Going Further Together

2017
ANNUAL REPORT
 Going Further Together

Hanwha Corporation

Achieving the Dream as World’s Leading Company

Established as the first Hanwha entity under the founding

philosophy of ‘contributing to the nation and society’,

Hanwha Corporation has realigned its business operations

to focus on explosives, defense, trade, and machinery, striving to

become a leading global company that promotes

contents the development of humanity and advances human values.

01 Going Further Together 04 Business Highlights 09 Financial Highlights 10 Board of Directors
11 Affiliates 14 Explosives Business 18 Defense Business 24 Trade Business 28 Machinery Business
32 Corporate Responsibilities 38 Global Network 40 Corporate Timeline 41 Financial Report
002 Going Further Together 2017 ANNUAL REPORT 003

Hanwha Corporation, Going Further Together Hanwha Corporation has played a crucial role in supporting the nation’s economic development

for the past sixty years. With our innovative endeavors to improve management efficiency, we
have realigned our business operations to focus on the Explosives and Defense Divisions as well as
our global expertise-based Trade Division. We successfully completed our merger with Hanwha
TechM (currently Hanwha Corporation/Machinery Division) in October 2014. We also

strengthened our position as the nation’s largest total defense contractor after launching Hanwha
affiliates in the defense sector: Hanwha Techwin and Hanwha Thales in June 2015, and
Hanwha Defense in May 2016. This has allowed us to move forward with our vision to be a global

top 10 defense industry player. Based on our broad business experience, we have also created new
core technologies, sustaining market growth and expansion abroad.
004 Business Highlights 2017 ANNUAL REPORT 005

E x p l o s i v e s

EXPLOSIVES

EXPLOSIVES The Explosives Division has Deeper Innovation

strengthened Hanwha Corporation’s
The root of foundation by succeeding in the first
localization of explosives ever in
Hanwha Korea. The Division is strengthening
its competitive edge in the domestic
Group market by revamping its business
DEFENSE Hanwha TRADE structure and developing R&D
Corporation capabilities, while working to secure
Hanwha Mining Services
Ammonium nitrate explosives, gunpowder, and
comprehensive blasting services,
particularly targeting large mines overseas.
Wider Growth
● Operation of mining services in Australia
● Operation of mining services in Indonesia

new growth momentum through ● Export of explosives plant to Vietnam

increased overseas ventures. ● Mining services in Latin America (in the planning stage)

MACHINERY

Major Results
The Explosives Division built four global
networks including those in Indonesia
and Singapore. This was achieved by
establishing subsidiaries in Australia and
Chile, which advanced the Division into

Business Highlights the mining service business in Australia as

well as Central and South America. That
said, the Division has been accelerating

in 2016 its overseas expansion after acquiring a

local mining service company in Australia.

Hanwha Corporation has four business divisions:

It also took steps to maximize its revenues
by strengthening its domestic business
explosives, defense, trade, and machinery. All of them are committed to helping to build
foundations. This involved launching a
a happier and healthier future for everyone.
range of new products, such as electronic
detonators, and continuously expanding
the business of raw materials for
explosives and applications.
006 Business Highlights
D e f e n s e
DEFENSE The Defense Division is continuously
expanding its existing portfolio of
Improving national precision guided munitions and
ammunitions, based on its expertise
security with and technology amassed for over
forty years. As the nation’s leading
advanced defense defense contractor, it is also
enhancing its global competitiveness
technology through active advancements into
global markets and partnerships with
leading global players.
Major Results
Achieved over 10% growth in
sales compared to 2015 through
commencement of 230mm-class MRL,
Chunmoo business, increase in export
sales and winning new development
business of precision guided munition
and ammunition.
2017 ANNUAL REPORT
Deeper Innovation
● Propulsion System
Developing cutting edge propulsion system, such as dual-
pulse rocket motor and DACS which rapidly improve
mobility and accuracy rate of precision guided munitions.
● Navigation System
Developing various types of integrated navigation system
including MEMS (Micro Electro Mechanical System), RLG
(Ring Laser Gyroscope), FOG (Fiber Optic Gyroscope), etc.
● Laser Equipment
Developing high energy laser technology for future Bearing/Agricultural. Furthermore,
projectile weapons including Laser Range Finder which
can be equipped on ground-based launchers, helicopters,
combat fighters, etc.
Wider Growth
● Pursuing synergy through expansion of interchange
among four defense units of Hanwha Group in the
areas of R&D, PR & marketing, purchasing, etc.
● Increasing depth in the business area as an expert of ● LPG station operation business
precision strike weapon systems through business
alignment among the affiliates.
● Strengthening competitive advantage in sales in the
strategic points including the Middle East and expanding
the range of export products.
007
T r a d e
TRADE Trade Division is concentrating Deeper Innovation
its effort on businesses such as
● Establishing stable profit basis through concentrating
Global Petroleum/Defense/Renewable its effort on businesses that it possesses competitive
Energy that it owns expertise above advantage/market leading capability.
Leading its competitors. Additionally, Trade ● Minimizing potential loss though establishment of
efficient enterprise risk management system and
Division is putting its effort in
Company establishing stable profit basis by
reinforcing its risk management capability.
● Preoccupying strategic markets and securing market
reinforcing businesses that it holds
market leading capability such as Steel/
leading capability though utilization and concentration of
effort onto global network.
concerning its global network, Trade Wider Growth
Division is strengthening its network
● Petroleum/Steel/Industrial Machinery/Merchandise Trade
and network’s profit basis by securing
● Defense weapons system supply/project business
expertise in core businesses such as ● Hospital system export business regarding Middle East
Petroleum/Defense and consistently and CIS region
exploring independent business ● Transportation infrastructure project business in
opportunities within its strategic Philippines
markets such as China, South East Asia ● Domestic energy plant supply business
and Middle East.
● Onshore oilfield operation business in California,
United States
● LNG Project in Qatar
● Resource development business including farming
Major Results project in Cambodia
Trade Division re-aligned its organizational
structure with focusing itself on
the businesses with expertise/core
competencies and after that, it focused
on improving its profit basis by enlarging
its export in core businesses such as
Petroleum/Defense/Renewable Energy.
Furthermore, Trade Division awarded
and carried out large scale projects such
as supplying automation facility toward
Chinese battery plant and supplying
medical facilities toward Kazakhstan
national university hospital.
008 Business Highlights
M a c h i n e r
MACHINERY The Division has created a range
of high-value equipment such as
Total engineering industrial machinery and machine
tools through continuous technological
solutions provider development with a focus on thermal,
automation, and precision processing
technologies. Based on its advanced
technologies in the aviation business,
the Division is also gaining recognition
as a leading global player in the areas
of aviation auxiliaries and application
components. It is introducing advanced
technologies through continuous
R&D, while helping to improve the
quality and productivity of domestic
and overseas companies.
Major Results
The Division enhanced its competitiveness
in aviation business by establishing
partnerships with global companies.
This included signing a contract
with UTAS for the export of aviation
components and an MOU with GE
for aviation maintenance. It is also
retaining the largest domestic market
share in the CNC automatic lathe sector
through customized machine tool
development and sales. The Division
has also won recognition for its
technology by successfully developing
solar cell production facilities while
striving to become a global solar cell
facility manufacturer in overseas markets.
2017 ANNUAL REPORT Financial Highlights 009
2016
y
2015
2014
Deeper Innovation
● Thermal Technologies
We supply thermal equipment systems used in a broad
range of areas, including steel and automobile
manufacturing, displays, and the environment.
We also provide high-efficiency industrial furnaces and
energy plant facilities by combining energy reduction, TOTAL ASSETS REVENUE OPERATING PROFIT NET PROFIT
154.9 47.1 1,686 1,289
vacuum, drive system, and process control technologies.
In addition, we have secured technologies for the
integrated operation of turn-key thermal equipment
projects. This involves cell process equipment KRW in trillions KRW in trillions KRW in billions KRW in billions
that is required for the photovoltaic business,
a key operation of the Hanwha Group.
● Automation Technologies 145.6 41.4 758 121
Our integrated automation technologies, ranging from (2015) (2015) (2015) (2015)
design and procurement to installation and post-
management, were instrumental in building the world’s
123.7 37.5 516 -163
first fully-automated tire handling system. We also design (2014) (2014) (2014) (2014)
and manufacture automotive powertrain that are the
core parts of automobile driving, based on flexible
installations and precision assembly technologies.
● Precision Processing Technologies
Our efforts in this field include (1) a 24-hour unmanned
production system that boasts 0.1um ultra-precision
control and 5/1,000-level roundness and cylindricity;
(2) machine tools with turning diameters ranging from
Ø3 to 38 that require extreme levels of precision and
combined processing; and (3) ultra- high-precision metal
Financial Highlights
processing for the production of aircraft hydraulic and
defense components. We boast a well-earned reputation
for expertise in a wide range of production processes,
from multi-axis machining to micro-electrical
Even in the global economic recession and gloomy business climate home
discharging machining.
and abroad, Hanwha Corporation has been continuously endeavoring to renovate
Wider Growth itself as a sustainable and ever-growing company.
● Strengthen global competitiveness through the
Machinery Division’s thermal, automation,
and precision processing technologies.
● Increase competitiveness in plant logistics automation,
and aerospace businesses.
010 Board of Directors 2017 ANNUAL REPORT Affiliates 011

