Table of contents Business Report ...... 1 【 Confirmation by Representative Director 】 ...... 2 I. Company Overview ...... 3 1. Company Overview ...... 3 2. History of the Company ...... 14 3. Changes to Paid-in Capital...... 16 4. Total Number of Shares ...... 16 5. Status of Voting Rights ...... 17 6. Dividend ...... 17 II. Business Activities ...... 19 III. Financial Matters ...... 29 1. Summarized Financial Information ...... 29 2. Consolidated Financial Statements ...... 30 3. Notes to Consolidated Financial Statements ...... 35 4. Financial Statements ...... 78 5. Notes to Financial Statements ...... 81 6. Other Financial Matters ...... 122 IV. Auditor’s Audit Opinion ...... 127 V. Directors’ Management Diagnoses and Analytic Opinions ...... 129 VI. Company’s Organizations such as the Board of Directors ...... 134 1. Board of Directors ...... 134 2. Audit System ...... 135 3. Shareholders’ Exercise of Voting Rights ...... 136 VII. Shareholders ...... 137 VIII. Executives and Employees ...... 141 1. Status of the Executives and Employees ...... 141 2. Remuneration to Executives ...... 142 IX. Affiliates ...... 144 X. Transactions with Stakeholders ...... 146 XI. Other Matters Necessary for the Protection of Investors ...... 147 【 Confirmation of Expert 】 ...... 151 1. Confirmation by experts ...... 151 2. Interests with experts ...... 151

Business Report (The 20th Year)

Business year from January 1, 2018 to Sep 30, 2018

To The Financial Services Commission Korea Stock Exchange November 15, 2018

Type of corporation for submission: Listed company Occurrence of exemption reason: Not applicable Company Name: Silicon Works Co., Ltd. Representative Director: Son Bo-Ik Address of the Headquarters: 222 Techno 2-ro, Yuseong-gu, Daejeon, Korea Tel) +82-2-3777-1114 (Homepage) http://www.siliconworks.co.kr Person responsible for this report: (Position) CFO (Name) Sung Kwan Choi Tel) +82-2-3774-1114

【Confirmation by Representative Director】

Confirmation and Signature of Representative Director

Letter of Confirmation

We are representative director and others responsible for reporting. Based on the review and confirmation of this annual report with significant care, we confirm that all the important matters to be provided have been given without omission, falsification or any such signs and that nothing inducing critical misunderstanding of users of this report has been provided or expressed.

Also we hereby confirm that the company has established and manages its internal accounting management system based on Article 2-2 and Article 2-3 of the [Act on External Auditors of Stock Companies]. (Limited to the companies subject to external audit based on Article 2 of the same Act).

November 15, 2018 Silicon Works Co., Ltd.

Son Bo-Ik Representative Director

Choi Sung-Kwan Director of Reporting

I. Company Overview

1. Company Overview A. Outline of subsidiaries to be consolidated (only when the stock-listed corporation that drafts the consolidated financial statements submits the annual, semiannual or quarterly report) (Unit: KRW) Whether Total asset at Company Main Basis of controlling it is Foundation Address the end of the name businesses relationship major previous year subsidiary Control over the Open new investee Silicon 2540 N. First markets and (paragraph 5 to 18 October Works Inc. st. #300 San support 323,446,339 of K-IFRS No. 1110 N/A 15, 2012 (USA) Jose, CA 95131 existing consolidated customers financial statements) 3A15, Control over the Zhongchen Open new investee Silicon Building, No. 1 markets and (paragraph 5 to 18 Works China March Lizezhong 2 support 1,278,075,342 of K-IFRS No. 1110 N/A Co., LTD 3, 2017 Road, existing consolidated (China) Wangjing, customers financial Chaoyang, statements) Beijing Note) The total assets of Silicon Works Inc. (USA) and Silicon Works China Co., LTD (China) at the end of the current fiscal year are December 31, 2017.

(1) Changes of companies to be consolidated Division Subsidiary Reason Newly - - consolidated - - Excluded from - - consolidation - -

B. Legal and Commercial Name of the Company The company’s name is Silicon Works Co., Ltd., or Silicon Works shortly.

C. Date of Establishment and period of survival The company was established on November 11, 1999.

D. Address, Telephone Number and Website of the Headquarters ① Address: (H.Q) 222 Techno 2-ro, Yuseong-gu, Daejeon ② Telephone: +82-42-712-7700 ③ Website: http://www.siliconworks.co.kr

E. Whether the Company is an SME. - Not applicable -

F. Major Areas of Businesses The company develops, manufactures and sells semiconductors as major business activity. For details of the company’s major business activities, please refer to “II. Business Activities”.

G. Total Number of Subsidiaries, Name and Listed Status of Major Subsidiaries ① Name of corporate group: LG affiliates ② Companies belonging to the corporate group (as of Sep 30, 2018)

A. Domestic corporations Division Company name Major business types Remarks LG Corporation 110111-0003543 Holding company (other service business) LG Electronics Co., Ltd. 110111-2487050 Manufacturing business for broadcasting receivers and other image and sound devices LG International Co., 110111-0004632 Manufacturing, wholesale, retail, service, construction and real estate Ltd. LG Chemicals Co., Ltd. 110111-2207995 Petrochemical and basic compound manufacturing business LG Life & Health Co., 110111-2208000 Cosmetics and living product manufacturing business Ltd. Listed LG Display Co., Ltd. 110111-0393134 Liquid crystal display device manufacturing business LG U Plus Co., Ltd. 110111-1296676 Wire/wireless communication service LG Innotech Co., Ltd. 110111-0192180 Other electronic component manufacturing business GIIR Corporation 110111-0375398 Non-financial holding company LG Hausys Co., Ltd. 110111-4071207 Construction plastic product manufacturing business Silicon Works Co., Ltd. 160111-0089395 Flat display system IC designing and manufacturing Robostar Co., Ltd.., 110111-1655393 Manufacture and sale of industrial robots Subtotal 12 companies LG CNS Co., Ltd. 110111-0516695 Other software consulting, development and supply business LG Sports Co., Ltd. 110111-0359300 Professional baseball team operation LG Institute of 110111-0423494 Institution for economy, management and environment research and construction Management Development Co., Ltd. SK Siltron Co., Ltd. 175311-0001348 Semiconductor and other electronic component manufacturing business LG MMA Co., Ltd. 206211-0001805 Other basic organic compound manufacturing business Media Log Co., Ltd. 110111-1905441 Value added communication business Dacom Crossing Co., 110111-2234683 International line rental Ltd. Serve One Co., Ltd. 110111-2411520 Vicarious purchase in company to company, other real estate lease business Unlisted Hiplaza Co., Ltd. 131111-0028801 Home appliance wholesale business Seetech Co., Ltd. 110111-0589171 Electricity, gas, steam and air control and supply business Lusem Co., Ltd. 176011-0038073 Semiconductor IC assembly CS Leader Co., Ltd. 110111-2271924 Telemarketing service business A-in Teleservice Co., 180111-0367581 Telemarketing service business Ltd. Biz Tech Partners Co., 110111-2689507 ERP consulting, development, outsourcing, business intelligence consulting, Ltd. development, etc. Coca Cola Beverages 110111-1342130 Manufacturing and selling of fresh beverages, etc. Co., Ltd. Hi-M Solutek Co., Ltd. 110111-3371989 Selling and maintenance business for electric, electronic and air conditioning devices Jiheung Co., Ltd. 180111-0630053 Manufacturing of electronic parts and devices, etc. CS One Partners Co., 110111-3961756 Telemarketing service business Ltd. HS Ad Co., Ltd. 110111-3076662 Advertising production and agency business L Best Co., Ltd. 110111-3806267 Advertising agency business LG Tostem BM Co., 110111-4080688 Manufacturing business for metallic doors, windows, shutter and related products Ltd. Hi-Teleservice Co., Ltd. 110111-4251552 Call center and telemarketing service business Thefaceshop Co., Ltd. 110111-0386973 Cosmetics product manufacturing business Korea Beverage Co., 211311-0005197 Food, beverage manufacturing, selling and exporting business Ltd. Gonjiam Yewon Co., 134211-0111354 Agriculture, forestry, wholesale and retail business Ltd. Global Dynasty 110113-0014992 Investment for overseas resource development Overseas Resource Development Private Offering Investment Company Hatai HTB Co., Ltd. 110111-0900004 Beverage manufacturing, selling and leasing business Sal de Vida Korea Co., 144811-0008169 Mining, wholesale and retail business Ltd. Ace Freezing Air 135111-0047493 Freezer and air conditioners manufacturing and selling business Conditioning Co., Ltd. Korea Elecom Co., Ltd. 110111-2654493 Automatic metering remote control system developing, manufacturing, selling, etc. Hi-entech Co., Ltd. 110111-1799703 Environment facility management, engineering, etc. LG Hitachi Water 110111-4777201 Water treatment business Solution Co., Ltd. Nanum Nuri Co., Ltd. 176011-0075546 Social welfare service business Clean Soul LLC 110114-0113073 Soap and cleaner wholesale business LG Fuel Cell Systems 110111-4922070 Business for solid oxidant and fuel cell systems Korea Co., Ltd. Innowith Co., Ltd. 200111-0343156 Service business Hanuri Co., Ltd. 134811-0262254 Cleaning service, steam car washing, dormitory management service business, etc. Haengbok Nuri Co., 150111-0172829 Chemical product manufacturing, cleaning service and car washing business Ltd. With You Co., Ltd. 110111-5145556 Service business CNP Cosmetics Co., 110111-1905318 Cosmetics sales business Ltd. KNI Co., Ltd. 110111-2061581 Groceries sales business Pantos Logistics Co., 110111-0208127 Complex logistics brokerage and others Ltd. Pantos Busan Newport 180111-0641133 Warehousing and others Logistics Center Co., Ltd. Helistar Air Co., Ltd. 120111-0528086 General air cargo agency and others FMG Co., Ltd. 140111-0020096 Cosmetics manufacturing business Bargeunnuri Co., Ltd. 150111-0206876 Cleaning service business, car cleaning business Dangjin Tank Terminal 165011-0011709 Oil and chemical, gas storage and transportation business Co., Ltd. Farmhannong Co., Ltd. 110111-4362482 Manufacturing of pesticides and other agricultural chemicals, fertilizers and nitrogen compounds Farm Hwaong Co., Ltd. 161311-0027506 Facility cultivation of vegetables, flowers and fruits crops Haengbokmaru Co. 140111-0049179 General cleaning for buildings, operation of non-alcoholic beverage stores and Ltd. specialized coffee stores LG Farouk Co., Ltd. 110111-2225921 Wholesale and retail of hair care products Migene Story Co., Ltd. 131111 -0466580 Gene analysis information providing service Miraem Co., Ltd. 134211-0190259 Tourist hotel business, Tourist use facility business Dreamnuri Co., Ltd 110111-6560282 General cleaning for buildings Taegeuk 134811-0004367 Pharmaceutical manufacturing Pharmaceutical Co., Ltd JES Pharmaceutical 205911-0016611 Pharmaceutical manufacturing Co., LTD Promotion of the 110111-6590007 Manufacture and sale of drinkable spring water development of the spring water Ulleung Chusan Yongchunsu Greennuri Co., Ltd 230111-0286144 General cleaning for buildings Hanultari Co., Ltd 110111-6628337 Other general grocery retail businesses Robomedi Co., Ltd. 161511-0181019 Manufacture and wholesaler of motor Subtotal 58 companies Total 70 companies

* Silicon Works Co., Ltd. was included in our affiliates on July 1, 2014. * Hibusiness Logistics Co., Ltd. changed its name into High Logistics Co., Ltd. on August 4, 2014. * Picsdics Co., Ltd. was excluded from our affiliates on November 18, 2014. * CNP Cosmetics Co., Ltd. was included in our affiliates on January 2, 2015. * Gumi Ochang Solar Power Plant Co., Ltd. was included in our affiliates on January 2, 2015. * Gumi Ochang Solar Power Plant Co., Ltd. was merged to Serve One Co., Ltd. on February 25, 2015. * KNI Co., Ltd. was included in our affiliates on March 2, 2015 * Pantos Co., Ltd. was included in our affiliates on August 1, 2015. * Pantos Busan Newport Logistics Center Co., Ltd. was included in our affiliates on August 1, 2015. * Helistar Air Co., Ltd. was included in our affiliates on August 1, 2015. * Janice Co., Ltd. was included in our affiliates on September 1, 2015. * Bargeunnuri Co., Ltd. was included in our affiliates on October 1, 2015. * Dangjin Tank Terminal Co., Ltd. was included in our affiliates on October 1, 2015. * LG Solar Energy Co., Ltd. was merged to Serve One Co., Ltd. on October 21, 2015. * Sarangnuri Co., Ltd. was included in our affiliates on November 1, 2015. * LG Toyo Engineering Co., Ltd. was included in our affiliates on December 22, 2015. * Future Co., Ltd. was excluded from our affiliates on March 17, 2016. * One Seen Sky Tech was excluded from our affiliates on May 3, 2016. * Haitai Beverage Co., Ltd. changed its company name to Haitai HTB Co., Ltd. on May 30, 2016. * Farmhannong Co., Ltd. was included in our affiliates on June 1, 2016. * Saemangeum Farm Co., Ltd. was included in our affiliates on June 1, 2016. * Cecil Co., Ltd. was included in our affiliates on June 1, 2016. * Agrotech Co., Ltd. was included in our affiliates on June 1, 2016. * Farm Biotech Co., Ltd. was included in our affiliates on June 1, 2016. * Farm Ceres Co., Ltd. was included in our affiliates on June 1, 2016. * Farm PFI Co., Ltd. was included in our affiliates on June 1, 2016. * Farm Hwaong Co., Ltd. was included in our affiliates on June 1, 2016. * Farm Heungnong Co., Ltd. was included in our affiliates on June 1, 2016. * Chem Green Energy Co., Ltd. was included in our affiliates on June 1, 2016. * Hi-Logistics Co., Ltd. was excluded from our affiliates on August 23, 2016. * Haengbokmaru Co., Ltd. was included in our affiliates on October 1, 2016. * Farm Heungnong Co., Ltd. and Chem Green Energy Co., Ltd. were excluded from our affiliates on October 5, 2016. * Biz Tech Partners Co., Ltd. was included in our affiliates on November 1, 2016. * Saemangeum Farm Co., Ltd., Farm PFI Co., Ltd., Hausys Interpane Co., Ltd. and Everon Co., Ltd. were excluded from our affiliates on November 18, 2016. * LG Farouk Co., Ltd. was included in our affiliates on December 1, 2016. * Farm Ceres Co., Ltd. was excluded from our affiliates on December 22, 2016. * Gene Story Co., Ltd. was included in our affiliates on December 30, 2016. * B&E Partners Co., Ltd. changed its company name to Biz Tech Partners Co., Ltd. on January 3, 2017. * (Former) Biz Tech Partners Co., Ltd. was excluded from our affiliates on January 18, 2017. * LG Life Science Co., Ltd. and Ucess Partners Co., Ltd. were excluded from our affiliates on January 18, 2017. * Pantos Logistics Co., Ltd. changed its company name to Pantos Co., Ltd. on March 21, 2017. * Pantos Busan Newport Logistics Center Co., Ltd. changed its company name to Pantos Busan Newport Center Co., Ltd. on March 27, 2017. * Gene Story Co., Ltd. changed its company name to Migene Story Co., Ltd. on March 27, 2017. * Farm Biotech was excluded from our affiliates on March 29, 2017. * Miraem Co., Ltd. was included in our affiliates on July 1, 2017. * Agrotech Co., Ltd. was excluded from our affiliates on Mar 5, 2017 * Dreamnuri Co., Ltd. was included in our affiliates on Jan 1, 2018 * SK Silitron(formerly LG Silitron) was excluded from our affiliates on Jan 3, 2018 * Cecil Co., Ltd. was excluded from our affiliates on Jan 3, 2018 * Taegeuk Pharmaceutical Co., Ltd. was included in our affiliates on Feb 1, 2018 * JES Pharmaceutical Co., LTD was included in our affiliates on Feb 1, 2018 * Promotion of the development of the spring water Ulleung Chusan Yongchunsu was included in our affiliates on Feb 1, 2018 * Greennuri Co., Ltd. was included in our affiliates on Feb 1, 2018 * Hanultari Co., Ltd. was included in our affiliates on Feb 1, 2018 * LG Nsys Co., Ltd. was excluded from our affiliates on April 12, 2018 * LBLusem Co., Ltd. (formerly Lusem Co., Ltd.) was excluded from our affiliates on April 18, 2018 * Hausys ENG Co., Ltd. was excluded from our affiliates on Jul 10, 2018 * Janice Co., Ltd. changed its company name to FMG Co., Ltd. on Jul 25, 2018 * Sarangnuri Co., Ltd. was excluded from our affiliates on Aug 27, 2018 * Robostar Co., Ltd. was included in our affiliates on Sep 1, 2018

B. Overseas corporations No. Name of affiliate Direct equity Country Holding company 1 Arcelik-LG Klima Sanayi ve Ticarta A.S. 50.0% Turkey LG Electronics Co., Ltd. 2 Beijing LG Building Development Company 100.0% China LG Electronics Co., Ltd. 3 Beijing LG Household & Healthcare Co.,Ltd. 78.0% China LG Life & Health Co., Ltd. 4 Beijing Yuanzhimeng Advertising Co.,LTD. 100.0% China GIIR Co., Ltd. 5 DACOM AMERICA, INC. 100.0% USA LG U Plus Co., Ltd. 6 Easytec Global Services Innovation Limited 100.0% Nigeria LG Electronics Co., Ltd. 7 EIC PROPERTIES PTE, LTD. 84.5% Singapore LG Electronics Co., Ltd., etc. 8 Entrue Brasil Servicos de T.I. Ltda 100.0% Brazil LG CNS Co., Ltd. 9 GIIR America Inc. 100.0% USA GIIR Co., Ltd. 10 GllR Communications India Private Limited 100.0% India GIIR Co., Ltd. 11 GllR UK Limited 100.0% UK GIIR Co., Ltd. 12 Hangzhou LG Cosmetics Co.,Ltd. 81.7% China LG Life & Health Co., Ltd. 13 Hi Logistics China Co.Ltd 100.0% China Pantos Logistics Co., Ltd. 14 Inspur LG Digital Mobile Communications Co., Ltd. 70.2% China LG Electronics Co., Ltd. 15 KM Resources Inc. 70.0% Malaysia Philco Resources Ltd. 16 Korea Carbon International Co., Ltd. 60.0% China LG Corporation 17 L&T Display Technology (Fujian) Limited 51.0% China LG Display Co., Ltd. 18 LG Chem (China) Investment Co.,Ltd. 100.0% China LG Chem Co., Ltd. 19 LG Chem (Nanjing) Information & Electronics Materials Co.,Ltd. 100.0% China LG Chem Co., Ltd. 20 LG Chem (Taiwan), Ltd. 100.0% Taiwan LG Chem Co., Ltd. 21 LG Chem (Tianjin) Engineering Plastics Co.,Ltd. 100.0% China LG Chem Co., Ltd. 22 LG Chem America, Inc. 100.0% USA LG Chem Co., Ltd. 23 LG Chem BRASIL INTERMEDIACAO DE NEGOCIOS DO SETOR QUIMICO LTDA. 100.0% Brazil LG Chem Co., Ltd. 24 LG Chem Display Materials (Beijing) Co.,Ltd. 100.0% China LG Chem Co., Ltd. 25 LG Chem Europe Gmbh 100.0% Germany LG Chem Co., Ltd. 26 LG Chem Michigan Inc. 100.0% USA LG Chem Co., Ltd. 27 LG Chem Poland Sp. z o.o. 100.0% Poland LG Chem Co., Ltd. 28 LG Chemical (Guangzhou) Engineering Plastics Co.,Ltd. 100.0% China LG Chem Co., Ltd. 29 LG Chem HK Ltd. 100.0% China LG Chem Co., Ltd. 30 LG Chemical India Pvt. Ltd. 100.0% India LG Chem Co., Ltd. 31 LG CNS America Inc. 100.0% USA LG CNS Co., Ltd. 32 LG CNS China Inc. 100.0% China LG CNS Co., Ltd. 33 LG CNS Europe B.V 100.0% Netherlands LG CNS Co., Ltd. 34 LG CNS India Pvt. Ltd. 100.0% India LG CNS Co., Ltd. 35 LG CNS PHILIPPINES, INC. 100.0% Philippines LG CNS Co., Ltd. 36 LG Consulting corp. 100.0% Panama LG Electronics Co., Ltd. 37 LG Display America,Inc. 100.0% USA LG Display Co., Ltd. 38 LG Display Germany GmbH 100.0% Germany LG Display Co., Ltd. 39 LG Display GuangZhou Co., Ltd 100.0% China LG Display Co., Ltd. 40 LG Display Japan Co.,Ltd. 100.0% Japan LG Display Co., Ltd. 41 LG Display Nanjing Co.,Ltd. 100.0% China LG Display Co., Ltd. 42 LG Display Poland Sp.zo.o. 80.0% Poland LG Display Co., Ltd. 43 LG Display Shanghai Co.,Ltd. 100.0% China LG Display Co., Ltd. 44 LG Display ShenZhen Co., Ltd 100.0% China LG Display Co., Ltd. 45 LG Display Singapore Pte. Ltd. 100.0% Singapore LG Display Co., Ltd. 46 LG Display Taiwan Co.,Ltd. 100.0% Taiwan LG Display Co., Ltd. 47 LG Display Yantai Co., Ltd. 100.0% China LG Display Co., Ltd. 48 LG Electronics (Hangzhou) Co., Ltd. 70.0% China LG Electronics Co., Ltd. 49 LG Electronics (China) Co., Ltd. 100.0% China LG Electronics Co., Ltd. 50 LG Electronics (China) Research and Development Center Co., Ltd. 100.0% China LG Electronics Co., Ltd. 51 LG Electronics (Levant) Jordan 100.0% Jordan LG Electronics Co., Ltd. 52 LG Electronics Alabama Inc. 100.0% USA LG Electronics Co., Ltd. 53 LG Electronics Algeria SARL 70.0% Algeria LG Electronics Co., Ltd. 54 LG Electronics Almaty Kazakhstan 100.0% Kazakhstan LG Electronics Co., Ltd. 55 LG Electronics Argentina S.A. 100.0% Argentina LG Electronics Co., Ltd. 56 LG Electronics Australia Pty, Ltd. 100.0% Australia LG Electronics Co., Ltd. 57 LG Electronics Benelux Sales B.V. 100.0% Netherlands LG Electronics Co., Ltd. 58 LG Electronics Canada, Inc. 100.0% Canada LG Electronics Co., Ltd. 59 LG Electronics Colombia Ltda 100.0% Columbia LG Electronics Co., Ltd. 60 LG Electronics do Brasil Ltda. (LGEBR) 100.0% Brazil LG Electronics Co., Ltd. 61 LG Electronics Deutschland GmbH 100.0% Germany LG Electronics Co., Ltd. 62 LG Electronics Dubai FZE 100.0% Arab Emirate LG Electronics Co., Ltd. 63 LG Electronics Egypt S.A.E 100.0% Egypt LG Electronics Co., Ltd. 64 LG Electronics Espana S.A 100.0% Spain LG Electronics Co., Ltd. 65 LG Electronics European Holdings B.V. 100.0% Netherlands LG Electronics Co., Ltd. 66 LG Electronics European Shared Service Center B.V. 100.0% Netherlands LG Electronics Co., Ltd. 67 LG Electronics France S.A.S. 100.0% France LG Electronics Co., Ltd. 68 LG Electronics Guatemala S.A. 100.0% Guatemala LG Electronics Co., Ltd. 69 LG Electronics Gulf FZE 100.0% Arab Emirate LG Electronics Co., Ltd. 70 LG Electronics Hellas S.A. 100.0% Greece LG Electronics Co., Ltd. 71 LG Electronics HK Ltd. 100.0% China LG Electronics Co., Ltd. 72 LG Electronics Honduras S.de R.L. 20.0% Honduras LG Electronics Co., Ltd. 73 LG Electronics Huizhou Ltd. 80.0% China LG Electronics Co., Ltd. 74 LG Electronics Inc Chile Ltda. 100.0% Chile LG Electronics Co., Ltd. 75 LG Electronics India Pvt. Ltd. 100.0% India LG Electronics Co., Ltd. 76 LG Electronics Italia S.p.A. 100.0% Italy LG Electronics Co., Ltd. 77 LG Electronics Japan Lab, Inc. 100.0% Japan LG Electronics Co., Ltd. 78 LG Electronics Japan, Inc. 100.0% Japan LG Electronics Co., Ltd. 79 LG Electronics Latvia, LLC 100.0% Latvia LG Electronics Co., Ltd. 80 LG Electronics Magyar KFT 100.0% Hungary LG Electronics Co., Ltd. 81 LG Electronics Malaysia SDN.BHD 100.0% Malaysia LG Electronics Co., Ltd. 82 LG Electronics Mexicalli S.A.DE C.V. 100.0% Mexico LG Electronics Co., Ltd. 83 LG Electronics Mexico S.A.DE C.V. 100.0% Mexico LG Electronics Co., Ltd. 84 LG Electronics Middle East Co., Ltd. 100.0% Arab Emirate LG Electronics Co., Ltd. 85 LG Electronics Mlawa Sp. z o.o. 100.0% Poland LG Electronics Co., Ltd. 86 LG Electronics Mobile Research U.S.A.,LLC. 100.0% USA LG Electronics Co., Ltd. 87 LG Electronics Mobilecomm U.S.A.,Inc. 100.0% USA LG Electronics Co., Ltd. 88 LG Electronics Monterrey Mexico S.A. de C.V 100.0% Mexico LG Electronics Co., Ltd. 89 LG Electronics Morocco S.A.R.L. 100.0% Morocco LG Electronics Co., Ltd. 90 LG Electronics Nanjing New Technology Co., Ltd 70.0% China LG Electronics Co., Ltd. 91 LG Electronics Nigeria Limited 100.0% Nigeria LG Electronics Co., Ltd. 92 LG Electronics Nordic AB 100.0% Sweden LG Electronics Co., Ltd. 93 LG Electronics North Africa Service Company SARL 100.0% Tunisia LG Electronics Co., Ltd. 94 LG Electronics Overseas Trading FZE 100.0% Arab Emirate LG Electronics Co., Ltd. 95 LG Electronics Panama, S.A. 100.0% Panama LG Electronics Co., Ltd. 96 LG Electronics Peru S.A. 100.0% Peru LG Electronics Co., Ltd. 97 LG Electronics Philippines Inc. 100.0% Philippines LG Electronics Co., Ltd. 98 LG Electronics Polska Sp. Z.o.o. 100.0% Poland LG Electronics Co., Ltd. 99 LG Electronics Portugal S.A. 100.0% Portugal LG Electronics Co., Ltd. 100 LG Electronics Qinhuangdao Inc. 100.0% China LG Electronics Co., Ltd. 101 LG Electronics Reynosa S.A. DE C.V. 100.0% Mexico LG Electronics Co., Ltd. 102 LG Electronics RUS, LLC 100.0% Russia LG Electronics Co., Ltd. 103 LG Electronics S.A. (Pty) Ltd. 100.0% South Africa LG Electronics Co., Ltd. 104 LG Electronics Shenyang Inc. 78.9% China LG Electronics Co., Ltd. 105 LG Electronics Singapore PTE LTD 100.0% Singapore LG Electronics Co., Ltd. 106 LG Electronics Taiwan Taipei Co.,Ltd. 100.0% Taiwan LG Electronics Co., Ltd. 107 LG Electronics Thailand Co., Ltd. 100.0% Thailand LG Electronics Co., Ltd. 108 LG Electronics Tianjin Appliances Co., Ltd. 80.0% China LG Electronics Co., Ltd. 109 LG Electronics Ticaret A.S. 100.0% Turkey LG Electronics Co., Ltd. 110 LG Electronics U.S.A., Inc. 100.0% USA LG Electronics Co., Ltd. 111 LG Electronics Ukraine Inc. 100.0% Ukraine LG Electronics Co., Ltd. 112 LG Electronics United Kingdom Ltd. 100.0% UK LG Electronics Co., Ltd. 113 LG Electronics Venezuela S.A 100.0% Venezuela LG Electronics Co., Ltd. 114 LG Electronics Wroclaw Sp. z o.o 100.0% Poland LG Electronics Co., Ltd. 115 LG Electronics(Shanghai) Research and Development Center Co., Ltd. 100.0% China LG Electronics Co., Ltd. 116 LG Electronics (Kunshan) Computer Co., Ltd. 100.0% China LG Electronics Co., Ltd. 117 LG Electronics Africa Logistics FZE 100.0% Arab Emirate LG Electronics Co., Ltd. 118 LG Electronics Miami Inc. 100.0% USA LG Electronics Co., Ltd. 119 LG Hausys America,Inc. 100.0% USA LG Hausys Co., Ltd. 120 LG Hausys Europe GmbH 100.0% Germany LG Hausys Co., Ltd. 121 LG Hausys India Private Limited 100.0% India LG Hausys Co., Ltd. 122 LG Hausys RUS,LLC. 100.0% Russia LG Hausys Co., Ltd. 123 LG Hausys Trading Co., Ltd. 100.0% China LG Hausys Co., Ltd. 124 LG HOLDINGS (HK) LIMITED 100.0% China LG Electronics Co., Ltd., etc. 125 LG Household & Health Care (Taiwan), Ltd. 100.0% Taiwan LG Life & Health Co., Ltd. 126 LG Household & Health Care America Inc. 100.0% USA LG Life & Health Co., Ltd. 127 LG Household &Health Care TRADING(Shanghai)Co.,Ltd 100.0% China LG Life & Health Co., Ltd. 128 LG Innotek (Taiwan) Co., Ltd. 100.0% Taiwan LG Innotech Co., Ltd. 129 LG Innotek Huizhou Co., Ltd. 100.0% China LG Innotech Co., Ltd. 130 PT. LG Innotek Indonesia 100.0% Indonesia LG Innotech Co., Ltd. 131 LG Innotek Poland Sp.z.o.o. 100.0% Poland LG Innotech Co., Ltd. 132 LG Innotek USA, Inc. 100.0% USA LG Innotech Co., Ltd. 133 LG Innotek Yantai Co., Ltd. 100.0% China LG Innotech Co., Ltd. 134 LG International Yakutsk 100.0% Russia LG Corporation 135 LG International(America) Inc. 100.0% USA LG Corporation 136 Natural Resources Investment (Australia) Pty., Ltd. 100.0% Australia LG Corporation 137 LG International(China) Corp. 100.0% China LG Corporation 138 LG International(Deutschland) GmbH. 100.0% Germany LG Corporation 139 LG International(HK) Ltd. 100.0% China LG Corporation 140 LG International(Japan) Ltd. 100.0% Japan LG Corporation 141 LG International(Saudi) LLC 90.0% Saudi Arabia LG Corporation 142 LG International(Singapore) Pte.,Ltd. 100.0% Singapore LG Corporation 143 LG Life Sciences (Beijing) Co.,Ltd 100.0% China LG Life Sciences Co., Ltd. 144 LG Life Sciences India Pvt,Ltd 100.0% India LG Life Sciences Co., Ltd. 145 LG Life Sciences Poland Ltd 100.0% Poland LG Life Sciences Co., Ltd. 146 LG Polymers India Pvt. Ltd. 100.0% India LG Chem Co., Ltd. 147 SK Siltron America, Inc. 100.0% USA LG Siltron Co., Ltd. 148 SK Siltron Japan, Inc. 100.0% Japan LG Siltron Co., Ltd. 149 LG Soft India Private Limited 100.0% India LG Electronics Co., Ltd. 150 LG VINA Chemical Co.,Ltd. 40.0% Vietnam LG Chem Co., Ltd. 151 LG Vina Cosmetics Co.,Ltd. 60.0% Vietnam LG Life & Health Co., Ltd. 152 LG-Shaker Co. Ltd. 51.0% Saudi Arabia LG Electronics Co., Ltd. 153 Nanjing LG International VMI Ltd. Co. 100.0% China LG International(China) Corp. 154 Nanjing LG-Panda Appliances Co., Ltd. 70.0% China LG Electronics Co., Ltd. 155 Ningbo LG Yongxing Chemical Co.,Ltd. 75.0% China LG Chem Co., Ltd. 156 Ningbo Zhenhai LG Yongxing Trading Co.,Ltd. 75.0% China LG Chem Co., Ltd. 157 P.T. LG Electronics Indonesia 100.0% Indonesia LG Electronics Co., Ltd. 158 Philco Resources Ltd. 60.0% Malaysia LG Corporation 159 PT. LG CNS Indonesia 100.0% Indonesia LG CNS Co., Ltd. 160 PT. Batubara Global Energy 100.0% Indonesia LG Corporation 161 PT. Green Global Lestari 100.0% Indonesia LG Corporation 162 PT. Indonesia Renewable Resources 100.0% Indonesia LG Corporation 163 PT. Mega Global Energy 100.0% Indonesia PT. Batubara Global Energy 164 Qingdao LG Inspur Digital Communication Co., Ltd. 70.0% China LG Electronics Co., Ltd. 165 Resources Investment (H.K) Limited 100.0% China LG Corporation 166 Serveone Construction (NanJing) Co., Ltd. 100.0% China Serveone Co, Ltd. 167 Serveone(Nanjing).Co.,LTD 100.0% China Serveone Co, Ltd. 168 Servicios Integrales LG S.A DE C.V 100.0% Mexico LG Electronics Co., Ltd. 169 Servicios LG Monterrey Mexico S.A. de C.V. 100.0% Mexico LG Electronics Co., Ltd. 170 Steel Flower Electric Machinery (Tianjin) Co., Ltd. 100.0% China LG Corporation 171 Taizhou LG Electronics Refrigeration Co., Ltd. 100.0% China LG Electronics Co., Ltd. 172 THEFACESHOP(SHANGHAI) CO., LTD 100.0% China Thefaceshop Co., Ltd.

