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1、 Corporate Governance Report FY2021 SAMSUNG ELECTRONICS Co.,Ltd.The Company has prepared this report in accordance with Article 24-2 of the Enforcement Decree of Disclosure Regulations in Securities Markets to provide investors with information regarding the Companys corporate governance.The informa
2、tion in this report is based on the corporate governance status as of December 31,2021,and changes that occurred as of the reporting date are separately stated.Activities related to corporate governance are from January 1,2021 to December 31,2021.If the Korea Stock Exchange guidelines have set a spe
3、cific period of time for certain information,the information is based on that period.The information for“Core Principle and Specific Principle included in this report is based on the guideline set forth by the Korea Exchange.Table of contents.Outline.1.Corporate governance.2 1.Corporate governance p
4、olicy.2 2.Shareholders 4 (1)Shareholder rights.4(2)Equitable treatment of shareholders 11 3.Board of Directors.20(1)Roles and responsibilities.20(2)Board composition.28(3)Responsibilities of Independent Directors.37(4)Evaluation of Independent Directors.42(5)Board operation.44(6)Board committees.50
5、4.Audit system.58(1)Internal audit system.58(2)External auditor.65.Other matters related to corporate governance.67 Attached.Compliance of corporate governance key indices 69-1-(KRW 100 mil)Outline Company name:Samsung Electronics Co.,Ltd.(SEC)Report supervisor:Tae-gyu Kang at IR Team Phone:+82-2-22
6、55-9000 Email: Deputy supervisor:Min-gyu Kim at IR Team Phone:+82-2-2255-8116 Email: Base date:Dec 31,2021(last day of the previous fiscal year of disclosure of report)Company outline The major shareholder and others Samsung Life Insurance and 15 others(including affiliates and foundations establish
7、ed with SEC contributions)Portion of shares owned by major shareholders,etc.21.14%Portion of shares owned by minority shareholders 65.71%Category of business(finance/non-finance)Non-finance Main products Electric and electronic products Belonging to enterprise group in accordance with the Monopoly R
8、egulation and Fair Trade Act Yes Subject to Act on the Management of Public Institutions No Name of enterprise group Samsung Financial information highlights FY2021 FY2020 FY2019 Consolidated revenue 2,796,048 2,368,070 2,304,009 Consolidated operating profit 516,339 359,939 277,685 Consolidated pro
9、fit from continuing operations 399,075 264,078 217,389 Consolidated net profit 399,075 264,078 217,389 Consolidated total assets 4,266,212 3,782,357 3,525,645 Separate total assets 2,511,122 2,296,644 2,161,809 Portion of shares data as of the reporting date(December 31,2021)-2-Corporate Governance
10、1.Corporate Governance Policy(1)Governance principles and policies Aiming to be a global leader that grows along with people and local communities,Samsung Electronics Co.,Ltd.(the Company)operates with a philosophy that states:“We will devote our human resources and technology to create superior pro
11、ducts and services,thereby contributing to a better global society.”Our corporate governance is structured and managed in a transparent manner in accordance with applicable legal procedures.The members of the Board of Directors(the Board)are elected by resolution at a general meeting of shareholders
12、 and consist of five Executive Directors and six Independent Directors as of the reporting date.Executive Directors are elected from candidates recommended by the Board.For Independent Directors,the Independent Director Recommendation Committee,which consists entirely of Independent Directors,recomm
13、ends candidates through a separate procedure to ensure a more deliberate and objective consideration.Information regarding the candidates is provided in detail to shareholders before a general meeting in the form of reference material,convocation notice,and letter before they are elected on the day
14、of annual general meeting(AGM)through shareholder approval.The Board is structured in a way that ensures independent decisions and judgements to promote Company growth and shareholder rights and interests.In order to enhance independence,Independent Directors comprise the majority of the Board,and t
15、hey hold meetings that exclude the Companys management members to ensure candid and objective discussions.However,on April 20,2022,Wha-jin Han vacated her position as an Independent Director citing personal reasons,and Byung-gook Park passed away on May 17,2022.Thus,the Company will appoint new Inde
16、pendent Directors at the first general meeting of shareholders convened after the vacation of the positions,pursuant to Article 542-8 Paragraph 3 of the Commercial Act.We have been working continually to improve our governance:revisions to the Companys Articles of Incorporation and regulations of th
17、e Board of Directors in March 2016 allowed any Directornot just the CEOsto be appointed as Chairman,and in March 2018,the Board elected a Chairman who was not a CEO.The revisions were designed to enable Executive Directors to better concentrate on management activities and strengthen the Boards chec
18、k on management.In March 2020,an Independent Director was elected as the Chairman of the Board,further enhancing the independence and transparency of the Board,and in March 2022,the new Chairman was also appointed from among Independent Directors.Meanwhile,we have strengthened our institutional syst
19、em,allowing us to avoid conflicts of interest and prevent self-interests from influencing Board decisions.Article 398 of the Commercial Act limits transactions between a Director and the Company,and,in accordance with Article 9 of the Regulations of the Board of Directors,a Director is prohibited fr
20、om exercising voting rights in cases where he or she has a special interest in or even a possibility of a conflict of interest with the Company.In a rapidly changing business environment,Director expertise is essential as the Board is constantly required to make strategic decisions.The Companys main
21、stay business DivisionsDevice eXperience(DX)and Device Solutions(DS)are each headed by a leading professional in the relevant field;and each head also participates on the Board and practices responsible management as CEO.In 2022,along with the CEOs,President and Head of Mobile eXperience(MX)Business
22、 Tae-moon Roh,President and CFO Hark-kyu Park,and President and Head of Memory Business Jung-bae Lee were appointed as Executive Directors based on their expertise and management and leadership capabilities.The Board needs diverse perspectives in order to make broad decisions.Independent Directors l
23、everage their expertise and skills from various fields,including finance,law,IT,ESG,and investment to contribute to the Boards informed and objective decision-making process.Detailed information regarding our corporate governance is available on our website(https:/ in our business reports(https:/ co
24、rporate governance A.Ensuring responsible management through the participation of business representatives on the Board In the rapidly changing IT industry,prompt and strategic decision making is required to remain competitive.Under such an environment,the Company needs Directors who have a high-lev
25、el of expertise and fully understand our businesses.Accordingly,the Board appoints the heads of the DX Division and the DS Division as Executive Directors to participate in the decision-making process.Having expert,highly-experienced key executives from each business on the Board enables a comprehen
26、sive and long-term approach to decision making,and with heads of the business divisions taking CEO positions,we are practicing responsible management.Meanwhile,our Independent Directors provide abundant expertise in various fieldsincluding finance,law,IT,ESG,and investmentand supervise the activitie
27、s of both management and Executive Directors and offer objective advice.B.Enhancing the Boards efficiency through the delegation of authorities The Board makes resolutions on matters provided for by the relevant laws and regulations or the Articles of Incorporation,matters delegated by a general mee
28、ting of shareholders,as well as on important matters concerning basic policies and execution of the Companys business.While some matters require the review and resolution of the entire Board,others can be reviewed more efficiently by committees of the Board equipped with expertise in the relevant fi
29、eld.The Board has delegated specific responsibilities to six committees,in accordance with Article 28-2 of the Articles of Incorporation and Article 11-2 of the Regulations of the Board of Directors,in order to enhance its operational efficiency.Agendas approved by committees of the Board are immedi
30、ately reported to all Directors,and if deemed necessary,each Director may request the Chairman to call for a board meeting to put the resolutions approved by the committee(excluding the Audit Committee)forward for a vote at a meeting of the Board.C.Improving supervision via committees composed of a
31、majority of Independent Directors As the Companys business continues to evolve,the Board constantly faces increasingly complex and varied managerial matters.In response,the Board has expanded its responsibilities and established new committees(such as the Related Party Transactions Committee,Compens
32、ation Committee,and Sustainability Committee)to delegate the new roles.These committees consist entirely of Independent Directors,and they make independent and objective decisions and expand their responsibility to supervise management from a diverse perspective.In particular,the CSR Committee(curre
33、ntly the Sustainability Committee)has commissioned research groups(e.g.,Corporate Ecosystem Development Research Group,Environmental Safety Research Group)led by Independent Directors to collaborate with outside experts to provide the Company with applicable advice.The Committee in April 2017 was re
34、organized,expanded to the Governance Committee to further conduct the role of reviewing matters related to enhancing shareholder value.In July 2021,the Committee was reorganized and expanded once again,with the resultant Sustainability Committee tasked with strengthening the Boards role in sustainab
35、ility management,including ESG.The Board will continue its efforts to find new ways to further enhance the Company.-4-2.Shareholders (1)Shareholder rights(Core Principle 1)Shareholder rights Shareholders should have timely access to all information that is necessary to exercise their rights in a leg
36、itimate process.1)General meeting of shareholders(Specific Principle 1-)Corporations should provide timely access to information for shareholders concerning the date,location,agenda,etc.,of general meetings prior to the meeting.A.Summary of general meetings The 53rd Annual General Meeting of Shareho
37、lders(AGM)took place at am 9:00 on March 16,2022 in Suwon(where the Companys headquarters is located)at the Suwon Convention Center.Agenda items at the AGM included the approval of 2021 financial statements,appointment of Directors,and approval of remuneration limit for Directors,all of which were a
38、pproved as submitted.The following is a summary of recent shareholders meetings.The 51st AGM The 52nd AGM The 53rd AGM Date of resolution on convocation Feb 21,2020 Feb 16,2021 Feb 15,2022 Date of convocation notice Feb 21,2020 Feb 16,2021 Feb 15,2022 Date of meeting Mar 18,2020 Mar 17,2021 Mar 16,2
