1. 2001. 8. 23

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

3. Ⅰ. Company Overview

4. 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

5. Page 5 2. Growth Company History - 1973 Conception of The Hotel Shilla, Seoul - 1979 Grand Opening of the Hotel Shilla, Seoul - 1986 Grand Opening of the Duty Free Shop - 1990 Opening of the Cheju Shilla (330 rms) - 1991 Publicly Listed on the KSE - 1997 Expansion of the Cheju Shilla (99 Rms) - 2000 New Cheju Duty Free Shop Opened Top Accreditations Major Events Sep. 2000 Institutional Investor Magazine - World`s 39 th Best Hotel - World`s 39 th Best Hotel Oct. 2000 Business Traveler Magazine - Seoul`s No.1 Hotel - Seoul`s No.1 Hotel Nov. 2000 Asian Business Magazine - Asia`s No.1 Hotel - Asia`s No.1 Hotel Jan. 2001 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

6. Page 6 3. Ownership Structure As of 31, Dec. 2000  Samsung Japanese investors Minority Sharehoders Employees Foreign Investors

7. 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

8. Ⅱ. Profitability

9. Page 9 1. Profit & Loss Statement For 1H 2001 1H 2000 1H 2001 Y-o-Y % Sales198.0215.8 9.0 % Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Duty Free Shop Food Services 47.818.6112.119.547.717.8129.321.0 - 0.2 % - 4.3 % 15.3 % 7.7 % Operating Income 29.030.00.1 Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Duty Free Shop Food Services 13.14.312.40.111.72.515.70.1 - 1.4 - 1.7 3.30 Income Before Tax 10.328.618.3 Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Duty Free Shop Food Services 5.70.73.20.78.50.819.20.12.80.116.0 - 0.6 Net Income 7.120.012.9 (KRW bn, %)  Sales Growth : 9%, Income Growth before Taxes : 178%  Sales Growth : 9%, Income Growth before Taxes : 178%

10. Page 10 2. 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)FY2000FY2001FY2002Sales405.9459.7477.2 Hotel Opetaions (Seoul) Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Hotel Opetaions (Cheju) Duty Free Shop Duty Free Shop Food Services 95.140.3230.134.798.639.5278.543.1110.046.5273.642.3 Operating Income 58.063.973.8 Hotel Opetaions (Seoul) Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Hotel Opetaions (Cheju) Duty Free Shop Duty Free Shop Food Services Food Services20.98.725.82.522.26.533.81.430.910.429.92.3 Income Before Tax 22.758.775.1 Hotel Opetaions (Seoul) Hotel Opetaions (Seoul) Hotel Opetaions (Cheju) Hotel Opetaions (Cheju) Duty Free Shop Duty Free Shop Food Services Food Services5.50.715.21.215.63.037.92.230.49.532.62.1 Net Income 15.340.552.0 (KRW bn, %)

11. Ⅲ. Financial Status

12. Page 12  Realized ROE over the Bank Interest Rates  Changing to Negative Net Borrowings in 2002 FY2000FY2001FY2002 Total Assets 700.0658.2701.5 (Non-Current Assets) (Non-Current Assets)(488.8)(515.6)(504.7) Total Liabilities 281.2222.9234.2 (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 419.8435.3467.3 - Capital Stock - Capital Stock - Capital Surplus - Capital Surplus (Asset Revaluation Reserves) (Asset Revaluation Reserves) - Retained Eearnings - Retained Eearnings200.0207.9(104.6)33.3200.0207.9(104.6)45.7200.0207.9(104.6)77.7 Index - ROE - EPS - EPS3.63839.31,01211.61,300 (KRW bn, %)

13. Page 13 Ⅳ. Long Term Outlook

14. Page 14 1. 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 ~ 2002 - Maintain solid Financial structure - Upgrade service and facilities - Establish marketing system - Reinforce strong points of Shillia Hotels 2003 ~ 2005 - Retain top level service and knowledgeable personnel - Stabilize and expand existing businesses - Establish strategic e-business 2006 ~ 2010 - Find a new profitable business (domestic & abroad) - Close-down non-performing businesses - Become a leading international hotel group

15. Page 15 2. 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