2011 Business Report 2011.1.1~2011.12.31

www.hanjin-holdings.com

HANJIN SHPPING HOLDINGS CO.,LTD. 25-11, Yoido-Dong, Youngdeungpo-Gu, , Korea Tel : 82-2-3770-6868 Fax : 82-2-2287-3488 Business Report 2011.01.01~2011.12.31 Contents Message from CEO 04

Business Report

Company Overview 06 Holding Company, Subsidiaries, Affiliates and Consolidation 10 Operating Results and Financial Status 11 Directors and Auditors 12 Major Shareholders 12 Investment Status of Holdings, status of Subsidiaries investing in other companies and Other Companies investing in Hanjin Shipping Holdings 12 The Major Creditors 14

Audit Report and Financial Statements

Audit Report by Audit Committee 16 Independent Auditors’ Report 17 Non-Consolidated Statements of Financial Position 18 Non-Consolidated Statements of Operations 20 Non-Consolidated Statements of Disposition of Accumulated Deficit 21 Global Service Network 22 Holding Company and Subsidiaries 24 HANJIN SHIPPING HOLDINGS 2011 BUSINESS RERORT

Message from CEO

equipment. optimized for making profit. As the holding company, we will lead our affiliates so that they can concentrate on Well aware of the economic crisis, we at Hanjin Shipping their core businesses and achieve their given tasks. Holdings and operating companies tried our best in securing profitability by executing emergency business We will improve our profit structure through plan. However, due to the impact of hiking oil prices and business diversification. oversupply of vessels, we were not able to make significant improvement in our profitability. Our major sources of profit consist of trademark rights, building leases and dividends. However, we will try to Dear Shareholders, diversify our business portfolio by aggressively seeking and advancing into new business areas with great The year 2012 matters even more than any other year to potentials. Hanjin Shipping Holdings. We will elevate our brand values. We are determined to overcome the current crisis and thus, we reorganized our organization and top We will elevate the brand value of “Hanjin Shipping” so management staff back on December 1st, which is much that it can help improve our corporate image and earlier than our usual practice. Also, we are trying our customer reliance on our services, which will naturally best in returning to profitability as early as possible by link up the increase in profit of our businesses. achieving our goals in 2012 through profitability Dear Shareholders, improvement and cost reduction. Dear Shareholders, Hanjin Shipping, our major operating company, expects As mentioned earlier, we will try our best in turning the Upon our 74th Annual Shareholders General Meeting, we would like to thank the current oversupply situation to continue due to the current crisis into a new opportunity. We will continue our you for the unwavering support you have shown us. delivery of new vessels this year. However, they also efforts in overcoming the current difficulties and in expect the market to recover gradually as major shipping returning to profitability as early as possible this year. Last year was marked by huge operating losses caused by from KRW 23.9 billion to KRW 36.2 billion thanks to the carriers are trying to bring balance to demand and supply several difficulties including shipping market profits we made from trademark rights and building through service rationalization and to increase freight Once again, we look forward to your unwavering support deterioration, hiking oil prices and the economic crisis in leases. rates up to sustainable level. and faith in us. May God bless you and your family with the Euro zone. health and happiness. In case of our operating company, Hanjin Shipping This year we expect to encounter many difficulties again However, reminding ourselves that “crisis is another achieved total sales of KRW 9.5 trillion, which is 1% less due to the continuous hike in oil prices caused by the Thank you. opportunity”, we will try our best in showing you of our than that of last year. However, its operating loss recorded unstable political situation in the Middle East and to the appreciation by returning to profitability in the year 2012. KRW 492.6 billion as a result of the economic slump of economic slow-down of the major economies. However, the world s major economies, fall in freigt rates due to in order to return to profitability, we are planning on 2012. 3. 16 Let us share with you our 2011 performances. oversupply of vessels, hike in fuel prices caused by the executing the following action plans: political situation in the Middle East and northern Africa. CEO Eun Young Choi We achieved KRW 36.2 billion in operating revenue, We will improve management activities of our Hanjin Shipping Holdings Co., Ltd. KRW 301.8 billion in operating loss and KRW 285.9 CyberLogitec, IT specialist in shipping and logitiscs, affiliates. billion in net loss. This includes KRW 327.1 billion of achieved 3% increase in total sales over last year from valuation loss by equity method for subsidiaries. If KRW 69.7 billion to KRW 71.6 billion. However, the We will review and improve business structure in excluded, the net profit adds up to KRW 18.3 billion. company also made operating loss of KRW 1.5 billion container, bulk, terminal, 3PL, IT and more. All Our operating revenue jumped by 52% over last year due to expenses such as additional purchase of businesses should be operated based on the system

