,375 comprehensive income Share of profit of associates and joint ventures (other 32,948 28,706 income/ expenses) Dividends income 234,998 223,996 Foreign exchange gain (loss) 2,411 (8,855) Gain (loss) on translation of foreign currency 4,649 (26,469) Loss on valuation of financial assets at fair value - (8) through profit or loss Gain on disposal of investments 19,881 5,379 Gain (loss) on disposal of property, plant and 47,042 (5,988) equipment Gain (loss) on disposal of investment properties 45,976 - Gain on disposal of intangible assets 101 2,020 Reversal of provision for impairment (other (9,142) (5,559) impairment loss) Donations (2,309) (4,318) Loss on disposal of trade receivables (6,281) (3,858) Others (15,393) (9,788) Adjusted operating profit \ 564,052 \ 332,633

84 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

28. Financial Income and Expenses

Financial income and expenses for the three-month periods ended March 31, 2018 and 2017, consist of:

(in millions of Korean won) 2018 2017

Interest income: Deposits in bank \ 9,323 \ 13,535 Securities 1,176 1,176 Loans 5,728 5,513 Overdue interest 4 8 Present value discounts 664 839 Others 5,443 7,275 Foreign exchange gain 3,365 10,344 Gain on translation of foreign currency 12,865 51,762 Total financial income 38,568 90,452

Interest expenses: Short-term borrowings 13,503 11,487 Long-term borrowings 6,105 11,734 Debentures 18,519 24,239 Others 5,387 3,240 Capitalized interests (2,543) (6,451) Foreign exchange loss 4,906 6,751 Loss on translation of foreign currency 12,139 50,525 Total financial expenses 58,016 101,525 Financial expenses, net \ 19,448 \ 11,073

85 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

29. Income Tax Expense

Income tax expense is recognized based on the best estimate of the weighted average annual income tax rate expected for the full financial year.

30. Earnings per Share

Basic earnings per ordinary share for the three-month periods ended March 31, 2018 and 2017, is as follows:

(in Korean won and in shares) 2018 2017

Profit for the period 1 \ 398,635 million \ 214,170 million Profit for the period attributable to ordinary shares 395,070 million 212,246 million Weighted average number of ordinary shares outstanding 163,464,540 shares 163,464,540 shares Basic earnings per ordinary share \ 2,417 \ 1,298

1 The amount is the profit attributable to the owners of the Parent Company for the period.

Basic earnings per preferred share for the three-month periods ended March 31, 2018 and 2017, is as follows:

(in Korean won and in shares) 2018 2017

Profit for the period 1 \ 398,635 million \ 214,170 million Profit for the period attributable to preferred shares 3,565 million 1,924 million Weighted average number of preferred shares outstanding 1,467,591 shares 1,467,591 shares Basic earnings per preferred share \ 2,429 \ 1,311

1 The amount is the profit attributable to the owners of the Parent Company for the period.

Since there is no dilutive potential ordinary share, the diluted earnings per ordinary share and the basic earnings per ordinary share are the same for the three-month periods ended March 31, 2018 and 2017.

31. Related Party Transactions

As at March 31, 2018, the Group's related parties consist of 52 associates and joint ventures, including Samsung Bioepis Co., Ltd. and other related parties (Note 1.3). Meanwhile, the Enterprise Group, which the Group belongs to, in accordance with the Monopoly Regulation and Fair Trade Act of the Republic of Korea, consists of 62 entities including Samsung Electronics Co., Ltd., as at March 31, 2018.

