Source - RNS
RNS Number : 6468K
Lotte Shopping Co. Ltd
23 September 2016
 

Semi-Annual Report

 

(47th fiscal year)

For the six month period ended 30 June 2016

To: Financial Services Commission of Korea
KRX KOSPI Market                                                                                                                                                                                                                                                                                      16 August 2016

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Company Name                    :    Lotte Shopping Co., Ltd.

CEO                 :                      Wonjoon Lee

Head Office     :                      81, Namdaemun-ro, Jung-gu, Seoul
(Tel) +82 2-771-2500
(Homepage) http://www.lotteshopping.com

Prepared by    :                      (Position) Head of Planning Division

(Name) Sang Soo Kim
(Tel) +82 2-2118-2025

On 16 August 2016, Lotte Shopping Co., Ltd. (the "Company") filed its business report for the first six months of 2016 (the "Business Report") with the Financial Services Commission of Korea (the "FSC") and the KRX KOSPI Market of the Korea Exchange. This is a summary of the Business Report translated into English.  Except where indicated otherwise, financial information contained in this summary and in the attached condensed consolidated interim financial statements of the Company as of and for the six months period ended 30 June 2016 has been prepared in accordance with the Korean equivalent of International Financial Reporting Standards ("Korean IFRS"). References to "2Q" of a fiscal year are references to the six month period ended 30 June or, as the context requires, 30 June of such fiscal year.

 



 

I.          Overview of the Company

A.         Main Businesses of the Company

The Company had 70 subsidiaries as of 30 June 2016, and the Company and its subsidiaries (on a consolidated basis, the "Group") may be divided into the following segments: department store segment, discount store segment, finance (credit card service) segment, electronics segment, Convenience store segment and other business segment.

B.        Subsidiaries and Affiliates of the Company

1.         Consolidated Subsidiaries

See Note 1 of the notes to the attached condensed consolidated interim financial statements of the Company as of and for six month period ended 30 June 2016.

2.         Affiliates

The Company has 93 affiliates.

a.         Listed companies

Business category

Affiliates

Number of companies

listed company

Lotte Confectionary, Lotte Food, Lotte Chilsung Beverage

Lotte Chemical

Lotte Shopping, Lotte Hi-mart

Lotte Insurance

Hyundai Information Technology

Lotte finechemical

9

b.    Unlisted companies

Business category

Affiliates

Number of companies

unlisted company

Lotteria, CH Beverage, MJA Wine, HUI, Chung-buk Soju, Baekhak Beverage, Lotte-Nestle Korea

Lotte Hotel, Lotte Giants, Lotte Hotel Busan, Lotte Corporation, D-Cinema Korea, Lotte JTB, Lotte Gimhae Development, Universal Studios Korea Development

Lotte International, Lotte Station Building, Lotte Logistics, Korea Seven, Lotte.com, Lotte Asahi Liquor, FRL Korea, Woori Home Shopping, Buy the Way, Korea STL, Lotte Suwon Station Shopping Town, Lotte DF Global, Lotte DF Retail, S&S International, NCF, Lotte Songdo Shopping Town, CS Mart , Lotte Department Store Masan, Korea Fuji Film, Sambark LFT

Lotte Aluminium, Canon Korea Business Solutions

Lotte Engineering & Construction, Lotte Asset Development, Lotte Incheon Development, Universal Studios Korea Resort Asset Management Corporation,  Donggyo Cheonggiwa PFV, Lotte Incheon Town, Magok District PFV

Daehong Communications, Mobizap Media, M.Hub

Lotte Data Communication, Han Paysys

Lotte Capital, Lotte Card, Lotte PS Net, Mybi, Busan Hanaro Card, eB Card, Gyeonggi Smartcard, Incheon Smartcard, Jang Kyo PFV

Seetec, KP Chemtech, Lotte MRC, Lotte Mitsui Chemicals, Lotte Versalis Elastomers, DACC Aerospace, Angel With

Hyundai Logistics, Hyundai Cosco Logistics

Aegis First, Lotte Members, Lotte shopping town Daegu, Lotte Duty Free Jeju, Lotte Town Dongtan, Lotte Autolease, Lotte Rental, Lotte Auto Care, Green Car, SDJ, JG Industrial development, Lotte Accelerator, Hantok Chemical, S-EnPol, Lotte Ulsan Development, Sweet with

84

 Since the last business report, Lotte finechemical, Lotte Accelerator, Hantok Chemical, S-EnPol, Lotte Ulsan Development, abd Sweet with became affiliates of the Company, and Cinema Food, Cinema trading out of affiliates.

C.        Recent Changes in Management

Summary of the appointment of the board of directors at the annual general shareholders' meeting held on March 2016:

·      Appointment of inside director: Dongbin Shin, Youngja Shin, Inwon Lee, Wonjoon Lee

·      Appointment of outside directors: Soogeun Kwak, JaeWon Lee, JaeWan Bahk, SeokYoung Choi

D.        Recent Acquisitions by the Company

On 19 January 2012, the Company acquired a 97.37% equity interest in CS Mart Co., Ltd. and became its controlling shareholder.

