2011 SAMsUNG ENGINEERING

SUsTAINABILITY REPOrT

CREATIVE ENGINEERING SOLUTION PROVIDER

CONTENTS

CEO Message Corporate Governance Approach to Sustainability

02 10 22 60
SLOGAN

BUSINESS FOR SUSTAINAbILITY

Growth Strategy Core Competence Project Highlight
Shaybah NGL Project S-Oil Onsan Refinery Expansion Project Suji Respia

COMMITMENT TO SUSTAINAbILITY
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

PERFORMANcE SUMMARY
Economic, Environmental and Social Performance GRI Index

APPENDIX

We are a force with no boundaries, rising above client expectations while creating a visionary future Creative Engineering Solution Provider
[Vision 2020] USD 40 billion in revenue & USD 50 billion in order

71
ABOUT THIS REPOrT
This report is Samsung Engineerings rst sustainability report. It was written to present Samsung Engineerings commitment to enhancing economic, environmental and social value and achievements comprehensively in accordance with the Global Reporting Initiative (GRI) G3.1 guidelines. Reporting Period | This report covers Samsung Engineerings performance and activities from January through December 2011, and if necessary to provide time-series trends, the data of the two most recent scal years (from January 2010 through December 2011) were utilized. As for some issues of signicance, relevant data reported until April 2012 is included in this report. Reporting Boundary and Scope | We aim to report all aspects of Samsung Engineerings domestic and overseas business areas (including project sites) in principle, but in cases where data collection was not possible, the specic scope of the data was stated. We set a principle of not including subsidiaries and suppliers within our reporting boundaries, while some of their activities are reported with additional statements. The reporting boundaries and scope were based on recommendations of the GRI guidelines. To ensure the objectivity and transparency of the content, we commissioned a third party without vested interests in the company to verify the accounts herein (Independent Assurance Statement p.76 - p.77). Samsung Engineering will continue to publish the Sustainability Report to share our sustainability management activities and performance as well as future goals with our stakeholders.

VISION

CORE VALUE

Continuous Challenge Global Citizenship Creative Convergence Creating and pursuing future value for clients through engineering excellence

MISSION

BUSINESS AREA & MaJor Track Record

Samsung Engineering has achieved outstanding performance records globally for petrochemical, refinery, gas and other hydrocarbon plant projects. Moreover, we are seeing tangible results in providing services for industrial and environmental projects as well as power plant, metallurgy and other new business opportunities. We are involved in several projects of various scales around the globe spanning from the Middle East, Asia, and Americas to Europe.

Founded Countries Workforce

(As of the end of 2011)

EUROPE MIDDLE EAST/ NORTH AFRICA

02

01

1970 30 7,620

Head Office (Seoul, Korea)

ASIA

03

AMERICAS

04

EUROPE
HUNGARY
HANKOOK TIRE_PCR/TBR Plant SAMSUNG SDI_PDP No. 4 Module Plant

MIDDLE EAST / NORTH AFRICA

UAE
BOROUGE_2 OCU Plant HCSEZ_ICAD IWT Plant FERTIL_2 AMMONIA/Urea Project TAKREER_RRE Package #3 Offsites & Utilites Project ADNOC_Shah Gas Development Package #4 U & O Project ADNOC & Borealis J/V Borouge_3 PO (Polyolefin) Plant Borouge_3 LDPE Plant

ASIA
SAUDI ARABIA
SABIC_Gas ASU Plant SAMCO_Acrylic Acid Plant SPC_PDH/PP Plant APPC_PDH/PP Plant TASNEE_Ethylene Plant SHARK_EG Plant IBN ZAHR_PP Plant, OCT Plant MA'ADEN_ Ammonia Plant, Aluminum Complex KAYAN_PP Plant, Amines Plant SAUDI ARAMCO_DHT Plant SATORP_Jubail Export Refinery Package #3 and #4 Plant  SAUDI ARAMCO_Shaybah NGL (Natural Gas Liquid) Project Wasit Cogen. Project SAUDI ARAMCO_CO2 Capture & Injection Plant SOCC_SOCC. Aluminum Alkyls Project

AMERICAS
VIETNAM
INTEL_A9 T9 ATM Plant PMPC_PVC Plant PETROVIETNAM_Fertilizer Plant and CO2 Recovery Plant

INDIA
IOC_FCC/DHDT Plant, LAB Plant, EG Plant IPCL_C2/C3 Plant, LLDPE/HDPE Plant IISCO_Steel Plant ONGC_OPal DFCU/AU Plant

MEXICO
 PEMEX_Salamanca Refinery Plant, Tula Refinery Plant, Minatitlan Refinery Plant POSCO_CGL Utility Plant CFE_Manzanillo LNG Terminal Project, Norte II Power Plant

SLOVAKIA
SAMSUNG ELECTRONICS_LCD Module Line HANSOL_LCD Parts Plant

CHINA
HANKOOK TIRE_PCR/TBR Plant SAMSUNG ELECTRONICS_LCD Module Line  SAMSUNG SDI_Tianjin LED Plant, Tianjin Battery Cell Line AIR LIQUIDE_HYCO Plant SAMSUNG ELECTRON-MECHANICS_ MLCC Line

MALAYSIA
PCSB_Sabah Oil & Gas Termical Project

TRINIDAD & TOBAGO

 PETROTRIN_CCR Refinery Plant, Ultra Low Sulphur Diesel Unit, T&T ULSD

BAHRAIN
BAPCO_Lube Base Oil Plant SULB_Steel Mill Project MOW_Muharraq Sewage Treatment Plant

THAILAND
TTM_GSP-1 Plant PTT_GSP-5 Plant, GSP-6 Plant, ESP Plant TOC_EO/EG Plant MOC_Cracker Plant

USA
SASL_SAS CU Ultrapure Water System  Dow-Mitsui Chlor-Alkali LLC_Dow Chlorine Manufacturing Facility (Falcon)

KOREA
SAMSUNG MOBILE DISPLAY_SMD A2 Project KR_Seoul Maintenance Workshop Phase II Project YONGIN CITY_Sewage Treatment Plants BTO Project SEOUL CITY_2002 Korea-Japan World Cup Main Stadium

ALGERIA
SONATRACH_Skikda Refinery Plant

BUSINESS AREAS
Hydrocarbon

KEY FIGURES
Hydrocarbon Non-Hydrocarbon

New Orders (KRW billion)

Refinery
CDU/VDU Heavy Oil Upgrading Aromatics, HDS

Revenue (KRW billion)

Order Backlogs (KRW billion)

Gas
Gas Processing LNG (Liquefaction, Terminal)

Petrochemicals
Ethylene EO/EG Fine Chemicals PDH Polymers Fertilizers

Hydrocarbon Upstream
Oshore Platforms FPSO (FLNG) Pipeline GOSP

10,117

9,032

11,789

20,385 9,298
4,035 5,312 13,955 17,151

Non-Hydrocarbon

Power
 Thermal (Coal-IGCC, Oil/Gas Fired)

Metallurgy
Steel Mills  Non-Ferrous Plants (Aluminum, Copper, Nickel)

Industrial Facility
IT Facilities Industrial Manufacturing Facilities Pharmaceutical

Water Treatment
Desalination Sewage Treatment Ultra-Pure Reuse  Wastewater O&M Treatment

2009

2010

2011

2009

2010

2011

2009

2010

2011

CEO MESSAGE
Dear Valued Stakeholders:
legal compliance. In the process, we will cultivate an organizational culture in which every employee voluntarily complies with all related rules and regulations. Also, we will constantly monitor major legal risks and implement a fair trade system based on a corporate culture that stresses clean business practices at all times.

Our sustainability is founded on the basis of transparency, respect for the people and environment and the growth of our partners. For us, it is our way of creating value for stakeholders.

Samsung Engineering is a total engineering solution provider that generates future value for clients through plant construction. Our service encompasses feasibility studies, project financing, engineering, procurement, construction, commissioning, and operation & maintenance, and we are making rapid inroads into the global market. We boast outstanding capabilities to manage the risks of cost, quality, and project scheduling as well as an extensive track record and superb workforce. We have maintained an average annual growth of more than 30%, breaking our records for new orders and sales every year since 2005. Currently we are engaged in projects in more than 30 countries, and our workforce hails from 34 dierent nations. Amidst a changing global market environment, Samsung Engineering faces numerous new risks as well as opportunities. While we must address the work safety issues, we must also respond to growing public interest in environmental and ecological matters. At the same time, overseas projects represent an evergreater share of our business portfolio, requiring us to bolster our ties with local communities around the world, and the scope of our responsibilities toward our business partners continues to grow. Samsung Engineering will preemptively address issues that arise in the global business environment.

Generating Shared Value for Human and the Environment

The leading sources of competitiveness in the engineering industry are individual skills and the organizational strength to bring those skills together most effectively. Samsung Engineering practices equitable personnel management for organizational transparency. We are also encouraging self-motivated learning and fostering specialization so that our employees can focus on shared goals while exhibiting their individual skills freely on the global stage. The diversity of our employees' backgrounds will enable us to establish an organizational culture that serves as the wellspring for creative and innovative ideas. In addition, we remain committed to helping address global environmental issues such as climate change mitigation, bio-diversity protection, and water scarcity prevention. We are also concerned about raising awareness of future generation on the environment. Our competencies regarding environmental protection continue to improve. Samsung Engineering is at the forefront of the market for carbon dioxide recovery, desulfurization, and water treatment facilities. We are leveraging our environment-friendly engineering capabilities to reduce energy consumption, and we practice environment-friendly procurement and supply. The environmental management at our construction sites is thorough as well.

Innovating and Growing as a Global Top-tier

In 2011, Samsung Engineering achieved a record KRW 11.8 trillion in new orders and KRW 9.3 trillion in sales. We broke into the Iraqi and Qatari markets and are expanding our business into Central Asia, starting with Uzbekistan. We won the package deal, four units in one complex, for the Shaybah Natural Gas Liquid Project from Saudi Aramco, the Saudi Arabian state-run oil company. Meanwhile, we broke into the field of hydrocarbon upstream plant in 2010 by winning our first order for the GOSP (Gas Oil Separation Plant), and we bolstered our involvement in this area by winning a series of additional orders for these plants. For non-hydrocarbon plants, Samsung Engineering has received a steady stream of orders for facilities for power generation, metal processing, industrial uses and water treatment in Latin America, namely Mexico and Trinidad & Tobago as well as in the Middle East. Our perennial strength has been in petrochemicals, and we are now leveraging that strength to deepen our involvement in LNG processing, offshore platforms and other upstream areas, staying in step with the increasing demand for energy over the long term. We will also lay the groundwork for sustainable growth by diversifying into a multi-core business portfolio that encompasses power, metallurgy, and industrial plants. Furthermore, we will strengthen our position as a global engineering company which grows with clients by responding to changes preemptively through systematic risk management, stronger human resources development and upgraded business operation.

Growing in Tandem with Society

As companies grow, so does their eect on society and the environment, which means ever-greater corporate social responsibilities. Importantly, Samsung Engineering, a global player, is constantly searching for ways to grow together with stakeholders, and to improve the value being provided to business partners, local communities, governments and others. We have created jobs for local communities and helped local companies to grow. We continue to strengthen our global sourcing network by strictly engaging in fair trading practices and win-win partnerships. In 2011, we established SNTV (Samsung Naora Techno Valley) in Saudi Arabia as a multi-functional oce that contributes to the regional economy and society. Our business is engineering, and we are expanding CSR programs that are true to our knowledge-based profession. These include establishing libraries to help people learn in the countries where we do business, and oering classes on the environment to children. Samsung Engineering is committed to improving the transparency of our operations, and we are ready to listen to you, our stakeholders. I ask for your continued support and interest. Sincerely,

Growing with Transparency and Responsibility

Samsung Engineering will pay closer attention to stakeholders and fulfill all corporate social responsibilities. We are operating an ongoing compliance which is the integrated and regular system for legal risk management. This program includes a compliance support system and training our employees on ethics and President & CEO

Ki-Seok Park

02

CEO MESSAGE

SAMSUNG ENGINEERING SUSTAINABILITY REPORT

03

CORPORATE GOVERNANCE

Independence of the BOD and Protection of Stakeholder Rights

The by-laws of the BOD guarantee outside directors of Samsung Engineering the right to make decisions independently from the inuence of the company, the top management and shareholders. The by-laws are in compliance with legal provisions regarding the appointment and disqualication of outside directors as described in the Commercial Act of Korea Article 382 (3) and Article 542-8 (2).

The Composition and Roles of Committees under the BOD

We will protect the rights of shareholders and other stakeholders by building advanced corporate governance and engaging in responsible management.
BOD

Function
Deliberate upon and resolve general matters on the management of the company Appoint accounting, performance, and external auditors Deliberate and decide on major management issues

Composition*
3 inside directors 4 outside directors

Directors*

Samsung Engineering BOD members*

Audit Committee

3 outside directors

Cheol-Min Kim, Wan-Seon Shin, Sang-Hoon Kim

Management Committee Outside Director Recommendation Committee

3 inside directors

Ki-Seok Park, Byung-Bok Sohn, Byoung-Mook Kim Ki-Seok Park, Byung-Bok Sohn, Cheol-Min Kim, WanSeon Shin, Sang-Hoon Kim

Ki-Seok Park
President & CEO

BOD Chairman

Byung-Bok Sohn Inside Director

Head of Outsourcing Management Unit

Byoung-Mook Kim Inside Director

Head of Business Support Division

Recommend outside director candidates

2 inside directors 3 outside directors

* The composition and members of the BOD are as of May 2012.

Audit Committee | The Audit Committee is responsible for appointing accounting, performance and external auditors. The members of the Audit Committee are selected at the general shareholders meeting. The list of candidates for the Committee members is announced publically before the day of a meeting so that shareholders can make an informed decision on appointing Committee members. The Audit Committee is run by three outside directors to help to ensure the transparency of Samsung Engineerings management practices.
Cheol-Min Kim Outside Director
Tax Attorney, Law Firm Kim & Chang * The status of the BOD is as of May 2012.

Wan-Seon Shin Outside Director

Professor of Systems Management Engineering, Sungkyunkwan University

Sang-Hoon Kim Outside Director

Professor of Business Administration, Kwangwoon University

Ji-Jong Chang Outside Director

Vice President of External Relations, Hannam University

Management Committee | The Management Committee deliberates and decides on matters, and reports to the BOD as authorized by the BOD resolutions, by-laws or operation rules in order to facilitate quick and smooth decision-making on management issues. Outside Director Recommendation Committee | The role of the Outside Director Recommendation Committee is to help to ensure that outside directors are able to make decisions without being inuenced by the top management or dominant shareholders. To this end, the Committee, consisting of two inside and three outside directors, nominates outside director candidates and they are approved and appointed by the resolution of the general shareholders meeting. Candidates for outside directors are selected among those with extensive knowledge and experience in business administration and relevant technologies, ensuring that the outside directors have expertise in making effective and reasonable decisions regarding all aspects of the sustainability management. Those who are major shareholders of or in a special relationship with the company, however, are restricted from being appointed outside directors in order to prevent conicts of interests in the BOD.

The Composition and Roles of the BOD

BOD Composition | The Board of Directors (BOD) of Samsung Engineering aims to increase the eciency and transparency of management practices, and strengthen the nancial soundness of the company. The Samsung Engineering President & CEO serves concurrently as the chairperson of the board according to the BOD rules. The BOD consists of three inside and four outside directors. Inside director candidates are recommended by the BOD or shareholders, while outside directors are nominated by the Outside Director Recommendation Committee. BOD Meetings | The board of directors held eight directors meetings in 2011, including those regularly scheduled, with a 100 percent average attendance rate for both outside and inside directors. We assist outside directors in the performance of their duties in many aspects by ensuring that they have timely access to management information necessary for accurate understanding of the companys status. We also provide them with a reasonable level of compensation for expenses incurred while carrying out their duties. Performance Evaluation and Compensation | Compensations for BOD directors and company executives are dierentiated according to the results of regular business target reviews and performance evaluations. The limit of the compensation is annually approved by resolution at the general shareholders meeting. In 2011, KRW 5.95 billion was paid as the remuneration for the BOD, and the 2012 compensation limit was set at KRW 11 billion.

2011 Governance Key Figures

No. of BOD meetings held in 2011 Average BOD meeting attendance rate

8 100%

Percentage of outside directors in the BOD No. of external positions assumed by outside directors

57%
No more than two

04

Corporate Governance

SAMSUNG ENGINEERING SUSTAINABILITY REPORT

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APPROACH TO SUSTAINABILITY

Stakeholder Engagement
Classification of Stakeholders and Priorities | We divide stakeholders into two categories: business and non-business stakeholders. The clients, employees and suppliers fall into the category of business stakeholders, while non-business stakeholders include shareholders, investors, local communities near project sites, future generations, non-governmental organizations and government agencies.

We are aware of the importance of corporate social responsibility. Samsung Engineering will continue to create shared value with all stakeholders, through sustainability management.

Major Stakeholders of Samsung Engineering and Communication Channels

 The client portal  Sales and marketing channels of each business unit  PSI (Plant Satisfaction Index) surveys HSE satisfaction surveys I RC (Industrial Relations Council) E  mployees satisfaction survey Intranet C  ompany newsletter, Campaigns Regular meetings O  peration of associations with design companies, vendors and subcontractors in Korea O  peration of SEGA system for both domestic and overseas vendors O  peration of GPN system for overseas subcontractors F  SI (Family Satisfaction Index) surveys Meetings, training and support General shareholders meeting IR activities Public announcements Business updates report

s ent Cli

Em plo ye BUSInESS es STa kE

HO
ld

Environment

The Structure for Sustainability Management

 Organizations for Sustainability Management
Approaches to Sustainability Management | Our approaches to sustainability management cover the three directions of responsible growth, respect for people and the environment, and reliable partnership under the CSR slogan of Leading the Way, Building the Future. The directions are further divided into six priority areas (Corporate Governance, Ethics & Compliance, Environment, Health & Safety, Employees & Workplace, Supply Chain, and Local Community). We will continue to take a systematic approach to sustainability management. We will pursue transparent and responsible growth, respect human and the environment, and accompany our partners.

Er

 Environmental education program, 'Kumpooh' and 'Eco-generation'  Environmental campaigns  Development of environmental technology

Suppliers

ES In US c NOn-B Lo

CEO

Official Website Press kits Operation of global offices  Training regional specialists and market investigation  Social contributions to local communities

SS Ta kEH al OldEr Co mm uni ty

rs lde eho r a h S

CSR Office (under the Financial Support Division)

 Business Unit: EnergyHydrocarbon Power Business Unit  Risk Management: Project Support Dept., Quality Management Dept.  Corporate Governance: Business Management Dept., Human Resource Management Dept., Accounting & Tax Dept.  Ethics & Compliance: Compliance Dept., Legal Dept., Audit Dept.  Environment, Health & Safety: HSE Dept.  Employees & Workplace: Human Resource Management Dept.  Supply Chain: Outsourcing Planning Dept., Construction Planning Dept., EnergyHydrocarbonI&I Engineering Support Dept.  Local Community: Global Operation Support Dept., Human Resource Management Dept., PR/IR Dept.

Structures for Sustainability Management

Materiality Test
VISION

Creative Engineering Solution Provider

Approaches to Materiality Test | Samsung Engineering denes materiality as key expectations from the long-term perspective held by stakeholders who are directly or indirectly related to Samsung Engineerings business. We identied potential issues and made the issue pool by interviewing employees and considering ISO 26000, OECD Guidelines for Multinational Enterprises and other global standards as well as issues faced by other entities in the same industry. Then, we surveyed stakeholders to determine the materiality of such issues. We identied major issues through the engagement of stakeholders and evaluated their materiality in terms of (1) their business impacts and internal strategic priorities, and (2) the social pressures and the inuences of relevant stakeholders. The AA1000 Stakeholder Engagement Standard was applied to the test method.

CSR Slogan

Leading the Way, Building the Future

Directions

Responsible growth

Respect for People and the environment

Reliable partnership

Materiality Test Process

Concerned areas

Corporate Governance

Ethics & Compliance

Environment, Health & Safety

Employees & Workplace

Supply Chain

Local Community

STEP

01
Domestic and overseas business trends in the industry Internal interviews

STEP

02
Employees Clients Suppliers Other stakeholders*

STEP

03

Developing the issue pool

Surveying stakeholders

Selecting key issues

Global standards

CSR Office | Samsung Engineering established the CSR Office in 2011 to take diverse stakeholder opinions into account when making business management decisions. The CSR Oce identies sustainability management issues, performs relevant enterprise-level activities in cooperation with business and supporting units, and reports the results to top management. Other functions of the oce include raising employee awareness about sustainability management, and building communication channels and sharing information with external stakeholders. The establishment of the CSR Oce is the rst step for making organizational governance activities more systematic and sustainability management more practical. This represents our eorts to recognize our genuine social responsibilities and make them happen.

2011 Stakeholder Engagement Survey

Definitions of Samsung Engineerings key issues

I dentify the pool of issues concerning sustainability management

 The surveyed: employees, clients, suppliers and other stakeholders  Content: collect opinions from each stakeholder group about relevant issues in terms of the current status of Samsung Engineering and future directions * Other stakeholders include journalists, analysts, investors, the people from credit-rating agencies, government and NGOs who are familiar with Samsung Engineering as well as its shareholders.

 Analyze the business impacts and internal strategic priorities  Analyze the social pressures and the influences of relevant stakeholders Determine key issues

06

Approach to Sustainability

SAMSUNG ENGINEERING SUSTAINABILITY REPORT

07

Stakeholder Engagement Survey | We organized the 2011 Samsung Stakeholder Engagement Survey starting from January to February 2012 in order to identify the expectations of stakeholders. The questionnaires of the survey were developed in 21 areas to include issues dened by global standards and faced by other companies in the industry. The survey was conducted on the four groups of stakeholders (employees, clients, suppliers and other stakeholders). We consulted each stakeholder group to obtain their opinions about the current status of Samsung Engineering and future development directions with regard to sustainability management.