Leading the growth of Working with our Hanwha Life Insurance

Hanwha Life Insurance is South Korea’s oldest life insurer and

Hanwha
the second-largest in the country. It was the nation’s first large-sized
affiliates to lead insurer to be listed on the Korea stock exchange. It is evolving into
a top-flight global insurance company by constantly developing

Corporation the world market, its business capabilities, adding to its price competitiveness, and
strengthening its position in the global marketplace.

to become a top global sharpening our Date of Establishment

President & CEO
September 1946
Nam Gyu Cha
Major Businesses Life insurance, asset management,

player with Strategic competitive edge

Website
mortgage loans, personal loans
www.hanwhalife.com

decision making Hanwha Corporation, the parent company

of Hanwha Group, engages in a broad range
of businesses spanning the manufacturing,
construction, finance, services, and leisure
industries, with *60 domestic and 248 global
affiliates. Through the Hanwha connection,
Standing Directors Non-standing Directors Committees our affiliates are efficiently responding to new FINANCIAL INFORMATION (KRW in billions)

Yang Soo Choi Eui Don Hwang The Audit Committee market environments while enhancing our FY2016 FY2015
Representative Director Outside Director The committee evaluates the internal control global competiveness. We remain committed Total assets 1,053,313 988,554
Currently, Representative Director, Formerly, Chief of Staff, Korean Army system, performs audits on accounting and to advancing further into the world, and to Total liabilities 971,788 902,831
Explosives Division, relevant activities, and approves the appointment
providing creative leadership within the group, Capital stock 43,427 43,427
Hanwha Corporation Suk Hun Kang of external auditors.
Outside Director based on the solid corporate management Other paid-in capital -4,388 -4,388
Tae Jong Lee Currently, Attorney at Yulchon LLC The Outside Director foundations and expertise that we have Other capital composites 15,690 21,742
Representative Director
Recommendation Committee accomplished over the past sixty years. Retained earnings 26,797 24,943
Currently, Representative Director, Jong Ho Hong Total shareholders’ equity 81,525 85,724
Consisting only of outside directors, the committee * As of December, 31, 2016
Defense Division, Outside Director
Hanwha Corporation Formerly, Representative Director,
aims to ensure fairness and transparency in the Sales 159,965 156,432
recommendation process for outside director Operating income 3,048 4,806
Hanwha Energy Plaza
Youn Chul Kim candidates. Income before income taxes
4,090 5,742
Representative Director Chang Lok Kim The Related Party Transactions
expenses
Currently, Representative Director, Outside Director Net income 3,151 5,003
Machinery Division, Formerly, Governor of Korea Committee Shareholdings1 18.15% 21.67%
Hanwha Corporation Two thirds of the members of this committee,
Development Bank Controlling interests2 47.00% 47.00%
at a minimum, shall be outside directors. It was
Min Suhk Lee Yong Koo Kim established to respond to changes in the company’s
Representative Director Outside Director internal and external operating environment that
Currently, Representative Director, Formerly, Representative Director, require a high level of management transparency.
Trade Division, Hanwha Corporation Daewoo Telecom It makes decisions on transactions over a certain
volume with affiliated parties. Its chairman is
always an outside director.
✽ As of March 31, 2017

1 Shareholdings are based on the number of common shares

2 The term ‘controlling interests’ refers to the percentage of

46.55 %
shares held according to standards established by Hanwha
Corporation. It includes common shares that are based on all
shares issued by Hanwha Corporation and its subsidiaries
and affiliated companies as of the end of December 2016.

※ Based on separate financial statements (Hanwha Techwin is Hanwha Corporation Shareholdings

based on consolidated financial statements) (including a stake of 28.40% in Hanwha Engineering & Construction,
as of December 31, 2016)
 012 Affiliates 2017 ANNUAL REPORT 013

Hanwha Chemical
Hanwha Chemical was the South Korean chemical industry’s
very first player to produce polyvinyl chloride. It also increased its
presence in the global marketplace by being the first domestic player
to enter the petrochemical market in the Middle East. Its overall
goal is to leverage its experience and expertise in the photovoltaic
business to become a world leader in the chemical industry.
Date of Establishment August 1965
President & CEO Chang Bum Kim
Major Businesses Polyethylene (PE), Polyvinyl chloride (PVC),
Chlor-alkali (CA), photovoltaics
Website hcc.hanwha.co.kr
Hanwha Techwin
Hanwha Techwin was established in 1977 to engage in the
aircraft engine and film camera businesses. Since its founding, it has
pursued business diversification based on its optical and imaging
technologies and platform technologies in the area of aircraft
engines. It currently engages in the aircraft and gas turbine engine,
defense, energy equipment, security, and industrial machinery
businesses. As a member of Hanwha Group, boasting more than
sixty years of expertise in the field of manufacturing, Hanwha
Techwin continues to lay the foundations for its sustained growth
and customer value creation, based on its broad market insights,
commitment to high-quality, and a stable financial structure.
Date of Establishment August 1977
President & CEOs Hyun Woo Shin
Major Businesses Video security and surveillance cameras,
industrial and energy equipment,
aircraft engines, self-propelled artillery.
Website www.hanwhatechwin.com
Hanwha Engineering&Construction
As a general construction company that is primarily involved
in the areas of civil engineering, architecture, and plants,
Hanwha Engineering & Construction continues to grow based
on proven track record and technologies. The company has enjoyed
an average annual growth rate of 20% since 2002.
It aims to become a global construction company by 2020,
under the vision of ‘Design the World’.
Date of Establishment July 2002
President & CEO Kwang Ho Choi
Major Businesses Architecture and housing construction,
urban development, industrial plants, civil
engineering, and water treatment
Website www.hwenc.co.kr
Hanwha Hotels & Resorts
Hanwha Hotels & Resorts is a comprehensive, premium-level
leisure and food services company. In addition to operating South
Korea’s largest condominium chain with twelve resorts, 126-hole
golf courses both at home and in Japan, luxury boutique hotels, and
water parks and aquariums, it manages a large number of dining,
catering, and banquet facilities.
Date of Establishment March 1979
President & CEOs Seok Moon, Tae Ho Kim, Young Cheol Kim
Major Businesses Resorts, hotels, leisure, food services
Website www.hwrc.co.kr

FINANCIAL INFORMATION (KRW in billions)

FINANCIAL INFORMATION (KRW in billions)
FINANCIAL INFORMATION (KRW in billions)
FINANCIAL INFORMATION (KRW in billions)

2016 2015 2016 2015 2016 2015 2016 2015

Current assets 11,789 8,582 Current assets 27,802 19,980 Current assets 28,536 25,297 Current assets 1,215 1,122
Non-current assets 61,537 61,180 Non-current assets 28,722 21,099 Non-current assets 39,254 36,338 Non-current assets 21,697 21,541
Total assets 73,326 69,762 Total assets 56,524 41,079 Total assets 67,790 62,105 Total assets 22,912 22,664
Current liabilities 13,497 12,097 Current liabilities 19,686 13,516 Current liabilities 29,074 24,862 Current liabilities 7,953 6,295
Non-current liabilities 17,490 18,566 Non-current liabilities 13,431 5,112 Non-current liabilities 19,807 20,170 Non-current liabilities 7,498 9,168
Total liabilities 30,986 30,662 Total liabilities 33,117 18,628 Total liabilities 48,882 45,031 Total liabilities 15,451 15,463
Capital stock 8,297 8,153 Capital stock 2,657 2,657 Capital stock 1,531 1,496 Capital stock 1,159 1,159
Capital surplus 7,123 7,205 Capital surplus 1,885 1,885 Capital surplus 2,308 3,194 Capital surplus 4,202 4,202
Accumulated other
358 35 Other capital 5,349 7,735 Accumulated other
1,521 3,924 Capital adjustments -136 -136
comprehensive income comprehensive income
Retained earnings 13,500 10,157 Accumulated other
145 -46
Retained earnings 26,562 23,706 Retained earnings 13,548 8,460 comprehensive income
Total shareholders’ equity 23,408 22,451
Total shareholders’ equity 42,339 39,100 Total shareholders’ equity 18,908 17,074 Retained earnings 2,091 2,023
Sales 35,189 26,134
Sales 34,828 32,695 Sales 28,331 27,394 Total shareholders’ equity 7,461 7,201
Operating income 1,507 596
Operating income 4,003 1,878 Income before income taxes
Operating income 1,271 2,897 Sales 10,579 9,718
Income before income taxes expenses
4,185 191 Income before income taxes Operating income 130 116
expenses
3,993 442 expenses
3,263 6,011
Net income 3,459 62 Income before income taxes
115 -223
Net income 3,520 313 Net income 2,732 4,416 expenses
Shareholdings1 32.35% 32.35%
Shareholdings 1
36.13% 36.77% Shareholdings 1
100% 100% Net income 77 -251
Controlling interests2 32.35% 32.35%
Controlling interests 2
36.13% 36.77% Controlling interests 2
100% 100% Shareholdings 1
50.62% 50.62%
Controlling interests2 68.22% 68.53%

36.13 %
Hanwha Corporation Shareholdings
(as of December 31, 2016)
32.35 %
Hanwha Corporation Shareholdings
(as of December 31, 2016)
100 %
Hanwha Corporation Shareholdings
(as of December 31, 2016)
50.62%
Hanwha Corporation Shareholdings
(as of December 31, 2016)
 015

Industrial Founded in 1952, Hanwha Corporation

became the first Korean company to succeed
Explosives - in the production of dynamite in 1958.
Since then, we have steadily enhanced our
Domestic
competitiveness in the industrial explosives
business through continuous R&D and
automation. Much of our domestic revenue
is currently based on products from our
tunnel, mine drilling, and blasting businesses.
The company is prepared to propel again as
a total solutions provider for the industrial
explosives market.