4 5 HANJIN SHIPPING HOLDINGS 2011 BUSINESS RERORT

Company Overview

Established Hanjin Logistics Inc. (HJL) in Chicago Objectives 2001 Opened 120-acre exclusive container terminal in Oakland CKYH Alliance Agreement Holding business that controls, provides managerial guidance, Resource development. Launched 5500TEU vessel, the Hanjin Cairo, into Pendulum service organizes and rears all sorts of business of its subsidiary by Agriculture. Achieved OHSAS 18001 certification acquiring and owning its shares or equities. Human dispatch service. Signed terminal agreement with PSA to continue long-term partnership Shipping. Clerical support to joint development of goods or services, 2002 Opened newly constructed terminal at Pier T, Long Beach Port and terminal services. sales and equipments and joint use of computer system with Added China-Northwest Europe (CNE) service in cooperation with Coscon Warehousing. subsidiaries. Reinforced the All Water and Transatlantic Services (AWE1, 2, 3, and TAS) with CKYHS Real estate leasing. Provision of materials and equipments necessary to Began to offer mobile service for PDA users at Hanjin Shipping's Homepage (FEB) Shipbuilding and repair. information research services, production, sales, distribution, Split Pendulum Express Service into PNX (US) and NEX (Europe) to enhance service quality (FEB) Ship sales and chartering service. consulting, training, export using data processing and Introduced services to with Sinokor (MAR) Launched North China-Indonesia Express Service (NIX) jointly with COSCO (MAR) Port & terminal operation and development stevedoring. information telecommunications technology. 2003 Total logistics. Technology research and development, provision of Deployed 5750TEU vessel; Hanjin Basel (MAR), Hanjin Lisbon (MAY), Hanjin Madrid (JUN), Hanjin Chicago (JUL) Software business, Information & Telecommunications technology information and service consignment business. Sooho Cho appointed Chairman of Hanjin Shipping (JUL) business, Information & Telecommunications service Management consulting. Started the second phase on-dock operation of the Dedicated Terminal in Long Beach (AUG) business, and the development, sales, service, rent, Market research and management consulting. Accredited by Bureau Veritas Quality International for Quality, Environmental and Health & Safety Management Systems (DEC) installation, maintenance & repair and agencies related to License of intellectual property rights of brand and trademark Celebrated 10th Anniversary of the establishment of dedicated terminal in Aomi, (APR) Value-added Information & Telecommunications business. rights, etc. All Hanjin Shipping vessels became fully compliant with the ISPS code (MAY) Honored by International Business Association in Long Beach for contribution to Long Beach regional development (MAY) Equipment (Container/chassis) production. Any and all businesses that are necessary to any of the 2004 New and renewable energy, environmental energy business. foregoing objectives. Listed on Forbes 400 A-List Companies (SEP) J. W. Park appointed President & CEO of Hanjin Shipping (OCT) Restructured PDE, PNW and PDS that connect major ports in China with US West Coast (OCT) History Named the Best Partner by Electronics in China (JAN) Ordered three 6500 TEU class vessels to (FEB) 1949 Established Korea Shipping Corp.ƒ Signed MOU with Sebang to integrate the control of berths in Gamman and Gwanyang Terminals (MAR) 1968 Privatized Korea Shipping Corp. Named one of the Top Ten Companies that will lead Korea's future economy by Dong-4 Ilbo (APR) 1977 Established Hanjin Container Lines Ltd. MGS, a new weekly Asia-Mexico/Guatemala feeder service launched (JUN) 2005 1978 Established Korea`s first Middle East Route Deployed two 8000 TEU class vessels in Transpacific trade, the Hanjin Boston and the Hanjin Miami (JUN) 1979 Introduced Transpacific Service Won Best Buy's 2005 Quality Partnership Award (JUL) 1986 Launched All-Water East Coast Service, and Korea- Service Opened exclusive terminal in Seattle, USA Launched Antwerp International Terminal NV with K Ling. Yang Ming and PSA (AUG) 1988 Hanjin