On 31 October 2012, the Company acquired a 65.25% equity interest in Hi-mart Co., Ltd. and became its controlling shareholder.

Control over the Lotte.com was acquired by owning 50.01% of the stocks through the additional acquisition of the stocks of Lotte.com by participating in the capital increase through issuance of new stock on February 17, 2015 of Lotte.com that pursues mail-order business (additional acquisition of forfeited stock on February 26). Accordingly, the controlling company has additionally acquired the controlling power over the Lotte PS Net Co., Ltd.

 

E.         Changes in Capital Stock

1.         Increase (decrease) in share capital

(As of 30 June 2016)                                                                                                                                                    (Unit: Won, shares)

Date of new stock issuance

Type of issue

Details of the newly issued stock

Type

Quantity

Par value per share

Issued value

Remarks

9 February 2006

Paid-in capital increase (public subscription)

Common stock

6,857,143

5,000

400,000

LSE listed

(GDS)

9 February 2006

Paid-in capital increase (public subscription)

Common stock

1,714,286

5,000

400,000

KRX listed

16 March 2006

Paid-in capital increase (public subscription)

Common stock

471,945

5,000

400,000

LSE listed

(GDS)

22 January 2013

-

Common stock

2,447,518

5,000

-

KRX listed

 The Company's Global Depositary Shares ("GDSs") were issued at US$20.67 per GDS, at the ratio of one share of common stock to 20 shares of GDSs. (Applying an exchange rate of Won 967.8 per US$1.00).

 On 22 January 2013, additional shares of the Company that were issued in connection with the Company's acquisition of Lotte Midopa were listed on the Korea Exchange.

2.         Issuance of convertible bonds

(As of 30 June 2016)                                                                                                                               (Unit: thousand Won, shares, %)

Type of issue

Date of issuance

Date of maturity

Total face amount

Type of convertible stock

Conversion period

Conversion terms

Outstanding bonds

Rate

Price

Face amount

Shares upon conversion

First Overseas Convertible Bond

5 July 2011

5 July 2016

978,969,250

Unregistered common stock

5 July 2012 ~ 24 June 2016

100%

646

149,412,924

231,442

 The number of shares upon conversion was calculated by dividing the total principal amount by the conversion price, disregarding fractional shares.

 Conversion based on the fixed exchange rates of US$ 1.00 = Won 1,083.50 and JPY 100 = Won 1,345.29, which were the exchange rates announced by the Seoul Money Brokerage Services, Ltd. on 15 June 2011 (the date of the board of directors resolution in connection with the issuance).

 In accordance with Korean IFRS 1032, the number of shares to be issued and the amount in connection with the exercise of a conversion right on a convertible security must be fixed for the conversion right to be classified as an equity security.  In the Company's case, while the number of shares to be issued is fixed, the amount of principal to be paid upon maturity if the bonds remain unconverted will vary depending on the exchange rate.  As such, the convertible bonds must be classified as a debt security, and the Company recognizes the bonds in its liability accounts, instead of in its equity account.

 On 5 July 2014, holders exercised their early redemption option and redeemed US$480,800,000 and JPY 22,940,000,000 aggregate principal amount of the convertible bonds.

 The entire principal amount was redeemed as of July 5, 2016 without stock conversion during the period allowed for conversion.

F.         Total Number of Shares

(As of 30 June 2016)                                                                                                                                                              (Unit: shares)

Type

Number of shares

Common shares

Total

Number of shares authorized

60,000,000

60,000,000

Total issued shares

32,236,362

32,236,362

Total number of shares withdrawn

745,470

745,470

Number of issued shares

31,490,892

31,490,892

Number of treasury shares

1,938,688

1,938,688

Number of issued and outstanding

29,552,204

29,552,204

G.        Voting Rights

(As of 30 June 2016)                                                                                                                                                              (Unit: shares)

Type

Number of shares

Remarks

Total issued shares (A)

Common stock

31,490,892

-

Preferred stock

-

-

Shares without voting rights (B)

Common stock

1,938,688

Treasury stock

Preferred stock

-

-

Shares without voting rights pursuant to the Company's articles of incorporation (C)

Common stock

-

-

Preferred stock

-

-

Shares with restricted voting rights pursuant to law (D)

Common stock

-

-

Preferred stock

-

-

Shares with restored voting rights (E)

Common stock

-

-

Preferred stock

-

-

Shares with exercisable voting rights

(F = A - B - C - D + E)

Common stock

29,552,204

-

Preferred stock

-

-

H.        Dividends

1.         Dividends for the past three years

Subject

47th fiscal year (2Q)

46th fiscal year

45rd fiscal year

Par value per share (Won)