86 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Significant transactions between the Parent Company and related parties (associates, joint ventures and other related party) for the three-month periods ended March 31, 2018 and 2017, and the related account balances as at March 31, 2018 and December 31, 2017, consist of the following:

(in millions of Korean won) Sales Purchases Receivables Payables March 31, December March 31, December 2018 2017 2018 2017 2018 31, 2017 2018 31, 2017

Associates Samsung Bioepis Co., Ltd. \ 2,029 \ 3,761 \ - \ - \ 2,815 \ 3,614 \ - \ - Waris Gigih Engineering & Technology Sdn. Bhd. 48 86 ------Chongqing Shanxia Technology Textile Co., Ltd. - 19,468 ------Dongducheon Dream Power Co., Ltd. - 89 - - 30,817 30,817 - - Busan Green Energy Co., Ltd. - 6,685 ------Gangneung Eco Power Co.,Ltd. 3,530 2,823 - - 16,243 12,970 - - Gaziantep Hospital Management Investment Company 2,297 - - - 66 34 - - Rabigh Investment Company - - - - 49,551 49,774 - - Others 148 145 1 381 1,402 159 1 1

Joint ventures FCC Saudi LLC 7,703 - 12 - 4,319 80 - - Others 246 - 5 - 1,101 912 - -

Other related party Samsung Electronics Co., Ltd.2 749,547 244,725 37,678 33,985 179,656 617,069 225,153 218,983

Others1,2 Samsung Display Co., Ltd. 23,909 40,643 511 15,580 51,398 99,398 22,860 23,350 Samsung Heavy Industries Co., Ltd. 3,991 5,939 26 7 3,333 104 4,398 4,398 Samsung Life Insurance Co., Ltd.3 31,287 10,028 268 532 30,823 17,771 41,780 41,767 Others 25,328 21,585 45,402 39,857 54,490 972,531 211,709 213,636

1 The entities are not included in the scope of related parties in accordance with Korean IFRS 1024, but are included in the scope of Enterprise Group in accordance with the Monopoly Regulation and Fair Trade Act of the Republic of Korea. 2 Unbilled revenue from construction contracts based on the percentage of completion of \ 158,606 million (2017: \ 343,242 million) is excluded from sales. In addition, Due from customer for contract work amounting to \ 396,951 million (December 31, 2017: \ 310,656 million) and due to

87 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

customers for contract work amounting to \ 480,184 million (December 31, 2017: \ 549,233 million) are excluded from receivables and payables, respectively. 3 As at March 31, 2018, the Group deposited \ 470,639 million (December 31, 2017: \ 515,323 million) in Samsung Life Insurance Co., Ltd. as plan assets.

Significant transactions between the Group and related parties (associates, joint ventures and other related parties) (the above transactions are excluded) for the three-month periods ended March 31, 2018 and 2017, and the related account balances as at March 31, 2018 and December 31, 2017, consist of the following:

(in millions of Korean won) Sales Purchases Receivables Payables March 31, December March 31, December 2018 2017 2018 2017 2018 31, 2017 2018 31, 2017

Associates Samsung Bioepis Co., Ltd. \ 91,387 \ 2,561 \ - \ - \ 49,688 \ 3,682 \ 19,191 \ - Chongqing Shanxia Technology Textile Co., Ltd. - - - - 111 111 - - KST POWER NORTE S.A. DE C.V. 468 - - - 39,897 37,720 - - Others 6 - - - - 25 - -

Joint ventures South Kent Wind LP 113 114 - - 42 42 - - SP Belle River LP 120 769 - - 84 1,077 - - LJG Green Source Energy Alpha S.R.L. 362 338 - - 19,075 18,966 - - Kelar S.A. 519 - - - 27,491 27,099 - - Others 18,245 373 9 - 1,282 1,702 27,636 5

Other related party Samsung Electronics Co., Ltd.2 122,047 84,559 2,142 2,159 94,007 79,032 7,910 8,247

Others1,2 Samsung Display Co., Ltd. 20,292 23,771 12 17 17,060 22,790 474 481 Samsung Heavy Industries Co., Ltd. 64,422 52,037 - - 55,854 42,922 360 360 Samsung Life Insurance Co., Ltd.3 3,805 3,972 2,196 2,123 4,991 4,736 1,413 1,410 Others3 83,857 101,063 45,960 107,673 34,764 32,845 59,298 102,523

88 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

2 Unbilled revenue from construction contracts based on the percentage of completion of \ (-)13,811 million (2017: \ (-)7,263 million) is excluded from sales. In addition, Due from customer for contract work amounting to \ 11,737 million (December 31, 2017: \ 9,996 million) and due to customers for contract work amounting to \ 38,033 million (December 31, 2017: \ 22,481 million) are excluded from receivables and payables, respectively. 3 As at March 31, 2018, the Group (except for the Parent Company) deposited \ 139,441 million (December 31, 2017: \ 138,339 million) and \ 27,411 million (December 31, 2017: \ 35,445 million) as plan assets in Samsung Life Insurance Co., Ltd. and Samsung Fire & Marine Insurance Co., Ltd., respectively.