173 Tianjin LG Bohai Chemical Co.,Ltd. 75.0% China LG Chem Co., Ltd.

174 Tianjin LG Botian Chemical Co.,Ltd. 55.9% China LG Chem Co., Ltd.

175 LG Hausys Tianjin Co., Ltd. 100.0% China LG Hausys Co., Ltd.

176 Tianjin Li Jie Cartridge Heater co.,Ltd (LGETL) 66.7% China LG Electronics Co., Ltd.

177 UCESS PHILIPPINES, INC. 100.0% Philippines LG CNS Co., Ltd.

178 United Copper & Moly LLC 50.0% USA LG Corporation

179 V-ENS (M) Sdn. Bhd. 100.0% Malaysia LG Electronics Co., Ltd.

180 Zenith Electronics Corporation 100.0% USA LG Electronics Co., Ltd.

181 Zenith Electronics Corporation of Pennsylvania 100.0% USA LG Electronics Co., Ltd.

182 LG Chem(HUIZHOU) Petrochemical Co., Ltd. 70.0% China LG Chem Co., Ltd.

183 GllR Rus LLC 100.0% Russia GIIR Co., Ltd.

184 GllR Do Brasil Ltda 100.0% Brazil GIIR Co., Ltd.

185 LG Hausys (Wuxi) Co., Ltd. 100.0% China LG Hausys Co., Ltd.

186 Yantai VMI HUB LG International 100.0% China LG Corporation

187 PT. Mega Prima Persada 75.0% Indonesia PT. Batubara Global Energy

188 PT. Parna Agromas 95.0% Indonesia PT. Green Global Lestari

189 LG Electronics Air-Conditioning(Shandong) Co.,Ltd. 100.0% China LG Electronics Co., Ltd.

190 LG Electronics Angola Limitada 100.0% Angola LGEAF

191 Guangzhou Steel Flower Electric & Machinery Co., Ltd. 100.0% China LG Corporation

192 Colmineral S.A. de C.V 100.0% Mexico LG Corporation

193 Ginza Stefany Inc. 100.0% Japan LG Life & Health Co., Ltd. 194 LG CNS COLOMBIA SAS. 100.0% Columbia LG CNS Co., Ltd.

195 LHC Solar. LLC 100.0% USA LG International(America) Inc.

196 LG Hausys Mongolia LLC 100.0% Mongol LG Hausys Co., Ltd.

197 Hi Logistics India Private Limited 100.0% India Pantos Logistics Co., Ltd.

198 LG Electronics Service Kenya limited 100.0% Kenya LG Electronics Co., Ltd.

199 LG Electronics Saudi Arabia Limited Company 100.0% Saudi Arabia LG Electronics Co., Ltd.

200 LG Fuel Cell Systems Inc. 68.0% USA LG Electronics Co., Ltd., etc.

201 GIIR Thailand Ltd. 100.0% Thailand GIIR Co., Ltd.

202 Hi Logistics Malaysia Sdn Bhd 100.0% Malaysia Pantos Logistics Co., Ltd.

203 PT. Ganda Alam Makmur 60.0% Indonesia LG Corporation

204 LG Innotek Trading (Shanghai) Co., Ltd 100.0% China LG Innotech Co., Ltd.

205 Global OLED Technology LLC. 100.0% USA LG Electronics Co., Ltd., etc.

206 GllR Germany GmbH 100.0% Germany GIIR Co., Ltd.

207 GllR Ukraine LLC 100.0% Ukraine GIIR Co., Ltd.

208 LG Display (China) Co., Ltd. 70.0% China LG Display Co., Ltd.

209 LG Life Sciences (Thailand) Ltd. 100.0% Thailand LG Life Sciences Co., Ltd.

210 Everlife Co.,Ltd. 100.0% Japan LG Life & Health Co., Ltd.

211 TFS Singapore Private Limited 100.0% Singapore Thefaceshop Co., Ltd.

212 Everlifeagency Co.,Ltd. 100.0% Japan Everlife Co., Ltd.

213 Everlife H&B Co.,Ltd. 100.0% Taiwan Everlife Co., Ltd.

214 LG Electronics Pasig Inc. 38.0% Philippines LG Electronics Co., Ltd.

215 Hientech (Tianjin) CO.,LTD 80.0% China Hientech Co., Ltd.

216 LG Innotek Mexico S.A. de C.V. 100.0% Mexico LG Innotech Co., Ltd.

217 LGC Petrochemical India Private Ltd. 100.0% India LG Chem Co., Ltd.

218 LG International India Private Limited 100.0% India LG Corporation

219 LG International (Shanghai) Corp. 100.0% China LG International(China) Corp.

220 LG-SANITA,LTD. 55.0% Arab Emirate LG Life & Health Co., Ltd.

221 LG Electronics Vietnam Haiphong Co Ltd 100.0% Vietnam LG Electronics Co., Ltd.

222 Fertilizer Resources Investment Limited 100.0% China LG Corporation

223 PANTOS USA. INC. 100.0% USA Pantos Logistics Co., Ltd.

224 LG CHEM TK Kimya SANAYI VE TIC. Ltd. STI. 100.0% Turkey LG Chem Co., Ltd.

225 Fruits & Passion Boutiqes Inc. 100.0% Canada Thefaceshop Co., Ltd.

226 Fruits & Passion Immobilier Inc. 100.0% Canada Thefaceshop Co., Ltd.

227 3390306 Canada Inc. 100.0% Canada Thefaceshop Co., Ltd.

228 THE FACE SHOP Trade (Guandong ) Co., Ltd. 100.0% China Thefaceshop Co., Ltd.

229 LG CNS MALAYSIA SDN BHD 100.0% Malaysia LG CNS Co., Ltd.

230 LG Hausys(Tianjin) Engineering Co., Ltd. 100.0% China LG Hausys Tianjin Co., Ltd.

231 LG CNS Saudi Arabia LLC 51.0% Saudi Arabia LG CNS Co., Ltd.

232 LG CNS JAPAN Co., Ltd. 100.0% Japan LG CNS Co., Ltd.

233 HI LOGISTICS RUS Limited Liability Company 100.0% Russia Pantos Logistics Co., Ltd.

234 LG Chem Japan Co.,Ltd. 100.0% Japan LG Chem Co., Ltd.

235 UNIFIED INNOVATIVE TECHNOLOGY, LLC 100.0% USA LG Display Co., Ltd.

236 Collain Healthcare, LLC 70.0% USA LG CNS America Inc.

237 LG NanoH2O, Inc. 100.0% USA LG Chem Co., Ltd.

238 LG Holdings Japan Co., Ltd 100.0% Japan LG Corporation

239 Serveone(Guangzhou) Co., Ltd 100.0% China Serveone Co., Ltd.

240 PT. Binsar Natorang Energi 72.6% Indonesia LG Corporation

241 PT.LG Electronics Service Indonesia 99.8% Indonesia LG Electronics Co., Ltd.

242 SERVEONE VIETNAM Co.,Ltd 100.0% Vietnam Serveone Co., Ltd.

243 LG Life Sciences America Inc. 100.0% USA LG Life Sciences Co., Ltd

244 Silicon Works Inc. 100.0% USA Silicon Works Co., Ltd.

245 Hi Logistics Egypt 100.0% Egypt Pantos Logistics Co., Ltd.

246 Hi Logistics Vietnam Co. LTD. 100.0% Vietnam Hi-business Logistics Co., Ltd. 247 HS Ad MEA FZ-LLC 100.0% Arab Emirate HS Ad Co., Ltd.

248 HSAD LATIN AMERICA,S.A. 100.0% Panama HS Ad Co., Ltd.

249 Nanjing LG Chem New Energy Battery Co.,Ltd. 50.0% China LG Chem Co., Ltd.

250 NanoH2O (Jiangsu) Water Processing Technology Co. LTD. 100.0% China LG Chem Co., Ltd.

251 Combustion Synthesis Co., Ltd. 61.4% Japan LG Holdings Japan Co., Ltd.

252 LG Chem (Chongqing) Engineering Plastics Co.,Ltd. 100.0% China LG Chem Co., Ltd.

253 LG Chem Malaysia SDN.BHD 100.0% Malaysia LG Chem Co., Ltd.

254 LG CNS UZBEKISTAN, LLC 51.0% Uzbekistan LG CNS Co., Ltd.

255 LG Electronics Finland Lab, Oy 100.0% Finland LG Electronics Co., Ltd.

256 LG Display Guangzhou Trading Co., Ltd. 100.0% China LG Display Co., Ltd.

257 Haiphong Steel Flower Electrical & Machinery Company Limited 100.0% Vietnam LG International Corp.

258 Pantos Logistics (China) Co.,Ltd 100.0% China Pantos Logistics Co., Ltd.

259 FNS (Beijing) Logistics Co.,Ltd 100.0% China Pantos Logistics (China) Co.,Ltd

260 Pantos Logistics (Shanghai) Co.,Ltd 100.0% China Pantos Logistics Co., Ltd.

261 Pantos Logistics (Ningbo) Co.,Ltd 100.0% China Pantos Logistics (Shanghai) Co.,Ltd

262 Pantos Logistics(Shenzhen) Co.,Ltd 100.0% China Pantos Logistics (HK) Company limited

263 Pantos Logistics (HK) Company limited 100.0% China Pantos Logistics Co., Ltd.

264 Pantos Logistics (Taiwan) Co.,Ltd 100.0% Taiwan Pantos Logistics Co., Ltd.

265 PT. Pantos Logistics Indonesia 99.0% Indonesia Pantos Logistics Co., Ltd.

266 PT. Pantos Logistics Jakarta 99.0% Indonesia Pantos Logistics Co., Ltd.

267 PT. Pantos Express Indonesia 49.0% Indonesia PT. Pantos Logistics Indonesia

268 Pantos Logistics SINGAPORE PTE. LTD 100.0% Singapore PT. Pantos Logistics Indonesia

269 Pantos Logistics (Thailand) Co.,Ltd 100.0% Thailand Pantos Holdings (Thailand) Co.,Ltd.

270 Pantos Logistics MALAYSIA SDN. BHD. 100.0% Malaysia Pantos Logistics Co., Ltd.

271 PANTOS LOGISTICS (INDIA) PRIVATE LIMITED 100.0% India Pantos Logistics Co., Ltd.

272 Pantos Logistic (CAMBODIA) Co.,Ltd 100.0% Cambodia Pantos Logistics Co., Ltd.

273 Pantos Logitstics Vietnam Co.,Ltd 99.0% Vietnam PT. Pantos Logistics Indonesia

274 Pantos Logistics AUSTRALIA PTY LTD 100.0% Australia Pantos Logistics Co., Ltd.

275 Pantos Logistics Philippines Inc 40.0% Philippines PT. Pantos Logistics Indonesia

276 Pantos Holdings (Thailand) Co.,Ltd 48.5% Thailand Pantos Logistics Co., Ltd.

277 Pantos Logistics Myanmar Co.,Ltd 70.0% Myanmar Pantos Logistics Co., Ltd.

278 Pantos Logistics UK Ltd. 100.0% UK Pantos Logistics Co., Ltd.

279 Pantos Logistics Benelux B.V 100.0% Netherlands Pantos Logistics Co., Ltd.

280 Pantos Logistics France 100.0% France Pantos Logistics Co., Ltd.

281 Pantos Logistic Poland Sp.z o.o. 100.0% Poland Pantos Logistics Co., Ltd.

282 Pantos Logistics Germany GmbH 100.0% Germany Pantos Logistics Co., Ltd.

283 Pantos Logistics Spain S.L 100.0% Spain Pantos Logistics Co., Ltd.

284 Pantos Logistics DIS TICARET SANAYI VE TICARET LIMITED SIRKETI 100.0% Turkey Pantos Logistics Co., Ltd.

285 Pantos Logistics Mexico S.A DE C.V 100.0% Mexico Pantos Logistics Co., Ltd.

286 Pantos Do Brasil Logistica Ltda 100.0% Brazil Pantos Logistics Co., Ltd.

287 Pantos Logistics Colombia S.A.S 100.0% Colombia Pantos Logistics Co., Ltd.

288 Pantos Logistics Chile SPA 100.0% Chile Pantos Logistics Co., Ltd.

289 Pantos Logistics Panama S.A. 100.0% Panama Pantos Logistics Co., Ltd.

290 "FNS CIS" LLC 100.0% Russia Pantos Logistics Co., Ltd.

291 "Pantos Logistics Kazakhstan" 100.0% Kazakhstan Pantos Logistics Co., Ltd.

292 Pantos Logistics UKRAINE LTD 100.0% Ukraine Pantos Logistics Co., Ltd.

293 Pantos Customs Services LLC 99.0% Russia "FNS CIS" LLC

294 ZAO "Contrans" 51.0% Russia "FNS CIS" LLC

295 Pantos Logistics L.L.C (DUBAI) 49.0% Arab Emirate Pantos Logistics Co., Ltd.

296 PANTOS LOGISTICS AND SERVICE COMPANY LLC 70.0% Oman Pantos Logistics Co., Ltd.

297 Pantos Logistics Company Limited. (Kingdom of Saudi Arabia) 100.0% Saudi Arabia Pantos Logistics Co., Ltd.

298 Pantos Logistics Japan Inc. 70.0% Japan Pantos Logistics Co., Ltd.

299 LG Electronics Nanjing Battery Pack Co.,Ltd. 100.0% China LG Electronics Co., Ltd. 300 LG Electronics Nanjing Vehicle Components Co.,Ltd. 100.0% China LG Electronics Co., Ltd.

301 Hi.M Solutek HVAC Service and Maintenance LLC 100.0% Arab Emirate Hi-M Solutek Co., Ltd.

302 Highland Cement International Co., Ltd. 43.8% Myanmar LG International Corp.

303 SERVEONE POLAND sp. z o.o. 100.0% Poland Serveone

304 HILOGISTICS NJ INC. 100.0% USA Pantos Logistics Co., Ltd.

305 LG Display Vietnam Haiphong Co., Ltd. 100.0% Vietnam LG Display Co., Ltd.

306 Dongbu Farm Hannong (Heilongjiang) Chemical Corp 100.0% China Farmhannong Co., Ltd.

307 LG H&H HK LIMITED 80.0% China LG Household &Health Care TRADING(Shanghai) Co., Ltd

308 HI-M SOLUTEK PHILIPPINES INC.(*) 100.0% Philippines Hi-M Solutek Co., Ltd.

309 LG Chem Wroclaw Energy sp. z o.o. 100.0% Poland LG Chem Co., Ltd.

310 Suzhou Lehui Display Co., Ltd. 100.0% China LG Display Co., Ltd.

311 Toiletry Japan Inc. 70.0% Japan Ginza Stefany Inc.

312 LG Innotek Vietnam Haiphong Co., Ltd 100.0% Vietnam LG Innotech Co., Ltd.

313 LG HOUSEHOLD AND HEALTH CARE COSMETICS R AND D(SHANGHAI) CO.,LTD 100.0% China LG Life & Health Co., Ltd.

314 HI LOGISTICS BRASIL SERVICOS DE LOGISTICA LTDA 100.0% Brazil Pantos Logistics Co., Ltd.

315 PANTOS LOGISTICS AR 100.0% Argentina Pantos Logistics Mexico S.A DE C.V

316 HI-M SOLUTEK VIETNAM CO., LTD. 100.0% Vietnam HI-M SOLUTEK CO., LTD.

317 c2i(s.r.o) 50.1% Slovakia LG Hausys Co., Ltd.

318 FJ Composite Material Co., Ltd. 33.3% Japan LG Chem Co., Ltd.

319 LG CNS VIETNAM CO., LTD 100.0% Vietnam LG CNS Co., Ltd.

320 LG Corp. U.S.A. 100.0% USA LG Corporation

321 LG Hausys Canada, Inc. 100.0% Canada LG Hausys America,Inc.

322 Silicon Works China Co., Ltd 100.0% China Silicon Works Co., Ltd.

323 LGEUS Power, LLC 100.0% USA LG Electronics Co., Ltd.

324 LG Electronics Vehicle Component U.S.A., LLC 100.0% USA LG Electronics Co., Ltd.

325 LG Chem Hai Phong Veitnam Co., Ltd. 100.0% Vietnam LG Chem Co., Ltd.

326 Questeam Sdn Bhd 100.0% Malaysia Thefaceshop Co., Ltd.

327 Great American Transportation 100.0% USA Pantos Logistics Co., Ltd.

328 HS AD VIETNAM CO., LTD 97.0% Vietnam HS Ad Co., Ltd.

329 LG Chem Australia Pty Ltd 100.0% Australia LG Chem Co., Ltd.

330 CCP-LGE OWNER, LLC 70.2% USA LG Electronics Co,m Ltd.

331 LG Chem Mexico S. A. de C. V. 100.0% Mexico LG Chem Co., Ltd.

332 FarmHannong(Thailand) Ltd. 100.0% Thailand Farmhannong Co., Ltd.

333 Panthos Logistics Nigeria Limited 99.9% Nigeria Pantos Logistics Co., Ltd.

334 LG ELECTRONICS FUND I LLC(*) 100.0% USA LG Electronics Co., Ltd.

335 LG Technology Ventures LLC(*) 100.0% USA LG Electronics Co., Ltd.

336 LG Chem Hai Phong Engineering Plastics Ltd. 100.0% Vietnam LG Chem Co., Ltd.

337 LG Chem (Guangzhou) Information & Electronics Materials Co.,Ltd. 100.0% China LG Chem Co., Ltd.

338 LG CHEM FUND I LLC(*) 100.0% USA LG Chem Co., Ltd.

339 LG UPLUS FUND I LLC(*) 100.0% USA LG Uplus Co., Ltd.

340 LG DISPLAY FUND I LLC(*) 100.0% USA LG Display Co., Ltd.

341 HS GTM Germany GmbH 100.0% Germany HS Ad Co., Ltd. (*) There are no outstanding shares because it capital has not been paid although it was newly established.

H. Credit Rating Credit rating details of the company by specialized credit rating institutions for the recent 3 years are as follows.

[Domestic] Name of specialized credit Date of rating Rating object Credit rating Remarks rating institution (range of rating) Corporate bond A+ E Credible Co., Ltd. (AAA ~ C) 2016.05.11 Regular rating Commercial paper A E Credible Co., Ltd. (A ~ NR) Corporate bond A+ E Credible Co., Ltd. (AAA ~ C) 2016.10.11 Regular rating Commercial paper A E Credible Co., Ltd. (A ~ NR) Corporate bond A Nice Investors Service(AAA ~ D) Occasional Rating 2017.10.18 Commercial paper A2 Nice Investors Service(A1 ~ D)

[Domestic credit rating system with definition of rating] – E credible Category Credit rating Definition of rating AAA The best and excellent ability to repay the debt AA+/AA/AA- Very excellent ability to repay the debt, but a little weaker than AAA Excellent ability to repay the debt, but easy to be affected by business A+/A/A- recession and/or environmental changes rather than the above ratings Good ability to repay the debt, but including the possibility of the degrading BBB+/BBB/BBB- ability to repay the debt depending on business recession and/or environmental changes in the future Corporate No problem in the ability to repay the debt, but including speculative bond BB+/BB/BB- elements in stability depending on economic conditions and/or market environment changes Able to repay the debt, but speculative in stability due to the possibility of B+/B/B- default in case of the deteriorated economic environments in the future CCC+/CCC/CCC- Very speculative as the likelihood of default as of now is included CC High likelihood of default C Very high likelihood of default D Currently under default A Ability to generate cash flows is very good and stable. Ability to generate cash flows is good, but its stability is a little inferior to B the above rating. Ability to generate cash flows is ordinary or better, but the possibility of C+ degrading cash flows exists a little bit, depending on economic conditions and/or worsening environments in the future. Ability to generate cash flows is ordinary, but the possibility of degrading C- cash flows exists, depending on economic conditions and/or worsening CP environments in the future. Cash payment ability is poor because ability to generate cash flows is low or D the generation of cash flows is less than total borrowings. Cash payment ability is very poor because ability to generate cash flows is E little or the generation of cash flows is much less than total borrowings. Not rated because the reliability of financial statements is less or incomplete NF financial information is held (no cost statement, etc.) Rating is held because cash flow calculations are carried out for less than NR two years as of the book closing term.

[Domestic credit rating system with definition of rating] – Nice Investors Service Category Credit rating Definition of rating Companies that have the highest credit rating for commercial transactions AAA and are able to cope with changes in the environment. Companies that have good credit for commerce and can cope with changes AA in the environment. Companies with good credit for commerce and limited ability to cope with A environmental changes. Companies with good credit ability for commercial transactions but with a BBB possibility of deteriorating trading stability due to economic conditions and environmental deterioration. Corporate Companies with creditworthiness for commerce are generally concerned, and bond B trading stability is deteriorated due to economic conditions and environmental deterioration. Companies with credit capacity for commerce is below average, and which CCC are expected to deteriorate transaction stability. Companies with very low creditworthiness for transactions and low CC transaction stability. Companies with the lowest level of credit for commerce and a high C probability of transaction risk. D An entity that currently has credit risk or is in a state of credit risk. It has excellent cash flow generation capability and has the highest cash A1 payment capability. It has excellent ability to generate cash flow, and has overall top-level cash A2 payment capability. It has good ability to generate cash flow, but in the future, macroeconomic A3 and industrial environment deterioration may result in a Decrease in cash- out capability. It has normal ability to generate cash flow, and financial performance and CP B cash flow ability of investing activities may be deteriorated in the future when business performance deteriorates. It has below average ability to generate cash flow, and it is highly likely that C cash payment capability related to repayment of borrowings and capital investment activities will deteriorate when the current situation persists. It has weak ability to generate cash flow, and the ability to pay back D borrowings and investment activities is insufficient, which should lead to continued cash flow improvement.

I. Listing (or registration and designation) and special listing of the company's stock certificates Whether stock certificates Date of stock listing (or Whether special listing is Applicable regulations are listed (or registered or registration / designation) applied such as special listing designated) KOSDAQ market June 08, 2010 Not applicable Not applicable

2. History of the Company

The following is the company’s major historical events. Date Information Jun. 2014 Largest shareholder changed: Comet Network Co., Ltd.  LG Corporation Jul. 2014 belonged to the LG corporate group Apr. 2015 Acquired part of system IC business from Lusem Co., Ltd. Jul. 2015 Acquired part of System IC business from LG Electronics Co., Ltd. Oct. 2016 Awarded the prize of sales tower 500 billion won (Daejeon City) Mar. 2017 Change of representative director (Dae-Keun Han -> Bo-Ik Son) Oct. 2017 Awarded the prize of sales tower 600 billion won (Daejeon City) May. 2018 Acquired part of System IC business from LG Electronics Co., Ltd. (Entire assets and manpower related to T-Con chips for OLED TV) Jun. 2018 The 10th Korea KOSDAQ Award (KOSDAQ Association) (Best Job Creating Company Prize awarded)

The following are the major historical events of Silicon Works Inc. (USA), one of the company’s subsidiaries. Date Information Oct. 2012 Establishment of legal entity (Paid-in capital USD 500,000)

The following are the major historical events of Silicon Works China Co., LTD(China), one of the company’s subsidiaries. Date Information May. 2017 Establishment of legal entity (Paid-in capital CNY 4,085,400)

A. The Headquarters and Changes of the Address November 11, 1999: 4th Fl., Jeil Bank Building, 1299 Dunsan-dong, Seo-gu, Daejeon, Korea December 15, 2000: 5th Fl., Semyung Hoekwan Building, 1299 Dunsan-dong, Seo-gu, Daejeon, Korea October 4, 2005: 104-13 Munji-dong, Yuseong-gu, Daejeon, Korea January 31, 2011: 222 Techno 2-ro Yuseong-gu, Daejeon, Korea

B. Major changes to the Management Date Before After HAN Dae-Keun, KIM Dae-Seong, Mar. HAN Dae-Keun, KIM Dae-Seong, OH Hyeong-Seok, SHIN Tae-Hyeong, 2011 OH Hyeong-Seok, KIM Won-Taek KIM Won-Taek HAN Dae-Keun, KIM Dae-Seong, Mar. HAN Dae-Keun, KIM Dae-Seong, OH Hyeong- OH Hyeong-Seok, 2013 Seok, SHIN Tae-Hyeong SHIN Tae-Hyeong, KIM,Won-Taek Mar. HAN Dae-Keun, KIM Dae-Seong HAN Dae-Keun, KIM Dae-Seong, OH Hyeong- 2014 OH Hyeong-Seok, *SHIN Tae-Hyeong Seok Mar. HAN Dae-Keun, KIM Dae-Seong HAN Dae-Keun, BAE Dong-su 2015 OH Hyeong-Seok Jun. HAN Dae-Keun, BAE Dong-Su HAN Dae-Keun, BAE Dong-Su, SON Bo-Ik 2015 Mar. HAN Dae-Keun, BAE Dong-Su, SON Bo-Ik SON Bo-Ik, BAE Dong-Su, MIN Byeong-Hun 2017 Mar. SON Bo-Ik, BAE Dong-Su, Min Byeong-Hun SON Bo-Ik, Choi Sung-Kwan, JEONG Hyeon-Ok 2018 Note) Please refer to “VII. Executives and Employees” for more details on change in management.

C. Changes of the Largest Shareholder Please refer to “2. Changes of the Largest Shareholder – VII. Matters Pertaining to Shareholders” in this public disclosure document with regard to this matter.

3. Changes to Paid-in Capital - Not applicable

4. Total Number of Shares

Status of Total Number of Shares (Basic date: Sep. 30 2018) (Unit: shares) Share Type Division Comment Common share Preferred share Total Ⅰ. Total number of shares to be 43,000,000 7,000,000 50,000,000 - issued Ⅱ. Total number of shares issued so 16,264,300 - 16,264,300 - far Ⅲ. Total number of shares - - - - Decreased so far 1. Capital Decrease - - - - 2. Interest distribution - - - - 3. Redemption of redeemable - - - - shares 4. Others - - - - Ⅳ. Total number of shares issued 16,264,300 - 16,264,300 - (Ⅱ-Ⅲ) Ⅴ. Number of treasury shares - - - - Ⅵ. Number of outstanding shares 16,264,300 - 16,264,300 - (IV –V)

5. Status of Voting Rights

(Basic date: Sep. 30 2018) (Unit: shares) Division Number of shares Comment Total number of shares Common share 16,264,300 - issued (A) Preferred share - - Number of shares without Common share - - voting rights (B) Preferred share - - Number of shares with Common share - - restricted voting rights based on the Articles of Preferred share - - Association laws (C) Number of shares with Common share - - restricted voting rights based on other Preferred share - - laws (D) Number of shares with Common share - - resurrected voting rights Preferred share - - (E) Number of issued shares Common share 16,264,300 - with voting rights Preferred share - - (F = A - B - C – D + E)

6. Dividend

A. Dividend The Company, pursuant to its Articles of Incorporation, is distributing dividends through the Decisions by the board of directors and from shareholders’ meetings and determines reasonable amount of dividends based on business conditions, investments and shareholder value enhancement for the consistent growth within the profit available for dividend distribution. Moreover, Article 55 and 57 of the company’s Articles of Incorporation provides profit dividend and the prescription of extinction for rights of dividend payment claim.

B. Dividends over the Recent Three Business Years Major dividend indexes Current year Previous year Year before Division Type of share previous year The 19th year The 18th year The 17th year Face value per share (Won) 500 500 500 (Consolidated) Current net profit 47,064 50,680 48,451 (1 Million Won) (Individual) current net profit (million KRW) 46,458 50,564 48,350 (Consolidated) earnings per share (KRW) 2,894 3,116 3,018 Total dividends in cash (1 Million Won) 11,385 14,638 16,264 Total amount of dividends - - - (1 Million Won) (Consolidated) Cash dividend (%) 25 29 34 Common 1.4 2.6 2.4 shares Cash dividend rate (%) Preferred - - - shares Common - - - shares Share dividend rate (%) Preferred - - - shares Common 700 1,000 600 Dividend in cash per share shares (Won) Preferred - - - shares Common - - - Share allocation per share shares (Share) Preferred - - - shares

II. Business Activities

1. Business Overview

(1) System IC

(A) Characteristics of the Industry Our products have been growing as the display industry has grown as a key component driving the display panel.

The key competitive factor in the display parts market is to strengthen technological competitiveness based on the original technology and to enter the market in the early stage of display technology development.

As the complex product designing technology is required recently, technology gap is getting bigger between companies that have differentiated technology and those who have not.

(B) Market size and Growth In order to escape the maturation and growth constraints of the existing LCD display market, domestic and global companies are expanding their OLED investments and securing competitiveness.

OLED technology is expected to revolutionize the display industry such as ultra-high quality, flexible and bendable displays, and new applications such as smartwatch, VR (Virtual Reality), and automotive display as well as large- screen TVs and mobile handsets is expected to expand. [Annual panel sales]

[IHS, Silicon Works]

1. Medium and large panels - TV & IT

In the TV market, high-resolution large-area panels are increasing in weight. By 2017, the penetration rate of UHD TVs has exceeded the global average of 30%, and the proportion of high-resolution panels over UHD of domestic panel makers has exceeded 50%. In addition, since 2H17, production of high-definition panels with a capacity of 8K or more has begun, and premium products are expected to grow in weight.

The proportion of OLED TVs in the premium TV market is steadily increasing, and the number of TV set makers who have selected OLED panels as a product differentiation strategy has increased further, and the large OLED market is growing strongly. Chinese panel makers are aggressively investing in facilities based on enormous capital strength. In the next two to three years, Chinese panel makers' market share is expected to increase even more, as the volume of OLED panels will increase sharply with Chinese high-definition large-area LCD panels.

In the IT market, monitors, notebooks, and Tablet PCs are showing a year-on-year Marline since 2015. IT products are not expected to grow without a change in new form factors due to the maturation of the market. However, we are raising the value added by adding new functions such as increasing the resolution and using the touch panel, focusing on some premium brands.

2. Small panels – Mobile & Wearable devices

The mobile market has entered a stage of maturity. The smartphone market has grown to 1.5 billion units in 2017 and the projected growth rate is expected to be one-digit low by 2020. Growth in developed markets is expected to be lower than the global average, and growth in emerging markets is driving the growth of the entire mobile market. In particular, global demand for mobile phones is heavily influenced by China’s domestic demand. In addition, local set makers' share in the Chinese market is increasing, and the importance of set customers in China is growing.

The proportion of smart phones equipped with small OLED panels has grown to 30% in 2017 and will increase to more than 40% in 2021. Domestic and overseas panel makers are expanding their investment in small OLED facilities and Korean companies are leading the small OLED market due to the technology gap between domestic panel makers and Chinese panel makers. However, the share of Chinese companies in the OLED panel market is expected to increase gradually due to the expansion of Chinese makers' capacity within the next two to three years.

In 2017, SmartWatch has sold more than 100 million units, and the size of related markets will continue to increase through services linked to various devices such as IoT.

(C) Characteristics of economic fluctuations and competitive elements The core competitive element in the display component market is the market entry at the initial stage with the development of display, as well as the strengthening technological competitiveness based on original technologies. Securing the meaningful share in the new market where new technology is applied means an entry barrier while enjoying the economy of the scale before the industry become saturated along with differentiation through technological competitiveness.

The key competitors of the display parts market are not only strengthening technological competitiveness based on original technology, but also entering the market at an early stage along with the development of display. By securing a meaningful market share in new markets where new technologies are applied, we will create entry barriers by differentiating through technological competitiveness.