5,000

5,000

5,000

(Consolidated)Net profit (million Won)

148,339

-383,067

526,650

Earnings per share (Won)

3,939

-13,393

17,391

Total cash dividend (million Won)

-

59,104

59,104

Total stock dividend (million Won)

-

-

-

(Consolidated)Cash dividend payout ratio (%)

-

-

11.2

Cash dividend yield (%)

Common stock

-

0.83

0.72

Preferred stock

-

-

-

Stock dividend yield (%)

Common stock

-

-

-

Preferred stock

-

-

-

Cash dividend per share (Won)

Common stock

-

2,000

2,000

Preferred stock

-

-

-

Stock dividend per share

Common stock

-

-

-

Preferred stock

-

-

-

 Prepared on a separate basis in accordance with Korean IFRS.

2.         Calculation of earnings per share for the current period

Category

2016 (2Q)

Net profit for the period

Won 122,778,269,984

Interest on issued hybrid securities

Won (6,362,463,285)

Weighted average number of common stock (excluding treasury stock)

Shares 29,552,204

Earnings per common share

Won 3,939

 



 

II.         Business Description

A.         Business Overview

The following table is a summary of the Company's main businesses and subsidiaries organized by business segment.

Business segment

Subsidiaries

Main businesses

Department store

Lotte Shopping (department store)

Department store establishment, management and distribution businesses

Discount store

Lotte Shopping (discount store)

Large discount store establishment, management and distribution businesses

LOTTE VIETNAM SHOPPING CO., LTD.

Discount store business in Vietnam

LOTTE MART COMPANY LIMITED

Discount store business in China

Swift Harvest Ltd. and 8 other entities

Discount store and real estate businesses in China

PT. LOTTE SHOPPING INDONESIA

Discount store business in Indonesia

PT. LOTTE MART INDONESIA

Finance

Lotte Card

Credit card business

eB Card Co., Ltd.

Electronic payment and transportation card system (AFC system) businesses

Electronics

Lotte Hi-mart Co., Ltd.

A wholesale and retail company for electronics and household appliances

Convenience store

Korea Seven Co., Ltd.

Convenience store business

Buy the Way Inc.

Other

Lotte Shopping (supermarket)

Supermarket establishment, management and distribution businesses, including supermarket real estate and leasing

CS Mart

Lotte Shopping (cinema) 

Producing, investing and distributing movies; management of cinemas 

Lotte Shopping (LOHB's)

Retail business for consumer goods, such as cosmetics, food, and other merchandise

Woori Home Shopping & Television Co., Ltd.

TV home shopping, online shopping and catalogue shopping businesses

Lotte.com

Distribution businesses under the Electronic Transactions Act, such as online shopping mall management business

Lotte Members

Membership point-system and professional analysis businesses

Lotte Songdo Shopping Town Co., Ltd.

Development and management of Lotte Mall Songdo

Lotte Suwon Shopping Town Co., Ltd.

Property management and trust administration

LOTTE SHOPPING HOLDINGS (SINGAPORE) PTE. LTD.

Investing in retail businesses in Vietnam, India and Indonesia

Lotte Shopping Holdings (Hong Kong) Co., Limited

Investing in retail businesses in China

LHSC Limited

Investing in home shopping businesses in China

Lotte Properties (Chengdu) Limited

Mixed-use development of Chengdu Banseongang project in China

LOTTE PROPERTIES (CHENGDU) HK LIMITED

Mixed-use development and investment in Chengdu Banseongang project in China

Kotobuki Holding (HK) Ltd.

Investing in hotel businesses in Hong Kong

Hai Thanh - Kotobuki Joint Venture Company

Hotel business in Vietnam

 

The following table is a summary of the Company's financial condition by business segment.

(Unit: million Won, %)

Business segment

Division

47th fiscal year (2Q)

46th fiscal year (2Q)

46th fiscal year

45rd fiscal year

Amount

Percentage

of total

Amount

Percentage of total

Amount

Percentage of total

Amount

Percentage

of total

Department Store

Sales

3,921,408

27.2

3,881,154

27.4

8,032,532

27.6

8,043,745

28.6

Operating income

234,920

62.0

219,031

46.7

513,129

60.1

602,558

50.7

Total assets

16,009,935

39.7

16,201,038

40.7

16,704,343

41.1

16,794,731

41.9

Discount Store

Sales

4,155,480

28.8

4,147,462

29.3

8,323,692

28.6

8,208,956

29.2

Operating income

(60,624)

-16.0

(33,116)

-7.1

(61,431)