Major fund transactions with a related party for the three-month periods ended March 31, 2018 and 2017, are as follows:

(in millions of Korean won) 2018 2017 Loans Repayments Loans Repayments

Kelar S.A. ￦ - ￦ - ￦ 27,495 ￦ -

Payment guarantees for the liabilities of associates and joint ventures provided by the Group as at March 31, 2018 are as follows:

(in thousands of US dollars) Guaranteed amount Guaranteed Actual Guaranteed Principal debtor period borrowings amount

Associates Terminal KMS de GNL, S. de Santander and others Sep. 1, 2029 $ 87,248 $ 87,248 R.L. de C.V. KST Electric Power Company, KEB Hana Bank and Dec. 30, 2018 13,035 13,035 SAPI de C.V. others Joint venture Kelar S.A. BTMU and others Apr. 30, 2031 13,654 34,654 $ 113,937 $ 134,937

89 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

As at March 31, 2018, investments in Dongducheon Dream Power Co., Ltd., (acquisition cost: \ 81,191 million), are pledged as collateral to a financial institution against the borrowings (total borrowing limit of \ 1,285,000 million) of Dongducheon Dream Power Co., Ltd. (Note 13). In addition, the Group provides fund supplement commitment on expected working capital deficit of Dongducheon Dream Power Co., Ltd. up to \ 8,100 million.

As at March 31, 2018, investments in Gaziantep SPV (acquisition cost: \ 5,569 million), Rabigh 2 Investment Company (acquisition cost: \ 373 million) and Qurayyah Investment Company (acquisition cost: \ 52,215 million), are pledged as collateral against borrowings of investees (Note 13).

The Group has entered into a lease agreement in relation to use of land with Incheon Metropolitan City and entered into sublease agreements with Samsung Bioepis Co., Ltd. with the consent of Incheon Metropolitan City.

The Group recognized salaries and post-employment benefits for the key management as expenses, amounting to \ 1,252 million and \ 181 million, respectively. The key management includes directors (executive and non-executive), auditors and other managements. Meanwhile, the Group introduced long-term incentive plans for its executives based on a three-year management performance criteria and has made a provision for the cumulative estimated incentive cost for the past periods. For the three-month period ended March 31, 2018, the Group recognized expenses amounting to \ 1,178 million.

90 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

32. Cash Generated from Operations

Reconciliation between operating profit and net cash inflow (outflow) from operating activities, for the three-month periods ended March 31, 2018 and 2017, is as follows:

(in Korean won) 2018 2017

Profit for the period \ 363,110,290,923 \ 187,641,422,084 Addition Income tax expense 115,167,010,246 94,620,662,434 Interest expense 40,971,525,533 44,248,707,967 Depreciation 118,345,153,770 121,517,438,610 Post-employment benefits 24,017,090,827 25,473,026,982 Impairment loss 1,371,161,624 (12,783,418,086) Other impairment loss 10,292,827,891 12,143,599,634 Transfer in provision for construction losses 1,343,183,009 25,331,744,297 Transfer in provision for construction warranties 10,849,884,268 7,682,182,991 Loss on foreign currency translation 42,708,764,243 153,697,916,268 Loss on valuation of financial assets at fair value through profit or loss - 8,190,000 Loss on disposal of investments 104,177,902 898,599,007 Loss on disposal of property, plant and equipment 1,570,998,140 6,512,507,442 Loss on disposal of intangible assets 24,387,704 13,712,715 Share of loss of associates and joint ventures 72,366,308,105 55,194,774,390 Others expenses 15,487,195,014 3,705,202,971 454,619,668,276 538,264,847,622 Deduction Interest income (22,337,864,741) (28,345,886,979) Dividend income (234,998,306,451) (223,996,487,008) Gain on foreign exchange translation (48,083,954,559) (128,465,863,392) Reversal of provision for construction losses (34,818,315,648) (23,689,852,666) Reversal of provision for impairment (1,150,608,329) (6,579,503,595) Gain on disposal of investments (19,985,301,693) (6,278,492,952) Gain on disposal of property, plant and equipment (48,623,577,095) (525,195,839) Gain on disposal of intangible assets (124,532,375) (2,034,143,731) Gain on disposal of investment properties (45,975,704,561) - Share of profit of associates and joint ventures (38,988,629,029) (44,602,615,198) Other income (4,302,398,984) (9,834,784,145) (499,389,193,465) (474,352,825,505)

