Contents Ⅰ. Company Overview Ⅱ. Profitability Ⅲ. Financial Status Ⅳ. Longterm Outlook Ⅰ. Company Overview Ⅱ. Profitability Ⅲ. Financial Status Ⅳ. Longterm Outlook

Ⅰ. Company Overview

Page 4 1. Establishment Background To establish a world class hotel with a modern Korean ambience and hospitality Combination of traditional and modern comfort, with state of the art technology and facilities to maximize comfort and service for the business traveler Combination of traditional and modern comfort, with state of the art technology and facilities to maximize comfort and service for the business traveler To raise the standard of the hotel services industry in Korea A gateway to Korean cultural exchange of business and the arts  Upon the request of the government, Samsung purchased the government operated State Guest House to build an international hotel ☞ Became a Samsung affiliate in 1973

Page 5 2. Growth Company History Conception of The Hotel Shilla, Seoul Grand Opening of the Hotel Shilla, Seoul Grand Opening of the Duty Free Shop Opening of the Cheju Shilla (330 rms) Publicly Listed on the KSE Expansion of the Cheju Shilla (99 Rms) New Cheju Duty Free Shop Opened Top Accreditations Major Events Sep Institutional Investor Magazine - World`s 39 th Best Hotel - World`s 39 th Best Hotel Oct Business Traveler Magazine - Seoul`s No.1 Hotel - Seoul`s No.1 Hotel Nov Asian Business Magazine - Asia`s No.1 Hotel - Asia`s No.1 Hotel Jan Leader`s Magazine - World`s Best 10 CEOs of - World`s Best 10 CEOs of Hotel Business Hotel Business 1980 Host of Miss Universe Pageant 1983 Host of IPU General Meeting 1985 Host of IBRD, IMF Meeting 1986 Host of World Trade Ministers Meeting 1988 Official Hotel HQ for the 88 Olympics 1999 Host of IOC General Meeting 2000 Host of South-North High Rank Officials Meeting

Page 6 3. Ownership Structure As of 31, Dec  Samsung Japanese investors Minority Sharehoders Employees Foreign Investors

Page 7 4. Divisions Status Hotel Shilla (*Seoul) Hotel Shilla (*Cheju)  Rooms : 511 (Avg. Size 41.3m² / room)  Restaurants & Cafes : 10 (3,317m²)  Banquet Halls : 13 (3,056m²)  Fitness Club : 5,313m²  Employees : 825  Lot size : 92,400m²  Hotel size : 66,000m²  Rooms : 429 (Avg. Size 44.6m² / room)  Restaurants & Cafes : 5 (1,548m²)  Banquet Halls : 9 (2,327m²)  Fitness Club : 5,594m²  Employees : 333  Lot size : 102,300m²  Hotel size : 56,100m² Duty Free Shop Food Services  Employees : 248  Total area : 7,065m² - Seoul : 46 Shops 3,726m² - Seoul : 46 Shops 3,726m² - Cheju : 31 Shops 3,369m² - Cheju : 31 Shops 3,369m²  Employees : 231  Total Restaurants : 16 - Samsung Plaza : 5 - Samsung Plaza : 5 - Special Restaurants : 7 - Special Restaurants : 7 - Club : 2 - Club : 2 - Bakery : 2 Bakery - Bakery : 2 Bakery

Ⅱ. Profitability

Page 9 1. Profit & Loss Statement For 1H H H 2001 Y-o-Y % Sales % Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Duty Free Shop Food Services % % 15.3 % 7.7 % Operating Income Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Duty Free Shop Food Services Income Before Tax Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Duty Free Shop Food Services Net Income (KRW bn, %)  Sales Growth : 9%, Income Growth before Taxes : 178%  Sales Growth : 9%, Income Growth before Taxes : 178%

Page Estimated Profit & Loss Statement (FY2000~2002)  Estimated Operating Income Margin : 14%  Estimated Operating Income Margin : 14%  EPS : KRW 1,000/share (2001 FY)  EPS : KRW 1,000/share (2001 FY)FY2000FY2001FY2002Sales Hotel Opetaions (Seoul) Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Hotel Opetaions (Cheju) Duty Free Shop Duty Free Shop Food Services Operating Income Hotel Opetaions (Seoul) Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Hotel Opetaions (Cheju) Duty Free Shop Duty Free Shop Food Services Food Services Income Before Tax Hotel Opetaions (Seoul) Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Hotel Opetaions (Cheju) Duty Free Shop Duty Free Shop Food Services Food Services Net Income (KRW bn, %)

Ⅲ. Financial Status

Page 12  Realized ROE over the Bank Interest Rates  Changing to Negative Net Borrowings in 2002 FY2000FY2001FY2002 Total Assets (Non-Current Assets) (Non-Current Assets)(488.8)(515.6)(504.7) Total Liabilities (Debt/Equity Ratio %) (Debt/Equity Ratio %) - Total Borrowings - Total Borrowings (Net Borrowings) (Net Borrowings) (Net Borrowings Ratio %) (Net Borrowings Ratio %)(66.7)215.2(111.4)(26.5)(51.2)114.6(69.6)(16.0)(50.1)114.2 (  7.4) - Stockholders’ Equity Capital Stock - Capital Stock - Capital Surplus - Capital Surplus (Asset Revaluation Reserves) (Asset Revaluation Reserves) - Retained Eearnings - Retained Eearnings (104.6) (104.6) (104.6)77.7 Index - ROE - EPS - EPS , ,300 (KRW bn, %)

Page 13 Ⅳ. Long Term Outlook

Page Long Term Management Plan & Major Projects  Maxmizing brand value  Upgrade high quality service and facilities  Pursuing optimal financial structure Long Term Management Plan Major Projects Target Date Description 2001 ~ Maintain solid Financial structure - Upgrade service and facilities - Establish marketing system - Reinforce strong points of Shillia Hotels 2003 ~ Retain top level service and knowledgeable personnel - Stabilize and expand existing businesses - Establish strategic e-business 2006 ~ Find a new profitable business (domestic & abroad) - Close-down non-performing businesses - Become a leading international hotel group

Page Vision Shilla (Seoul) Shilla (Cheju) Duty Free Shop BusinessDiversity World’s Best Hotel Luxurious Resort Hotel #1 DFS by Building Global Network Pursuit of Hotel related Businesses Mission Leader in Hospitality with Quality & Intergrity Vision Leading Hotel Group for the 21 st Century