Shipping Co., Ltd. born through the merger with Korea Shipping Corp. established in 1949 Launched a dedicated repair shipyard in Qushan Island, China (OCT) Introduced Pendulum Service between USA and Europe via Asia 1991 Launched a local company in Valencia, Spain to substitute the previous sales office/agency (DEC) Opened exclusive terminaI in Long Beach, USA HJS Named Ocean Carrier of the Year 2005 by Owens Corning (MAR) Established exclusive terminal in Osaka Japan 1992 Launched New Asia-Mediterranean Service (MAR) First 4000TEU-class vessel deployed, the Hanjin Osaka 2006 The Opening Ceremony of the AIT (MAY) Mr. Sooho Cho elected President of HJS Ordered Korea's Largest Five 10,000 TEU Containerships (AUG) Opened exclusive terminal in Tokyo, Japan 1994 Introduced a New Ship Management System (OCT) Established services from Pusan to four ports in China Late Chairman, Mr. Sooho Cho to Receive Honorary Port Pilot Award (FEB) Launched Transatlantic Service, China Europe Express Service, and Mediterranean Service 1995 Signed Contract for Establishing Terminal Equipment in Pusan New Port Phase 2-1 (MAR) Introduced first LNG carrier, the Hanjin Pyong Taek Named ‘Carrier of the Year’ by Owens Corning for Five Consecutive Years (MAR) Added direct calls in China to Transpacific Service (CAX) 1996 Established Hanjin Overseas Tankers Pte., Ltd. in Singapore (JUL) First 5300TEU-class vessel deployed, the Hanjin London 2007 Acquired majority interest in DSR-Senator Line Honored as '2007 Word-Class Company' by Korean CEO Association (SEP) President Cho named chairman of the Korea Shipowners’ Association First to Open Maritime Training Center among Domestic Carriers (OCT) 1997 First Exclusive Container Terminal opened in Kamcheon, Korea Signed MOU for Dedicated Terminal Development in Jacksonville, U.S. (OCT) Kicked off new direct service to Manzanillo, Mexico Established Portal System for Ship Management (NOV) Signed ‘30 year Lease Contract’ for Dedicated Terminal in Jacksonville, U.S. (DEC) Opened exclusive terminal in Long Beach, USA 2008 Opened exclusive container terminal in Hamburg, Germany Named ‘Carrier of the Year’ by Owens Corning for Seven Consecutive Years (MAR) Launched new communications system under the name of New Information System Honored as ‘Carrier of the Year’ by Owens Corning 1998 Added second Australia/South Asia Service-Australia Service Plus (ASP) 2009 Demerger of the Company (Hanjin Shipping Holdings Co., Ltd., a holding company and Hanjin Shipping Co., Ltd., Established new intermodal customer center in Chicago an operating company through split-off) Opened exclusive container terminal in Kaohsiung, Taiwan and Kwangyang, Korea Launched Hanjin Shipping Holdings as a holding company Launched second LNG carrier, the Hanjin Muscat Published “The 60 Year History of Hanjin Shipping” 1999 Agreement with the Port of Oakland to build and operate a new 120-acre terminal 2010 Through investment in kinds, met conditions of Holding company via capital increase Introduced two 5600TEU-class container vessels into Pendulum Service (PDM 1) Hanjin Shipping received first 10,000TEU class containership (Jun.) Launched third LNG carrier, the Hanjin Sur Hanjin Shipping opened Vietnam Tan Cang-Cai Mep terminal (Mar.) Began direct Yantian call on Pendulum A Service 2011 Chairwoman and CEO Choi Eun-young received the civil medal for the first time in South Korean shipping industry (Jul.) Agreement with the Port of Long Beach to build and operate a new 370-acre terminal Hanjin Shipping transported 4 million TEU of container cargo on annual basis for the first time in (Nov.) 2000 Established a subsidiary company-CyberLogitec Vice Chairman Sooho Cho awarded 'Medal of Honor' from city of Hamburg As a holding company, Hanjin Shipping Holdings focuses on acquiring stocks of subsidiaries with the purpose of control, management and Achieved company-wide ISO 14001 certification development. Based on Dec. 31st 2011 onwards, our major subsidiary companies are Hanjin shipping and Cyber Logitec. Our revenues are composed of income from dividends, income of trademark rights, office rental income and etc.