91 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(in Korean won) 2018 2017

Changes in operating assets and liabilities Decrease in trade receivables 794,993,656,948 1,113,515,163,484 Increase in other current assets (231,598,194,740) (197,590,251,791) Decrease (increase) in inventories (51,527,997,446) 12,598,938,178 Decrease in trade payables (12,336,746,359) (20,311,199,376) Decrease in other current liabilities (313,177,528,417) (521,620,859,784) Decrease in provisions for construction warranties (9,715,229,529) (5,031,575,087) Increase (decrease) in long-term non-trade payables 18,172,386,947 (100,735,721) Payment of defined benefit liability (57,379,305,678) (18,612,410,272) Decrease in plan assets 54,331,523,715 20,477,780,931 Others (13,107,096,396) (2,027,562,073) 178,655,469,045 381,297,288,489 Cash generated from operations \ 496,996,234,779 \ 632,850,732,690

Changes in liabilities arising from financial activities for the three-month period ended March 31, 2018, are as follows:

(in millions of Korean won) Transactions without cash flows Cash flows At January 1, from financial At March 31, 2018 activities Amortization Others2 2018

Short-term borrowings \ 2,093,310 \ (495,424) \ - \ 54,658 \ 1,652,544 Long-term borrowings1 1,314,589 116,677 - (49,050) 1,382,216 Debentures 2,626,308 (150,000) 558 - 2,476,866 \ 6,034,207 \ (528,747) \ 558 \ 5,608 \ 5,511,626

1 Long-term borrowings include current portion of borrowings and debentures. 2 Others include changes due to exchange differences and others.

92 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

33. Segment Information

The strategic steering committee is the Group’s chief operating decision-maker. Management has determined the operating segments based on the information reviewed by the strategic steering committee for the purposes of allocating resources and assessing performance.

Also, a summary of information on the Group’s operations by business segment as at and for the three-month periods ended March 31, 2018 and 2017, is prepared after elimination of intercompany transactions in operating profit, and liabilities of operating segments are not included as those are not periodically reported to the Group’s management.

Summary of information on the Group’s operations by business segment as at and for the three-month periods ended March 31, 2018 and 2017, is as follows:

(in millions of Korean won) 2018 Food and Construction Trading Fashion Resort beverages Bio Common Total

External sales \ 3,008,792 \ 4,088,335 \ 477,883 \ 96,390 \ 476,335 \ 135,901 \ - \ 8,283,636 Internal sales (13,474) (759,024) (17,928) (828) (16,060) - - (807,314) Net sales 2,995,318 3,329,311 459,955 95,562 460,275 135,901 - 7,476,322 Operating profit (loss) 158,170 57,677 (445) (24,720) 16,925 1,564 - 209,171 Adjusted operating profit (loss) 297,793 168,068 86,601 (4,397) 15,087 900 - 564,052 Total assets1 8,743,118 4,145,939 1,161,577 2,404,596 594,973 7,395,802 23,839,132 48,285,137

1 For total assets, the common amount is separately presented.

93 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(in millions of Korean won) 2017 Food and Construction Trading Fashion Resort beverages Bio Common Total