Key Issues Defined by Samsung Engineering | We identied the level of stakeholder interests in key issues and evaluated their inuences to our businesses through the stakeholder survey. The ndings served as the basis for creating the materiality matrix. The materiality test identied upholding ethical practices and securing compliance, health & safety, talent development, and contributions to local economies as the issues of signicance.

The Results of the 2011 Materiality Test

Business impacts and internal strategic priorities

2011 Stakeholder Survey

Employees Clients Suppliers Non-business stakeholders (external)

Key issues
Project quality and risk management (p.14) Laying the groundwork (p.12) U  pholding ethical practices and securing compliance (p.25)  Occupational health and safety (p.35) HR development (p.39)  Strengthening the global network of suppliers (p.47) Contributions to local economies (p.52) local employment and purchases Raising environmental efficiency (p.30) Eco-friendlier projects (p.21) Project-based social contributions (p.56) R  esponses to macro-environmental issues (p.33) - Climate change, biodiversity, water shortage  Health and safety of local communities

Survey period

Jan. 9 ~ 23 (for about 2 weeks)  Domestic: about 6,000 people  Overseas: about 1,000 people Participation rates: 29.7%

Feb. 17~Mar. 2 (for about 2 weeks)  57 clients (domestic and overseas) Participation rates: 29.9%

Feb. 6 ~ 20 (for about 2 weeks) Domestic: 430 people Overseas: 308 people Participation rates: 31.7%

Jan. 11 ~ 25 (for about 2 weeks)  282 people (domestic and overseas) Participation rates: 29.0%

 Working conditions and employee welfare (p.42) Corruption prevention (p.26)  Win-win cooperation with suppliers (p.49)

Surveyed

Common items

 Evaluation of the current status and determination of future directions: Awareness, the progress of sustainability management, strategic relevance, and priorities in internal resource allocation  Common expectations: Ethics & compliance, environment, response to climate change, social contributions, and relationship with local communities Health & Safety HR development  Working conditions (discrimination)  Project execution capabilities  Project environment management Health & Safety Fair operations  (contract practices) Health & Safety Win-win cooperation Corporate governance Future growth potential

Technology transfer

Specific items

Potential issues

 Inspection of human rights conditions

Education for future generations

Social pressures and the influences of relevant stakeholders

Key Findings of the Stakeholder Engagement Survey

[The Level of Sustainability Management] How would you describe Samsung Engineerings current sustainability management level? 

[Health & Safety] Do you think that the company is providing employees and project participants with proper field safety and health programs?

[Human Resource Management] What do you think are the priorities to strengthen the competencies of human resources?

Very low Relatively low Moderate Relatively high Very high

0.0% 8.0% 36.0%

23.4% 11.9%

5.4% 10.2%

44.0%
12.0%

Yes No I dont know

64.7%

Strengthened education and training opportunities Practical performance evaluation Improved employee welfare Higher salaries and incentives Employment of experienced employees

16.9% 27.2%

40.3%

[Climate Change Response] How do you think the company should respond to climate change issues that have emerged as global concerns?
The company should refrain from taking actions as much as possible It is sufficient for the company to engage in defensive actions The company needs to engage in voluntary actions The company should show leadership preemptively The company should consider potential business opportunities

[Environmental issues] What are the areas that you think the company should concentrate more resources on?

[Win-Win Cooperation] What aspects of support and cooperation do you think are needed to build the long-term structure for mutually beneficial relationships with suppliers? 4.1% 15.5%

[Local Community] In which areas do you think the company should make more efforts for local communities with our business footprint?

0.1% 7.4% 11.2%

Execute projects focused on eco-friendliness Raise the environmental eciency of design and logistics Strengthen the management of construction sites Develop eco-friendlier technologies Show leadership in dealing with macro-level environmental issues

8.0% 9.4% 16.8%

37.1%

42.8%
38.5%

28.7%

Cooperative system for engaging in sales activities and winning new orders Financial incentives System for closer communication Support for HR development and training Technological cooperation

38.5%
18.9% 23.0%

Social contributions through local employment and purchases Investment in infrastructure and education opportunities in local communities Expanded welfare and benets for local employees Closer relationship with local stakeholders Project-based social contributions

8.4% 12.6% 17.3%

39.7%

22.1%

08

Approach to Sustainability

SAMSUNG ENGINEERING SUSTAINABILITY REPORT

09

BUSINESS FOR SUSTAINAbILITY

We aim to be an enterprise that grows sustainably through management strategies from the long-term perspective and responsible project execution in the changing market environment.

Growth Strategy

12

Core Competence

14

Project Highlight

16

Diversify business portfolio  Diversify markets  Upgrade project execution capabilities Strengthen human resources

 Project management capabilities  Systematic risk management Constant quality control

Shaybah NGL Project  S-Oil Onsan Refinery Expansion Project Suji Respia

Growth Strategy
We will focus on securing project execution capabilities and human resources that can be compared to those of other global players as well as diversifying business and client portfolios.

We will build an integrated project portfolio in the hydrocarbon plant industry by accumulating technological competence in hydrocarbon upstream projects such as LNG plants or offshore facilities and expanding the business value chain. Non-Hydrocarbon - Promoting Multi-core Business by Leveraging Superior Project Management and Engineering Capabilities Power Plants | In the non-hydrocarbon area, we are focusing our resources on power plant projects as a new growth business. The market volume of the power plant infrastructure business is expected to increase by more than $100 billion annually, as the global economy expands, urbanization and industrialization progress and the quality of life generally improves. We advanced into privately-funded power plant projects in Latin America in 2010 when we signed a contract for a combined-cycle gas thermal power plant in Mexico. The Mexican project was to construct combined-cycle thermal power plants, where gas turbines are run to generate electricity in the first stage and the byproducts (ue gas) are then used as a heat source to run steam turbines in the second stage. Such a system helps to raise the heat eciency and lower greenhouse gases at the same time. We aim to position ourselves as a major player in the power plant industry as we are in the hydrocarbon industry by accelerating eorts to advance into the Middle East and other geographical regions. MetallurgyIndustrial FacilityWater Treatment | We have maintained comparative advantages in the water treatment segment (sewage & wastewater treatment, water purification) and the steel mills. In 2011, we worked to diversify our non-ferrous product portfolio and to expand our presence in the desalination plant segment. The focus of our water treatment unit has been on the domestic market, but we are about to expand overseas by leveraging the solid track record achieved domestically. In the metallurgy segment, we will continue to build on our success in non-ferrous processing plant projects as we successfully execute the Aluminum Rolling Mill project in Saudi Arabia. Our industrial facility unit will strengthen capabilities through constant investment.

technologies recently developed in the US make the shale gasrelated business economically viable. As for the petrochemical plants, where we enjoy comparative advantages, the Latin American market is growing with great economic growth potential. Against this backdrop, we first advanced into Iraq and Qatar to expand our footprint in the Middle Eastern market. The national oil company of Qatar became our client for the first time. Furthermore, we managed to establish a foothold in the Central Asian market by signing contracts for gas processing and polymer plant projects in Uzbekistan. We were also awarded contracts from the US Exxon Mobile and Russian Lukoil which are global major oil companies. In 2012, we will strengthen our existing market dominance in the Middle East and advance into unexplored markets as early as possible. To this end, we will identify alternative markets or establish more concrete entrance strategies, analyzing the dierent features of individual countries in detail. This will allow us to establish practical and countryspecific roadmaps for advancing into new markets and to diversify our geographical markets.

Upgrade of Project Execution Capabilities

Project order receipt is not the end but just the starting point. Carefully managed projects will, upon completion, bring opportunities to allow us to generate strong profits going forward and win future contracts. We eliminate factors that may act as obstacles in billion-dollar projects by managing potential risks and conducting detailed simulation in terms of schedule, quality, costs and all other aspects. Moreover, we are committed to eliminating inefficiencies and optimizing the utilization of materials and people by organizing seamless cooperation among design, procurement, construction and other functions.

Business Process

Building the Foundation for Sustainable Growth by Diversifying Business Portfolio

To break down the revenue structure, hydrocarbonOperation & Maintenance

Hydrocarbon Advancing into the Offshore Plant Segment by Leveraging the Worlds Top-class Onshore Expertise RefineryGasPetrochemicals | Samsung Engineering showed improved capabilities and limitless potential in the chemical engineering area, to include hydrocarbon plants, oil refineries and gas processing plants, in 2011. Our unrivaled stature in the hydrocarbon area was reconfirmed when we won the Shaybah NGL project from Saudi Aramco, the Saudi Arabia staterun oil company. In 2012, we are poised to strengthen our market dominance in these traditional mainstay segments and to diversify our geographic market regions by advancing into Iraq and Kuwait as well as Russia and Indonesia, which play a signicant role in the global energy market. Hydrocarbon Upstream | We have continued to build a solid track record in the upstream hydrocarbon area, which we entered in 2010. We are further improving our expertise in Gas Oil Separation Plant (GOSP), winning orders for the Shaybah NGL project in Saudi Arabia, the Banyu project in Indonesia, and West Qurna project in Iraq.

Feasibility Study Engineering

related projects (refinery,gas, and petrochemical plants) account for 64% of Samsung Engineerings total revenues, while power plants, metallurgy, industrial facilities, water treatment and other non-hydrocarbonrelated areas hold the remaining 36%. The company is

Procurement Construction

Commissioning

focusing on the diversication of the business portfolio by advancing into new project areas to have flexible responsiveness to the recent move toward ever-larger project size and complexity. We are expanding the offshore business from the long-term perspective, as the energy market structure is expected to change and demand for energy is projected to remain robust. Meanwhile, we are also providing clients with genuine added value through exceptional engineering services that meet the needs and requirements of clients in the eight project areas of renery, gas, petrochemicals, power, metallurgy, water treatment, and industrial facility plants.

Strengthening Human Resource Competence and Building an Innovation and Creativity focused Corporate Culture
We believe that in the engineering field competitiveness stems largely from the competencies of individuals as well as from the ability to bring those skills together. Thus, our goal has been to ensure all employees are equipped with the capabilities to work globally, encouraging them to develop themselves and become experts in their respective areas of responsibility. Moreover, we work to ensure that the distinctive diversity of our workforce facilitates the generation of creative and innovative ideas. To this end, we are building a cooperative working atmosphere through constant communication and fostering a corporate culture that enables every employee to accomplish his or her duties regardless of gender, age, nationality, level of experience and other factors.

Expanding our Client Base through Market Diversification

The signicant changes observed in the EPC market include the diversication of geographical markets in line with the economic growth of emerging markets and resource-rich countries. In the hydrocarbon upstream businesses, an increasing number of orders for the GOSP (Gas Oil Separation Plant) projects were placed mainly by clients in Algeria, Libya and other North African countries in 2011. Meanwhile, the Asian region was assessed to have great potential for the oshore plant segment. In addition, we expect shale gas-related business opportunities will surge, as

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Core Competence
We will build the structure for sustainable growth through systematic risk and quality management, and outstanding project management capabilities.

Its integrated research and data retrieval functions guarantee us to share the information easily. Proposal Risk Management | We follow preset processes when submitting a project proposal to a client. Before nalizing a price offer, we review the observance of the proposal procedures, and the appropriateness of project schedule, exchange rates, contract terms and price estimates through a checklist. Project Risk Management | Once a project begins, we rst hold a workshop to identify potential risks that may emerge during the project execution. Then we analyze and assess those risks by using a systemic risk-mapping method, and perform various risk management strategies to maintain, reduce, transfer or avoid risks.

continuous improvement of business performance, and the operations of the system are documented and managed constantly. COPQ Management | Improving project quality is crucial for achieving sustainability because the failure of quality control eventually results in cost increases. As such, we implemented the Cost of Poor Quality (COPQ) management program in 2011, a cost-side approach to quality issues at the enterprise level, to minimize cost increases resulting from project management failures. The program helps us define and categorize potential quality-related costs, and nd possible solutions to deal with specic issues. Quality Issue Management | We are conducting internal and external audits for our projects in accordance with the quality management system. These quality audits are performed in various formats such as jointly with clients, exclusively in-house or through a third party. They allow us to identify and correct significant problems, helping to reduce client concerns. In addition, we used the categories of quality-related costs to establish concrete action plans to prevent the recurrence of problems. A quality issue management system was also established to ensure the continuous management and correction of those problems in the future.

Continuous Quality Control

Quality Management System | Samsung Engineerings quality management system was designed to meet all requirements of ISO 9001:2008/KS Q ISO 9001:2009. All of our organizations and employees clearly grasp the system and quality control policy, and they are determined to meet their responsibilities for the proper implementation of the policy. The quality targets include (1) improving client satisfaction on project execution, (2) attaining continuous improvement of work processes, and (3) improving project work quality. The quality management system is designed to promote the

Project Management Capabilities

In the engineering field, core competencies depend on the capabilities to manage projects as well as on expertise in design, procurement and construction work. We are committed to building an eective project management system and applying it to executing projects. Project Management | We have secured distinctive competitiveness by running an integrated project management system that oversees all project processes. At the initial stages of a project, knowledge-managementbased risk analysis and systematized scheduling methods are applied to predict project results and manage relevant risks. Moreover, our global sourcing and supply chain management systems allow us to respond flexibly to changes in the international market conditions and project schedules. Project Schedule Management | Project completion ahead of schedule is one of the top priorities for us while executing a project. We share information about ongoing projects with our clients and suppliers on a real-time basis through the Project Portal. The portal system keeps

them informed about the project progress and allows us to manage the projects eciently. These eorts towards maximizing clients' value have earned us a growing number of new orders.

> Offering Responsible Services: Plant Satisfaction Index (PSI) Survey 

We conduct regular Plant Satisfaction Index (PSI) surveys to solve clients' complaints and improve our business processes, and the results are managed as PSI. The Quality Management department is responsible for surveying the clients of important projects for their satisfaction at each stage of engineering/ procurement, construction and handover. The department identies and analyzes the major problems of a project and shares them with the person in charge of the project.

Systematic Risk Management

Almost all of our projects are conducted on a turnkey basis, where we perform everything from engineering design and procurement to construction and commissioning. As such, we are managing risks through a multifaceted risk management system and processes. Market Assessment and Analysis | The risk management processes at the marketing stage include (1) region selection, (2) preliminary research, (3) primary enterpriselevel report, (4) on-site research, (5) establishment of action plans and (6) secondary enterprise-level report. We make checklists based on the result from preliminary and onsite research and manage them. The Global Marketing Intelligence System (GMIS) is in operation as an information sharing platform that contains data on markets, products, clients, competitors, licensors, proposed recommendations, and our capabilities as well as the results of major meetings.

PSI execution phase

Engineering/Procurement

Construction

Handover

Aspects

Detailed design capabilities Client communication C  lient requests feedback Procurement capabilities Human capabilities O  rganization management ability Quality control ability

 Responsiveness to clients  Project execution capabilities  Project site management capabilities  Quality control capabilities  Document management  Problem-solving  Environment and safety  Responses to client complaints  Supplier management  Communication among different types of projects

Plant delivery processes D  ocument management  Technological training C  ommissioning  Technological guidance improvement M  aintenance plans S  upport for project completion R  esponses to client complaints

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PrOjEcT HIgHlIgHT
We will secure sustainability through environmental management while executing projects and contribute to the development of local communities.

* Saudization: The national policy of Saudi Arabia that encourages the employment of Saudi nationals and the usage of local equipment to a certain extent in businesses run by foreign enterprises. Companies that fail to comply with Saudization regulations are restricted from participating in Saudi Arabia.

trac, water collection and solid waste. As such, we established and are committed to implementing the Construction Environment Management Plan (CEMP) that includes ways to mitigate key ndings from the EIA and other potential concerns.

The SNTV is our second regional headquarters for managing operations in Saudi Arabia, the largest geographical market for Samsung Engineering, said President & CEO Ki-Seok Park. The completion of the SNTV represents our commitment to emerging as an economic, social and cultural partner of Saudi Arabia, not just as a business partner. The SNTV will be donated to the Al-Jubail community. The opening of the compound will help us position ourselves as the Great Company that contributes to the development of local communities.

Sustainability Obtained through Thorough Project Environmental Management

Our primary principle in executing projects is thorough environmental protection and management. In the Shaybah NGL project, we not only comply with Saudi Aramco's environmental standards but have also voluntarily adopted an

From an Engineering Service Provider to a Local Community Member

Samsung Engineering completed the construction of Samsung Naffora Techno Valley (SNTV) in May 2011 at the Jubail Industrial Complex of Saudi Arabia. It took 21 months and $100 million to build the regional headquarters, which has the total oor space of 38,000 m2 and 50,000 m2. The SNTV consists of an oce wing, training center, residential wing and employee welfare center. As such, it will provide us with capabilities to perform all EPC processes independently. Moreover, the facility will help us with hiring and employee training as well as with social contribution activities. The training center is divided into the Engineering Center and Safety Training Center, where local engineers are provided with design and safety training opportunities.

Shaybah NGL Project

Value Creation by Leveraging Integrated Project Execution Capabilities

Samsung Engineering signed a USD 2.8 billion contract for the Shaybah Natural Gas Liquid (NGL) project in Saudi Arabia in April 2011. The project was the first time ever that all the packages in one gas complex were awarded to a single company on a lump-sum turnkey basis. This was also the first time for Saudi Aramco to award a multi-package contract for gas separation plants and gas oil separation plants to a single engineering company. Samsung Engineering has completed a total of 24 projects in Saudi Arabia since entering the market in 2001 by carrying out the SPC PDH/PP project. About half of the projects were ordered by Saudi Aramco, the national oil company of Saudi Arabia. Our projects are in step with the Saudi governments determination to cultivate an EPC contractor on its own, contribute to the growth of the Saudi Arabian economy and maintain a close partnership with the client for long-term, sustainable growth.

aggressive environment & safety management policy to minimize environmental impact. Relevant systems and procedures have been established to monitor the implementation of these initiatives and correct problems. The client, Saudi Aramco, requires us to follow their environmental regulations and the results from the Environmental Impact Assessment (EIA). They comprehensively dene all possible areas in which the project may have an impact: air quality, biodiversity, archeological relics, soil quality, road

Order volume: USD 2.8 billion Execution period: 41 months (Construction period: 33 months)  No. of local staff for construction period: Maximum 11,700 Daily average 6,700

Client Saudi Aramco Location Shaybah, Saudi Arabia Period March 2011 - July 2014
Shaybah

Execution of the Worlds First Lump-sum turnkey Contract for a Massive Gas Complex
Shaybah is the largest oileld developed anywhere in the world during the last two decades. It is located in the Rub Al Khali desert, also known as the Dead Desert, near UAE. The client Saudi Aramco is operating oil well extractors and pipes as well as gas oil separation plants (GOSP) and other types of gas processing & oil renery facilities in this area. The Shaybah project site consists of the main NGL section and four GOSP sections. What it takes to complete this project successfully is an integrated management strategy at the early EPC stages as well as an interface management strategy to monitor the separate site areas effectively. As such, we are committed to completing this project with excellence because this will demonstrate our capabilities in executing lump-sum turnkey, multipackage projects. We began this project with the strategies focusing on implementation of innovative procurement systems and specic execution plans.

We approach the project with goals of securing transportation safety, ensuring the unfavorable environmental conditions do not result in lower productivity, shortening the construction schedule and preventing accidents of any kind.

us to secure a quality local supplier base and raise our construction cost competitiveness. This will also result in an increased number of subcontracts to local suppliers, thereby boosting local economies. The gas and oil industry of Saudi Arabia accounts for about 85~90% of the governments income and about 90% of the countrys total export. Given such a high dependency and the fact that almost all oil and gas plant projects are massive, the execution of relevant projects creates huge employment opportunities in this country. The Saudi Arabian government obliges a foreign contractor to employ a certain number of Saudi Arabians, a policy called Saudization*. We endorse the policy and do everything possible to contribute to the local economy. The Shaybah NGL project is planned to employ the maximum number of 11,700 people and the daily average number of 6,700 people through the construction period. We also employed 20 Saudi Arabian nationals from the beginning of the project in order to train them as senior engineers.
Signing Ceremony for Shaybah NGL Project in April 2011 Site View Site Camp

Contribution to Local Economies through Transactions with Local Suppliers and Employment of Local Residents
Samsung Engineering has a long relationship with Saudi Arabia. We have carried out a total of 20 projects, worth more than KRW 10 trillion, in Saudi Arabia since 2001, when we received the rst order in this country. Since we established a local oce in 1999, we have developed relationships with local communities by employing local residents and building close partnerships with local businesses. We established the Samsung Naora Techno Valley (SNTV), which serves as a regional headquarters focused on facilitating investment in local infrastructure projects, in 2011. SNTV has allowed

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S-Oil Onsan Refinery Expansion Project

Creating Client Value through Outstanding Technological Competitiveness

Korean refiner S-Oil invested KRW 1.3 trillion in the construction of the No. 2 Aromatic Complex, which will more than double the companys capacity for petrochemical products. The commissioning of the project was completed and the plant began regular production in April 2011, two months ahead of schedule. Samsung Engineering was awarded the contract for the plant expansion project, as we were recognized for our outstanding hydrocarbon project execution capabilities. We started the project in September 2008, and completed the plant in 32 months. The environmental protection and safety remained the top priority from start to finish. The principle can be detailed as (1) meeting economic responsibilities by contributing to the success of the client through perfect project execution, (2) minimizing environmental impact by strictly observing the clients as well as our own environmental regulations, (3) minimizing the number of work accidents through methodical safety management practices, and (4) making social contributions by procuring and hiring locally.