39、022 Days between date of convocation notice and AGM 26 days 29 days 29 days Location of meeting Convention Hall,3F,Suwon Convention Center,Suwon,Gyeonggi Province Convention Hall(3F)/Exhibition Hall(1F),Suwon Convention Center,Suwon,Gyeonggi Province Convention Hall(3F)/Exhibition Hall(1F),Suwon Con
40、vention Center,Suwon,Gyeonggi Province Reference material delivery method Convocation notice on electronic disclosure system,convocation letter(sent out to all shareholders),etc.Convocation notice on electronic disclosure system,convocation letter(sent out to all shareholders),newspaper notice,etc.C
41、onvocation notice on electronic disclosure system,convocation letter(sent out to shareholders who hold more than 1%of the shares outstanding)/letter of notice(sent to all shareholders),newspaper notice,etc.Notice method for non-Korean shareholders IR English website,English disclosure at respective
42、websites for the London Stock Exchange and Luxembourg Stock Exchange IR English website,English disclosure at respective websites for the Korea Exchange,London Stock Exchange and Luxembourg Stock Exchange IR English website,English disclosure at respective websites for the Korea Exchange,London Stoc
43、k Exchange,and Luxembourg Stock Exchange Presence of Board members 8 out of 9 11 out of 11 11 out of 11 Presence of Audit Committee Board members 3 out of 3 3 out of 3 3 out of 3 Shareholder remarks-Question on dividend policy-Question on impact of COVID-19 on revenue and response measures-Question
44、on plans for product launch-Question on labor-management culture-Question on current business issues and business strategies-Question on work environment-Complaint on a product-Question on dividend policy-Question on recruitment plans-Question on operation of the Board and Committees-Question on cur
45、rent business issues and business strategies-Complaint on quality and marketing issues-Question on dividend policy-Question on the reasons behind the appointment of Directors -5-Question on current business issues-Support for agendas-Question on the reasons behind the appointment of Directors-Suppor
46、t for agendas-Question on plans for product launch-Question on labor-management culture-Question on operation of the Board and Committees-Question on environment-friendly management policies B.Provision of AGM information As of the 52nd AGM,the Company discloses general information regarding the AGM
47、,including the date,location,and agenda items,on the electronic disclosure system of the Financial Supervisory Service(FSS)at least four weeks prior to the meeting to allow shareholders to fully review the agenda before exercising their voting rights.Previously,the AGM convocation notice had been se
48、nt to all shareholders in written form two weeks prior to the AGM.Starting from the 53rd AGM,the Company,pursuant to Article 542-4 of the Commercial Act and Article 17-3 of the Articles of Incorporation,disclosed the convocation notice on electronic disclosure system for shareholders holding less th
49、an 1%of the total issued shares with voting rights;and sent the convocation letter at least two weeks prior to the AGM for shareholders holding more than 1%of the total issued shares.In addition,starting from the 53rd AGM,letters of notice on the AGM are sent via mail separately to all shareholders
50、to protect the rights of minority shareholders who may have difficulty checking the convocation notice.In accordance with the revised Enforcement Decree of the Commercial Act,Business Report and Auditors Report are updated at least one week prior to the AGM on the DART system and on the IR website.T
51、hus,we provide our shareholders with detailed information to enhance their understanding of the AGM agenda.For the 53rd AGM,the information was offered via convocation notice four weeks prior to the AGM to allow shareholders to fully review the agenda.2)Shareholder participation(Specific Principle 1
52、-)The Company should encourage shareholder participation as much as possible and ensure shareholders can propose their opinions.A.Exercising voting rights For the past three years,the date of our AGM has not coincided with general meeting concentration dates to ensure greater participation of our sh
53、areholders.The 51st AGM The 52nd AGM The 53rd AGM General meeting concentration dates March 13/20/26/27,2020 March 26/30/31,2021 March 25/30/31,2022 AGM date March 18,2020 March 17,2021 March 16,2022 Avoided concentration date Yes Yes Yes Mail-in voting No No No Electronic voting Yes Yes Yes Proxy v
54、oting solicitation Yes Yes Yes -6-The Company does not allow mail-in voting.However,the Board in January 2020 resolved to adopt electronic voting to enable shareholders to more conveniently exercise their voting rights.Electronic voting has been available from the 51st AGM held in March 2020.In addi
55、tion,the Company recommends the granting of proxies by distributing letter of attorney via various meanse.g.,direct distribution,mail or fax,uploading the letter of attorney on the IR website(https:/ sending the letter of attorney through email.In the 52nd and 53rd AGM,shareholders exercised voting
56、rights directly,by proxy,or by electronic voting.The Company discloses the number of votes for and against each agenda item on the website immediately following the AGM to enhance transparency.The results of the voting are as follows:Agenda item Type of resolution Details Result Shares with voting r
57、ights Total votes Shares for Shares against or abstained 1 Ordinary Approval of FY21 financial statements,including statement of financial position,income statement,and statement for disposal of retained earnings Approved 5,372,291,434 4,158,978,735 4,128,612,994(99.27%)30,365,741(0.73%)2-1 2-1-1 Or
58、dinary Appointment of Han-jo Kim as an Independent Director Approved 5,616,725,387 4,403,374,461 3,061,624,473(69.53%)1,341,749,988(30.47%)2-1-2 Ordinary Appointment of Wha-jin Han as an Independent Director Approved 5,616,725,387 4,403,365,913 4,390,610,713(99.71%)12,755,200(0.29%)2-1-3 Ordinary Ap
59、pointment of Jun-sung Kim as an Independent Director Approved 5,616,725,387 4,403,362,643 4,301,085,196(97.68%)102,277,447(2.32%)2-2 2-2-1 Ordinary Appointment of Kye-hyun Kyung as an Executive Director Approved 5,616,725,387 4,403,304,505 3,801,822,604(86.34%)601,481,901(13.66%)2-2-2 Ordinary Appoi
60、ntment of Tae-moon Roh as an Executive Director Approved 5,616,725,387 4,403,299,611 4,313,602,631(97.96%)89,696,980(2.04%)2-2-3 Ordinary Appointment of Hark-kyu Park as an Executive Director Approved 5,616,725,387 4,403,299,869 3,791,570,612(86.11%)611,729,257(13.89%)2-2-4 Ordinary Appointment of J
61、ung-bae Lee as an Executive Director Approved 5,616,725,387 4,403,291,665 4,317,038,113(98.04%)86,253,552(1.96%)2-3 2-3-1 Ordinary Appointment of Han-jo Kim as an Audit Committee member Approved 5,190,052,876 3,976,616,516 2,968,145,202(74.64%)1,008,471,314(25.36%)2-3-2 Ordinary Appointment of Jeong
62、 Kim as a member of Audit Committee Approved 5,190,052,876 3,976,616,516 2,960,941,724(74.46%)1,015,674,792(25.54%)3 Ordinary Approval of remuneration limit for directors Approved 5,372,291,434 4,158,855,020 4,082,721,581(98.17%)76,133,439(1.83%)-7-Agenda item Type of resolution Details Result Share
63、s with voting rights Total votes Shares for Shares against or abstained 1 Ordinary Approval of FY20 financial statements,including balance sheet,income statement,and statement for disposal of retained earnings Approved 5,372,194,621 4,513,682,081 4,483,834,047 (99.34%)29,848,034 (0.66%)2-1-1 Ordinar
64、y Appointment of Byung-gook Park as an Independent Director Approved 5,616,647,528 4,758,116,602 3,896,940,233 (81.90%)861,176,369 (18.10%)2-1-2 Ordinary Appointment of Jeong Kim as an Independent Director Approved 5,616,647,528 4,758,115,593 3,865,872,358 (81.25%)892,243,235 (18.75%)2-2-1 Ordinary
65、Appointment of Ki-nam Kim as an Executive Director Approved 5,616,647,528 4,758,100,797 4,707,557,966 (98.94%)50,542,831 (1.06%)2-2-2 Ordinary Appointment of Hyun-suk Kim as an Executive Director Approved 5,616,647,528 4,758,076,522 4,707,517,675 (98.94%)50,558,847 (1.06%)2-2-3 Ordinary Appointment
66、of Dong-jin Koh as an Executive Director Approved 5,616,647,528 4,758,058,044 4,707,524,863 (98.94%)50,533,181 (1.06%)3 Ordinary Appointment of Sun-uk Kim as a member of Audit Committee Approved 4,990,591,497 4,131,965,645 3,284,441,300 (79.49%)847,524,345 (20.51%)4 Ordinary Approval of remuneration
67、 limit for directors Approved 5,372,194,621 4,513,566,180 3,838,844,687 (85.05%)674,721,493(14.95%)B.Measures to encourage shareholder participation in AGM Starting from the 52nd AGM,the Company discloses a convocation notice(via electronic disclosure system)of the AGM four weeks prior to the evente
68、arlier than what is required by relevant regulations,including the Commercial Actto ensure shareholders are fully informed about the AGM and its agenda.In addition,from the 53rd AGM,a convocation notice is disclosed via electronic disclosure system for shareholders who hold less than 1%of the shares
69、 outstanding;and a convocation letter is sent out by mail to shareholders holding more than 1%of the shares outstanding.Also,we provide more information on the AGM than what is required by relevant regulations such as the Commercial Act,including by separately sending out letters of notice on the AG
70、M by mail to all shareholders in consideration of minority shareholders who may have difficulty checking the convocation notice so that all shareholders can thoroughly review agenda items prior to exercising their voting rights.Moreover,we avoid shareholder meeting concentration dates,which are publ
71、ished by the Korea Listed Companies Association,to ensure higher shareholder participation at the AGM.From March 2020,we started using electronic voting so that shareholders can exercise their rights remotely.We will continue to do our utmost to engage with our shareholders,including through increas
72、ed AGM participation and exercising of voting rights.At the same time,we will continue to respect shareholders opinions and consider them in our decision-making process.-8-3)Shareholder proposals(Specific Principle 1-)The Company should ensure shareholders can propose general meeting agenda items co
73、nveniently.Shareholders should be able to freely ask questions and receive explanations regarding shareholder suggested meeting agendas.A.Shareholder right to propose agenda items In accordance with Article 363-2 and Article 542-6 Paragraph 2 of the Commercial Act,shareholders holding 3%or more of t
74、he shares outstanding or shareholders holding 0.5%or more of the shares outstanding(excluding shares not carrying voting rights)over the previous six months have the right to propose agenda items for a general meeting of shareholders via written or electronic form at least six weeks prior to a share
75、holders meeting or six weeks prior to the day and month of the previous fiscal years AGM in the case of an AGM.Unless the content of a shareholder proposal is against the law or Articles of Incorporation,or it falls under one of the subparagraphs in Article 12(Rejection of Shareholders Proposals)of
76、the Enforcement Decree of the Commercial Act,the Board shall include the proposal as part of the AGM agenda to be announced via convocation notice.Upon request by the shareholder,key points of the proposal shall also be included in the convocation notice.At the AGM,the shareholder will be given an o