Mid-long term annual sales growth rate target (by 2020)

14 . 5 %
Chemicals Since the completion of a state-of-the-art
nitric acid manufacturing facility in 1991,
Hanwha Corporation has been supplying
high-quality grades of nitric acid to many
customers in Korea, and increasing its volume
of exports to Japan, Taiwan, and other
Southeast Asian countries. By supplying
high-quality liquid ammonium nitrate as
a raw material for industrial explosives,
Hanwha Corporation’s Onsan plant has

Explosives Business
been contributing to the building and
expansion of Korea’s national infrastructure.
Our liquid ammonium nitrate is also used for
medical and semiconductor processes and
New challenges of the Explosives Business going global the production of medical gases. The main
use of the ammonia that is imported and sold

Hanwha Corporation is acknowledged for its world-class technological by Hanwha Corporation is for bio food
technologies and high-purity industrial gases.
acumen and safety in the explosives business. We mainly provide industrial It is also supplied to the De-NOx facilities in
major thermal power plants in Korea.
explosives as well as explosives applications, chemicals, and fireworks that
are leading both domestic and overseas markets. Based on independently
developed technologies and solid trust, we are now entering the global market.
Based on 60 years of experience and technology, Hanwha Corporation’s
explosives business is now going global.
016 Explosives Business 2017 ANNUAL REPORT 017

Cladding Hanwha Corporation has been

developing the explosives applications
business based on its explosives
manufacturing technologies that it has
been collecting and compiling for the
past half century. It particularly boasts the
nation’s leading technologies in the cladding
business. We produce economical, highly-
durable materials with a technology that
bonds different kinds of metals together
by using high impact energy generated
from the explosion of gunpowder. We then
supply them as core materials for chemical
and power generation plants. We are also
working to expand our global operations
following the invigoration of overseas plant
construction and overseas nuclear projects.

Fireworks We have been dedicated to elevating

the standard of fireworks presentation
technologies for customer satisfaction since
1964. Such efforts include developing an
ever-increasing variety of newer fireworks
programs and constant research in the arena
of effective launching systems. We have also Loading Services
pioneered a new field called multimedia
Bulk Product Range
fireworks for the first time in Korea.
Multimedia fireworks are accomplished by
grafting fireworks to multimedia elements Emulsion Plants Range Hanwha
that include illumination, laser, and video. Mining
We are planning to introduce new-concept Explosive Delivery Units
Services
performances by combining fireworks
with performances, which will facilitate the Full Blasting Services
telling of stories. By participating in a wide
spectrum of events at home and abroad, we Owner Operator Services
have been able to demonstrate and publicize
our outstanding firework technologies in the International Hanwha Mining Services has recently

global community. launched its International business platform.

Explosives Our offering is based on true ‘Customer
Choice’ and allows flexibility for our market
Division
Explosive Hanwha Corporation is adding to the consumers to adapt elements of our service
role and value of explosives through a broad levels in their mining value chain. Hanwha’s
Applied range of explosive applied businesses. We experience of 60 years in the Explosives
have succeeded in the localization of its Industry has ensured a consistent pipeline
Businesses
components and marketing in the global in global technologies. From Ammonium
market. Furthermore, we are leveraging our Nitrate supply through to advanced blasting
years of experience in the area of demolition solutions, Hanwha’s customers can be
methods to provide our customers in the assured of world class quality and service.
international civil engineering sector with Hanwha Mining Services has established
the finest in technologies and engineering business units in Indonesia, Australia, and
capabilities. Finally, we have built an Chile. Our customer base is expanding rapidly
explosives technology R&D center to promote and our willingness to work in a collaborative
the use of explosives in a wide variety of environment has positioned us for a
applications and conditions. successful future.
 019

Precision Hanwha Corporation/Defense is

participating in the development of cutting
Guided edge precision guided weapon system to
strengthen self-sufficiency in national defense
Munition
and construct Korean three-axis system carried
out by the Korean government.

1
Long-Range Surface-to-Air Missile 230mm-class MRL, Chunmoo​& TAipers(Air-to-Ground Missile)

To become nation’s No.1 producer of ammunition and guided munitions in 2020

No.

Defense Business
South Korea’s flagship defense contractor, contributing to national defense and peace
Key parts of We are carrying out the development of
advanced products including the key parts
Hanwha Corporation aspires to rank first in the domestic sales of precision guided munition of guided munitions such as INS, propulsion
system, laser range finder, etc.
guided munitions and ammunition business by 2020. It is also driven to
become one of the world’s top 30 defense contractors by 2025 under the
corporate vision to be ‘Trusted global partner providing innovative defense
solutions’. To this end, we are enhancing our competitiveness in key businesses
through sustained investment in R&D, and advancing our competitiveness in
weapon systems through institutional innovations and risk factor management.
We are also dedicated to achieving our mid- to long-term goals. This is mainly
done by making diversified attempts to expand our overseas businesses and
becoming an organization that develops new growth engines. Navigation System Based On
Micro Electro Mechanical System
Navigation system Based On Ring
Laser Gyroscope
Laser Range Finder
020 Defense Business 2017 ANNUAL REPORT 021

Ammunition We are currently developing guided

ammunition that can pinpoint strike
targets as well as intelligent ammunitions
that are capable of identifying targets,
while conducting research to enhance the
performance of existing ammunitions.
In addition, we are dedicated to the
operational deployment of new ammunitions
that correspond with changes in the
battlefield, including decreases in military
power and the number of soldiers on duty.
Remote Control Munition System

Propelling Charges

Er-155mm
Ammunition

Wide Area Denial Munition

81mm Mortar
Ammunition
With Improved
Fragmentation
Performance

Key We have unrivalled technologies in the fields

of fuses and propelling charges, which are
Components of key components in ammunitions. We also
boast innovative technology in the area of
Ammunitions
pyrotechnics that consists of a variety of
explosives.

Fuzes

155mm Precision-
Guided Ammunition

Pyrotechnics
022 Defense Business 2017 ANNUAL REPORT 023

Hanwha Techwin
Hanwha Techwin is a precision technology company that
has maintained stable growth for about forty years. Currently,
it engages in the aircraft and gas turbine engine, defense,
energy equipment, security, and industrial machinery
businesses. Following its acquisition by Hanwha Group
in 2015, Hanwha Techwin is expanding synergies in the
Space aviation
sectors of defense and precision machinery.
Ammunitions Aircraft engines and
Advanced ammunition
Hanwha, components, aircraft
hydraulic systems and
a global leader actuators

in the defense
industry Hanwha Systems
Hanwha Systems is committed to developing cutting-
edge weapon systems that will play a key role in network-
Precision guided oriented modern warfare. Building on its unrivalled precision
munitions Mobility
Precision guided munitions, Armored vehicles,
electronics and software-based technologies and expertise
launching systems, self-propelled artillery in areas such as radars, electron optics, battle systems, and
navigation system
Command, Control, command, control and communications, it is leading the
Communication,
Computer and Intelligence advancement of South Korea's defense industry.
(C4I)/Intelligence,
surveillance and
reconnaissance (ISR)
Radars, C4I,
Tactical Information
Communication Network
(TICN)

Hanwha Defense
Hanwha Defense is a global leader in integrated defense
systems and offers total solutions for national defense.
emerged as the nation’s largest player in the defense industry, based on its innovation It is expanding its business spheres by shifting from initial
mobility equipment to anti-aircraft, guided, and launching
and integrated capabilities in ammunitions and combined weapon systems. This
systems, precision navigation, and laser areas. This involves
successful advancement was achieved by launching Hanwha Techwin, a precision
the development and mass production of major combat and
machinery supplier that produces the K-9 self-propelled artillery as well as aircraft combat support equipment, in addition to precision navigation
engines and parts and Hanwha Thales, a defense electronics company, in June equipment that is loaded onto approximately 40 launching
2015. The following year, Hanwha Defense, a leader in integrated defense systems systems and 30 weapon systems for the armed forces.
including mobility equipment, joined Hanwha Group.
 025

Overseas subsidiaries(13) & Representative Offices(17)

Trade Business
30 net work s
Oil and
Chemical
Business
The Oil and Chemical Department is the
only oil and petrochemical trader in South
Korea to have achieved vertical integration
from crude oil and condensates to refined oil
products, basic petrochemicals, and synthetic
resins. Its extensive business portfolio
includes the import, domestic sales, export,
and cross trade of oil products (naphtha, fuel
Serving as the bridgehead toward global market oil); petrochemicals (ethylene, propylene,
BTX, and methanol); synthetic resins (PO,
Trade Division is concentrating its effort on businesses such as Petroleum/ PVC, PS); and inorganic chemicals (solar salt,
refined salt, caustic sodas, sodium cyanide,
Defense/Renewable Energy that it owns competitive expertise and can fertilizers). The Department is advancing

bring out synergy with Hanwha Group subsidiaries. At the same time, it’s into new markets in South America, Africa,
Europe, and the CIS region, while expanding
concentrating on reinforcing its competencies in domestic businesses that its presence in the Chinese and Southeast
Asian markets. To better respond to changes
it holds market leading capability such as Industrial Machineries/Steel/ in the market and improve the stability of its