Client S-Oil Corporation Location Onsan, Korea

Onsan

Period September 2008 - April 2011

Challenges of the Worlds Largest Para-xylene Plant Project

The No. 2 Aromatic Complex in Onsan, Korea has the worlds largest para-xylene plant. Annual output capacity has been raised to 900,000 tons of para-xylene and to 300,000 tons of benzene. Para-xylene is produced from naphtha feedstock and used to produce polyester, PET (Poly Ethylene Terephthalate) and food packing materials. Benzene is a feedstock for making polymers, plastics, surfactants, drugs and dyes. The products produced in the expanded facilities will be sold on the global market, increasing Koreas annual export by more than USD 2 billion. Project execution was determined to be extremely dicult because it was basically an expansion of existing facilities to establish the worlds largest annual production capacity. Moreover, the complex is located on a site reclaimed from the sea, and the allotted period was just 32 months.

To overcome these challenges, we designed tall pipe racks and structural steel, used to make the structural framework of the plant, so that major equipment can be installed among them. In addition, we adopted the modularization method, where almost all installations were pre-fabricated offsite, and then moved to and assembled onsite. In addition, we established and implemented strategies to accelerate construction, including engineering and schedule management, adjustment of priorities depending on constructability, focused delivery management of long lead equipments, and commissioningcentered project execution.

heavy industrial and non-ferrous metal operations are placed. The industrial complex had resulted in relatively higher levels of pollutants such as SO2, NO2, O3, CO, PM10 in the area than in other regions. Thus, the government designated it as a special environmental countermeasure zone, subject to stricter environmental air quality standards, in 1986. We had to come up with measures to curb NOx and SOx emissions to meet the tight environmental standards from the design phase. We set preventive environmental protection and voluntary green management as our core business values under the principle of focusing on the prevention of environmental accidents. We implemented the denitrification and desulfurization facilities to reduce SOx and NOx emissions. We installed air pollution prevention equipment that has emission standards stricter than legal regulations, and even processed rainfall at the project site by installing a special water treatment system (Process Clean Sewer System).

Project Execution in a Special Environmental Countermeasure Area

Another challenge faced by this project was the status of the Ulsan-Onsan area. The plant is located in Onsan, where industrial complexes and various

We also installed photovoltaic power generators with a combined capacity of up to 20 kW a day. The electricity generated by the solar panels is used for outdoor lighting and lights in the control room.

by training employees, preparing for possible emergencies, responding to actual accidents and engaging in eective communication eorts. For the S-Oil Onsan project, we established risk management plan for each phase of work before construction. For example, we used equipment modules and assembled them before installation so as to manage risks related to limited working spaces. We also conducted simulation tests to manage seasonal risks such as bad weather and extreme weather events. We continuously monitored the safety-related risks and carried out constant performance assessments for the analysis and management of these risks. Efforts were also made to correct

inadequate practices and to prevent the recurrence of the same accidents. These safety management activities enabled us to exceed the clients expectations.

 INTERVIEW
 At rst, I was worried about whether Samsung Engineering could draw a design that can accommodate all necessary facilities at this limited site as well as complete this project properly. The allocated time for this project was rather short, too. To make matters worse, unusual extreme weather events such as frequent torrential rains and unprecedented heavy snowfall became further obstacles that the employees had to overcome. However, Samsung Engineering addressed all of these challenges, met the delivery date and satised the quality requirements. The completion of this project on schedule helped us to secure growth momentum as a global market leader. (Duck-Soon Lim, Project Manager of S-Oil Corporation)

Project Site Management Based on the Health & Safety Management System
We adopted the Plan-Do-Check-Act (PDCA) method for the management of health, safety and the environment for construction projects. The PDCA method consists of four steps: (1) identifying risk factors, (2) establishing targets and detailed action plans through risk assessment, (3) determining specic roles and responsibilities for organizations, and (4) managing actual projects

Order volume: USD 1 billion E  xecution period: 32 months (Construction period: 22 months) N  o. of local staff for construction period: Maximum 4,200 Daily average 2,300

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Suji Respia
Client Yongin City Location Yongin, Korea
Yongin

Sewage Treatment Facilities Combined with a Leisure Complex

Samsung Engineering has operated a privately funded project to integrate the management of 15 Sewage treatment facilities in the city of Yongin since 2010. Suji Respia is a noteworthy project that features eco-friendliness by turning a facility once shunned into place where residents want to come and relax. We will contribute to solving water shortages by utilizing our advanced technologies and preventing streams from drying up.

Special Page Responses to Climate Change by Building Plants with Reduced GHG Emissions
Samsung Engineering is poised to tackle rising environmental issues such as climate change and water shortages and to capture new market opportunities by developing and obtaining eco-friendlier technologies and engaging in relevant projects. The projects described below show the plant projects to which our CO2 recovery and SF6 decomposition technologies are applied in order to reduce GHG emissions.

Period December 2005 - June 2010

PVFCCo CO2 Recovery Project

Client: PVFCCo Location: Baria-Vungtau Province, Vietnam

Eco-friendlier Sewage Treatment Center with a Green Park

Local residents tend to avoid sewage treatment facilities, as they emit odors and release wastewater. In Suji Respia, however, the sewage treatment units are all placed underground and any odor is completely contained through deodorization and air purification systems. Moreover, a leisure complex is built on the premises, to include a sports center, art hall, soccer stadium, running track and park for the public to use. While the conventional sewage treatment plant is an object of public displeasure, Suji Respia has become the rst of its kind that is well received by local residents. The International Water Association (IWA) recognized this design idea and gave Samsung Engineering the 2008 Project Innovation Award for this project in the Design category of the East Asia/ Pacic region. Yongin, one of the most important satellite cities in the Seoul Metropolitan Area, has a rapidly growing population, and the citys sewage treatment needs have consequently seen a sharp rise. This project was privately funded on a BuildTransfer-Operate (BTO) basis under the Act on Public-Private Partnerships in Infrastructure. The contractor is tasked with opening twelve new sewage treatment facilities and serving as the single operator of Yongins 15 facilities, including two existing sewage treatment facilities and one night soil dump. This was the single largest privately funded project in Korea and the 15 facilities are processing 252,530 m3 of sewage a day, which accounts for over 80% of the total sewage generated in Yongin.

Environmental Protection through Advanced Water Treatment Technologies

Out of the twelve facilities that will be constructed, four units located near the Han River basin feature advanced water treatment functions to meet the requirements defined by the governments Total Water Pollution Load Management System, which is aimed at protecting the environmental water quality and preventing water pollution. The four facilities are equipped with membrane bioreactor (MBR) systems, functioning in an eco-friendlier way. Moreover, they were designed to feature an advanced water treatment technology by adopting Samsung Engineerings patented total phosphorus treatment technology (PADDO : Pre-anoxic, Anaerobic, dPAO, Denitrifying, Oxic)) to reduce pollution and the use of treatment chemicals.

In addition, Suji Respia provides Tancheon and Seongbokcheon, streams flowing into the Han River drainage system, with 30,000 tons of water a day each to prevent them from drying up. We will continue to seek out ways to improve the environment and the quality of life for local residents through our engineering technologies as we did in Suji Respia.

Period: January 2009 - January 2011 A petrochemical plant consumes fuel and generates a huge amount of CO2. Part of the greenhouse gases is reused or recycled to produce urea and methanol after CO2 recovery processes. The PVFCCo CO2 Recovery project demonstrates Samsung Engineerings CO2 recovery technologies, which capture carbon dioxide in combustion gas of a plants ammonia processes and use it as a base material in urea production. PVFCCo is a Vietnamese company that produces fertilizers, liquid ammonia, industrial gases and other petrochemical materials. PVFCCo has contributed to laying the groundwork for Vietnams petrochemical industry and to growing the economy since it was established in 2003. We were awarded contracts for technological support, quality assurance and project execution for the PVFCCo project, and we completed the project within the 24-month project schedule. It is expected that the project will reduce CO2 emissions by 87,600 tCO2 annually as the plant processes 240 tCO2 per day.

 Operation of 15 water treatment facilities with a combined daily capacity of 250,000 tons  Application of advanced water treatment technologies  Prevention of the drying-up of nearby streams

LCD SF6 Decomposition Facilities and CDM Service

Client: Samsung Electronics Co., Ltd. Location: Asan, Korea Period: September 2009 - December 2015 The LCD SF6 Decomposition project of Samsung Electronics is aimed at reducing the emissions of SF6, a peruorinated compound (PFC) generated from LCD fabrication processes, by decomposing the gas through a high temperature catalytic process. The LCD Industries Association proposed a voluntary target to limit the emissions of process greenhouse gases within three million tons from all member manufactures combined by 2010. In step with the initiative, Samsung Electronics set a target of halving GHG emissions by 2013 compared to the 2008 level. This project was certified as a UN Clean Development Mechanism (CDM) in 2010. The reduction facilities were completed and are now in operation. A UN agency is monitoring reductions in CO2 emissions resulting from the facilities. The monitoring process will be finished in mid-2012 and the reduction in CO2 will be certified as carbon credits that are tradable in carbon exchanges in Europe and other regions.

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COMMITMENT TO SUSTAINAbILITY
We are assessing the impacts of our businesses thoroughly in all of the economic, environmental and social aspects, and are committed to meeting the responsibilities as a corporate citizen.

Ethics & Compliance

24

Environment, Health & Safety

 Strengthening eco-friendly engineering, procurement and construction management practices  Improving and enhancing the HSE system  Raising awareness about safety and the environment

28

Employees & Workplace

38

Supply Chain

46

Local Community

50

 Preventing legal risks  Running a regular legal risk management system  Promoting a corporate culture focusing on employee ethics and compliance

 Improving development and training programs for employees  Providing fair and competitive rewards based on job performance  Building a corporate culture for effective communication and cooperation

 Strengthening our global partnership network  Establishing fair purchasing practices  Promoting "shared growth" and communication

 Systematic management of global offices  Expanding local purchasing and employment  Expanding contributions to local communities

COmmITmEnT TO SUSTaInaBIlITy

EThIcS & COMpLIANcE

The Compliance Program for Ethical and Legal Management Practices

We ensure that the management and employees manage legal risks properly and voluntarily abide by relevant rules and regulations through implementing the Compliance Program.

Operations of the Compliance Program

Today, legal governance for sustainability management is not just a matter of corporate ethics but also directly associated with corporate survival. In 2011, we developed a systematic compliance program and established the Compliance Committee and an organization dedicated to legal governance to respond to stricter external regulations and ensure our business activities are conducted in compliance with laws. As such, we will abide by local laws and regulations in countries with our business footprint, meeting our social responsibilities as a global player and continuing to promote legal governance. Organizations and operational structure | The Compliance Committee, the highest decision-making body in the Compliance Program, deliberates upon and resolves major matters regarding the companys compliance management policy and the operation of relevant structures. The Chief Compliance Officer (CCO) is primarily responsible for supervising Samsung Engineerings compliance management practices and the Compliance Program. The CCO, who is appointed by the resolution of the Board of Directors, sets the standards for the companys compliance policy and practices, and holds

The Compliance Department is established under the Compliance Committee and guarantees independence. The department is responsible for planning and implementing compliance initiatives as well as supporting the Committee and the CCO. Enterpriselevel departments and business units have their own Compliance Ocers (COs) and Compliance Managers (CMs) in charge of legal risk-related activities.

Organization in charge of Securing Compliance

CEO
The Compliance Committee CCO (Chief Compliance Officer) The Chief of the Compliance Department
Support for the observance of laws, monitoring

Fair trade

Corruption prevention

Environment & safety

Industrial relations, protection of information

DISCLOSURE ON MANAGEMENT APPROACH

ManagEmEnT PrIncIPlES
Samsung Engineering has implemented the Compliance Program, a permanent initiative for the integrated management of legal risks, helping to ensure that our business practices are conducted in compliance with laws and regulations. The program allows us to build a systematic compliance support structure, ensuring that the management and employees voluntarily abide by relevant rules and regulations and manage legal risks.

responsibility for awarding best practices and correcting violations.

Enterprise-level CO/CM

Business Unit CO/CM

Foreign Bases CO/CM

* CO: Compliance Officer / CM: Compliance Manager

Compliance Mission and Vision

VISION

GOalS
MISSION

Build the platform for sustainable growth by establishing an integrated compliance management system at the enterprise level

Build systematic, integrated compliance response systems

Encourage the top management and employees to adopt a compliance-oriented mindset

Preventing legal risks

Running a regular legal risk management system

Promoting a corporate culture focusing on employee ethics and compliance

Goals

Prevention and regular management system for key legal risks

Setting guidelines Education & Training
S  hare the importance of compliance with the top management and employees R  aise awareness about compliance and routinize compliance practices

Feedback
Review and monitor Establish improvement plans

OrganIZaTIOnS In CHargE
Compliance Legal Audit

Select key tasks E  stablish operational standards and manuals

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COMMITMENT TO SUSTAINABILITY
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Compliance Guidelines
We selected legal risks that have huge potential impacts on our businesses but are now inappropriately managed as key tasks. We established employee guidelines about the compliance risks and strengthened training programs customized by duty and rank. We are also improving compliance processes and managing relevant risks by receiving reviews and feedback. The details of key tasks are described below:

We prohibit discrimination based on gender, race, nationality, religion and other factors. Sexual harassment is not be tolerated in any case. We strictly prohibit employees from leaking employment information to those in business relations or to those who are not approved to receive such information. Environment and Safety | We understand and observe our OHS rules as well as the environmental, safety and administrative laws and regulations of countries where we operate. We implement measures to prevent industrial and environmental accidents and do not release environmental pollutants. In addition to setting the guidelines in these five areas,
Fair trade

Monitoring and Feedback

If dening and responding to compliance risks is the rst step of legal risk management, continuous monitoring of dened risks is both the goal and starting point towards the correction of the problems. We have established a compliance monitoring system that enables the Compliance Department, the Compliance Ocer, and Compliance Manager of each functional and business unit, and the relevant departments to review one anothers
Compliance management pledge in April 2011

Ethical Management Website | We operate an online homepage on corporate ethics in order to build a corporate culture emphasizing integrity. The standards and the Code of Conduct toward fair and transparent management practices are suggested on the page. Employees can report a violation of corporate ethics on this site.

Compliance Processes

2011 Ethics & Compliance Key Figures

We have been involved in continuous communication eorts to raise employees' awareness and understanding about the companys ethics and compliance management and to educate them on core corporate values.
Offline training sessions
Corruption prevention Total training sessions Total hours for training on ethics and compliance Compliance

compliance activities. We have also conducted regular audits for subsidiaries and project sites at home and abroad. These initiatives help to raise employees awareness about compliance activities. Compliance Management System | We are running the Compliance Management System in order to support employees to take part in compliance activities. The basic items of the system include the introduction to the Compliance Program, regulations and manuals, Q&A board, recent compliance trends, recent compliance issues, education sessions and support for whistleblowers.

Samsung Engineerings Compliance Program obliges employees to abide by in-house rules and regulations such as accounting standards and procedures, accountability to report

Corruption prevention

Guidelines

Environment & safety

corporate management, and the code of conduct and the code of ethics to promote employees integrity.

34

92

Corrections/ Feedback

Training/ Education

Constant Communication Efforts

Samsung Engineering has continued to communicate with and educate employees about the companys compliance management pledge through in-house broadcasts and ocial memorandums, encouraging them to engage in compliance management practices proactively. In 2011, each employee spent an average of 128.5 hours on compliance training sessions. The subjects of the training included points that employees should bear in mind concerning legal compliance, relevant laws and regulations, fair trade and corruption prevention.

1,828 hours 4,373 hours 1,475 people 3,043 people

Labor relations and corporate culture

Information protection

No. of participants

 Setting guidelines and improving systems: the boundary system, dos & donts Reporting to the top management and feedback Issuing warnings and drawing solutions for correction Evaluation and disciplinary actions

Online training sessions

Corruption prevention No. of participants Compliance

4,045 people 4,367 people

Fair Trade | Employees are not allowed to be involved in unfair transactions and unlawful collusion and to ask someone to provide improper influence. Our people shall not submit a bid based on false information, but rather shall adhere to fair contracting and subcontracting practices at all times. Corruption Prevention | Our employees in any case do not conduct inappropriate acts such as receiving money, entertainment or any service for undue benefits. They are not allowed to oer nor receive rebates or to be involved in doubtful transactions. Information Protection | We do not unlawfully obtain or reveal information that is designated as legally protected trade secrets or proprietary by the company or a third party. Our people follow information security best practices and relevant corporate rules in performing their duties and do not abuse the resources, intellectual property or facilities of the company. Industrial Relations and Corporate Culture | We follow domestic and overseas labor laws in our business operations.

Compliance management declaration ceremony in April 2011

Standards and Guidelines for Ethics and Compliance Management

Samsung Engineering Compliance Training Program in 2011

Session title Understanding of the Compliance Program Content and objective Education on compliance and the companys action plans  Outline of the Compliance Program, global trends, relevant organizations at Samsung Engineering  Urging the top management to take leading roles in compliance activities preemptively E  ducation on the ban on collusion, corruption prevention activities, international laws and rules, and violation case studies Compliance with Samsung Engineering guidelines and processes C  ontrol of legal risks that may occur with regard to the relationship with clients and suppliers Target Executives, Team chiefs Date March

Samsung Business Principles Principles and Standards Code of Ethics Code of Conduct

 Operational standards for compliance-related activities Guidelines Guidelines on major legal risks Definitions of wrongful practices for employees

Fair Trade and Corruption Prevention

Executives, July, Managers in September charge of sales (twice)

Compliance with O  utline of the Compliance Program, corruption prevention activities, the Fair Subcontract the Fair Subcontract Transaction Act, major concerns for transactions with suppliers, etc. Transaction Act R  aising working-level employees awareness about compliance through actual visits to ongoing project sites and solving problems through early detection of potential legal issues

Employees on May major project November sites at home (36 times) and abroad

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COmmITmEnT TO SUSTaInaBIlITy

ENvIRONMENT, HEALTh & SAFETY

Green Management Applied to All Project Processes

We have established green management strategies that are applicable to all processes, ranging from engineering and procurement to construction. Our green management performance index helps the entire organization to engage in green management practices.

Green Management Strategies

As environmental issues have attracted global attention, we face ever-greater demands for standardizing green management systems and disclosing environmental information. Clients present diversied environmental requirements from the project bidding stage to include environmental waste disposal and the protection of the native plant species around project sites. In the assessment of credit ratings and corporate performance, environmental disclosure requirements have become stricter. Moreover, we now have a growing internal need to understand local environmental laws and regulations in countries where Samsung Engineering operates, as our geographical markets have been diversied and project scales continue to expand.

Green Management System

We incorporated green management initiatives into the existing environmental management system in early 2011 to establish the enterprise-level green management structure and we obtained the Green Management System certicate in November 2011. This is an integrated certification based on the ISO 14001 Environmental Management System standards and incorporates the International Standard for GHG Emissions (ISO 14064) and the environmental requirements in the Guidance on Social Responsibility (ISO 26000). ERS | The manager of each project conducts a self-assessment of environmental capabilities through the Environmental Rating System (ERS). The ERS consists of performance evaluation items with regard to project site environmental management in the three categories of legal regulations, site environmental management and the environmental management system. SEIS | Environmental information of Samsung Engineerings domestic and overseas project sites are collected monthly through the Sustainable Environmental Initiative System (SEIS), the internal management system. SEIS consists of three systems, (1) the Environmental Management System (EMS), which establishes environmental plans, manages project sites, and monitors environmental performance based on ISO 14001, (2) the GHG Management System (GMS) designed to collect data on GHG emissions, and (3) Green Performance Indicators (GPI), which is a module for analyzing green management performance.

Green Management Strategies

Strategic direction

Promote green management

Realize eco-friendly project sites

Spread the Eco-Culture

DISCLOSURE ON MANAGEMENT APPROACH

ManagEmEnT PrIncIPlES
We have set promoting green management, realizing eco-friendly project sites and promulgating a culture of ecoawareness as our main environmental strategies, and have established a management system for low-carbon and green growth. Under our people-first principles, we ensure that the health and safety of our employees and project staff remain a top priority. We will continue to practice proper safety and environmental management throughout every business process, encompassing the engineering, procurement and construction stages.
* Environmental data was collected from all project sites in principle. Some sites, however, were excluded from the data collection scope in accordance with Samsung Engineerings internal directives if they were deemed to have negligible environmental impacts given the project characteristics and size.

Key action plans

Lead global green management trends and achieve corporate sustainability Reduce raw material consumption, Make logistics ecofriendly, Develop eco-friendly products, Practice green procurement

Prevent environmental accidents and meet corporate social responsibilities Obey environmental laws and regulations, Preserve water resources, Reduce waste, Protect biodiversity

Raise environmental awareness and share core values Give environmental training by position, Build EcoPartnerships with suppliers

Key themes

GOalS

Against this backdrop, Samsung Engineering established strategic directions for environmental action plans to attain higher environmental performance. Our green management strategies reect various initiatives such as the reduction of raw material use, adherence to environmental laws and regulations, and training
Improving and enhancing the HSE system Raising awareness about safety and the environment

Strengthening eco-friendly engineering, procurement and construction management practices

programs to help promote green management, realize ecofriendlier project sites and spread the Eco-Culture.
Green management system certification in November 2011

OrganIZaTIOn In CHargE
HSE Outsourcing Planning

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Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Attaining Environmental Efficiency in All Business Processes

Engineering Procurement Construction Operation

 Identify environmental issues  Analyze environmental needs  Establish plans to reduce environmental impacts and identify key performance indicators

 Raise energy efficiency  Reduce pollutants  Apply eco-friendly construction methods

 Eco-friendly/green purchase  Optimize logistics  Environmental assessment for suppliers

E  stablish the construction environmental management plan C  onsider resource usage, pollutant releases, and biodiversity protection

 Monitor environmental pollutants in real-time  Optimize the use of energy, water and chemicals

Attaining Environmental Efficiency in the Engineering and Procurement Processes

We work hard to meet social responsibilities in relation to the use of resources and energy, possible environmental impacts, GHG emissions and other environmental issues in the basic and detailed engineering, and procurement processes. We are also providing safe and reliable products and services. Low-emission Engineering | Our project designs are drawn to reduce resource use, waste generation, air and water quality pollution and noise by adopting optimized and up-to-date technologies. In the basic engineering stage, we provide clients with alternative designs that contain facilities to minimize environmental pollution and treatment systems for releasing effluent properly and we encourage clients to accept the alternative designs. Value Engineering | Value engineering refers to a method for reducing costs by optimizing designs for higher efficiency. Design optimization provides environmental benefits such as reduced energy and resource use as well as cost saving. We pursue eco-friendly design through the value engineering methodology. Green Purchase and Supplier Assessment | As a corporate consumer, we endorse green procurement and encourage the use of green products. We are helping to promote sustainable consumption practices and responding to the governments environmental policies by purchasing green products under the Procurement Procedure for Eco-friendly Materials. By doing so, we are helping to mitigate the negative impact of our business activities on people and the environment and to use limited resources most eciently, thereby maintaining the quality of life and the environment in general.