The display industry needs technology and capital-intensive characteristics and economies of scale, and the barriers to entry are becoming higher as technological completeness increases. Fierce competition among panel manufacturers in the past has resulted in improved supply capacity and high growth rates throughout the display industry, coupled with increased demand. However, recently, due to the high maturity of the market and limited demand, it has entered a low-growth phase, and replacement demand has not increased significantly due to its sensitivity to economic fluctuations. Unless new demand is created through innovative products, it is difficult to expect continued growth of the market.

(D) Market share According to IHS, a market research company, we entered the top 60 global semiconductor companies in 2017 and ranked fifth in terms of display driver IC companies. However, competitiveness of new technologies is more important than the recent sales scale itself, as an important criterion for judging the competitive advantage of the company. We have successfully entered the OLED market through close cooperation with panel customers, and we continue to expand our business into new areas such as automobiles, batteries, and consumer electronics.

(E) Strength of the company Company not only provide the core components of Display System Semiconductor as a total solution, but also localize the products that have been highly dependent on imports, contributing to stable parts procurement and price competitiveness of domestic downstream companies. We are also actively supporting customer's market by providing customized premium products through continuous technology development. The win-win strategy based on trust with forward-looking companies plays a major role in our competitiveness.

As a result, we have secured technological responsiveness that enables us to respond swiftly and flexibly to market changes, from new product development to supply. Based on our unique design technology, we are continuing our efforts to diversify our customers by securing not only domestic but also overseas customers with high market potential.

(2) Silicon Works Inc. (USA), Silicon Works China Co., LTD(China)

(A) Characteristics of the Industry For characteristics of the industry of Silicon Works Inc., Silicon Works China Co., LTD please refer to Section (A) of (1) System IC in the Business Overview above.

(B) Size and growth of the market For characteristics of the industry of Silicon Works Inc., Silicon Works China Co., LTD please refer to the Section (B) of (1) System IC in the Business Overview above.

(C) Features and competitive elements of Economic fluctuation For characteristics of the industry of Silicon Works Inc., Silicon Works China Co., LTD please refer to the Section (C) of (1) System IC in the Business Overview above.

(D) Market Share For characteristics of the industry of Silicon Works Inc., Silicon Works China Co., LTD please refer to the Section (D) of (1) System IC in the Business Overview above.

(E) Strengths of the Company For characteristics of the industry of Silicon Works Inc., Silicon Works China Co., LTD please refer to the Section (E) of (1) System IC in the Business Overview above.

(3) Summary of financial status for each business activity

(A) Financial status for each business activity

[Basic date: Sep. 30, 2018] (Unit: Thousand KRW) Quarter of 20th Category Location Title 19th year 18th year year Assets 537,259,773 544,294,125 485,997,742 Semiconductor Daejeon Liabilities 123,095,831 132,068,704 105,319,662 Capital 414,163,941 412,225,422 380,678,080 Note) The financial status of Silicon Works Inc. (USA) and Silicon Works China Co., LTD(China) is included in the semiconductor category.

(B) Profit or loss for each business activity

[Basic date: Sep. 30, 2018] (Unit: Thousand KRW) Category Location Title Q3 of 20th year 19th year 18th year Sales 555,804,285 692,761,282 610,043,215 Semiconductor Daejeon Operating income 34,938,434 45,521,509 50,617,456 Current net income 32,589,186 47,064,354 50,680,306 Note) The financial status of Silicon Works Inc. (USA) and Silicon Works China Co., LTD(China) is included in the semiconductor category.

2. Major Products [Basic date: Sep. 30, 2018] (Unit: Thousand KRW) Q3 of 20th year 19th year 18th year Major Business Sector Product Product Detail Proportion Proportion Proportion Product Sales Sales Sales (%) (%) (%) Driver- 467,879,378 84.18 585,037,467 84.45 468,721,134 76.84 IC Panel driver IC Semiconductor System IC Non and others Driver- 87,924,907 15.82 107,723,815 15.55 141,316,081 23.16 IC Total 555,804,285 100.00 692,761,282 100.00 610,043,215 100.00

3. Major Raw Materials

[Basic date: Sep. 30, 2018] (Unit: Thousand KRW) Raw material Purchase Major supplier Remarks Wafer, etc. 289,184,527 SK Hynix Co., Ltd., etc. - Processing Cost, etc. 163,862,456 LB Semicon Co., Ltd., etc. - Note) LG Innotech Co., Ltd. and Lusem Co., Ltd. among our company’s suppliers belong to LG affiliates.

As our company is a fabless company placing orders and commissioning semiconductor manufacturing processes and the cost for the purchase of wafers is a very important element for the management performance and it is considered to be confidential. Hence, the company will not provide the unit cost and trends of wafer prices.

4. Manufacturing and Facilities

A. Manufacturing Capacity and Facilities Our company is a fabless company and has no manufacturing facilities. All the necessary manufacturing is commissioned to professional semiconductor manufacturers (foundries). Accordingly, it has no separate manufacturing facilities and the details are not provided.

B. Commissioned Manufacturing Fabless companies depend on commissioned processing from wafer manufacturing to package and testing. As wafer manufacturing foundries, package and testing businesses involve large-scaled investment due the characteristics of semiconductor industry, the businesses are divided accordingly.

5. Sales

[Basic date: Sep. 30, 2018] A. Sales Performance (Unit: Thousand KRW) Division Sales type Division Q3 of 20th year 19th year 18th year Products and Semiconductor System IC Domestic 22,394,339 30,104,137 30,516,694 others Exports 533,409,946 662,657,145 579,526,521 Domestic 22,394,339 30,104,137 34,873,037 Total Exports 533,409,946 662,657,145 500,963,969 Total 555,804,285 692,761,282 535,837,006

B. Sales Channels, Methods, Strategies, and Major Customers

(1) Sales and mass production support organizations

Organization chart [Businesses by sales organizations] Division Operational span - Market and customer analysis, strengthening benchmarking Sales Division - Seize opportunity to enter the market by sector / secure orders - Establishment and implementation of mid- and long-term purchase strategy for cost reduction and preemptive response to changes in internal / external SCM Division environment - Development product supply chain management - Timely / proper production supply - Secure product reliability Product Technology Division - Securing advanced quality and technology - Establishment of quality management system Quality Management - Establishment of quality assurance and management system for customers - Providing customers with the best shipping quality and high reliability products - Achieve customer satisfaction with continuous improvement and prompt customer service

(2) Sales channel Most of our sales are direct sales,. The company develops and sells products based on consistent discussions on the product specifications and characteristics with electronic companies which are most of the buyers.

Product Partner Sales route Order → Silicon Works (OEM → release → delivery) System IC LG Display, etc. Settlement: Payment within 30 ~ 120 days

(3) Sales strategy The company is expected to maintain its competitiveness in the market through the development of new products and technologies as well as differentiated customer support to strengthen the customer base and to expand subjects of new customers. Also, it will keep its market status by providing the optimum solutions requested by customers as tailor-made products.

6. Order Situation

Driver chips for displays manufactured by the company vary according to the size and characteristics of display panels. Based on the characteristics of purchase policies of major panel providers, order in a cycle of about 10 weeks is placed as the necessary amount is decided, followed by additional requests at any given time thereafter.

7. Market Risk and Risk Management

The consolidated entity is exposed to credit risk, liquidity risk and market risk with regard to financial products. Information on the aforesaid risk to which the consolidated entity is exposed is disclosed in the notes with the goal, policy, risk evaluation and management procedure, and capital management of the consolidated entity. Additional quantitative information is also disclosed throughout these financial statements.

1) Credit Risk Management Credit risk refers to risk where the consolidated entity may have financial losses as customers or transactional counterpart fails to fulfill contractual obligations for financial products, and it may mainly break out from account receivables for customers and investment assets. Our company is trading with customers with the certain level or higher of credit rating in an effort to reduce financial losses due to default, while reviewing the credit ratings of customers with exposure to credit risk periodically. Credit risk may break out even from transactions with financial institutions as well, and our company is in principle trading only with the banks of higher credit ranking in an effort to reduce this risk. Our company ensures that new transactions are carried out for deposits with the higher likelihood of credit risk such as trust deposits only after approval by the executive in charge. The exposure level of the consolidated entity to credit risk in the current quarter is maximum 4,245billion KRW, including cash, cashable assets, trade receivables and other receivables.

2) Liquidity Risk Management Liquidity risk refers to risk where the consolidated entity has difficulties in fulfilling obligations for financial liabilities (account payables and other payables) which will be cleared with the delivery of cash or other financial assets. The liquidity management method of the consolidated entity is to maintain liquidity good enough to pay back any debt on the maturity without any excessive loss in an abnormal way or any risk of damage to the consolidated entity’s reputation even under any financially difficult circumstance. The consolidated entity manages liquidity risk by maintaining cash, cashable assets and short-term financial products sufficiently. Among the total of KRW188.5 billion of financial liabilities held by the consolidated entity during the current quarter year, KRW188.5 billion is due within one year due to the contract, and a stable liquidity ratio of 269.5% has been kept.

3) Market risk Market risk refers to risk with variations on the fair values of financial products or future cash flows due to variations in the market prices.

(A) Exchange rate risk management

The consolidated entity is exposed to the exchange rate risk related to the sales profits and costs indicated in currencies other than the Korean Won which is the functioning currency. The major presentation currency for these transactions is the USD.

The book values of the cash assets and liabilities presented in foreign currency other than the functioning currency at the end of the current quarter and the previous year as follows.

(Unit: million KRW) Current quarter End of previous year Division USD JPY EUR CNY USD JPY CNY Assets in foreign - 12,674 456 109 15,742 1,246 153 currency Liabilities in foreign 16 28,698 70 271 11,745 - 255 currency

The influence of changes in foreign exchange rate for the Korean Won on the profits (before corporate tax) at the end of the current quarter and the previous year is shown below.

(Unit: Thousand KRW) Current quarter End of previous year Division (If 5% changed) (If 5% changed) USD ± 801,169 ± 199,860 JPY ± 19,281 ± 62,307 EUR ± 780 CNY ± 8,123 ± 5,115

(B) Interest Rate Risk Management

The consolidated entity is not recognizing the fixed interest rate financial products as the financial products for which the profits or losses should be recognized in the current fiscal year. Accordingly, the revenues and operating cash flows of the consolidated entity are actually independent of variations in the market interest rate.

4) Capital Risk Management The capital management of the consolidated entity is for maintaining the existence of the company as a going concern, minimizing the capital cost for funding, maximizing the profits of the shareholders, and maintaining an appropriate equity structure. The consolidated entity is managing its capital based on the liability ratio. The liability ratio is calculated by dividing the total liability with the capital in the financial statement. In the current quarter, the consolidated entity maintains a proper debt ratio at 48.2%.

For more details on the market risks, please refer to the notes to this disclosure document. “Ⅲ. Financial Matters”: 3. Notes to Consolidated Financial Statements - 7 Financial Risk Management.

8. Transaction of Derivatives As of the reporting day, there is no relevant information.

9. Major Contracts in Management As of the reporting day, there is no relevant information.

10. Research and Development

A. Research and Development Organization

Organization Chart

B. Research and Development Cost (Unit: Thousand KRW) Division Q3of 20th year 19th year 18th year

Raw material cost - - -

Asset Labor cost - - - processing Manufacturing cost - - -

Sub-total - - -

Manufacturing cost - - - Selling and Cost processing administrative 65,334,359 79,214,211 52,630,577 expense Total 65,334,359 79,214,211 52,630,577 (Ratio to sales) (11.75%) (11.43%) (8.63%)

C. Performances in research and development

The company is specializing in display components and has secured a variety of product technologies over the entire area of displays from components for IT products such as laptop computers, monitors and tablet PC’s to other components for TV and mobile devices during the recent years. Our company’s main products include D-IC, T-Con and PMIC while increasing sales through expanding product lineup to LED DIC, Touch IC, Mobile DDI, TDDI, etc. In addition to these products, the company is carrying out the mass production or development of some analog semiconductors for electric fittings and OA machines such as power IC, motor driver, power switch and sensor IC and others through expanding technologies to various application areas other than displays.

11. Other Matters Necessary for Investment Decision Making

A. Intellectual Property in Possession

Patent Registration and Application Status

Status of patent registration by product

III. Financial Matters

1. Summarized Financial Information

A. Summarized consolidated financial information The company's consolidated financial statements for the quarter year of the 20th year are prepared in accordance with Korea - International Financial Reporting Standards (K-IFRS) and reviewed by external auditors. The Company's 19th, 18th consolidated financial statements have been prepared in accordance with K-IFRS. (Unit: Thousand KRW) Quarter of 20th year 19th year 18th Year Division (Jun. 30, 2018) (Dec. 31, 2017) (Dec. 31, 2016) [Current assets] 540,257,016 497,749,254 440,498,707  Quick assets 437,871,030 436,737,980 382,213,413  Inventory assets 102,385,986 61,011,274 58,285,294 [Non-current assets] 99,716,251 46,544,871 45,499,036  Transferrable financial assets 2,019,905 3,358,369 3,313,529  Tangible asset 23,281,620 15,208,687 15,266,918  Intangible asset 57,233,340 17,715,664 17,136,502  Other non-current assets 12,767,891 10,262,151 9,782,087 Total assets 639,973,268 544,294,125 485,997,743 [Current liabilities] 200,461,445 129,360,440 100,300,512 [Non-current liabilities] 7,728,113 2,708,263 5,019,150 Total liabilities 208,189,557 132,068,704 105,319,662 [Paid-in-capital] 8,132,150 8,132,150 8,132,150 [Capital surplus] 76,343,170 76,343,170 76,343,170 [Capital adjustment] (128,911,842) 1,645,781 1,470,097 [Retained earnings] 347,437,302 326,104,320 294,732,662 [Non-controlling equity] 0 0 0 Total equities 431,783,710 412,225,422 380,678,080 (Jan. 1~Sep.30, 2018) (Jan. 1~Dec. 31, 2017) (Jan. 1~Dec. 31, 2016) Sales 555,804,285 692,761,282 610,043,215 Operating profit 34,938,434 45,521,509 50,617,456 Current net profit 32,589,186 47,064,354 50,680,306 Controlling company’s equity 32,589,186 47,064,354 50,680,306 Non-controlling company’s 0 0 0 equity Net earnings per share (KRW) 2,004 2,894 3,116 Net diluted earnings per share 2,004 2,894 3,116 (KRW) Number of company included in 2 2 1 the consolidation

B. Summarized financial information The company's financial statements for the quarter year of the 20th year are prepared in accordance with Korea - International Financial Reporting Standards (K-IFRS) and reviewed by external auditors. The Company's 19th, 18th consolidated financial statements have been prepared in accordance with K-IFRS. (Unit: Thousand KRW) Quarter of 20th year 19th year 18th year Title (Jun. 30, 2018) (Dec. 31, 2017) (Dec. 31, 2016) [Current assets] 538,987,628 496,552,390 440,305,213  Quick assets 436,601,641 435,541,116 382,019,919  Inventory assets 102,385,986 61,011,274 58,285,294 [Non-current assets] 100,666,401 47,293,891 45,630,651  Transferrable financial assets 2,019,905 3,358,369 3,313,529  Tangible asset 21,991,254 15,188,032 15,261,211  Intangible asset 57,233,340 17,715,664 17,136,502  Other non-current assets 15,011,902 11,031,826 9,919,409 Total assets 639,654,029 543,846,281 485,935,865 [Current liabilities] 200,811,668 129,626,588 100,401,191 [Non-current liabilities] 7,728,113 2,708,263 5,019,151 Total liabilities 208,539,781 132,334,851 105,420,342 [Paid-in-capital] 8,132,150 8,132,150 8,132,150 [Capital surplus] 76,343,170 76,343,170 76,343,170 [Capital adjustment] -1,807,731 1,705,780 1,474,710 [Retained earnings] 346,640,735 325,330,329 294,565,492 Total equities 431,114,248 411,511,429 380,515,523 Evaluation method for investment Cost method Cost method Cost method securities of dependent joint company (Jan. 1~Sep. 30, (Jan. 1~Mar. 31, (Jan. 1~Mar. 31, 2017)

2018) 2017) Sales 555,804,068 692,756,756 452,926,688 Operating profit (loss) 34,925,352 44,713,714 32,890,231 Current net profit (loss) 32,566,611 46,457,534 34,525,558 Net earnings (loss) per share (KRW) 2,002 2,856 2,123 Net diluted earnings (loss) per share 2,002 2,856 2,123 (KRW)

2. Consolidated Financial Statements

Consolidated statement of financial position End of quarter of the 20th year: Sep. 30, 2018 End of quarter of the 19th year: Dec. 31, 2017 (Unit: KRW)

th End of Quarter of End of 19 year 20th year Assets Current assets 540,257,016,276 497,749,253,911 Cash and cash equivalent 13,210,594,352 74,727,328,394 Short-term financial instruments 185,000,000,000 200,000,000,000 Trade receivables 215,223,641,891 139,950,086,915 Other current receivables 2,426,647,543 1,613,047,474 Other current assets 22,010,146,007 12,477,004,782 Current tax assets 7,970,512,714 Inventory assets 102,385,986,483 61,011,273,632 Non-current assets 99,716,251,401 46,544,871,417 Non-current available for sale financial assets 2,019,905,416 3,358,368,987 Other non-current receivables 7,086,710,839 5,119,490,368 Investments in affiliated companies 4,413,493,239 Tangible assets 23,281,620,340 15,208,686,675 Intangible assets 57,233,340,479 17,715,663,840 Other non-current assets 1,457,743,881 1,393,732,647 Deferred corporate tax assets 4,223,437,207 3,748,928,900 Total assets 639,973,267,677 544,294,125,328 Liabilities Current liabilities 200,461,444,700 129,360,440,474 Trade payables 162,845,943,286 97,214,262,012 Other payables 25,615,581,554 23,223,057,470 Other current liabilities 7,142,506,491 4,755,476,030 Current tax liabilities 4,857,413,369 4,167,644,962 Non-current liabilities 7,728,112,786 2,708,263,242 Other non-current payables 15,000,000 15,000,000 Defined benefit liability 6,490,594,637 1,983,353,031 Other non-current liabilities 1,222,518,149 709,910,211 Total liabilities 208,189,557,486 132,068,703,716 Capital Proportion reverted to owners of parent 431,783,710,191 412,225,421,612 company Capital 8,132,150,000 8,132,150,000 Capital surplus 76,343,170,500 76,343,170,500 Other capital accounts -128,911,842 1,645,780,697 Retained earnings 347,437,301,533 326,104,320,415 Non-controlling shares Total equities 431,783,710,191 412,225,421,612 Total equities and liabilities 639,973,267,677 544,294,125,328

Consolidated Comprehensive Profit and Loss Statement Quarter of 20th year: from Jan. 01, 2018 to Sep. 30, 2018 Quarter of 19th year: from Jan. 01, 2018 to Sep. 30, 2017 (Unit: KRW) Q3 of 20th year Q3 of 19th year

3 Months Accumulate 3 Months Accumulate

Revenue 213,925,475,317 555,804,285,392 180,536,269,137 493,067,529,347

Cost of goods sold 157,796,489,111 416,979,239,670 141,670,648,912 394,367,779,099

Gross profit on sales 56,128,986,206 138,825,045,722 38,865,620,225 98,699,750,248

Selling and administrative 34,876,272,216 103,886,612,095 23,543,889,015 71,431,205,219 expenses

Operating profit (loss) 21,252,713,990 34,938,433,627 15,321,731,210 27,268,545,029

Financial income 993,475,493 3,216,389,270 924,302,017 2,711,954,049

Financial expense 10,237,915 668,084,019 2,681,724

Other non-operating income 1,112,425,066 2,096,242,130 279,581,069 1,442,788,460

Other non-operating 680,854,035 1,578,626,775 310,991,025 2,595,396,258 expenses

Equity method gains / losses 2,662,451 3,493,239

Net profit (loss) before 22,670,185,050 38,007,847,472 16,214,623,271 28,825,209,556 corporate income tax expense

Corporate income tax 4,921,186,744 5,418,661,255 3,429,874,343 5,780,417,522 expense

Current quarter net profit 17,748,998,306 32,589,186,217 12,784,748,928 23,044,792,034 (loss)

Attribution of current quarter net profit (loss)

Current quarter net profit 17,748,998,306 32,589,186,217 12,784,748,928 23,044,792,034 (loss) attributable to owners of ruling company Current quarter net profit (loss) attributable to non- controlling share

Earnings per share Q3 of 20th year Q3 of 19th year

3 Months Accumulate 3 Months Accumulate

Basic earnings (loss) per share 1,091 2,004 786 1,417 (Unit: KRW)

Diluted earnings (loss) per 1,091 2,004 786 1,417 share (Unit: KRW)

Consolidated Comprehensive Profit and Loss Statement Quarter of 20th year: from Jan. 01, 2018 to Sep. 30, 2018 Quarter of 19th year: from Jan. 01, 2017 to Jun. 30, 2017 (Unit: KRW)

Q3 of 20th year Q3 of 19th year

3 Months Accumulate 3 Months Accumulate

Current quarter net profit (loss) 17,748,998,306 32,589,186,217 12,784,748,928 23,044,792,034

Other comprehensive profit or loss -129,229,567 -68,912,847 -45,473,919 251,263,495

Items that are reclassified to profit or loss (After-tax other comprehensive income)

Profit or loss on transferable financial assets -2,384,869 -2,384,869 (other comprehensive profit or loss before tax) Corporate tax effect 577,138 577,138

Corporate tax related to items that can be

reclassified to profit or loss Gain (loss) on available-for-sale financial -87,877,704 312,502,180 assets (pre-tax Other comprehensive income)

Profit (loss) on hedge of net investment in -127,421,836 -67,105,116 21,137,381 14,386,843 foreign operations (other comprehensive profit or loss before tax) Corporate tax effect -21,266,404 75,625,528

Current quarter total comprehensive profit or 17,619,768,739 32,520,273,370 12,739,275,009 23,296,055,529 loss Attribution of current quarter total comprehensive profit or loss

Total comprehensive income, equity 17,619,768,739 32,520,273,370 12,739,275,009 23,296,055,529 attributable to the owners of the parent Total comprehensive income, non-controlling interest

Consolidated Statement for Changes in Capital Quarter of 20th year: from Jan. 01, 2018 to Sep. 30, 2018 Quarter of 19th year: from Jan. 01, 2018 to Sep. 30, 2018 (Unit: KRW)

Capital

Capital attributable to owners of the parent company

Total equity attributable to Non-controlling Consolidated Total capital Capital Capital surplus Other capital shareholders of the parent stake retained earnings company 8,132,150,00 2017.01.01 (capital at the beginning) 76,343,170,500 1,470,096,980 294,732,662,342 380,678,079,822 380,678,079,822 0

Application of K-IFRS 1109 for the first time (2018.01.01)

Application of K-IFRS 1115 for the first time (2018.01.01)

2018.1.1 (beginning) (amount rewritten)

Current quartery net profit 23,044,792,034 23,044,792,034 23,044,792,034

Total comprehensive profit or Evaluated profit or loss of transferrable 236,876,652 236,876,652 236,876,652 loss financial assets

Translated profit / loss of foreign operations 14,386,843 14,386,843 14,386,843 -14,637,870,000 -14,637,870,000

Transactions with shareholders Annual dividend directly recognized in capital

8,132,150,00 76,343,170,500 1,721,360,475 303,139,584,376 389,336,265,351 389,336,265,351 2017.09.30 (capital at the end) 0 8,132,150,00 76,343,170,500 -59,998,995 326,233,125,316 410,648,446,821 410,648,446,821 2018.01.01 (capital at the beginning) 0

Application of K-IFRS 1109 for the first time (2018.01.01) -1,705,779,692 1,705,779,692

Application of K-IFRS 1115 for the first time (2018.01.01) -1,576,974,791 -1,576,974,791 -1,576,974,791

8,132,150,00 76,343,170,500 -59,998,995 326,233,125,316 410,648,446,821 410,648,446,821 2018.1.1 (beginning) (amount rewritten) 0

Current-quarter net profit 32,589,186,217 32,589,186,217 32,589,186,217

Total comprehensive profit or Evaluated profit or loss of transferrable -1,807,731 -1,807,731 -1,807,731 loss financial assets

Translated profit / loss of foreign operations -67,105,116 -67,105,116 -67,105,116

-11,385,010,000 -11,385,010,000 -11,385,010,000

Transactions with shareholders Annual dividend directly recognized in capital

8,132,150,00 76,343,170,500 128,911,842 347,437,301,533 431,783,710,191 431,783,710,191 2018.09.30 (capital at the end) 0

Consolidated Cash Flow Statement Quarter of 20th year: from Jan. 01, 2018 to Sep. 30, 2018 Quarter of 19th year: from Jan. 01, 2017 to Sep. 30, 2017 (Unit: KRW)

Q3 of 20th year Q3 of 19th year Cash flow from sales operations 926,856,266 17,861,659,432 Cash generated from sales -4,190,647,692 26,802,176,055 Current quarter net profit (loss) 32,589,186,217 23,044,792,034 Addition or deduction for Current quarter net profit 11,970,212,451 10,493,563,039 adjustment Change to equities/liabilities on sales operations -48,750,046,360 -6,736,179,018 Gain on interest 2,317,731,431 2,654,789,992 Payment of corporate tax 2,799,772,527 -11,595,306,615 Cash flow from investments -51,032,237,125 -3,967,532,568 Disposal of short-term financial instruments 15,000,000,000 Increase in other trade receivables -3,652,119,126 -1,048,807,455 Decrease in other trade receivables 1,334,167,747 212,743,513 Acquisition of tangible assets -10,653,163,426 -1,889,143,577 Disposition of tangible assets 950,581,440 -1,362,615,590 Acquisition of intangible assets -3,977,586,555 300,000,000 Disposition of intangible assets 231,545,455 Current profit or loss - disposition of financial 600,000,000 assets measured at fair value Other comprehensive income - Disposal of fair 97,615,131 value measurement financial assets Disposition of transferable financial assets 260,000,000 Increase in advances -423,281,180 -439,709,459 Acquisition of investment securities of related -4,410,000,000 companies Cash outflow due to business transfer -46,129,996,611 Cash flow from financial activities -11,385,010,000 -14,637,870,000 Dividend payments -11,385,010,000 -14,637,870,000 Net Increase (Decrease) of cash and cash equivalents -61,490,390,859 -743,743,136 before taking into account changes in exchange rate Cash and cash equivalents at the beginning 74,727,328,394 262,888,712,296 Effect of foreign exchange rate movements on cash -26,343,183 11,092,585 and cash equivalents Cash and cash equivalents at the end 13,210,594,352 262,156,061,745

3. Notes to Consolidated Financial Statements

1. Company overview (1) Overview of the controlling company Silicon Works Co., Ltd. (hereinafter referred to as the “controlling company”) was established on November 11, 1999 for the purpose of manufacturing and designing FPD (flat panel display) semiconductor IC. And the company is located at 222 Techno 2-ro, Daedeok-gu, Daejeon, Korea. The controlling company was certified by the Korea Technology Promotion Agency as a corporate subsidiary research facility in accordance with Article 16 of the Technology Development Promotion Act and Clause 1 of Article 15 of the Enforcement Marree of the same act on October 19, 2001. Also, the controlling company has been designated as an “advanced technology company” as per Clause 1 of Article 9 of the Special Law on the Cultivation of the Special Research and Development District of Daedeok on October 23, 2011.

The controlling company was then listed on KOSDAQ market as of June 8, 2010. After several increases in capital with or without considerations, the amount of paid-in capital of the company at the end of the current quarter is KRW 8,132,150,000 (issued shares: 16,264,300 and authorized shares 50,000,000).

The status of the shareholders of the controlling company at the end of the current quarter is as follows: (Unit: shares) Shareholder Number of shares owned Ownership stake Remarks LG Corp. 5,380,524 33.08% Largest shareholder Templeton Asset 878,254 5.40% - Management, Ltd. BlackRock Fund Advisors 833,753 5.13% - Others 9,171,769 56.39% - Total 16,264,300 100.00% - The Current quarter consolidated financial statements for the reporting period ending on Sep 30, 2018 are comprised of shares in the controlling company and its subsidiaries (hereinafter the "consolidated entity").

(2) Overview of subsidiaries to be consolidated at the end of the end of the current quarter Company Address Major business Month of Controlling equity ratio at Controlling equity ratio at name activity account the end of the end of the end of the previous closing current quarter year Semiconductor Silicon Works USA manufacturing Dec 100.00% 100.00% Inc. and designing Silicon Works Semiconductor China Co., China manufacturing Dec 100.00% 100.00% Ltd.(*) and designing (*)Silicon Works China Co.,Ltd was newly established for the purpose of expanding the Chinese market in the current year.

(3) Summarized financial information of subsidiaries The summarized financial information of the subsidiary at the end of the current quarter and previous year is as follows; (Unit: KRW) Silicon Works Inc. Silicon Works China Co., Division Ltd. Current quarter Previous year Current quarter Previous year Assets 263,309,228 323,446,339 2,775,085,924 1,278,075,342 Liabilities 13,795,867 4,178,074 41,994,198 71,575,336 Capital 249,513,361 319,268,265 2,733,091,726 1,206,500,006 Sales 1,1,96,739,268 1,316,368,098 1,895,565,965 1,1184,858,491 Current net profit (loss) (80,452,728) 56,372,555 99,534,660 550,447,921 Total comprehensive (69,754,904) 19,389,262 21,731,720 532,042,006 profit (loss)

2. Standards for the preparation of financial statements

(1) Application of accounting principle These Current quarter consolidated financial statements are the summarized interim consolidated financial statements, which are prepared in accordance with Korea - International Financial Reporting Standards (K-IFRS). These financial statements have been prepared in accordance with K-IFRS 1034 'Interim Financial Reporting' and contain less information than required by the consolidated financial statements. The selective disclosures include a description of significant transactions or events that are necessary to understand the Group's financial position and changes in its operating results since the end of the previous reporting period.

K-IFRS 1109 and K-1115 have been applied for the first time in the financial statements of the Group and significant accounting policy changes are explained in note 3.

(2) Estimation and judgment ① Management's judgment, uncertainty of assumptions and assumptions In preparing the interim financial statements, K-IFRS requires management to make judgments based on management's best judgment as to the application of accounting policies or the effects of accounting for assets, liabilities, Estimates and the use of households. Actual results may differ from these estimates if estimates and assumptions that are based on management's best judgment at the end of the interim reporting period differ from the actual environment.

Management's assessment of the application of accounting policies and estimates of the amounts used in the quarterly consolidated financial statements is based on new and significant judgments and uncertainties related to the adoption of Korean IFRS 1109 and 1115, Except for the major sources, are the same as those applied to the consolidated financial statements for the year ended December 31, 2017.

② Fair value measurement As the accounting policy and disclosure of the consolidated entity require the measurement of fair value for many financial and non-financial assets and liabilities, the consolidated entity established the policies and procedures for the evaluation of fair value. The policies and procedures include the operations of the evaluation department responsible for the review on the measurement of every significance fair value including fair value classified into Level 3 in the hierarchy system of fair value, and the results are directly reported to the financial executive.

The evaluation department is regularly reviewing significant input variables and evaluation adjustment which cannot be observed. If any third party information such as the broker price or evaluation organization is used in measuring fair value, the evaluation based on information acquired from the third party by the evaluation department includes the classification per level in the hierarchy system of fair value and we are making a Decision on whether or not to conclude if requirement in the applicable standard are met.

If the fair value of an asset or liability is measured, the consolidated entity uses the input variable which can be observed from the market as much as possible. The fair values are classified within the hierarchy system of fair values based on input variables used in the valuation techniques as below; - Level 1: Publicly announced price not adjusted in the active market accessible to the same asset or liability on the measured day - Level 2: Input variable which can be observed directly or indirectly to the asset or liability other than publicly announced price - Level 3: Input variable which cannot be observed to the asset or liability

If many input variables used for measuring the fair value of an asset or liability are classified into different levels within the hierarchy system of fair values, the consolidated entity classifies the entire fair value measurements into the same level with the lowest level of an input variable in the hierarchy system of significant fair values over the entire measurements while recognizing the transfer between levels in the hierarchy system of fair values at the end of the reporting period when the variation occurred.

3. Significant Accounting Policies The Group has adopted the same accounting policies that were used to prepare the annual financial statements for the year ended December 31, 2017, except as explained below. Changes in accounting policy described below will also be reflected in the annual financial statements for the year ended December 31, 2018.

(1) Reclassification of accounts in the financial statements The consolidated entity reclassified certain items out of cost of goods sold, selling and administrative expenses in the consolidated income statement to present financial information more appropriately for the current quarter-year, and changed the classification of the compared consolidated income statement for the previous quarter-year.