-7.2

67,075

5.6

Total assets

9,797,395

24.3

10,426,278

26.2

9,742,640

23.9

10,412,802

26.0

Finance

Sales

884,052

6.1

882,954

6.2

1,789,948

6.1

1,760,811

6.3

Operating income

94,097

24.8

121,435

25.9

165,698

19.4

202,636

17.1

Total assets

9,629,306

23.9

8,520,909

21.4

9,402,558

23.1

8,575,013

21.4

Electronics

Sales

1,838,355

12.8

1,827,077

12.9

3,896,137

13.4

3,754,295

13.4

Operating income

68,794

18.1

77,537

16.5

160,180

18.8

144,391

12.2

Total assets

2,978,115

7.4

2,931,598

7.4

2,905,213

7.1

2,774,637

6.9

Convenience

Store

Sales

1,773,121

12.3

1,570,453

11.1

3,314,814

11.4

2,685,504

9.6

Operating income

19,798

5.2

31,773

6.8

45,707

5.4

37,554

3.2

Total assets

1,136,904

2.8

1,180,442

3.0

1,149,742

2.8

1,157,632

2.9

Others (1)

Sales

1,836,850

12.8

1,854,249

13.1

3,770,532

12.9

3,646,256

12.9

Operating income

22,176

5.9

52,740

11.2

30,430

3.5

134,165

11.2

Total assets

798,500

2.0

524,583

1.3

788,870

2.0

357,511

0.9

Total

Sales

14,409,266

100.0

14,163,349

100.0

29,127,655

100.0

28,099,567

100.0

Operating income

379,161

100.0

469,400

100.0

853,713

100.0

1,188,379

100.0

Total assets

40,350,155

100.0

39,784,848

100.0

40,693,366

100.0

40,072,326

100.0

 Represents adjustments for consolidation.

 

 

 

1.         Department store business segment

a.         Lotte Shopping (department store)

i.          Industry overview

The following tables show the market size and number of department stores in Korea.

Department store market size in Korea

 (Unit: trillion Won, %)

Category

2013

2014

2015

Market size

29.8

29.3

29.2

Growth rate

4.6

-1.7

-0.3

 Source: National Statistics Office

 Excludes data for outlets.

 

Number of department stores in Korea

(Unit: stores)

Category

2013

2014

2015

Number of department stores

93

95

96

Increase (decrease)

+4

+2

+1

 Source: National Statistics Office

 Excludes data for outlets.

ii.          Company overview

Trends in market share

(Unit: %)

Category

2013

2014

2015

Lotte department store's market share

45.8%

48.5%

51.5%

 Source: National Statistics Office and Company data.

 Sales from the Company's department stores are gross sales (including sales from leased shops).

 The revenue of Lotte Department Stores includes 31 stores owned by the Company, as well as two Young Plaza stores, 17 outlet stores, and 3 stores operated by the Company pursuant to management contracts with Lotte Station Building and Lotte Department Store Masan (an affiliate of the Company).

2.         Discount stores business segment

a.         Lotte Shopping (discount store)

i.          Industry overview

The following tables show the market size and number of discount stores in Korea.

Discount store market size in Korea

(Unit: trillion Won, %)

Category

2014

2015

2016 (2Q)

Market size

46.6

48.6

25.3

Growth rate

3.3%

4.3%

6.4%

 Source: National Statistics Office

 Based on data for large marts (defined as having retail space of 3,000 square meters or more - includes certain duty free shops and outlets).

 

Number of discount stores in Korea

(Unit: stores)

Category

2014

2015

2016 (2Q)

Number of discount stores

528

544

545

Increase (decrease)

+17

+16

+1

 Source: National Statistics Office

 Based on data for large marts (defined as having retail space of 3,000 square meters or more - includes certain duty free shops and outlets).

 

ii.          Company overview

The following table shows the market share of Lotte Mart in the discount store market in Korea.

Trends in market share

(Unit: %)

Category

2014

2015

2016 (2Q)

Lotte Mart's market share

15.4

14.9

14.1

 Source: National Statistics Office and Company data.

b.         LOTTE VIETNAM SHOPPING CO., LTD.

i.          Industry overview

Trends in market size in Vietnam

Category

2013

2014

2015

Population (million people)

90

91

92

GDP (USD 100 million)

1,717

1,917

2,134

Per capita (USD)

1,914

2,115

2,330

Growth rate (%)

5.4

5.5

5.6

Consumer price index (%)

6.6

5.2

5.2

 Source: Planet Retail and the General Statistics Office of Vietnam

ii.          Company overview

The Company opened its first store in Vietnam in south Saigon in December 2008 followed by its second store in Phu Tho in July 2010.  The Company has selected Vietnam as one of its target countries for expansion of the discount store business and plans to enhance its presence in Vietnam through aggressive expansion and localization.  As of 30 June 2016, the Company operated 12 stores in Vietnam.