77、pportunity to present the details on the agenda item he or she proposed.Human Resources is responsible for tasks related to agenda proposals by shareholders.Once a proposal is submitted,the shareholder will be identified,a legal review will be conducted,and then a letter or electronic notice will be
78、 sent to the shareholder to verify submission.Information on shareholder proposals is available on our website(https:/ the last three years,there have been no shareholder proposals.Therefore,details on implementations of shareholder proposal-related activities are not included in this document.Also,
79、there have not been any public statements from institutional investors regarding stewardship activities in the recent three years.B.Providing information on shareholder right to propose agenda The Company strives to protect shareholder rights.As part of Company efforts,the general process for propos
80、ing an agenda item is posted on our website to ensure shareholders are well informed of their rights to conveniently express their opinions to management.The right to propose agenda items will continue to be safeguarded:the Company will review all proposals from a legal perspective,follow due proces
81、s,and if appropriate submit them as an agenda item for the AGM.4)Shareholder return policy (Specific Principle 1-)Corporations should establish a mid-to long-term shareholder return policy and relevant plans,which includes those for dividends,and provide the information to shareholders.A.Shareholder
82、 return policy and relevant plans In addition to strengthening our product and business competitiveness,we work to enhance shareholder value via shareholder returns.In October 2017,we announced our shareholder return program for the coming three-year period(i.e.,20182020),increasing predictability o
83、f the scale of our shareholder return activities.Under this policy,we returned 50%of our total free cash flow for the three-year period,which included regular dividends of KRW 28.9 trillion(KRW 9.6 trillion/year)and a special dividend of KRW 10.7 trillion that was paid out with the end-year dividend
84、 for 2020.In January 2021,we announced the shareholder return policy for the three-year term from 2021 to 2023,and we plan to keep the shareholder return pool at 50%of the annual free cash flow in line with the policy.The annual,regular dividend has been increased to KRW 9.8 trillion,so increased di
85、vidends(compared to the previous policy)have been paid from 1Q21.Also,if a significant amount of expected return has been generated,we will actively consider executing a portion of it at the close of each years results.For reference,the Company started distributing quarterly dividends from 1Q17 to e
86、nhance shareholder value by providing a consistent amount of dividends throughout the year.When establishing return policies,distributing dividends,or repurchasing shares,we immediately disclose the information to our shareholders and also provide details via earnings calls and our website.Additiona
87、lly,we provide information on shareholder return by uploading the Letter to Shareholders on the IR website,and shareholders can conveniently check their dividends on a dividend-check service,which can be accessed via the Companys mobile app.-9-B.Information on shareholder return policy We are workin
88、g to ensure that shareholders are well informed on our shareholder return policy,which aligns with our efforts to protect shareholder rights.The Company will continue to do our best to keep shareholders up-to-date.5)Shareholder return status(Specific Principle 1-)Shareholders rights to receive divid
89、ends in accordance with shareholder return policy and relevant plans should be respected.A.Dividend payouts Despite a challenging business environment domestically and globally,regular dividends of KRW 9.6 trillion were paid annually according to the shareholder return policy for the three-year term
90、 from 2018 to 2020.In 2020,the last year of the three-year term,a special dividend of KRW 10.7 trillion(KRW 1,578 per share)was paid with the end-year dividend for 2020 as part of the policy.In 2021,regular,annual dividends increased to KRW 9.8 trillion and have been distributed according to the new
91、ly announced policy for the three-year term from 2021 to 2023.The specifics of distributions over the last three years are shown below.(KRW)Year Settlement month Share type Stock dividend Cash dividend Dividend per share Total dividends Yield*Payout ratio Consolidated Separate 2021 December Common-1
92、,444 8,620,366,002,200 1.8%25.0%31.7%Preferred-1,445 1,189,071,281,500 2.0%2020 December Common-2,994 17,873,528,954,700 4.0%78.0%130.2%Preferred-2,995 2,464,545,666,500 4.2%2019 December Common-1,416 8,453,212,090,800 2.6%44.7%62.7%Preferred-1,417 1,166,030,453,900 3.1%Yield is based on the average
93、 closing price of the week prior to 2 days before the date of record.The Company has not distributed unequal dividends in the recent three years.We distributed interim dividends until 2016 and started distributing quarterly dividends from 2017.Details are shown in the following table:(KRW)Year Quart
94、er Share type Dividend per share Total dividend Date of Board resolution Face value 2021 1Q Common 361 2,155,091,500,550 Apr 29,2021 100 Preferred 361 297,062,098,700 2Q Common 361 2,155,091,500,550 Jul 29,2021 Preferred 361 297,062,098,700 3Q Common 361 2,155,091,500,550 Oct 28,2021 Preferred 361 2
95、97,062,098,700 4Q Common 361 2,155,091,500,550 Jan 27,2022 Preferred 362 297,884,985,400 2020 1Q Common 354 2,113,303,022,700 Apr 29,2020 100 Preferred 354 291,301,891,800 2Q Common 354 2,113,303,022,700 Jul 30,2020 Preferred 354 291,301,891,800 3Q Common 354 2,113,303,022,700 Oct 29,2020 Preferred
96、354 291,301,891,800 4Q Common 1,932 11,533,619,886,600 Jan 28,2021 -10-Preferred 1,933 1,590,639,991,100 2019 1Q Common 354 2,113,303,022,700 Apr 30,2019 100 Preferred 354 291,301,891,800 2Q Common 354 2,113,303,022,700 Jul 31,2019 Preferred 354 291,301,891,800 3Q Common 354 2,113,303,022,700 Oct 31
97、,2019 Preferred 354 291,301,891,800 4Q Common 354 2,113,303,022,700 Jan 30,2020 Preferred 355 292,124,778,500 B.Determining shareholder return amount We strive to enhance shareholder value through proactive shareholder returns,which includes dividends.We determine the dividend amount based on overal
98、l aspects of our business,including results achieved through our differentiated technology,strategic investments for sustainable growth,and cash flow.The Company will continue to strive to protect shareholder value via sustainable growth and appropriate shareholder return policies.-11-(2)Equitable t
99、reatment of shareholders (Core Principle 2)Equitable treatment of shareholders All shareholders should be provided equal voting rights in accordance with the type and number of their shares.Corporations should make efforts to build a system that makes corporate information available to all sharehold
100、ers equally.1)Equitable provision of information(Specific Principle 2-)Shareholders voting rights should not be violated.Corporations should provide sufficient information in a timely and equal manner to all shareholders.A.Issued shares and categories of shares The number of authorized shares in acc
101、ordance with our Articles of Incorporation is 25 billion,including 5 billion preferred shares.The total number of shares outstanding as of the reporting date was 6,792,669,250,including 5,969,782,550 common shares and 822,886,700 preferred shares.The issuance ratios of common shares and preferred sh
102、ares are 29.85%and 16.46%,respectively.Preferred shares do not carry voting rights and receive an annual cash dividend that is 1%higher than common shares do based on face value.If dividends are not distributed for common shares,preferred shares may not receive dividends.In the past three years,a ge
103、neral meeting of a specific class of shareholders has not been held as the requirements for convocation have not been met.Share type Number of authorized shares Number of issued shares*Issuance ratio Note Common 20,000,000,000 5,969,782,550 29.85%-Preferred 5,000,000,000 822,886,700 16.46%-*As of De
104、cember 31,2021 B.Voting rights We continue to work to ensure our shareholders receive fair treatment and the rights of minority shareholders are protected.The Company adheres to the one-share-one-vote rule and strives to secure equitable voting rights in accordance with the Commercial Act and releva
105、nt laws.C.Communication with shareholders (i)Investors Relations(IR)events The Company holds earnings conference calls at the end of January,April,July,and October to report its financial results for the preceding year,first quarter,second quarter and third quarter,respectively.Also,we conduct our I
106、nvestor Forum at least once a year to help shareholders better understand our business by providing information in areas of high investor interest.In addition,we continue to engage in and strengthen communication with our shareholders by participating in IR events such as conferences organized by br
107、okerages,investor meetings,etc.Information on IR events from the beginning of FY21 up to the disclosure date is presented below and is also available our website(https:/ the start of FY21 to the disclosure date,we held no official events with minority shareholders that enabled direct conversations,b
108、ut we have maintained communication through various means.First,we provide live webcasts of key events,such as earnings conference calls and our Investor Forum,for minority shareholders to listen to.In addition,we actively communicate with minority shareholders,including by assigning an employee exc
109、lusively responsible for taking phone calls from minority shareholders,disclosing an email address(on our website)dedicated to answering questions,and opening a method to collect questions on our website before key events.Date Participants Form Contents Note 2022 May 23-27 Foreign institutional inve
110、stors NDR Business performance and outlook Daiwa Conference May 17 Foreign institutional investors Conference call Business performance and outlook Korea Investment&Securities Conference -12-Date Participants Form Contents Note May 813 Foreign institutional investors NDR Business performance and out
111、look Overseas roadshow Apr 2829 Domestic institutional investors Conference call Business performance and outlook Domestic roadshow Apr 28 Domestic/foreign institutional investors Conference call 1Q22 Business results and Q&A 1Q22 earnings release Mar 30 Foreign institutional investors Conference ca
112、ll Business performance and outlook CS Conference Mar 24 Foreign institutional investors Conference call Business performance and outlook BoAML Conference Mar 8 Foreign institutional investors Conference call Business performance and outlook Daiwa Conference Mar 3 Foreign institutional investors Con
113、ference call Business performance and outlook Citi Conference Feb 25 Foreign institutional investors Conference call Business performance and outlook JP Conference Feb 15 Foreign institutional investors Conference call Business performance and outlook GS Conference Feb 310 Foreign institutional inve