Resources and Energy | We use the ISO 14001 system to monitor resource and energy consumption at all construction sites to respond to domestic and overseas regulations and reduce costs. The consumption of key resources directly aects the overall cost of a project. Water Resources | We divide construction water sources into tap water, surface water, underground water and reused water, managing each category appropriately. Almost every site uses tap water, and water collection has never been reported as aecting the surrounding environment. We collect rainwater and underground water that comes to the surface during excavation work. The collected water is used in sprinkling systems or when washing off onsite areas, thereby reducing overall water consumption. Air Quality | We consider the possibility of air quality pollution in all of our business processes starting from engineering, procurement and construction to commissioning. We

established the standards for air pollutant emissions and air quality pollution prevention facilities. These standards and facilities are applied to domestic and overseas construction sites to protect the health of employees and local residents alike. People are posted at the entrance of every project site to supervise vehicle and wheel washing processes. All vehicles that carry cargoes with dust scattering must be covered. Dustproof covers are also put on materials piled in the open air and on slopes at construction sites. Soil | Plant construction projects potentially aect the environment because soil is used in abundance. Possible impacts include

upsetting the ecological balance, damaging local plant species and polluting the soil. We consider the environmental impacts of excavation and reclamation work based on engineering and project site environmental management plans established prior to the kick-o of the actual project. Waste and Hazardous Materials | We engage in a multifaceted effort to minimize waste generation during our business activities. Thorough management steps are also in place for hazardous materials to cover storage, vehicle transportation, pipe transportation, vehicle maintenance and vehicle refueling.

CASE

Eco-friendly Engineering Design

Eco-friendliness is built in during the design stage. We provided eco-friendlier designs for Samsung Corning Precision Materials Project in 2011. The oce and plant buildings feature various ideas for higher energy eciency and greater eco-friendliness. The operation of air conditioning systems can be controlled by individual oces, while ceiling-mounted air intake vents reduce heat from lighting. Energy losses from the HAVC system were minimized by adopting the ow control unit. Moreover, energy eciency certied appliances, watersaving shuto valves and remote-controlled individual lighting systems were put in, helping the client minimize resource use. Photovoltaic modules were also installed to use the renewable energy source in the plant buildings.

2011 Environmental Gudelines

We established and distributed the following environmental guidelines and manuals to provide the standard guidance for all environmental processes in 2011:

Samsung Corning Precision Materials Project

> Use of Recycled Materials 

The use of recycled structural steel in plant construction is over 95% of the total amount. (Only qualified recycled structural steel is used in the aspects of strength, tensile force and hardness.)

120,000
 Environmental management handbook  Construction environmental management guides  Site environmental management guidelines  Casebook of Q&As on construction environment  Casebook of project best practices/failures  Casebook of environmental regulation violations

Project Site Environmental Management in the Construction Process

Samsung Engineering manages project sites in the most ecofriendly way possible to minimize the impact on resources, energy, water, air, soil and ecosystems.

120,000 ton

Use of recycled steel in 2011

60,000 15,000
Unit: Ton

2009

2010

2011

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Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Green Management Performance

Performance Management | We set up our own Green Management Performance Index based on the standards stipulated in KSI 7001. The index is used when diagnosing environmental impact during engineering, procurement and construction, and performance is monitored regularly. The Green Management Performance Index covers two areas: operational performance and management performance. Operational performance is evaluated on a monthly basis by project. It is calculated as intensity per revenue, allowing us to compare the results among construction sites and chronologically. We conduct monthly, quarterly and yearly

performance assessments at the enterprise level and set improvement targets to improve green management performance steadily. Action Plans | We categorize business units according to function such as engineering, procurement, construction and support to analyze the requirements for each part and identify green management issues. The issues are prioritized in the green management plan according to importance. Each task includes detailed action plans to achieve targets related to problem areas, scheduling and people in charge.

Responses to Climate Change, Water Scarcity, Threatened Biodiversity and other Macro-environmental Issues
We understand macro-level environmental issues such as climate change and biodiversity, and our entire organization will strive to tackle the related challenges.

Reponses to Climate Change

Samsung Engineering annually assesses climate change-related risks and opportunities for major functions of business under the Green Management Planning Guidelines. Significant risks and opportunities are addressed with individual action plans.

Greenhouse Gas Management System | Our greenhouse gas inventory was established to serve as a basis to respond to climate change. We began collecting our GHG emissions at domestic construction sites in 2007, and expanded the coverage to overseas sites in 2008. The system went online in 2009. The GHG management system receives data by emission source. When the type and amount of energy sources are entered, GHG emissions are automatically calculated using the appropriate methods.

Category
(1) Operational Performance Index (OPI) Energy Usage Amount** GHG Emissions** Water Usage Waste Generation Waste Recycling Rate

2010 Index Data Index

2011 Data

2012 Target Target*

Strategies to Tackle Climate Change | Acquiring the technologies of carbon capture & storage (CCS) and integrated gasication combined cycle (IGCC) are short-term strategies for us to meet international climate change pacts and environmental regulations. Our long-term strategy calls for developing new markets and technologies to address changes in the global business environment caused by climate change.

72.0 GJ/KRW billion 5.9 tCO2e/KRW billion 8.3 ton/KRW 100 million 5.2 ton/KRW 100 million 37.2 %

382,435 GJ 31,199 tCO2e 438,265 ton 274,490 ton 59,354 ton

110.8 GJ/KRW billion 8.7 tCO2e/KRW billion 7.6 ton/KRW 100 million 5.2 ton/KRW 100 million 34 %

1,030,151 GJ 80,713 tCO2e 711,290 ton 482,219 ton 111,654 ton

YOY 2.5 % YOY 2.5 % YOY 2.5 % YOY 5.0 % 35 %

GHG Emissions
2010
Direct emissions (Scope 1, tCO2e) Indirect emissions (Scope 2, tCO2e) Total CO2 intensity (tCO2e/KRW billion) Other emissions (Scope 3, tCO2e)* - Subcontractors (Construction equipments) - Environmental facilities* 23,342 7,857 31,199 5.9 1,742,941 62,974 1,679,967

GHG emissions by direct sources in 2011*

2011
67,824 12,889 80,713 8.7 1,894,948 198,480 1,696,468
Unit: tCO2e Oces Vehicles

(2) Management Performance Index (MPI) MRO Green Product Investment Rate Green Product*** Rate Training N/A 56 % 58.8 % N/A KRW 9.9 billion Environment level 80.1 points 23.1 % 54 % 38.7 % 0.76 hr/person KRW 85.9 million KRW 11.2 billion Environment level 78.4 points 5,792 hr 25 % 50 % 0.85 hr/person

68,165

12,548
Headquarters Project sites

* Target is based on the performance index (intensity) ** Energy usage amount and GHG emissions are based on the emission of Scope 1 and Scope 2. *** Green product rate = (The number of green projects) X 100 / (the number of projects subject to assessment) Green products: Projects that received 80 or higher points in the Green/Environmental Inspection Assessment

* Environmental facilities include sewage and waste water treatment plant and waste incineration plant.

* GHG emissions by direct sources include the emissions of Scope 1 and Scope 2.

Greenhouse Gas Emissions by Country* Unit: tCO e

2

Saudi Arabia UAE Korea Algeria India Trinidad and Tobago Bahrain Mexico Malaysia China Hungary 352 281 242 100 25 657 585 13,475 17,141 20,943

26,912

* GHG emissions by country include the emissions of Scope 1 and Scope 2.

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Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Reponses to Water Scarcity

Samsung Engineering is a total water treatment solution provider, ranging from wastewater and sewage treatment to deionization and desalination. We develop sewage and industrial water reuse technologies to help address increased water usage and subsequent water shortages in the future. We respond to water shortages and new regulations on total pollutant loads by developing technologies to reduce industrial water consumption and wastewater generation. Moreover, we strive to diversify into desalination plants by leveraging our extensive expertise and experience in deionization and membrane technologies. Recycling Waste Water | The current water supply capacity is now insufficient for satisfying water demand from the semiconductor, LCD and other electronics industries because water quality has generally deteriorated while the industries have grown. Thus, the need to secure alternative water sources continues to grow. We developed a waste water reuse technology (SEMBR+R/O), and more than 15 million tons of water are now reused annually, helping to solve the water shortage in these industries. In addition, solid-advanced

oxidation process (S-AOP) technology has enabled us to process 25 million tons of low waste-density water produced in the AMOLED processes and reuse it as process water.

Health and Safety as Key Indicators for Sustainable Business

Biodiversity Protection
Keen attention has been paid to biodiversity protection along with climate change since 2010. The International Union for Conservation of Nature and Natural Resources (IUCN) said in a UN report that 17,291 endangered species are at serious risk. To protect wildlife, Samsung Engineering strictly fulfills the reporting requirement prior to the start of construction, and all relevant protection guidelines are followed during project execution. Ecology Management Procedure | We conducted biodiversity protection activities under our in-house Ecology Management Procedure in 2011. The procedure provides practical advice applicable to construction sites for protecting biodiversity, including the identification of factors affecting biodiversity, prioritization of issues, and selection of projection methods.

We set challenging safety and health targets at the enterprise level. We promise to remove factors threatening the safety and health of employees and achieve accident-free sites.

Safety and Health Program

Our Safety and Health Program is carried out to guarantee the safety for our employees and subcontracted workers and to achieve higher performance in safety management at every level of our businesses. Safety Management System | The Samsung Engineering safety management system complies with OHSAS 18001. Our safety and health program not only complies with related regulations but also requires the full participation of business partners and subcontractors as well as our employees. The program aims at establishing rigorous safety and health targets every year, eliminating hazards that may threaten employees' health and safety, and improving the level of health and safety consistently.

Preliminary Risk Management | Samsung Engineering conducts preliminary construction meetings and risk assessments to identify the most efficient work methods for dangerous work and manage risks prior to actual construction. Risk assessment meetings are attended by Samsung Engineerings construction and safety managers as well as by their counterparts from subcontractors. The discussions also serve as small pre-construction meetings on dangerous work. We are building an advanced safety management system by simulating all projects and monitoring the simulation results to improve performance.

CASE

Biodiversity Protection - Manzanillo LNG Terminal Project, Mexico

Protecting Wild Forests - Mangrove Protection G  reenpeace and other environment organizations expressed signicant concerns over this project and the Mexican government made the protection of mangrove trees, a habitat for hundreds species of fauna and ora, a precondition for project execution. We met this requirement by devising measures to reduce environmental impacts and took great care to protect the mangroves around the lake. Protecting Wild Animals - Fauna Rescue  e captured and relocated wild animals in the site before the kick-o of project execution, as mandated by Mexican wildlife protection W regulations.

2011 Subcontractor Safety Key Figures

Samsung Engineering regularly evaluates safety levels of domestic and overseas subcontractors. We are committed to improving the safety of subcontractors through training, monitoring and inspection activities.

Subcontractor safety training

341sessions

Subcontractor safety level assessment result* (Unit: %)

88.6

* Fauna Rescue Instructions Do not collect, hunt and trade in wild animals Do not use barbed-wire fences for excavation work  Secure animal trails by propping up fences with sticks after work Rescue live animals trapped in fences. Conduct pre-inspection before demolition Avoid all kinds of activities hazardous to wild animals

Subcontractor -Samsung Engineering HSE Department joint safety inspection

87.9 83.4 62.5 50.8 66.7

7times
75.0

70.6

On-site monitoring and audits

141on-site monitorings 81 audits

Domestic

Overseas

2008 Subcontractor CEO meetings and best practice presentations Mangroves in preserved sites Limit access to protect forest Capture and relocate wild alligators Fauna rescue team activities

2009

2010

2011

2008

2009

2010

2011

32 companies joined

* Safety management levels of domestic and overseas subcontractors are evaluated in the six-grade scheme (A, B, C+, C, D, E). The graph shows the percentage of subcontractors that have received the grade B or higher.

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COMMITMENT TO SUSTAINABILITY
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

2011 Health and Safety Performance*

In 2011, exposure work hours were 132,163,393 man-hours which were almost doubled compared to the 58,797,318 manhours recorded in 2010 as a result of expanded project activities. The level of accident management displayed by the Lost Time Incident Rate (LTIR) stood at 0.0045 in 2011. Total exposure work hours

Standards and Guidelines | Samsung Engineering published and distributed training guidelines by construction type for managers and employees at overseas construction sites in August 2011. A total of 30 manuals were published for managers and 24 for other employees. They were delivered to all sites along with safety training materials. In December 2011, the Project Setup Guide Package was shared to help project managers establish the HSE management system in the initial stages of a project. Supervisor Assessment | Samsung Engineering assesses

Client HSE Satisfaction Survey | Samsung Engineering annually surveys overseas clients to see how they are satised with our HSE management. The survey allows us to assess and analyze the current HSE status and to understand the dierent characteristics of clients. We also examine our strengths and weaknesses by country. We are committed to achieving excellent HSE performance by consistently carrying out HSE management activities and correcting any problems.

132,163,393

MH

0.0045
Asia

LTIR

Client HSE Satisfaction Survey Results

Overseas

the performance of supervisors at domestic and overseas sites every six months. According to the evaluation
America

Middle East

Africa

0.0070 (LTIR) 0.0978 (TRIR)

0 (LTIR) 0 (TRIR)

81 71

results, we reward outstanding performers and discipline underperformers. As an increasing number of new employees join the company, we sought new measures to enhance their understanding of our safety management system.
Unit: Points

79

0 (LTIR) 0.1173 (TRIR)

0 (LTIR) 0.3430 (TRIR)

2009

2010

2011

Supervisor Assessment Results

Domestic Fatality: 1 Lost Work Day: 2 Restricted Work: 13 Medical Treatment: 46 First Aid: 314 Near Miss: 894
Unit: Points

83

85

Overseas

University Student Internship Program | We organized an

81
Unit: Points

82

internship program in cooperation with the safety engineering departments of prestigious universities to strengthen students eld working capabilities and enhance our corporate

* Information is based on performance recorded in 2011. (The Asian gures do not include Korean data, and the domestic eld accident rate stood at 0.18% as of 2011) * TRIR (Total Recordable Incident Rate) = (Fatality + Lost Workday Case + Restricted Work + Medical Treatment) / Manhour X 200,000 LTIR (Lost Time Incident Rate) = (Fatality + Lost Workday Case) / Manhour X 200,000

2010

2011

2010

2011

image. One 4-week internship was held in each half of 2011. Participants worked as eld safety assistants.

Training and Awareness Reinforcement

Training and Communication | For the successful implementation of the safety and environmental management system, Samsung Engineerings HSE Department provides employees with information and training programs so that they can clearly understand and act in accordance with HSE principles. Publishing in-house newsletters, organizing campaigns and issuing cautions on safety risks are some examples. In addition, training sessions are held regularly. We also participate in relevant associations such as the working-level council among construction companies. Training on safety and environmental issues was provided through the safety training matrix in 2011. The classes covered more than 20 subjects such as Personal Protective Equipment and Fall Prevention, targeting the specific duties of the trainees. A total of 2,681 employees attended the regularly scheduled safety and environment training programs consisting of ve basic and two selective sessions held at the headquarters or through online. The four courses for suppliers were attended by 377 people.

External Activities | We are a member of various safetyrelated associations and councils that are also represented by other domestic engineering and construction companies. Samsung Engineering chairs the Construction Safety Manager Association (CSMA), and participates in the Construction Safety Officer Association, KOSHA 18001 Association, and the Council of HSE Managers at Samsung Groups four construction companies. The CSMA held the Construction Safety Forum, the Safety and Health Week initiative, the Safety and Health Manager's Night program and other safety and environment related activities. Safety Talk | We organized the Safety Talk Program, an inhouse campaign to raise awareness on safety, in 2011. The program was designed to encourage employees to participate in the eorts to become a global leader in industrial safety. The program required employees to attend a ve-minute Safety Talk before key official meetings and meetings with clients, except intra-department meetings. The Safety Talk program raised employees awareness of the importance of safety and served as a platform to share safety training packages.
HSE Excellence Achievement of safe MH without LTA (Lost Time Accident) University student internship progam Achievement of safe MH without LTA for Saudi Aramco DHT project Achievement of safe MH without LTA for GAS phase (ASU) project

2011 HSE Award

Item Project
Borouge-3 PO/LDPE GAS phase VIII (ASU) JERP #3 Aromatic Units Fertil-2 Ammonia/Urea SAMCo Acrylic Acid Bapco Lube Base Oil Saudi Aramco DHT Ma'aden Ammonia Global Engineering Center Project Samsung Electronics Co., Ltd. NF

Country
UAE Saudi Arabia Saudi Arabia UAE Saudi Arabia Bahrain Saudi Arabia Saudi Arabia Korea China

Award
7 million MH without LTA 6 million MH without LTA 10 million MH without LTA 5 million MH without LTA 5 million MH without LTA 9.5 million MH without LTA 17 million MH without LTA 15 million MH without LTA Grand prize in construction, Maeil Business Newspaper Safety Management Award Tianjin City Haihe Cup Award

Date
December November October October September July May March December March

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COmmITmEnT TO SUSTaInaBIlITy

EMpLOYEES & WORkpLAcE

Human Resource Management for Successful Career Development

Samsung Engineering helps employees fulfill their true potentials by ensuring fairness in human resource management and offering integrated career development programs.

Recruitment
Human Resource Philosophy | We are looking for people who aspire to be experts in their fields, effective business leaders and global citizens by committing themselves to our common vision and values. We are helping our employees acquire these qualities with a wide range of training programs and employee benefits. These offerings will help them lead innovative activities, adhere to ethical practices and become successful global players.

Talent Development Programs

Talent Development Strategies | We are seeking to run talent development programs that help our employees fulll their utmost potentials and promote a challenging spirit. To make this happen, we encourage our employees not only to enhance basic job skills but also to develop leadership and cultural abilities for higher organizational efficiency; to have a better understanding of engineering, procurement and construction; to enhance their conversation skills including advanced English proficiency; to expand globally based on our domestic capabilities to increase our global presence. To achieve the goal of cultivating talented employees, we are implementing coherent human resource development strategies, including strengthening our organizational
r leading the embe w re m anagement s orld tan Co obal m da l g rd in EGRITY T N I
IN
F RO N T I E
R

Human Resource Philosophy

Multi-Dimensional Thinking & Creative Imagination

competitiveness (Value/Leadership/Job Skill/Global Business), running rank-specific business leadership development programs and attracting talented employees from around the world.
t generation lea Nex change and der futu g din re lea

desty & Transparenc Mo y

regulation Unity Self-

Global talent llenging the worl d cha

NO

Passion, Challenging Spirits, Change

TEA

DISCLOSURE ON MANAGEMENT APPROACH

ManagEmEnT PrIncIPlES
We are providing our employees with diverse training programs and attractive employee benefits to help them lead innovative activities, stick to ethical practices and become successful global players. We aim to become an ever-better company to work for by focusing more on developing human resources and providing a better working environment.
* The employee benets and training programs described in this report are mainly based on those oered at our headquarters in Korea. They may vary depending on the circumstances of each overseas oce.

MWORK Te y am erg play syn to a er maximizing als chiev e common go

Fair HR Management | We are committed to making our organization more transparent and dynamic by ensuring fairness in our human resource management. We have established policies and guidelines for maintaining diversity in our workforce to ensure that nobody is discriminated against on the grounds of gender, age, religion or disability. We create

V AT I O N

Objectives of our Talent Development Programs

Samsung Engineering wants who is...

Armed with expertise, leadership, global mindset and connecting with the organization based on shared value and vision

Objective

Performance driven

Change champion

Global Standard

Client driven

GOalS

Approach
Job expert development

Engineering Academy
Skill training Leadership training

Improving development and training programs for employees

Providing fair and competitive rewards based on job performance

Building a corporate culture for eective communication and cooperation

or modify our human resource management rules based on Koreas relevant laws and update them whenever they are revised to prevent our employees from having their interests compromised. Our overseas office hire and manage their employees in compliance with relevant local laws.