External sales \ 2,726,819 \ 3,513,258 \ 483,299 \ 103,708 \ 462,675 \ 107,648 \ - \ 7,397,407 Internal sales (16,317) (644,468) (17,834) (311) (16,175) - - (695,105) Net sales 2,710,502 2,868,790 465,465 103,397 446,500 107,648 - 6,702,302 Operating profit (loss) 90,680 43,969 (1,531) (18,851) 31,134 (8,026) - 137,375 Adjusted operating profit (loss) 148,506 141,341 29,557 (3,263) 27,884 (11,392) - 332,633 Total assets1 9,205,481 3,717,538 1,246,709 2,470,021 610,684 7,531,537 19,217,423 43,999,393

1 For total assets, the common amount is separately presented.

94 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Summary of information on the Group’s operations by geographic areas, where the Parent Company and its subsidiaries are located respectively, for the three-month periods ended March 31, 2018 and 2017, is as follows:

(in millions of Korean won) 2018 Domestic Asia Europe The Americas Total

Total revenue \ 5,661,966 \ 1,947,491 \ 295,542 \ 378,637 \ 8,283,636 Intercompany revenue (535,166) (206,380) (59,635) (6,133) (807,314) Revenue from external customers \ 5,126,800 \ 1,741,111 \ 235,907 \ 372,504 \ 7,476,322

(in millions of Korean won) 2017 Domestic Asia Europe The Americas Total

Total revenue \ 5,255,334 \ 1,456,950 \ 319,316 \ 365,807 \ 7,397,407 Intercompany revenue (430,353) (171,090) (62,750) (30,912) (695,105) Revenue from external customers \ 4,824,981 \ 1,285,860 \ 256,566 \ 334,895 \ 6,702,302

34. Financial Risk Management

34.1 Financial Risk Management

The Group is exposed to various financial risks such as market risk, credit risk and liquidity risk while performing various activities. Market risk arises from currency risk, fair value interest rate risk, cash flow interest rate risk and price risk.

As these interim financial statements do not include all the financial risk management and disclosures required for the annual financial statements, please refer to the December 31, 2017 annual financial statements.

There has been no significant change in the risk management department and other risk management policy of the Group since December 31, 2017.

95 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

34.2 Fair Value Measurement

The fair value of the financial instruments traded in wide market, such as available-for-sale financial assets and others, are estimated based on the publicly announced market price as at the reporting date. If there is no market for such financial instruments, the fair value is estimated by using certain valuation methods. For assessing the fair value, the Group uses various valuation methods, and establishes the assumptions based on the market condition as at the reporting date. For long-term liabilities, the official market price or dollar-asking price of the similar instruments is used. In addition, the Group uses various valuation methods such as estimated cash flows discount method to estimate fair value. Fair values of interest rate swap and currency swap are calculated by discounting future estimated cash flows. The fair values of metal futures and currency forward contract are estimated by using the official price and the official forward exchange rate as at the reporting date, respectively. The Group records the net book amount after deducting the provision for impairment from the gross amount as the approximate value of the trade receivables and trade payables. The fair value of the financial liabilities is the discounted amount of the future cash flow under the terms of the contract by using current market interest rate applied on similar financial instruments.

Fair value hierarchy classifications of the financial instruments that are measured at fair value or its fair value is disclosed as at March 31, 2018 and December 31, 2017, are as follows:

(in millions of Korean won) March 31, 2018 Level 1 Level 2 Level 3 Total Assets measured at fair value Financial assets at fair value through other comprehensive income ￦ 22,846,499 ￦ 815 ￦ 320,059 ￦ 23,167,373 Financial assets at fair value through profit or loss 2,165 - 21,898 24,063 Derivative financial instruments: - Held for trading - 13,922 - 13,922 Hedging - 7,181 - 7,181 ￦ 22,848,664 ￦ 21,918 ￦ 341,957 ￦ 23,212,539 Liabilities measured at fair value Derivative financial instruments: Held for trading ￦ - ￦ 40,881 ￦ 1,933,562 ￦ 1,974,443 Hedging - 4,438 - 4,438 ￦ - ￦ 45,319 ￦ 1,933,562 ￦ 1,978,881