114、stors Conference call Business performance and outlook Overseas roadshow Jan 2728 Domestic institutional investors Conference call Business performance and outlook Domestic roadshow Jan 27 Domestic/foreign institutional investors Conference call 4Q21 Business results and Q&A 4Q21 earnings release 20
115、21 Dec 9 Foreign institutional investors Conference call Business performance and outlook Nomura Conference Dec 7 Foreign institutional investors Conference call Business performance and outlook UBS Conference Dec 2 Domestic institutional investors Conference call Business performance and outlook NH
116、 Investment&Securities Conference Nov 22 Domestic institutional investors Conference call Business performance and outlook Kiwoom Securities Conference Nov 16 Domestic/foreign institutional investors Conference call Business performance and outlook 2021 Investors Forum Nov 12 Domestic institutional
117、investors Conference call Business performance and outlook Shinhan Investment Corporation Conference Nov 11 Foreign institutional investors Conference call Business performance and outlook JP Conference Nov 910 Foreign institutional investors Conference call Business performance and outlook Korea In
118、vestment&Securities Conference Nov 15 Foreign institutional investors NDR Business performance and outlook Overseas roadshow Oct 2829 Domestic institutional investors Conference call Business performance and outlook Domestic roadshow Oct 28 Domestic/foreign institutional investors Conference call 3Q
119、21 Business results and Q&A 3Q21 earnings release Sep 28 Domestic institutional investors Conference call Business performance and outlook Daishin Securities Conference Sep 27 Domestic institutional investors Conference call Business performance and outlook eBest Investment&Securities Conference Sep
120、 16 Foreign institutional investors Conference call Business performance and outlook CSLA Conference -13-Date Participants Form Contents Note Sep 8 Foreign institutional investors Conference call Business performance and outlook KB Securities Conference Sep 7 Foreign institutional investors Conferen
121、ce call Business performance and outlook CS Conference Sep 12 Foreign institutional investors Conference call Business performance and outlook HSBC Conference Aug 19 Foreign institutional investors Conference call Business performance and outlook BoAML Conference Aug 17 Foreign institutional investo
122、rs Conference call Business performance and outlook GS Conference Aug 26 Foreign institutional investors Conference call Business performance and outlook Overseas roadshow Jul 2930 Domestic institutional investors Conference call Business performance and outlook Domestic roadshow Jul 29 Domestic/for
123、eign institutional investors Conference call 2Q21 Business results and Q&A 2Q21 earnings release Jun 29 Domestic institutional investors Conference call Business performance and outlook Hana Financial Investment Conference Jun 24 Foreign institutional investors Conference call Business performance a
124、nd outlook UBS Conference Jun 2 Foreign institutional investors Conference call Business performance and outlook BoAML Conference Jun 24 Foreign institutional investors Conference call Business performance and outlook Citi Conference May 31Jun 4 Foreign institutional investors Conference call Busine
125、ss performance and outlook Nomura Conference May 2021 Foreign institutional investors Conference call Business performance and outlook Korea Investment&Securities Conference May 1721 Foreign institutional investors Conference call Business performance and outlook Daiwa Conference May 1718 Foreign in
126、stitutional investors Conference call Business performance and outlook NH Investment&Securities Conference Apr 2930 Domestic institutional investors Conference call Business performance and outlook Domestic roadshow Apr 29 Domestic/foreign investors Conference call 1Q21 Business results and Q&A 1Q21
127、 earnings release Apr 1516 Foreign institutional investors Conference call Business performance and outlook Daiwa Conference Mar 25 Foreign institutional investors Conference call Business performance and outlook CS Conference Mar 18 Foreign institutional investors Conference call Business performan
128、ce and outlook BoAML Conference Mar 12 Foreign institutional investors Conference call Business performance and outlook KB Securities Conference Mar 8 Foreign institutional investors Conference call Business performance and outlook Daiwa Conference Mar 5 Foreign institutional investors Conference ca
129、ll Business performance and outlook Citi Conference Feb 26 Foreign institutional investors Conference call Business performance and outlook GS Conference Feb 26 Foreign institutional investors Conference call Business performance and outlook JP Conference Feb 15 Foreign institutional investors Confe
130、rence call Business performance and outlook Overseas roadshow Jan 2829 Domestic institutional investors Conference call Business performance and outlook Domestic roadshow Jan 28 Domestic/foreign investors Conference call 4Q20 Business results and Q&A 4Q20 earnings release -14-(ii)IR website To meet
131、increasing shareholder demand for information,we provide a wide range of in-depth IR material to enhance the understanding of and confidence in the Company.We have worked to increase ease of access to necessary and useful information via our user-friendly website,which provides details on public dis
132、closures,IR events,financial information,stock information,corporate governance,etc.Also,our Articles of Incorporation,business reports,financial information,and corporate information materials can be downloaded and major events are broadcast live on the website as part of our ongoing efforts to hel
133、p investors access Company information.In addition,we provide the contact information(phone number and email address)of the IR team on our website(https:/ enable convenient communication with shareholders.(iii)Provision of English material All materials are provided on our English website(https:/ pr
134、ovide shareholders with easy access to necessary information.We also provide the contact information(phone number and email address)of the IR team on our global website(https:/ enable convenient communication for non-Korean shareholders.As we list GDRs on the London Stock Exchange(LSE)and the Luxemb
135、ourg Stock Exchange(LuxSE),we submit English disclosures via both the LSE and LuxSE system.In addition,we submit a separate English disclosure via the Korea Exchanges(KRX)Korea Investors Network for Disclosure System(KIND)and provide disclosures on our English website for the convenience of non-Kore
136、an shareholders.LSE website:http:/ website:https:/www.bourse.lu/KRX:https:/engkind.krx.co.kr/English IR website:https:/ following is the list of English disclosures submitted via KIND since the beginning of FY21 as of the disclosure date.Disclosure date Title Content Apr 28,2022 Decision on Cash Div
137、idends and Dividends in Kind 1Q22 Dividend payout Apr 28,2022 Report on Business Performance according to Consolidated Financial Statements(Fair Disclosure)1Q22 Earnings release Apr 7,2022 Organization of Investor Relations Event Information on 1Q22 earnings call Apr 7,2022 Report on Business Perfor
138、mance according to Consolidated Financial Statements(Fair Disclosure)1Q22 Pre-Earnings Guidance Mar 16,2022 Notice on Change of CEO Change of CEO Mar 16,2022 Outcome of Annual Shareholders Meeting Annual Shareholders Meeting results Feb 16,2022 Decision on Calling Shareholders Meeting Convocation no
139、tice for Annual Shareholders Meeting Feb 15,2022 Notice on Change of CEO Change of CEO Jan 27,2022 Decision on Cash Dividends and Dividends in Kind 4Q21 Dividend payout Jan 27,2022 Report on Business Performance according to Consolidated Financial Statements(Fair Disclosure)4Q21 Earnings release Jan
140、 7,2022 Organization of Investor Relations Event Information on 4Q21 earnings call Jan 7,2022 Report on Business Performance according to Consolidated Financial Statements(Fair Disclosure)4Q21 Pre-Earnings Guidance Nov 10,2021 Organization of Investor Relations Event Information on 2021 Investors Fo
141、rum Oct 28,2021 Decision on Cash Dividends and Dividends in Kind 3Q21 Dividend payout Oct 28,2021 Report on Business Performance according to Consolidated Financial Statements(Fair Disclosure)3Q21 Earnings release Oct 8,2021 Organization of Investor Relations Event Information on 3Q21 earnings call
142、Oct 8,2021 Report on Business Performance according to Consolidated Financial Statements(Fair Disclosure)3Q21 Pre-Earnings Guidance Jul 29,2021 Decision on Cash Dividends and Dividends in Kind 2Q21 Dividend payout -15-Jul 29,2021 Report on Business Performance according to Consolidated Financial Sta
143、tements(Fair Disclosure)2Q21 Earnings release Jul 7,2021 Organization of Investor Relations Event Information on 2Q21 earnings call Jul 7,2021 Report on Business Performance according to Consolidated Financial Statements(Fair Disclosure)2Q21 Pre-Earnings Guidance Apr 29,2021 Decision on Cash Dividen
144、ds and Dividends in Kind 1Q21 Dividend payout Apr 29,2021 Report on Business Performance according to Consolidated Financial Statements(Fair Disclosure)1Q21 Earnings Release Apr 7,2021 Organization of Investor Relations Event Information on 1Q21 earnings call Apr 7,2021 Report on Business Performanc
145、e according to Consolidated Financial Statements(Fair Disclosure)1Q21 Pre-Earnings Guidance Mar 17,2021 Outcome of Annual Shareholders Meeting Annual Shareholders Meeting results Feb 16,2021 Decision on Calling Shareholders Meeting Convocation notice for Annual Shareholders Meeting Jan 28,2021 Decis
146、ion on Cash Dividends and Dividends in Kind 4Q20 Dividend payout Jan 28,2021 Report on Business Performance according to Consolidated Financial Statements(Fair Disclosure)4Q20 Earnings Release Jan 8,2021 Organization of Investor Relations Event Information on 4Q20 earnings call Jan 8,2021 Report on
147、Business Performance according to Consolidated Financial Statements(Fair Disclosure)4Q20 Pre-Earnings Guidance(iv)Public disclosure of corporate information We make disclosures in a timely manner to provide detailed corporate information to shareholders.For high-interest information,such as business
148、 results,investment plans,and shareholder return policy,we provide disclosures before making an external announcement,and the specifics of public disclosures since the beginning of FY21 as of the disclosure date are shown below.Since 2Q09,the Company has been providing earnings guidance approximatel
149、y three weeks prior to the earnings call to improve investor understanding.Disclosure date Title/content Apr 28,2022 2022 1Q Earnings Release Apr 07,2022 1Q 2022 Pre-Earnings Guidance Jan 27,2022 2021 4Q Earnings Release Jan 07,2022 4Q 2021 Pre-Earnings Guidance Oct 28,2021 2021 3Q Earnings Release
150、Oct 08,2021 3Q 2021 Pre-Earnings Guidance Jul 29,2021 2021 2Q Earnings Release Jul 07,2021 2Q 2021 Pre-Earnings Guidance Apr 29,2021 2021 1Q Earnings Release Apr 07,2021 1Q 2021 Pre-Earnings Guidance Jan 28,2021 Shareholder return policy for 20212023 Jan 28,2021 2020 4Q Earnings Release Jan 08,2021
151、4Q 2020 Pre-Earnings Guidance (v)Unfaithful disclosure corporation designation The Company is committed to legal and regulatory compliance.We deliver information promptly and accurately via thorough planning and reviews,awareness of the need for public disclosures in advance,and regular inspections.