Global competitiveness

Learning culture

Early adaptation of new recruit

e-HRD system implementation

OrganIZaTIOn In CHargE
Human Resource Management Industrial Relations Council

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Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Training Programs | Our training programs, which may vary depending on employee rank, can be divided into three segments: fundamental programs, cultural programs and technical programs. The fundamental programs are focused on basic work-related skills, including how to work and communicate with other employees effectively. The
Average annual learning hours per employee

cultural programs are mainly composed of mental training sessions designed to stimulate employees to develop cultural competencies and act and think like leaders. Finally, the technical programs are intended to help employees improve work-related skills needed to lead future growth and become global players by honing their foreign language skills intensively.
Training expense per employee

Performance Assessment and Rewards

We are oering a wide range of fair and competitive performancebased rewards in order to retain talented employees with strong capabilities and experience and to provide appropriate incentives for outstanding performance. The rewards are based on the systematic performance evaluation. Annual Salary System for All Employees | We are offering annually determined salaries based on performance for all employees. Under the annual salary system, the basic salary and bonus, which consisting of individual and group incentive, are provided. Moreover, the incentives are given to the employees

who award a project, finish a project successfully and show innovation in their elds. Fair Evaluations | Our performance evaluation programs are based on competency and performance history. The evaluation results are directly linked to promotion and annual salary. In 2011, we began a new compensation program that bases payment on previous evaluations in order to assess each employees performance and competencies on a long-term basis. The new program allows employees to receive more stable income by focusing on the longer history of their performance.

197

135
Structure of Talent Development Program
BASIC Value Executives General Managers Promoted managers (Deputy) Managers Assistant Managers Sta CULTURE Leadership

177

169

hours

Unit: KRW in ten thousands

> Workforce Diversity

2009 2010 2011

We are committed to making our organization more integrated and promoting activities for more effective communication among employees to maximize the positive effects of diversity in our workforce. As of December
TECHNIQUE Job Skills TECHNIQUE Global Business

2011, we had 1,213 local employees hired by overseas offices and the total number of our overseas employees stood at 1,366, and female employees were 1,088, with the figures on an upward trend. In addition, we are striving to reduce conflicts within our organization by holding meetings and forums for each rank since the number of entry-level and experienced employees entering our organization has significantly increased for the past three years. They will promote mutually-beneficial practices through communication and cooperation. Notably, we conducted research to see how our employees treat and accept the colleagues with various background in order to improve the corporate culture and strengthen our organizational capabilities in 2011. Total Employees
* This number includes all employees in the headquarters and overseas oces

Newly-appointed executives

Senior managers Leader's Academy Nurturing executives [Introduction] Scouted Experienced Overseas Samsung EMBA Leadership education for Training regional each rank specialists Samsung MBA Internal miniMBA

Management

PM

LE

PRM

CM

EPC Language courses EPC School

Core Jobs Development Courses

Business School PE

Selection and training KP CFM FCM Education for each job skill

Middle manager nurturing process

Internal small foreign language center

Special courses for business units Strategic language courses Onsite language courses

Workforce Breakdown (Domestic vs. Overseas)

* As of the end of 2011

Newlyappointed assistant manager Internal introduction Group introduction

Business English Online

Sales Project Design Procurement Construction Support

7,620 5,882

1,213
(16%)

Character education for associates Oine training

Process for upgrading entry-level employees to deploy them to major tasks earlier

Intensive English courses for newly-hired employees

4,680
Unit: People 2009 2010 2011 Unit: People

6,407
(84%) Headquarters Overseas Oces

Online training

Training from Samsung Group

Scheduled to open

Course
Quick upgrading Improving core job skills Internal foreign language center Business School Reverse Engineering TSDP (Technical Skill Development Program)

Purpose and Description

Enable participants to do what is usually done by one-year assistant managers in a project on their own Improve job expertise and general management competencies Enable participants to communicate with foreign business partners in a more professional way Allow participants to enhance business-related basic competencies to do tasks from a multi-dimensional and integrated perspective Enable participants to acquire the ability of engineering through case studies Enable participants to have a better understanding of design codes and specifications to improve their basic competencies

Target
Up to one year after entry Sta - Depury Managers All employees All employees Three to four years after entry Two to three years after entry
Unit: People 2009 2010 2011

Overseas Employees
18.5% 17.9% 1,366 1,021 865

Female Employees
14.3% 1,088 828 636
Unit: People 2009 2010 2011

17.4%

14.1% 13.6%

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Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Promoting a Work and Life Balance

Realization of Great Workplace

Employee Satisfaction Survey | Every employee has the chance to respond to an annual employee satisfaction survey as part of our efforts to enhance our organizational

construction sites (India, UAE and Algeria, etc.). In the program, the counselors offered customized counseling services through face-to-face meetings, which received a tremendous response. In addition, the counseling center provides parenting and family advice to give our employees a sense of comfort and security and help them have more harmonious family lives. Going forward, we will enhance our counseling services on treatable mental health conditions, such as depression and mental disabilities, and make counseling mandatory for employees who work at sites for a long time or who are dispatched to sites at an older age. Club Activities | We encourage our employees to join clubs, at least one club per person, as part of our efforts to promote internal communication and strengthen the corporate culture. Currently, there are over 30 clubs, including basketball teams and bands, involving 1,500 people. As our workforce increases in size, we are providing more assistance for club activities by adding more specific activities to the club list, paying 80 percent of the club bills and making it simpler to get a refund. More importantly, we are running donation programs in association with club activities to make the participants fulfill themselves. In 2012, we will develop the donation programs into talent donation activities in association with community outreach programs.

We are committed to a balance between work and personal life for all staff. To make this happen, we are improving our working environment and providing a wide range of employee benefits.

strength and provide a better working environment for our employees. The survey is designed to measure how much individuals and teams understand and focus on work and how eectively they communicate with each other. We take

Employee Benefits
Employee Benefits | We are providing diverse fringe benefits, including support for leisure activities, health insurance and nancial assistance for family events, to help our staff concentrate on their work better. Notably, we employed a selective benefits program, where employees

can choose the benets they need in 2011. The new program was adopted by reflecting employees feedback from the Industrial Relations Council that the effects of the fringe benefits may vary depending on the circumstances of individual employees. Retirement Pension Plans | We are running a retirement pension plan to help our employees live on a stable income stream after retirement in accordance with Koreas Employee Retirement Benefit Security Act. We offer a defined-benefit
Gene ral m Den edic a tal exp l ex en s Su

measures to resolve problems, if there are any, based on the results. In 2011, we developed a questionnaire reflecting our specific circumstances and used it to measure what our employees thought about their working environment. Around 63.5 percent participated and the overall satisfaction rate was 74.7. Regarding questions about leadership, general tasks, and the overall organization, the scores were high, but it was found that we needed to do something to increase work efficiency, enhance system integration and define corporate values more specifically to meet the needs of our growing organization. We will analyze the results of the survey and do what is needed to improve how we work at the department level as well as the company-wide level. In-house Counseling Center | We are running an inhouse counseling center with four regular qualified counselors for our employees and their family members. The center was opened in 2010 and provides around 200 counseling sessions every month as of 2012. The counseling is conducted via face-to-face meeting, online counseling, email, SMS and phone calls. The center helps reduce stress at work and make communication and cooperation between employees more effective by administering psychological tests to our employees and departments, providing feedback for them and oering department-level programs designed to improve communication among team members. Notably, in 2011, the center carried out a program called Counselors Visit You in overseas offices and 9 domestic and overseas

Employee Benefits
es seas rance r di su ajo ent in m d ee acci y b ce

type of pension plan, which has an accumulated capital of KRW 86.7 billion, managed by Samsung Life Insurance. Assistance for Maternity Care | We are striving to protect maternity care in many ways so as to help raise the low birth rate, one of todays hottest social issues in Korea, and allow
prehensive che cku Com Basic checkup f p for or s taff staf

es ns pe s e

cov Th ere r d

Gro up

n ura ins

p med port ica f lb

or ls il

l tuitions schoo ren ool tuitions hild n presch C dre il h C

r port fo Sup ation fees c u ed

Employee Benefits

female employees to maintain a balance between work and family. If a female employee gets pregnant and reports it via our internal maternity protection system, her department manager will adjust what she has to do at work according to her conditions and make sure that she has regular prenatal tests. After she returns to work following the maternity leave spanning 90 days before and after childbirth, she can use an in-house Maternity Room, be given priority in getting her child admitted to the company daycare center, and use a exible work schedule.

Medical chec kup s

Meal allowances Selective benefits

2011 Employee Benefits Key Figures

Turnover rate*

2.03%

1.84%

2.35%

2009

2010

2011

* Turover rate is based on the annual average number of fulltime employees in headquarters.

42

Commitment TO Sustainability

Other Benef i ts

Christmas concert organized by the music club

Accumulated capital of our retirement pension plan

( as of December 2011, dened-benet type)

86.7 KRW billion 100 %

Activities of skin-scuba diving

Percentage of employees who work more than 1 year after returning to work from maternity leave

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COMMITMENT TO SUSTAINABILITY
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

to resolve complaints from employees and reflect their ideas when revising main company policies and rules. These eorts are helping to protect the rights of the employees.

Strengthening the Corporate Culture and Addressing Employees Complaints

Sharing the Corporate Culture | We prohibit forced labor and child labor at all of our work sites, domestic and overseas, in accordance with Koreas labor-related laws and the local regulations of the countries where we operate. All newly-hired employees, whether they are entry-level or experienced, are
18th H.U.G. IRC (Industrial Relations Council) Our employee at Samsung Engineering India

required to take a two-hour class at an orientation about the corporate culture pursuing shared growth and tolerance of diversity regardless of region, nationality, gender, age, race and religion. As for existing employees, they learn how to embrace diversity, communicate and cooperate with colleagues, prevent

corruption and avoid discrimination through corporate culture promotion programs. Also, all employees are educated about gender equality and sexual harassment prevention every year and can le a complaint via the IRC for Woman and counseling center if there are any issues involving sexual discrimination or harassment. In 2011, there were no reported cases of forced labor, child labor, sexual harassment or sexual discrimination. Addressing Employees Complaints | We have established an online and offline process to resolve complaints from employees. If any of the employees nds unreasonable practices or inconveniences, they can ask for a meeting with their department leader or post an article via GRID-Q, the internal realtime reporting system or the bulletin board or the anonymous reporting function within the website of the IRC. If there are any issues regarding human rights violations, personal worries or

Operation of Industrial Relations Council

Industrial Relations Council (IRC) | We have established a labor management council defined in the labor law in order to improve employees welfare and put the company on a sustainable footing by promoting engagement and cooperation between the employer and employees. The council, a representation of the employees, is helping to build one of the best working environments in our industry, by encouraging cooperation and a mutually benecial corporate culture based on trust and making the company share more of the gains from growth with its employees. The representatives of the IRC are elected by direct voting. Currently, twenty representatives are working for the 18th H.U.G. IRC, which was launched in April 2011, in several divisions, including Harmony, Unique and GWP. The council is striving to realize its vision of

creating a harmonious corporate culture in many ways. They are helping the management and employees feel connected with each other by making visits to domestic and overseas construction sites, holding diverse types of labor-management meetings and forums once or more every month, making the new headquarters building more comfortable for employees, and running a program to enhance business sensibilities. Promoting Labor-Management Communication | We hold regular labor-management council meetings involving labor representatives and the same number of management representatives. At the meetings, labor representatives share employees feedback on major policies with the management so that something can be done to improve the working environment. In particular, the top management, including the CEO, CFO meet with labor representatives on a regular basis

Number of participants receiving education about the corporate culture

Training for corporate culture Training for corporate competence enhancement

4,170 3,475 1,541

Unit: People

1,910

Unit: People

matters that need to be kept confidential, we make sure that

2010 2011

2010

2011

internal specialized counselors have private meetings with the reporter to address the issue. Our complaint resolution system is working eectively to help create a better working environment and build trust between employees and the company.

* The education about the corporate culture includes classes focused on managing diversity and building communication to prevent discrimination regardless of gender, nationality, status and age.

Vision and Mission of the Industrial Relations Council

> Womens Leadership Conference

VISION
SECL DNA Creator Creating a harmonious corporate culture
MISSION

In 2011, we held the Womens Leadership Conference to share ideas about the desired roles of women as leaders and promote communication between female employees. In the event, the activities of the IRC for Woman were presented and an external leadership instructor and a specialized counselor were invited to give a special lecture about how to become a successful female leader to the audience. The conference also served as a valuable opportunity for networking.

Harmony
Promote a harmonious corporate culture through autonomous communication

Unique
Unlock your potential in diversity

GWP
Realize your dream as a professional

STRATEGY Improve company rules Move into the new headquarters building

A C

t rea

Work Pla

WLB & sensibility programs

Trend Motivation

GWP
ey ac ond Work Pl
Shared growth programs

Affinity / Relationship / Communication

44

Global

Commitment TO Sustainability

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COmmITmEnT TO SUSTaInaBIlITy

SUppLY ChAIN

Global Sourcing Network Based on Fair Trade and Shared Growth

We are committed to upgrading our global sourcing network to increase our business competencies, preventing collusion and corruption, and allowing all project participants to gain a fair share of growth based on transparent trade and principled business ethics.

F/S*

Engineering

Procurement

Construction

Commissioning

O&M**

Design

Vendor

Subcontractor

*F/S: Feasibility Study ** O&M: Operation & Maintenance

Global Network of our Partners

Our partners are made up of design companies for engineering design, vendors for procurement and subcontractors for construction. Each department chooses and registers a company as a partner according to criteria, such as expertise, overall competencies, environmental awareness and ethical conduct. A company registered as a partner tends to have a long-term relationship with us. Design for Engineering | We have a total of 183 registered design partners: 81 companies in the hydrocarbon sector and 102 companies in the non-hydrocarbon sectors, such as power, metallurgy, industrial facilities, and water treatment. Moreover, we are running Gisuhwe, an association of design companies, for 24 such companies. We are well aware that the development of our design partners has a direct impact on the quality of plants we make, so we are providing the partners with diverse assistance, such as know-how transfer. Vendors for Procurement | We have 5,000 registered vendors and since 1994, we have run Seongjohwe, an association of

vendors, consisting of Korean ones. In 2008, we began to run SEGA (Samsung Engineering Global Alliance) to strengthen our global network. We select SEGA member companies based on impartial assessment and help them remain loyal to us with a wide range of incentives. We analyze the needs of SEGA members and use the results to explore ways to make inroads into new markets along with SEGA members and develop training programs for them. Subcontractors for Construction | For a company which seeks to carry out executing projects, especially in foreign countries, selecting appropriate subcontractors is of great importance to complete the project successfully. We have established the Samsung Contractors Association for domestic projects and the GPN (Global Partner Networking) for overseas projects to discover competent subcontractors and build long-term partnerships with them. We will use the GPN to set up a database of region-specic and product-specic subcontractor information and analyze the performance of subcontractors to select them strategically. At the same time, the subcontractors will be able to use the GPN to communicate with us by posting their demands to the system and having discussions with us.

DISCLOSURE ON MANAGEMENT APPROACH

ManagEmEnT PrIncIPlES
We maintain an integrated supply chain system to ensure fairness in transactions with our partners and share gains from growth with them. We will strive to enhance the shared growth system by allowing our partners to communicate with us more effectively.

GOalS

SEGA (Samsung Engineering Global Alliance)

A total of 5,113 registered vendors, 257 SEGA vendors
SEGA Category Name 862 967 849 1,005 1,430 5,113

SEGA: 20% of vendors ordered, 23% of the amount ordered

Korea Europe North America Others 5% 3% 5%

Strengthening our global partnership network

Establishing fair purchasing practices

Promoting shared growth and communication

Korea (Seongjohwe) 32 (22) 36 (15) 31 (19) 36 (21) 12 (8) 147 (85)

India 10 3 5 9 1 28

China Others Total

1,300 vendors KRW 4.3 trillion

OrganIZaTIOn In CHargE
Audit Outsourcing Planning Energy Engineering Support Compliance Construction Planning Hydrocarbon Engineering Support Construction Technology I&I Engineering Support

Static Rotating & package Piping Electrical & instruments Logistics & inspection Total

8 1 2 11

12 34 12 13 71

62 74 48 60 13 257

87% SEGA* 257 (20%) KRW 1,000 billion (23%)

Number of vendors ordered

Amount of annual order

Countries of SEGA vendors ordered

* The number of registered SEGA vendors and the amount of orders are as of December 2011.

46

Commitment TO Sustainability

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COMMITMENT TO SUSTAINABILITY
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Signing ceremony of the fair trade agreement for the win-win cooperation and subcontracting in March 2010

Training about quality control for onsite supervisors of our subcontractors in April 2011

Seminar on market trends of raw materials and equipments in June 2010

Better Payment Conditions | We began to make all payments in cash to our partners based on the progress of a project. Moreover, the payment term has been reduced from 15 days to 10 days. Financial Assistance | We gave loans worth a total of KRW 2.05 billion with no interest for six months to ve small and mid sized cash-strapped partners. Also, we set up a shared growth

programs. We held a total of 117 sessions of education about the latest technology and best practices. We also oered online training courses to 514 employees from our partners. Technical Know-how Transfer | We are striving to provide our partners with technical support, which they need most. We oered training programs and technical support for the latest technology, such as 3D modeling, to our partners to help them implement operational innovations and enhance technological capabilities. In addition, we assisted 28 of our partners in earning ISO 9001 certification, an ISO standard for a quality management system. Each of the certications is reported to have generated KRW 9.05 million, including a direct cost of KRW 4.25 million, in cost savings.

Fair Trade
We select new partners to add to our official partner list carefully according to criteria, such as environmental awareness and ethical conduct as well as expertise and overall competences. Corruption Prevention | As more nations are stepping up anti-corruption measures, we made it mandatory for our partners to sign and submit the anti-corruption pledge and for all proposal participants to attend classes about non-disclosure requirements and the prevention of collusion and corruption in 2011. In addition, our Audit Department and Compliance Department have a team of dedicated instructors for each rank to offer training programs for corporate competency enhancement and compliance to entry-level employees, experienced employees, employees to be dispatched to overseas work sites, domestic and overseas employees for construction sites and global oces. Fair Trade | We have introduced a fair trade compliance agreement to enhance commitment to compliance with regulations and ethical practices and are implementing specic action plans accordingly. Moreover, we are striving to create more transparent and equal partnerships by sticking to the principle of shared growth throughout our operations of choosing partners and managing processes. In addition, we are imposing strict restrictions and requirements on areas possibly subject to unfairness in bidding and selecting subcontractors. Furthermore, we are running a fair trade system to evaluate our partners regularly in a fair and objective manner and identify unfair practices and resolve problems, if any. This system allows us to help our partners improve the quality of their products and enhance operational eciency.

2011 Supply Chain Key Figures

Received the Good Company Award for fair trade and shared growth in October 2011

fund worth KRW 10.6 billion with a credit limit of KRW 31.8 billion and have lent a total of KRW 10.5 billion to 9 small and mid sized partners with a 1% interest, which was lower than the market interest rate, as of the end of January 2012. Support for Education & Training | We are helping our partners improve their technological capabilities and increase their corporate value by oering diverse education and training

Value of Shared Growth Fund

KRW

(As of January 2012)

10.6 billion
> Communication with Partners 
We hold meetings with 'Gisuhwe', an association of design companies, 'Seongjohwe', an association of vendors, and 'Seonggeonhwe', an association of subcontractors and collect feedback through surveys on a regular basis. Going forward, we will strengthen communication with overseas partners through our global network.
Communication Channels
Design company Meeting of Gisuhwe Section meetings by disciplines General Meeting of SEGA Korea Seongjohwe Section Meeting of Seongjohwe Vendor Steering Committee of Seongjohwe Seminar on market trends of raw materials and equipments Investigation of partners family satisfaction index (FSI) Meetings

The number of partners assisted in obtaining ISO 9001 certification

ISO 28 partners

Win-win Partnership
We help our Korean partners move into foreign markets with us to build long-term partnerships with them. We oer them well-organized assistance for nancing, training and know-how transfer, to allow them to enhance their competitiveness and capture a fair share of gains from growth. Expanding Overseas with Partners | We help our Korean partners make inroads into foreign markets with us. To make this happen, we held a conference to explain how to penetrate overseas markets and collect ideas from our partners in 2009. We asked 66 participants about the countries in which they would like to operate and helped them set up specic plans to receive orders from foreign countries and operate in emerging markets with significant growth potential. So far, we have worked with several of our partners in Saudi Arabia and the UAE.
Subcontractor

Frequency
Once a year

Tasks
Network and exchange information

Every quarter Discuss current matters at section level and exchange information Once a year Any time Share operational organizations of SEGA Korea Seongjohwe and meet with the CEO Share the performance results of each section

Four times a Discuss current matters of Seongjohwe and share the performance year results of each section Once a year Eliminate project risks accompanying fast changing market conditions and share expected market trends of raw materials and equipment Assess the processes of choosing subcontractors, making agreements, managing construction, controlling quality and hazards, paying the bills, developing trade practices, and give advice on mutually benecial cooperation Meetings by disciplines

Once a year

Any time

48

Commitment TO Sustainability

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COmmITmEnT TO SUSTaInaBIlITy

LOcAL COMMUNITY

Contributing to the Development of Local Communities through Business

We are helping local communities we operate in to grow and prosper by making the communities part of our business activities.

Global Operations
We are a global corporation operating in diverse countries. We contribute to the development of local communities we operate in by hiring local employees and making purchases from local rms. By December 2011, we had set up 20 global offices in 30 countries where we have projects, and the number of locally hired employees was 1,213, or 16 percent of all our employees. We are making as many purchases as possible from local companies to reduce cost and help boost the local economy. We are aiming to exceed USD 5 billion in orders from overseas offices, 5,800 employees hired by overseas operations (23 percent of our workforce) and 40-percent share of design tasks by 2020. To achieve these goals, we will operate regional headquarters in four major regions: the Middle East, India, South East Asia and North America and multi-functional oces with high marketing and resource capabilities in other regions. Global Operation Support Department Created | We established Samsung Engineering India (SEI), our first global oce in 2006 and have since strengthened our global network.

2011 Global Operation Key Figures

Number of countries we operate in

30 countries 20 offices 1,213 people

Global operations

Employees at global operations

We will follow our local content strategy to purchase and use resources eciently, diversify our channels of recruitment by making the most of our foreign EPC Center Pool through regional EPC offices. Moreover, we will expand our global outsourcing to add more value to our products and services.