 

 

Status of LOTTE VIETNAM SHOPPING CO., LTD. stores

(Unit: stores)

Category

2014

2015

2016 (2Q)

Number of stores

10

11

12

Increase (decrease)

+4

+1

+1

c.         LOTTE MART COMPANY LIMITED / Swift Harvest Ltd and 8 other entities

i.          Industry overview

Trends in market size in China

Category

2014

2015

2016(E)

Population (thousand people)

1,367,520

1,374,620

1,373,540

GDP (USD 100 million)

104,917

112,119

113,830

Per capita (USD)

7,672

8,154

8,240

Growth rate (%)

7.4

6.9

6.7

Increase in consumer price index (%)

2.3

1.8

1.9

 Source: Planet Retail

ii.          Company overview

The Company has been actively expanding into the Chinese market, starting with the acquisition of eight Makro stores in China in June 2008. The Company acquired Times Ltd.'s discount stores in 2009.  The Company operated 100 stores in China as of 30 June 2016(Not included 16 Beijing Super) and plans to continually expand in the regions where its stores are already located and also improve its customer service and competitiveness.

Status of stores in China

(Unit: stores)

Category

2014

2015

2016 (2Q)

Number of stores

Shanghai

72

74

74

Qingdao

6

0

0

Beijing

12

12

12

Beijing(super)

-

16

16

Shenyang

8

8

8

Chongqing

5

6

6

Total

103

116

116

Increase (decrease)

-4

+13

+0

d.    PT. LOTTE SHOPPING INDONESIA and PT. LOTTE MART INDONESIA

i.          Industry overview

Trends in the market size in Indonesia

Category

2013

2014

2015

Population (million people)

248

251

255

GDP (USD 100 million)

8,739

8,507

9,080

Increase in consumer price index (%)

6.4

6.0

6.8

 Source: Planet Retail (June 2015)

ii.          Company overview

The Company acquired 19 Makro stores in Indonesia in November 2008 and opened 16 stores through its local retail business subsidiary in 2010~ 2015.  As of 30 June 2016, the Company operated 43 stores in Indonesia and plans to continually expand in Indonesia.

Status of stores in Indonesia

(Unit: stores)

Category

2014

2015

2016 (2Q)

Number of stores

38

41

43

Increase (decrease)

+2

+3

+2

3.         Financial business sector segment

a.     Lotte Card

i.          Industry overview

Status of credit card business

(As of 30 June 2016)

Type 

Company name  

Number of companies

Dedicated credit card companies

Lotte Card, Samsung Card, Hyundai Card, Shinhan Card, Hana SK Card, BC Card, KDB Capital, KB Kookmin Card, Woori Card

9

Banks with credit card business

Kyongnam Bank, Kwangju Bank, Industrial Bank of Korea, Daegu Bank, Busan Bank, Suhyup Bank, Standard Chartered Bank, Citibank Korea, Jeonbuk Bank, Jeju Bank, NH Nonghyup Bank

11

 Source: Press Release from the Credit Finance Association

 

Credit card issuances and usage data

Year

Economically active population
(ten thousand persons)

Number of Credit card

(ten thousand card)

per credit card number of Economically active population (card)

2013

2,587

10,203

3.9

2014

2,654

9,232

3.5

2015

2,691

9,314

3.5

Source: Press release from the Financial Supervisory Service

ii.          Company overview

Lotte Card, a subsidiary of the Company, is a leading credit card company in Korea with the largest distribution and service network.

Trends in market share

(Unit: trillion Won, %)

Category

2013

2014

2015

Credit card market size in Korea by charge volumes

585.6

594.1

630.7

Lotte Card's charge volumes 

54.1

53.5

56.6

Lotte Card's market share

9.2%

9.0%

9.0%

  Source: Financial Statistics Information System of the Financial Supervisory Service

 Based on credit purchases (including lump-sum payments, instalments and corporate purchases) and cash loans (including cash services and card loans).

 

 

 

b.    eB Card

i.          Industry overview

Prepaid cards use electronic money to pay for transportation services.  Prepaid cards are used in the transportation and distribution sectors throughout Korea.

Competitive situation

Comparisons of competitors in 2016 (2Q)

MYbi

eB Card

Korea Smart Card

Card name

MYbi Card

Cash Bee

T Money

Service area

Busan, Ulsan, Gyeongnam Province, etc.

Gyeonggi Province, Incheon, Chungnam Province, etc.

Seoul, Jeju, Pohang, etc.

Bus

8,520 buses

18,376 buses

11,053 buses

Taxi

53,092 taxies

33,662 taxies

122,225 taxies

Subway

129 stations

-

441 stations

ii.          Company overview

eB Card, a subsidiary of the Company, provides electronic money services for store and transportation networks.  In December 2010, eB Card issued a new pre-paid card brand called "Cash Bee."  Unlike then prepaid transportation cards existing before, Cash Bee cards can be used to make purchases at convenience stores and retail outlets in addition to paying for transportation fares.  As of 30 June 2016, Cash Bee cards are accepted at 79,890 places.

In addition, in May 2011, eB Card introduced Near Field Communication (NFC) based pre-paid mobile Cash Bee for NFC compatible mobile smartphones.  Users of pre-paid mobile Cash Bee can download the mobile Cash Bee application on to their NFC compatible mobile smartphones to make purchases at convenience stores and retail outlets in addition to paying for transportation fares.