96 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

(in millions of Korean won) December 31, 2017 Level 1 Level 2 Level 3 Total Assets measured at fair value Financial assets at fair value through other comprehensive income ￦ 22,883,966 ￦ 815 ￦ 319,952 ￦ 23,204,733 Financial assets at fair value through profit or loss 2,165 - 22,274 24,439 Derivative financial instruments: - Held for trading - 18,149 - 18,149 Hedging - 6,351 - 6,351 ￦ 22,886,131 ￦ 25,315 ￦ 342,226 ￦ 23,253,672 Liabilities measured at fair value Derivative financial instruments: Held for trading ￦ - ￦ 14,810 ￦ 1,933,562 ￦ 1,948,372 Hedging - 8,788 - 8,788 ￦ - ￦ 23,598 ￦ 1,933,562 ￦ 1,957,160

. Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). . All inputs other than quoted prices included in level 1 that are observable (either directly that is, prices, or indirectly that is, derived from prices) for the asset or liability (Level 2). . Unobservable inputs for the asset or liability (Level 3).

During the three-month period ended March 31, 2018, there has been no significant change in the business or economic circumstances that affect the fair value of the entity's financial assets and financial liabilities.

There are no reclassification of the financial assets during the three-month period ended March 31, 2018.

97 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Valuation techniques and the inputs used in the fair value measurement related to recurring and non-recurring fair value measurements categorized within Level 2 and Level 3 of the fair value hierarchy and disclosed fair value are as follows:

(in millions of Korean won) Fair value Level Fair value measurements Inputs

Financial assets measured at fair value Net asset value method, discounted Growth rate, discount rate Energy industry equities \ 72,601 3 cash flow method and others and others Net asset value method, discounted Growth rate, discount rate Cooperative contribution 41,885 3 cash flow method and others and others Net asset value method, discounted Growth rate, discount rate Other equities 205,573 3 cash flow method and others and others Counterparty credit risk Investment bonds 815 2 Discounted cash flow method and others Derivatives (assets) Currency forwards and Currency forwards rate , 21,103 2 Market approach others discount rate and others Derivatives (liabilities) Currency forwards and Currency forwards rate , 45,319 2 Market approach others discount rate and others Fair value of underlying Option1 1,933,562 3 Binomial option pricing model asset (Samsung Bioepis Co., Ltd.)

1 Fair value of the call option on shares of Samsung Bioepis Co., Ltd. possessed by Biogen Therapeutics Inc. is recognized as derivatives (liabilities). The derivatives expire within 2018, and the exercise price of the option is a sum of the acquisition price of the investment and cumulative interests on the investment. The fair value of the option can vary significantly depending on the market condition and the exercisability of the option.

Valuation process of fair value measurements classified in level 3

The finance department of the Group’s divisions is responsible for fair value measurements which contain fair value measurement categorized in Level 3 for the purpose of financial report and the said department reports periodically the fair value valuation process and its outcome on reporting schedule at the end of every year.

98 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

35. Changes in Accounting Policies

As explained in Note 2, The Group has applied Korean IFRS 1115 Revenue from contracts with customers from January 1, 2018. In accordance with the transitional provisions in Korean IFRS 1115, comparative figures have not been restated. The application of Korean IFRS 1115 has impact on the financial statements as follows.

In summary, the following adjustments were made to the amounts recognized in the statements of financial position at the date of initial application (January 1, 2018):

December 31, 2017 January 1, 2018 (before (after (in millions of Korean won) adjustments)1 Adjustments adjustments)1

Trade receivables \ 4,992,459 \ (170,035) \ 4,822,424 Other current assets 2,628,872 (81,225) 2,547,647 Inventories 1,533,034 3,222 1,536,256 Investments in associates and joint ventures 5,741,754 (143,959) 5,597,795 Other non-current assets 711,126 31,702 742,828 Total assets \ 49,048,903 \ (360,295) \ 48,688,608 Other current liabilities 9,180,835 (91,888) 9,088,947 Deferred tax liabilities 6,295,263 (44,286) 6,250,977 Provisions 257,025 2,583 259,608 Other non-current liabilities 234,607 42,720 277,327 Total liabilities \ 23,897,653 \ (90,871) \ 23,806,782 Retained earnings 5,755,405 (181,400) 5,574,005 Non-controlling interests 2,594,498 (88,024) 2,506,474 Total equity \ 25,151,250 \ (269,424) \ 24,881,826

(i) Accounting for returns and refunds

Under the previous standard, when the customer has a right to return the product within a given period, the Group previously recognized a provision for returns which was measured on a net basis at the margin on the sale. Under Korean IFRS 1115, if a customer returns a product, the gross amount for the expected refunds to customers is recognized.