152、Thanks to these efforts,the Company has never received an unfaithful disclosure corporation designation.D.Provision of corporate information We will continue to provide information to shareholders in a timely manner and distribute it fairly,via IR activities,webcasting of major conference calls,time
153、ly public disclosures,and our website.-16-2)Related-party transactions and self-dealing transactions(Specific Principle 2-)The Company should establish and operate a system to protect shareholders from wrongful related-party and self-dealing transactions of other shareholders,including controlling s
154、hareholders.(i)Internal control system for related-party and self-dealing transactions The Company has internal regulations to prevent related-party or self-dealing transactions that are in managements or a controlling shareholders own interests.In accordance with Article 40 of the Articles of Incor
155、poration,the Board has the authority over approval of related party transactions;and Article 10 Paragraph 3 of the Regulations of the Board provides that approval of related party transactions and approval of transactions between the Company and director shall be approved by the Board.The Company ha
156、s voluntarily established the Related Party Transaction Committee within the Board to review related party transactions,aiming to enhance corporate transparency by building a compliance system that promotes fair transactions.The Committee,consisting entirely of Independent Directors,conducts prelimi
157、nary reviews and approves related party transactions that are worth KRW 5 billion or above in accordance with the Monopoly Regulation and Fair Trade Act,and other transactions that are deemed significant.Also,the Committee receives reports on related party transactions with affiliates and can reques
158、t a detailed investigation.For related party transactions that materially violate relevant laws or regulations of the Company,the Committee has the right to propose corrective measures to the Board.In addition,the Board in February 2017 reinforced procedures related to executing external financial d
159、onations.We created an External Sponsorship Council to conduct preliminary reviews of donations of over KRW 10 million,while donations exceeding KRW 1 billion require the approval of the Board and are voluntarily disclosed.Details of the Companys donations are reported quarterly to the Audit Committ
160、ee,which consists entirely of Independent Directors.(ii)Comprehensive resolutions of the Board on related party transactions with subsidiaries,etc.and self-dealing transactions with executives or controlling shareholders,etc.)Pursuant to Article 542-9 of the Commercial Act and Article 35 of the Enfo
161、rcement Decree of the same Act,“Transactions with Interested Persons Including Major Shareholders”,the Company obtains comprehensive approval of the Board in advance for the estimated total amount of transactions with a subsidiary during the business year that are anticipated to take up 5%or more of
162、 the total assets or gross sales of the Company as at the end of the latest business year.In 2021,the Board made eight comprehensive approval of transactions with overseas subsidiaries to be made in 2022.Pursuant to Article 26 of the Monopoly Regulation And Fair Trade Act and Article 33 of the Enfor
163、cement Decree of the same Act,“Resolutions by Board of Directors on Large-Scale Internal Trading and Disclosure”,transaction with an affiliate at least 20%of the total number of shares issued by which is held by the same person,either alone or together with his or her relatives or an affiliate that
164、is a subsidiary,as provided for in the Commercial Act,of said affiliate in which the quarterly trading amount of goods and services is KRW 5 billion or more is subject to approval by the board of directors and disclosure.However,in accordance with Article 9-2 of the Regulation on resolution by the b
165、oard of directors and disclosure on large-scale internal trading,transactions within the designated period of within a year may be approved at once so the Company receives the Boards approval of the estimated transaction amount for next year beforehand and discloses the details.(iii)Transactions wit
166、h stakeholders(controlling shareholders,etc.)Credit offerings for affiliates and subsidiaries As of December 31,2021,SECs payment guarantees for affiliates,including Samsung Electronics America,Inc.(SEA)for financing purposes are shown below.(USD thousand)Company Relationship Creditor Guarantee star
167、t date Guarantee expiry date Limit of guarantee Transactions Interest Rate(%)Beginning of period End of period Beginning of period Increase/decrease End of period SEA Subsidiary BOA etc.Apr 16,2021 Dec 16,2022 1,328,000 1,328,000-SEM Subsidiary BBVA etc.Mar 28,2021 Dec 16,2022 485,000 906,000-SAMCOL
168、 Subsidiary Citibank etc.Jun 14,2021 Dec 16,2022 310,000 310,000 117,109(117,109)-SEDA Subsidiary BRADESCO etc.Sep 30,2021 Dec 16,2022 559,000 409,000-17-Company Relationship Creditor Guarantee start date Guarantee expiry date Limit of guarantee Transactions Interest Rate(%)Beginning of period End o
169、f period Beginning of period Increase/decrease End of period SECH Subsidiary Citibank etc.Jun 14,2021 Dec 16,2022 142,000 62,000-SEPR Subsidiary BBVA etc.Jun 01,2021 Dec 16,2022 230,000 150,000-SSA Subsidiary SCB etc.Jun 14,2021 Dec 16,2022 318,000 318,000-SEMAG Subsidiary SocGen etc.Nov 09,2021 Dec
170、 16,2022 110,000 110,000-SETK Subsidiary BNP etc.Jun 14,2021 Dec 16,2022 837,000 807,000 169,280(67,005)102,275 19.9%SETK-P Subsidiary BNP etc.Nov 9,2021 Dec 16,2022-130,000-33,334 33,334 25.6%SECE Subsidiary Citibank etc.Jul 19,2021 Dec 16,2022 74,434 73,722-SEEG Subsidiary HSBC Jun 14,2021 Jun 13,
171、2022 85,000 85,000-SEIN Subsidiary BNP etc.Jun 14,2021 Nov 08,2022 145,000 70,000-SJC Subsidiary Mizuho Bank etc.Apr 30,2021 Dec 16,2022 916,062 877,579-SEUC Subsidiary Credit Agricole etc.Jun 14,2021 Dec 16,2022 150,000 150,000-SEDAM Subsidiary Citibank etc.Jun 14,2021 Dec 16,2022 222,000 141,000-S
172、ECA Subsidiary BoA Nov 09,2021 Nov 08,2022 70,000 70,000-SELA Subsidiary Citibank Dec 17,2021 Dec 16,2022 120,000 120,000-SEEH Subsidiary HSBC etc.Jun 14,2021 Dec 16,2022 653,000 712,400-SERK Subsidiary SOCGEN etc.Jun 14,2021 Dec 16,2022 269,800 290,000-SELV Subsidiary Citibank Dec 17,2021 Dec 16,20
173、22 10,000 10,000-SEIL Subsidiary Citibank Dec 17,2021 Dec 16,2022-15,600-10,947 10,947 1.35%SAPL Subsidiary BOA etc.Jun 14,2021 Dec 16,2022 395,000 345,000-SEV Subsidiary SCB Nov 09,2020 Feb 28,2022 15,000-SAVINA Subsidiary HSBC Jun 14,2021 Jun 13,2022 71,000 51,000-SET Subsidiary SCB Nov 09,2020 Fe
174、b 28,2022 30,000-SCIC Subsidiary HSBC etc.Jun 14,2021 Dec 16,2022 300,000 300,000-SME Subsidiary SCB Nov 09,2021 Nov 08,2022 110,000 110,000-SAMEX Subsidiary Citibank Dec 17,2021 Dec 16,2022 5,000 5,000-SEASA Subsidiary Citibank Dec 17,2021 Dec 16,2022 2,000 2,000-SSAP Subsidiary SCB Nov 09,2021 Nov
175、 08,2022 30,000 35,000-SEPM Subsidiary HSBC Jun 14,2021 Jun 13,2022 35,000 35,000-SESAR Subsidiary HSBC Jun 14,2021 Jun 13,2022 50,000 50,000-AdGear Technologies Inc.Subsidiary BOA Nov 09,2021 Nov 08,2022 2,000 2,000-Harman International Industries,Inc.Subsidiary JP Morgan Jun 14,2021 Jun 13,2022 10
176、0,000 100,000-Harman International Japan Co.,Ltd.Subsidiary MUFG Nov 09,2021 Nov 08,2022 25,000 25,000-Harman RUS CIS LLC Subsidiary SocGen Nov 09,2021 Nov 08,2022 15,000 15,000-Harman Holding Limited Subsidiary HSBC Jun 14,2021 Jun 13,2022 30,000 30,000-Harman do Brasil Industria Eletronica e Parti
177、cipacoes Ltda.Subsidiary SocGen Nov 09,2021 Nov 08,2022 15,000 15,000-18-Company Relationship Creditor Guarantee start date Guarantee expiry date Limit of guarantee Transactions Interest Rate(%)Beginning of period End of period Beginning of period Increase/decrease End of period Harman da Amazonia I
178、ndustria Eletronica e Participacoes Ltda.Total 8,264,296 8,265,301 286,389(139,833)146,556 On a separate basis.SEC claims fees on the debt guarantees depending on the maturity date of each debt guarantee,general loan interest rate,etc.In 2021,the Company claimed approximately USD 266,000 as guarante
179、e fee and,as of the reporting date,has not collected the amount.Acquisitions and disposals of assets with affiliates and subsidiaries In 2021,the Company sold assets to affiliates,including to Samsung China Semiconductor LLC.(SCS)for its facility equipment expansion,while acquiring assets from affil
180、iates to improve efficiency of domestic production.(KRW mil)Company Relationship Transaction type Transaction date1)Asset Transaction purpose Amount2)Gain or loss on disposal SCS Affiliates Asset sale/purchase Dec 28,2021 Machinery,etc.Enhance capacity and production efficiency 199,913 119,712 SESS
181、Affiliates Asset sale/purchase Oct 19,2021 Machinery,etc Enhance capacity and production efficiency 14,451 775 SAS Affiliates Asset sale/purchase Oct 22,2021 Machinery,etc.Enhance capacity and production efficiency 8,694 730 SEHC Affiliates Asset sale/purchase Dec 9,2021 Machinery,etc Enhance capaci
182、ty and production efficiency 4,122 81 SIEL Affiliates Asset sale Jun 14,2021 Machinery,etc Enhance capacity and production efficiency 2,609 356 Samsung Bioepis Affiliates Asset sale May 13,2021 Machinery,etc.Enhance capacity and production efficiency 2,371 51 SEV Affiliates Asset sale/purchase Dec 1
183、,2021 Machinery,etc.Enhance capacity and production efficiency 2,033 625 SEVT Affiliates Asset sale/purchase Dec 24,2021 Machinery,etc.Enhance capacity and production efficiency 1,797 208 Samsung SDI Affiliates Asset sale Feb 17,2021 Machinery,etc.Enhance capacity and production efficiency 269 181 S
184、EDA Affiliates Asset sale Jul 23,2021 Machinery,etc.Enhance capacity and production efficiency 403 170 SEIN Affiliates Asset purchase Jan 11,2021 Machinery,etc.Enhance capacity and production efficiency 162-TSEC Affiliates Asset purchase Mar 24,2021 Machinery,etc.Enhance capacity and production effi
185、ciency 102-On a separate basis.1)Most recent transaction.2)Calculated by an appropriate method based upon market value assessment.Transaction was made under normal conditions(e.g.,terms of cash payment within the 15th,30th of the following month of transaction).Business transactions with affiliates
186、and subsidiaries In 2021,SEC conducted the following business transactions,including purchase and sales with Samsung Electronics America,Inc.(SEA),etc.(KRW mil)Subsidiary Type of transaction Transaction date Items/assets Transaction value SEA Sales,purchases,etc.JanDec 2021 HHPs and home appliances,
187、etc.33,025,957 SSI Sales,purchases,etc.JanDec 2021 Semiconductors,etc.32,303,859 SEVT Sales,purchases,etc.JanDec 2021 HHPs,etc.30,527,566 SSS Sales,purchases,etc.JanDec 2021 Semiconductors,etc.25,687,821 SEV Sales,purchases,etc.JanDec 2021 HHPs,etc.22,040,207 On a separate basis.Transactions worth 5
188、%and above of revenue.-19-Transactions with stakeholders other than affiliates and subsidiaries As of December 31,2021,the Companys outstanding loan amount is approximately KRW 114.6 billion for obligations related to support for supplier companies for product competitiveness and mutual development
189、as well as home loan and educational expenses for employee welfare.(KRW mil)Company Relation Loans Account title Transaction Period start Change Period end Elentec Co.,Ltd.,etc.Partner company and employee Short-term loans 32,818 10,181 42,999 Bumjin I&D,etc.Partner company and employee Long-term lo
190、ans 81,283(9,679)71,604 Total 114,101 502 114,603 On a separate basis.3)Measures to protect shareholder rights(Specific Principle 2-)Corporations should devise measures to protect shareholders,including collecting opinions of minority shareholders and protecting the rights of dissident shareholders,
191、when there is a change in the corporations ownership structure or main businesses,such as merger,transfer of business,spin-off,and comprehensive exchange and transfer of stock.A.Policies to protect shareholders on issues that cause significant changes to the companys ownership structure or business
192、The Company continues its efforts to protect the interests and rights of minority shareholders,including by actively collecting feedback from minority shareholders and improving access to information.First,we operate a hotline through which minority shareholders can conveniently ask questions,and we
193、 provide an email address on our website to ensure they can easily submit questions and receive feedback.Moreover,we established a system to allow shareholders to make inquiries online prior to quarterly earnings calls and the AGM;and questions on topics that garner a high level of interest are answ
194、ered during the corresponding event.Thus,we are endeavoring to actively communicate with shareholders and collect their opinions for consideration in our major policies.In addition,we provide a webcast of our key events to enhance access to information,a livestream of the AGM to ensure shareholders
195、have an option to watch the proceedings without physically participating in the event,as well as various information on our revamped website in which the design,headings,etc.have been adjusted to user convenience.We have various channels to collect the opinions of shareholders on issues that cause s
196、ignificant changes to the Companys ownership structure or business,but we do not yet have policies related to protecting the rights of dissident shareholders,etc.However,we will remain committed to actively communicating with and reflecting the voices of our shareholders before making important deci
197、sions,and we will review establishing concrete policies over the mid-to long-term.B.Outcome of implementing the policies to protect shareholders against the occurrence of significant issues and future plans No merger,crucial transfer of business,spin-off(including physical spin-off),or comprehensive