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Current status of Subsidiary Companies Changes in Stockholder's Equity in the past six years (Unit : KRW in Millions) (Unit : share, KRW) Company Name Possessed Shares Book value of Shares Weighted by Assets Remarks Increase Date Types Par Value Number of (reduction) of Capital Stock Method Hanjin Shipping 36.02% 741,655 85.72% Listed Company shares Capital Cyber Logitec 40.00% 13,547 1.57% Unlisted Company 2007. 12. 14 Registered comon stock 5,000 79,612,946 39,494,000,000 398,064,730,000 Warrant 2008. 07. 04 Registered comon stock 5,000 87,349,097 38,680,755,000 436,745,485,000 Merger Total - 755,202 87.29% - 2008. 12. 18 Registered comon stock 5,000 88,368,297 5,096,000,000 441,841,485,000 Warrant Weighted by Assets shows book value of shares divided by total assets (865,197 Mill.) of Hanjin shipping holdings (Based on Dec. 31st 2011 statistics) 2009. 12. 02 Registered comon stock 5,000 14,283,516 (370,423,905,000) 71,417,580,000 Demerger 2010. 03. 19 Registered comon stock 5,000 43,790,877 147,536,805,000 218,954,385,000 Captial increase

Hanjin Shipping had decided to separate the company into Hanjin Shipping Holdings Co., Ltd., a holding company and Hanjin Shipping Co., Ltd., an operating company focusing on shipping business, according to Commercial Act. Demerger date was December 1st 2009.

87,349,097 88,368,297 79,612,946 Number of shares Capital Stock Business Location 43,790,877 436,745,485,000 441,841,485,000 Name Main Business Location 398,064,730,000

Head Office Holding company and office rental 25-11, Yoido-Dong, Youngdeungpo-Gu, Seoul, Korea 14,283,516

218,954,385,000

71,417,580,000

2007.12.14 2008.07.04 2008.12.18 2009.12.02 2010.03.18

Division of Personnel Agency Business of Stock (Unit : person) Classification Office Jobs Technical Post Other Jobs Total Classification Remarks Male/Female 12/1 - - 13 Closing Date December 31 Shareholder's Meeting Within three month from the closing date Closing of stock Book Period from January 1 to January 31 Method of Public Notice Company's Homepage (http://www.hanjin-holdings.com) Types of Share Certificates 1, 5, 10, 50, 100, 500, 1000, 10000 Name : Hana Bank Transfer Agent Stock Information Location 43-2, Yoido, Youngdeoungpo, Seoul Type and Number of Issued stocks (Unit : share, KRW, %) Bonds (Unit : KRW in Millions) Type of shares Number of Shares Amount (KRW) Portion Remarks Classification The Date of Issue Total Face Value Outstanding Balance The date of Maturity Registered common stock 43,790,877 218,954,385,000 100 - 1st Public Bond 2009.02.19 50,000 50,000 2012.02.19 Registered preferred stock - - - - 2nd Private Placement Bond 2010.06.21 50,000 50,000 2013.06.21 3rd Private Placement Bond 2011.10.28 40,000 40,000 2014.10.28 Total 43,790,877 218,954,385,000 100 - Total 140,000 140,000

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Business Overview Operating Results and Financial Status

For the last three years Review of Operations Operating Results “Refer to CEO’s Message” '(Unit : Korean Won in Millions) Description FY2011 FY2010 FY2009 Operating revenue 36,236 160,931 12,840 Operating expense 338,066 9,186 12,930 Revenue Breakdown by Business Operating income (loss) (301,830) 151,745 (90) (Unit : KRW in Millions) Finance income 1,348 1,206 159 Revenue Amount Revenue Amount Finance expense 8,212 5,768 291 Classification Remarks FY 2011 FY 2010 Others (126) 336 Income (loss) before income taxes (308,820) 147,519 (222) Operating income 36,236 23,910 - Income taxes expense (income) (22,875) 3,944 (7,851) Equity in income of equity - 137,021 - Income (loss) from continuing operations (285,945) 143,575 7,629 method accounted investees Income (loss) from discontinued operations - - (1,320,790) Total 36,236 160,931 Net income (loss) (285,945) 143,575 (1,313,161) Total other comprehensive Income (loss) (38,935) 129,490 - Total comprehensive Income (loss) (324,880) 273,065 -