(2) Changes in accounting policies The Group initially applied K-IFRS 1109, 'Financial Instruments' and No. 1115 'Revenue from customers' contracts, effective from January 1, 2018. Other standards effective subsequently since January 1, 2018 have no significant effect on the entity's consolidated financial statements. The consolidated entity adopted the Korea Financial Accounting Standards the first time as of January 1, 2018 and did not re-prepare the consolidated financial statements for the previous years in accordance with the transition rules.

The following are the major impacts of the first-time adoption of the Standard.

① K-IFRS No. 1109 Financial Instruments K-IFRS 1109 provides for the recognition and measurement of certain financial assets, financial liabilities and certain contracts that can be bought or sold. This Statement replaces K-IFRS 1039 Financial Instruments: Recognition and Measurement.

Changes in the beginning balances of equity as a result of application of K-IFRS No. 1109 are as follows.

(Unit: KRW)

Classification Effect of application (Jan 1, 2018)

Retained earnings

Profit or loss - Fair value measurement Financial assets 1,705,779,692 Recognition of valuation gains under K-IFRS No. 1109

Effect of application (Jan 1, 2018) 1,705,779,692

The nature and effect of major changes in accounting policies in accordance with K-IFRS No. 1109 are as follows.

(A) Classification of financial assets and financial liabilities K-IFRS 1109 retained most of the existing requirements of K-IFRS 1039 for the classification and measurement of financial liabilities. However, we have eliminated the existing classification of financial assets which are distinguished as held-to-maturity financial assets, loans, receivables and transferable financial assets.

The adoption of K-IFRS No. 1109 has no significant effect on the Group's accounting policies related to financial liabilities. The effect of adoption of K-IFRS 1109 on classification and measurement of financial assets is as follows.

In accordance with K-IFRS 1109, financial assets are measured at amortized cost when initially applied. Financial assets, other comprehensive income - fair value measurement debt instruments, other comprehensive income - fair value measurement equity instruments, profit or loss - fair value measurement category it is classified. Classification of financial assets in accordance with K-IFRS No. 1109 is generally based on the nature of the contractual cash flows of the business models and financial assets in which the financial assets are managed. Derivatives embedded in contracts in which the host contract is a financial asset covered by the scope of this standard are not separated but classify financial assets based on the composite financial instruments as a whole.

Financial assets are measured at amortized cost unless they are both designated at fair value through profit or loss if both of the following conditions are met: - Hold financial assets under a business model that is intended to hold to receive contractual cash flows. - Under the terms of the contract, there is a cash flow consisting solely of interest payments on interest and principal balance on a particular day.

Debt instruments are measured at fair value when they meet both of the following conditions: profit or loss - if not designated as fair value measurement, other comprehensive income at fair value. - Retain financial assets under a business model that serves both through receipt of contractual cash flows and sale of financial assets. - Cash flows, consisting solely of interest payments on principal and principal balance on a particular day, occur in accordance with the terms conditions of the contract.

At the date of initial recognition of an equity instrument that is not a trading instrument, the Group may make an irrevocable choice to present subsequent changes in the fair value of that investment in other comprehensive income. This choice is made by financial instruments.

All of the financial instruments not measured at fair value are measured at fair value through profit or loss, including all derivatives, at fair value. If the entity designates a financial asset that meets the criteria for measurement at fair value as a component of fair value gain or fair value measurement, if the accounting mismatch is eliminated or significantly reduced, the asset can be designated as profit or loss - fair value measurement. However, such designation cannot be canceled.

The following accounting policies apply to subsequent measurement of financial assets.

Profit or loss - Fair value These assets are subsequently measured at fair value. Net gain or loss, measurement Financial assets: including interest and dividend income, is recognized in profit or loss. These assets are subsequently measured at amortized cost using the effective interest method. Amortization is reduced by loss of loss (see (b)). Measurement of amortization cost Interest income, foreign currency translation gains and losses are financial assets: recognized in profit or loss. The gain or loss on disposal is also recognized in profit or loss These assets are subsequently measured at fair value. Interest income, foreign currency translation gains and losses calculated using the effective Other comprehensive income - fair interest method are recognized in profit or loss. Other profit or loss is value measurement Debt recognized in other comprehensive income. The gain or loss accumulated instruments : in other comprehensive income or loss on disposal is reclassified to profit or loss. Other comprehensive income - fair These assets are subsequently measured at fair value. Dividends are value measurement equity recognized in profit or loss if the dividends do not clearly represent the instruments : number of investment costs. Other profit or loss is recognized in other comprehensive income and is never reclassified to profit or loss.

The effect on the carrying amount of a financial asset under the application of K-IFRS No. 1109 on January 1, 2018 relates only to the new impairment requirement as described below.

The following table and accompanying notes describe the new measurement categories of K-IFRS 1109 for each classification of the initial measurement categories in accordance with K-IFRS 1039 and January 1, 2018.

(Unit: KRW)

Classification Classification Carrying amount Carrying amount Classification Note according to K-IFRS according to K-IFRS according to K- according to K- 1039 1109 IFRS 1039 IFRS 1109

Financial assets

Other comprehensive Available-for-sale income - fair value Equity instruments (a) 600,000,000 600,000,000 financial assets measurement equity instruments

Other comprehensive Available-for-sale income - fair value Initial investment 2,758,368,987 2,758,368,987 financial assets measurement debt instruments

Measurement of Trade receivables (b) Loans and receivables amortization cost 139,950,086,915 139,950,086,915 Financial assets

Measurement of Other receivables (b) Loans and receivables amortization cost 6,732,537,842 6,732,537,842 Financial assets

Short-term Measurement of financial (b) Loans and receivables amortization cost 200,000,000,000 200,000,000,000 instruments Financial assets

Measurement of Cash and cash (b) Loans and receivables amortization cost 74,727,328,394 74,727,328,394 equivalents Financial assets

(a) Equity instruments are products that the Group invests for the purpose of holding long-term for strategic purposes. As permitted by K-IFRS 1109, the Group designates these investments as other comprehensive income- fair value measurement financial assets at the date of initial application.

(b) Trade receivables, other receivables, short-term financial instruments and cash and cash equivalents classified as loans and receivables in accordance with Korean IFRS 1039 are classified as amortized cost financial assets.

(B) Impairment of financial assets K-IFRS 1109 replaces the "Accrued Loss" model of K-IFRS 1039 with the "expected credit loss" model. The new impairment model is applied to financial instruments measured at amortized cost, contractual assets and other comprehensive income - for debt instruments measured at fair value, but not equity instruments. In accordance with K-IFRS 1109, credit losses will be recognized earlier than K-IFRS 1039.

Financial assets measured at amortized cost include trade and other receivables, short-term financial instruments and cash and cash equivalents

In accordance with K-IFRS 1109, allowance for losses is measured using two criteria: - 12 months expected credit losses: expected credit losses due to defaults on financial instruments that can occur within 12 months after the end of the reporting period - Total expected credit losses: Expected credit losses due to any default event that may occur during the expected life of the financial instrument

The Group measures the allowance for losses by the amount corresponding to the expected credit loss for the whole period, except for the following financial assets measured at the expected credit loss of 12 months. - Debt securities determined to have low credit risk at the end of the reporting period - Other debt securities and bank deposits that do not have a significant increase in credit risk (i.e., non-default risk arising over the expected life of the financial asset)

When determining whether the credit risk of a financial asset has significantly increased since the initial recognition and when estimating the expected credit loss, the Group considers information that can be used and reasonably supported, without undue cost or effort. This includes qualitative and quantitative information and analysis based on the Group's past experience and known credit ratings, including forward-looking information.

1) Measuring expected credit losses The expected credit loss is the probability weight of the credit loss. Credit loss is measured as the present value of all cash deficits (ie, the difference between all contractual cash flows that are expected to be paid under the contract and all contractual cash flows that are expected to be received). 2) Credit-impaired financial assets At the end of each reporting period, the Group assesses the carrying amounts of financial assets measured at amortized cost and other comprehensive income - whether the creditworthiness of the debt securities measured at fair value is impaired. If there is more than one event that adversely affects the estimated future cash flows of the financial asset, the financial asset is impaired.

3) Indication of allowance for credit loss on statement of financial position The allowance for losses on financial assets measured at amortized cost is deducted from the carrying amount of the asset. Other comprehensive income - for debt instruments measured at fair value, the provision for losses is recognized in other comprehensive income, instead of reducing the carrying amount of the asset.

4) Influence of new damage model As a result of applying the impairment provisions of K-IFRS No. 1109 as of January 1, 2018, there is no additional provision for losses as compared with the allowances under No. 1039. In addition, the effects on the Current quarter consolidated income statement, Current quarter consolidated comprehensive income statement and Current quarter consolidated cash flow statement, which ended on the same date of the consolidated entity’s Current quarter consolidated statement of financial position on June 30, 2018, are not important.

② K-IFRS No. 1115, "Revenue from contracts with customers" The Group has adopted K-IFRS 1115, 'Revenue from contracts with customers' as of January 1, 2018 as the initial application date.

K-IFRS 1115 is a comprehensive framework for determining when and how much revenue is recognized. The Standard is based on the current K-IFRS 1018 'Revenue', No. 1011 'Construction Contract', K-IFRS Interpretation No. 2031 'Revenue: Exchange Transaction of Advertising Services', No. 2113 'Customer Loyalty Program' 'Real estate construction contract', No. 2118 'Transfer of assets from customers'. The consolidated entity's service business sector provides product development services at the request of the customers, which generally takes more than three months, and the consolidated entity has recognized revenues proportionally according to the progress percentage estimated on the basis of service acceptance check reports when the Korea Financial Accounting Standards No. 1018 'Revenues’ before revision is applied. In accordance with the Korea Financial Accounting Standards No. 1115, revenues can be recognized by applying the progress percentage only if the company has the payment claim rights that can be enforced for the completed portion of performance in its obligation up to now when the company itself has no alternative use of the assets that have been made with the performance of its obligation by the company. As it is considered that the consolidated entity's service business sector cannot meet the applicable requirements, revenues are recognized by applying the delivery criteria.

The Group recognizes the cumulative effect of the initial application of the Standard as an adjustment to the beginning balance of retained earnings and applies the Standard only to contracts that are not completed on January 1, Accordingly, the effect of adopting K-IFRS No. 1115 reflected in retained earnings as of January 1, 2018 is as follows.

(Unit: KRW)

Classification Effect of application (Jan 1, 2018)

Retained earnings

Development Services Revenue recognized (3,953,203,200) at one point

Development service-related costs 2,376,228,409

Effect of application (Jan 1, 2018) (1,576,974,791)

The effects of applying the Korea Financial Accounting Standards No. 1115 to the Current quarter consolidated income statement and Current quarter consolidated comprehensive income statement, which ended on the same date of the Current quarter consolidated statement of financial position as of June 30, 2018, are as follows; The effects on the consolidated entity’s Current quarter consolidated cash flow statement, ending on the same date, are important.

The effects on the Current quarter consolidated statement of financial position as of the end of the current quarter are as follows.

(Unit: KRW)

Amount before Reflection Classification Disclosure amount Adjustment of No. 1115

Assets

Current assets 540,257,016,276 (3,304,364,489) 536,952,651,787

Inventory 102,385,986,483 (128,266,959) 102,257,719,524

Prepaid expenses 14,761,636,313 (3,176,097,530) 11,585,538,783

Non-current assets 99,716,251,401 - 99,716,251,401

Total assets 639,973,267,677 (3,304,364,489) 636,668,903,188

Capital

Retained earnings 347,437,301,533 (771,341,177) 346,665,960,356

Total capital 431,783,710,191 (771,341,177) 431,012,369,014

Liabilities

Current Liabilities 200,461,444,700 (2,533,023,312) 197,928,421,388

Advance payment 2,646,917,113 (2,361,013,406) 285,903,707

Provision 4,034,557,563 (172,009,906) 3,862,547,657

Non-current liabilities 7,728,112,786 - 7,728,112,786

Total Liabilities 208,189,557,486 (2,533,023,312) 205,656,534,174

Total capital and liabilities 639,973,267,677 (3,304,364,489) 636,668,903,188

The effects on the Current quarter consolidated income statement and Current quarter consolidated income statement during the current quarter are as follows.

(Unit: KRW)

Amount before Reflection Classification Disclosure amount Adjustment of No. 1115

Revenue 555,804,285,392 (1,420,179,888) 554,384,105,504 Cost of sales 416,979,239,670 928,136,080 417,907,375,750

Gross profit on sales 138,825,045,722 (2,348,315,968) 136,476,729,754

Operating income 34,938,433,627 (2,348,315,968) 32,590,117,659

Net income before income 38,007,847,472 (2,348,315,968) 35,659,531,504 taxes

Income tax revenue 5,418,661,255 - 5,418,661,255

Current quarter net profit 32,589,186,217 (2,348,315,968) 30,240,870,249

Current quarter total 32,520,273,370 (2,348,315,968) 30,171,957,402 comprehensive profit

(3) Unapplied revision standard Amendments and interpretations that have not been effective as of January 1, 2018 are as follows. The Group did not apply the following amendments and interpretations at the time of preparation of consolidated financial statements.

① K-IFRS No. 1116 "Lease" In accordance with SKAS No. 1017 "Leases", K-IFRS Interpretation No. 2104, "Determining whether a lease is included in an arrangement", K-IFRS 2015 Operating lease: Incentive, Standards established in lieu of an 'appraisal of the substance of a transaction involving a lease in a legal form' The Group must determine whether the contract itself is a lease or whether the contract includes a lease at the time of the contractual arrangement.

The lessee and the lessor must account for each lease element of the lease as a lease, separate from the non-lease element ("non-lease element") in an agreement that includes a lease or lease. The lessee recognizes lease liabilities and licensees for all lease commitments except short-term and minority leases, where the liability is measured at the present value of the unpaid rent at the inception of the lease and the lease- It is measured by the lease payments, lease opening direct costs, dismantling, removal and restoration costs of the underlying assets.

This amendment is effective for annual periods beginning on or after January 1, 2019, but may be early adopted in conjunction with K-IFRS No. 1115. The Group expects that this revision will not have a material impact on the consolidated financial statements.

4. Sales The Group is comprised of a single research and development organization, has the same marketing strategy, and sees and reports the sales segment as a single segment.

As the consolidated entity operates mainly in Korea, most of the transactions are occurring in Korea. Therefore, no regional information is calculated.

The customer, which accounted for more than 10% of the consolidated entity’s sales in the current quarter, is one company, and it accounted for 90% of total sales. The customer, which accounted for more than 10% of the consolidated entity’s sales in the previous quarter, is one company, and it accounted for 91% of total sales.

5. Classification of Financial Products by Category (1) Financial products by category The carrying amounts of financial instruments by category at the end of the current quarter and previous periods are as follows.

(Unit: KRW) Division End of current quarter End of previous year

Financial assets Fair value measurement financial

assets

Profit or loss - Fair value 1,519,905,416 - measurement financial assets

Other comprehensive income 500,000,000 2,758,368,987 - Fair value measurement financial assets

Sub total 2,019,905,416 2,758,368,987

Financial assets not measured at fair values

Transferable financial assets - 600,000,000

Measurement of amortization cost Financial assets

Cash and cash equivalents 13,210,594,352 74,727,328,394

Short-term financial 185,000,000,000 200,000,000,000 instruments

Trade receivables 215,223,641,891 139,950,086,915

Other receivables 9,513,358,382 6,732,537,842

Sub total 422,947,594,625 421,409,953,151

Total 424,967,500,041 424,768,322,138

Financial liabilities Financial liabilities measured at

amortized cost

Trade liabilities 162,845,943,286 97,214,262,012

Other liabilities 25,630,581,554 23,238,057,470

Total 188,476,524,840 120,452,319,482

(2) Financial revenues and financial costs by category The details of financial income and financial expenses for the current and previous quarter are as follows;

(Unit: KRW) Interest income Other income (*)

Division Previous Current Previous Current quarter quarter quarter quarter

Measurement of amortization cost 3,172,071,768 2,710,468,979 (82,464,916) 625,628,623 Financial assets

Profit or loss - Fair value measurement - - (638,463,571) - Financial assets

Total 3,172,071,768 2,710,468,979 (720,928,487) 625,628,623 (*) Other profits and losses are comprised of foreign exchange conversion gains and losses, foreign exchange gains or losses, and current profit and loss - loss on the valuation of financial assets measured at fair values.

6. Financial risk management The consolidated entity is exposed to credit risks, liquidity risks and market risks as far as the financial products are concerned. These notes disclose the information on the risks to which the company is exposed, as well as the goals, policies, the procedure for evaluating and managing the risks, and management of capital set by the company. Further quantifiable information is disclosed throughout these financial statements.

(1) Credit risks Credit risks are the risks of suffering financial losses due to the default of contractual obligations by the customer or the other party in an agreement for a financial product. This kind of risk is mainly related to the account receivables and investment assets.

① Exposure to credit risks The book value of a financial asset means the maximum level of exposure to credit risks. The maximum level of exposure to credit risks at the end of current quarter and previous year for the consolidated entity is shown below; (Unit: KRW) Division End of current quarter End of previous year Cash and cashable assets (*) 13,210,594,352 74,727,328,394 Short-term financial instruments 185,000,000,000 200,000,000,000 Trade receivables 215,223,641,891 139,950,086,915 Other receivables 9,513,358,382 6,732,537,842 Available-for-sale financial assets - 2,758,368,987 (debt securities) Profit or loss - Fair value 1,519,905,416 - measurement Financial assets Total 424,467,500,041 424,168,322,138

② Impairment loss The consolidated entity has established allowances for the possible losses from its accounts receivable. This allowance is composed of specific impairment losses for each significant item as well as losses that have occurred within a group of similar financial assets but yet to be recognized. The allowance for the group of financial assets is set based on the past data on the recollection of similar financial assets.

Trade receivables are presented on the consolidated statement of financial position at net amounts where allowance for bad debt loan is deducted. The details of trade receivables and related allowance for bad debt loan on the basis of total amounts before the deduction of allowance for bad debt loan as of the end of the current quarter and end of the previous year are as follows

(Unit: KRW) Division End of current quarter End of previous year Account receivables 215,223,641,891 139,950,086,915 Allowance for bad debts: - - Net book value of account 215,223,641,891 139,950,086,915 receivables

The age of receivables and impaired amounts for each age at the end of current quarter and previous year are as follows: (Unit: KRW) End of current quarter End of previous year Division Balance Impaired amount Balance Impaired amount Within 3 months 214,785,053,777 - 138,307,918,335 - 3 ~ 6 months 438,043,714 - 1,624,452,580 - More than 6 months 544,400 - 17,716,000 - Total 215,223,641,891 - 139,950,086,915 -

(2) Liquidity risks The liquidity risks refer to the risks involved in difficulties on fulfilling the financial liabilities to be repaid by transfer of cash or other financial assets of the consolidated entity. The method of management of liquidity for the consolidated entity focuses on maintaining sufficient liquidity in order to repay the debts within the due date without damaging the reputation of the company or suffering excessive losses even during financial hardships.

The consolidated entity is managing the liquidity risks by maintaining cash, cashable assets, and short-term financial products to the satisfaction of any liquidity risk.

The contractual due dates for financial liabilities held by the consolidated entity at the end of current quarter and previous year are as follows: The amounts do not reflect the effects of offsetting agreements.

①End of current quarter (Unit: KRW) Cash flow per 1 year to less than Division Book value Less than a year contract 5 years Account payable 162,845,943,286 162,845,943,286 162,845,943,286 - Other payables 25,630,581,554 25,630,581,554 25,615,581,554 15,000,000 Total 188,476,524,840 188,476,524,840 188,461,524,840 15,000,000

②End of previous year (Unit: KRW) Cash flow per 1 year to less than 5 Division Book value Less than a year contract years Account payable 97,214,262,012 97,214,262,012 97,214,262,012 - Other payables 23,238,057,470 23,238,057,470 23,223,057,470 15,000,000 Total 120,452,319,482 120,452,319,482 120,437,319,482 15,000,000 (3) Market risks Market risks mean the risks of changes in future cash flows or fair values of financial products due to changes in market prices.

① Exchange rate risk The consolidated entity is exposed to the exchange rate risk related to the sales profits and costs indicated in KRW, which is the functioning currency. The major presentation currency for these transactions is USD.

A) Exposure to exchange rate risks The book values of the cash assets and liabilities presented in foreign currency other than the functioning currency at the end of current quarter and previous year are as follows:

(Unit: KRW) End of current quarter End of previous year Division USD JPY CNY USD JPY CNY Assets in foreign currency: Cash and 1,462,968,973 455,522,674 - 108,822,570 1,086,625,579 1,031,446,991 cashable assets Account 11,211,525,858 - - - 14,655,432,818 214,698,439 receivables Total 12,674,494,831 455,522,674 - 108,822,570 15,742,058,397 1,246,145,430 Liabilities in foreign currency: Trade 24,601,004,432 - - - 8,893,029,319 - payables Account 4,096,865,721 69,905,520 15,609,840 271,278,720 2,851,824,150 - payables Total 28,697,870,153 69,905,520 15,609,840 271,278,720 11,744,853,469 -

The foreign exchange rates applied to the conversion of monetary assets and liabilities in foreign currency are as follows;

(Unit: KRW) Division End of current quarter End of previous year USD 1,112.70 1,071.40 JPY 9.81 9.49 EUR 1,294.57 - CNY 161.78 163.65

B) Sensitivity analysis If the exchange rates of the key foreign currency that compose a large part of the financial assets and liabilities of the consolidated entity at the end of current quarter and previous year, the capital, incomes and losses of the consolidated entity would have changed. Such an analysis is based on the assumption of fluctuation the consolidated entity believes with rationalities at the end of current quarter. Also, it was assumed during the analysis of the sensitivity that other factors such as the interest rate do not change. The effect of the changes in foreign exchange rate for Korean won (before corporate tax) for the current quarter and the previous year on the losses and gains are as follows:

(Unit: KRW) End of current quarter End of previous year Division 5% increase 5% Decrease 5% increase 5% Decrease USD (801,168,766) 801,168,766 199,860,246 (199,860,246) JPY 19,280,858 (19,280,858) 62,307,272 (62,307,272) EUR (780,492) 780,492 - - CNY (8,122,808) 8,122,808 (5,114,662) 5,114,662

② Interest rate risk The assets of the consolidated entity with interests are fixed with the fixed interest rate, and the consolidated entity is not recognizing financial products with the fixed interest rate as the financial products for which the profits or losses should be recognized in the current fiscal year. Therefore, the profit and operating cash flows of the consolidated entity are actually independent from variations in the market interest rates.

(4) Fair values Book values and fair values of financial assets and financial liabilities including the hierarchy system of fair values are as follow; ① End of current quarter (Unit: KRW) Division Book value Level 1 Level 2 Level 3 Total Financial assets measured with fair value Profit or loss – Fair value 1,519,905,416 - - 1,519,905,416 1,519,905,416 measurement Other comprehensive income – 500,000,000 - - 500,000,000 500,000,000 Fair value measurement Total 2,019,905,416 - - 2,019,905,416 2,019,905,416 Financial assets not measured with fair value Cash and cashable assets (*1) 13,210,594,352 - - - - Short-term financial 185,000,000,000 instruments(*1) Trade receivables (*1) 215,223,641,891 - - - - Other receivables (*1) 9,513,358,382 - - - - Total 422,947,594,625 - - - - Financial liabilities not measured with fair value Account payables (*1) 162,845,943,286 - - - - Other liabilities (*1) 25,630,581,554 - - - - Total 188,476,524,840 - - - - (*) No fair value for financial assets and financial liabilities not measured with fair value is included because book value fall under the reasonable approximate values of fair values.

② End of previous year (Unit: KRW) Division Book value Level 1 Level 2 Level 3 Total Financial assets measured with fair value Transferrable financial assets 2,758,368,987 - - 2,758,368,987 2,758,368,987 Financial assets not measured with fair value Cash and cashable assets (*1) 74,727,328,394 - - - - Short-term financial 200,000,000,000 instruments(*1) Trade receivables (*1) 139,950,086,915 - - - - Other receivables (*1) 6,732,537,842 - - - - Transferrable financial assets 600,000,000 - - - - (*2) Total 422,009,953,151 - - - - Financial liabilities not measured with fair value Account payables (*1) 97,214,262,012 - - - - Other liabilities (*1) 23,238,057,470 - - - - Total 120,452,319,482 - - - - (*1) No fair value for financial assets and financial liabilities not measured with fair value is included because book values fall under the reasonable approximate values of fair values. (*2) Measurements were done with cost in accordance with Corporate Accounting Standard No. 1039 because measurements could not be done in a reliable manner on fair values under other methods because they fall under the equity products without any announced price in the active market for the same product (i.e. input variable of Level 1).

Changes of transferrable financial assets classified into measurements under Level 3 of fair value during the current quarter are as follows; (Unit: KRW) Division Beginning Evaluation (*) Disposition Ending Profit or loss –Fair 2,758,368,987 (638,463,571) (600,000,000) 1,519,905,416 value measurement Financial assets Other comprehensive 600,000,000 (2,384,869) (97,615,131) 500,000,000 income - fair value measurement financial assets (*) Fair value was evaluated using methods such as transaction prices between independent third parties, etc.

(5) Capital management The capital management of the consolidated entity aims at maintaining the existence of the company as a going concern, minimizing the cost for funding, maximizing the profits of the shareholders, and maintaining an appropriate equity structure. The consolidated entity manages its capital on the basis of the debt ratio, which is calculated by dividing the total liabilities by equity in the consolidated statement of financial position. The ratio of liabilities of the consolidated entity at the end of current quarter and previous year are as follows: (Unit: KRW) Division End of current quarter End of previous year Total liabilities 208,189,557,486 132,068,703,716 Total capital 431,783,710,191 412,225,421,612 Debt ratio 48.22% 32.04%

7. Cash and cashable assets The status of the cash and cashable assets at the end of current quarter and previous year is as follows: (Unit: KRW) Division End of current year End of previous year Demand deposit (*1) 12,394,274,096 39,519,553,753 Time deposit (*2) 816,320,256 35,207,774,641 Total 13,210,594,352 74,727,328,394 (*1) This financial product has a very high liquidity easy to convert to a fixed amount, and low risk of changes in value. (*2) As the due date is within 3 months from the date of acquisition, they were recognized as cash and cashable assets.

8. Short-term financial instruments The details of short-term financial instruments as of the end of the current quarter and end of the previous year are as follows; (Unit: KRW) Division End of current quarter End of previous year Time deposit 185,000,000,000 200,000,000,000-

9. Trade receivables and other receivables The status on trade and other receivables at the end of current quarter and previous year is as follows; (Unit: KRW) Division End of current quarter End of previous year Current Non-current Current Non-current Trade receivables 215,223,641,891 - 139,950,086,915 - Account receivables 301,312,653 - 691,189,239 - Revenues receivables 1,605,246,566 - 750,906,229 - Loans 520,088,324 4,301,522,231 170,952,006 1,421,352,204 Security deposits - 2,785,188,608 - 3,698,138,164 Total 217,650,289,434 7,086,710,839 141,563,134,389 5,119,490,368

10. Transferrable financial assets (1) The status of transferrable financial assets at the end of current quarter and previous year are as follows; (Unit: KRW) Division End of current quarter End of previous year Current profit or loss - debt instruments - - measured at fair values LB Investment(*1) 1,519,905,416 2,758,368,987 Other comprehensive profits or losses - equity instruments measured at fair values Daedeok Investment (*2) 500,000,000 500,000,000 Daedeok Inno-Polis Venture Association (*2) - 100,000,000 Total 2,019,905,416 3,358,368,987

11. Other assets The details of other current assets at the end of current quarter and previous year are as follows; (Unit: KRW) End of current quarter End of previous year Division Current Non-current Current Non-current Advanced payments 966,652,364 1,457,743,881 1,004,121,088 1,393,732,647 Advanced expenses 14,761,636,313 - 6,546,090,914 - VAT fee 6,281,857,330 - 4,926,792,780 - Total 22,010,146,007 1,457,743,881 12,477,004,782 1,393,732,647

12. Inventory assets (1) The details of inventory assets for the consolidated entity at the end of current quarter and previous year are as follows; (Unit: KRW) Division End of current quarter End of previous year Products in process 105,135,338,140 63,454,067,429 Products in process return assets 128,266,959 - Allowance for evaluated loss on products in process (2,877,618,616) (2,442,793,797) Total 102,385,986,483 61,011,273,632

(2) The return of evaluated loss recognized for inventory assets during the current quarter and previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Cost of goods sold: - Return of evaluated loss for inventory assets 434,824,819 1,156,238,860

13. Investments in affiliated companies

(1) The details of stock investments in associates as of the end of the current quarter and end of the previous year are as follows;

(Unit: KRW)

Name of Major sales Closing End of current quarter Previous year Location company activities month Share ratio(%) Book value Share ratio(%) Book value

Advanced power R & D and device design of Korea Mar 49.00 4,413,493,239 - - Technology (*) semiconductor devices

(*) The consolidated entity invested 4.410 billion KRW in Advanced Power Device Technology Co., Ltd., which was newly established, for the development of products and technologies during the current quarter.

(2) Changes in investments in associates during the current quarter are as follows.

(Unit: KRW)

Equity method gains / Beginning Acquisition End of current quarter losses

- 4,410,000,000 3,493,239 4,413,493,239

(3) The summarized financial information of the affiliates as of the end of the current quarter is as follows;

(Unit: KRW)

Advanced Power Device Technology Co., LTD. Classification End of current quarter

Assets 9,559,293,058

Liabilities 395,921,840

Capital 9,163,371,218

Sales 1,718,663,747

Current quarter net profit 163,371,218

Total comprehensive income 163,371,218

(4) As of end of current quarter, the Company has adjusted the amount of financial information of related companies to the carrying amount of equity interest in the associate as follows.

(Unit: KRW) Company name Ending net Consolidated Net assets (+) (±) Others (*) Ending book assets entity’s ratio of equity Goodwill value (A) shareholding (A*B) (%) (B) Advanced Power Device 9,163,371,218 49.00 4,490,051,897 - (76,558,658) 4,413,493,239 Technology Co., Ltd. (*) Unrealized profits and losses on internal transactions between the consolidated entity and affiliates are included.

14. Tangible assets

(1) Details of tangible assets at the end of the current quarter and previous years are as follows.

(Unit: KRW)

Classification End of current quarter Previous year

Acquisition Cost 45,104,949,592 34,315,918,816

Accumulated amortization (21,249,895,002) (18,530,165,623)

Accumulated impairment loss (564,056,013) (564,056,013)

Government subsidy (9,378,237) (13,010,505)

Book value 23,281,620,340 15,208,686,675

(2) Details of property, plant and equipment at the end of the current quarter and previous quarter are as follows. ① Current quarter

(Unit: KRW) Other tangible Division Land Building Machinery Furnishings Total assets(*) Book value at 5,220,274,972 3,256,217,768 - 3,446,936,246 2,885,137,434 400,120,255 the beginning Weighted - - 188,300,000 6,555,877,172 2,138,594,885 2,855,106,628 Acquisition Amount Disposition in (218,667,378) (343,137,144) - - (3,151,462) (20,298,042) the year Depreciation - (183,744,723) (1,176,876) (1,429,283,255) (1,108,411,639) (319,866,993) cost Acquisition - - - 8,636,108 - - amount due to business transfer(*2) Other increase - - - (44,822,665) (1,020,951) - / decrease Book value at 5,001,607,594 2,729,335,901 187,123,124 8,537,343,606 3,911,148,267 2,915,061,848 the end of current quarter (*) Other tangible assets include facilities, leasehold improvements and vehicles. (* 2) Acquired due to business transfer during the current quarter (See Note 31).

② Previous quarter

(Unit: KRW) Other tangible Total Division Land Building Machinery Furnishings assets Book value at 5,319,324,106 3,639,831,603 3,201,876,035 2,694,092,255 411,793,827 15,266,917,826 the beginning Acquisition - - 220,201,200 608,288,798 101,168,000 929,657,998 during the year Disposition (99,049,134) (129,283,856) - - - (228,332,990) during the year Depreciation - (127,164,990) (623,961,290) (576,973,347) (67,342,630) (1,395,442,257) cost Other increase - - - 7,840 (348,872) (341,032) / Decrease Book value at the end of 5,220,274,972 3,383,382,757 2,798,115,945 2,725,415,546 445,270,325 14,572,459,545 previous quarter (*) Other tangible assets include facilities, leasehold improvements and vehicles.