Trends in market share

(Unit: 100 million Won, %)

Category

2013

2014

2015

Market size for prepaid cards in Korea based on sales (1)

2,678

2,974

3,434

EB Card

692

857

932

EB Card's market share

25.8

28.8

27.1

 Based on disclosure of MYbi, eB Card and Korea Smart Card.

 

 

 

 

 

4.         Electronics

a.     Lotte Hi-mart

i.          Industry overview

Market size of household / consumer electronics in Korea

(Unit: trillion Won)

Category

2013

2014

2015

Household electronics

16.8

16.9

17.8

Computer and communication devices

21.8

19.7

19.8

 Source: National Statistics Office

ii.          Company overview

Lotte Hi-Mart was established in 1987. Since then, it quickly established itself as an electronics specialty store with a nationwide store network. Lotte Hi-Mart, which had initially sold large electronic products such as TVs, refrigerators and washing machines, began to offer personal computers in 2001 and other IT products.  In 2007, Lotte Hi-Mart began selling mobile products, such as smartphones, tablet PCs and related products, and is continually expanding sales in this area.

In the 2Q of 2016, Steady growth of sales of Household electronics and outside factors and changes in trend, Hi-mart's revenue increased by approximately 0.6% on a consolidated basis compared to the 2Q of 2015, largely due to the expansion of SKU(Stock Keeping Unit).

Lotte Hi-mart as of 30 June 2016, operated 442 stores in total.

Lotte Hi-Mart currently operates 11 logistic centres and implements a CS Master system for training and management of specialized installation teams. As of 30 June 2016, 593 household electronics installation teams and 1,480 air conditioner installation teams were in charge of installation. In addition, there were 11 service centres for electronics repair services.

The online shopping mall was launched in 2000 to expand into the rapidly-growing online market and attract young customers who are familiar with the use of the Internet. The shopping mall currently operates through a website (www.e-himart.co.kr).

In addition, our company is providing smart pick services at all of our outlets. This service allows the customers to designate the outlet and the date of the visit of the outlet after having ordered products through the on-line shopping mall, and to collect the products on the corresponding date. Currently, this service is provided for products including PCs, cameras, cleaners, electric heaters and shavers, etc., and we are planning to continuously expand the range of products to be included in the service.

 

Market share of household / consumer electronics among household / consumer electronics stores

Store 

2013

2014

2015

Lotte HiMart

46.6

48.6

48.5

Electronics Land

7.3

7.0

6.4

Living Plaza

26.7

25.5

27.1

Hi Plaza

19.4

18.9

18.1

 Source: Audit reports of respective companies

5.         Convenience Store

Korea Seven / Buy the Way

i.          Industry overview

The convenience store industry in Korea faces challenges including market saturation, new government regulations on store openings and conflicts with franchisees.  In addition to market maturity which led to a slump in monthly store opening rates, the enforcement of the amended Franchise Act which restricts store openings have forced industry players to shift their strategy from quantitative growth to qualitative growth.  Under such environment, the convenience store industry's plans for store openings have shifted from large cities to mid- and small-sized cities and focus has been placed on increasing sales in current stores by diversifying products and increasing price competitiveness.  Increased disputes with franchisees have also spurred franchisor companies to seek out new ways to achieve shared growth with their franchisees.

ii.          Company overview

Korea Seven, a subsidiary of the Company, has operated a chain of convenience stores in Korea under the brand name 7-Eleven since 1989.  Korea Seven acquired 100% of the capital stock of Buy the Way, which also operates convenience stores in Korea, in 2010.

Trends in market share

(Unit: %)

Category

2013

2014

2015

Korea Seven and Buy the Way's market share

28.8

27.8

27.6

      Estimated based on Company data and includes acquired Buy the Way stores.

 

6.         Other Business Segment

a.     Lotte Super, CS Mart

i.          Industry overview

Large supermarket chains are growing at a slower rate than the industry rate due to stricter laws protecting local merchants that restrict the opening of new stores by large supermarket chains.  Overall, the industry was slow to grow due poor consumption levels, mandatory days of closure and shorter hours of business.  Accordingly, the industry is seeking various ways to continue growing, such as store diversification and new business development.  The sluggish growth is expected to continue in 2016 for large supermarket chains.  As such, they are making efforts to boost sales by diversifying new stores, developing new products that follow consumption trends and pioneering new businesses as well as increase profits by improving store operation efficiency and cutting costs.

ii.          Company overview

Lotte Super started its supermarket business in April 2000. Starting with the Jeonnong store as its first store, Lotte Super has built up many stores across Korea, including through the acquisition of the chain store business of Hanwha Stores in 2004 and Big Mart and Nice Mart in 2007.