Financial Status '(Unit : Korean Won in Millions) Description FY2011 FY2010 FY2009 Current assets 30,014 36,381 47,518 Holding Company, Subsidiaries, Affiliates and Consolidation Cash and cash equivalents 16,853 27,074 37,047 Short-term financial instruments 6,894 1,853 2,022 Trade and other receivables 6,074 7,266 992 Inventories 11 7 - Other current assets 182 181 7,457 Holding Company Non-current assets 835,183 1,125,793 329,607 N/A Property, plant and equipment 42,343 42,908 42,858 Investment property 36,671 37,336 38,318 Intangible assets 44 44 44 Investments in associates and joint ventures 755,202 1,045,349 248,286 Employee benefits 347 - - Subsidiary Companies Other non-current assets 576 156 101 Total assets 865,197 1,162,174 377,125 Current liabilities 76,253 31,887 10,826 Subsidiary companies Relation to Hanjin Shipping Holdings(HJH) Trade and other payables 1,765 1,975 962 Name Registration Paid-up Capital Owned Shares HJH's shares(%) Business with HJH Income taxes payables - - 100 Hanjin Shipping Korea KRW 625,000,000,000 45,027,519 36.02 - Borrowings 64,991 20,000 - Cyber Logitec Korea KRW 2,000,000,000 160,000 40.00 - Deposits received 8,312 9,683 9,587 Other current liabilities 1,185 229 177 Non-current liabilities 149,222 155,177 76,641 Borrowings 130,000 99,928 49,858 Retirement benefit obligations - 2,242 - Deferred income tax liabilities 19,222 53,007 26,783 Total liabilities 225,475 187,064 87,467 Current Post in Subsidiaries Share capital 218,955 218,955 71,418 Share premium 417,782 417,782 75,966 Directors Concurrent Companies Retained earnings 138,985 437,702 679,845 Name Position Name Position Treasury shares (68,830) (68,830) (56,381) Accumulated other comprehensive loss (67,170) (30,499) (481,190) Hanjin Shipping Choi Eun-Young Chairwoman & CEO Chairwoman & CEO Total equity 639,722 975,110 289,658 Cyber Logitec Total liabilities and equity 865,197 1,162,174 377,125