198、 exchange and transfer of stock that causes a significant change in the Companys ownership structure or main businesses occurred during the reporting period,and we do not have detailed plans on such issues.If such issues arise in the future,Samsung will ensure we collect various opinions from shareh
199、olders beforehand and work to produce measures to protect the rights of dissident shareholders to maximize shareholder value.-20-3.Board of Directors (1)Roles and responsibilities(Core Principle 3)Role and responsibilities of the Board The Board of Directors should establish business goals and strat
200、egies for the interests of the corporation and shareholders and supervise management effectively.1)Effective implementation of Board role(Specific Principle 3-)The Board of Directors should perform the decision-making and supervisory functions effectively.A.Board system The Board is an essential bod
201、y of a listed company that makes strategic decisions on important business matters from a multi-faceted perspective and through independent oversight of management.The Company operates its Board and supports Boards activities by establishing an institutional framework such as the Articles of Incorpo
202、ration and Regulations of the Board of Directors.(i)Matters to be resolved The Board makes resolutions on matters according to the relevant laws,Articles of Incorporation,and Regulations of the Board of Directors on important matters related to the Companys management policies and business operation
203、s.In accordance with the Articles of Incorporation,matters to be submitted to the Board are as follows:Matters to be resolved by the Board in accordance with the Articles of Incorporation 1.Establishment of factories,branches,representative offices or business offices in and outside the country 2.Pr
204、eferred dividend yield on preferred shares 3.Retirement of treasury shares 4.Transfer agent,the location of its services and the scope of its operation 5.Matters related to issuance of new shares-Disposal of forfeited and fractional shares-Allocation of new shares to persons other than shareholders
205、6.Issuing new shares via public offering related conditions 7.Matters related to stock options-Granting stock options to officers and employees(excluding directors)-Cancelation of grant of stock options 8.Closing register of shareholders and the record date for occasions such as a convocation of a s
206、pecial meeting of shareholders 9.Matters related to issuance of convertible bonds -Disposal of forfeited and fractional shares -Issuance of convertible bonds to persons other than shareholders-Convertible bonds issued on the condition that rights will be attached to only a portion of convertible bon
207、ds-Conversion price when issuing convertible bonds to persons other than shareholders-Adjustment of conversion period 10.Matters related to issuance of bonds with warrants -Disposal of forfeited and fractional shares-Issuance of bonds with warrants to persons other than shareholders and the face val
208、ue-Amount of new shares which can be subscribed for by the holders of the bonds-Face value when issuing bonds with warrants to persons other than shareholders -21-Adjustment of the period during which the warrant holder may exercise his/her right to subscribe for new shares 11.Convocation of a gener
209、al meeting of shareholders 12.Chairman of the general meeting of shareholders when a CEO is imprisoned 13.Appointment of CEOs 14.Selection of Chairman,Vice-Chairman,President,Executive Vice President,Senior Vice President,Vice President 15.Responsibilities of President,Executive Vice President,Senio
210、r Vice President,Vice President 16.How proxy works when a CEO is unable to perform the role 17.Establishing committees within the Board 18.Matters related to the rights and operations of each committee 19.Appointment of the Chairman of the Board 20.Approval of concurrent positions held by Directors
211、21.Distribution of profit 22.Approval of related party transactions,etc.-Transactions made with related parties as defined in the Monopoly Regulation and Fair Trade Act or large-scale internal transactions for related parties as designated in Article 26 of the same Act-Transactions listed in Article
212、 542-9 Section 3 of the Commercial Act with majority shareholders(including their related parties in accordance with the Commercial Act)or related parties(excluding transactions of which the total value has been approved by the Board,in accordance with Section 5 Clause 2 of the Article)23.Establishm
213、ent and execution of specific rules needed for promotion and management of business In accordance with Article 10 of the Regulations of the Board of Directors,matters to be submitted to the Board are as follows:Matters to be resolved by the Board in accordance with the regulations of the Board 1.Con
214、vocation of a general meeting of shareholders and matters to be submitted to the meetings-Convocation of a general meeting of shareholders -Approval of business reports and financial statements -Amendment to the Articles of Incorporation -Reduction of capital -Dissolution,merger,and continuance of t
215、he Company -Transfer of the whole or an important part of the Companys business,or acquisition of the whole or an important part of other companies that has a material impact on the Companys business-Conclusion,alteration,or rescission of contracts regarding leasing the whole business,giving a manda
216、te to manage such business or sharing with another party the entire profits and losses from the business or any similar contract-Ex post facto incorporation-Appointment or dismissal of directors-Issuance of stock below par value-Exemption of directors liabilities-Stock dividends-Decision to offer st
217、ock options-Remuneration of directors-Election of chairman of the general meeting of shareholders(in the case when the Board is required to appoint the chairman of the meeting)-Appointment of a person to convoke the general meeting of shareholders(in the case when the Board is required to appoint th
218、e chairman of the meeting)-Other matters to submit to the general meeting of shareholders 2.Matters related to management-Establishment of basic principles of the Companys management-Approval of management plans,quarterly reports,and semi-annual reports -22-Appointment or dismissal of compliance off
219、icers,and establishment,revision,or abolishment of compliance guidelines 3.Matters related to assets or financial affairs -Transfer of legal reserve to capital-Matters related to issuance of shares Issuance of new shares Issuance of convertible bonds and bonds with rights to subscribe for new shares
220、-Acquisition,disposition,or retirement of treasury stocks-Approval of related party transactions,etc.Transactions made with related parties as defined in the Monopoly Regulation and Fair Trade Act or large-scale internal transactions for related parties as designated in Article 26 of the same Act Tr
221、ansactions listed in Article 542-9 Section 3 of the Commercial Act with majority shareholders(including their related parties)or related parties(excluding transactions of which the total value has been approved by the Board,in accordance with Section 5 Clause 2 of the Article)-Decision to offer stoc
222、k options(excluding directors)-Investment in or disposal of equity in other companies with a value of 2.5%of the total equity-Direct overseas investments with a value of over 2.5%of the total equity-Asset revaluation-Stock split or reverse split-Material changes of accounting standards-New debt guar
223、antees or collateral issuances with a value of over 2.5%of the total equity Collateral:Only in the case of providing collateral for others Guarantee:Excludes performance guarantee(e.g.,bid,contract,defect,difference guarantee)and tax payment guarantee -Loan contract with a value of over 5%of the tot
224、al equity-Listing of its securities on overseas stock exchange-Important matters when setting up or withdrawing from a fund for stock buyback-Shares forfeited in a capital increase-Provisional payment or loan with a value of over 0.5%of the total equity-Donation,contribution,or sponsorship of over K
225、RW 1 billion per year 4.Matters related to the Board,Board committees,etc.-Approval of Director holding a position in another company of a competitive and/or similar business field to the Company,and approval of transactions between a Director and the Company-Appointment of the Chairman of the Board
226、-Appointment of the CEO and decision to appoint of co-CEOs-Appointment and removal of directors to positions and responsibilities-Establishment of committees and appointment or removal of committee members 5.Others-Amendment and abolishment of the Regulations of the Board of Directors and the regula
227、tions of each committee-Other matters provided for by relevant laws and regulations or the Articles of Incorporation,matters delegated by general meeting of shareholders,and matters deemed necessary by the CEO(ii)Matters to be resolved by the Board other than those mandated by relevant laws The Comp
228、anys Articles of Incorporation and regulations of the Board of Directors stipulate that important matters,in addition to matters that are mandated by law,to be reviewed and approved by the Board.A prime example is the approval process for business management plans for the next year.The plan receives
229、 final approval at the Board so that the direction of the business is sufficiently discussed and opinions are collected.It is approved before quarterly and half-year reports are submitted,enabling a review on the implementation of management plans.In addition,all donations and social contributions o
230、ver KRW 1 billion are to be resolved by the Board,enhancing the transparency of operating donations and social contribution funds and compliance of our management.Moreover,matters delegated at the general meeting of shareholders or deemed necessary by a CEO can be added to the subject of deliberatio
231、n at the Board,ensuring that the Board reviews a variety of matters other than what is included in the Articles of Incorporation and regulations of the Board.-23-Matters to be reviewed and resolved by the Board in accordance with the Companys Articles of Incorporation and regulation of the Board,alt
232、hough not mandated by the laws,are as follows:1.Matters related to management,etc.-Resolution and revision of basic policy for business management-Approval of business plans,and quarterly and half-year reports-Establishment of factories,branches,representative offices or business offices in and outs
233、ide the country 2.Matters related to finance,etc.-Acquisitions or disposals of equity investments with a value over 2.5%of the total equity-Direct overseas investments with a value over 2.5%of the total equity-Re-evaluation of asset-Significant changes in accounting standard-New debt guarantee or co
234、llateral issuance with a value over 2.5%of the total equity Collateral:Only in the case of providing collateral for others Guarantee:Excludes performance guarantee(e.g.,bid,contract,defect,difference guarantee)and tax payment guarantee-New credit agreement contract with a value over 5%of the total e
235、quity-Listing in overseas stock market-Important matters regarding application for or termination of treasury fund at investment and trust company -Loans and provisional payments over 0.5%of total equity -Annual donation,contribution,sponsorship over KRW 1 billion 3.Agenda items to be submitted to t
236、he AGM 4.Other matters delegated at the general meeting of shareholders and matters deemed necessary by a CEO (iii)Delegation of authority The Board can establish committees under the Board and delegate certain responsibilities to the committees in accordance with Article 28-2 of the Articles of Inc
237、orporation and Article 11-2 of the Regulations of the Board of Directors.Also,in accordance with Article 11 of the regulations of the Board,the decision can be delegated to a committee within the Board through a Board resolution,except as stipulated by relevant laws or Articles of Incorporation.Exec
238、ution of matters resolved at board meetings is led by the Companys CEO.Management Committee 1.General management-Annual or mid-to long-term management policy and strategy-Key management strategy -Business planning and restructuring-Establishment,relocation,and withdrawal of overseas branches and cor
239、porations-Initiating cooperative efforts,such as strategic partnerships with foreign companies-Acquisition or disposal of domestic and overseas subsidiaries(provided the value of the transaction exceeds 0.1%of total equity)-Other major management matters-Establishment,relocation,and withdrawal of br
240、anches and operations-Appointment or dismissal of supervisors-Suspension or shutdown of production over 5%of the total production in the recent year-Licensing agreements,technology transfers,and technology partnerships of over 0.5%of the total equity-Acquisitions and transfers of patents related to
241、new material and new technology of over 0.5%of the total equity-Collection and destruction of products corresponding to over 5%of the total sales in the recent business year-Contracting for over 5%of the total sales in the recent business year-Contracting or canceling of single sales agencies and su
242、ppliers over 5%of the total sales in the recent business year -24-Setting basic principles of organization management-Decision making on basic principles and any changes related to wages,bonuses,and fringe benefits-Appointments,dismissals,and changes of transfer agents-Closing of the shareholder reg