15. Intangible assets (1) The details of intangible assets as of the end of the current halt and end of the previous year are as follows;

(Unit: KRW)

Classification End of current quarter Previous year

Acquisition Cost 76,995,087,886 34,871,917,433

Accumulated amortization (19,408,749,033) (16,638,372,641)

Accumulated impairment loss (337,876,490) (489,308,643)

Government subsidy (15,121,884) (28,572,309)

Book value 57,233,340,479 17,715,663,840

(2) The change details of book values on the intangible assets in the current quarter and previous quarter are as follows; ① Current year (Unit: KRW)

Industrial Other Intangible Division Goodwill property Software Membership intangible assets under Total rights assets(*1) construction Book value 9,044,018,628 1,298,212,02 1,329,137,15 1,693,653,00 2,250,000,040 2,100,643,000 17,715,663,84 0 2 0 0 at the beginning of current year

- 303,105,361 546,457,960 613,350,000 - 2,260,585,236 3,723,498,557 Acquisition in the year Disposition - - - (238,000,000 - - (238,000,000) ) in the year Depreciation - (156,210,507 (859,715,428 - (1,741,000,03 - (2,756,925,96 ) ) 2) 7) s for intangible

assets Acquisition 18,869,104,04 - - - 19,920,000,00 - 38,789,104,04 9 0 9 amount due to business transfer (* 2) Transfer to - - 2,778,683,00 - - (2,778,683,00 - 0 0) the main

account Book value 27,913,122,67 1,445,106,87 3,794,562,68 2,069,003,00 20,429,000,00 1,582,545,236 57,233,340,47 7 4 4 0 8 9 at the end of current quarter (*1) Other intangible assets consist of customer relationship intangible assets arising from business transfer. (*2) Acquired due to business transfer during the current quarter (See Note 31).

② Previous quarter (Unit: KRW) Intangible Industrial Other intangible Division Goodwill Software Membership assets under Total property rights assets(*) construction Book value 9,044,018,62 1,192,742,04 1,835,313,88 1,401,677,00 3,662,750,024 - 17,136,501,578 at the 8 0 6 0 beginning of previous year Weighted - 250,001,059 342,329,000 308,019,690 - 666,431,25 1,566,780,999 Acquisition 0 Amount Amortizatio - (139,713,834) (712,683,257) - (1,147,749,988 - (2,000,147,079 n of ) ) intangible assets Book value 9,044,018,62 1,303,029,26 1,464,959,62 1,709,696,69 2,515,000,036 666,431,25 16,703,135,498 at the end 8 5 9 0 0 of previous quarter (*1) Other intangible assets consist of customer relationship intangible assets arising from business transfer. 16. Government subsidies The consolidated entity entered into a joint research and development agreement with the coordinating company for the new technology development under a national initiative. The consolidated entity spent the government subsidy provided under the above-mentioned program for purchase of various tangible and intangible assets, while recognizing the transactions as Decreasing in the relevant subsidy asset entry Government project Coordinating company Digital holographic table top terminal technology development ETRI

17. Payables and other liabilities The details of payables and other liabilities at the end of current quarter and previous year are as follows; (Unit: KRW) End of current year End of previous year Division Current Non-current Current Non-current Trade payables 162,845,943,286 - 97,214,262,012 - Accounts Payable 12,699,794,827 - 17,739,427,532 - Unpaid expense 12,915,786,727 - 5,483,629,938 - Lease guarantee - 15,000,000 - 15,000,000 deposit Total 188,461,524,840 15,000,000 120,437,319,482 15,000,000

18. Other liabilities (1). The details of other non-current liabilities at the end of current quarter and previous year are as follows; (Unit: KRW) Division End of current quarter End of previous year Current Non-current Current Non-current Advances 2,646,917,113 - 66,240,000 - Withholdings 461,031,815 - 625,902,748 - Other allowance 4,034,557,563 - 4,063,333,282 - liabilities Long-term employee - 655,537,749 - 583,749,811 salary liabilities Recovery allowance - 566,980,400 - 126,160,400 liabilities Total 7,142,506,491 1,222,518,149 4,755,476,030 709,910,211

(2) Changes to allowance liabilities in the current quarter are as follows; (Unit: KRW) Division Beginning Increase (return) Decrease Ending Provision for sales 4,063,333,282 35,268,553 (236,054,178) 3,862,547,657 warrant Return provision - 1,022,023,515 (850,013,609) 172,009,906 Total 4,063,333,282 1,057,292,068 (1,086,067,787) 4,034,557,563

The consolidated entity recognizes warranty expense in the provision for product warranties as expected to be borne by the consolidated entity related to sales guarantee for the products, and recognizes the corresponding transferred amount in selling and administrative expenses. On the other hand, the consolidated entity recognizes the amount corresponding to the portion of revenue to be canceled at the time of product return as allowance liability for return and deduction to sales in accordance with the Korea Financial Accounting Standards No. 1115.

19. Capital and capital surplus (1) The details of capital at the end of current quarter and previous year are as follows; (Unit: Share, KRW) Division End of current quarter End of previous year Number of authorized shares 50,000,000 shares 50,000,000 shares price per share 500 500 Total number of issued shares 16,264,300 shares 16,264,300 shares Capital 8,132,150,000 8,132,150,000

(2) There are no changes in the number of shares outstanding (16,264,300 shares) in the current quarter and previous quarter.

(3) The composition of capital surplus at the end of current quarter and end of previous year is as follows; (Unit: KRW) Division End of current quarter End of previous year Premium on capital stocks 66,560,617,129 66,560,617,129 Other Capital Surplus 9,782,553,371 9,782,553,371 Total 76,343,170,500 76,343,170,500

20. Other capital items The composition of the other capital items at the end of current quarter and previous year are as follows: (Unit: KRW) Division End of current quarter End of previous year Loss from conversion on overseas businesses (127,104,111) (59,998,995) Other comprehensive profit and loss - profit and (1,807,731) - loss on valuation of financial assets measured at fair values Gain on valuation of available-for-sale financial - 1,705,779,692 assets Total (128,911,842) 1,645,780,697

21. Retained earnings (1) The details of retained earnings at the end of current quarter and previous year are as follows; (Unit: KRW) Division End of current quarter End of previous year Legal reserve 4,066,075,000 4,066,075,000 Unappropriated retained earnings 343,371,226,533 322,038,245,415 Total 347,437,301,533 326,104,320,415

(2) The details of unappropriated retained earnings for the current quarter and previous year are as follows; (Unit: KRW) Division Current quarter Previous quarter Beginning 322,038,245,415 290,666,587,342 Dividend (11,385,010,000) (14,637,870,000) Adjustments for first application of 1,705,779,692 - K-IFRS 1109 Adjustments for first application of (1,576,974,791) - K-IFRS 1115 Current quarter net profit 32,589,186,217 23,044,792,034 End of current quarter 343,371,226,533 299,073,509,376

22. Earnings per share (1) Basic earnings per share ① The calculated amounts of earnings per share in the current quarter and previous quarter are as follows; (Unit: KRW, Shares) Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated Current quarter consolidated 17,748,998,306 32,589,186,217 12,784,748,928 23,044,792,034 net profit Number of weighted average 16,264,300 16,264,300 16,264,300 16,264,300 outstanding common stocks Earnings per basic share 1,091 2,004 786 1,417

② Details of calculations on the number of weighted average outstanding common stocks for the current quarter

No. of Number of weighted average No. of Weight No. of issued outstanding outstanding common stocks Treasury shares (1) common shares shares (2) (1-2) 3 months Accumulated 3 months Accumulated

16,264,300 16,264,300 92days/92days 273days/273days 16,264,300 16,264,300 - shares shares shares shares

③ Details of calculations on the number of weighted average outstanding common stocks for the previous quarter No. of Number of weighted average No. of Weight No. of issued outstanding outstanding common stocks Treasury shares (1) common shares shares (2) 3 months Accumulated 3 months Accumulated (1-2) 16,264,300 16,264,300 92days/92days 273days/273days 16,264,300 16,264,300 - shares shares shares shares

(2) Diluted earnings per share The consolidated entity does not have any diluted stocks in the current quarter and previous quarter. Accordingly, the diluted earnings per share is the same as the basic earnings per share.

23. Financial revenues and expenses (1) The details of financial revenues in the current quarter and previous quarter are as follows: (Unit: KRW)

Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated

Interest income 969,436,181 3,172,071,768 918,846,493 2,710,468,979 Foreign exchange gains - 399,677 - - (financial) Profit from foreign currency 15,295,601 35,174,114 5,455,524 1,485,070 conversion (financial) Current net profit – Gain on 8,743,711 8,743,711 - - valuation of fair value measurement Total 993,475,493 3,216,389,270 924,302,017 2,711,954,049

(2) The details of financial expenses in the current quarter and previous quarter are as follows; (Unit: KRW)

Current year Previous year Division 3 months Accumulated 3 months Accumulated

Loss from foreign exchange 340,346 4,325,302 - 62,250 rate (financial) Loss from foreign currency 9,897,569 16,551,435 - 2,619,474 conversion (financial) Current profit or loss - loss - 647,207,282 - - on valuation of financial assets measured at fair values Total 10,237,915 668,084,019 - 2,681,724

24. Other non-operating revenues and expenses (1) The details of other non-operating revenues in the current quarter and previous quarter are as follows: (Unit: KRW)

Current year Previous year Division 3 months Accumulated 3 months Accumulated

Profit from foreign exchange 569,113,008 1,087,669,924 204,568,990 1,190,405,339 rate (non-financial) Profit from foreign currency 107,718,320 255,679,713 72,228,259 158,201,121 conversion (non-financial) Gains on disposition of 402,481,697 416,660,897 - 91,159,335 tangible assets Gains on disposition of 15,000,000 15,000,000 - - intangible assets Profit under equity method 18,112,041 321,231,596 2,783,820 3,022,665 Other profit 1,112,425,066 2,096,242,130 279,581,069 1,442,788,460 Total 569,113,008 1,087,669,924 204,568,990 1,190,405,339

(2) The details of other non-operating expenses in the current quarter and previous quarter are as follows: (Unit: KRW) Current year Previous year Division 3 months Accumulated 3 months Accumulated Loss from foreign exchange rate 642,068,065 1,379,833,304 232,704,771 524,082,397 (non-financial)

Loss from foreign currency - 60,678,303 60,015,406 197,698,786 conversion (non-financial) Loss from disposition of tangible 32,572,924 51,333,483 - 19,492,325 assets Loss from disposition of intangible - 21,454,545 - - assets Other loss 6,213,046 65,327,140 18,270,848 1,854,122,750 Total 680,854,035 1,578,626,775 310,991,025 2,595,396,258

25. Operating income Major items and amounts included in calculating operating incomes in the current quarter and previous quarter are as follows; (Unit: KRW)

Current year Previous year Division 3 months Accumulated 3 months Accumulated

Sales 213,925,475,317 555,804,285,392 180,536,269,137 493,067,529,347 Sales due to sales of 211,149,575,914 549,025,483,467 178,502,285,642 487,427,079,372 goods Other sales 2,775,899,403 6,778,801,925 2,033,983,495 5,640,449,975 Cost of sales 157,796,489,111 416,979,239,670 141,670,648,912 394,367,779,099 Cost of goods sold 156,025,492,898 414,121,591,533 133,211,170,192 368,515,336,861 Other cost of sales 1,770,996,213 2,857,648,137 8,459,478,720 25,852,442,238 Selling and 34,876,272,216 103,886,612,095 23,543,889,015 71,431,205,219 administrative expenses Salary and bonuses 6,653,495,484 17,769,247,613 3,374,890,444 9,462,093,417 Retirement benefits 494,236,026 1,471,686,875 195,090,164 654,868,479 Employee benefits 1,486,222,928 3,697,071,608 652,132,179 1,545,447,558 Travel expenses 452,324,532 1,390,378,300 500,909,843 1,270,709,334 Paid rents 1,325,533,286 3,367,488,385 627,629,718 1,848,319,981 Paid fees 2,012,949,770 5,383,415,345 854,149,900 2,623,472,444 Depreciation cost 634,668,673 1,548,966,585 219,063,891 617,825,147 Depreciation of 234,168,591 540,867,656 30,180,721 92,742,163 intangible assets Product loss (848,930,326) 35,268,553 (1,078,767,029) 54,276,591 guarantee cost R & D expenses 21,510,424,301 65,334,359,062 17,593,268,712 51,487,983,957 Other selling and 921,178,951 3,347,862,113 575,340,472 1,773,466,148 administrative expenses Operating profit 21,252,713,990 34,938,433,627 15,321,731,210 27,268,545,029

26. Employee salaries The consolidated entity is paying their retiring employees with the predetermined amount of severance payment in lump sum, based on the level of salaries and the years in service, and this is classified as defined salary system. Such severance payment amount can be withdrawn before the resignation of the employee as interim settlement, for which several legal requirements apply. The required years in service for such a settlement again after an interim settlement are set anew.

(1) The details of the defined salary liabilities at the end of current quarter and previous year are as follows: (Unit: KRW) Division End of current quarter End of previous year Present value of defined salary 29,179,205,154 25,999,037,468 liabilities Fair value of assets deposited outside (22,688,610,517) (24,015,684,437) of the company Defined salary liabilities (assets) 6,490,594,637 1,983,353,031

(2) Changes in the present value of defined salary liabilities during current quarter and the previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Beginning balance of defined salary liabilities 25,999,037,468 20,190,982,385 Service cost of the current year 3,688,100,763 3,127,046,539 Interest expenses 583,480,884 393,009,963 Transfer between affiliates 1,070,511,559 1,741,660,883 Retirement benefit payment (2,161,925,520) (1,699,567,850) Balance of defined salary liabilities at the end of quarter 29,179,205,154 23,753,131,920 year

(3) The changes in the fair values of the assets deposited outside of the company in the current quarter and previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Beginning balance of externally reserved assets 24,015,684,437 15,729,358,445 Interest revenues 537,339,924 302,637,681 Retirement benefit payments from externally reserved (1,864,413,844) (1,728,395,333) assets Ending balance of externally reserved assets 22,688,610,517 14,303,600,793

(4) Expenses recognized in profit or loss for the current quarter and the previous quarter ar are as follows; (Unit: KRW) Division Current quarter Previous quarter Current working cost 3,688,100,763 3,127,046,539 Net interest cost 46,140,960 90,372,282 Total 3,734,241,723 3,217,418,821

(5) The composition of externally reserved assets for the end of current quarter and the end of the previous year are as follows; (Unit: KRW) Division End of current quarter end of the previous year Short-term financial products, etc. 22,688,610,517 24,015,684,437

27. Corporate tax expenses Corporate tax expense is calculated by adjusting income tax expense related to items recognized other than profit or loss and deferred income tax expense due to the adjustment and temporary differences arising in the current period. The average effective tax rates for the current quarter and previous quarter are 3.2% and 18.6%, respectively.

28. Cash flow statement (1) The details on the reconciliation of the incomes and expenses for the sales activities for the current quarter and previous quarter are as follows (Unit: KRW) Division Current quarter Previous quarter Corporate tax expense 5,418,661,255 5,780,417,522 Depreciation Cost 3,042,483,486 2,117,774,203 Profit from disposition of tangible assets (416,660,897) (91,159,335) Loss from disposition of tangible assets 51,333,483 19,492,325 Amortization of intangible assets 2,756,925,967 2,000,147,079 Profit from disposition of intangible assets (15,000,000) - Loss from disposition of intangible assets 21,454,545 - Retirement benefits 3,734,241,723 3,217,418,821 Profit from foreign currency conversion (290,853,827) (159,686,191) Loss from foreign currency conversion 77,229,738 200,318,260 Interest revenues (3,172,071,768) (2,710,468,979) Product Loss Guarantee Cost 35,268,553 54,276,591 Long-term employee benefits 92,229,861 65,032,743 Profit under equity method (3,493,239) - Current profit or loss - loss on valuation of financial assets 647,207,282 - measured at fair values Current profit or loss – gains on valuation of financial assets (8,743,711) - measured at fair values Total 11,970,212,451 10,493,563,039

(2) The details on the changes in assets and liabilities due to sales activities for the current quarter and previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Decrease (Increase) of trade receivables (67,354,033,315) (26,200,804,341) Decrease (Increase) of other receivables 389,891,852 (220,966,171) Decrease (Increase) of other current assets (7,165,021,111) (5,912,125,059) Decrease (increase) of inventory assets (38,866,247,601) (5,974,357,627) Decrease of other non-current assets 56,164,585 4,000,000 Increase (Decrease) of trade payables 63,190,624,647 26,360,956,137 Decrease (Increase) of other current liabilities (2,053,508,967) (309,755,703) Increase (Decrease) of other payables 2,357,005,590 3,753,129,562 Increase (decrease) in non-current other liabilities - 23,500,618 Increase (decrease) in other non-current liabilities (77,921,923) (30,244,800) Payment of retirement (2,161,925,520) (1,699,567,850) Decrease in externally reserved assets 1,864,413,844 1,728,395,333 Transfer of defined benefit obligations 1,070,511,559 1,741,660,883 Total (48,750,046,360) (6,736,179,018)

(3) Cash flows from operating activities on the cash flow statement are recorded using the indirect method. The significant transactions that do not involve cash inflows and outflows for the current quarter and previous quarter are as follows. (Unit: KRW) Division Current quarter Previous quarter Increase of accounts payables related to acquisition of 586,415,259 153,229,340 tangible assets Decrease of accounts payables related to acquisition of (557,193,359) 64,989,250 intangible assets Substitution of advance payments into intangible assets 303,105,361 250,001,059 Increase of tangible assets due to restoration obligation 498,300,000 -

(4) Cash flows related to financial activities The changes in liabilities arising from financial activities during the current quarter are as follows; (Unit: KRW) Division Beginning Cash flow from financing Non-cash transaction End of quarter activities Dividend (11,385,010,000) 11,385,010,000 - payable

29. Restricted use of financial products The details of financial products whose use is limited at the end of end of the current quarter are as follows; (Unit: KRW) Division Amount Details of limit to use Cash and cashable assets 816,320,256 Government subsidies

30. Special interest parties (1) The details of the consolidated entity’s related parties as of the end of the current quarter and previous year are as follows; Type of special interest End of current year end of the previous year Companies that exercise significant influence LG Corp. LG Corp. on the consolidated entity Affiliates Advanced Power Device - Technology Co., LTD Etc., Affiliates of LG Corp. Affiliates of LG Corp. Large Business Group Affiliated Large Business Group Affiliated Company (*) Company (*) (*) Not included in scope of related party pursuant to K-IFRS 1024 'Disclosure of related parties', but it belongs to the same large corporate group under the monopolistic regulation and fair trade law.

(2) The transactional details with special interest parties in the current quarter and previous quarter are as follows; (Unit: KRW) Division of Name of special interest party Current quarter Previous year special Transactional details 3 months Accumulated 3 months Accumulated relationship Advanced Power Device Acquisition of tangible Affiliates Technology Co., Ltd. and intangible assets 536,852,373 842,145,236 - -

Sales - 60,000,000 90,000,000 271,795,830

Other non-operating income - 72,993,637 - - Lusem Co., Ltd. - 15,467,193,707 28,178,162,381 78,483,340,87 Operating expenses 7

Other subsidiaries of Operating expenses 597,872,178 1,248,800,358 229,254,496 695,499,738 LG Corp. LG CNS Co., Ltd. Acquisition of tangible or intangible assets 752,000,000 4,698,669,460 203,366,250 939,921,250

Sales - 10,437,150 6,762,900 8,472,300 Serveone Co., Ltd. Operating expenses 236,159,010 562,577,673 10,325,952 45,528,025

LG Management Development Operating expenses Institute Inhwawon Co., Ltd. 5,271,380 5,271,380 - -

LG Electronics USA Inc. Sales 62,932,500 230,530,500 12,621,000 60,455,000

LG International japan Ltd Sales 1,056,255,048 2,072,766,573 509,397,660 2,303,553,244

Sales 256,533,869 673,007,302 133,622,328 600,525,943

LG Display Co., Ltd. Other non-operating 195,614,724,036 499,435,256,021 163,018,564,984 448,485,876,8 income 08

- 20,695,281 - - LG Innotek Co., Ltd. Operating expenses

6,758,270,235 17,559,908,055 3,469,218,782 6,550,090,782 LG Chem Co., Ltd. Sales

Other Sales - - 449,128,810 corporations - belonging to the LG Electronics Co., Ltd 1,625,068,036 5,412,360,555 7,067,194,451 large Operating expenses conglomerate 3,609,378,186 group

1,523,264,671 3,020,434,017 972,400,980 2,644,074,134 LG Uplus Operating expenses

46,129,996,611 46,129,996,611 - - LG Nsys Co., Ltd. Operating expenses

26,379,030 81,744,855 20,831,717 64,113,470 Pantos Co., Ltd. Operating expenses

- - 862,500 3,669,000 Himtek Solutech Co., Ltd. 303,779,140 893,106,088 183,201,000 406,863,500 HS Ad Co., Ltd. Operating expenses

(*) It is excluded from related parties because LG Corp sold all shares of Lusem Co., Ltd. during the current quarter year, and the transaction details after it is excluded from the scope of related parties are not included.

(3) The status of the credits / liabilities with special interest parties at the end of current quarter and end of the previous year are as follows: (Unit: KRW) End of current quarter End of the previous year Type of special relationship Name of the party Trade receivables Trade payables and other Trade receivables Trade payables and other payables payables Advanced Power Device Affiliates Technology Co., Ltd. - 201,481,491 - -

Lusem Co., Ltd. - - 101,571,313 20,006,255,832

Other Subsidiaries of LG LG CNS Co., Ltd. Corp. - 332,147,761 - 449,299,457

Serveone Co., Ltd 300,000,000 91,303,595 304,434,204 9,041,480 LG Electronics USA Inc. 545,146,200 - 95,461,740 - LG International japan Ltd 210,003,109 - 214,698,440 - LG Display Co., Ltd. 110,867,647,136 - 120,031,080,096 - LG Innotek Co., Ltd. - 3,324,808,086 - 3,822,924,292 Other corporations LG Electronics Co., Ltd. belonging to the large 1,442,034,983 77,232,947 2,934,441,593 2,489,197,156 conglomerate group LG Innotek Co., Ltd. Indonesia - - 2,785,640 - LG Nsys Co., Ltd. - - - 121,000 LG Management Development Institute - 6,161,100 - - Inhwawon Co., Ltd. Pantos Co., Ltd. - 199,185,063 - 159,257,215 113,364,831,428 Total 4,232,320,043 123,684,473,026 26,936,096,432

(*) Due to the disposal of all shares of Lusem Co., Ltd. held by LG Co., Ltd. during the current quarter, it was excluded from related parties as of the end of the current term.

(4) The transactional details with special interest parties in the current quarter and previous year are as follows; (Unit: KRW) Current quarter Previous year Type of special Name of the party Cash contribution Cash Dividend relationship contribution payments

Companies that exercise significant LG Co., Ltd. - 3,766,366,800 4,842,471,60 influence on the consolidated entity Advanced Power Affiliates Device Technology 4,410,000,000 - - Co., Ltd(*)

Total 4,410,000,000 3,766,366,800 4,842,471,600

(*)The Group invested ₩ 4,410 million in Advanced Power Device Technologies Co., Ltd., a newly established subsidiary, in the current quarter.

(5) The compensation for key management personnel for the current and previous quarter are as follows. (Unit: KRW) Division Current quarter Previous quarter 3 months Accumulated 3 months Accumulated Short-term salaries 996,440,488 1,816,332,808 256,439,710 925,314,780

Severance payment 67,512,665 201,523,301 11,192,066 182,631,494

Total 1,063,953,153 2,017,856,109 267,631,776 1,107,946,274

The key executives of the controlling company include the auditors and the registered directors (including outside directors.)

(6) The consolidated entity has no security and guarantee detail providing to or provided by special interest parties at the end of current quarter and previous year.

31. Events after the reporting period (1) General Information On July 1, the parent company acquired all of the development, manufacturing and sales of OLED T-Con chip business from LG Electronics to build a total system semiconductor solution for OLED TV.

(Unit: KRW)

Division Amount

Transfer cost:

Cash and cash equivalents 46,129,996,611

Succession assets and liabilities:

Trade receivables and other receivables 7,879,739,697

Inventory 2,508,465,250

Tangible assets 8,636,108

Intangible assets such as contracts with 19,920,000,000 customers

Trade payables and current liabilities (3,055,948,493) Goodwill 18,869,104,049

Total 46,129,996,611

4. Financial Statements Statement of financial position End of quarter of 20th year: Sep. 30, 2018 End of 19th year: Dec. 31, 2017 (Unit: KRW)

th th End of quarter of 20 19 year year: Assets Current assets 538,987,627,609 496,552,389,629 Cash and cash equivalent 12,327,313,986 73,769,560,133 Short-term financial instruments 185,000,000,000 200,000,000,000 Trade receivables 215,223,641,891 139,950,086,915 Other current receivables 2,426,197,656 1,612,693,033 Other current assets 21,624,487,593 12,238,263,202 Current tax assets - 7,970,512,714 Inventory assets 102,385,986,483 61,011,273,632 Non-current assets 100,666,401,473 47,293,891,063 Long-term investment assets Other non-current receivables 2,111,161,705 3,358,368,987 Investments in subsidiaries Investments in associates 6,749,760,604 5,077,388,910 Tangible assets 2,316,636,045 811,776,045 Intangible assets 4,410,000,000 Other non-current assets 22,089,872,830 15,188,031,734 Deferred corporate tax assets 18,970,287,256 17,715,663,840 Total assets 1,426,161,163 1,393,732,647 Liabilities Current liabilities 162,845,288,724 97,214,262,012 Trade payables 25,979,556,183 23,534,385,271 Other payables 7,142,506,491 4,755,476,030 Other current liabilities 4,844,316,988 4,122,464,751 Unpaid corporate tax 162,845,288,724 97,214,262,012 Non-current liabilities 7,728,112,786 2,708,263,242 Other non-current payables 15,000,000 15,000,000 Other non-current liabilities 1,222,518,149 709,910,211 Defined benefit liability 6,490,594,637 1,983,353,031 Total liabilities 208,539,781,172 132,334,851,306 Capital Capital 8,132,150,000 8,132,150,000 Capital surplus 76,343,170,500 76,343,170,500 Other capital accounts (1,807,731) 1,705,779,692 Retained earnings 346,640,735,141 325,330,329,194 Total equities 431,114,247,910 411,511,429,386 Total equities and liabilities 639,654,029,082 543,846,280,692

Quarterly Income Statement Quarter of 20th year from Jan. 1, 2018 to Sep. 30, 2018 Quarter of 19th year from Jan. 1, 2017 to Sep. 30, 2017 (Unit: KRW) Q3 of 20th year Q3r of 19th year

3 months Accumulated 3 months Accumulated

Sales 213,925,472,228 555,804,067,653 180,536,262,932 493,062,999,660

Cost of goods sold 157,796,489,111 416,979,239,670 141,670,648,912 394,367,779,099

Gross profit on sales 56,128,983,117 138,824,827,983 38,865,614,020 98,695,220,561

Selling and administrative 34,942,451,196 103,899,475,635 24,215,482,851 72,026,576,415 expenses

Operating profit 21,186,531,921 34,925,352,348 14,650,131,169 26,668,644,146

Financial income 977,711,686 3,179,721,651 924,297,960 2,711,874,322

Financial expense 13,768,308 657,220,575 - 2,681,724

Other non-operating income 1,112,143,791 2,081,979,924 278,258,183 1,441,316,850

Other non-operating expenses 680,854,156 1,578,611,930 304,290,870 2,585,412,680

Net profit before corporate tax 22,581,764,934 37,951,221,418 15,548,396,442 28,233,740,914

Corporate tax expense 4,907,767,968 5,384,610,372 3,282,825,840 5,632,464,987

Current quarter net profit (loss) 17,673,996,966 32,566,611,046 12,265,570,602 22,601,275,927

Earnings per share

Basic earnings per share 1,087 2,002 754 1,390

Diluted earnings per share 1,087 2,002 754 1,390 Comprehensive Profit and Loss Statement Quarter of 20th year from Jan. 1, 2018 to Sep. 30, 2018 Quarter of 19th year from Jan. 1, 2017 to Sep. 30, 2017 (Unit: KRW)

th th Q3 of 20 year Q3 of 19 year

3 months Accumulated 3 months Accumulated

Current quarter net profit (loss) 17,673,996,966 32,566,611,046 12,265,570,602 22,601,275,927

Other comprehensive profit or loss (1,807,731) (1,807,731) (66,611,300) 236,876,652

Items that are not reclassified to profit or loss (other comprehensive profit or loss before tax)

Gain on valuation of available-for-sale (2,384,869) (2,384,869) - - financial assets (other comprehensive profit or loss before tax)

Corporate tax effect 577,138 577,138 - -

Items that are reclassified to profit or loss (other comprehensive profit or loss before tax) Gain on valuation of available-for-sale - - (87,877,704) 312,502,180 financial assets Corporate tax effect - - 21,266,404 (75,625,528)

Current quarter total comprehensive profit or 17,672,189,235 32,564,803,315 12,198,959,302 22,838,152,579 loss

Statement for Changes in Capital Quarter of 20th year from Jan. 1, 2018 to Sep. 30, 2018 Quarter of 19th year from Jan. 1, 2017 to Sep. 30, 2017 (Unit: KRW)

Capital

Capital Capital surplus Other capital Retained earnings Total capital

2017.01.01 (capital at the beginning) 8,132,150,000 76,343,170,500 1,474,710,767 294,565,491,597 380,515,522,864

Application of K-IFRS 1109 for the first time (2018.01.01)

Application of K-IFRS 1115 for the first time (2018.01.01)

2018.1.1 (beginning) (amount rewritten)

Current quarter net profit - - - 22,601,275,927 22,601,275,927 Total comprehensive profit or loss Evaluated profit or loss of transferrable financial - - 236,876,652 - 236,876,652 assets

Transactions with shareholders directly Annual dividend (14,637,870,000) (14,637,870,000) recognized in capital

2017.09.30 (capital at the end) 8,132,150,000 76,343,170,500 1,711,587,419

2018.01.01 (capital at the beginning) 8,132,150,000 76,343,170,500 1,705,779,692 325,330,329,194 411,511,429,386

Application of K-IFRS 1109 for the first time (2018.01.01) - - (1,705,779,692) 1,705,779,692 -

Application of K-IFRS 1115 for the first time (2018.01.01) - - - (1,576,974,791) (1,576,974,791) 2018.1.1 (beginning) (amount rewritten) 8,132,150,000 76,343,170,500 - 325,459,134,095 409,934,454,595

Current quarter net profit - - - 32,566,611,046 32,566,611,046 Total comprehensive profit or loss Evaluated profit or loss of transferrable - - (1,807,731) - (1,807,731) financial assets Transactions with shareholders directly - - - (11,385,010,000) (11,385,010,000) Annual dividend recognized in capital

2018.06.30 (capital at the end) 8,132,150,000 8,132,150,000 76,343,170,500 (1,807,731) 346,640,735,141

Cash Flow Statement Quarter of 20th year from Jan. 1, 2018 to Sep. 30, 2018 Quarter of 19th year from Jan. 1, 2017 to Sep. 30, 2017 (Unit: KRW)

Q3 of 20th year Q3 of 19th year Cash flow from sales operations 1,126,052,361 17,520,178,183 Cash generated from sales (4,024,408,652) 26,459,869,261 Current quarter net profit (loss) 32,566,611,046 22,601,275,927 Adjustments 11,953,237,238 10,332,198,458 Change to equities/liabilities on sales operations (48,544,256,936) (6,473,605,124) Gain on interest (operating) 2,316,637,603 2,654,710,265 Payment of corporate tax (return) 2,833,823,410 (11,594,401,343) Cash flow from investments (51,173,275,215) (4,591,584,282) Disposition of short-term financial instruments 15,000,000,000 - Increase in other trade receivables (3,620,000,000) (1,008,968,436) Decrease in other trade receivables 1,334,167,747 212,743,513 Acquisition of tangible assets (9,307,279,202) (1,878,580,310) Disposition of tangible assets 936,400,000 300,000,000 Acquisition of intangible assets (3,977,586,555) (1,362,615,590) Disposition of intangible assets 231,545,455 - Current quarter profit or loss - disposition of 600,000,000 - financial assets measured at fair values Other comprehensive income - disposition of 97,615,131 - financial assets measured at fair values Disposition of available-for-sale financial assets 260,000,000 Increase in advances (423,281,180) (439,709,459) Acquisition of investment stocks in subsidiaries (1,504,860,000) (674,454,000) Acquisition of investment securities of related (4,410,000,000) - companies Cash outflow due to business transfer (46,129,996,611) - Cash flow from financial activities (11,385,010,000) (14,637,870,000) Dividend payments (11,385,010,000) (14,637,870,000) Net Increase (Decrease) of cash and cash equivalents (61,432,232,854) (1,709,276,099) before taking into account changes in exchange rate Cash and cash equivalents at the beginning 73,769,560,133 262,696,790,919 Effect of foreign exchange rate movements on cash (10,013,293) (1,134,404) and cash equivalents Cash and cash equivalents at the end 12,327,313,986 260,986,380,416

5. Notes on Financial Statements

1. Company overview (1) Overview of the controlling company Silicon Works Co., Ltd. (hereinafter referred to as the “controlling company”) was established on November 11, 1999 for the purpose of manufacturing and designing FPD (flat panel display) semiconductor IC. And the company is located at 222 Techno 2-ro, Daedeok-gu, Daejeon, Korea. The controlling company was certified by the Korea Technology Promotion Agency as a corporate subsidiary research facility in accordance with Article 16 of the Technology Development Promotion Act and Clause 1 of Article 15 of the Enforcement Marree of the same act on October 19, 2001. Also, the controlling company has been designated as an “advanced technology company” as per Clause 1 of Article 9 of the Special Law on the Cultivation of the Special Research and Development District of Daedeok on October 23, 2011.