Agricultural. Furthermore, Trade Division is expanding its business model businesses, the Department has endeavored
to develop new strategic items, strengthen
toward project businesses including healthcare (hospital system export), partnership with customers, and expand
its value chains. The Oil and Chemical
infrastructure construction. With carrying out diverse businesses ranging from Department is consolidating its position as

conventional trading to resource development and project businesses, Trade the top trader in the oil and petrochemical
sector by providing total solution services to
Division serves as a bridgehead of Hanwha Group’s expansion toward global its customers around the globe.

market.
026 Trade Business
Machinery/ Machinery/Metal Department is carrying
out trade business including tripartite
Metal Business trade concerning wide range of machinery/
metal business including bearing, industrial
machinery, defense and steel. Especially
regarding defense systems, Machinery/
Metal Department provides extensive range
of defense systems ranging from individual
protection gear to surveillance system and
battlefield management system. Other
than that, Machinery/Metal Department
established market leading capability in
industrial machinery and steel business
through its sourcing capability coming from
extensive global network and long-term
know-how accumulated in domestic market.
Also, Machinery/Metal Department is seeking
out joint foreign market development with
its core suppliers.
2017 ANNUAL REPORT 027
Merchandise Merchandise Department is developing
wide range of businesses ranging from
Business industrial merchandise to living essentials
including hospital/healthcare facility supply,
industrial/plant/energy facilities, agricultural
and building materials. Machinery/Metal
Department possesses diverse business
models ranging from conventional trade
to project businesses, among project
businesses, Machinery/Metal Department
is focusing on Turn-key transfer of hospital
systems, energy/transportation infrastructure
project and diverse automation facility
projects. Additionally, concerning Trading,
Merchandise Department carries out diverse
types of businesses. It supplies Chilean pork
under its own brand, ‘True Andes Pork’, jointly
developed with the global food company
Agrosuper and it deals with diverse building
materials including interior, exterior, and
subsidiary materials and it also deals with
agricultural trading including soybean, rice
and nuts, etc.
 029

Solar Hanwha Corporation has advanced

into the photovoltaic equipment market
with its thermal, automation, and precision
processing technologies that have
been accumulated for more than a half
century. Hanwha won recognition for
its sophisticated technology by carrying
out turnkey projects for cell and module
manufacturing facilities. It is growing into
the world’s leading maker for supplying solar
cell production facilities after successfully
providing facilities for Jincheon cell process
lines and Eumseong module lines of
Hanwha Q CELLS.

Mid- to long-term operating margin target

10 %
Aerospace Hanwha Corporation has evolved into
a major player in South Korea’s aerospace
and defense sectors, specializing in the
manufacture of hydraulic components
and flight control actuation and fuel systems.
Boasting state-of-the-art technologies
that have enabled us to obtain a domestic
Defense Quality Management System
certificate and a wide range of international-
standard quality certifications, we are
committed to ongoing technological
advancement, development, and innovation.

Machinery Business
Providing total engineering solutions for the development of human societies

Hanwha Corporation’s machinery business activities are based on its state-

of-the-art thermal, automation, and precision processing technologies. It is
growing into a global player in the machinery field by continuously adding to
its business territories, diversifying its portfolio, and securing technologies.
030 Machinery Business
Machine Hanwha Corporation launched its
machine tools business in 1977, developing
tools South Korea’s first generation of automatic
lathes in 1983. It has also attained an
unrivalled level of technological superiority
over its competitors through the
manufacture of combined- and terret-type
automatic lathes that meet the needs of users
through constant R&D efforts. In addition,
it is becoming a recognized player in the
international machine tools industry through
an assertive program of globalization based
on its accumulated experience over the past
50-plus years. This includes establishing
subsidiaries in the United States and China,
as well as an office in Europe.
Factory Hanwha Corporation has been a
reputable supplier of logistics systems both
Automation at home and abroad for the past forty-five
years, while leading logistics innovations
in production fields, based on its rich
experience, track records, and technologies.
In particular, we have presented a new
logistics paradigm by successfully completing
the world’s first fully-automated tire handling
system. We also provide total engineering
solutions through an integrated program
of logistics consulting, designs, installations,
and post-management services.
2017 ANNUAL REPORT 031
Powertrain Through the partnership with leading
automobile and heavy industry companies
such as GM, Ford, Chrysler, and Hyundai,
Hanwha Corporation has become a
well-trusted supplier of automobile, heavy
machinery engine and transmission assembly
lines around the world, including the United
States, China, the Czech Republic, Mexico and
Brazil. We are leading in the world market
for powertrain equipment through the
continuous development of such new and
innovative products as flexible production
systems and engine and mission testing
facilities.
Plant Hanwha Corporation launched an
industrial furnace business in 1976,
Machinery manufacturing such highly-regarded
products as steel and thermal treatment
furnaces and display ovens. Our state-of-the-
art technologies include thermal and drive
systems, as well as vacuum, atmosphere-
controlled, and line control systems. Our
lineup of future growth items includes
carbon materials manufacturing furnaces, slit
coaters, high-temperature furnaces for OLED,
RDF manufacturing lines, and wood pellet
manufacturing lines.
032 Corporate Responsibilities 2017 ANNUAL REPORT
Creating
Environmental
Values
ECO-YHES
The term ECO-YHES refers to Health,
Environment, and Safety, with ˝YES˝ taking the
form of a forest to symbolize the environment.
Our overall goal is to demonstrate our
commitment to sustainable management and
fulfilling our social responsibilities.
033
A unique environment management system monitoring
health, environment, and safety collectively
Green sustainable growth through low carbon
emission
Hanwha Corporation was the very first company in South
Korea to carry out an environmental preservation campaign that
happened in 1991. We developed it even further by using it as the
basis for our ECO-YHES health, environment, and safety programs
and processes that we put in place in 2000. Our leadership in
preserving and protecting the environment also includes putting
environmental management systems in place at all our worksites.
We also take part in ‘green’ corporate activities, including a one
company-one river program and environmental conservation
projects that are carried out by local governments. We monitored
the management conditions of all our worksites in 2012. We
also put the finishing touches to our environmental, safety, and
health management system by building an environmental, safety,
health, and greenhouse gas IT system. In keeping with the central
government's ‘low-carbon green growth’ policy, we are working
to help resolve such environmental problems as climate change
and global warming. This includes striking a task force to study
low-carbon, ‘green’ growth, building an in-house greenhouse
gas inventory, and improving our level of energy efficiency. We
generate a large amount of nitrous oxide (N2O), a greenhouse gas
that is produced when we make nitric acid at our Onsan plant.
We reduced this amount by more than 200,000 tons annually by
installing N2O reduction facilities in 2006. It should be the top
priority commitment for a global company to sustain a green
environment for the next generation.
034 Corporate Responsibilities 2017 ANNUAL REPORT 035

Building Social contribution initiatives aiming at ‘further together’

rather than ‘faster alone’
Culturing a healthier community with good

A Bright
neighbors
Hanwha Corporation is committed to creating a world that
is more beautiful for all future generations. From our inception

Community
we have committed ourselves to social contribution activities. We
have reshifted from simply assisting the underprivileged to truly
fulfilling our role as a responsible corporate citizen by finding new
ways to put the true meaning of sharing into practice. Our social
contribution activities are funded by a matching grant program
through which we provide donations in proportion to the amount
voluntarily raised by our employees every month with a matching
ratio of 150%. We also operate a paid volunteer system that actively
supports voluntary service activities by our employees. This allows
them to engage in these activities even during their working hours.
Our goal is to develop a culture in which our employees voluntarily
participate in CSR activities and where the company actively
encourages them to do so.
036 Corporate Responsibilities 2017 ANNUAL REPORT 037

Fostering Implementing HR programs for employee top-grading

Nurturing creative youths to lead global markets
Hanwha Corporation believes that human resources are the

Creative very core of its corporate competitiveness. Accordingly, we are

implementing active HR programs, aiming for the top grading of
all our employees. This is to foster high-caliber global talents with

Human
competitiveness and creative thinking. These include providing
opportunities to study abroad, and regional expert courses that
dispatch outstanding employees to every region of the world.
We are also operating a variety of educational programs such as

Resources science and engineering graduate school courses, employee skill

improvement courses, and job training by internal and external
lecturers in an effort to nurture excellent technological human
resources. Likewise, we are devoted to seeking out excellent
human resources by utilizing strategic employment. We continue
to recruit outstanding R&D personnel who majored in science
and engineering and cultivate customized talents by building
an industryacademia network. We are also equipped with a
framework that enables the hiring of quality human resources at
all times by constructing databases for professional pools by field.
We hire new recruits regardless of their academic backgrounds,
gender, or birthplace, preferring to focus instead on their native
abilities and their potential for growth. We are committed to
helping them develop into experts in their various fields through
the development of a competency- and performance-based
management culture.
038 Global Network 2017 ANNUAL REPORT 039