DISCLOSURE ON MANAGEMENT APPROACH

ManagEmEnT PrIncIPlES
We are committed to helping local communities where we operate to grow and prosper by hiring local employees, making purchases from local companies and investing in the infrastructure while engaging in community outreach activities. We will continue to fulfill our corporate social responsibilities by encouraging more employees to participate in community volunteer activities and maintaining close relationships with local organizations in need as part of our global social contribution initiatives.

In July 2011, we created the Global Operation Support Department at the headquarters in Korea to help make major inroads into foreign markets through effective localization strategies.

GOalS

Functions of Global Offices

Functions of Offices Multi-functional (Marketing, Support for operations, IPO, EPC) Marketing Business Support Number of Offices 8 6 3 1 2 20 Countries Saudi Arabia, India, USA, Mexico, Algeria, Thailand, UAE, China Vietnam, Japan, Brazil, Venezuela, Indonesia, Uzbekistan Malaysia, Hungary, Trinidad & Tobago Italy UK, Singapore

Systematic management of global oces

Expanding local purchasing and employment

Expanding contributions to local communities

OrganIZaTIOn In CHargE
Global Operation Support Human Resource Management PR/IR

Procurement Financing Total

50

Commitment TO Sustainability

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COMMITMENT TO SUSTAINABILITY
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Localized Approach
Hiring Local Employees | We recruited a wide range of employees from the countries where we operate in 2011 to help create a virtuous cycle in the local economy. We are focused on expanding our global operations by hiring employees from the region. Our goal is to increase the total number of stas employed by our overseas oces from 1,213 now to 3,600 by 2015. We will not just increase local recruitment but also strive to hire and retain more talented local employees as supervisors for their workplaces so as to enhance operational eciency. Moreover, we will make the most of our sta rotation program designed to deploy employees to understaed workplaces to nurture talented overseas employees at the headquarters in Korea. We are increasing local recruitment every year to create jobs and stimulate the local economy. In addition, we are working to strengthen our local capabilities by maintaining the ratio of locally-hired supervisors at a reasonable 17 to 20 percent of the workforce in the region. In Saudi Arabia, we are preferentially employing people with disabilities, providing internship opportunities for college students, and running a workplace tour program. In 2010, we employed 30 people with disabilities in Saudi Arabia.

Also we are fully complying with the Saudization Policy, a mandatory labor policy from the Ministry of Labor of Saudi Arabia and have recently received the Best Company Award for Saudization. We exceeded the NITAQAT requirement ratio of 7 percent to achieve 11.7 percent in December 2011. Furthermore, we employ many local workers or those from other countries when carrying out overseas projects. Finding and Cooperating with Local Companies | We conduct an in-depth investigation of a country before we decide to move into the market. We classify target countries into a strategically important group and a general group depending on how much they matter to our business and look for local constructors and equipment makers with a competitive advantage, which we can partner with while estimating the sales potential of the markets. We are striving to work with as many local companies as possible to contribute to the development of local economy. Managing Impact on Local Community | Before we launch construction of a project, we hold public hearings to minimize its negative impacts on the local community. If any problems are identified during public hearings, our project managers nd solutions following the internal procedure.
The whole view of SNTV

Contributing to the Local Community - SNTV

Completion of SNTV | We held an opening ceremony for Samsung Naffora Techno Valley (SNTV), a multi-functional office building in Saudi Arabia. We began to construct the building with the investment of around USD 100 million in September 2009 and completed it after 21 months. The building is located within the Jubail Industrial Complex in Saudi Arabia, where we are carrying out four projects, including the construction of renery facilities. Functions of SNTV | The SNTV, covering 50,000 m2 of the site area and 38,000 m2 of the gross floor area, consists of 4 facilities including engineering, safety and sports center as well as accommodations. The building will be used not just to carry out its own EPC projects but also to recruit

local residents, offer training courses and provide voluntary community services. The SNTV is designed to integrate the functions of Samsung Saudi Arabia (SSA), our former subsidiary in the nation and Samsung EPC (SEPC), a regional office built to conduct local projects. Saudi Arabia is our biggest market, where we received orders worth USD 4.7 billion in 2011. We will use the SNTV to provide permanent offices and quality employee benefits, such as decent accommodations, for our employees and to help our clients achieve significant growth. In addition, the building will serve not only as our regional headquarters for our biggest market but as a cornerstone on which we can develop our partnership with Saudi Arabia from business level to economic, social and cultural level.

> 2011 Local Procurement Results

We made 32 percent of all our purchases in the markets where we operate in 2011.* Our total spending on procurement of materials for that year was more than KRW 1.35 trillion.
Total Value of Local Procurement KRW 1.35 trillion Local to Total Procurement Ratio

>  Contributions of SNTV to the Local Community

We use the SNTV to help Saudi Arabia develop its economy, safety and welfare in diverse ways. The engineering center offers offices for our client so that they can promote communication in and help hire and nurture local employees. The safety training center is designed to raise the employees' awareness about safety and reduce industrial accidents by providing safety education programs from the Occupational Safety and Health Administration. Finally, the sports center is provided to local community as a sport and educational facility. The SNTV will be donated to the local community of Al-Jubail in thirty years. We hope the building will pave the way for us to grow as a Great Company that is committed to the development of the local community.
Linking our business activities with local contribution programs

32%

Korea
Saudi UAE Arabia

USA

17% 26%

86%

70%
Local Economy Hire and train local employees

India

41%

Malaysia

58%

Local Community Contribute to the development of the local community  Provide safety experience education for the general public  Open sport facilities to people on holidays  Voluntary community services by employees, such as blood donation

Local Environment Public awareness about environmental protection  Hold a writing competition about environmental protection  Support environmental protection activities through sisterhood relationships with local schools

Hire and train Saudi employees Offer safety training programs

* The ratio of local procurement to total procurement of materials in major markets: Countries whose local procurement ratio is 10% or lower, such as China, Thailand, Malaysia and Algeria, are not included.

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Commitment TO Sustainability

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COMMITMENT TO SUSTAINABILITY
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Social Contributions and Investment in the Community

We reaffirm our commitment to fulfilling our social corporate responsibilities through social contribution in Korea and overseas.

Creating Future Value through Social Contribution Activities We have engaged in a wide range of social contribution activities based on our business activities in cooperation with our global oces. We have rearmed our commitment to responsibilities as a global corporate citizen by building schools of hope in foreign countries and provided urgent relief efforts for Haiti and laid the foundation to become a

socially responsible global corporate citizen by participating in voluntary community services in major markets. Moreover, we are leading the eorts to make the world a better place to live in by engaging in diverse voluntary community services and building sisterhood relationships with rural areas and other local communities. 'Kumpooh', Environmental Education Program We launched 'Kumpooh', the environmental education program for schools in our neighborhood in 1996. At rst, it was part of voluntary community services conducted by a department. The program offers online content and offline activity programs about environmental protection for children. This is one of our representative social contribution activities. - Korean Website: www.e-gen.co.kr - English Website: www.eco-generation.org Integrated Online Education Site on Environmental Protection | Children can have access to a wide range of multimedia learning resources, such as Flash content, video les games, stories and quizzes about the environment. The website is available in two languages: Korean and English. One -Day Teachers Classes about Environmental Protection | Our employees give specialized classes about the environment, such as water treatment and energy, to elementary and middle-school students. In addition, we provide activity programs for experiments and quiz competitions. In 2011, we began to manage a team of employee supporters and dispatch them to schools as one-day teachers to raise childrens awareness about environmental protection.
3.2% 6.0% 16.6% 5.6% 20.0% 2.7%

'Kumpooh' summer camp

as the environment and green growth by using our own technology and specialized staff. The MOU will allow us to expand our existing activities. MOU Signed with UNEP Headquarters | In September 2011, we signed a memorandum of understanding to jointly operate an environment networking platform for children with the United Nations Environment Programme in Tunza, Indonesia, where the International Children's Conference on the Environment was held. The children around the world can share diverse content on the environment and engage in community activities via the online platform and communicate with each other in real-time through SNS functions.

Our Social Contribution Activities

Promoting talent donation and giving activities

Building libraries in strategically important countries Voluntary community services in foreign countries

Creating a future value through social contribution activities

Creating shared value through marketing strategies and association Voluntary community services associated with the local community Employees have greater pride in their company through social contribution activities

Donation of talent, knowledge and experience Local public services in Gangdong-gu Giving festival Family public service activities of families

INTERVIEW

Priceless Experiences with 'Kumpooh'

2011 Social Contributions Key Figures

We engaged in more voluntary community services and collected more donations from our employees in 2011. The donations and direct public services were focused on educational programs, and we also gave high priority to assistance for medical institutions and rural areas. Spending on Social Contributions (unit: KRW 1,000)
Category
Donation Direct public services Fund-raising among our employees Total

Composition of Social Contributions in 2011

2009
3,774,987 167,845 50,774 3,993,606

2010
4,155,016 303,078 72,741 4,530,835

2011
4,687,897 753,796 109,908 5,551,601

UCC & English Essay Competitions about Environmental Preservation | We have held UCC competitions since 2007 and organized English essay competitions via Eco-generation, our English website since 2008 as part of our efforts to promote environmental awareness among children. We will expand the events to the 'Global Environment Forum for Teenagers', a combination of competitions and lectures from 2012. MOU for Educational Donation Signed | We signed a memorandum of understanding to promote educational donations with Koreas Ministry of Education, Science and Technology in August 2011. We are running online and oine education programs in 'Kumpooh' about several topics, such

Hyo-Seon Koh, a volunteer for 'Kumpooh' summer camp

Donations

38.9% 20.0%

Direct public services 57.3%

Kumpooh was a friend as well as a teacher to me.

I joined 'Kumpooh' when I was an elementary school student and have served as its member for over ten years. Though I used to live in Jeju Island, I have been able to join the activities via the online website. What I remember most is that I presented a speech introducing 'Kumpooh' at the Asian Childrens Conference on the Environment in Japan in 2007. I hope more children will learn more about how to protect the environment and have valuable experiences at 'Kumpooh'. (Hyo-Seon Koh, student, 24)

29.7%

Total time spent on participating in voluntary community services Average time spent per person on participating in voluntary community services

82,887 hours 12.1 hours

Educational Institutions: KRW 1.8 billion Medical Institutions: KRW 1.4 billion Culture: KRW 780 million

Environmental Institutions: KRW 280 million Social Welfare: KRW 150 million Others: KRW 260 million

'Kumpooh': KRW 430 million Libraries: KRW 150 million Assistance for Rural Areas: KRW 150 million Others: KRW 20 million

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Commitment TO Sustainability

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COMMITMENT TO SUSTAINABILITY
Ethics & Compliance Environment, Health & Safety Employees & Workplace Supply Chain Local Community

Social Contributions in Korea

We are committed to growing along with local communities where we operate by fulfilling our corporate social responsibilities. We will continue this commitment to help shape a brighter future. Sisterhood Relationships with Rural Communities | We have sisterhood relationships with nine villages in Korea. We help them with farm work, hold direct markets for agricultural products, invite local residents to take a tour of Seoul, and oer assistance for village events. For example, our employees regularly visit the villages to build close relationships with local residents by helping them do farm work, including collecting chestnuts and picking grapes and pears, in peak season. Moreover, we provide medical examinations for residents in sister villages with poor medical systems and donate thermal underwear for the elderly so that they can keep warm in winter. Meanwhile, we buy agricultural products from the direct markets to help farm village create more profit and donate the products to local welfare centers.

Talent Donation | We are running a specialized volunteerism program designed to allow our employees to volunteer their expertise to less experienced and younger co-workers to upgrade their professionalism as part of our commitment to nurturing talent. For this program, we hold workshops for volunteerism leaders, encourage our employees to participate in more talent donation programs and do various activities in association with clubs. Voluntary Community Services in Connection with Local Communities | We sponsor community welfare organizations in our neighborhood and provide voluntary services on a regular basis to maintain close relationships with them. In addition, our technicians visit low-income families to maintain and repair their home appliances and work with community organizations to provide specialized voluntary services. We are also providing assistance and voluntary work for events in Gangdong-gu, a home to our headquarters for the development of local community.

Voluntary community services in Mexico

Social Contributions around the World

We donate part of our prots we earn in overseas markets to the local communities we operate in. School of Hope in Vietnam | We built a 'School of Hope' in Vietnam with donations from our employees and company's financial assistance. The school is designed to provide educational programs for preschoolers but it is also offering health and medical services for local residents. We are providing educational services for infants in Ky Tho Bac, a rural village with poor education. We are also oering health education and medical services for local residents, including pregnant women. Industry-University Collaboration and Voluntary Community Services in Mexico | We are engaged in projects in Mexico, with dedication to serving the local community we operate in. We consider ourselves a permanent member of the local community, not as a temporary visitor. So we are nding organizations in need and providing assistance for them under the slogan of Samsung, Buen Amigo (Samsung, Good Friend!). Furthermore, we have built a strong collaborative relationship with Universidad de Colima, a university in the state of Colima, and oer its students internships to find talented employees and teach them job skills. In addition, we donated face masks to local organizations

when swine u hit the nation, and are doing voluntary work at orphanages and nursing homes. Mentoring and Other Support for Schools in Poor Regions in India | Our Indian office is providing school uniforms and supplies for students from low-income regions in its Corporate Social Mentoring program and offering mentoring services to help create a intimate relationship with them. In 2010, we provided personal computers and PC education programs for elementary school students from low-income families attending the Good Samaritans School in Madanpur Khadar. Also, we invited 40 elementary school students to our Indian oce to take a tour of the oces to show them how engineers work. In addition, we have done voluntary work at local orphanages and sponsored sick children since 2006. Building Libraries in Underdeveloped Nations | Given the fact that engineering is a knowledge-based industry, we have built libraries in strategically important nations since 2011. This is part of our commitment to helping build a better future by investing in nurturing talent in client nations. This year, we will build libraries in India. This will be our first step towards remodeling decrepit schools and community centers in rural regions into new libraries for children and local residents.

Voluntary services at Samsung Engineering India (SEI) Digging up potatoes as voluntary services Voluntary services at the School of Hope in Vietnam 'Kumpooh' workshop for the UNEP International Childrens Conference on the Environment Employees voluntary services in the village of Mirinae, a rural community

56

Commitment TO Sustainability

SAMSUNG ENGINEERING SUSTAINABILITY REPORT

57

PLANT ENGINEERING AND OUR LIVES

From the manufacturing of small plastic bottles with clean water that we drink every morning to the oil refining to power cars and airplanes for our journey, the plant engineering industry is closely connected with all of our lives.

Energy Plant
Refinery and gas plant separates and produces a variety of oils and gases suitable for their uses from crude oil. And, the energy sources are generally used in a wide range of our lives such as product production, flight, driving, and commercial and residential facilities.

Environmental Plant
Environmental plant plays a major role in preventing environmental pollution through the treatment of wastewater, seawater desalination, incineration, landfill, reduction of greenhouse gas emissions and recovery of soil pollution. To maintain a clean environment along with industrial

Petrochemical Plant
About 70% of our body is made of water, while petrochemical products account for 70% of our daily necessities. Petrochemical plants produce raw materials for the production of our daily necessities by using basic petrochemicals cracked in the refining process. These raw materials are used in a variety of products such as vehicles, cell phones and clothes.

development is valuable and essential for our next generations.

Industrial Facilities Plant

Industrial plant encompasses a wide range of facilities to support basic industries and manufacturing such as roads, railways, sports complexes, logistics bases, hotels and tire factories, which are essential for our bountiful lives.

Power Plant
Power plant generates and supplies electricity that is necessary for our lives. The electric energy makes it possible for us to do a lot of things that have been not feasible by other energy sources.

Metallurgy Plant
Mineral resources are transformed into various metallic materials to make it easier to be manufactured through the metallurgy plant. Moreover, metallic materials are used in building facilities and manufacturing products such as vehicles and home appliances.

A sustainable future for the next generations will be ensured when limited resources of the earth are more effectively used through cutting-edge plant engineering technologies that prevent environmental impacts and improve energy efficiency. Based on know-how, experiences and insight accumulated for 42 years, we at Samsung Engineering are committed to providing optimal engineering solutions, thereby becoming a global leading plant engineering company that contributes to the sustainability of mankind and environment.

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SAMSUNG ENGINEERING SUSTAINABILITY REPORT

59

SAMSUNg ENgINEERINg Sustainability Report

Performance Summary

EcONOMIc DATA

Income Statement*
(Unit: KRW million)

2010
Revenue - Domestic - Overseas Cost of sales Gross prots Administrative expenses Other operating income Other operating expenses Operating prot Share of prot of associates Financial income Financial costs Prot before income tax Income tax Prot for the year
* These nancial statements are prepared on a consolidated basis and in accordance with the KIFRS standards.

2011
9,298,184 2,437,309 6,860,875 8,219,469 1,078,715 459,730 334,535 236,254 717,266 36 63,905 94,187 687,020 172,494 514,526

5,312,261 1,782,934 3,529,327 4,501,886 810,375 381,769 188,058 204,410 412,254 69,375 22,603 459,026 122,403 336,623

Balance Sheet*
(Unit: KRW million)

2010
Total assets Current assets - Cash and cash equivalents - Other current assets Non-current assets - Tangible and intangible assets - Other non-current assets Total liabilities Current liabilities Non-current liabilities Total equity Capital stock Consolidated surplus Retained earnings Other reserve Non-controlling interest Total liabilities and equity
* These nancial statements are prepared on a consolidated basis and in accordance with the KIFRS standards.

2011
5,188,615 4,156,825 560,018 3,596,807 1,031,790 734,482 297,308 3,875,258 3,644,841 230,417 1,313,357 200,000 56,624 1,358,353 264,338 37,282 5,188,615

3,534,863 2,831,725 408,701 2,423,024 703,138 491,535 211,603 2,578,050 2,404,525 173,525 956,813 200,000 56,624 937,816 197,489 40,138 3,534,863

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SAMSUNG ENGINEERING SUSTAINABILITY REPORT

61

ENVIRONMENTAL DATA

Consumption & Emissions

2010
Consumption of energy (Unit: GJ) Direct energy consumption - Gasoline - Diesel - Kerosene - Heavy oil - LNG - LPG Indirect energy consumption Consumption of water (Unit: Ton) - Tap water - Underground water - Surface water - Recycled water Greenhouse gas emissions* (Unit: tCO2e) Direct emissions (Scope 1) Indirect emissions (Scope 2) Other emissions (Scope 3) - Subcontractors (Construction equipments) - Environmental facilities** Amount of waste produced (Unit: Ton) - Construction waste - Industrial waste - Specied waste Amount of waste treated (Unit: Ton) - Burned - Landlled - Recycled - Discharged to the sea
* The greenhouse gas emissions are a total amount including Scope 1 and Scope 2. ** Environmental facilities include sewage and waste water treatment plant and waste incineration plant.

Health & Safety

2011
1,030,151 931,790 92,314 793,285 3,792 1,185 39,081 2,133 98,361 711,290 396,250 192,725 23,413 98,902 80,713 67,824 12,889 1,894,948 198,480 1,696,468 482,219 475,244 3,430 3,545 482,219 318,322 52,241 111,654 2 Value of spending on the environment (Unit: KRW million) - Spending on the environment* - Investment in the environment** Number of participants in education about the environment (Unit: People) Number of participants in education about safety (Unit: People) Total time of exposure to work (Unit: MH) Industrial accident rate: domestic-converted industrial accident rate* (Unit: %) Industrial accident rate: overseas-LTIR** - Middle East - Asia - Africa - America

2010
58,797,318 0.12 0.0034 0 0.0139 0 0

2011
132,163,393 0.18 0.0045 0.0070 0 0 0

382,435 322,323 59,116 218,889 16,690 15 26,495 1,118 60,112 438,265 378,097 12,788 4,500 42,880 31,199 23,342 7,857 1,742,941 62,974 1,679,967 274,490 232,213 30,071 12,206 274,490 172,416 42,720 59,354 0

* Converted industrial accident rate (%) = Number of converted industrial accident victims / number of regular workers X 100 Number of converted accident victims: weighted by the deaths (10 times that of those who were injured in industrial accidents) Number of regular workers: (Annual sales value for domestic construction projects X Labor cost rate) / (Average monthly salary of the construction industry X 12) ** LTIR (Lost Time Incident Rate) = (Fatality + Lost Workday Case) / Manhour X 200,000

HSE Communication & Investment

2010
6,287 3,487 2,800 7,616 676,153

2011
9,111 6,511 2,600 60,555 1,196,727

* Spending on the environment: money spent on the efforts to protect the environment, treat waste and purchase environmentally-friendly products ** Investment in the environment: money spent on research and development for environmentally-friendly purposes

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Performance Summary

SAMSUNG ENGINEERING SUSTAINABILITY REPORT

63

SOcIAL DATA

Workforce Status
2010
Total number of employees* (Unit: People) Gender - Male - Female Region of birth - Korea - Asia Pacic (excl. Korea) - Americas - Middle East Asia - Europe - Africa Employment status - Permanent - Fixed-term - Overseas ofces Percentage of locally-hired managers (Unit: %)
* The total number of employees refers to all employees in the headquarters and overseas oces as of December of each year.