The controlling company was then listed on KOSDAQ market as of June 8, 2010. After several increases in capital with or without considerations, the amount of paid-in capital of the company at the end of the current quarter is KRW 8,132,150,000 (issued shares: 16,264,300 and authorized shares 50,000,000).

The status of the shareholders of the controlling company at the end of current quarter is as follows: Shareholder Number of shares owned Ownership stake Remarks LG Corp. 5,380,524 33.08% Largest shareholder Templeton Asset 878,254 5.40% - Management, Ltd. BlackRock Fund Advisors 833,753 5.13% - Others 9,171,769 56.39% - Total 16,264,300 100.00% -

2. Standards for the preparation of financial statements (1) Application of accounting principle The company's Current quarter financial statements are the summarized interim financial statements prepared in accordance with the Korea - International Financial Reporting Standards (K-IFRS). These financial statements have been prepared in accordance with K-IFRS 1034 'Interim Financial Reporting' and contain less information than required by the consolidated financial statements. The selective disclosures include a description of significant transactions or events that are necessary to understand the Group's financial position and changes in its operating results since the end of the previous reporting period.

The Korea Financial Accounting Standards No. 1109 and No. 115 are first applied to the company’s Current quarter financial statements and significant changes to accounting policy are explained in Note 3.

The company's Current quarter financial statements are separate financial statements in accordance with the Korea Financial Accounting Standards No. 1027 'Separate Financial Statements', which are based not on the reported performance and net assets of the invested entities for the investment assets but on accounting processing on the basis of direct equity investments by the participants of the ruling company, investors of affiliates or joint ruling company.

(2) Estimation and judgment ① Management's judgment, uncertainty of assumptions and assumptions In preparing the interim financial statements, K-IFRS requires management to make judgments based on management's best judgment as to the application of accounting policies or the effects of accounting for assets, liabilities, Estimates and the use of households. Actual results may differ from these estimates if estimates and assumptions that are based on management's best judgment at the end of the interim reporting period differ from the actual environment.

The judgment of management team on the application of our accounting policies and estimates used in the Current quarter financial statements are the same as the applications to the annual financial statements of the fiscal year ending on December 31, 2017, except for the new and important judgments and major sources of uncertainty in the projections with regard to the application of the Korea Financial Accounting Standards No. 1109 and No. 1115 which are explained in in Note 3.

② Fair value measurement As the accounting policy and disclosure of the consolidated entity require the measurement of fair value for many financial and non-financial assets and liabilities, the consolidated entity established the policies and procedures for the evaluation of fair value. The policies and procedures include the operations of the evaluation department responsible for the review on the measurement of every significance fair value including fair value classified into Level 3 in the hierarchy system of fair value, and the results are directly reported to the financial executive.

The evaluation department is regularly reviewing significant input variables and evaluation adjustment which cannot be observed. If any third party information such as the broker price or evaluation organization is used in measuring fair value, the evaluation based on information acquired from the third party by the evaluation department includes the classification per level in the hierarchy system of fair value and we are making a Decision on whether or not to conclude if requirement in the applicable standard are met.

If the fair value of an asset or liability is measured, the consolidated entity uses the input variable which can be observed from the market as much as possible. The fair values are classified within the hierarchy system of fair values based on input variables used in the valuation techniques as below; - Level 1: Publicly announced price not adjusted in the active market accessible to the same asset or liability on the measured day - Level 2: Input variable which can be observed directly or indirectly to the asset or liability other than publicly announced price - Level 3: Input variable which cannot be observed to the asset or liability

If many input variables used for measuring the fair value of an asset or liability are classified into different levels within the hierarchy system of fair values, the consolidated entity classifies the entire fair value measurements into the same level with the lowest level of an input variable in the hierarchy system of significant fair values over the entire measurements while recognizing the transfer between levels in the hierarchy system of fair values at the end of the reporting period when the variation occurred.

3. Significant Accounting Policies The Group has adopted the same accounting policies that were used to prepare the annual financial statements for the year ended December 31, 2017, except as explained below. Changes in accounting policy described below will also be reflected in the annual financial statements for the year ended December 31, 2018.

(1) Reclassification of accounts in the financial statements The Group reclassified certain items of cost of sales, selling expenses and administrative expenses in the consolidated income statement and consolidated statement of comprehensive income to present financial information more appropriately in the current quarter. And the classification of consolidated income statement and consolidated statement of comprehensive income have been changed.

(2) Changes in accounting policies The Group initially applied K-IFRS 1109, 'Financial Instruments' and No. 1115 'Revenue from customers' contracts, effective from January 1, 2018. Other standards effective after January 1, 2018 have no significant effect on the Group's financial statements.

The Group adopted the Korean IFRS for the first time as of January 1, 2018 and did not reclassify its financial statements in accordance with the transition rules.

The following are the major impacts of the first-time adoption of the Standard.

① K-IFRS No. 1109 Financial Instruments K-IFRS 1109 provides for the recognition and measurement of certain financial assets, financial liabilities and certain contracts that can be bought or sold. This Statement replaces K-IFRS 1039 Financial Instruments: Recognition and Measurement.

Changes in the beginning balances of equity as a result of application of K-IFRS No. 1109 are as follows.

(Unit: KRW)

Classification Effect of application (Jan 1, 2018)

Retained earnings

Profit or loss - Fair value measurement Financial assets 1,705,779,692 Recognition of valuation gains under K-IFRS No. 1109

Effect of application (Jan 1, 2018) 1,705,779,692

The nature and effect of major changes in accounting policies in accordance with K-IFRS No. 1109 are as follows.

(A) Classification of financial assets and financial liabilities K-IFRS 1109 retained most of the existing requirements of K-IFRS 1039 for the classification and measurement of financial liabilities. However, we have eliminated the existing classification of held-to-maturity investments, loans and receivables and available-for-sale financial assets.

The adoption of K-IFRS No. 1109 has no significant effect on the Group's accounting policies related to financial liabilities. The effect of adoption of K-IFRS 1109 on classification and measurement of financial assets is as follows.

In accordance with K-IFRS 1109, financial assets are measured at amortized cost when initially applied. Financial assets, other comprehensive income - fair value measurement debt instruments, other comprehensive income - fair value measurement equity instruments, profit or loss - fair value measurement category it is classified. Classification of financial assets in accordance with K-IFRS No. 1109 is generally based on the nature of the contractual cash flows of the business models and financial assets in which the financial assets are managed. Derivatives embedded in contracts in which the host contract is a financial asset covered by the scope of this standard are not separated but classify financial assets based on the composite financial instruments as a whole.

Financial assets are measured at amortized cost unless they are both designated at fair value through profit or loss if both of the following conditions are met: - Hold financial assets under a business model that is intended to hold to receive contractual cash flows. - Under the terms of the contract, there is a cash flow consisting solely of interest payments on interest and principal balance on a particular day.

Debt instruments are measured at fair value when they meet both of the following conditions: profit or loss - if not designated as fair value measurement, other comprehensive income at fair value. - Retain financial assets under a business model that serves both through receipt of contractual cash flows and sale of financial assets. - Under the terms of the contract, there is a cash flow consisting solely of interest payments on interest and principal balance on a particular day.

At the date of initial recognition of an equity instrument that is not a trading instrument, the Group may make an irrevocable choice to present subsequent changes in the fair value of that investment in other comprehensive income. This choice is made by financial instruments.

All of the financial instruments not measured at fair value are measured at fair value through profit or loss, including all derivatives, at fair value. If the entity designates a financial asset that meets the criteria for measurement at fair value as a component of fair value gain or fair value measurement, if the accounting mismatch is eliminated or significantly reduced, the asset can be designated as profit or loss - fair value measurement. However, such designation cannot be canceled.

The following accounting policies apply to subsequent measurement of financial assets.

Profit or loss - Fair value These assets are subsequently measured at fair value. Net gain or loss, including measurement Financial interest and dividend income, is recognized in profit or loss. assets Measurement of These assets are subsequently measured at amortized cost using the effective amortization cost financial interest method. Amortization is reduced by loss of loss (see (b)). Interest income, assets foreign currency translation gains and losses are recognized in profit or loss. The gain or loss on disposal is also recognized in profit or loss. Other comprehensive These assets are subsequently measured at fair value. Interest income, foreign income - fair value currency translation gains and losses calculated using the effective interest method measurement Debt are recognized in profit or loss. Other profit or loss is recognized in other instruments comprehensive income. The gain or loss accumulated in other comprehensive income or loss on disposal is reclassified to profit or loss. Other comprehensive These assets are subsequently measured at fair value. Dividends are recognized in income - fair value profit or loss if the dividends do not clearly represent the number of investment measurement equity costs. Other profit or loss is recognized in other comprehensive income and is never instruments reclassified to profit or loss.

The effect on the carrying amount of a financial asset under the application of K-IFRS No. 1109 on January 1, 2018 relates only to the new impairment requirement as described below.

The following table and accompanying notes describe the new measurement categories of K-IFRS 1109 for each classification of the initial measurement categories in accordance with K-IFRS 1039 and January 1, 2018.

(Unit: KRW)

Classification Carrying amount Carrying amount Classification according to K-IFRS Classification Note according to K- according to K- according to K-IFRS 1109 IFRS 1039 IFRS 1039 1109

Financial assets

Other comprehensive income - fair Available-for-sale Equity instruments (a) value measurement equity 600,000,000 600,000,000 financial assets instruments

Available-for-sale Other comprehensive income - fair Initial investment 2,758,368,987 2,758,368,987 financial assets value measurement debt instruments

Loans and Measurement of amortization cost Trade receivables (b) 139,950,086,915 139,950,086,915 receivables Financial assets

Loans and Measurement of amortization cost Other receivables (b) 6,690,081,943 6,690,081,943 receivables Financial assets

Short-term financial Loans and Measurement of amortization cost (b) 200,000,000,000 200,000,000,000 instruments receivables Financial assets

Cash and cash Loans and Measurement of amortization cost (b) 73,769,560,133 73,769,560,133 equivalents receivables Financial assets

(a) Equity instruments are products that the Group invests for the purpose of holding long-term for strategic purposes. As permitted by K-IFRS 1109, the Group designates these investments as other comprehensive income- fair value measurement financial assets at the date of initial application.

(b) Trade receivables, other receivables, short-term financial instruments and cash and cash equivalents classified as loans and receivables in accordance with Korean IFRS 1039 are classified as amortized cost financial assets.

(B) Impairment of financial assets K-IFRS 1109 replaces the "Accrued Loss" model of K-IFRS 1039 with the "expected credit loss" model. The new impairment model is applied to financial instruments measured at amortized cost, contractual assets and other comprehensive income - for debt instruments measured at fair value, but not equity instruments. In accordance with K-IFRS 1109, credit losses will be recognized earlier than K-IFRS 1039.

Financial assets measured at amortized cost include trade and other receivables, short-term financial instruments and cash and cash equivalents

In accordance with K-IFRS 1109, allowance for losses is measured using two criteria: - 12 months expected credit losses: expected credit losses due to defaults on financial instruments that can occur within 12 months after the end of the reporting period - Total expected credit losses: Expected credit losses due to any default event that may occur during the expected life of the financial instrument

The Group measures the allowance for losses by the amount corresponding to the expected credit loss for the whole period, except for the following financial assets measured at the expected credit loss of 12 months. - Debt securities determined to have low credit risk at the end of the reporting period - Other debt securities and bank deposits that do not have a significant increase in credit risk (i.e., non-default risk arising over the expected life of the financial asset)

When determining whether the credit risk of a financial asset has significantly increased since the initial recognition and when estimating the expected credit loss, the Group considers information that can be used and reasonably supported, without undue cost or effort. This includes qualitative and quantitative information and analysis based on the Group's past experience and known credit ratings, including forward-looking information.

1) Measuring expected credit losses The expected credit loss is the probability weight of the credit loss. Credit loss is measured as the present value of all cash deficits (ie, the difference between all contractual cash flows that are expected to be paid under the contract and all contractual cash flows that are expected to be received). 2) Credit-impaired financial assets At the end of each reporting period, the Group assesses the carrying amounts of financial assets measured at amortized cost and other comprehensive income - whether the creditworthiness of the debt securities measured at fair value is impaired. If there is more than one event that adversely affects the estimated future cash flows of the financial asset, the financial asset is impaired.

3) Indication of allowance for credit loss on statement of financial position The allowance for losses on financial assets measured at amortized cost is deducted from the carrying amount of the asset. Other comprehensive income - for debt instruments measured at fair value, the provision for losses is recognized in other comprehensive income, instead of reducing the carrying amount of the asset.

4) Influence of new damage model As a result of applying the impairment provisions of the Korea Financial Accounting Standards No. 1109, there is no additional provision for losses as compared with the allowances under No. 1039. In addition, the effects on the Current quarter income statement, Current quarter comprehensive income statement and Current quarter cash flow statement, which ended on the same date of the company’s Current quarter statement of financial position as of June 30, 2018, are not important.

② K-IFRS No. 1115, "Revenue from contracts with customers" The Group has adopted K-IFRS 1115, 'Revenue from contracts with customers' as of January 1, 2018 as the initial application date.

K-IFRS 1115 is a comprehensive framework for determining when and how much revenue is recognized. The Standard is based on the current K-IFRS 1018 'Revenue', No. 1011 'Construction Contract', K-IFRS Interpretation No. 2031 'Revenue: Exchange Transaction of Advertising Services', No. 2113 'Customer Loyalty Program' 'Real estate construction contract', No. 2118 'Transfer of assets from customers'.

The company’s service business sector provides product development services at the request of the customers, which generally takes more than three months, and the company has recognized revenues proportionally according to the progress percentage estimated on the basis of service acceptance check reports when the Korea Financial Accounting Standards No. 1018 'Revenues’ before revision is applied.

In accordance with the Korea Financial Accounting Standards No. 1115, revenues can be recognized by applying the progress percentage only if the company has the payment claim rights that can be enforced for the completed portion of performance in its obligation up to now when the company itself has no alternative use of the assets that have been made with the performance of its obligation by the company. As the company's services business sector is considered to be unable to meet the requirements, revenues have been recognized based on the delivery criteria.

The Group recognizes the cumulative effect of the initial application of the Standard as an adjustment to the beginning balance of retained earnings and applies the Standard only to contracts that are not completed on January 1, Accordingly, the effect of adopting K-IFRS No. 1115 reflected in retained earnings as of January 1, 2018 is as follows.

(Unit: KRW)

Classification Effect of application (Jan 1, 2018)

Retained earnings

Development Services Revenue recognized (3,953,203,200) at one point

Development service-related costs 2,376,228,409

Effect of application (Jan 1, 2018) (1,576,974,791)

The effects of applying the Korea Financial Accounting Standards No. 1115 to the Current quarter income statement and Current quarter comprehensive income statement, which ended on the same date of the Current quarter statement of financial position as of Sep 30, 2018, are as follows; The effects on our Current quarter cash flow statement, which ended on the same date, are not important.

The effects on the Current quarter financial statements as of the end of the current quarter are as follows;

(Unit: KRW)

Amount before Reflection Classification Disclosure amount Adjustment of No. 1115

Assets

Current assets 538,987,627,609 (3,304,364,489) 535,683,263,120

Inventory 102,385,986,483 (128,266,959) 102,257,719,524

Prepaid expenses 14,380,078,488 (3,176,097,530) 11,203,980,958

Non-Current assets 100,666,401,473 - 100,666,401,473

Total assets 639,654,029,082 (3,304,364,489) 636,349,664,593

Capital

Retained earnings 346,640,735,141 (771,341,177) 345,869,393,964

Total capital 431,114,247,910 (771,341,177) 430,342,906,733

Liabilities

Current liabilities 200,811,668,386 (2,533,023,312) 198,278,645,074

Advance payment 2,646,917,113 (2,361,013,406) 285,903,707

Provision 4,034,557,563 (172,009,906) 3,862,547,657

Non-Current Liabilities 7,728,112,786 - 7,728,112,786

Total Liabilities 208,539,781,172 (2,533,023,312) 206,006,757,860

Total capital and liabilities 639,654,029,082 (3,304,364,489) 636,349,664,593

The effects on the Current quarter income statement and Current quarter comprehensive income statement for the current quarter are as follows;

(Unit: KRW)

Amount before Reflection Classification Disclosure amount Adjustment of No. 1115

Revenue 555,804,067,653 (1,420,179,888) 554,383,887,765

Cost of sales 416,979,239,670 928,136,080 417,907,375,750

Gross profit on sales 138,824,827,983 (2,348,315,968) 136,476,512,015 Operating income 34,925,352,348 (2,348,315,968) 32,577,036,380

Net income before income 37,951,221,418 (2,348,315,968) 35,602,905,450 taxes

Corporate tax expense 5,384,610,372 - 5,384,610,372

Current quarter net profit 32,566,611,046 (2,348,315,968) 30,218,295,078

Current quarter total 32,564,803,315 (2,348,315,968) 30,216,487,347 comprehensive profit

(3) Unapplied revision standard Amendments and interpretations that have not been effective as of January 1, 2018 are as follows. The Group did not apply the following amendments and interpretations at the time of preparation of consolidated financial statements.

① K-IFRS No. 1116 "Lease" In accordance with SKAS No. 1017 "Leases", K-IFRS Interpretation No. 2104, "Determining whether a lease is included in an arrangement", K-IFRS 2015 Operating lease: Incentive, Standards established in lieu of an 'appraisal of the substance of a transaction involving a lease in a legal form' The Group must determine whether the contract itself is a lease or whether the contract includes a lease at the time of the contractual arrangement.

The lessee and the lessor must account for each lease element of the lease as a lease, separate from the non-lease element ("non-lease element") in an agreement that includes a lease or lease. The lessee recognizes lease liabilities and licensees for all lease commitments except short-term and minority leases, where the liability is measured at the present value of the unpaid rent at the inception of the lease and the lease- It is measured by the lease payments, lease opening direct costs, dismantling, removal and restoration costs of the underlying assets.

This amendment is effective for annual periods beginning on or after January 1, 2019, but may be early adopted in conjunction with K-IFRS No. 1115. The Group expects that this revision will not have a material impact on the consolidated financial statements.

4. Classification of Financial Products by Category (1) Financial products by category The carrying amounts of financial instruments by category at the end of current quarter and previous periods are as follows.

(Unit: KRW) Division End of current quarter End of previous year

Financial assets Fair value measurement financial assets Profit or loss - Fair value 1,519,905,416 - measurement financial assets

Other comprehensive income 500,000,000 - (Unit: KRW) Division End of current quarter End of previous year

- Fair value measurement financial assets

Available-for-sale financial assets - 2,758,368,987

Total 2,019,905,416 2,758,368,987

Financial assets not measured at fair values

Transferable financial assets - 600,000,000

Measurement of amortization cost Financial assets

Cash and cash equivalents 12,327,313,986 73,769,560,133

Short-term financial 185,000,000,000 200,000,000,000 instruments

Trade receivables 215,223,641,891 139,950,086,915

Other receivables 9,440,282,501 6,690,081,943

Sub total 421,991,238,378 420,409,728,991

Total 424,011,143,794 423,768,097,978

Financial liabilities Financial liabilities measured at amortized cost Trade liabilities 162,845,288,724 97,214,262,012

Other liabilities 25,994,556,183 23,549,385,271

Total 188,839,844,907 120,763,647,283

(2) Financial revenues and financial costs by category The details of financial incomes and financial costs for the current and previous quarter are as follows;

(Unit: KRW) Interest income Other income (*)

Division Previous Current Previous Current quarter quarter quarter quarter

Measurement of amortization cost 3,170,977,940 2,710,389,252 (107,175,263) 634,253,750 Financial assets

Current profit or loss - loss on evaluation - - (638,463,571) - measured at fair values

Total 3,170,977,940 2,710,389,252 (745,638,834) 634,253,750 (*) Other profits and losses are composed of foreign exchange conversion profits and losses, foreign exchange gains and losses, and current profits and losses - loss on valuation of financial assets measured at fair values

5. Financial risk management The consolidated entity is exposed to credit risks, liquidity risks and market risks as far as the financial products are concerned. These notes disclose the information on the risks to which the company is exposed, as well as the goals, policies, the procedure for evaluating and managing the risks, and management of capital set by the company. Further quantifiable information is disclosed throughout these financial statements.

(1) Credit risks Credit risks are the risks of suffering financial losses due to the default of contractual obligations by the customer or the other party in an agreement for a financial product. This kind of risk is mainly related to the account receivables and investment assets.

① Exposure to credit risks The book value of a financial asset means the maximum level of exposure to credit risks. The maximum level of exposure to credit risks at the end of current quarter and previous year for the consolidated entity is shown below; (Unit: KRW) Division End of current quarter End of previous year Cash and cashable assets 12,327,313,986 73,769,560,133 Short-term financial instruments 185,000,000,000 200,000,000,000 Trade receivables 215,223,641,891 139,950,086,915 Other receivables 9,440,282,501 6,690,081,943 Available-for-sale financial assets - 2,758,368,987 (debt securities) Profit or loss - Fair value 1,519,905,416 - measurement Financial assets Total 423,511,143,794 423,168,097,978

② Impairment loss The consolidated entity has established allowances for the possible losses from its accounts receivable. This allowance is composed of specific impairment losses for each significant item as well as losses that have occurred within a group of similar financial assets but yet to be recognized. The allowance for the group of financial assets is set based on the past data on the recollection of similar financial assets.

Account receivables are indicated in the financial statement with the allowance for losses deducted. In this regard, the details on the allowance for losses related to the accounts receivables, as well as the accounts receivable in their entire amount before reduction at the end of current quarter and previous year are as follows:

(Unit: KRW) Division End of current quarter End of previous year Account receivables 215,223,641,891 139,950,086,915 Allowance for bad debts: - - Net book value of account receivables 215,223,641,891 139,950,086,915

The age of receivables and impaired amounts for each age at the end of current quarter and previous year are as follows: (Unit: KRW) End of current quarter End of previous year Division Balance Impaired amount Balance Impaired amount Within 3 months 214,785,053,777 - 138,307,918,335 - 3 ~ 6 months 438,043,714 - 1,624,452,580 - More than 6 months 544,400 - 17,716,000 - Total 215,223,641,891 - 139,950,086,915 -

(2) Liquidity risks The liquidity risks refer to the risks involved in difficulties on fulfilling the financial liabilities to be repaid by transfer of cash or other financial assets of the consolidated entity. The method of management of liquidity for the consolidated entity focuses on maintaining sufficient liquidity in order to repay the debts within the due date without damaging the reputation of the company or suffering excessive losses even during financial hardships.

The consolidated entity is managing the liquidity risks by maintaining cash, cashable assets, and short-term financial products to the satisfaction of any liquidity risk.

The contractual due dates for financial liabilities held by the consolidated entity at the end of current quarter are as follows: The amounts do not reflect the effects of offsetting agreements.

① End of current quarter (Unit: KRW) Cash flow per 1 year to less than Division Book value Less than a year contract 5 years Account payable 162,845,288,724 162,845,288,724 162,845,288,724 - Other payables 25,994,556,183 25,994,556,183 25,979,556,183 15,000,000 Total 188,839,844,907 188,839,844,907 188,824,844,907 15,000,000

②End of previous quarter (Unit: KRW) Cash flow per 1 year to less than 5 Division Book value Less than a year contract years Account payable 97,214,262,012 97,214,262,012 97,214,262,012 - Other payables 23,549,385,271 23,549,385,271 23,534,385,271 15,000,000 Total 120,763,647,283 120,763,647,283 120,748,647,283 15,000,000

(3) Market risks Market risks mean the risks of changes in future cash flows or fair values of financial products due to changes in market prices.

① Exchange rate risk The consolidated entity is exposed to the exchange rate risk related to the sales profits and costs indicated in KRW, which is the functioning currency. The major presentation currency for these transactions is USD.

A) Exposure to exchange rate risks The book values of the cash assets and liabilities presented in foreign currency other than the functioning currency at the end of the current quarter and previous year are as follows:

(Unit: KRW) End of the current quarter End of previous year Division USD JPY EUR CNY USD JPY CNY Assets in foreign currency: Cash and 1,462,968,973 455,522,674 - 108,822,570 1,086,625,579 1,031,446,991 152,628,880 cashable assets Account 11,211,525,858 - - - 14,655,432,818 214,698,439 - receivables Total 12,674,494,831 455,522,674 - 108,822,570 15,742,058,397 1,246,145,430 152,628,880 Liabilities in foreign currency: Trade 24,601,004,432 - - - 8,893,029,319 - - payables Account 4,096,865,721 69,905,520 15,609,840 271,278,720 2,851,824,150 - 254,922,110 payables Total 28,697,870,153 69,905,520 15,609,840 271,278,720 11,744,853,469 - 254,922,110

The foreign exchange rates applied to the conversion of monetary assets and liabilities in foreign currency are as follows;

Division End of the current quarter End of previous quarter USD 1,112.70 1,071.40 JPY 9.81 9.49 EUR 1,294.57 - CNY 161.78 163.65

B) Sensitivity analysis If the exchange rates of the key foreign currency that compose a large part of the financial assets and liabilities of the consolidated entity at the end of the current quarter and previous year, the capital, incomes and losses of the consolidated entity would have changed. Such an analysis is based on the assumption of fluctuation the consolidated entity believes with rationalities at the end of current quarter. Also, it was assumed during the analysis of the sensitivity that other factors such as the interest rate do not change. The effect of the changes in foreign exchange rate for Korean won (before corporate tax) for the end of current year and the previous year on the losses and gains are as follows:

(Unit: KRW) End of the current quarter End of previous year Division 5% increase 5% Decrease 5% increase 5% Decrease USD (801,168,766) 801,168,766 199,860,246 (199,860,246) JPY 19,280,858 (19,280,858) 62,307,272 (62,307,272) EUR (780,492) 780,492 - - CNY (8,122,808) 8,122,808 (5,114,662) 5,114,662

② Interest rate risk The assets of the consolidated entity with interests are fixed with the fixed interest rate, and the consolidated entity is not recognizing financial products with the fixed interest rate as the financial products for which the profits or losses should be recognized in the current fiscal year. Therefore, the profit and operating cash flows of the consolidated entity are actually independent from variations in the market interest rates.

(4) Fair values Book values and fair values of financial assets and financial liabilities including the hierarchy system of fair values are as follow; ① End of current quarter (Unit: KRW) Division Book value Level 1 Level 2 Level 3 Total Financial assets measured with fair value Profit or loss – Fair value 1,519,905,416 - - 1,519,905,416 1,519,905,416 measurement Other comprehensive income – 500,000,000 - - 500,000,000 500,000,000 Fair value measurement Total 2,019,905,416 - - 2,019,905,416 2,019,905,416 Financial assets not measured with fair value Cash and cashable assets 12,327,313,986 - - - - Short-term financial 185,000,000,000 instruments Trade receivables 215,223,641,891 - - - - Other receivables 9,440,282,501 - - - - Total 421,991,238,378 - - - - Financial liabilities not measured with fair value Account payables 162,845,288,724 - - - - Other liabilities 25,994,556,183 - - - - Total 188,839,844,907 - - - - (*) No fair value for financial assets and financial liabilities not measured with fair value is included because book value fall under the reasonable approximate values of fair values.

② End of previous quarter (Unit: KRW) Division Book value Level 1 Level 2 Level 3 Total Financial assets measured with fair value Transferrable financial assets 2,758,368,987 - - 2,758,368,987 2,758,368,987 Financial assets not measured with fair value Cash and cashable assets (*1) 73,769,560,133 - - - - Short-term financial 200,000,000,000 instruments(*1) Trade receivables (*1) 139,950,086,915 - - - - Other receivables (*1) 6,690,081,943 - - - - Transferrable financial assets 600,000,000 - - - - (*2) Total 421,009,728,991 - - - - Financial liabilities not measured with fair value Account payables (*1) 97,214,262,012 - - - - Other liabilities (*1) 23,549,385,271 - - - - Total 120,763,647,283 - - - - (*1) No fair value for financial assets and financial liabilities not measured with fair value is included because book values fall under the reasonable approximate values of fair values. (*2) Measurements were done with cost in accordance with Corporate Accounting Standard No. 1039 because measurements could not be done in a reliable manner on fair values under other methods because they fall under the equity products without any announced price in the active market for the same product (i.e. input variable of Level 1).

Changes of transferrable financial assets classified into measurements under Level 3 of fair value during the current quarter are as follows; (Unit: KRW) Division Beginning Evaluation (*) Disposition End of quarter Profit or loss - Fair 2,758,368,987 (638,463,571) (600,000,000) 1,519,905,416 value measurement Financial assets Other comprehensive 600,000,000 (2,384,869) (97,615,131) 500,000,000 income - fair value measurement financial assets (*) Fair value was evaluated using methods such as transaction prices between independent third parties, etc.

(5) Capital management The capital management of the consolidated entity aims at maintaining the existence of the company as a going concern, minimizing the cost for funding, maximizing the profits of the shareholders, and maintaining an appropriate equity structure. The consolidated entity manages the capital based on the ratio of liability, which is calculated by dividing the total liability in the financial statement with capital. The ratio of liabilities of the consolidated entity at the end of the current quarter and previous year are as follows: (Unit: KRW) Division End of current quarter End of previous year Total liabilities 208,539,781,172 132,334,851,306 Total capital 431,114,247,910 411,511,429,386 Debt ratio 48.37% 32.16%

6. Cash and cashable assets The status of the cash and cashable assets at the end of the current quarter and previous year is as follows: (Unit: KRW) Division End of current quarter End of previous year Demand deposit (*1) 11,510,993,730 38,561,785,492 Time deposit (*2) 816,320,256 35,207,774,641 Total 12,327,313,986 73,769,560,133 (*1) This financial product has a very high liquidity easy to convert to a fixed amount, and low risk of changes in value. (*2) As the due date is within 3 months from the date of acquisition, they were recognized as cash and cashable assets.

7. Short-term financial instruments The details of short-term financial instruments as of the end of the current quarter and end of the previous year are as follows; (Unit: KRW) Division End of current quarter End of previous quarter Time deposit 185,000,000,000 200,000,000,000

8. Trade receivables and other receivables The status on trade and other receivables at the end of the current quarter and previous year is as follows; (Unit: KRW) Division End of current quarter End of previous quarter Current Non-current Current Non-current Trade receivables 215,223,641,891 - 139,950,086,915 - Account receivables 300,862,766 - 690,834,798 - Revenues receivables 1,605,246,566 - 750,906,229 - Loans 520,088,324 4,301,522,231 170,952,006 1,421,352,204 Security deposits - 2,712,562,614 - 3,656,036,706 Total 217,649,839,547 7,014,084,845 141,562,779,948 5,077,388,910

9. Transferrable financial assets (1) The status of transferrable financial assets at the end of the current quarter and previous year are as follows; (Unit: KRW) Division End of current quarter End of previous quarter Current profit or loss - debt instruments measured at fair values LB Investment 1,511,161,705 2,758,368,987 Other comprehensive profit or loss - equity instruments measured at fair values Daedeok Investment 500,000,000 500,000,000 Daedeok Inno-Polis Venture Association 100,000,000 Total 2,019,905,416 3,358,368,987

10. Other assets The details of other current assets at the end of current quarter and previous year are as follows; (Unit: KRW) End of current quarter End of previous year Division Current Non-current Current Non-current Advanced payments 962,551,775 1,457,743,881 1,003,622,446 1,393,732,647 Advanced expenses 14,380,078,488 - 6,307,847,976 - Long-term advance 6,281,857,330 - 4,926,792,780 - payments Total 21,624,487,593 1,457,743,881 12,238,263,202 1,393,732,647

11. Inventory assets (1) The details of inventory assets for the consolidated entity at the end of current quarter and previous year are as follows; (Unit: KRW) Division End of current quarter End of previous year Products in process 105,135,338,140 63,454,067,429 Products in process return assets 128,266,959 - Allowance for evaluated loss on products in process (2,877,618,616) (2,442,793,797) Total 102,385,986,483 61,011,273,632

(2) The return of evaluated loss recognized for inventory assets during the current quarter and previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Cost of goods sold: Return of evaluated loss for inventory assets 434,824,819 1,156,238,860

12. Investment stocks in subsidiaries and affiliates (1) The details of investment stocks in subsidiaries as of the end of the current quarter and end of the previous year are as follows;

(Unit: KRW)

Major sales Closing End of current quarter End of the previous year Name of company Location activities month Share ratio(%) Book value Share ratio(%) Book value

Silicon Works Inc R & D and design 100.00 137,322,045 100.00 137,322,045

U.S.A. of semiconductor Dec

devices

Silicon Works R & D and design 100.00 2,179,314,000 100.00 674,454,000

China Co., Ltd(*) China of semiconductor Dec

devices

Total 811,776,045 811,776,045 (*) A Chinese corporation was newly established for the purpose of expanding into the Chinese market during the previous year, and 1,504,860 thousand Korean won was additionally invested in the current quarter.

