Global Leader in Ocean & Power
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SAMSUNG HEAVY INDUSTRIES Eco-friendly paper was used for this report. 35th Fl., Samsung Life Insurance Seocho Tower, 1321-15 Seocho-Dong, Seocho-Gu, Seoul, 137-955, Korea Tel: 02-3458-6354 Fax: 02-3458-6359 Ocean & Power Samsung Heavy Industries Sustainability Report 2011 SAMSUNG HEAVY INDUSTRIES fj^^f*

Samsung Heavy Industries Sustainability Report 2011 About this Report 1 Sustainability Management Vision & Strategy Global Leader of Shipbuilding & Offshore Industry 20 Eco-friendly Technologies Sustainable Management Green Mangement Greenhouse Gas Emissions Reduction 64 Industrial Water & Energy Consumption Management 67 Sustainable Management Data 69 Third Party Assurance Report 72 About this Report Samsung Heavy Industries has published sustainability report on an annual basis since 2011. The company aims to inform internal/external stakeholders on its sustainability management...

SAMSUNG HEAVY INDUSTRIES 2 · Introduction 2011 SUSTAINABILITY REPORT 3 5. Published SHI s rst Sustainability Report 2011 Highlights SHI has conducted various business, environmental, and social activities throughout 2011. 6. Ofcial launch of CEO blog Window of Awareness Our first sustainability report was issued June 2011, titled 2010 SHI sustainability report, with the theme of sustainable value creation. This year s report covers SHI s contribution to the economy, environment, and society as part of efforts for sustainable growth. Being the first among major domestic shipbuilders to issue...

4 · Introduction SAMSUNG HEAVY INDUSTRIES 2011 SUSTAINABILITY REPORT 5 CEO Message Respected stakeholders of Samsung Heavy Industries, To meet the growing demand for corporate social responsibility and engineering. We are now added to the list of Asia Pacific region by stakeholder communication, we published our first sustainability Dow Jones Sustainability Index (DJSI) as well. report in 2011. This year, we are publishing our second report, to look Also to pursue sustainable growth, we are strengthening our back on our efforts of the past year on the pursuit of balanced growth...

SAMSUNG HEAVY INDUSTRIES 6 Sustainability Management · Vision & Strategy ··Eco-friendly Technologies · Partnership · Green Management 6 Introduction 2011 SUSTAINABILITY REPORT 7 Company Profile Samsung Heavy Industries aims for World best in Shipbuilding & Offshore, Construction, Wind, and Electronics. Oslo Moscow London New York Tokyo Athens RONGCHENG Shanghai Dubai Houston Fukuoka NINGBO India Singapore Head Ofce/ Construction & Engineering Division Rio de janeiro Suwon Power & Control Systems Business Division Daeduk Research Center Geoje Shipyard Company Name Date of Establishment...

8 Sustainability Management · Vision & Strategy · Eco-friendly Technologies · Partnership · Green Management SAMSUNG HEAVY INDUSTRIES 2011 SUSTAINABILITY REPORT 9 Sustainability Management Sustainable Business Activities SHI makes its ceaseless efforts to achieve harmonious growth and development in economic, social and environment sector. Stakeholder Engagement / Board of Directors / Compliance Management / Risk Management

SAMSUNG HEAVY INDUSTRIES 10 Sustainability Management · Vision & Strategy · Eco-friendly Technologies · Partnership · Green Management 2011 SUSTAINABILITY REPORT 11 Stakeholder Engagement Sustainability report works as a communication channel for Key Issue Assessment Results Stakeholders of SHI internal/external stakeholders to share vital information. Thus SHI SHI has derived 20 issues through key issue assessment process, listed dened its employees, clients (ship owners), partners, shareholders, Clients them in prioritized order according to level of stakeholder interest and (Ship Owner)...

SAMSUNG HEAVY INDUSTRIES 12 Sustainability Management · Vision & Strategy · Eco-friendly Technologies · Partnership · Green Management 2011 SUSTAINABILITY REPORT 13 Board of Directors Shareholder Structure system operation and BoD member assignment. Along with the issues As of the end 2011, the total number of SHI outstanding shares was 230,990,231(230,875,386 common stocks and 114,845 preferred stocks), with the largest shareholder being Samsung Electronics, Director status Name of Member to discuss social responsibility issues in future BoD meetings. In-Sik Roh performance and current...

SAMSUNG HEAVY INDUSTRIES 14 Sustainability Management · Vision & Strategy · Eco-friendly Technologies · Partnership · Green Management 2011 SUSTAINABILITY REPORT 15 Compliance Management Operational Structure Compliance Body Increasing demands for corporate social responsibility and more Compliance Performer 2011 CP Training Program Overview Compliance performers are namely Compliance Leader (CL) and Compliance Committee rigorous sets of regulations due to frequent legal disputes are part With the CEO as chairperson, the compliance committee is the highest of common trend around the globe....

SAMSUNG HEAVY INDUSTRIES 16 Sustainability Management · Vision & Strategy · Eco-friendly Technologies · Partnership · Green Management 2011 SUSTAINABILITY REPORT 17 Risk Management Financial Risk Management Non-nancial Risk Prevention SHI is constantly exposed to exchange rate volatility, due to foreign SHI carries out preventive measures in the fields of safety, exchange transactions and raw materials trade in the fields of environment, and compliance to effectively respond to unanticipated shipbuilding, plant-building, manufacturing and construction. The non-nancial risks. Currently the...

18 Sustainability Management · Vision & Strategy · Eco-friendly Technologies · Partnership · Green Management SAMSUNG HEAVY INDUSTRIES 2011 SUSTAINABILITY REPORT 19 Vision & Strategy Vision of SHI With competitive edge that made the dream of making Korea the powerhouse of shipbuilding and ocean industry come true, the endeavor for the global leadership remains ceaseless. The global leader of shipbuilding and ocean industry / The future of SHI