Ethics & Compliance Training

2011
7,620 6,532 1,088 6,184 1,175 172 44 24 21 4,645 1,762 1,213 17 Total value of spending on social contributions (Unit: KRW million) Donations - Educational Institutions - Medical Institutions - Culture - Environmental Institutions - Social welfare - Others Direct public services - Libraries - 'Kumpooh' - Assistance for Rural Areas - Others Fund-raising by employees Total hours spent on participating in voluntary services (Unit: Hours) Average hours spent per person on participating in voluntary services* (Unit: Hours) Hours of training about ethics and compliance (Unit: Hours) - Corruption prevention 5,054 828 4,831 888 109 11 23 20 3,791 1,224 867 18 - Compliance Number of participants in ofine training about ethics and compliance (Unit: People) - Corruption prevention - Compliance Number of participants in online training about ethics and compliance (Unit: People) - Corruption prevention - Compliance

2010
4,740 4,740 4,458 4,458 3,518 3,518

2011
6,201 1,828 4,373 4,518 1,475 3,043 8,412 4,045 4,367

5,882

Social Contribution
2010
4,531 4,155 65 1,501 2,000 185 120 284 303 0 100 122 81 73 60,382 11.4

2011
5,551 4,688 1,822 1,390 780 282 151 263 753 150 430 150 23 110 82,887 12.1

Training & Career Development

2010
Total training hours (Unit: Hours) - Value - Job - Leadership - Global business Average training hours per employees* (Unit: Hours) Training expense per employee* (Unit: KRW in ten thousands) Percentage of annual performance assessment (Unit: %) 800,265 154,722 393,617 89,101 162,825 151 169 100

2011
927,770 291,852 312,459 53,241 270,218 135 197 100

* The average training hours and training expense per employee are based on the average annual training time in the headquarters in Korea, excluding data from overseas oces.

* The average hours spent per person on participating in voluntary services is based on the average number of employees in the headquarters in Korea, with our overseas oces excluded.

Employee Welfare
2010
Ratio of entry-level employees' wages to the ofcial minimum wage* (Unit: %) Wage tables for men and women Turnover rate** (Unit: %) 191.8 Same 1.84

Supply Chain
2011
191.7 Same 2.35 Number of partners we helped to obtain ISO certication (Unit: Companies) Volume of the win-win fund (Unit: KRW million) Percentage of SEGA order value (Unit: %)

2010
32

2011
28 106 23

* The ratio of entry-level employees' wages to the ocial minimum wage is based on the data from the headquarters in Korea. Our overseas oces pay more than what is required by local laws. ** Turnover rate is based on the annual average number of full-time employees in headquarters.

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Performance Summary

SAMSUNG ENGINEERING SUSTAINABILITY REPORT

65

GRI TAbLE
Reported
Indicator Description Page
2-3 2-3, 12-13 Inside the cover 74 72-73 Inside the cover, 72-73 72-73, 74 Inside the cover, 72-73 61, 74 75 1 1 Back Cover 6-9 1 1 1 66-69 1, 76-79 4-5 4-5 4-5 4-5 4-5 4-5 4-5 4-5 4-5 4-5 2-3 75 75 6-9 6-9 6-9 6-9

Partially Reported Remarks

Not Reported
Indicator Description Page
61 21, 33 42 64 52 51, 64 53-57 16-21 31 32, 62 32, 62 31 32, 62 30 62 34 34 34 32-33, 62 33, 62 21, 33 18 34 62 -

Status

Status

Remarks

1. Strategy and Analysis 1.1 Statement from most senior decision-maker in organization 1.2 Description of key impacts, risks, and opportunities 2. Organizational Prole 2.1 Name of organization 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 Primary brands, products, and/or services Operational structure Location of organization's headquarters Location of overseas branch ofces and sites Nature of ownership and legal form Markets served Scale of the reporting organization Signicant changes during reporting period regarding size, structure, or ownership Awards received in reporting period

Samsung Engineering Co., Ltd.

Economic Performance Indicators EC1 Direct economic value generated and distributed EC2 EC3 EC4 EC5 EC6 EC7 EC8 EC9 Financial implications and other risks and opportunities for organization's activities due to climate change Coverage of organization's dened benet plan obligations Signicant nancial assistance received from governments Range of ratios of standard entry-level wages compared to local minimum wage at signicant locations of operation Policy, practices, and proportion of spending on locally-based suppliers at signicant locations of operation Process of hiring local workers preferably and percentages of locally-hired high-ranking managers Development and impact of infrastructure investments and services provided primarily for public benet through commercial, in-kind, or pro bono engagement Understanding and describing signicant indirect economic impacts

Not Reported

No major change affecting decisions made by stakeholders during the reporting period

Environmental Performance Indicators EN1 Materials used by weight or volume EN2 Percentage of materials used that are recycled input materials EN3 Direct energy consumption by primary energy source EN4 Indirect energy consumption by primary source Energy saved due to conservation and efciency improvements Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives or services more widely used Initiatives to reduce indirect energy consumption and reductions achieved Total water withdrawal by source Water sources signicantly affected by withdrawal of water Percentage and total volume of water recycled and reused Location and size of land owned, leased, managed in, or adjacent to protected areas and areas of high biodiversity managed by us Description of signicant impacts of activities, products, and services on biodiversity biological diversity Habitats protected or restored Strategies, current actions, and future plans for managing impacts on biodiversity Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk and the government and living in the areas affected by our business activities Total direct and indirect greenhouse gas emissions by weight Other relevant indirect greenhouse gas emissions by weight Initiatives to reduce greenhouse gas emissions and reductions achieved Emissions of ozone-depleting substances by weight NOx, SOx, and other signicant air emissions by type and weight Total water discharge by quality and destination Total weight of waste by type and disposal method Total number and volume of signicant spills EN5 EN6 EN7 EN8 EN9

Not Reported

3. Report Parameters 3.1 Reporting period 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 Date of most recent previous report (if any) Reporting cycle (annual, biennial, etc.) Contact point for questions regarding the report or its contents Process for dening report content Boundaries of report State any specic limitations on the scope or boundary of report Basis for reporting on comparability from period to period and/or between organizations Data measurement techniques and bases of calculations for data, including performance index Explanation of the effects of & reasons for any re-statements of information provided in earlier reports Signicant changes from previous reporting periods applied in the report Table identifying the location of the Standard Disclosures in the report Policy and current practices with regard to seeking external assurances for the report

2011. 01 ~ 2011. 12 No previous publication Every year

Not Reported

Not Reported No water sources that are signicantly affected are found Not Reported

All domestic and overseas workplaces, with project

EN10 EN11

Comment separately if special attention is needed for a basis of measuring and calculating data No previous publication No previous publication

EN12 EN13 EN14 EN15 EN16 EN17 EN18 EN19 EN20 EN21 EN22 EN23

4. Governance, Commitments, and Engagement 4.1 Governance of organization 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 Indicate whether the Chair of the highest governance body is also an executive ofcer Number of members of highest governance body that are independent and/or non-executive members Mechanisms for shareholders and employees to provide recommendations or directions to highest governance body Compensation for members of highest governance body, senior managers, and executives Processes in place for highest governance body to ensure conicts of interest are avoided Process for determining the qualications and expertise of the members of the highest governance body Internally developed statements of mission or values, codes of conduct, and principles Procedures of highest governance body for management of economic, environmental, and social performances Processes for evaluating highest governance body's own performance Whether and how the precautionary approach or principle is addressed by the organization Externally developed economic, environmental, and social charters, principles, or other initiatives Membership in associations and/or national/international advocacy organizations List of stakeholder groups engaged by the organization Bases for identication and selection of stakeholders with whom to engage Approaches to stakeholder engagement, including frequency of engagement by type and stakeholder group Key topics and concerns raised through stakeholder engagement, and responses to them

Not Reported

Not Reported Practices of managing air pollutants are partially reported

Prevented any major leaks from occurring by using toxic substance management guidelines for each project and no signicant accident was occurred in 2011 No case of transportation, import and export, treatment of wastes specified in provisions I,II,III,IV of the Annex of Basel Convention has occurred Not Reported

EN24

Weight of transported, imported, exported, or treated wastes deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII Annex of Basel Convention Name of water bodies signicantly affected by the reporting organization's discharges of water and runoff protection states, protection levels and biological diversity value of related habitats Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation

EN25 EN26

20-21, 30-31

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Performance Summary

SAMSUNG ENGINEERING SUSTAINABILITY REPORT

67

Indicator
EN27

Description
Percentage of products sold and their packaging materials that are reclaimed by category Monetary value of signicant nes and total number of non-monetary sanctions for noncompliance with environmental laws and regulations Signicant environmental impacts of transporting products and other goods and materials used for the organization's operations and transporting members of the workforce Total environmental protection expenditures and investments by type

Page
-

Status

Remarks
No packages were used. No case of violation other than a fine for environmental damage has occurred during the reporting period. There was one case of an imposed ne.

Indicator
Society Performance Indicators SO1 SO2 SO3 SO4 SO5

Description
Percentage of operations with implemented local community engagement, impact assessments, and development programs Percentage and total number of business units analyzed for risks related to corruption Percentage of employees trained in organization's anti-corruption policies and procedures Actions taken in response to incidents of corruption Public policy positions and participation in public policy development and lobbying Total value of nancial and in-kind contributions to political parties, politicians, and related institutions, by country Total number of legal actions for anti-competitive behavior and monopoly practices, and outcomes Monetary value of signicant nes, and total number of non-monetary sanctions for non-compliance with laws and regulations

Page

Status

Remarks
This can be checked through the initial environmental impact evaluation beginning of project execution.

EN28

16-19, 52 27 27 -

EN29 EN30

30 32, 62 64 42, 64 42 44 44 36, 63 37 40, 64 4, 64 64 42

Labor Practices and Decent Work Performance Indicators LA1 Total workforce by employment type, employment contract, and region LA2 LA3 LA4 LA5 LA6 LA7 LA8 LA9 LA10 LA11 LA12 LA13 LA14 LA15 Total number and rate of employee turnover by age group, gender, and region Benets provided to full-time employees that are not provided to temporary or part-time employees Percentage of employees covered by collective bargaining agreements Minimum notice period(s) regarding signicant operational changes Percentage of total workforce represented in formal joint management-worker health and safety committees Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities Education, training, prevention, and risk-control programs to assist workforce members, their families, or community members family members and local residents deal with serious diseases Health and safety topics covered in formal agreements with labor unions Average hours of training per year per employee Programs for skills management and lifelong learning for continued employability and managing career endings Percentage of employees receiving regular performance and career development reviews Composition of governance bodies and breakdown of employees per category by indicators of diversity Ratio of basic salary of men to women by employee category Return to work and retention rates after parental leave

SO6 Collect requests and opinions of employees through the Industrial Relations Council. The notication is done via ofcial channels, such as the Industrial Relations Council. The Health and Safety Committee is run for each project. SO7 SO8

Not Reported The Code of Ethics stipulates that the company is prevented from participating in politics. The Code of Ethics stipulates that the company is prevented from participating in politics. No cases. There have been no legal actions in connection with unfair competition and monopoly behavior. Not Reported This is checked through the environmental impact evaluation at the beginning of project execution. No workplaces have been found to have a seriously negative impact on local communities Not Reported

SO9

Operations with signicant potential or actual negative impacts on local communities

There is no trade union. Health and safety issues are discussed through the HSE Department. Not Reported 100%

SO10

Prevention and mitigation measures implemented in operations with signicant potential or actual negative impacts on local communities

Product Responsibility Performance Indicators PR1 PR2 Life cycle stages in which health and safety impacts of products and services are assessed, and percentage of signicant products and services subject to such procedures Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes Type of product and service information required by procedures, and percentage of products and services subject to such information requirements Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling Practices related to customer satisfaction, including results of surveys measuring customer satisfaction Programs for adherence to laws, standards, and voluntary codes related to marketing communications Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data Monetary value of signicant nes for noncompliance with laws and regulations concerning provision of products and services 35 15

Safety elements are checked through the pre-evaluation of hazards during the project execution. Not applicable due to the nature of our business Not applicable due to the nature of our business Not applicable due to the nature of our business Product marketing communication complying with marketing-related laws and targeting people randomly is not conducted. 0 Case 0 Case 0 Case

100%

PR3 PR4

Human Rights Performance Indicators HR1 Percentage and total number of signicant investment agreements that include human rights clauses or that have undergone human rights screening Percentage of signicant suppliers and contractors that have undergone screening on human rights Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including percentage of employees trained Total number of incidents of discrimination, and actions taken Operations identied in which the right to exercise freedom of association and collective bargaining may be at signicant risk Operations identied as having signicant risk for incidents of child labor, and measures taken Operations identied as having signicant risk for incidents of forced labor, and measures taken Percentage of security personnel trained in the organization's policies or procedures concerning human rights relevant to operations Total number of incidents of violations involving rights of indigenous peoples, and actions taken Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments Number of complaints related human rights that are filed, dealt with, and resolved through the official complaint registration channel -

0%. We do not have an official process to check about human rights protection when we determine whether to make an investment in our subsidiaries and joint ventures Not Reported

PR5 PR6 PR7

HR2 HR3 HR4 HR5 HR6 HR7 HR8 HR9 HR10 HR11

45 45 45 52 8-9 45

Not Reported Not Reported

PR8 PR9

Partners are responsible for facility security and security managers are trained about human rights and ethics in accordance with internal ethics regulations. In 2011, the working environment and possible discrimination elements were evaluated with stakeholders involved.

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Performance Summary

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69

GRI STATEMENT

SAMSUNg ENgINEERINg Sustainability Report

Appendix

Our sustainability report meets all requirements of Level B+ at the level of reporting indicators in the GRI G3.1 guidelines. Also, a third-party verier and the application level checking of GRI have conrmed that this report is appropriate for B+ in the application levels of the G3.1 guidelines.

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Performance Summary

CORpORATE PROFILE
UK Establishment Date President & CEO Employees Contact Address 1970. 01. 20 Ki-Seok Park 7,620 (as of the end of 2011) Tel: 02-2053-3000 Fax: 02-2053-3339 500 Samsung GEC, Sangil-dong, Gangdong-gu, Seoul, Korea Capital Stock KRW 200 billion Total Assets Revenue Operating Profit KRW 5.19 trillion (as of the end of 2011, based on KIFRS) KRW 9.3 trillion (as of the end of 2011, based on KIFRS) KRW 717 billion (as of the end of 2011, based on the KIFRS) USA Saudi Arabia UAE Mexico Thailand Venezuela Trinidad & Tobago Malaysia Singapore Indonesia Vietnam Italy Uzbekistan Algeria India China Hungary

Head Office (Seoul, Korea)

Japan

Brazil

Global Network
Americas Americas Europe Middle East / Africa Asia Grupo Samsung Ingenieria Mexico, S.A. De C.V. Sevilla #40 Piso 9 col. Juarez, Delegacion Cuauhtemoc C.P. 06600 Mexico City Tel 52-55-5207-6823 Fax 52-55-5080-7721 Samsung Engineering America INC. 2103 Citywest Blvd., 18th oor, #101 Houston TX 77042, USA Tel 1-281-360-2058 Fax 1-281-360-2195 Samsung Engineering Co., Ltd. Venezuela office Ocina 10-B-3, Piso 10, Torre La Noria, Paseo Enrique Eraso, Urb. Las Mercedes, Sector San Roman, Caracas, Venezuela Tel 58-212-992-2831/3031 Fax 58-212-992-3639 Samsung Engineering Trinidad Co., Ltd. T&T Chamber of Industry & Commerce Bldg. 1st Floor Westmoorings Trinidad West Indies Port of Spain Trinidad & Tobago Tel 51-868-637-5403 Fax 1-868-632-6104 Samsung Engineering America do Sul Projeto e Consultoria Ltda 20090-003 Av. Rio Branco 1, 16 andar, Sala 1610 Centro, Rio de Janeiro, RJ, Brasil Tel 55-21-3613-3100 Fax 55-21-3613-3111 Europe Samsung Engineering Milan Office Via Brescia 28, Palazzo D, Scala 3, 20063 Cernusco Sul Naviglio, Milano, Italy Tel 39-02-3672-2050 Fax 39-02-3672-2074 Samsung Engineering Magyarorszag KFT. 1123 Alkotas u.53. Budapest Hungary Tel 36-1-319-2694 Fax 36-1-319-2641 Samsung Engineering CO., Ltd. UK Office 16th Fl., City Tower, 40 Basinghall St. London EC2V 5DE UK Tel 44-20-7382-1643 Fax 44-20-7382-1649 Middle East / Africa Samsung Saudi Arabia Co., Ltd. & Samsung EPC Co., Ltd. P.O.BOX 35816, Samsung Naora Techno Valley, Jubail 31961, Kingdom of Saudi Arabia Tel 966-3-356-5900 Fax 966-3-356-5929 Samsung Engineering Abu Dhabi Office P.O. Box 73410, 31st Floor, Etihad Tower 3, Baynunah Street, Al Bateen, Abu Dhabi, UAE Tel 971- 2-676-2323 Fax 971- 2-676-2772 Samsung Engineering Algeria (Branch Office) 16035 01 Rue Des Cretes- Hydra, Alger, Algerie Tel 213-21-48-4620 Fax 213-21-48-4622 Samsung Engineering Tashkent Office 100084, International Business Centre, Block A, 8th Floor, 107B, Amir Temur Street, Tashkent, Uzbekistan Tel 998-71-238-5830~2 Fax 998-71-238-5837 Samsung Engineering Co., Ltd. Tokyo Office Roppongi T-cube 17F, 3-1-1, Roppongi, Minato-ku, Tokyo, 106-8532, Japan Tel 81-3-6234-2184 Fax 81-3-6234-2183 Samsung Engineering Malaysia Sdn., Bhd. Suite 14.06, 14th Fl, Kenanga international, Jalan Sultan Ismail 50250 Kuala Lumpur, Malaysia Tel 603-2162-0714 Fax 603-2162-0907 Samsung Engineering Construction (Shanghai) Co., Ltd. 15F, Onelujiazui No. 68 Yin Cheng Road Shanghai 200120, PRC Tel 86-21-5010-6886 Fax 86-21-5010-6887 Samsung Engineering India Private Ltd. 201301 A1,WindsorITPark,TowerA,Level-5,Sector-125, Noida, U.P.India Tel 91-120-406-0700 Fax 91-120-406-0750 Asia Samsung Thai Engineering Co., Ltd. 98 Sathom Square Oce Tower, Unit 1~6, 14th Floor, and 15th Floor, North Sathom Rd, Silom, Bangrak, Bangkok 10500, Thailand Tel 66-2-232-7500 Fax 66-2-232-7525 Samsung Engineering Vietnam Representative Office Unit 1909, 19th Floor, Keangnam Hanoi Landmark Tower 72 Building, Plot E6, Giay Giay New Urban Area, Me Tri Commune, Tu Liem District, Hanoi, Vietnam Tel 84-4-3934-7992 Fax 84-4-3934-7994 Samsung Engineering Co., Ltd. Singapore Representative Office 049483 3 Church Street, 12-01 Samsung HUB Building, Singapore Tel 65-6222-0841 Fax 65-6222-6735 BUT. Samsung Engineering Indonesia 135-856 Bapindo Plaza, 16th oor of Mandiri Tower Jl.Jend Sudirman Kav.54~55, Jakarta Indonesia Tel 62-21-2995-0112 Fax 62-21-2995-0109

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CORpORATE PROFILE

Organizational Chart

List of Awards (Overseas)

Category Overseas Year 2011 2011 2011 2011 2010 2010 2010 2010 2010 Awards MEED 2011 Top EPC Contractor (Ranked 2nd) ENR Top International Contractor (Overseas Ranked 34th) ENR Top International Contractor (Global Ranked 55th) PMI Distinguished Project Award (Thailand GSP-6) Oil & Gas Middle East Annual Ranking (2nd) ENR Top International Contractor (Overseas Ranked 35th) ENR Top International Contractor (Global Ranked 69th) Institutional Investor (Best IR Ranked 1st) Forbes Asias 50 Fabulous Companies Description Ranked by MEED, a professional magazine on the Middle East economy. Received new orders in the oil and gas sectors Ranked by ENR, a professional magazine on the US construction business, based on overseas sales Ranked by ENR, a professional magazine on the US construction business, based on domestic/overseas sales Granted by PMI, the worlds leading not-for-prot membership association for the project management profession. Competencies for performing individual projects are evaluated and awards are given on a project-by-project basis Ranked by Oil & Gas, a professional magazine on the petrochemical business in the Middle East. Received new orders in the oil and gas sectors Ranked by ENR, a professional magazine on the US construction business, based on overseas sales Ranked by ENR, a professional magazine on the US construction business, based on domestic/overseas sales. Ranked by Institutional Investor, a professional magazine for stock investors, based on a survey of 800 investors and analysts Ranked by Forbes Asia based on sales, operating prot, and market capitalization for the past ve years

CEO

Overseas Overseas

President of Corporate Planning Global Environment Research Center Audit Department HSE Department

Overseas Overseas Overseas Overseas Overseas Overseas

Marketing Unit

Energy Business

Hydrocarbon Business

Power Business

Outsourcing Management Unit

Business Support Division

List of Awards (Domestic)

Category Domestic Domestic Domestic Year 2011 2011 2011 2010 2010 2010 2009 2009 Awards Hankyung Dailys Super Companies in Korea (Ranked 31st) Fortune Koreas 500 Top Companies (Ranked 88th) Fortune Koreas Fastest Growing Companies Hankyung Dailys Super Companies in Korea (Ranked 37th) Fortune Koreas 500 Top Companies (Ranked 93rd) Fortune Koreas Fastest Growing Companies Hankyung Dailys Super Companies in Korea (Ranked 51st) Fortune Koreas 500 Top Companies (Ranked 117th) Description Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income Ranked by Fortune Korea based on the sales of the previous year A total of 11 companies were on the list Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income Ranked by Fortune Korea based on sales of the previous year Fortune Koreas Fastest Growing Companies Ranked by Hankyung Daily based on a combination of market capitalization, sales and net income Ranked by Fortune Korea based on sales of the previous year

Upstream Project Management Division

Gas Project Management Division

Domestic Project Management Division

Corporate Strategy & Planning Division Financial Support Division

Renery Project Management Division

Petrochemical Project Management Division

Steel & Metals Plant Project Management Division

Domestic Domestic

Energy Engineering Technology Division

Hydrocarbon Engineering Technology Division

Industrial & Infrastructure Engineering Technology Division

Domestic Domestic Domestic

Ownership Structure

Member of Associations*
13.1% 63.6%
Total Shares Issued
Shareholders Cheil Industries Inc. National Pension Service of Korea Samsung SDI Co., Ltd. JF Asset Management Limited Korea Investment Trust Asset Management Others Total Number of Shares Held 5,238,299 3,846,299 2,036,966 1,748,374 1,667,782 25,462,280 40,000,000 Equity Ratio 13.1% 9.6% 5.1% 4.4% 4.2% 63.6% 100% Construction Outsourcing Association International Water Association(IWA) Seoul Chapter, The Construction Association of Korea Seoul Chamber of Commerce A Chapter of Korea Institute of Registered Architects The Federation of Korean Industries The American Chamber of Commerce in Korea The European Union Chamber of Commerce in Korea Korea Business Council for Sustainability Development (KBCSD) The Construction Management Association of Korea Korea Construction Engineers Association Korea Economic Research Institute Korea Professional Engineers Association Korea Management Association The Korea International Trade Association Korea Industrial Technology Association Korea Fire Facility Association Korean Society of Fire Protection Professional Engineers Fire Safety Association Korea Engineering & Consulting Association Korea Carbon Capture and Storage Association Korea Electrical Contractors Association Korea Electric Engineers Association Korea Information Communication Contractors Association The Korea Railway Association Korea Plant Industries Association Korea Plant Engineering Association Korea Institute of Plant Engineering & Construction International Contractors Association of Korea Korea Green Foundation

40 million

9.6% 5.1% 4.4% 4.2%

Cheil Industries National Pension Service Samsung SDI JF Asset Korea Investment Trust Others

* The principles regarding corporate social responsibility or support for external initiatives are under internal consideration.