Subsidiaries Representative Offices

Hanwha (H.K.) Co., Ltd.
Unit 2201, 22/F Golden Centre, 188 Des Voeux Road
Central, HongKong
T 852-2169-0617 | F 852-2529-4678
Hanwha International (Shanghai) Co., Ltd.
21F, New Caohejing international business center A,
No.391 Guiping Road, Shanghai 200233, China
M 86-186-2136-0032 | F 86-21-3209-2312
Hanwha TechM (Suzhou) Co., Ltd.
North Side of Sigang Segment, Zhangyang Road
Zhangjiagang Economic and Technology
Development Zone, Zhangjiagang,
Jiangsu 215600, China
T 86-512-8959-8910 | F 86-512-8959-8365
Hanwha Q CELLS Japan Co., Ltd
Hanwha Building, 8th Floor 10-1
Shiba 4-chome Minato-ku, Tokyo 108, Japan
T 81-3-5441-5900 | F 81-3-5441-5921
Hanwha Mining Services Singapore Pte.
Ltd.
8 Cross Street, #10-00 65 PWC Buliding, Singapore
T 65-8332-4313
Hanwha International (Singapore) Pte.
Ltd.
4 Shenton Way #15-05/06 SGX 2 Center
Singapore 068807
T 65-6227-2754 | F 65-6227-9337
Amru & Hanwha International Co., Ltd.
#15A, Phum Boeung Salang Sangkat Russei Keo
Khan Russei Keo, Phnom Penh, Cambodia
T 855-23-990-987
Hanwha International LLC
300 Frank W. Burr Blvd. Suite #52 Teaneck
NJ 07666, USA
T 1-201-347-3000
Eagle Petroleum, LLC
Triangle Building, Suite 220, 5201 California
Avenue Bakersfield, CA 93309, USA
T 1-661-873-4688 | F 1-661-873-4689
Hanwha TechM USA LLC
1500 East Highwood, Pontiac, MI 48340, USA
T 1-248-588-1242 | F 1-248-588-1246
Hanwha Machinery America Inc.
9750 South Oakwood Park Drive,
Franklin, WI 53132, USA
T 1-414-421-2300
Universal Bearings LLC
431 N Birkey St, Bremen, IN 46506, USA
T 1-574-546-2261(265)
HSSC Stainless, INC.
3806 Orangewood Irvine CA 92618, USA
T : 562-745-7199
Hanwha Europe GmbH
www.hanwha.de
Mergenthalerallee 79-81, 65760 Eschborn
Germany
T 49-6196-5016-0 | F 49-6196-5016-90
Hanwha Mining Services Australia Pty Ltd.
Unit 3, 47 Forrest Street, Subiaco WA 6008
T 61-8-6181-0300
Hanwha Mining Services Chile SPA
Cerro El Plomo 5630, Piso 9 Las Condes
Santiago, Chile
T 56-2-2666-4231
Hanwha International Peru S.A.C.
Av.Javier Prado Este 560 Off. 2003, San Isidro.
Lima-Peru
T 51-637-2390 | M 51-942-106-363
Hanwha Corporation
Beijing Representative Office
27F, Taikang Financial Tower
no.38 Yard East 3rd ring north Road
Chaoyang district, Beijing 100026 P.R.C.
T 86-10-6583-7971 | F 86-10-6583-7999
Hanwha Corporation
Guangzhou Representative Office
Fortune Plaza, West Tower Room 1903
#114-118 Tiyudong Road Guangzhou, China
T 86-20-3893-1571 | F 86-20-3893-2760
Hanwha (H.K.) Co., LTD.
Shanghai Representative Office
21F, New Caohejing international business center A,
No.391 Guiping Road, Shanghai 200233, China
M 86-186-2136-0032
Hanwha Corporation
Taipei Representative Office
8F-4, 207, Tun-Hwan Road, Taipei, Taiwan
T 886-22-547-3355 | F 886-22-546-9955
Hanwha Corporation
Jakarta Representative Office
S. Widjojo Building, 9th Floor J.L.Jend Sudirman
71 Jakarta 12190, Indonesia
T 62-21-520-5815 | F 62-21-520-5810
Hanwha Corporation
Ho Chi Minh Representative Office
Saigon Riverside Office Center 15th Floor
Room 1504 2A-4A Ton Duc Thang Street Dist.1
Ho Chi Minh City, Vietnam
T 84-8-3822-7301 | F 84-8-3822-7302
Hanwha Corporation
Manila Representative Office
168 Golden Rock Bldg. 4th Floor Unit 4022
168 Salcedo St., Legaspi Village, Makati City
Philippines 1229
T 63-2-812-1366 | F 63-2-893-9482
Hanwha Corporation
Yangon Representative Office
Myawaddy Bank Complex Tower <B>
Rm. B-502 No. 151 Corner of Wartan Rd. & Bo
Gyoke Aung San Rd. Lanmadaw Township
Yangon, Myanmar
T 95-1-230-1350
 
Hanwha Corporation
Tehran Representative Office
No.6, 7th Flr. Sayeh Building, Valiasr St. Tehran
Iran
T 98-212-268-8780 | F 98-21-2204-0872
Hanwha Corporation
Almaty Representative Office
Nurly Tau Business Center 4A, Floor 10
Room 48, 7 Alfarabi Prospect Almaty 050059
Republic of Kazakhstan
T 7-727-311-0273, 0274 | F 7-727-311-0275
Hanwha Corporation
Athens Representative Office
Rizariou 2A and Mikras Asias 66 Chalandri
Athens 15233, Greece
T 30-210-685-8280 | F 30-210-685-8240
Hanwha Europe GmbH
Budapest Representative Office
Dayka Gabor U.3 Rubin Business Center
Room 204, 1118, Budapest, Hungary
T 36-1-319-3237 | F 36-1-319-3234
Hanwha Corporation
Moscow Representative Office
Leninsky Prospekt 113 / 1
Park Place Business Center, Office 212D
Moscow 117198, Russia
T 7-495-662-3001, 3002 | F 7-495-662-3003
Hanwha Corporation
Istanbul Representative Office
Maslak, AHİ EVRAN CAD No:6 Kat:9 No:4 , 34398
Sarıyer/İstanbul, Turkey
T 90-212-481-4271 | F 90-212-482-7987
Hanwha Europe GmbH
Warsaw Representative Office
Curtis Plaza 18 Wolska Str., 02-675
Warsaw, Poland
T 48-660-282-940 | F 48-660-700-810

Hanwha International India Pvt. Ltd. Hanwha Corporation

No.35, 3rd Floor, Maker Chamber III, Nariman Stuttgart Representative Office
Point, Mumbai 400 021, India Tilsiter Straβe 6 71065 Sindelfingen, Stuttgart,
T 91-22-2204-3718 | F 91-22-2204-3719 Germany
T 49-7031-4699-211 | F 49-7031-4699-213
NBL (PT. NANTOY BARA LESTARI)
Jl.Semoga Indah No.69 RT. 14RW.04 Kelurahan Hanwha Corporation
Lanjas MuaraTeweh, Indonesia External Profit Company (Johannesburg)
T 62 21 6288585 Room 108. AMR office park, 3 Concorde road.
Bedfordview. Johannesburg 2008 SA
PT. Hanwha Mining Services Indonesia T 27-11-326-5100
Citicon Tower Jl. Letjen S Parman Kav.72
11th Floor Unite F2 RT.RW. Sub-district of Hanwha Corporation
Slipi District of Palmerah, West Jakarta Nairobi Representative Office
DKI Jakarta Raya 11410, Indonesia X2, Kamirembe place, Ring road Kilimani,
T 62-21-2930-8840 Nairobi, Kenya, Hanwha Corporation
T 254-020-516-0257 | M 254 733 971 126
S&P World Networks DMCC
Unit 2408, JBC5, Cluster W
Jumeirah Lakes Towers, Dubai
PO box 643730, UAE
T 82-2-729-4849
040 Corporate Timeline 2017 ANNUAL REPORT

Hanwha
Corporation’s
Challenge
for the Future

1952 10 Founded as Korea Explosives Co., Ltd.

1974 05 Officially designated as a national defense contractor
1976 06 IPO (Capital stock KRW 3,274,000,000)

FINANCIAL REPORT
1993 03 Company name changed to Hanwha Corporation.
1995 01 Merged with Golden Bell Trading Co. (Trade Business)
2002 07 Spun off the Construction Division (Hanwha Engineering & Construction) and
Machinery Division (Hanwha Corporation Machinery Division)
2005 05 Signed a business agreement for land development at the Incheon Factory site
(1st and 2nd housing sales in 2006 and 2007)
2006 10 Completed the transfer of the Incheon Factory to Boeun
2007 01 Completed the construction of the Comprehensive Research Institute
2008
2008
04
12
Merged the Gumi and Changwon Factories
Received the Gold Tower Industrial Medal and the USD 2 Billion Export Tower Award 042 047 048 054
2009 09 Completed Asan Factory
2009 11 Opened Hanwha Historical Museum MD&A Independent Consolidated Separate Financial
2010 10 Merged with Microaerobot Auditor’s Report Financial statements Statements
2013 07 Launched Hanwha Mining Services
2014 10 Merged with Hanwha TechM (Currently Hanwha Corporation Machinery Division)
2014 11 Signed agreement to acquire Samsung Techwin and Samsung Thales
2015 06 Launched Hanwha Techwin and Hanwha Thales
2016 05 Launched Hanwha Defense (Former Doosan DST)
FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

Earnings Summary Revenue and Opreating Profit by Business

Total revenue in 2016 was KRW 47.120 trillion, which is an increase of 13.9% from the previous year. Operating profit surged
(KRW in billions)
sharply by 122.3% to reach KRW 1.686 trillion. This increase was attributed to a rise in sales backed by solid business
2016 Percentage 2015 Percentage YoY Change % Change
operations in almost all sectors and significant growth in the profitability of our solar energy, explosives, and chemical
manufacturing divisions. As a result, we recorded a net income of KRW 1.289 trillion, approximately ten times greater than Revenue 47,120.2 100.0% 41,376.3 100.0% 5,743.9 13.9%

the previous year's figure. The comprehensive income amounted to KRW 349.3 billion due to a favorable net income, Explosives/Manufacturing 5,832.0 12.4% 3,558.5 8.6% 2,273.5 63.9%
despite having posted other comprehensive losses driven by a loss in the market-to-market valuation of available-for-sale Trading & Wholesale Retails 5,917.8 12.6% 5,933.7 14.3% (15.9) -0.3%
financial assets.
Petrochemical Production 5,044.7 10.7% 5,745.0 13.9% (700.3) -12.2%