(ii) Accounting for costs to fulfil a contract

Under the previous standard, the cost of obtaining a contract was recognized as asset based on the possibility of obtaining the contract without considering the nature or recoverability of contract amount. Under Korean IFRS 1115, if the costs incurred in fulfilling a contract with a customer are related directly to a contract that the entity can specifically generate resources of the entity that will be used in satisfying performance obligations in the future, and are expected to be recovered, the costs are recognized as assets, and the related trade receivables (due from customer for contract

99 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

work) and advances received (due to customer for contract work) are adjusted.

(iii) Offsetting of contract assets and contract liabilities

Under the previous standard, due from customers and advance payments (due to customers) from single contract were reported in gross amounts. Under Korean IFRS 1115, as due from customers and advance payments (due to customers) are contract asset and contract liabilities, respectively, due from customers and advance payments (due to customers) from a single contract were subject to offset and reported in net amounts.

(iv) Accounting for CMO business

Under the previous standards, for sales of biomedical supplies, revenue was recognized considering that the significant risks and rewards of ownership was transferred to customer when the produced goods have obtained quality release from the customer; and for services, revenue was recognized when service was transferred. Under Korean IFRS 1115, only sales of biomedical supplies was identified as performance obligation and accordingly revenue was allocated and recognized over the period of time control over the goods transfer to customers. Due to such changes, contract assets and contract liabilities were newly recognized

Financial statement line items affected by the adoption of the new rules in the current period are as follows:

Statement of financial position

Amount before application of (in millions of Korean won) Reported amount1 Adjustments Korean IFRS 1115

Trade receivables \ 4,099,924 \ 267,217 \ 4,367,141 Other current assets 2,991,311 94,534 3,085,845 Inventories 1,593,337 (5,871) 1,587,466 Investments in associates and joint ventures 5,567,684 145,592 5,713,276 Other non-current assets 754,948 (30,352) 724,596 Total assets \ 48,285,137 \ 471,120 \ 48,756,257 Other current liabilities 9,098,492 204,945 9,303,437 Deferred tax liabilities 6,290,961 42,669 6,333,630 Provisions 255,259 (5,335) 249,924 Other non-current liabilities 281,196 (37,803) 243,393 Total liabilities \ 23,396,372 \ 204,476 \ 23,600,848 Retained earnings 5,642,643 178,436 5,821,079 Non-controlling interests 2,468,036 88,208 2,556,244 Total equity \ 24,888,765 \ 266,644 \ 25,155,409

100 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Statement of comprehensive income

Amount before application of (in millions of Korean won) Reported amount Adjustments Korean IFRS 1115

Net sales \ 7,476,322 \ 3,783 \ 7,480,105 Cost of sales 6,548,596 8,222 6,556,818 Gross profit 927,726 (4,439) 923,287 Selling and administrative expenses 718,554 1,590 720,144 Operating profit 209,172 (6,029) 203,143 Non-operating income and expenses 269,105 1,632 270,737 Income tax expenses 115,167 (1,617) 113,550 Profit for the period 363,110 (2,780) 360,330 Total comprehensive income 338,381 (2,780) 335,601

Statement of cash flows

Amount before application of (in millions of Korean won) Reported amount Adjustments Korean IFRS 1115

Profit for the period \ 363,110 \ (2,780) \ 360,330 Adjustments for 454,411 (3,248) 451,163 Share of profit or loss of associates and joint ventures 33,378 (1,632) 31,746 Income tax expenses 115,167 (1,616) 113,551 Changes in operating assets and liabilities 178,655 6,029 184,684 Decrease in trade receivables 794,994 412 795,406 Increase in other current assets (231,598) (15,189) (246,787) Increase in other current liabilities (313,178) 20,909 (292,269) Decrease in provisions for construction warranties (9,715) (104) (9,819)

101 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

The Group has applied Korean IFRS 1109 on January 1, 2017, the date of initial application. The application of Korean IFRS 1109 has following impacts on the financial statements as at March 31, 2017.