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Directors and Auditors Investment Detail Name Investors Owned Shares Ratio(%) Division Status Name Job function Hanjin Shipping Mexico S.A. de C.V. Hanjin Shipping - 51.00 Standing Representative Director Choi Eun-Young Chairwoman & CEO Hanjin Shipping Bangladesh Limited Hanjin Shipping - 49.00 Non-standing Director Cho Yang-Ho - Hanjin Shipping America, LLC. Hanjin Shipping - 100.00 Non-standing Outside Director Oh Yong-Kook Chairman of Audit Committee Hanjin Shipping Canada, INC Hanjin Shipping - 100.00 Non-standing Outside Director Kim Chan-Kil Member of Audit Committee Hanjin Shipping Europe Management GmbH Hanjin Shipping - 100.00 Hanjin Shipping Europe GmbH & Co.KG Hanjin Shipping - 100.00 Non-standing Outside Director Seo Dong-Woo Member of Audit Committee Tatal Terminal International LLC Hanjin Shipping - 60.00 Antwerp International Terminal Hanjin Shipping 1,486,030 14.02 Total Terminal International Algeciras S.A Hanjin Shipping 50,000,000 100.00 Tan Cang Cai Mep International Co., Ltd. Hanjin Shipping - 21.33 Major Shareholders (Unit : KRW in Thousand) CJSC Nakhodka International Terminal Hanjin Shipping 25,000 5.00 Shanghai Sinhan Shipping Agency Co., Ltd. Hanjin Shipping - 49.00 Transaction with company Name Number of Shares Remarks Shandong Hanjin Freight & Tansportation Co., Ltd. Hanjin Shipping - 37.69 Earning Expense Huahan (Tianjin) Container Co., Ltd. Hanjin Shipping - 30.00 Dalian Hantong Logistics Co., Ltd. Hanjin Shipping - 50.00 Eun Young Choi & others 7,264,220 16.59 - - Affiliated person Shandong Hanjin Logistics Co., Ltd. Hanjin Shipping - 60.00 Yang Hyun Foundation 4,333,483 9.90 20,964 23,628 Nonprofit foundation Thai Hanjin Logistics Co., Ltd. Hanjin Shipping 3,675,000 49.00 Lines Co., Ltd. 7,315,479 16.71 - - affiliated company Hanjin Logistic Inc. Hanjin Shipping 40,248 100.00 Korean Airport Service Co., Ltd. 4,683,898 10.70 - 5,477 affiliated company Hanjin Logistics (Shanghai) Co., Ltd Hanjin Shipping 1,600,000 25.53 Hanjin Transportatin Co., Ltd. 17,122 0.04 - 80,152 affiliated company Hanjin Overseas Bulk Ltd. Hanjin Shipping 554,570 100.00 Hanjin Overseas Tanker Pte, Ltd. Hanjin Shipping 34,277,500 100.00 PVP V LABUAN LTD 431,848 0.99 - - Cotenant Hanjin Eurobulk Ltd. Hanjin Shipping 210,000 50.00 Prime Value 4,786,441 10.93 - - - Zhejiang Eastern Shipyard Co., Ltd. Hanjin Shipping - 34.00 Hillstar Assets Limited 4,041,257 9.23 - - - Hanjin International Japan Co., Ltd. Hanjin Shipping 500 25.00 Hanjin Romania S.R.L. Hanjin Shipping 3,179,050 100.00 kawasaki Kisen kaisha, Ltd. Hanjin Shipping 7,546,000 0.99 GT NEXUS Hanjin Shipping 156,250 0.43 Investment Status of Hanjin Shipping Holdings, status of Hanjin New Port Co., Ltd. Hanjin Shipping 2,958,000 51.00 Pyeong Taek Container Terminal Co., Ltd. Hanjin Shipping 2,360,000 59.00 Sebang Terminal Co., Ltd. Hanjin Shipping 130,000 45.00 Subsidiaries investing in other companies and Other Companies Gwangyang International Container Terminal Co., Ltd. Hanjin Shipping 10,000 50.00 Hanjin Shipping Gwang yang Terminal Co., Ltd. Hanjin Shipping 280,000 70.00 Hanjin Pacific Corporation Hanjin Shipping 55,000 60.00 investing in Hanjin Shipping Holdings Gamman Common Management Co., Ltd. Hanjin Shipping 2,500 20.00 Hanjin New Port Logistics Corporation Hanjin Shipping 420,000 66.67 Korea International Terminal Hanjin Shipping 499,500 5.55 1. Investment Status by Hanjin Shipping Holdings & Subsidiaries Pusan New Port Co., Ltd. Hanjin Shipping 339,000 0.29 Busan Marine & Oil Corporation Hanjin Shipping 960,000 48.00 Investment Detail Hanjin Shipping Gyeong-In terminal Hanjin Shipping 640,000 80.00 Name Investors Owned Shares Ratio(%) HJLK Corporation Hanjin Shipping 460,000 100.00 Hanjin Kerry Logistics Hanjin Shipping 455,000 65.00 Hanjin Shipping Hanjin Shipping Holdings 45,027,519 36.02 BuiltOne Co., Ltd. Hanjin Shipping 25,000 9.16 CyberLogitec Hanjin Shipping Holdings 160,000 40.00 eNtoB Corporation Hanjin Shipping 200,000 6.25 Hanjin Shipping (Singapore) Pte., Ltd. Hanjin Shipping 16,375,000 100.00 LG Uplus Corp Hanjin Shipping 300,000 0.06 Hanjin Shipping (China) Co., Ltd. Hanjin Shipping - 100.00 Moorim P&P Co., Ltd. Hanjin Shipping 146,294 0.24 Hanjin Shipping Line Malaysia sdn.Bhd. Hanjin Shipping 14,140,000 100.00 Glonet Systems Hanjin Shipping 100,000 1.50 Hanjin Shipping Do Brasil Ltda. Hanjin Shipping 768,658 100.00 Korea BIZ-Net Co., Ltd. Hanjin Shipping 17,541 9.91 Hanjin Shipping Poland Ltd. Hanjin Shipping 537 100.00 Hanjin Ship Management Co., Ltd. Hanjin Shipping 599,997 100.00 Hanjin Shipping Hungary Transportation Co., Ltd. Hanjin Shipping - 100.00 KT Submarine Co., Ltd Hanjin Shipping 1,323,000 30.21 Hanjin Shipping Australia Pty, Ltd. Hanjin Shipping 1,700,000 100.00 TONGYEONG Tug Co., Ltd. Hanjin Shipping 29,000 14.50 Hanjin Shipping India Pvt, Ltd. Hanjin Shipping 8,151,000 100.00 KOREA P&I CLUB Hanjin Shipping - 14.24 Hanjin Shipping (Cyprus) Co., Ltd. Hanjin Shipping 1,000 100.00 Samoul Co., Ltd. Hanjin Shipping 240,000 60.00 CyberLogitec America, Inc. CyberLogitec Atlanta Shipping Agency (Holding) Ltd. Hanjin Shipping 50 100.00 3,000 100.00 CyberLogitec Shaghai. Co.,Ltd CyberLogitec - 100.00 Hanjin Shipping (Vietnam) Co., Ltd. Hanjin Shipping - 51.00 CyberLogitec Spain S.L.U CyberLogitec - 100.00 Hanjin Spain S.A. Hanjin Shipping 1,020 51.00 Hanjin Shipping (Thailand) Co., Ltd. Hanjin Shipping 1,470,000 49.00 Investment Detail Hanjin Shipping Lanka (Private) Ltd. Hanjin Shipping 2,588,900 40.00 Name Investors Hanjin Italy S.P.A. Hanjin Shipping 250,000 50.00 Owned Shares Ratio(%) Hanjin Shipping (Taiwan) Co., Ltd. Hanjin Shipping 1,800,000 60.00 Hanjin Shipping Holdings Kawasaki Kisen Kaisha.,Ltd. 347,517 0.79 Hanjin Shipping U.A.E. LLC Hanjin Shipping 1,960 49.00