(KRW in billions) Construction 3,630.2 7.7% 3,324.6 8.0% 305.6 9.2%

2016 2015 YoY Change % Change Leisure/Service 1,466.9 3.1% 1,269.0 3.1% 197.9 15.6%

a. Revenue 47,120.2 41,376.3 5,743.9 13.9% Photovoltaic Business 4,472.5 9.5% 3,422.9 8.3% 1,049.6 30.7%

b. Cost of sales 43,049.7 38,427.6 4,622.1 12.0% Finance 25,254.1 53.6% 22,716.8 54.9% 2,537.3 11.2%

c. Gross profit (a-b) 4,070.5 2,948.7 1,121.8 38.0% Others 1,216.2 2.6% 1,196.5 2.9% 19.7 1.6%

c. Gross profit (a-b) 2,384.5 2,190.2 194.3 8.9% Adjustment of consolidated (5,714.2) -12.1% (5,790.7) -14.0% 76.5 1.3%

e. Operating profit (c-d) 1,686.0 758.5 927.5 122.3% Operating profit 1,685.9 100.0% 758.5 100.0% 927.4 122.3%

f. Other operating income/expenses (49.6) (511.5) 461.9 90.3% Explosives/Manufacturing 352.9 20.9% 159.5 21.0% 193.4 121.3%

g. Finance income/costs (415.9) (387.7) (28.2) -7.3% Trading & Wholesale Retails 38.5 2.3% 33.8 4.5% 4.7 13.9%

h. Share of profit of associates 451.5 316.1 135.4 42.8% Petrochemical Production 513.9 30.5% 200.6 26.4% 313.3 156.2%

i. Profit before income tax (e+f+g+h) 1,672.0 175.4 1,496.6 853.2% Construction Turned to
121.4 7.2% (414.7) -54.7% 536.1
profitability
j. Income tax expenses 383.3 54.8 328.5 599.5%
Leisure/Service 30.7 1.8% 19.0 2.5% 11.7 61.6%
k. Profit (Loss) for the year (i-j) 1,288.7 120.6 1,168.1 968.6%
Photovoltaic Business 278.0 16.5% 105.2 13.9% 172.8 164.3%
l. Other comprehensive income (Loss) (939.4) 113.0 (1,052.4) Turned to deficit
Finance 377.9 22.4% 715.3 94.3% (337.4) -47.2%
m. Total comprehensive income (Loss) (k+l) 349.3 233.6 115.7 49.5%
Others 47.1 2.8% 56.7 7.5% (9.6) -16.9%
n. Earning per share (in KRW) 684.8 (409.7) 1,094.5 -
Adjustment of consolidated (74.5) -4.4% (116.9) -15.4% 42.4 36.3%

042 2017 ANNUAL REPORT 043

FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

Balance Sheet Summary Cash Flows

Total equity grew by 4.3% over the year to KRW 14.228 trillion, led by significant growth in net income and increases in
new rights issues and capital surplus. This increase in total equity occurred despite the generation of other compressive
losses, including a loss in the valuation of available-for-sale securities. Total liabilities increased by 6.6%, however, leading
to a rise in our debt-to-equity ratio by 21.34% points to 988.5%. Liabilities of the financial business are regarded as both
liabilities and assets, since they represent customers' deposits. As a result, our debt-to-equity ratio stood at 169.1% when
excluding the liabilities of the financial business.
At the end of 2016, the company had KRW 3.769 trillion in cash and cash equivalents, which was an upswing of 67.9% over
the previous year. This increase was due to a decrease in cash outflow from our investment activities, reflecting falls in
the acquisition of tangible and intangible assets and available-for-sale securities, although cash flow from our operating
activities did also decline. Cash flow from our financing activities also increased by KRW 1.285 trillion, following a rise in
borrowings and the execution of new rights issues.

(KRW in billions) (KRW in billions)

2016 2015 YoY Change % Change 2016 2015 YoY Change % Change

Current assets 12,431.9 11,222.9 1,209.0 10.8% I. Cash flow from operating activities 6,097.3 9,620.7 (3,523.4) -36.6%

Cash and cash equivalents 2,860.4 1,182.4 1,678.0 141.9% Cash generated from operations 3,265.4 6,583.4 (3,318.0) -50.4%

Trade and other receivables 4,957.3 5,127.4 (170.1) -3.3% Interest & Dividends received from
3,533.1 3,351.5 181.6 5.4%
financial business
Other current assets 1,859.3 1,802.9 56.4 3.1%
Interest paid in financial business (78.3) (37.8) (40.5) 107.1%
Inventories 2,754.9 3,110.2 (355.3) -11.4%
Income tax paid (622.9) (276.4) (346.5) 125.4%
Non-current assets 16,309.8 15,476.6 833.2 5.4%
II. Cash flow from investing activities (5,857.3) (8,958.2) 3,100.9 -34.6%
Available-for-sale financial assets 584.0 923.2 (339.2) -36.7%
Acquisition of tangible & intangible assets (1,282.1) (1,550.4) 268.3 -17.3%
Investments in associates 1,884.6 1,601.9 282.7 17.6%
Disposal of tangible & intangible assets 178.9 146.6 32.3 22.0%
Tangible assets 10,327.7 10,406.4 (78.7) -0.8%
Acquisition of associates' stocks (215.6) (318.6) 103.0 -32.3%
Intangible assets 1,521.6 880.3 641.3 72.9%
Disposal of associates' stocks 57.1 44.6 12.5 28.0%
Other non-current assets 1,991.9 1,664.8 327.1 19.6%
Increase(Decrease) in held-to-maturity
Assets for financial business 126,129.3 118,922.2 7,207.1 6.1% - - -
financial assets
Total assets 154,871.0 145,621.7 9,249.3 6.4%
Increase(Decrease) in value of available-
(3,484.8) (7,236.7) 3,751.9 -51.8%
Current liabilities 13,661.2 12,794.9 866.3 6.8% forsale financial assets

Non-current liabilities 10,392.1 10,278.0 114.1 1.1% Increase(Decrease) in other financial assets (325.9) (165.0) (160.9) 97.5%

Liabilities for financial business 116,589.8 108,903.1 7,686.7 7.1% Interest and dividends received 197.9 131.4 66.5 50.6%

Total Liabilities 140,643.1 131,976.0 8,667.1 6.6% Others (982.8) (10.1) (972.7) 9630.7%

Capital stock 489.6 377.2 112.4 29.8% III. Cash flow from financing activities 1,294.7 9.9 1,284.8 12977.8%

Capital surplus 670.9 522.2 148.7 28.5% Increase in Borrowings and others 7,555.5 6,951.5 604.0 8.7%

Capital adjustments 38.2 38.9 (7) -1.8% Repayment of Borrowings and others (6,141.2) (5,786.3) (354.9) 6.1%

Accumulated other comprehensive income 214.2 626.9 (412.7) -65.8% Interest and dividends paid (505.6) (492.7) (12.9) 2.6%

Retained earnings 2,995.3 2,589.3 406.0 15.7% Others 10.7 (662.6) 673.3 -101.6%

Non-controlling interest 9,819.7 9,491.2 328.5 3.5% IV. Increase in cash and cash equivalents 1,534.7 672.4 862.3 128.2%

Total equity 14,227.9 13,645.7 582.2 4.3% V. Beginning cash and cash equivalents 2,244.2 1,570.3 673.9 42.9%

Total liabilities and equity 154,871.0 145,621.7 9,249.3 6.4% VI. Change in cash due to foreign currency
(9.9) 1.5 (11.4) -760.0%
translation
Liability-to-equity ratio 988.50% 967.16% 21.34%
VII. End cash and cash equivalents of the year 3,769.0 2,244.2 1,524.8 67.9%

044 2017 ANNUAL REPORT 045

FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

Current Status of Equity-Method Securities Independent Auditor’s Report

The company invested in a number of domestic and overseas businesses based on its management strategies for
diversification and new businesses. As of the end of 2016, the book value of our equity-method securities was KRW 2.028
trillion. Our equity gains on our investments amounted to KRW 451.5 billion due to recording KRW 430.2 billion in equity To the Shareholders and the Board of Directors of
method gains fromYeochun NCC, Hanwha General Chemical, and Hanwha Systems(formerly Hanwha Thales). Hanwha Corporation

(KRW in billions)

Percentage of ownership(%) Ending Balance Equity gain(loss) on

investments We have audited the accompanying separate financial statements of Hanwha Corporation (the “Company”), which comprise the separate
statement of financial position as of December 31, 2016, and the related separate statement of comprehensive income, separate statement of
YEOCHUN NCC Co., Ltd. 50.00 586.9 241.9 changes in equity and separate statement of cash flows, all expressed in Korean won, for the year ended December 31, 2016, and a summary of
Hanwha Investment&Securities Co., Ltd. 39.88 191.9 (6.9) significant accounting policies and other explanatory information.