243、ister and setting the reference date-Establishing corporate guidelines for business and management related activities 2.Matters related to finance-Acquisitions or disposals of equity investments with a value no less than 0.1%and less than 2.5%of the total equity-Direct overseas investments with a va
244、lue no less than 0.1%and less than 2.5%of the total equity-New debt guarantee(excluding extension of period)or collateral issuance with a value no less than 0.1%and less than 2.5%of the total equity Collateral:Only in the case of providing collateral for others Guarantee:Excludes performance guarant
245、ee(e.g.,bid,contract,defect,difference guarantee)and tax payment guarantee-New credit agreement contract(excluding extension of period)with a value no less than 0.1%and less than 5%of the total equity-Approval of related party transactions:Related party transactions with affiliates involving cash(lo
246、ans and provisional payments),equity(stocks and bonds)or assets(such as real estate and intangible property rights)with a value no less than KRW 3 billion and less than 5 billion,as defined in the Monopoly Regulation and Fair Trade Act Excluding cases where existing contracts are renewed without sig
247、nificant changes.-Insurance of Corporate Bond -Acquisition and disposal of real estate with a value of over 0.1%of the total equity,provided the transaction is with the third party-Any matters that the CEO deems necessary and important for the business(e.g.,capex)3.All other matters except for those
248、 delegated to the Board and other committees in accordance with regulations of the Board.Audit Committee 1.Audit overall business of the Company,including tasks performed by the Board and the CEOs.2.Request Directors or employees to submit reports on the business operated by the Company or investiga
249、te the businesses or assets of the Company.3.Directors shall report to the committee immediately if they find any risks that can have a material impact on the Company.4.Any other authority granted to the committee by relevant laws and regulations,the Articles of Incorporation or a Board resolution I
250、ndependent Director Recommendation Committee 1.Recommends Independent Director candidates to the Board to be presented at a general meeting of shareholders.Related Party Transactions Committee 1.Receives reports on related party transactions,conducts preliminary reviews on related party transactions
251、 exceeding KRW 5 billion before submission to the Board,and resolves transactions deemed significant by the secretary of the Committee 2.Right to order investigation of details on related party transactions 3.Right to propose corrective measures for related party transactions that are subject to ser
252、ious violations of the law and regulations of the Company Compensation Committee 1.Propose a remuneration limit for Directors at the AGM 2.Establish a Director remuneration system 3.Other matters delegated by the Board Sustainability Committee 1.Matters related to sustainability management -25-Key s
253、trategies and policies on sustainability management-Report on key activities for sustainability management including environment,society,and governance-Plans for publishing the Companys Sustainability Report 2.Matters related to enhancing shareholder value-Preliminary review on shareholder return po
254、licies-Report on key issues related to shareholder rights and interest 3.Other matters that may significantly impact sustainability management and shareholder value that are deemed necessary for the Committee to discuss 4.Matters related to the establishment,composition,and operation of organization
255、s under the Committee,including research groups,councils,etc.5.Other matters delegated by the Board B.Effectiveness of Board performance As the top decision making body of the Company,the Board supports executives to facilitate proper decision making and effectively oversees the work of the executiv
256、es;it resolves important matters in addition to what is stipulated by the law and Articles of Incorporation and establishes committees which are delegated to review major issues.2)CEO succession plan(Specific Principle 3-)The Board of Directors should establish and implement a policy on the successi
257、on of chief executive officers(including an emergency nomination policy)and continue to improve these policies.(i)Establishing CEO succession plan and executor of the plan The Companys CEOs must possess excellent management skills;have abundant business experience and related knowledge;provide leade
258、rship that enables setting a clear vision for Company employees as well as external stakeholders,including shareholders;demonstrate an innovative mindset;and not fall under criteria for disqualification in accordance with the lawe.g.,the Commercial Act.Considering these qualities cannot be developed
259、 within a short period of time,we operate a system to nurture potential candidates and to systematically expand their roles based on high-level evaluation processes and training strategies.In order to promptly respond to unexpected events or changes in the business environment,we manage a pool of ca
260、ndidates from various backgrounds.The CEO succession procedure is as follows:From the pool of CEO candidates,who have been receiving training,the person best fitting the position with management and leadership competencies is recommended to the Board of Directors.Then the Board reviews the eligibili
261、ty and confirms the candidate.Once the candidate is appointed as an Executive Director at the general meeting of shareholders,the Board conducts a final review and elects the person as CEO.If the CEO is unable to carry on with the position for any reason,including personal affairs,an acting CEO will
262、 be designated immediately as per the Articles of Incorporation.If it is necessary to appoint a new CEO based on the management environment,the succession procedure will be promptly implemented.Former CEOs may work as a non-registered executive,or sign a contract as an on-site advisor or consultant
263、after retiring,to support succession activities.(ii)Selection,management,training of candidates The Company selects individuals to be included in the CEO candidate pool from our executives through an eligibility review every year.The two categories of the pool are:Ready now for candidates able to as
264、sume the role of CEO after 1-2 years of training;and Ready Later for candidates who will be ready in 3-5 years.The candidate pool is put together through discussions among key executives,including the CEOs.A candidate considered the best fit for a vacant CEO position,based on the strategic role the
265、person has to play at the time,is recommended to the Board of Directors.Executives who are selected to the CEO candidate pool receive training in the Samsung business Leader Program(SLP).The program includes basic training to nurture the comprehensive competency necessary for the next-generation CEO
266、,such as management strategies,leadership,and global competencies.On top of the basic training,candidates are provided with customized training,including job rotation to strengthen business experience and knowledge.-26-(iii)Training Sessions In 2021,ten executives in the pool of next-generation CEO
267、candidates participated in the SLP and gathered to receive four,different week-long training sessions from April to October 2021.3)Internal control policy of the Board of Directors(Specific Principle 3-)The Board of Directors should establish and implement internal control systems(risk management,co
268、mpliance,internal accounting management,disclosure information management,etc.)and continue to improve these policies.(i)Risk management A companys operation is continuously exposed to myriad risks that can occur in the business environment such as those related to the business,finance,and environme
269、ntal safety.Risks related to the Companys management are managed at a fundamental level,and are addressed by relevant departments in the Company.However,issues of great importance are broken down by characteristic of the risk,and the Board and its committees are entrusted to supervise such issues.Th
270、e roles and responsibilities of the Board and its Committees to manage risks are distinctly divided,with the Board overseeing changes in policies and regulations as well as the Companys overall business conditions;the Management Committee reviewing business operations;the Audit Committee supervising
271、 financial matters,including accounting transparency;the Related Party Transactions Committee managing risks in compliance with laws and ethics related to transactions with subsidiaries;and the Sustainability Committee reviewing risks of issues that may significantly impact shareholder value,such as
272、 those related to corporate social responsibility and shareholder return policy.In particular,in July 2021,the Governance Committee was reorganized to the Sustainability Committee to strengthen the Boards roles and responsibilities in sustainability management,including management of non-financial r
273、isks.The Sustainability Committee performs the responsibilities of the previous Governance Committee,such as implementing corporate social responsibility and enhancing shareholder value,and it expanded its discussions to agendas related to ESG,such as those related to climate change,circular economy
274、,labor rights,diversity,supply chain,and ethical management,thereby reinforcing its role to provide direction for the Companys sustainability management and monitoring its achievements.To continue to secure market competitiveness as a leading global IT company and manage comprehensive risks across t
275、he whole company,including preemptively identifying external risks and performing the role as a control tower when unexpected issues arise,Samsung in 2022 newly established a Business Risk Management Group under the Corporate Management Team of the Corporate Management Office.The Company has establi
276、shed and is operating a system in which,upon discovery of a risk,relevant departments are summoned,a T/F is formed,and,after countermeasures are established,support is provided for executives in their decision making.Moreover,also in 2022,we further reinforced the Sustainability Council,putting it u
277、nder direct oversight of the CEO;and the executives review various issues related to sustainability management,such as environment,social contribution,labor rights,health and safety,and ethical and compliance management,and subsequently report to the Board and Sustainability Committee depending on i
278、ssues.Furthermore,we have an Internal Control Management Group that manages and operates regulations on internal accounting management,and we have established and are operating an internal accounting management system to increase the effectiveness and enhance the transparency of accounting informati
279、on.Through the system,key tasks were broken down into 15 areas,the core control items are regularly evaluated and monitored,and the CEO reports the results to the Audit Committee,Board,and the AGM every year.(ii)Compliance,internal accounting,and disclosure Since 2012,we establish compliance standar
280、ds and appoint the Head of Compliance Team as a Compliance Officer through a resolution of the Board,enabling compliance activities,in accordance with Article 542-13 of the Commercial Act and Article 10 of the regulation of the Board of Directors.In 2020 in particular,the Company implemented measure
281、s to strengthen legal compliance:we moved the Compliance Team,previously under the Legal Affairs Office,to directly under the leadership of the CEOs,strengthening its independence;and we also revised our compliance standards.As a result,the Compliance Officer reports to the Board at least twice per
282、year on his or her activities,which include compliance oversight results,measures for establishing and maintaining a culture of compliance,and evaluations on the validity of the compliance control system.Also,the Officer attends all Board meetings and Board Committee meetings,such as Management Comm
283、ittee meetings,to support major decision making procedures.In order to ensure credibility in the Companys financial information and disclosures,we operate an internal accounting management system based on an internal accounting management regulation established in accordance with Article 8 of the Ac
284、t on External Audit of Stock Companies,resolved by the Board in December 2001.The Company revised its internal accounting management regulations through a board -27-resolution in January 2019,as the Act on External Audit of Stock Companies was revised completely in October 2017 and went into effect
285、in November 2018.In accordance with internal regulations,we have established a department which oversees the internal accounting management system activities and a department which supports tasks of the Audit Committee such as assessment of the internal accounting management system.Also,CEOs conduct
286、 an annual review on the effectiveness of the internal accounting management system and report the results at the general meeting of shareholders.SEC strictly complies with the relevant laws and is working to ensure that accurate information is disseminated fairly via public disclosures.The IR team
287、and the Corporate Finance&Accounting Team,being responsible for disclosure activities,designate one supervisor and two deputy supervisors for public disclosure who participate in training sessions to continuously enhance their expertise.In addition,in order to strengthen the internal management stru
288、cture,SEC established a regulation regarding management of publicly disclosed information,which determines the procedures of public disclosure and details relevant to managing publicly disclosed information.The responsible teams run weekly checks based on an internal disclosure management system to