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Audit Report and Financial Statements The Major Creditors Audit Report by Audit Committee 16 (Unit : KRW in Millions) Independent Auditors Report 17 The No. of Share FINANCIAL Non-Consolidated Statements of Financial Position 18 Creditors Amount Ratio Remarks Holding Non-Consolidated Statements of Operations 20 National Agricultural 55,000 - - - Non-Consolidated Statements of Disposition of Cooperative Federation SECTION Accumulated Deficit 21 Korea Investment & 50,000 - - - Securities Co. KDB 50,000 - - - Kookmin Bank 40,000 - - -

14 HANJIN SHIPPING HOLDINGS 2011 BUSINESS RERORT

Audit Report by Audit Committee Independent Auditors’ Report

We have audited accounting and business status of Hanjin Shipping Holdings Co., Ltd. as of December 31, 2011 and for the The Board of Directors and Stockholders year that ended on December 31, 2011 and are reporting the results as below. Hanjin Shipping Holdings Co., Ltd.:

1. The Outline of Audit Procedure Based on a report originally issued in Korean In order to conduct the accounting audit, we have read the company’s accounting books and related documents, and studied the related detailed statements. When necessary, we have applied proper audit procedures to compare, inspect, attend and inquire. We have audited the accompanying statements of financial position of Hanjin Shipping Holdings Co., Ltd. (the “company”) as of December 31, 2011, 2010 and January 1, 2010, and the related statements of comprehensive income, To conduct the business status inspection, we have attended the board of director’s meeting and other important changes in equity and cash flows for the years ended December 31, 2011 and 2010. Management is responsible for the meetings. We have also received briefings from the board of directors regarding sales and other business status preparation and fair presentation of these financial statements in accordance with Korean International Financial when necessary. We have referred to the documents related to company business and studied the details of the Reporting Standards. Our responsibility is to express an opinion on these financial statements based on our audits. documents to meet the proper audit procedures. We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial 2. The Balance Sheets and Statements of Income statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles The balance sheet and statement of income fairly present the financial position of Hanjin Shipping Holdings Co., used and significant estimates made by management, as well as evaluating the overall financial statement Ltd. in accordance with the laws of the Republic of Korea and the company’s articles of incorporation. presentation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

3. Non-Consolidated Statements of Disposition of Accumulated Deficit In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Group as of December 31, 2011, 2010 and January 1, 2010 and its financial performance and its cash flows for Non-Consolidated Statements of Disposition of Accumulated Deficit is properly prepared in accordance with the the years ended December 31, 2011 and 2010, in accordance with Korean International Financial Reporting laws of the Republic of Korea and the company’s articles of incorporation. Standards.

4. The business report Without qualifying our opinion, we draw attention to the following: The business report fairly presents the current status of company in accordance with the laws of the Republic of Korea and the company’s articles of incorporation. The procedures and practices utilized in the Republic of Korea to audit such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying financial statements are for use by those knowledgeable about Korean auditing standards and their application in practice.

February 28, 2012 Hanjin Shipping Holdings Co., Ltd. KPMG Samjong Accounting Corp. Chairman of Audit Committee, Outside Director Youg Kook Oh Seoul, Korea February 29, 2012

This report is effective as of February 29, 2012, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

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Non-Consolidated Statements of Financial Position