In addition, Lotte Super entered the online supermarket business by opening an online shopping mall in 2009.  In 2010, Lotte Super started a new franchise model to strengthen its cooperation with small and medium-sized merchants and contribute to regional communities through increased employment and service improvements, among others.  In 2012, Lotte Super strengthened its leading market position by acquiring CS Distribution and thereby creating synergy effects from the newly acquired businesses such as the voluntary franchise business.  In March 2013, Lotte Super launched a mobile application to enhance convenience for customers and became the first player in the industry to pave the new avenue of mobile supermarket shopping. Beginning with the 'Lotte Premium Food Market' No. 1 in June 2016, we are providing differentiated products and services including more than 7,000 domestic and foreign premium level food items by entering the premium food market, which is undergoing new growth in alignment with the changes in the domestic consumption environment.

b.    Lotte Cinema

i.          Industry overview

The Korean film industry recorded sales of Won 758 billion in the second quarter of 2016, reflecting a 0.5% decrease from the same period in 2015. In the second quarter of 2016, 94.6 million movie tickets were sold, showing a 0.5% decrease from the same period in 2015.

ii.          Company overview

As of 30 June 2016, Lotte Cinema operated 106 movie cinemas.  In addition, Lotte Cinema entered the Vietnamese market in May 2008 and was the first Korean company to do so.  In December 2010, Lotte Cinema opened its first overseas cinema in Songshan, China, as part of its plan to expand in overseas markets.  In 2014, Lotte Cinema opened two new cinemas in China and five new cinemas in Vietnam.  As of 30 June 2016, Lotte Cinema operated 38 overseas cinemas.

Trends in market share

(Unit: 10,000 persons, %)

Category

2014 (2Q)

2015 (2Q)

2016 (2Q)

Number of movie tickets sold in the cinema industry in Korea

9,652

9,507

9,462

Number of movie tickets sold by Lotte Cinema(1)

2,827

2,805

2,841

Lotte Cinema's market share

29.3

29.5

30.0

                                  

Note:

(1)                Includes the number of movie tickets sold by cinemas managed but not owned by Lotte Cinema.

 

 

c.     Lotte Shopping (LOHB's)

i.          Industry overview

Health & Beauty specialty stores ("H&Bs") are the Korean distribution channel for overseas drug stores that focus on the retail of cosmetics and other beauty products. In 2015, the H&B industry increased 40% to Won 1 trillion compared to 2014. While other distribution industries have seen stagnation in growth due to the recent economic slowdown and severe price discounting resulting from intense competition, the H&B industry expects to continue expanding by catering to recent conscious consumption trends focused on pricing and quality. CJ's Olive Young and GS's Watson's are the leaders in the industry, and Lotte's LOHB's and Shinsegae's Boons, later market entrants, are also expanding.

ii.          Company overview

LOHB's entered the H&B business when it opened its first store in Seoul in May 2013. As of 30 June 2016, LOHB's operated 67 stores in Korea.

Trends in market share

 (Unit: stores, %)

Category

2014

2015

2016(2Q)

Number of stores owned by major Korean H&B companies(1)

565

732

841

Number of stores owned by LOHB's

30

53

67

LOHB's market share

5.3%

7.2%

8.0%

                          

Note:

      Estimates based on Company data.

(1)            Major companies refer to Olive Young (CJ), Watsons (GS), LOHB's (Lotte), Pandora (Megamart) and Boons (Shinsegae).

 

d.    Woori Home Shopping

i.          Industry overview

(1)       TV home shopping

There are six TV home shopping companies in Korea. Korea Home Shopping (currently GS Home Shopping) and 39 Home Shopping (currently CJ O Shopping) started in 1995, three companies, Woori Home Shopping, Hyundai Home Shopping and NS Home Shopping, joined the market in 2001 and Home & Shopping joined the market in 2011.  TV home shopping companies, under the approval of the Korea Communications Commission, furnish customers with product information through TV channels, receive orders, mostly through phone calls, and then deliver the ordered products to customers at their desired locations.  Therefore, TV home shopping business operation requires infrastructure, such as broadcasting facilities and logistics systems, strategic products planning and a variety of customer services. 

(2)       Online shopping mall

Online shopping malls deliver product information directly to consumers through wholesalers and Internet and allow customers to purchase at their convenience and at cheaper prices.

(3)       Catalogue

Catalogue companies send catalogues describing products to select customers, and customers can order and purchase products through the catalogues that they receive.  Increasing customer base and delivering the optimal product information to customers are important elements in this business.

ii.          Company overview

Woori Home Shopping, a subsidiary of the Company, sells a variety of consumer goods and services by means of TV home shopping.  In addition, Woori Home Shopping also operates an online shopping mall and catalogue shopping business.

Trends in market share

(Unit: 100 million Won, %)

Category

2014

2015

2015(1Q)

2016 (1Q)

Market size of the home shopping industry in Korea

41,000

40,682

7,706

7,328

Woori Home Shopping sales

8,692

8,646

2,132

2,008

Woori Home Shopping market share

21.2

21.3

27.7

27.4

 Estimated based on publicly disclosed estimated total sales data for the Company's competitors in Korea (excluding NS Home Shopping and Home & Shopping).