Hanwha General Chemical Co., Ltd. 36.05 766.9 184.2 Management’s Responsibility for the Separate Financial Statements
Hanwha Thales Co., Ltd. 1,000.0 - 4.1 accordance with Korean International Financial Reporting Standards (“K-IFRS”) and for such internal control as management determines is
necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error.
Others 482.0 28.2

2,027.7 451.5 Auditor’s responsibility

Our responsibility is to express an audit opinion on these separate financial statements based on our audits. We conducted our audits in
accordance with Korean Standards on Auditing (“KSAs”). Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the separate financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate financial statements.
Dividend Policy The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the separate
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
In 2016, reflecting an increase in our net income over the year, the dividends amounted to KRW 600 per common share,
entity’s preparation and fair presentation of the separate financial statements in order to design audit procedures that are appropriate in the
KRW 650 per prior preferred share, and KRW 680 per third preferred share. circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
We also procured the necessary investment funds to continue our business on an ongoing basis, as well as for investment evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
activities using our internal reserves for growth potential. This included KRW 5.8 billion in legal reserve. The reserves are evaluating the overall presentation of the separate financial statements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
part of our sustained efforts to provide a higher rate of return to our shareholders.
Opinion
In our opinion, the separate financial statements present fairly, in all material respects, the financial position of the Company as of December 31,
(KRW in billions) 2016, and its financial performance and its cash flows for the year ended December 31, 2016, in accordance with K-IFRS.
2016 2015 YoY Change % Change
Others Matters
Dividend amount from appropriation of surplus 57.0 34.8 22.2 63.8% related separate statement of income, separate statement of comprehensive income, separate statements of changes in equity and separate statements of
cash flows for the year then ended December 31, 2015, were audited by Samil PricewaterhouseCoopers in accordance with the former KSAs, known as
Dividend per share (in KRW)
auditing standards generally accepted in Korea, and an unqualified opinion was expressed on March 17, 2016.
Common 600 500 100 20.0%

1st Preferred 650 550 100 18.2%

3rd Preferred 680 0 680

Dividend rate (par value)

Common 12.0% 10.0% 2.00% 20.0% March 16, 2017

1st Preferred 13.0% 11.0% 2.00% 18.2%

3rd Preferred 13.6% 0.0% 13.60%

Dividend propensity 53.62% 96.13% -42.51% -44.2%

Profit for the year 106.3 36.2

This report is effective as of March 17, 2016, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report,
could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that
the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

046 2017 ANNUAL REPORT 047

FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

Consolidated Statements of Financial Position

December 31, 2016 and 2015

Hanwha Corporation and Subsidiaries

(USD in millions) (USD in millions)

2016 2015 2016 2015

Assets Liabilities

Current assets $ 10,287 $ 9,287 Current liabilities $ 11,304 $ 10,587

Cash and cash equivalents 2,367 978 Trade and other payables 3,101 2,453

AFS financial assets - - Borrowings and debentures 5,093 5,067

Trade and other receivables 4,102 4,243 Other financial liabilities 663 602

Other financial assets 585 690 Other current liabilities 2,161 2,306

Other current assets 820 661 Provisions for other liabilities and charges 75 70

Current income tax assets 17 14 Current income tax liabilities 211 86

Inventories 2,280 2,574 Liabilities of disposal group classified as held-for-sale - 3

Assets held for sale(included assets of disposal group) 116 127 Non-current liabilities 8,599 8,505

Non-current assets 13,496 12,806 Trade and other payables 134 334

AFS financial assets 483 764 Borrowings and debentures 4,718 4,600

Trade and other receivables 44 57 Other financial liabilities 218 261

Other financial assets 362 202 Other non-current liabilities 1,173 1,182

Investments in associates 1,559 1,326 Net defined benefit liabilities 1,111 903

Investment property 926 790 Provisions for other liabilities and charges 272 190

Property, plant and equipment 8,546 8,611 Deferred income tax liabilities 973 1,035

Intangible assets 1,259 728 Liabilities for financial business 96,475 90,114

Other non-current assets 55 80 Withheld liabilities 749 731

Deferred income tax assets 262 248 Insurance contract liabilities 70,285 64,506

Assets for financial business 104,368 98,405 Policyholder's equity adjustments 676 955

Cash and cash equivalents 752 879 Current income tax liabilities 12 3

Deposits 920 766 Deferred income tax liabilities 439 605

Securities 55,795 53,030 Derivative financial liabilities 1,450 1,266

Investments in associates 118 181 Net defined benefit liabilities 153 140

Loans and non-trade receivables 21,256 18,819 Provisions for other liabilities and charges 46 21

Property, plant and equipment 1,456 1,473 Other financial liabilities 5,398 5,703

Investment property 2,242 2,288 Other liabilities 211 212

Intangible assets 325 345 Separate account liabilities 17,056 15,972

Derivative financial assets 634 467 Total liabilities $ 116,378 $ 109,206

Current income tax assets 62 74

(Continued)
Deferred income tax assets 28 13

Other financial assets 1,693 1,570

Other assets 2,644 2,765

Separate account assets 16,443 15,735

Total assets $ 128,151 $ 120,498

048 2017 ANNUAL REPORT 049

FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

Consolidated Statements of Comprehensive Income

Years Ended December 31, 2016 and 2015

Hanwha Corporation and Subsidiaries

(USD in millions) (USD in millions, except per share amount)

2016 2015 2016 2015

Equity Revenue $ 38,991 $ 34,238

Equity attributable to owners of the parent $ 3,648 $ 3,438 Revenue from non-financial business 18,285 15,586
Capital stock 405 312 Revenue from financial business 20,706 18,652
Capital surplus 555 432 Cost of sales $ 35,623 $ 31,798
Capital adjustments 32 32 Cost of sales from non-financial business 15,283 13,788
Accumulated other comprehensive income 177 519 Cost of sales from financial business 20,340 18,010
Retained earnings 2,479 2,143 Gross profit 3,368 2,440
Non-controlling interest 8,125 7,854
Selling and administrative expenses 1,973 1,812
Total equity 11,773 11,292
Operating profit 1,395 628
Total liabilities and equity $ 128,151 $ 120,498
Other gains 931 888

Other losses 973 1,312

Finance income 38 50

Finance costs 382 371

Share in profit of associates 374 262

Profit before income tax expense 1,383 145

Income tax expense 317 45

Profit for the year $ 1,066 $ 100

Profit (loss) attributable to:

Equity holders of the parent company’s profit for the year $ 406 $ (236)

Non-controlling interests’ profit for the year $ 660 $ 336

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Change in value of available-for-sale financial assets (685) 206

Share in other comprehensive income of associates (4) 7

Gain (loss) on valuation of derivatives qualifying cash flow hedge 20 (26)

Translation of foreign currency financial statements (55) (43)

Other comprehensive income (loss) of separate accounts (22) 2

Items that will not be reclassified to profit or loss:

Remeasurements of the net defined benefit liabilities (31) (53)

Other comprehensive income (loss) for the year, net of tax $ (777) $ 93

Total comprehensive income for the year $ 289 $ 193

(Continued)

050 2017 ANNUAL REPORT 051

FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

2016 2015 Consolidated Statements of Changes in Equity

Attributable to: Years Ended December 31, 2016 and 2015

Equity holders of the Parent Company $ 49 $ (239) Hanwha Corporation and Subsidiaries
(USD in millions)
Non-controlling interest 240 432
Capital Capital Capital Accumulated Other Retained Non- Total
Total comprehensive income for the year $ 289 $ 193 Stock Surplus Adjustments Comprehensive Earnings Controlling
Income & Expense Interest
Earnings per share attributable to the equity holders
of the Parent Company during the year Balance at January 1, 2015 $ 312 $ 335 $ 32 $ 491 $ 2,437 $ 6,419 $ 10,026

Basic earnings per common share $ 5.67 $ (3.39) Total comprehensive income for the year

Profit for the year (236) 336 100

Basic earnings per preferred share $ 5.71 $ (3.39)
Comprehensive income

Change in value of AFS financial assets - - - 72 - 135 207

Share in other comprehensive income of
- - - 3 - 4 7
associates
Gain (loss) on valuation of derivatives qualifying
- - - (11) - (15) (26)
cash flow hedge
Translation of foreign currency financial
- - - (36) - (8) (44)
statements
Remeasurements of the net defined
- - - - (31) (21) (52)
benefit liabilities
Other comprehensive
- - - 1 - 2 3
income of separate accounts
Transactions with equity holders of the Parent :

Dividends - - - - (29) (77) (106)

Capital transaction within the Group - 103 - - - 1,078 1,181

Other changes in Equity - (6) - - 2 1 (3)

Balance at December 31, 2015 $ 312 $ 432 $ 32 $ 520 $ 2,143 $ 7,854 $ 11,293

Balance at January 1, 2016 $ 312 $ 432 $ 32 $ 520 $ 2,143 $ 7,854 $ 11,293

Total comprehensive income for the year

Profit for the year - - - - 407 660 1,067

Comprehensive income :

Change in value of AFS financial assets - - - (308) - (376) (684)

Share in other comprehensive income of
- - - (1) - (3) (4)
associates
Gain (loss) on valuation of derivatives
- - - 9 - 11 20
qualifying cash flow hedge
Translation of foreign currency financial
- - - (31) - (25) (56)
statements
Remeasurements of the net
- - - - (17) (15) (32)
defined benefit liabilities
Other comprehensive income
- - - (12) - (11) (23)
of separate accounts
Transactions with equity holders of the Parent : - - - - - - -

Dividends - - - - (29) (78) (107)