Statement of comprehensive income (for the three-month period ended March 31, 2017)

Amount before Amount after application of application of (in millions of Korean won) Korean IFRS 1109 Korean IFRS 1109 Difference

Selling and administrative expenses \ 740,396 \ 740,020 \ (376) Operating profit 136,999 137,375 376 Other income 477,880 477,884 4 Other expenses 284,648 282,626 (2,022) Profit before income tax 279,860 282,262 2,402 Income tax expense 94,352 94,621 269 Profit for the period 185,508 187,641 2,133 Items that may be subsequently reclassified to profit or loss Changes in the fair value of available-for-sale securities 1,026,860 - (1,026,860) Items that will not be reclassified to profit or loss Gain on valuation of financial assets at fair value through other comprehensive income - 1,025,755 1,025,755 Total comprehensive income 1,061,637 1,062,666 1,029 Earnings per share Basic earnings per share (in Korean won) 1,285 1,298 13

102 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Statement of changes in equity (for the three-month period ended March 31, 2017)

(in millions of Korean won) Amount before application of Korean IFRS 1109 Amount after application of Korean IFRS 1109 Difference Attributable to owners of the Parent Attributable to owners of the Parent Attributable to owners of the Parent Company Company Company Consolidated Other Consolidated Other Consolidated Other share components Total share components Total share components Total premium of equity Total equity premium of equity Total equity premium of equity Total equity Cumulative effect of changes \ - \ - \ - \ - \ (16,550) \ 551 \ (15,999) \ (15,999) \ (16,550) \ 551 \ (15,999) \ (15,999) in accounting policy Profit for the period 212,036 - 212,036 185,508 214,170 - 214,170 187,642 2,134 - 2,134 2,134 Changes in the fair value of available-for-sale financial - 1,026,860 1,026,860 1,026,860 - - - - - (1,026,860) (1,026,860) (1,026,860) assets Gain (loss)on valuation of financial assets at fair value - - - - (1,105) 1,026,860 1,025,755 1,025,755 (1,105) 1,026,860 1,025,755 1,025,755 through other comprehensive income Balance at March 31, 2017 5,351,144 3,488,905 19,327,447 22,071,676 5,335,622 3,489,457 19,312,476 22,056,705 (15,522) 552 (14,971) (14,971)

103 Samsung C&T Corporation and Subsidiaries Notes to the Consolidated Interim Financial Statements March 31, 2018 and 2017 (Unaudited), and December 31, 2017

Statement of cash flows (for the three-month period ended March 31, 2017)

Amount before Amount after application of application of (in millions of Korean won) Korean IFRS 1109 Korean IFRS 1109 Difference

Profit for the period \ 185,508 \ 187,641 \ 2,133 Addition of expenses without cash outflows 540,394 538,265 (2,129) Deduction of revenues without cash inflows (474,348) (474,353) (5) Disposal of available-for-sale financial 12,031 - (12,031) assets Disposal of financial assets at fair value - 10,875 10,875 through profit or loss Disposal of financial assets at fair value - 1,156 1,156 through other comprehensive income Acquisition of available-for-sale financial (1,277) - 1,277 assets Acquisition of financial assets at fair value - (112) (112) through profit or loss Acquisition of financial assets at fair value - (1,165) (1,165) through other comprehensive income

Notes Influence of the standards adopted by the Group in 2017 is applied to relevant notes.

36. Events after the Reporting Period

The Group has selected Bain Capital as the preferred negotiation partner regarding sales of shares of Hanwha General Chemical Co., Ltd., and is currently under negotiation.

104