(2) The details of stock investments in associates as of the end of the current quarter and end of the previous year are as follows;

(Unit: KRW)

Name of Major sales Closing Current year Previous year Location company activities month Share ratio(%) Book value Share ratio(%) Book value

Advanced power R & D and device design of Korea Mar 49.00 4,410,000,000 - - Technology (*) semiconductor devices

(*) The company invested \4,410,000,000 to the newly formed Advanced Power Device Technology for the purpose of product and technology development.

13. Tangible assets

(1) Details of tangible assets at the end of the current quarter and previous years are as follows.

(Unit: KRW)

Classification End of the current quarter End of the previous quarter

Acquisition Cost 43,782,925,835 34,254,811,071

Accumulated amortization (21,218,237,985) (18,489,712,819)

Accumulated impairment loss (564,056,013) (564,056,013)

Government subsidy (9,378,237) (13,010,505)

Book value 21,991,253,600 15,188,031,734

(2) Details of property, plant and equipment at the end of the current quarter and previous quarter are as follows. ① Current quarter

(Unit: KRW) Other Total Division Land Building Construct Machinery Fixture tangible assets(*) Book value at 5,220,274,972 3,256,217,768 - 3,446,936,246 2,864,482,493 400,120,255 15,188,031,734 the beginning of current year Weighted - - 188,300,000 5,237,941,775 2,110,646,058 2,855,106,628 10,391,994,461 Acquisition Amount Weighted (218,667,378) (343,137,144) - - (3,151,462) (20,298,042) (585,254,026) Disposition in the year Depreciation - (183,744,723) (1,176,876) (1,404,261,872) (1,103,104,213) (319,866,993) (3,012,154,677) cost Acquisition - - - 8,636,108 - - 8,636,108 amount due to business transfer (**) Book value at 5,001,607,594 2,729,335,901 187,123,124 7,289,252,257 3,868,872,876 2,915,061,848 21,991,253,600 the end of current quarter (*) Other tangible assets include facilities, leasehold improvements and vehicles. (**) Acquired due to business transfer during the current quarter (See Note 30).

② Previous quarter

(Unit: KRW) Other tangible Total Division Land Building Machinery Fixture assets(*) Book value at 5,319,324,106 3,639,831,603 3,201,876,035 2,693,759,422 406,420,255 15,261,211,421 the beginning of previous year Acquisition in - - 220,201,200 605,443,966 101,168,000 926,813,166 the year Disposition in (99,049,134) (129,283,856) - - - (228,332,990) the year Depreciation - (127,164,990) (623,961,290) (576,803,502) (62,317,930) (1,390,247,712) cost Book value at 5,220,274,972 3,383,382,757 2,798,115,945 2,722,399,886 445,270,325 14,569,443,885 the end of previous quarter (*) Other tangible assets include facilities, leasehold improvements and vehicles.

14. Intangible assets (1) The details of intangible assets as of the end of the current quarter and end of the previous year are as follows;

(Unit: KRW)

Classification End of the current quarter End of the previous quarter

Acquisition Cost 76,995,087,886 34,871,917,433

Accumulated amortization (19,408,749,033) (16,638,372,641)

Accumulated impairment loss (337,876,490) (489,308,643)

Government subsidy (15,121,884) (28,572,309)

Book value 57,233,340,479 17,715,663,840

(2) The changes to the book values of intangible assets in the current and previous quarter are as follows; ① Current quarter (Unit: KRW)

Industrial Other Intangible Division Goodwill property Software Membership intangible assets under Total rights assets(*) construction Book value 9,044,018,628 1,298,212,02 1,329,137,15 1,693,653,00 2,250,000,040 2,100,643,000 17,715,663,840

at the 0 2 0 beginning of current year Acquisition - 303,105,361 546,457,960 613,350,000 - 2,260,585,236 3,723,498,557 in the year

Disposition - - - (238,000,000) - - (238,000,000) in the year

Depreciations - (156,210,507) (859,715,428) - (1,741,000,032 - (2,756,925,967

for intangible ) ) assets Acquisition 18,869,104,04 - - - 19,920,000,000 - 38,789,104,049

amount due 9 to business transfer (**) Transfer to - - 2,778,683,00 - - (2,778,683,000 -

the main 0 ) account Book values 27,913,122,67 1,445,106,87 3,794,562,68 2,069,003,00 20,429,000,008 1,582,545,236 57,233,340,479

at the end of 7 4 4 0 current quarter

(*) Other intangible assets consist of customer relationship intangible assets arising from a business combination in 2015. (**) Acquired due to business transfer during the current quarter (See Note 30).

② Previous quarter (Unit: KRW) Other Intangible Industrial Division Goodwill Software Membership intangible assets under Total property rights assets(*) construction Book value at 9,044,018,628 1,192,742,040 1,835,313,886 1,401,677,000 3,662,750,024 - 17,136,501,578 the beginning of previous year Weighted - 217,903,621 277,929,000 308,019,690 - 532,190,000 1,336,042,311 Acquisition Amount Amortization - (91,647,780) (486,874,586) - (882,749,992) - (1,461,272,358) of intangible assets Book value at 9,044,018,628 1,318,997,881 1,626,368,300 1,709,696,690 2,780,000,032 532,190,000 17,011,271,531 the end of previous year (*) Other intangible assets consist of customer relationship intangible assets arising from a business combination in 2015.

15. Government subsidies The consolidated entity entered into a joint research and development agreement with the coordinating company for the new technology development under a national initiative. The consolidated entity spent the government subsidy provided under the above-mentioned program for purchase of various tangible and intangible assets, while recognizing the transactions as Decreasing in the relevant subsidy asset entry Government project Coordinating company Digital holographic table top terminal technology development ETRI

16. Payables and other liabilities The details of payables and other liabilities at the end of the current quarter and previous year are as follows; (Unit: KRW) End of the current quarter End of previous quarter Division Current Non-current Current Non-current Trade payables 162,845,288,724 - 97,214,262,012 - Accounts Payable 13,063,769,456 - 18,050,755,333 - Unpaid expense 12,915,786,727 - 5,483,629,938 - Lease guarantee - 15,000,000 - 15,000,000 deposit Total 188,824,844,907 15,000,000 120,748,647,283 15,000,000

17. Other liabilities (1). The details of other non-current liabilities at the end of the current quarter and previous year are as follows; (Unit: KRW) Division End of the current quarter End of previous quarter Current Non-current Current Non-current Advances 2,646,917,113 - 66,240,000 - Withholdings 461,031,815 - 625,902,748 - Other allowance 4,034,557,563 - 4,063,333,282 - liabilities Long-term employee - 655,537,749 - 583,749,811 salary liabilities Recovery allowance - 566,980,400 - 126,160,400 liabilities Total 7,142,506,491 1,222,518,149 4,755,476,030 709,910,211

(2) Changes to allowance liabilities in the current year are as follows; (Unit: KRW) Division Beginning Increase Decrease End of quarter Provision for sales 4,063,333,282 35,268,553 (236,054,178) 3,862,547,657 warrant Return provision - 1,022,023,515 (850,013,609) 172,009,906 Total 4,063,333,282 1,057,292,068 (1,086,067,787) 4,034,557,563 The company recognizes warranty expense in the provision for product warranties as expected to be borne by the company related to sales guarantee for the products, and recognizes the corresponding transferred amount in selling and administrative expenses. On the other hand, the company recognizes the amount corresponding to the portion of revenue to be canceled at the time of product return as allowance liability for return and deduction to sales in accordance with the Korea Financial Accounting Standards No. 1115.

18. Capital and capital surplus (1) The details of capital at the end of the current quarter and previous year are as follows; (Unit: Share, KRW) Division End of current quarter End of previous year Number of authorized shares 50,000,000 50,000,000 price per share 500 500 Total number of issued shares 16,264,300 shares 16,264,300 shares Capital 8,132,150,000 8,132,150,000

(2) There are no changes in the number of shares outstanding (16,264,300 shares) in the current quarter and previous quarter.

(3) The composition of capital surplus at the end of the current quarter and end of previous year is as follows; (Unit: KRW) Division End of the current quarter End of previous year Premium on capital stocks 66,560,617,129 66,560,617,129 Other Capital Surplus 9,782,553,371 9,782,553,371 Total 76,343,170,500 76,343,170,500

19. Other capital items The composition of the other capital items at the end of the current quarter and previous year are as follows: (Unit: KRW) Division End of the current quarter End of previous year Other comprehensive profit and loss - profit and (1,807,731) - loss on valuation of financial assets measured at fair values Gain on valuation of available-for-sale financial - 1,705,779,692 assets Total (1,807,731) 1,705,779,692

20. Retained earnings (1) The details of retained earnings at the end of the current quarter and previous year are as follows; (Unit: KRW) Division End of the current quarter End of previous year Statutory reserves 4,066,075,000 4,066,075,000 Unappropriated retained earnings 342,574,660,141 321,264,254,194 Total 346,640,735,141 325,330,329,194

(2) The details of unappropriated retained earnings for the current quarter and previous year are as follows; (Unit: KRW) Division Current quarter Previous quarter Beginning 321,264,254,194 290,499,416,597 Dividend (11,385,010,000) (14,637,870,000) Adjustments for first application of 1,705,779,692 - K-IFRS 1109 Adjustments for first application of (1,576,974,791) - K-IFRS 1115 Net income end of current quarter 32,566,611,046 22,601,275,927 End of current quarter 342,574,660,141 298,462,822,524

21. Earnings per share (1) Basic earnings per share ① The calculated amounts of earnings per share in the current quarter and previous quarter are as follows; (Unit: KRW, Shares) Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated Consolidated net income in the 17,673,996,966 32,566,611,046 12,265,570,602 22,601,275,927 quarter Number of weighted average 16,264,300 16,264,300 16,264,300 16,264,300 outstanding common stocks Earnings per basic share 1,087 2,002 754 1,390

② Details of calculations on the number of weighted average outstanding common stocks for the current quarter

No. of Number of weighted average Weight No. of No. of outstanding outstanding common stocks Division issued Treasury common shares (1) shares (2) shares 3 months Accumulated 3 months Accumulated (1-2)

92days/92days 273days/273days 16,264,300 16,264,300 16,264,300 16,264,300 Beginning - shares shares shares shares

92days/92days 273days/273days 16,264,300 16,264,300 Total shares shares

③ Details of calculations on the number of weighted average outstanding common stocks for the previous quarter No. of Number of weighted average Weight No. of No. of outstanding outstanding common stocks Division issued Treasury common shares (1) shares (2) shares 3 months Accumulated 3 months Accumulated (1-2)

92days/92days 273days/273days 16,264,300 16,264,300 16,264,300 16,264,300 Beginning - shares shares shares shares

92days/92days 273days/273days 16,264,300 16,264,300 Total shares shares

(2) Diluted earnings per share The consolidated entity does not have any diluted stocks in the current quarter and previous quarter. Accordingly, the diluted earnings per share is the same as the basic earnings per share.

22. Financial revenues and expenses (1) The details of financial revenues in the current quarter and previous quarter are as follows: (Unit: KRW)

Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated

Interest income 968,967,975 3,170,977,940 918,842,436 2,710,389,252 Profit from foreign currency - - 5,455,524 1,485,070 conversion (financial) Profit or loss - Fair value 8,743,711 8,743,711 - - measurement Gain on valuation of financial assets Total 977,711,686 3,179,721,651 924,297,960 2,711,874,322

(2) The details of financial expenses in the current quarter and previous quarter are as follows; (Unit: KRW)

Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated

Loss from foreign exchange - - - 62,250 rate (financial) Loss from foreign currency 13,768,308 10,013,293 - 2,619,474 conversion (financial) Current profit or loss - loss - 647,207,282 - - on valuation of financial assets measured at fair values Total 13,768,308 657,220,575 - 2,681,724

23. Other non-operating revenues and expenses (1) The details of other non-operating revenues in the current quarter and previous quarter are as follows: (Unit: KRW)

Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated

Profit from foreign exchange 569,113,008 1,087,669,924 204,484,072 1,190,284,701 rate (non-financial) Profit from foreign currency 107,718,320 255,679,713 70,990,446 156,963,308 conversion (non-financial) Gains on disposition of 402,280,457 402,479,457 - 91,159,335 tangible assets Gains on disposition of 15,000,000 15,000,000 - - intangible assets Other profit 18,032,006 321,150,830 2,783,665 2,909,506 Total 1,112,143,791 2,081,979,924 278,258,183 1,441,316,850

(2) The details of other non-operating expenses in the current quarter and previous quarter are as follows: (Unit: KRW) Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated Loss from foreign exchange rate 642,068,065 1,379,833,304 232,509,956 523,169,857 (non-financial) Loss from foreign currency - 60,678,303 53,510,066 188,627,748 conversion (non-financial) Loss from disposition of tangible 32,572,924 51,333,483 - 19,492,325 assets Loss from disposition of intangible - 21,454,545 - - assets Other loss 6,213,167 65,312,295 18,270,848 1,854,122,750 Total 680,854,156 1,578,611,930 304,290,870 2,585,412,680

24. Operating income Major items and amounts included in calculating operating incomes in the current quarter and previous quarter are as follows; (Unit: KRW)

Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated

Sales 213,925,472,228 555,804,067,653 180,536,262,932 493,062,999,660 Sales due to sales of 211,149,572,825 549,025,265,728 178,502,155,345 487,331,955,427 goods Other sales 2,775,899,403 6,778,801,925 2,034,107,587 5,731,044,233 Cost of sales 157,796,489,111 416,979,239,670 141,670,648,912 394,367,779,099 Cost of goods sold 156,025,492,898 414,121,591,533 133,211,170,192 368,515,336,861 Other cost of sales 1,770,996,213 2,857,648,137 8,459,478,720 25,852,442,238 Selling and 34,942,451,196 103,899,475,635 24,215,482,851 72,026,576,415 administrative expenses Salary and bonuses 6,033,485,841 15,989,530,705 3,131,873,671 8,723,229,839 Retirement benefits 494,236,026 1,471,686,875 195,090,164 654,868,479 Employee benefits 1,474,477,983 3,662,374,996 648,898,131 1,534,975,253 Travel expenses 377,703,610 1,179,200,859 476,998,329 1,208,254,167 Rental payables 1,203,428,081 3,078,733,947 600,228,041 1,778,761,308 Service fees 3,174,706,406 8,399,898,926 1,877,612,311 4,248,526,256 Depreciation expenses 607,596,125 1,518,637,776 218,599,888 612,166,599 Depreciation of 234,168,591 540,867,656 30,180,721 92,742,163 intangible assets Product loss guarantee (848,930,326) 35,268,553 (1,078,767,029) 54,276,591 cost R & D expenses 21,510,424,301 65,334,359,062 17,593,268,712 51,487,983,957 Others 681,154,558 2,688,916,280 521,499,912 1,630,791,803 Operating profit 21,186,531,921 34,925,352,348 14,650,131,169 26,668,644,146

25. Employee salaries The consolidated entity is paying their retiring employees with the predetermined amount of severance payment in lump sum, based on the level of salaries and the years in service, and this is classified as defined salary system. Such severance payment amount can be withdrawn before the resignation of the employee as interim settlement, for which several legal requirements apply. The required years in service for such a settlement again after an interim settlement are set anew.

(1) The details of the defined salary liabilities at the end of the current quarter and previous year are as follows: (Unit: KRW) Division End of the current quarter End of previous year Present value of defined salary 29,179,205,154 25,999,037,468 liabilities Fair value of assets deposited outside (22,688,610,517) (24,015,684,437) of the company Defined salary liabilities (assets) 6,490,594,637 1,983,353,031

(2) Changes in the present value of defined salary liabilities during current quarter and the previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Beginning balance of defined salary liabilities 25,999,037,468 20,190,982,385 Service cost of the current year 3,688,100,763 3,127,046,539 Interest expenses 583,480,884 393,009,963 Transfer between affiliates 1,070,511,559 1,741,660,883 Retirement benefit payment (2,161,925,520) (1,699,567,850) Ending balance of defined salary liabilities 29,179,205,154 23,753,131,920

(3) The changes in the fair values of the assets deposited outside of the company in the current quarter and previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Beginning balance of externally reserved assets 24,015,684,437 15,729,358,445 Interest revenues 537,339,924 302,637,681 Retirement benefit payments from externally reserved (1,864,413,844) (1,728,395,333) assets Ending balance of externally reserved assets 22,688,610,517 14,303,600,793

(4) Expenses recognized in profit or loss for the current quarter and the previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Current working cost 3,688,100,763 3,127,046,539 Net interest cost 46,140,960 90,372,282 Total 3,734,241,723 3,217,418,821

(5) The composition of externally reserved assets for the end of current quarter and the end of the previous year are as follows; (Unit: KRW) Division End of current quarter End of the previous year Short-term financial products, etc. 22,688,610,517 24,015,684,437

26. Corporate tax expenses Corporate tax expense is calculated by adjusting income tax expense related to items recognized other than profit or loss and deferred income tax expense due to the adjustment and temporary differences arising in the current period. The average effective tax rates for the current quarter and previous quarter are 3.1% and 18.5%, respectively.

27. Cash flow statement (1) The details on the reconciliation of the incomes and expenses for the sales activities for the current quarter and previous quarter are as follows (Unit: KRW) Division Current quarter Previous quarter Corporate tax expense 5,384,610,372 5,632,464,987 Depreciation Cost 3,012,154,677 2,112,115,655 Profit from disposition of tangible assets (402,479,457) (91,159,335) Loss from disposition of tangible assets 51,333,483 19,492,325 Amortization of intangible assets 2,756,925,967 2,000,147,079 Profit from disposition of intangible assets (15,000,000) - Loss from disposition of intangible assets 21,454,545 - Retirement benefits 3,734,241,723 3,217,418,821 Profit from foreign currency conversion (255,679,713) (158,448,378) Loss from foreign currency conversion 70,691,596 191,247,222 Interest revenues (3,170,977,940) (2,710,389,252) Product Loss Guarantee Cost 35,268,553 54,276,591 Long-term employee benefits 92,229,861 65,032,743 Profit under equity method (8,743,711) - Current profit or loss - loss on valuation of financial assets 647,207,282 - measured at fair values Current profit or loss – gains on valuation of financial assets 11,953,237,238 10,332,198,458 measured at fair values Total 5,384,610,372 5,632,464,987

(2) The details on the changes in assets and liabilities due to sales activities for the current quarter and previous quarter are as follows; (Unit: KRW) Division Current quarter Previous quarter Decrease (Increase) of trade receivables (67,355,285,645) (26,200,819,341) Decrease (Increase) of other receivables 389,972,032 (220,966,171) Decrease (Increase) of other current assets (7,009,995,982) (5,809,487,452) Decrease (increase) of inventory assets 56,164,585 4,000,000 Decrease of other non-current assets (38,866,247,601) (5,974,357,627) Increase (Decrease) of trade payables 63,189,946,578 26,361,069,296 Decrease (Increase) of other current liabilities (2,053,508,967) (309,755,703) Increase (Decrease) of other payables 2,409,620,104 3,912,967,690 Increase (decrease) in non-current other liabilities - 23,500,618 Increase (decrease) in other non-current liabilities (77,921,923) (30,244,800) Payment of retirement (2,161,925,520) (1,699,567,850) Decrease in externally reserved assets 1,864,413,844 1,728,395,333 Transfer of defined benefit obligations 1,070,511,559 1,741,660,883 Total (48,544,256,936) (6,473,605,124)

(3) Cash flows from operating activities on the cash flow statement are recorded using the indirect method. The significant transactions that do not involve cash inflows and outflows for the current quarter and previous quarter are as follows. (Unit: KRW) Division Current quarter Previous quarter Increase of accounts payables related to acquisition of 586,415,259 153,229,340 tangible assets Decrease of accounts payables related to acquisition of (557,193,359) 64,989,250 intangible assets Substitution of advance payments into intangible assets 303,105,361 250,001,059 Increase of tangible assets due to restoration obligation 498,300,000 -

(4) Cash flows related to financial activities The changes in liabilities arising from financial activities during the current quarter are as follows; (Unit: KRW) Division Beginning Cash flow from financing Non-cash transaction End of quarter activities Dividend (11,385,010,000) 11,385,010,000 - payable

28. Restricted use of financial products The details of financial products whose use is limited at the end of current quarter are as follows; (Unit: KRW) Division Amount Details of limit to use Cash and cashable assets 705,135,138 Government subsidies

29. Special interest parties

(1) Details of special interest parties for the consolidated entity under the controlling and controlled relationships at the end of current quarter and end of the previous year are as follows; Type of special interest End of current quarter End of the previous year Companies that exercise substantial LG Corp. LG Corp. influences on the consolidated entity Subsidiaries Silicon Works Inc. Silicon Works Inc. Silicon Works China Co,. Ltd Silicon Works China Co,. Ltd Affiliates Advanced Power Device - Technology Co., LTD Etc Affiliates of LG Corp. Affiliates of LG Corp. Large Business Group Affiliated Large Business Group Affiliated Company (*) Company (*) (*) Not included in scope of related party pursuant to K-IFRS 1024 'Disclosure of related parties', but it belongs to the same large corporate group under the monopolistic regulation and fair trade law.

(2) The transactional details with special interest parties in the current quarter and previous quarter are as follows; (Unit: KRW) Division of Current quarter Previous quarter Name of special interest Transactional special party details 3 months Accumulated 3 months Accumulated relationship Subsidiaries Silicon Works Inc. Sales - 1,070,819 - 91,811,959 Operating 464,533,356 1,199,927,025 304,884,000 916,848,000 expenses Silicon Works China Co,. Operating 751,557,629 1,998,324,659 762,645,000 762,645,000 Ltd expenses Affiliates Advanced Power Device Acquisition of 536,852,373 842,145,236 - - Technology Co., Ltd tangible or intangible assets Others Lusem Co., Ltd. Sales - 60,000,000 90,000,000 271,795,830 Subsidiaries of Other non- - 72,993,637 - - LG Corp. operating income Operating - 15,467,193,707 28,178,162,381 78,483,340,877 expenses LG CNS Co., Ltd. Operating 597,872,178 1,248,800,358 229,254,496 695,499,738 expenses Acquisition of 752,000,000 4,698,669,460 203,366,250 939,921,250 tangible or intangible assets Serveone Co., Ltd. Sales - 10,437,150 6,762,900 8,472,300 Operating 236,159,010 562,577,673 10,325,952 45,528,025 expenses LG Management Operating 5,271,380 5,271,380 - - Development Institute expenses Inhwawon Co., Ltd. Other LG Electronics USA Inc. Sales 62,932,500 230,530,500 12,621,000 60,455,000 corporations LG International japan 1,056,255,048 2,072,766,573 509,397,660 2,303,553,244 belonging to Sales Ltd the large Sales 256,533,869 673,007,302 133,622,328 600,525,943 conglomerate Other non- group LG Display Co., Ltd. 195,614,724,036 499,435,256,021 163,018,564,984 448,485,876,808 operating income Operating LG Innotek Co., Ltd. - 20,695,281 - - expenses LG Chem Co., Ltd. Sales 6,758,270,235 17,559,908,055 3,469,218,782 6,550,090,782 - - 449,128,810 Sales LG Electronics Co., Ltd. - Operating 1,625,068,036 5,412,360,555 3,609,378,186 7,067,194,451 expenses LG Uplus Operating 1,523,264,671 3,020,434,017 972,400,980 2,644,074,134 expenses LG Nsys Co., Ltd. Operating 46,129,996,611 46,129,996,611 - - expenses Pantos Co., Ltd. Operating 26,379,030 81,744,855 20,831,717 64,113,470 expenses Himtech Soluteck Co., - - 862,500 3,669,000 Ltd., HS Ad Co., Ltd. Operating 303,779,140 893,106,088 183,201,000 406,863,500 expenses (*) It is excluded from related parties. LG sold all shares of Lusem Co., Ltd. during the current quarter year, and the transaction details after it is excluded from the scope of related parties are not included.

(3) The details of receivables and payables to related parties as of the end of the current quarter and end of the previous year are as follows; (Unit: KRW) End of current quarter End of the previous year Type of special Name of the party Trade receivables Trade payables and Trade receivables Trade payables and relationship other payables other payables

Silicon Works Inc. - 147,151,637 - 96,426,000 Subsidiaries Silicon Works China Co., - 258,862,114 - 245,475,000 Ltd. Advanced Power Device Affiliates - 407,412,104 - - Technology Co., Ltd

Lusem Co., Ltd. (*) - - 101,571,313 20,006,255,832

Other Subsidiaries of LG CNS Co., Ltd. - 907,189,305 - 449,299,457 LG Corp.

Serveone Co., Ltd. 300,000,000 167,277,591 304,434,204 9,041,480

LG Electronics USA Inc. 780,073,913 - 95,461,740 -

LG International japan - - 214,698,440 - Ltd LG Display Co., Ltd. 197,320,447,426 - 120,031,080,096 -

LG Innotek Co., Ltd. - 6,850,138,334 - 3,822,924,292 Other corporations LG Electronics Co., Ltd. belonging to the 2,396,278,036 74,465,042 2,934,441,593 2,489,197,156

large conglomerate LG Innotek Co., Ltd. - - 2,785,640 - group Indonesia LG Nsys Co., Ltd. - - - 121,000

LG Management - 45,378,300 - - Development Institute Inhwawon Co., Ltd. Pantos Co., Ltd. - 304,344,020 - 159,257,215

Total 113,364,831,428 200,796,799,375 9,162,218,447 123,684,473,026

(*) Due to the disposal of all shares of Lusem Co., Ltd. held by LG Co., Ltd. during the current quarter, it was excluded from related parties as of the end of the current quarter term.

(4) The transactional details with special interest parties in the current quarter and previous year are as follows; (Unit: KRW) Type of special Current quarter Previous year Name of the party relationship Cash contribution Dividend payments Cash contribution Dividend payments

Companies exercising significant influence LG Co., Ltd. - 3,766,366,800 - 4,842,471,600 on the consolidated entity

Silicon Works China Subsidiaries 1,504,860,000 - 674,454,000 Co., Ltd.(*1)

Advanced Power Affiliates Device Technology 4,410,000,000 - - - Co., Ltd(*2)

Total 5,914,860,000 3,766,366,800 674,454,000 4,842,471,600

(*1) The company has additionally invested 1,505 million KRW to Silicon Works China Co., Ltd., a subsidiary of the company. (*2) The Group invested ₩ 4,410 million in Advanced Power Device Technologies Co., Ltd., a newly established subsidiary, in the current quarter.

(5) The compensation for key management personnel for the current and previous quarter are as follows. (Unit: KRW) Current quarter Previous quarter Division 3 months Accumulated 3 months Accumulated Short-term salaries 996,440,488 1,816,332,808 256,439,710 925,314,780

Severance payment 67,512,665 201,523,301 11,192,066 182,631,494

Total 1,063,953,153 2,017,856,109 267,631,776 1,107,946,274

The key executives of the controlling company include the auditors and the registered directors (including outside directors.)

(6) The consolidated entity has no security and guarantee detail providing to or provided by special interest parties at the end of the current quarter and end of the previous year

30. Events after the reporting period (1) General Information On July 1, the parent company acquired all of the development, manufacturing and sales of OLED T-Con chip business from LG Electronics to build a total system semiconductor solution for OLED TV.

(Unit: KRW)

Division Amount

Transfer cost:

Cash and cash equivalents 46,129,996,611

Succession assets and liabilities:

Trade receivables and other receivables 7,879,739,697

Inventory 2,508,465,250

Tangible assets 8,636,108

Intangible assets such as contracts with 19,920,000,000 customers

Trade payables and current liabilities (3,055,948,493)

Goodwill 18,869,104,049

Total 46,129,996,611

6. Other Financial Matters

A. Cautions such as re-preparation of financial statements

Not applicable

B. Establishment of allowance for bad debts

1) Established allowance for bad debts per each accounting title [Basic date: Sep. 30, 2018] (Unit: KRW, %) Allowance for bad Ratio of allowance Division Accounting title Receivables amount debt establishment Trade receivables 215,223,641,891 - 0.0 Other receivables 2,426,647,543 - 0.0 Q3 of 20th year Non-current other 7,086,710,839 - 0.0 receivables Total 224,737,000,273 - 0.0 Trade receivables 139,950,086,915 - 0.0 Other receivables 1,613,047,474 - 0.0 19th year Non-current other 5,119,490,368 - 0.0 receivables Total 146,682,624,757 - 0.0 Trade receivables 110,873,434,017 - 0.0 Other receivables 773,139,051 - 0.0 18th year Non-current other 4,037,643,302 - 0.0 receivables Total 115,684,216,370 - 0.0

Note) The consolidated subsidiaries of the company have no record of establishing allowance for bad debts.

2) Changes in allowance for bad debts Changes in the allowance for bad debts on trade receivables during the period are as follows: [Basic date: Sep. 30, 2018] (Unit: KRW) Item Q3 of 20th 19th year 18th year 1. Total allowance for bad 0 0 0 debts at the beginning 2. Net recognition as bad - - - debts(①+②±③) ① Amount processed as - - - bad debts (Receivables written-off) ② Recollected receivables - - - ③ Other - - - increases/Decreases 3. Amount in reflection of 0 0 0 allowance for bad debts 4. Total allowance for bad 0 0 0 debts at the end

Note) The consolidated subsidiaries of the company have no record of changes with the allowance for bad debts.

3) Policy on establishing the allowance for bad debts over the account receivables The assumed bad debt amounts are set to allowances for bad debts in parallel use of the individual analysis method and age analysis for the balances of trade receivables. - Establish 100% of allowance for bad debts to receivables with the age of a year or longer as a result of analysis on the age of receivables. - The experience ratio of bad debts is calculated and established on the basis of the accrued bad debts in reality on the average balance of receivables in the past 3 years.

4) Outstanding amount of account receivables at the end of current quarter by their ages [Basic date: Sep. 30, 2018] (Unit: KRW, %) Age of receivables Item Total Less than 3 months 3 ∼ 6 months Above 6 months Account receivables 214,785,053,777 438,043,714 544,400 215,223,641,891 Total 214,785,053,777 438,043,714 544,400 215,223,641,891 Percentage (%) 99.80 0.20 0.00 100.00

C. Inventory status

1) Status on inventory asset per business division [Basic date: Sep. 30, 2018] (Unit: KRW) Business Division Accounting title Q3 of20th year 19th year 18th year Remarks Products - - - - Semiconductor Products in process 102,385,986,483 61,011,273,632 58,285,294,191 - Total 102,385,986,483 61,011,273,632 58,285,294,191 - Portion of inventory over gross assets (%) 16.0 11.2 11,9 - [Total inventory ÷ total assets at the end × 100] Inventory turnover ratio (recollection) [Converted annual sales cost÷{(Inventory at the 7times 9times 8times - beginning + Inventory at the end)÷2}]

2) Due diligence results on inventories - Date of due diligence Due diligence on inventory assets is carried out twice a year on the basis at the end of June and December.

- Method of due diligence Examination with samples is carried out for some items with less importance although total quantity shall be examined in principle.

The external auditor shall be present in the due diligence of inventory, take samples and check out the existence of inventory assets.

- Status of long-term stagnant inventory, etc. Not applicable

D. Contract status Not applicable

E. Evaluation details of fair value

1) Summary of Fair Value Evaluation Procedures

[Non-derivative financial assets] The consolidated entity divides non-derivative financial assets into 4 categories such as financial assets to be recognized in the current profit or loss, financial assets held until maturity, lending and receivables, and transferrable financial assets, and they are recognized in the statement of financial position. Non-derivative financial assets are measured with fair value at the initial recognition. If they do not belong to financial assets to be recognized in the current profit or loss, transactional cost directly relating to the acquisition of financial assets is added to fair value at the initial recognition.

(A) Financial assets to be recognized in the current profit or loss The company classified short-term trading financial assets or financial assets designated as financial assets to be recognized in the current profit or loss at the initial recognition into financial assets to be recognized into the current profit or loss. Financial assets to be recognized into the current profit or loss are measured with fair value after initial recognition and any change in fair value is recognized in the current profit or loss. On the other hand, any transactional cost relating to the acquisition at the initial recognition is recognized in the current profit or loss immediately on its occurrence.