Increase in paid-in capital 93 217 - - - - 310

Capital transaction within the Group - (88) - - - 112 24

Other changes in Equity - (6) (1) - (25) (3) (35)

Balance at December 31, 2016 $ 405 $ 555 $ 31 $ 177 $ 2,479 $ 8,126 $ 11,773

052 2017 ANNUAL REPORT 053

FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

Separate Statements of Financial Position

December 31, 2016 and 2015

Hanwha Corporation
(US Dollars) (US Dollars)

2016 2015 2016 2015

Assets Equity

Current assets $ 1,674,843,109 $ 1,598,089,829 Capital stock $ 405,089,073 $ 312,114,311

Cash and cash equivalents 255,164,814 54,399,890 Capital surplus 497,067,513 279,468,507

Trade and other receivables 823,860,657 902,200,961 Capital adjustments (17,170,947) (17,170,947)

Other financial assets 23,722,139 23,172,445 Accumulated other comprehensive income and expense (552,744) (661,585)

Other current assets 82,531,405 115,472,247 Retained earnings 1,688,771,211 1,635,766,444

Inventories 489,564,094 491,673,413 Total equity $ 2,573,204,106 $ 2,209,516,730

Assets held-for-sale - 11,170,873 Total liabilities and equity $ 6,428,804,653 $ 6,279,105,380

Non-current assets $ 4,753,961,544 $ 4,681,015,551

AFS financial assets 7,174,260 7,735,089

Trade and other receivables 11,697,718 411,523

Other financial assets 34,851,781 51,219,054

Investments in subsidiaries and associates 3,696,450,481 3,687,526,233

Investment property 3,146,015 3,222,103

Property, plant and equipment 918,783,479 838,210,292

Intangible assets 76,524,328 87,238,916

Other non-current assets 5,333,482 5,452,341

Total Assets $ 6,428,804,653 $ 6,279,105,380

Liabilities

Current liabilities $ 2,650,806,449 $ 2,355,713,985

Trade and other payables 916,331,523 813,318,925

Borrowings and debentures 1,302,637,321 1,214,838,083

Other financial liabilities 111,002,378 49,482,726

Other current liabilities 278,791,388 259,373,652

Provisions 148,454 79,369

Current tax income liabilities 41,895,385 18,621,230

Non-current liabilities $ 1,204,794,098 $ 1,713,874,665

Trade and other payables 12,459,091 155,928,625

Borrowings and debentures 794,493,582 1,078,231,811

Other financial liabilities 4,023,143 57,257,482

Net defined benefit liabilities 236,147,239 223,548,212

Provisions 24,725,074 26,805,920

Other non-current liabilities - 4,713

Deferred tax income liabilities 132,945,969 172,097,902

Total liabilities $ 3,855,600,547 $ 4,069,588,650

(Continued)

054 2017 ANNUAL REPORT 055

FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

Separate Statements of Comprehensive Income Separate Statements of Changes in Equity

Years Ended December 31, 2016 and 2015 Years Ended December 31, 2016 and 2015

Hanwha Corporation Hanwha Corporation

(US Dollars) (US Dollars)

2016 2015 Capital Capital Capital Accumulated other Retained Total

Stock Surplus Adjustments Comprehensive Earnings
Revenue $ 4,221,639,352 $ 4,219,212,935 Income and expense

Cost of sales 3,760,939,186 3,812,510,394 Balance at January 1, 2015 $ 312,114,311 $ 279,468,507 $ (17,170,947) $ (553,776) $ 1,644,492,836 $ 2,218,350,931

Gross profit 460,700,166 406,702,541 Dividends - - - - (28,798,493) (28,798,493)

Selling and administrative expenses 275,188,894 269,445,068 Profit for the year - - - - 29,945,221 29,945,221

Operating profit 185,511,272 137,257,473 Remeasurements of the net

- - - - (9,873,120) (9,873,120)
defined benefit liabilities
Other gains 191,076,684 191,560,220

Other losses 247,554,961 275,898,139 Change in value of

- - - (107,809) - (107,809)
AFS financial assets
Finance income 54,905,959 58,146,260
Balance at December 31, 2015 $ 312,114,311 $ 279,468,507 $ (17,170,947) $ (661,585) $ 1,635,766,444 $ 2,209,516,730
Finance costs 78,140,458 77,132,056
Balance at January 1, 2016 $ 312,114,311 $ 279,468,507 $ (17,170,947) $ (661,585) $ 1,635,766,444 $ 2,209,516,730
Profit before income tax 105,798,496 33,933,758
Increase paid in capital 92,974,762 217,599,006 - - - 310,573,768
Income tax expense(profit) 17,858,602 3,988,537
Dividends - - - - (28,798,493) (28,798,493)
Profit for the year $ 87,939,894 $ 29,945,221
Profit for the year - - - - 87,939,894 87,939,894
Other comprehensive income
Remeasurements of the net
- - - - (6,114,092) (6,114,092)
1. Items that will not be reclassified to profit or loss: defined benefit liabilities

Remeasurements of the net defined benefit liabilities (6,114,092) (9,873,120) Change in value of
- - - 108,841 - 108,841
AFS financial assets
2. Items that will be reclassified to profit of loss :
Others - - - - (22,542) (22,542)
Change in value of AFS financial assets 108,841 (107,809)
Balance at December 31, 2016 $ 405,089,073 $ 497,067,513 $ (17,170,947) $ (552,744) $ 1,688,771,211 $ 2,573,204,106
Other comprehensive income (loss) for the year,
(6,005,251) (9,980,929)
net of tax

Total comprehensive income for the year $ 81,934,643 $ 19,964,292

Earnings per share attributable to the equity holders of

the Company during the year

Basic earnings per common share $ 1.08 $ 0.43

Basic earnings per preferred share $ 1.12 $ 0.47

056 2017 ANNUAL REPORT 057

FINANCIAL REPORT MD&A CONSOLIDATED FINANCIAL STATEMENTS SEPARATE FINANCIAL STATEMENTS

Separate Statements of Cash Flows 2016 2015

Years Ended December 31, 2016 and 2015 Cash flows from financing activities

Hanwha Corporation Increase in short-term borrowings $ 285,518,078 $ 533,892,243

(US Dollars)
Redemption of short-term borrowings (383,373,129) (49,648,324)
2016 2015
Redemption of current portion of long-term borrowings (37,724,878) (360,803,112)
Cash flows from operating activities
Increase in long-term borrowings 54,777,844 181,759,205
Cash generated from operations $ 302,422,443 $ 47,176,200
Issuance of debentures 164,735,358 313,470,815
Income tax refund(paid) (31,837,167) (45,207,876)
Redemption of debentures (289,615,225) -
Net cash generated from operating activities $ 270,585,276 $ 1,968,324
Increase paid in capital 310,573,768 -
Cash flows from investing activities
Increase in leasehold deposits received 1,464,460 57,923
Decrease in short-term financial instruments 86,121,638 222,962
Decrease in leasehold deposits received (98,883) (66,860)
Increase in short-term financial instruments (88,748,520) (1,077,597)
Interest paid (67,598,446) (71,296,796)
Decrease in long-term financial instruments 20,663 3,146,463
Dividends paid (28,798,493) (28,798,493)
Increase in long-term financial instruments (3,640,877) (5,006,682)
Others - (255,950)
Decrease in short-term loans - 3,677,406
Net cash generated from financing activities $ 9,860,454 $ 518,310,651
Increase in short-term loans - (15,701)
Net increase(decrease) in cash and cash equivalents $ 200,764,924 $ 13,924,519
Decrease in long-term loans 1,401,829 94,837
Cash and cash equivalents
Increase in long-term loans (7,820,989) (14,952,192)
Cash and cash equivalents at beginning of year 54,399,890 40,475,371
Decrease in leasehold deposits 8,130,587 2,162,784
Cash and cash equivalents at the end of year $ 255,164,814 $ 54,399,890
Increase in leasehold deposits (5,355,483) (3,739,482)

Decrease in other financial assets 2,484,527 1,443,752

Decrease in AFS financial assets 704,418 1,563,580

Increase in AFS financial assets (40,601) (1,099,552)

Proceeds from disposal of investments in subsidiaries and associates 169,698,882 12,867,702

Acquisition of investments in subsidiaries and associates (178,419,657) (438,097,687)

Increase in receipt of government grants 2,020,533 1,974,470

Proceeds from disposal of investment property 37,688 2,707,720

Acquisition of investment property (21,137) -

Proceeds from disposal of property, plant and equipment 1,137,929 4,383,743

Acquisition of property, plant and equipment (118,772,312) (125,101,298)

Proceeds from disposal of intangible assets 3,573,551 573,279

Acquisition of intangible assets (13,274,819) (15,486,714)

Proceeds from disposal of assets held-for-sale 10,177,906 8,272,238

Interest received 1,886,459 3,525,243

Dividends received 49,016,979 51,606,270

Net cash used in investing activities $ (79,680,806) $ (506,354,456)

(Continued)

058 2017 ANNUAL REPORT 059

 Technology for the Future,
Challenge to the Globe
Hanwha Corporation is now taking off
into the world with new challenges and passion.
Hanwha Corporation works for the investors by furnishing
more accurate and credible financial information.

For more information, Please contact IR Team Tel +82.2.729.1623 Fax +82.505.730.3333 E-mail ryanjsuh1@hanwha.com
Hanwha bldg., 86, Cheonggyecheon-ro(Janggyo-dong), Jung-gu, Seoul, Korea

www.hanwhacorp.co.kr