289、see if disclosures are required and notify the persons responsible for public disclosure activities if necessary.(iii)Other internal control policies We appointed a Chief Safety Officer(CSO)for each the DX Division and the DS Division in December 2021 and February 2022,respectively,and as of the dis
290、closure date,the CSO oversees matters related to health and safety.The CSO has authority to make independent decisions,supervise,execute budgets,and appoint personnel on matters related to health and safety to create a safe environment for each worksite,prevent defects in products and equipment,and
291、protect the health and safety of workers.-28-(2)Board composition(Core Principle 4)Composition of the Board The Board of Directors should be constituted to enable efficient decision making and oversight of management.Directors should be appointed in a transparent manner to reflect the opinions of sh
292、areholders.1)Organization of the Board and Independent Directors(Specific Principle 4-)The Board of Directors should be constituted to enable effective and thorough discussions and decision making,and should have a sufficient number of Independent Directors to be able to work independently from exec
293、utives and controlling shareholders.A.Board composition(i)Board of Directors,Board committees,support team organization A general meeting of shareholders is one of the Companys highest decision-making body.It decides on and approves important issues concerning the Companys management,including the e
294、lection of Directors,amendments to the Articles of Incorporation,approval of financial statements,etc.The Board oversees the managements tasks and makes resolutions on matters provided for by the relevant laws and regulations or the Articles of Incorporation,on matters delegated by a general meeting
295、 of shareholders,and on important matters concerning basic policies and execution of the Companys business.To further enhance board expertise,the Board delegates authority to six committees,with related departments tasked in a supporting role.-29-HR Team(7 members)Management Team(4 members)Auditing
296、Team(4 members)Internal Accounting Support Group(3 members)Public Affairs Team(4 members)CEOs(DX,DS)Execution Organization General Meeting of Shareholders The Board of Directors(5 Executive Directors,4 Independent Directors)Sustainability Committee(4 Independent Directors)Independent Director Recomm
297、endation Committee(1 Independent Director)Compensation Committee(2 Independent Directors)Management Committee(5 Executive Directors)Audit Committee(3 Independent Directors)Related Party Transactions Committee(3 Independent Directors)Sustainability Council(3 members)On April 20,2022,Wha-jin Han vacat
298、ed her position as an Independent Director citing personal reasons,and Byung-gook Park passed away on May 17,2022.Thus,the Company will appoint new Independent Directors at the first general meeting of shareholders convened after the vacating of the positions.-30-(ii)Board Composition The list of Di
299、rectors as of the disclosure date is as follows.Name Sex(Age)Position/role Term Expertise Career Jong-hee Han M(60)Executive Director Head of Management Committee Mar 18,2020 Mar 17,2023 DX Division Vice Chairman&CEO Head of DX(Device eXperience)Division Kye-hyun Kyung M(59)Executive Director Manage
300、ment Committee Mar 16,2022 Mar 15,2025 DS Division President&CEO Head of DS(Device Solution)Division Tae-moon Roh M(53)Executive Director Management Committee Mar 16,2022 Mar 15,2025 MX Business President&CEO Head of MX(Mobile eXperience)Business Hark-kyu Park M(57)Executive Director Management Comm
301、ittee Mar 16,2022 Mar 15,2025 Corporate management President&Head of Corporate Management Office Jung-bae Lee M(55)Executive Director Management Committee Mar 16,2022 Mar 15,2025 Memory Business President&Head of Memory Business Han-jo Kim M(65)Chairman of the Board,Independent Director Head of Audi
302、t Committee Head of Sustainability Committee Related Party Transactions Committee Compensation Committee Mar 20,2019 Mar 19,2025(two consecutive terms)Finance,social contribution Former Chairman of Hana Foundation Former Vice-Chairman of Hana Financial Group Sun-uk Kim F(69)Independent Director Head
303、 of Related Party Transactions Committee Audit Committee Sustainability Committee Mar 23,2018 Mar 22,2024(two consecutive terms)Law Professor Emeritus of School of Law at Ewha Womans University Former Minister of Government Legislation Jeong Kim M(61)Independent Director Head of Independent Director
304、 Recommendation Committee Audit Committee Related Party Transactions Committee Sustainability Committee Mar 23,2018 Mar 22,2024(two consecutive terms)IT,business management President of Kiswe Mobile Former president of Alcatel-Lucent,Bell Lab Jun-sung Kim M(54)Independent Director Compensation Commi
305、ttee Sustainability Committee Mar 16,2022Mar 15,2025 Finance,investment CIO of National University of Singapore Endowment Fund Former Managing Director of Government of Singapore Investment Corporation(GIC)On April 20,2022,Wha-jin Han vacated her position as an Independent Director citing personal r
306、easons,and Byung-gook Park passed away on May 17,2022.Thus,the Company will appoint new Independent Directors at the first general meeting of shareholders convened after the vacating of the positions.-31-Committee Composition Main role of the committee Note Title Position Name Sex Concurrent Managem
307、ent Committee(A)Head Executive Director Jong-hee Han M-Resolve matters related to management in general,finance,and those delegated by the Board of Directors Member Executive Director Kye-hyun Kyung M-Member Executive Director Tae-moon Roh M-Member Executive Director Hark-kyu Park M-Member Executive
308、 Director Jung-bae Lee M-Independent Director Recommendation Committee(B)Head Independent Director Jeong Kim M C,D,F Evaluate candidates for Independent Directors on their independence,diversity,and competence and make recommendations Audit Committee(C)Head Independent Director Han-jo Kim M D,E,F Au
309、diting on Company-wide activities,including financial state Member Independent Director Sun-uk Kim F D,F Member Independent Director Jeong Kim M B,D,F Related Party Transactions Committee (D)Head Independent Director Sun-uk Kim F C,F Enhance transparency of management by voluntary compliance to fair
310、 transaction Member Independent Director Jeong Kim M B,C,F Member Independent Director Han-jo Kim M C,E,F Compensation Committee (E)Member Independent Director Han-jo Kim M C,D,F Secure objectivity and transparency of the process determining Director remuneration Member Independent Director Jun-sung
311、 Kim M F Sustainability Committee(F)Head Independent Director Han-jo Kim M C,D,E Governance Committee was expanded and reorganized in July 2021 Work to fulfill social responsibility and enhance shareholder value by pursuing sustainability management in the areas of ESG Member Independent Director Su
312、n-uk Kim F C,D Member Independent Director Jeong Kim M B,C,D Member Independent Director Jun-sung Kim M E Wha-jin Han was appointed on March 16,2022 and was a member of Independent Director Recommendation Committee and Sustainability Committee,but she vacated her positions on April 20,2022,citing pe
313、rsonal reasons.Byung-gook Park was appointed on March 17,2022 and was a member of Independent Director Recommendation Committee,Compensation Committee,and Sustainability Committee,but he passed away on May 17,2022.(iii)Independent Director number,portion,consecutive terms,etc.The Board shall have at
314、 least 3 but no more than 14 Directors,in accordance with Article 24 of the Articles of Incorporation.While having more than 3 Directors is in accordance with Article 383 of the Commercial Act,we believe,considering the size of the company,that the maximum number should not exceed 14 to ensure effic
315、ient decision-making at and management of meetings.As of the disclosure date,the Board consisted of 9 Directors,of which 4(or 44%)are Independent Directors.On March 16,2022 at the 53rd AGM,the Company appointed 3 Independent Directors to ensure that Independent Directors constitute a majority of the
316、 Board out of a total of 11 Directors,but on April 20,2022,Wha-jin Han vacated her position as an -32-Independent Director citing personal reasons,and Byung-gook Park passed away on May 17,2022.Consequently,Independent Directors temporarily do not constitute a majority of the Board as of the disclos
317、ure date.Thus,pursuant to Article 542-8 Paragraph 3 of the Commercial Act,new Independent Directors will be appointed at the first general meeting of shareholders convened after the vacating of the positions.Each director serves a 3-year term,although Independent Directors can serve 2 consecutive te
318、rms.At the AGM in 2021,Director Sun-uk Kim and Jeong Kim were reappointed and are serving their second term,and at the AGM in 2022,Director Han-jo Kim was reappointed and is serving his second term.(iv)Separation of CEO and Board Chairman positions Following a board resolution in March 2018,the role
319、s of CEO and Chairman of the Board were separated to secure independence of the Board from executives and controlling shareholders.In February 2020,an Independent Director was appointed as the Chairman of the Board through a board resolution.In March 2022,Independent Director Han-jo Kim was appointe
320、d as the Chairman of the Board through a board resolution.B.Board independence and diversity The Board is composed in a way that promotes efficiency in meetings and decision making.However,on April 20,2022,Wha-jin Han vacated her position as an Independent Director citing personal reasons,and Byung-
321、gook Park passed away on May 17,2022,so the Board is temporarily unable to fulfill the required ratio of Independent Directors prescribed in Article 542-8 Paragraph 1 of the Commercial Act.Pursuant to Article 542-8 Paragraph 3,new Independent Directors will be appointed at the first general meeting
322、of shareholders convened after the vacating of the positions.The Company formed the Board striving to ensure diversity,considering factors such as expertise,sex,birthplace,nationality,etc.when appointing Directors.Independent Directors are chosen from those eligible in accordance with relevant laws
323、with expertise and experience in finance,law,IT,ESG,investment,etc.,who can oversee management from an objective and external perspective.The Company separated the roles of Board Chairman and CEO to enhance board independence,and an Independent Director was appointed as Chairman of the Board.In addi
324、tion,Independent Directors hold meetings that exclude Executive Directors to discuss current issues,such as increasing shareholder value,and freely express opinions among themselves.2)Board expertise and sense of responsibility(Specific Principle 4-)The Board of Directors should be composed of exper
325、ts in various fields whose experience and sense of responsibility enable significant contributions to the management of the Company.A.Committee status(i)Expertise,sense of responsibility and diversity of the Board A rapidly changing management environment requires the Board of Directors to make stra
326、tegic decisions.Therefore,each Director must be equipped with expertise,a sense of responsibility,and the ability to offer diverse opinions.To that end,the head of DX Division and head of DS Divisionour mainstay business divisionsparticipate as Executive Directors to practice responsible management
327、in accordance with our internal policy.Alongside our Executive Directors,Independent Directors,who are experts in a variety of fields,including finance,law,IT,ESG,and investment,oversee business management from a balanced and independent perspective.The Company encourages diversity and does not limi
328、t Independent Director positions by nationality,gender,birthplace,religion etc.,to ensure the Board makes business decisions from a balanced perspective.Thus,we are doing our utmost to secure expertise,a sense of responsibility,and diversity of the Board.Executive Director Jong-hee Han is a top expe
329、rt in the development of display technology,and he played a pivotal role in taking Samsungs TV business to the pinnacle of the global market and keeping it there for sixteen consecutive years.He was appointed as the CEO and Head of the DX Division,which was created by merging the Consumer Electronic
330、s(CE)Division and IT&Mobile Communications(IM)Division in 2022.In 2022,Executive Director Kye-hyun Kyung was also appointed as CEO in recognition of his expertise in technology and leadership capabilities as an expert in semiconductor,having developed core memory technologies,including the worlds fi
331、rst Direct Rambus DRAM and the worlds first Three-Dimensional Vertical NAND Flash Memory.Executive Director Tae-moon Roh is an expert in smartphones who developed Galaxy S,and as the Head of MX Business,delivered record results in 2021the highest since 2014achieving KRW 104 trillion in revenue by in
332、troducing innovative products such as S21 and foldables,and by reinforcing wearables,such as Galaxy Buds and Galaxy Watch.-33-Executive Director Hark-kyu Park is a leading finance expert,having held numerous key positions in core businesses,including corporate manager in Mexico,Head of the VD Busine
333、ss Support Group,Head of the MX Business Support Team,Head of SDS Business Operation,and Head of Corporate Management Office of the DS Division.As the Head of Corporate Management Office of the DX Division,who oversees the whole company,his core responsibilities include planning,finance,and HR,and he maximizes management achievements by managing resources effectively and by closely supporting busi