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INdEpENdENT ASSURANcE STATEMENT

Scope and objectives
Two Tomorrows (Asia) Limited has undertaken independent assurance of Samsung Engineerings 2011 Sustainability Report. The assurance process was conducted in accordance with AA1000AS (2008). We were engaged to provide moderate level, Type 1 assurance, which includes evaluation of adherence to the AA1000APS (2008) principles of inclusivity, materiality and responsiveness (the Principles). We undertook no checking of sustainability performance data and consequently oer no assurance over performance data or associated claims included in the Report.

engagement with stakeholders other than sta.  Assessment of information provided to us by Samsung Engineering on its reporting and management processes relating to the Principles.  Assessment of supporting evidence for key claims in the Report.  Review and feedback on drafts of the Report and the Global Reporting Initiative (GRI) index in the report.

documented process for stakeholder identication and participation should be established to ensure that the current approach is ongoing and not one o.  Samsung Engineering demonstrates a high level of understanding and response to overseas clients needs, including the example of improving its EHS performance and providing feedback to clients through VOC (Voice of customer) system. In addition to clients, further improvement can be made by expanding approaches such as use of regional experts and market intelligence to cover potential CR risks relating to global project sites, suppliers and local communities. We also recommend that Samsung Engineering should ensure more systematic and integrated management of environmental and social issues through continuous collection and analysis of related information through regional hubs.  Samsung Engineerings approach and reporting emphasises eco-efficiency in the whole life cycle of the business. To ensure continuous improvement, stakeholders and relevant communication channels should be taken into consideration at every step of the business including engineering, procurement, construction and operations during the development of stakeholder participation processes. Material issues are those which are necessary for stakeholders to make informed judgments concerning Samsung Engineering and its impacts. B  ased on the work undertaken, we are not aware of any issues that are of high materiality for its operations that Samsung Engineering has not recognised within its report. However, we recommend that future materiality assessment should exclude those issues that many stakeholders consider as standard business management activities, such as Project Quality, Risk management, Providing base for continual growth, unless these can be clearly linked with CSR implementation areas and goals.  The process for assessing the business impact of sustainability issues should reflect legal, project quality and environmental risk factors. We also recommend that Samsung Engineering should ensure consistent implementation of the materiality assessment process by establishing a formal process for top management review and approval of material assessment processes and results.  We also recommend that Samsung Engineering should introduce a stakeholder review committee for review and moderation of the materiality assessment process, to ensure this reflects the full range of stakeholders opinions. Responsiveness concerns the extent to which an organisation responds to stakeholder issues.  The results of the companys stakeholder survey revealed that implementation of environmental-friendly projects is seen by the majority of stakeholders as the most important issue among the environmental section. As the materiality analysis assigned relatively low signicance to this topic, based on its current business impact, the Report includes only one case study on the greenhouse

gas reduction plant project. We recommend that future reports should include additional information on the companys projects in this area, such as enhancing relevant R&D, employee development and marketing capacity building, and development of a strategy for creating related opportunity in the long term.  Establishing the Green Management System, that integrates the energy, greenhouse gas and other environmental aspects of ISO 26000, is a commendable approach. We recommend that Samsung Engineering should ensure that the system is embedded within each functional division and project teams.  Samsung Engineering also utilises an ERS (Environmental Rating System) to identify further performance improvement opportunities. In the future we recommend that the company should ensure that the results of the ERS are more directly reected in the performance evaluation of the project teams.  In many developing country projects, establishing joint ventures with local partners is required by local law. We recommend that Samsung Engineering should report on the current status of JVs in relevant developing countries, and efforts to establish a formal system for screening partner companies capacity for managing social and environmental risks will be needed.  Samsung Engineering is potentially exposed to risk through incidents within international projects and local suppliers. We recommend that Samsung Engineering should establish a systematic incident management plan that prioritises and implements a communication strategy for relevant stakeholders.

Findings
We reviewed and provided feedback on drafts of the Report and where necessary changes were made. On the basis of the work undertaken, nothing came to our attention to suggest that the Report does not properly describe Samsung Engineerings adherence to the Principles of the AA1000APS.

Responsibilities of the directors of Samsung Engineering and of the assurance providers

The directors of Samsung Engineering have sole responsibility for the preparation of the Report. In performing our assurance work, our responsibility is to the management of Samsung Engineering. However our statement represents our independent opinion and is intended to inform all of Samsung Engineerings stakeholders. We adopt a balanced approach towards all of Samsung Engineerings stakeholders. We have no other contract with Samsung Engineering and this is the rst year that we have provided independent assurance. We were not involved in the preparation of any part of the Report. However, having reviewed and provided feedback on drafts of the Report, in a number of instances changes were made to the nal version. Our team comprised MinGu Jun, project leader, and InMog Yang. This assurance statement was prepared by the team in English, and reviewed and signed o by Jon Woodhead, Sustainability Services Director, Two Tomorrows. Further information, including individual competencies relating to the team can be found at: www.twotomorrows.com.

Observations
Without affecting our assurance opinion we also provide the following observations. In this first sustainability report, Samsung Engineering established three directions and six areas for CSR implementation and linked them with the corporate vision of Creative Engineering Solution Provider. This is a good starting point for integrating the CSR framework with efforts to achieve the vision. In the future, integration between the corporate vision and strategy and the CSR framework will be increased through regular review of the CSR directions and areas, to ensure these reect new material issues, and to exploit further linkages with the corporate vision. Over time, the current governance structure for CSR, where main issues are managed by the CSR team, should be improved by appointing a responsible Director and establishing a committee under the Board of Directors to oversee progress and to provide authority for action. These developments should also be used to support enhancements in the management and capacity of relevant functional divisions. The Report includes a series of CSR goals in the Commitment to Sustainability section. Samsung Engineering should ensure that these goals are clearly linked with material issues identified through stakeholder engagement and the materiality assessment process. We also recommend that Samsung Engineering improve the goals to include more specic, measurable, achievable, relevant and time bound targets. We have conrmed that the GRI indicators referenced in the GRI index pages are reported either partially or fully. In our opinion the Report meets the criteria within the GRI G3 guidelines to an application level of B+. Inclusivity concerns the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability.  Samsung Engineering categorises its stakeholders as Business Stakeholders and Non-Business Stakeholders, in line with the AA1000 Stakeholder Engagement Standard. Whilst this approach is seen as a good basis, a formal

Two Tomorrows (Asia) Limited Seoul, Korea 15th May 2012

Basis of our opinion

We undertook the following activities:  Review of Samsung Engineerings process for identifying and evaluating material issues.  Brief materiality assessment based on internet research, peer reports, performance standards of International Finance Corporation, ESG report of an SRI (Socially Responsible Investment) analyst and our Tomorrows Value Rating to compare the issues identied through the Samsung Engineering materiality process.  Interviews with four executive management team members and managers responsible for managing non-financial issues, based at the Seoul headquarters. Interviewees were suggested by Samsung Engineering and agreed with Two Tomorrows.  Review of Samsung Engineerings approach to stakeholder engagement and the outputs of recent stakeholder engagement. We had no direct

Jon Woodhead
Project Director

MinGu Jun
Project Leader

InMog Yang
Lead Associate

Two Tomorrows (Asia) Limited is part of DNV, a global provider of services for managing risk, helping customers to safely and responsibly improve their business performance. www.twotomorrows.com

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REvIEw OpINION
I am very pleased to meet the Sustainability Report of Samsung Engineering, which is leading the industry through many successful projects both in Korea and abroad. After having reviewed this report, I would like to give you four points as follows: The rst point is about the role of the engineering industry in relation with sustainability management. So far Samsung Engineering has endeavored to accommodate clients requirements fully and address quality challenges thoroughly by means of Plant Satisfaction Index (PSI), which is introduced in this report. And it is very likely that Samsung Engineerings key clients in the oil and gas, petrochemical, power generation, and steel industry will include sustainability-related issues in their project requirements. Sustainability activities by the International Petroleum Industry Environmental Conservation Association (IPIECA), the International Association of Oil & Gas Producers (OGP), and the World Steel Association are such examples. At the same time, the Royal Academy of Engineering has demanded that an engineer should consider a way of contributing to sustainable development in applying his/her engineering knowledge even when his/her client does not ask him/her to do so. Therefore I hope that Samsung Engineering will not only respond to clients increasing demands for sustainable development completely, but also be equipped with a capability of proposing a creative sustainability solution that the client has not thought of yet, and thus enhancing the level of sustainability management of both Samsung Engineering and its client. The second point is concerned with the linkage between corporate strategy and sustainability management strategy. I think that the vision of Creative Engineering Solution Provider for the well-being of humankind and the environment, presented in this report, is a major step forward of the companys strategy because it links Samsung Engineerings corporate strategy and sustainability management strategy with this common value. In particular, Global Citizenship that Samsung Engineering has selected as one of its core values shows the companys strong will to become a corporate citizen contributing to sustainable development. However, it should be borne in mind that it is not a matter of verbal expression simply to improve logical consistency when we assert that sustainability management strategy should be linked to corporate strategy closely. Rather, it is a warning against a supercial approach that mechanically adds a new societal demand of sustainability management without any change in the existing management practices. Therefore, I hope that the future strategy of Samsung Engineering will evolve into an integrated one, which merges an aspect of sustainable development with the companys established tradition of uncompromising quality control of its projects and performance. May 2012 Director of Sustainability Management Research Center, Kookmin Institute of Business Research My third point is about the meaning of sustainability reporting. It should be noted that sustainability reporting is not merely publishing a report, but a part of continuous process of plan-do-check-act. In this sense, the following report will need to demonstrate clearly how Samsung Engineering has incorporated what is measured, assessed, and promised in this report in the companys business activities during the reporting period. The fourth point is related to a way of building up trust in communicating sustainability. Along with assurance, the third-party review has been used as a way of gaining stakeholder trust in a companys sustainability report. However, above all things, stakeholder trust relies on how consistently the company has put its promise into action. Samsung Engineering should review constantly whether its business activities are proceeding towards the directions as promised in the disclosures on management approach of this report (to cite a few, strengthening compliance system; establishing an eco-friendly business management; creating a work environment balancing work and life; fair trade and mutually benecial supply chain management; and contributing to the local community) and prove how it is materializing its promises in its activities to achieve performance as anticipated. To link this point with the aforementioned meaning of sustainability reporting, publishing this report may be the rst step to stakeholder trust, but the reports to be published next year, the year following next year, and the subsequent years that show consistent actions towards its promises are truly the way to earn and accumulate trust. I am looking forward to seeing Samsung Engineering developing into a company obtaining stakeholder trust and leading sustainable development through business and management innovation.

GHG ASSURANcE STATEMENT

No.: AS_PRJC-378793-2012-CCS-KOR_E

DNV ASSURANCE STATEMENT

Introduction
DNV Certication, Ltd. (DNV) was commissioned by Samsung Engineering Co., Ltd. (Samsung Engineering) to verify the Samsung Engineerings Greenhouse Gas Inventory Report for the calendar year 2010~2011 (the report) based upon a limited level of assurance. Samsung Engineering is responsible for the preparation of the GHG emissions data on the basis set out within the WRI/ WBCSD GHG protocol: 2004 and the principles set out in ISO 14064-1:2006. Our responsibility in performing this work is to the management of Samsung Engineering only and in accordance with terms of reference agreed with them. DNV expressly disclaims any liability or responsibility for any decisions, whether investment or otherwise, based upon this assurance statement.

Verification Approach
The verication has been conducted by DNV from 23rd April through 18th May 2012 and performed in accordance with the verication principles and tasks outlined in ISO 14064-3:2006. We planned and performed our work so as to obtain all the information and explanations deemed necessary to provide us with sucient evidence to provide a limited verication opinion concerning the completeness of the emission inventory as well as the reported emission gures in ton CO2 equivalent. As part of the verification process:  We have reviewed and verified the Samsung Engineerings Greenhouse gas Management System.  We have reviewed the GHG inventory Report dated on 23rd April 2012.  We have reviewed and verified the process to generate, aggregate and report the emissions data.

Scope of Assurance
The emissions data covered by our examination comprise Direct emissions (Scope 1 emissions), Energy indirect emissions (Scope 2 emissions) and Other indirect emissions (Scope 3 emissions) : R  eporting period under verification : Calendar Year 2010~2011 O  rganizational boundary for reporting : Samsung Engineering Co., Ltd.
Address / Remark Year 2010 6 buildings (including headquarter) 34 construction sites in Korea Overseas 14 construction sites 7 sites for Operation & Maintenance Year 2011 9 buildings (including headquarter) 46 construction sites in Korea Overseas 17 construction sites 7 sites for Operation & Maintenance

Conclusions
As a result of the work described above, in our opinion nothing has come to our attention that would cause us to believe that the GHG emissions data set out in Samsung Engineerings report are not fairly stated. The GHG Emissions of Samsung Engineering for the year 2010~2011 were conrmed as below;

Organizational Boundaries Buildings Domestic construction sites Overseas construction sites Operation & Maintenance sites

Verification activity Desk Review, Site visit, Process & data verication Desk Review, Site visit, Process & data verication Desk Review, Process & data verication Desk Review, Site visit, Process & data verication

Greenhouse Gas Emissions of Samsung Engineering Co., Ltd. from Yr 2010~2011

(Unit: ton CO2-e)

Operational Boundary (Period) Year 2010 Year 2010

Direct emissions (Scope 1) 23,342 67,824

Indirect emission (Scope 2) 7,857 12,889

Other indirect emissions (Scope 3) 1,742,941 1,894,948

Total emissions 1,774,140 1,975,661

Han-Kyun Rho

 In order to report the GHG emissions as an integer, the rounded number on the statement might be dierent from the number on the system with 1 tCO2. Total emissions = Scope 1 + Scope 2 + Scope 3

18th May 2012

Tae-Ho Kim
Lead Verier

In-Kyoon
Country Manager DNV Certication, Ltd.

This Assurance Statement is valid as of the date of the issuance (18th May 2012). Please note that this Assurance statement would be revised if any material discrepancy which may impact on the Greenhouse Gas Emissions of Samsung engineering Co., Ltd., is subsequently brought to our attention. In the event of ambiguity or contradiction in this statement between English version and Korean version, Korean shall be given precedent.

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GLOSSARY

Terms AA1000AS

Description This is a principle regarding obligations to explain sustainability management, specied by the company. The international standard includes three principles: inclusivity, materiality and responsiveness. This refers to all technologies that remove carbon dioxide from fossil fuels by capturing and storing the gas. This technology allows you to collect in high density, take away and store carbon dioxide before it is emitted into the air. Research is under way to make this technology available as an alternative technology for preventing global warming. In this system, which is stipulated in Article 12 of the Kyoto Protocol, an advanced nation can be considered to have reduced greenhouse gases in its region by investing in a developing nation to reduce greenhouse gas emissions in the region. This refers to a global project by international nancial or investment organizations, to conduct a survey asking major businesses in each country what strategies they have to respond to climate change and how much carbon they release into the air. This technology allows you to increase efciency, reduce emissions of or reuse CO2 in processes to treat byproducts, such as methanol and urea, or ancillary materials by recycling CO2 generated in consuming fuel in a petrochemical plant. This refers to collecting and integrating technologies from various elds and completing projects. This is a combination of the initials of engineering, procurement and construction and refers to the scope of work of an engineering project. This indicates the entire engineering process from front end engineering, design, design basis to process the design package to completion of the basic design package. This refers to a gas causing a greenhouse effect. Greenhouse gases specied by the WRI/WBSCD are CO2, CH4, N2O, PFCs, HFCs and SF6. This indicates a plant that separates oil and gas before treating them. Oil and gas are mixed when they are extracted from oil wells and separated to be made into products. This is an independent international non-prot organization that created international standards for a sustainability report. This organization provides standardized reporting indices for a sustainability report. The current version is G3.1. In accordance with the international trends towards integrated reporting, the organization is developing G4, a new framework for a sustainability report, including existing nancial reports and expected to announce it in 2013. This refers to the client demanding that contractors propose price, delivery date, and other options conditions in relation to the construction of a plant or purchase of equipment. This refers to a package deal, where a plant construction agreement is signed based on estimated construction volume and amount while design is incomplete. The contractor provides all services, including nancing, land purchase, design, construction and test operation, and delivers the facility to the client in complete form. This refers to a technique of identifying opportunities and risks a company faces and determine which are more important than the others by considering both stakeholders interests and business issues deducted from communication among stakeholders. In the dictionary, this means a part of sea, which is near the coast. This also indicates all facilities and activities for drilling oil and natural gas from the sea and transporting them through pipes to the shores. This refers to a colorless, transparent and volatile liquid smelling of aromatic odor, which is one of xylene isomers with two methyl groups attached to benzene. This refers to a combination of industrial facilities, machine, electricity, construction, communications and is used to indicate facilities and factories. This refers to evaluating qualications of bidders when the client requests that they submit a bidding or proposal. This refers to disassembling and examining, or analyzing a nished product in detail to discover its design or production process. This refers to responsibilities that the government, companies, institutions and organizations should fulll. For businesses, this may be called corporate sustainability . Responsibilities are applied to various elds, such as human rights, the environment, labor practices and organizational governance and the international standard for social responsibility (ISO 26000) came into effect in 2010. This refers to organic compounds (CO(NH2)2) with crystalline materials and no color. They are nal compounds in the protein metabolism of mammals and certain sh (AA1000AS). This refers to a process from oil exploration, mining to the production of petrochemical products. On the contrary, the sales process, including marketing, transportation and distribution, is called downstream. All activities, such as design criteria, specication, suppliers and construction methods, can be improved to meet requirements of quality, construction period, and stability in each section of EPC at minimum cost.
Local Community Song-Yi Kim, Ho-Jae Lee, Ji-Hee lim, Jae-Woo Chang, Na-Mi Choi

CCS (Carbon Capture and Storage)

CDM (Clean Development Mechanism) CDP (Carbon Disclosure Project) CO2 Recovery Engineering EPC FEED (Front End Engineering Design) Green House Gas GOSP (Gas Oil Separation Plant)

2011 Samsung Engineering Sustainability Management Task Force

CSR Office

Sung-Il Hong, Jeong-Hee Sohn, Sung-Ah Lee, Seung-Kyu Lee

GRI (Global Reporting Initiative)

Project Management

Dong-Jin Lee, Beom-Seop Yun, Ji-Young Kim, Jeong-In Song, Jin-Hyung Park, Ji-Won Moon

Corporate Governance

Min-Kook Kang, Seung-Kwon Bang, Wan-Seob Kim

ITB (Invitation to Bid)

Ethics & Compliance

Tae-Yong Park, Jae-Sang Na, Jong-Kwang Lee

LSTK (Lump Sum Turn Key)

Environment, Health & Safety

Dae-Hoon Kim, Soo-Jung Hong, Cheon-Su Yeo

Materiality Test Offshore Para-Xylene Plant PQ (Pre-Qualication) Reverse Engineering SR (Social Responsibility)

Employees & Workplace

Ki-Chae Ahn, Jae-Hyun Park, Seok-Min Lee, Ki-Seung Han, Do-Young Park, Joon-Kyu Chung

Supply Chain

Dong-Soo Son, Kyu-Ha Kim, Joung-Jun Baek, Ji-Eun Shin

If you want to download this report in PDF format, visit our website at http://www.samsungengineering.com If you have any suggestions or questions about this report, please contact us using the information below.
500 Samsung GEC, Sangil-dong, Gangdong-gu, Seoul, Korea 134-090 Tel: +82-2-2053-3000 Fax: +82-2-2053-3339 E-mail: [email protected] Website: http://www.samsungengineering.com

Urea Upstream Value Engineering

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Samsung Engineering Co., Ltd. was selected as a component of the Dow Jones Sustainability Index (DJSI). The DJSI is a benchmark index for global sustainability management.

500 Samsung GEC, Sangil-dong, Gangdong-gu, Seoul, Korea Tel. 02-2053-3000 Fax. 02-2053-3339

www.samsungengineering.com

This report was printed on environment-friendly paper using soy ink.