(B) Held to maturity financial assets If the company has the active intention and ability to hold until maturity as non-derivative financial assets whose maturity is fixed and amount to be paid is confirmed or possibly determined, the company classifies them into financial assets held until maturity. After initial recognition, the company applies the effective interest rate method and measures them with the cost after amortization.

(C) Lending and receivables Non-derivative financial assets whose payment is fixed or possibly determined and trading price is not publicized in the active market are classified into lending and receivables. After initial recognition, the company applies the effective interest rate method and measures them with the cost after amortization.

(D) Transferrable financial assets If non-derivative financial assets are designated as transferrable items or not classified into either of financial assets to be recognized in the current profit or loss, financial assets held until maturity or lending and receivables, they are classified as transferrable financial assets. After initial recognition, they are measured with fair value and any change in fair value is recognized as other comprehensive profit or loss. However, cost is used for measurements for equity products and others whose market price is not publicized in the active market and fair value cannot be measured in a reliable manner.

(E) Financial products by category For more details, refer to "Ⅲ. Financial Matters, 3. Notes to Consolidate Financial Statements, 6. Classification per Category of Financial Products (1), 7. Financial Risk Management (4)" in this disclosure document.

F. Record on issue of liability securities

Issue of Liability Securities [Basic date: Sep. 30, 2018] (Unit: KRW, %) Type Date Rating grade Method Total Interest Date of Undertaking Type of of (Rating Repayment of issue amount rate Maturity company issue issue organization) ------Total ------

Outstanding Balance of Corporate Paper [Basic date: Sep. 30, 2018] (Unit: KRW) Exceeding Exceeding Exceeding Exceeding Exceeding Exceeding 10 days 30 days 90 days a year 2 years Remaining to 180 days Exceeding 10 days or less Not more Not more Not more Not more Not more Total maturity Not more 3 years than 30 than 90 than 180 than 2 than 3 than a year days days days years years Public ------offering Unpaid Private ------balance offering

Total ------

Outstanding Balance of Electronic Short-term Bond [Basic date: Sep. 30, 2018] (Unit: KRW) Exceeding Exceeding Exceeding Exceeding 90 days 10 days or 10 days 30 days 180 days Limit of Remaining Remaining to maturity Not more Total less Not more Not more Not more issue limit than 180 than 30 days than 90 days than a year days Public ------offering Unpaid Private ------balance offering Total ------

Outstanding Balance of Corporate Bonds [Basic date: Sep. 30, 2018] (Unit: KRW) Exceeding 1 Exceeding 2 Exceeding 3 Exceeding 4 Exceeding 5 1 year or year years years years years Exceeding Remaining to maturity Total less Not more Not more Not more Not more Not more 10 years than 2 years than 3 years than 4 years than 5 years than 10 years Public ------offering Unpaid Private ------balance offering Total ------

Outstanding Balance of Hybrid Securities [Basic date: Sep. 30, 2018] (Unit: KRW) Exceeding 5 Exceeding Exceeding Exceeding Exceeding 1 years 10 years 15 years 20 years 1 year or year Exceeding Remaining to maturity Not more Not more Not more Not more Total less Not more 30 years than 10 than 15 than 20 than 30 than 5 years years years years years Public ------offering Unpaid Private ------balance offering Total ------

Outsourcing Balance of Conditional Capital Securities [Basic date: Sep. 30, 2018] (Unit: KRW) Exceeding Exceeding Exceeding Exceeding Exceeding Exceeding Exceeding 1 year 2 years 3 years 4 years 5 years 10 years 20 years Remaining to Exceeding 1 year or less Not more Not more Not more Not more Not more Not more Not more Total maturity 30 years than 2 than 3 than 4 than 5 than 10 than 20 than 30 years years years years years years years Public ------offering Unpaid Private ------balance offering Total ------

IV. Auditor’s Audit Opinion

1. Audit Opinion of Auditor

1. Name and audit opinion of auditor Special remarks in the Business year Auditor Audit opinion audit report Q3 of 20th year (current) Samjung KPMG, Inc. - - 19th year (previous) Samjung KPMG, Inc. Appropriate - 18th year (previous before last) Samjung KPMG, Inc. Appropriate -

2. Status of audit service contract (Unit: Thousand KRW) Total required Business year Auditor Subject Remuneration time Consolidated financial Q3 of 20th year Samjung KPMG, statements, financial statements, 165,000 - (current) Inc. interim financial statements Consolidated financial Samjung KPMG, 19th year (previous) statements, financial statements, 105,000 1,174 Inc. interim financial statements Consolidated financial 18th year (previous Samjung KPMG, statements, financial statements, 115,000 1,321 before last) Inc. interim financial statements

3. Status of non-audit service contracts with auditor (Unit: Thousand KRW) Business year Contract date Services Period Remuneration Remarks Q3 of 20th year - - - - - (current) 19th year (previous) - - - - - Advisory works for the design, construction 18th year (previous 2016.09.19 ~ 2016.09.19 and operation of 20,000 - before last) 2016.12.31 internal accounting control system

4. Auditor’s opinion on subsidiaries There is no subsidiary which has received any audit opinion other than appropriate from auditor during the current quarter.

2. Change of Auditors

The Audit Committee of the company approved Samjung KPMG, Inc. as the company’s external auditor for the period from the 19th year to the 21st year on February 28, 2017, following the 18th year. The change of external auditors was reported to the 18th regular general shareholders’ meeting of the company in accordance with Article 4-3 of the Act on the External Auditor of Limited Liability Company, and Article 4 and 53 of the company’s Articles of Incorporation.

3. Internal Accounting Management System

A. Status of operation of internal accounting management system (1) Report by the Internal Accounting Manager Business Reporting date Report Comment year The company’s internal accounting control system as of Feb 1st, February 1, 2018 is thought to be effectively designed and 19th year 2018 operated in terms of importance, considering the standard regulations on the internal accounting control system. The company’s internal accounting control system as of Feb 1st, February 1, 2017 is thought to be effectively designed and 18th year 2017 operated in terms of importance, considering the standard regulations on the internal accounting control system. As of February 4, 2016, in light of the company’s Model Rule on Feb 4th, Internal Accounting Management Policies, the internal 17th year - 2016 accounting management policy is deemed effectively designed and well managed.

(2) Overall opinions represented in the audit report by auditor There were no comments from the auditor on the first quarter of the 20th year. As a result of the review by the external auditors, it has been found that the contents of the report on the operation of the IACS of the 19th, 18th and 17th IAMS have not been prepared in accordance with the provisions of the IAMS I expressed my opinion that it was not. V. Directors’ Management Diagnoses and Analytic Opinions

We do not list these items in quarterly, semiannual report.

VI. Company’s Organizations such as the Board of Directors

1. Board of Directors

A. Overview of the Structure of Board of Directors

As of the day this report is prepared, the board of directors comprises of 2 full-time directors, 1 uncategorized non- executive director and 3 independent directors. With regard to the history and roles of each director, please refer to “Ⅷ. Executives and Employees - 1. Executives and Employees”.

B. Major Resolutions Name of independent directors Mun, Geon- Shin, Young-Su Lee, Nam-Joo Yoon, Il-Gu Woo (Attendance: Year Date Agenda Pass (Attendance: (Attendance: (Attendance: 100%) 75%) 75%) 50%) Approval or Disapproval Approval of 19th year’s financial statements and Passed Approved Approved Approved business reports 1 2018.02.01 Reporting of internal accounting control - Report item Report item Report item system operation Decision on the date, time and place of 19th Passed Nonattendance Approved Approved regular general meeting - of shareholders Decision on the 2 2018.02.28 purposes of 19th regular Passed Nonattendance Approved Approved general meeting of shareholders Amendment of Board of Directors' Operating Passed Nonattendance Approved Approved Regulations Increase in capital of - Report item Report item Report item China corporation Approval of the executive remuneration Passed Nonattendance Approved Approved 3 2018.03.16 of directors - Approval of amendment of personnel Passed Nonattendance Approved Approved management regulations for executive officers Approval of executive officer special bonus Passed Nonattendance Approved Approved execution Decision on business Approved Nonattendance Approved Passed transfer Appointment of Approved Nonattendance Approved compliance support and enactment of Passed 4 2018.05.29 compliance control standards Approval of Approved Nonattendance Approved remuneration for Passed outside directors Report on management Report item Report item Report item performance in the Q2 - 5 2018.07.24 of 2018 Amendment of Audit Approved Approved Approved Passed Committee Regulations Note) Independent Director and Audit Committee Member Gun-Moon resigned on March 16, 2018. Note) Independent Director and Audit Committee Member Young-Su Shin was elected from the 19th Regular General Shareholders Meeting, and his term is 3 years.

C. Committees within the Board of Directors

The audit committee was excluded in accordance with preparation standards of corporate disclosure forms.

D. Independence of Directors

The directors are elected at the shareholders' meeting, and the candidates for the directors to be elected at the general shareholders' meeting are selected by the board of directors and confirmed as agenda to be submitted to the general shareholders' meeting. Outside directors are finally appointed at a general shareholders' meeting after rigorous internal review as we ensure fairness and independence in the appointment of outside directors.

■ Authorities of the board of directors

1) The board of directors Decides important corporate issues pursuant to Chapter 5 of the Articles of Incorporation. 2) The board of directors must review and Decide the following issues pursuant to Article 393-2 of the Commercial Law:

- Proposal of issues requiring the approval of the general shareholders’ meeting - Appointment of CEO and Decision of co-representatives - Decisions on appointment, term, position, and remuneration of executives - Other important matters as to the company’s basic policies and operating activities

2. Audit System

A. Audit Committee

(1) The composition of the Audit Committee and inclusion of independent directors

Independent Name Career Information Comments director or not Bachelor’s degree in Business Administration at Seogang University Auditor Nam-Ju, Lee Outside Director Director at SAMIL PricewaterhouseCoopers Chairperson (Current) Director of Sungjee Accounting Corporation Ph.D. Electric Engineering, School of Engineering, Georgia University, USA Yoon-Il, Gu Outside Director - (Current) Professor, Department of Electric and Electronic Engineering, College of Engineering, Yonsei University Young-Su, Shin Masters and Doctorate Degree in Power Electronics at Outside Director - Seoul National University (Current) Professor of Electricity and Electronics at KAIST

(2) Independence of the members of the Audit Committee

The members of the Audit Committee (three persons) are all independent directors who do not have any reasons for disqualification in accordance with the Commerce Law. They are maintaining their independence and the appointment of the members has been made after a thoroughly review by the board of directors and the final approval by the general meeting of shareholders. The company is complying with the procedures set forth in the Commerce Law and other relevant laws. Also, the organization, authority, and the scope of works are clearly stated in the relevant rules in order to carry out the auditory works.

(3) Activities of the Audit Committee

Approval Shin, LEE, Moon, Yoon, Il- Young- Nam- Ju Gun-Woo Goo Year Date Agenda Pass soo Comment

Approved or disapproved

Evaluation on the operation of - 2018 2018.01.18 19th internal accounting control Passed Approved Approved Approved - system Report Report on management Report Report 2018 2018.07l.24 - - item - performance in the Q2 of 2018 item item

B. Compliance support person etc. Name Date of Birth Major Career Date of Appointment Bachelor of Law, Chungnam National University Team Leader of Management & Legal Team, Team Jin-Bok, Kim 1960.10 Leader of Contract Legal Team, LG Electronics 2018.05.29 Current, Diagnostic / Legal Team / Legal, Silicon Works

3. Shareholders’ Exercise of Voting Rights

A. Voting system

(1) Adopting the concentrated voting system, voting in writing or the electronic voting system

As of the day that the company prepared the report, there is no relevant information.

B. Exercise of the Right of the Minority Shareholders

As of the day that the company prepared the report, there is no relevant information.

C. Competition over Management Right

As of the day that the company prepared the report, there is no competition over management right.

VII. Shareholders

1. Shareholding of the Largest Shareholder and its Special Interest Parties

A. Shares Held by the Largest Shareholder and its Special Interest Parties

(Basic date: Sep. 30, 2018) (Unit: Shares, %) Number of shares owned (stake)

Beginning of the term End of the term Name Relation Share type Comment Number of Number of Stake Stake shares shares Common LG Corp. Principal 5,380,524 33.08 5,380,524 33.08 stock Common SON, Bo-Ik Executive 1,826 0.01 1,826 0.01 stock Common NA, Joon-Ho Executive 20,636 0.13 20,636 0.13 stock Common 5,402,986 33.22 5,402,986 33.22 - Total stock - - - - - Note) The number of shares includes the allocation of shares under the employee-stock-ownership plan to unregistered executives (Joon-Ho, NA) Note) Refer to “VII. Executives and Employees” for details on the change of management. Note) The number of shares held and the ownership rate are the stock ownership status as of the settlement date and may differ from the details of the bulk holdings report.

B. Important Issues Related to the Largest Shareholder

(1) Basic information of the largest shareholder (as of Sep 30, 2018) Name Number of CEO Business executive Largest shareholder investors (Representative member) (Business executive (The largest investor) member) Name Portion Name Portion Name Portion (%) (%) (%) LG Co., Ltd. 33,962 Kwang-mo 6.24 - - Bon-Mu, Ku 11.28 Koo Hyun-Hoi Ha - - - - - Note 1) Stake is based on common stock. Note 2) The above stake is based on June 30, 2018, which is the closing date of the shareholder list, and may differ from the stock ownership status as of settlement date.

Changes of representative directors, business executives, and largest shareholder of corporations or groups

CEO Business executive Largest shareholder Date of (Representative member) (Business executive member) (The largest investor) change Name Portion (%) Name Portion (%) Name Portion (%) 2018.06.29 Kwang-mo 6.24 - - - - Koo Note 1) The equity ratio is based on common shares. Note 2) The number of equity investors and share rates above are based on the closing date of August 1, 2018 and may differ from the current status of stock ownership as of the closing date. Note 3) As of the date of report submission, the maximum shareholder has been changed to Kwang-mo Koo, the maximum shareholder's ownership interest as of November 1, 2018 due to the death of the largest shareholder (Bon-moo Koo) (Kwang-mo, Koo et al. 2 persons, and the date of inheritance completion: November 1, 2018). (As of the date of report submission, the maximum shareholder has been changed to Kwang-mo, Koo: 15%, Bon- moo, KooL 0%). Please refer to the relevant disclosure of the LG for further changes. (Related disclosure: Maximum shareholders change, maximum shareholders' ownership change report (2018.11.02))

(2) Financial status (Unit: Million KRW) Division Total assets 22,243,109 Total liabilities 4,743,619 Total capital 17,499,490 Sales and profit or loss under equity method 5,810,419 Operating income 1,138,544 Current net profit 1,030,799 Note 1) Based on consolidated financial statements Note 2) Refer to the Current quarter reports of LG Corp., which are disclosed on Nov 14, 2018, for financial status as of the end of June 2018.

(3) Business status Our company’s largest shareholder LG Corp. was established on January 5, 1947 and listed on the stock market on February 13, 1970. LG Corp. is a holding company which owns 14 subsidiaries such as LG Electronics, LG Chemicals, LG U Plus at the end of December 2017. Major income sources of LG Corp. consist of dividend income, trademark use income, rental income, etc.

2. Changes to the Largest Shareholders

A. Details for changes to the largest shareholder - Not applicable

3. Distribution of Shares

Status of shares held

(Basic date: Sep. 30, 2018) (Unit: shares) Number of shares Classification Name of shareholder Stake Notes owned

LG Corporation 5,380,524 33.08% -

5% or higher Templeton Asset Management, Ltd. 878,254 5.40% (*) shareholders

BlackRock Fund Advisors 833,753 5.13% (**)

Employee Stock Ownership Association 7,026 0.04%

(*) The number of shares owned by Templeton Asset Management, Ltd. includes the share owned by three funds within the company. (**) The number of shares owned by BlackRock Fund Advisors includes the ownership interests of the four funds within the company. Note) The number of shares owned and stake provide descriptions on the status of shares owned based on the details on the reporting for massive ownership, but they may be different from the status of share owned as of the day of book closing.

Minority Shareholder Status (Basic date: December. 31, 2017) (Unit: shares) Shareholder Shares hold Division Number of Number of Comment Rate Stake shareholders shares Minority Shareholders having shares under 8,679 99.84% 8,136,815 50.02 shareholders 1/100 of the total shares issued

4. Operations for Shares

Division Information ①Shareholders have the rights to receive new shares in proportion to the number of shares held by themselves. ②Despite Clause 1, the company may distribute new shares in the event of the following, 1. When the company issues new shares via the general capital increase by public offering based on their solution of the board of directors according to Article 165-6 of「the Act on Capital Market and Financial Investment」 2. When the company issues new shares via stock option according to Article 542-3 of 「Commercial Law」 3. Primary distribution to the members of the Employee Stock Ownership Association within 20% of the total number of shares issued. 4. When necessary to achieve the management goals such as the introduction of new technology and Preemptive rights improvement of the financial structure according to Article 418 of the Commerce Act based on the Articles 5. When collecting new shares or having the acquirers take over the shares to be listed in the of Association security market or KOSDAQ 6. When the company issues new shares for foreigners’ investment based on the reasons of management according to the Foreigners Investment Promotion Act. 7. When issuing new shares according to the issuance of depository receipts(DR) within 50% of the total number of shares issued ③The handling of odd lots generated from the allocation of shares and new shares based on the abandonment or loss of preemptive rights shall be Marided based on the resolution of the board of directors. ④ Pursuant to Section 2, in the event one other than a shareholder assigns a new stock, he/she must notify the shareholder at least two weeks prior to the date of payment the provisions prescribed in Sections 1,2 and 2(2), 3 and 4 of Article 416 of the Commercial Law. Settlement date December 31 Regular shareholders’ Within three months after the closing of each business year general meeting Period closing the January 1 ∼ January 7, every year Shareholders’ list (Date shareholders’ list is closed: December 31 every year) One-share, 5-share, 10-share, 50-share, 100-share, 500-share, 1000-share, and 10,000-share certificates(8 Type of shares types) The Korea Securities Depository / Busan International Finance Center (BIFC), 40, Munhyeon Geumyung Transfer agent Road, Nam-gu, Busan, Korea / (Tel) +82 51-519-1500 The company’s public announcement is posted at its Website (www.siliconworks.co.kr). When network Public notices glitches or other unavoidable factors prevent the posting at its Website, the company makes notices at the Maeil Economic Daily published in Seoul.

5. Stock Price and Stock Trading

A. Domestic Stock Market (Unit: KRW, share) 2018 Type Jun May Apr Mar Feb Jan Silicon Stock price Maximum 47,200 49,950 47,750 42,150 38,900 40,400 Works Minimum 40,550 43,700 35,300 34,050 33,500 35,500 (A108320) Average 44,368 45,761 41,491 37,992 36,075 38,224 Common Maximum 535,226 783,290 209,531 200,955 197,119 510,480 Stock Volume of (day) Transaction Minimum (day) 50,761 52,084 84,548 69,655 37,858 41,898 Monthly 1,585,777 1,933,994 3,490,553 3,004,599 2,770,433 2,400,515 ※ The maximum and minimum share prices as well as the amount of trade are based on the closing price and the amount of daily transaction of the day.

B. Overseas Stock Market As of the day that prepared for the report, the company has nothing to report on this matter.

VIII. Executives and Employees

1. Status of the Executives and Employees

Status of Executives (Basic date: Sep. 30, 2018) (Unit: shares)

Number of shares Registered or Regular Service Term Name Gender Date of birth Title Duty Experience and education With Without not or not term expiry voting voting right right

MIT (Master) Bo-Ik, Sep ’15.06.10 Mar. 16, M Vice president Registered Regular CEO LG Electronics, Director of System 1,826 - Sohn 1961 ~present 2020 IC Center

Yonsei University, School of Sung Mar Managing Business Administration 14.11.01 ~ Mar. 16, Kwan M Registered Regular CFO - - 1973 Director LG Corp, Senior Manager of present 2018 Choi Financial department

System Hyeon semiconductors University of Helsinki(Master) Feb Not '18.03.16~ Mar. 16, Ok M Executive Director Registered development and LG Electronics, Management - - 1966 regular present 2019 Jeong commercialization Planning / Management advice

Ph.D. of Electrics Engineering, Young- Aug Independent Not Member of Seoul National University ’18.03.16 Mar. 15, soo M Registered - - 1967 director regular Audit Committee KAIST Professor, School of ~present 2021 Shin Electrical Engineering

Business administration, Seogang University Nam Ju November Independent Not Chairman of ’13.03.29 Mar. 17, M Registered Director of Samil Accounting - - LEE 1962 director regular Audit Committee ~present 2019 Corporation Certified Accountant at Sungjee Accounting Corp.

Ph.D. Of Electrical Engineering of IL-Gu Jun Independent Not Member of Georgia Tech '17.03.17 Mar. 16, M Registered - - YOON 1967 director regular Audit Committee Yonsei University Professor, ~ present 2020 Electrical Engineering

Kil- Jul Managing Master of Boston University `17.12.01 byung M Unregistered Regular CHO - - - !961 Director CHO of LG Siltorn ~ present SEUNG

Department of Electronic and Joon-Ho Sep Managing Research & Electric Engineering of In-Ha ’11.05.18 M Unregistered Regular 20,636 - - NA 1968 Director Development Univ(Master) ~present LG Semiconductors

M.S. of Electrics Engineering, Dae- Sep Research & Seoul National University ’17.07.31 hyup M Officer Unregistered Regular - - - 1965 Development LG Electronics, SIC Center DTV ~present KO SoC Development Chief

Techno MBA(Master) Chul-kyo Jan Sales ’15.07.01 M Officer Unregistered Regular LG Electronics, DIC Business Team 1,262 - Seo 1963 Representative ~present Leader, DIC Center

Korea Advanced Institute of Hyun- Science and Technology (Ph.D.) Feb Research & ’03.09.01 kyu M Officer Unregistered Regular Korea Electronics and 25,191 - 1971 Development ~present Chun Telecommunications Research Institute

Note) The number of shares owned includes allocations of shares under the employee-stock-ownership plan to unregistered executives (NA, Joon-Ho, Chun, Hyun-kyu). Note) Director Sung-kwan Choi was elected in the 19th Regular General Shareholders' Meeting, and has a three- year term. Note) Other Non-permanent Managing Director Hyeon-Ok Jeong was elected in the 19th Regular General Shareholders' Meeting, and has a one-year term. Note) Independent Director and Member of the Audit Committee Young-soo Shin was elected in the 19th Regular General Shareholders' Meeting, and has a three-year term. Note) Officer Dae-hyup Ko, Chul-kyo Seo, Hyun-kyu Chun was newly elected on Jan 1, 2018 Note) Other Non-permanent Managing Director Byung-hoon Min resigned on Mar 16, 2018 Note) Outside Director and an audit member of the Audit Committee Keon-Woo Mun resigned on March 16, 2018. Note) Dong-su, Bae retired on Mar 31, 2018 Note) Representative Director Bo-IK SON resigned the position of other non-permanent managing director for Lusem Co., Ltd. in parallel

Status of Employees (Basic date: Jun. 30, 2018) (Unit: Thousand KRW) Number of employees Employees without Total Average Average Term-based employees Total annual Business area Gender defined term working salary per Remarks salary (Short-term (Short-term years person All All employees) employees)

All Male 741 - 9 7 750 4.15 33,859,019 45,145 -

All Female 113 - 6 6 119 3.45 3,667m875 30,822 -

Total 854 - 15 13 869 4.05 37,526,895 43,184

2. Remuneration to Executives

1. Amount Approved by Shareholders’ Meeting (Unit: Thousand KRW) Amount approved in the Division Number Comment shareholders’ meeting

Director 6 5,000,000 -

2. Amount paid

2-1. All directors / auditors (Unit: Thousand KRW) Average per capita Number of persons Total remuneration Remarks remuneration 8 1,190,557 148,820 -

2-2. Type (Unit: Thousand KRW) Average per Number of Total Division capita Remarks persons remuneration remuneration Registered director (Excluding independent directors, members 4 1,100,492 275,123 - of the Audit Committee) Independent director (Excluding members of the Audit - - - - Committee) Member of the Audit Committee 4 90,065 22,516 - Auditor - - - - Note) Registered director Dong-su, Bae retired on Mar 31, 2018 Note) Independent Director and Audit Committee Member Gun-woo Moon resigned on March 16, 2018.

1. Individual Payment Amount

(Unit: Thousand KRW) Name Title Total remuneration Remuneration not included in the total remuneration - - - - Note) There are no directors or auditors with payouts of more than 500 million KRW as of the reporting date.

1. Individual Payment Amount

(Unit: Thousand KRW) Name Title Total remuneration Remuneration not included in the total remuneration - - - - Note) There are no employees with payouts of more than KRW 500 million as of the reporting date.

No stock option has yet to be exercised by executives and employees as of the reporting reference date.

Note) The closing price on Sep 30, 2018 was 40,550 KRW

IX. Affiliates

1. Name of the relevant corporate group and names of affiliates Name of corporate group: LG affiliates Name of the belonging company: Silicon Works - Corporate Registration No.: 160111-0089395 - Business Registration No.: 314-81-29147

Refer to "Ⅰ. Company Overview, 1. Company Overview - G. Total Number of Affiliates, Name of Major Affiliates and their Listing Status" in the disclosure documents for more details on the corporate group and its belonging companies to which the company belongs.

2. Diagram to Identify the Control, Dependence and Investment among Subsidiaries

3. Name of companies and details if there is any company directly or indirectly affecting the management of the company among affiliates

LG Corporation: Holding company

4. Status of Additional Positions in the Company and Subsidiaries

Name Position Status of Additional Positions Company Position Regular or not

Bo-Ik, Shon Vice President Silicon Works Inc.(USA) CEO Non-regular

Other Non- LG Corp Executive Director Regular permanent Hyeon-Ok, Jeong Other non- Managing LG Inotek permanent Non-regular Director managing director Note) Representative Director Bo-IK SON resigned the position of other non-permanent managing director for Lusem Co., Ltd. in parallel on Mar.15 2018

5. Status of Investment in Other Companies (Basic date: Sep. 30, 2018) (Unit: Million KRW, Thousand shares, %) Recent financial Balance at the beginning Increase (Decrease) Balance at the end state First Amount of Company Purpose of Acquisition Current Acquisition the First Assessed Name Investment Book (disposition) Book Total net Date Acquisition Quantity Share profit or Quantity Share value Value assets profit or Quantity Amount loss loss

Daedeok May 20, Simple Investment 500 100 8.9 500 - - - 100 8.9 500 3,372 454 2011 investment (Not listed) Silicon October. Pioneering Work Inc. 15, new 555 2,000 100 555 - - - 2,000 100 137 323 56 (Not listed) 2012 markets Daedeok Venture January Simple Dream 3, 100 20 20 100 - - - 20 20 100 490 2 investment Town 2014 (Not listed) Silicon Works March Pioneering China Co., 3, new 674 - 100 674 - - - - 100 674 1,278 550 LTD 2017 markets (Not listed) Advanced Mar Pioneering Power 12 new 4,410 176 49 4,410 - - - 176 49 4,410 9,559 8 Device 2018 markets Technology

Total 2,296 - 5,821 - - - 2,296 - 5,821 15,022 1,070

Note) Net profit and total assets of companies to which the company made equity investments in the latest fiscal year are calculated as of Mar. 31, 2017. Note) Advanced Power Device Technology was newly invested in this quarter and Net profit and total assets of the company was Mar. 31, 2018. X. Transactions with Stakeholders

1. Credit Granting to Large Shareholders

Our company is not applicable as of the report preparing day.

2. Transfer or Succession of Assets to or from Large Shareholders

A. Business transfer Amount for Date of contract Date of major transfer Date of Division (Date of board Contract party Contract details fact report (100 transfer resolution) million KRW) Business LG Electronics Entire assets and manpower related to T- 2018.05.29 480 2018.07.01 - transfer Co., Ltd. Con chip business for OLED TV Note 1) The transaction amount was appropriately calculated through the market and valuation. Note 2) Refer to “XI. Other matters necessary for the protection of investors -> 3. Other information such as sanctions -> Information after the merger -> (2) Comparison table of financial matters before and after the transfer of business” for profit or loss arising from the transactions.

Our company is not applicable as of the day of the reporting preparation.

3. Operational Transactions with Large Shareholders

[Basic date: Sep. 30, 2018] (Unit: Thousand KRW) Purchase Raw Division Company name Sales Outsourcing materials Others expense purchased

Serveone Co., Ltd. 10,437 567,849

LG Electronics Co., Ltd. 5,412,361 49,150,431

LG Display Co., Ltd. 499,455,951

LG INNOTEK Co., Ltd. 17,559,908

LG Electronics USA Inc. 2,072,767

LG CNS 5,947,470

Affiliates and their subsidiaries LG International Japan Ltd 673,007 Pantos Logistics Co., Ltd. 893,106

LG Management 230,531 Development Institute Co., Ltd.

HS Ad Co., Ltd. 9,900

Lusem 132,994 15,463,355 3,839

LG U Plus 81,745

4. Transactions with stakeholders other than major shareholders

The company is not applicable as of the reporting date.

XI. Other Matters Necessary for the Protection of Investors

1. Summary of Minutes from the General Shareholders’ Meeting

- None

Date Agenda Resolution Comment Agenda 1: Approval of 19th (January 1 ~ Mar 31, 2017) consolidated financial statements and financial statements Agenda 2: Appointment of directors Agenda 2-1: Appointment of Director Sung Kwan Choi 19th Regular General Agenda 2-2: Appointment of Other Non-Permanent Director Hyun-ok Agenda 1~4: Shareholders’ Jeong Approved as original - Meeting Agenda 2-3: Appointment of Independent Director Young-soo Shin plans (2018.03.16) Agenda 3: Appointment of members of the Audit Committee [1 person candidate for Independent Director and Member of Audit Young-soo Shin] Agenda 4: Approval of remuneration limit for directors Agenda 1: Approval of 18th (January 1 ~ Mar 31, 2016) consolidated financial statements and financial statements Agenda 2: Appointment of directors 18th Regular Agenda 2-1: Appointment of Director Bo-Ik Son General Agenda 2-2: Appointment of Other Non-Permanent Director Byeong- Agenda 1~4: Shareholders’ Hun Min Approved as original - Meeting Agenda 2-3: Appointment of Independent Director Il-Gu Yoon plans (2017.03.17) Agenda 3: Appointment of members of the Audit Committee [1 person candidate for Independent Director and Member of Audit Il- Gu Yoon] Agenda 4: Approval of remuneration limit for directors Agenda 1: Approval of consolidated financial statements and financial statements for the 17th year (January 1 ~ December 31, 2015) 17th Regular General Agenda 2: Appointment of directors Agenda 1~4: Shareholders’ Agenda 2-1: Appointment of Independent Director Nam-Joo Lee Resolution based on - Meeting Agenda 3: Appointment of audit committee members the original proposal (March 18, 2016) [Candidate for independent director and audit member Nam-Joo Lee] Agenda 4: Approval of directors remuneration limits

2. Contingent liabilities

- None

(Basic date: Jun. 30, 2018) (Unit: KRW) Submitted to Number Amount Remarks Bank - - - Financial institution (except bank) - - - Incorporated entity - - - Others (individual) - - -

- None

3. Sanctions and Other Situations

There is no case of any violation against domestic and/or international financial and tax obligations from laws and regulations such as the Commercial Code, Capital Market Act, External Audit Act, Fair Trade Act.

< Significant Incidents after the Basic Date for Preparation > None

None

None

A. General Division Contents Date of transfer 2018.07.01 Amount for transfer 48 billion KRW Company name LG Electronics Co., Ltd. Representative director Do-Hyun Jeong Address of head office LG Twin Tower, 128, Yeoui Road, Yeongdeungpo-gu, Seoul Background of business transfer Total solution construction for system semiconductors for OLED TV Legal form Business transfer and succession Specific details Related business on T-Con chip for OLED TV Key schedule Acquisition of entire assets and manpower in exchange for 48 billion KRW Note) Refer to the major issue report for the details of the contract.

B. Comparison table of financial matters before and after business transfer (Unit: Million KRW) Applicable Projection Performance Title of account Remarks company 1st year 2nd year 1st year 2nd year Difference Difference Performance Performance rate rate Sales 16,209 38,766 - - - - - Operating LG Electronics 1,888 4,755 - - - - - income Co., Ltd. Current net 947 2,636 - - - - - income Note 1) 1st year is July 1, 2018 (from the date of transfer) to December 31, 2018, and 2nd year is 2019.

[Confirmation of Expert]

1. Confirmation by experts

- Not applicable

2. Interests with experts

- Not applicable