As of December 31, 2011 and 2010

HANJIN SHIPPING HOLDINGS CO., LTD. (In thousands of won) (In thousands of won) Note 2011 2010 Note 2011 2010 Assets Equity Cash and cash equivalents 16,852,928 27,074,049 Share capital 218,954,385 218,954,385 Short-term financial instruments 6,894,115 1,852,625 Share premium 417,782,311 417,782,311 Trade and other receivables 6,074,095 7,265,833 Retained earnings 138,984,981 437,702,199 Inventories 10,501 7,555 Treasury shares (68,830,149) (68,830,150) Other current assets 182,405 181,005 Accumulated other comprehensive loss (67,169,560) (30,499,043) Current assets 30,014,044 36,381,067 Total equity 639,721,968 975,109,702 Property, plant and equipment 42,343,361 42,907,815 Total liabilities and equity 865,197,211 1,162,173,670 Investment property 36,670,440 37,335,712 Intangible assets 43,700 43,700 Investments in associates and joint ventures 755,202,057 1,045,349,175 Employee benefits 347,408 Other non-current assets 576,201 156,201 Non-current assets 835,183,167 1,125,792,603 Total assets 865,197,211 1,162,173,670

Liabilities Trade and other payables 1,765,045 1,974,932 Borrowings 64,991,284 20,000,000 Deposits received 8,312,015 9,682,519 Other current liabilities 1,184,865 229,099 Current liabilities 76,253,209 31,886,550 Borrowings 130,000,000 99,927,723 Retirement benefit obligations - 2,241,892 Deferred income tax liabilities 19,222,034 53,007,803 Non-current liabilities 149,222,034 155,177,418 Total liabilities 225,475,243 187,063,968

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Non-Consolidated Statements of Operations Non-Consolidated Statements of Disposition of Accumulated Deficit

For the years ended December 31, 2011 and 2010 For the years ended December 31, 2011 and 2010 Date of Disposition for 2011: March 16, 2012 Date of Appropriation for 2010: March 18, 2011

HANJIN SHIPPING HOLDINGS CO., LTD. HANJIN SHIPPING HOLDINGS CO., LTD. (In thousands of won) (In thousands of won) Note 2011 2010 Note 2011 2010 Operating revenue Unappropriated retained earnings (undisposed Operating income 36,236,162 23,909,981 accumulated deficit) Balance at beginning of year 97,889,944 Equity in income of equity method accounted investees - 137,020,815 256,320,921 Change of functional currency - 29,629,260 36,236,162 160,930,796 Change in retained earnings – change in equity method Operating expense (2,012,084) (2,976,110) accounted investments Operating expense 10,951,531 9,185,659 Actuarial gains (losses) (252,938) (239,341) Equity in loss of equity method accounted investees 327,115,116 - Net income (loss) (285,944,743) 143,575,366 338,066,647 9,185,659 Balance at end of year before appropriation (disposition) (31,888,844) 267,879,119 Income (loss) from operations (301,830,485) 151,745,137

Appropriation of retained earnings Finance income 1,348,582 1,205,862 Legal reserve - 1,050,745 Finance costs (8,211,728) (5,768,184) Dividends - 5% on par value at W 250 won per share - 10,507,453 Others (126,404) 336,027 -11,558,198 Income (loss) before income taxes (308,820,035) 147,518,842

Unappropriated retained earnings (accumulated deficit) Income tax expense (benefit) (22,875,292) 3,943,476 (31,888,844) 256,320,921 to be carried over to subsequent year Net income (loss) (285,944,743) 143,575,366

Other comprehensive income, net of income tax Actuarial losses (252,937) (239,341) Change in capital adjustments – change in equity method (36,670,517) 85,712,506 accounted investments March 16, 2012 Change in retained earnings – change in equity method (2,012,084) (2,976,110) accounted investments Hanjin Shipping Holdings Co., Ltd. Loss on presentation currency translations 46,992,922 Chairwoman & CEO Choi Eun-Yong Director Cho Yang-Ho Total other comprehensive income (loss), (38,935,538) 129,489,977 net of income tax Outside Director Oh Yong-Kook Outside Director Kim Chan-Kil Outside Director Seo Dong-Woo Total comprehensive income (loss) (324,880,281) 273,065,344

Earnings (loss) per share Basic and diluted earnings per share (won) (6,803) 4,001

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Global Service Network

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Holding Company and Subsidiaries

Holding Company Hanjin Shipping Holdings 25-11, Yoido-dong, Yongdeungpo-gu, Seoul 150-949, Korea 82-2-3770-6868 http://www.hanjin-holdings.com

Subsidiary Companies Hanjin Shipping 25-11, Yoido-dong, Yongdeungpo-gu, Seoul 150-949, Korea 82-2-3770-6114 http://www.hanjin.com

CyberLogitec 1605 Nuritkum Square, Sangam-dong, Mapo-ku, Seoul 121-795, Korea 82-2-6350-2000 http://www.cyberlogitec.com

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