 

e.    Lotte.com

i.          Industry overview

The size of the on-line shopping market, which is subjected to less limitations in terms of time and space in comparison to the off-line outlets, is increasing extremely rapidly since the emergence of the mobile shopping in the mid-2000's. Customers can get access to a diverse range of product information at anytime and anywhere, and enjoy very high level of convenience of shopping through the One-stop services for ordering and delivery. In addition, being able to purchase goods at significantly lower price in comparison to the off-line outlets is also one of the biggest attractions of the on-line shopping. Although the mobile/internet shopping market can be affected by the consumer sentiments for consumption in accordance with the economic situations of the time, it is possible to cope with the fluctuation in the economic situations by means of its outstanding price competitiveness in comparison to other off-line distribution channels.

In the on-line shopping market, extensive range of players including not only the companies specializing only on the pure on-line shopping but also off-line distribution companies such as department stores and discount outlets, as well as home shopping companies are competing in the area of B2C. In the internet shopping market, extensive range of players including not only the companies specializing only on the pure on-line shopping but also off-line distribution companies such as department stores and discount outlets, as well as home shopping companies are competing in the area of B2C. Moreover, there is markedly rapid growth of social commerce companies that uses the concept of cooperative purchasing since 2010. The annual volume of transaction of the on-line shopping market in 2015 was 53.9 trillion Won, which is a growth by approximately 19% from the previous year with continued growth every year.

Company overview

 

f. Lotte Members

ii.          Industry overview

Recently, 'Omni-channel consumption' in which the on and off-line channels are used simultaneously, 'Mobile shopping' through which consumers can access the shopping sites at anytime and anywhere, 'Global consumption' including direct purchase from overseas sources, etc., 'Rational consumption' through exhaustive comparison of prices and 'Malling consumption' of enjoying leisure and cultural life along with shopping are establishing themselves as the key industrial trend for the distribution and logistics industry.

With the full-fledged commencement of the era of mobile platform-based cultural contents, enormous changes have been brought into the production and consumption of contents. With the continued launching of O2O services with built-in lT technology and settlement services, off-line companies are unfolding Omni-channel strategy that combines on-line services. On the other hand, the Fin-tech market is growing rapidly in Korea in accordance with the alleviation of the regulations and the strategy for nurturing of the Fin-tech market by the government, with the creation of new markets through the activation of the competition and alliance between financing companies and IT companies in order to secure vantage point in the Fin-tech market.

h. Lotte Songdo Shopping Town

The Company completed its land purchases in connection with the construction of Lotte Mall Songdo in July 2011. In December 2013, the Company completed the first-stage of construction, the mart section, which is currently open for business. The second stage of this project is currently undergoing earthworks and is scheduled to be completed by the second half of 2017.

 

i. Lotte Suwon Station Shopping Town

It was incorporated on March 16, 2005, acquired the approval for the construction of Lotte Mall Suwon on January 3, 2012, permission for occupation and use of the mall on November 21, opened the Lotte Mall  Suwon on November 27, 2014 for business, and is currently operating and managing the Lotte Mall Suwon.

 

j. LOTTE SHOPPING HOLDINGS (SINGAPORE) PTE. LTD./ Lotte Shopping Holdings (Hong Kong) Co., Limited / LHSC Limited 

As of 30 June 2016, LOTTE SHOPPING HOLDINGS (SINGAPORE) PTE. LTD. held shares in distribution companies in India, Indonesia and Vietnam while Lotte Shopping Holdings (Hong Kong) Co., Limited holds shares in distribution companies in China as well as LHSC Limited, a holding company established for the acquisition of a home shopping company, Lucky Pai, in China.

(Unit: million Won,%)

Name of holding company

Name of subsidiaries

Shareholding ratio

Book value for investment stock

Business Type

LOTTE SHOPPING HOLDINGS (SINGAPORE) PTE. LTD.

Lotte Shopping India Private Limited

90.0

17

Distribution

(department store)

LOTTEMART C&C INDIA PRIVATE LIMITED

100.0

263

Distribution (mart)

PT. LOTTE SHOPPING INDONESIA

80.0

265,154

Distribution

 (mart)

PT. LOTTE MART INDONESIA

99.0

49,237

Distribution

 (mart)

LOTTE HOTEL & RETAIL VIETNAM PTE. LTD.

40.0

28,838

Investment company

PT. LOTTE Shopping Avenue Indonesia

99.0

50,734

Distribution

(department store)

Lotte Shopping Plaza Vietnam Co., Ltd.

100.0

32,903

Distribution

(department store)

Lotte Vietnam Shopping Co., Ltd.

100.0

57,739

Distribution

 (mart)

LOTTE E-COMMERCE VIETNAM CO.,LTD.

100.0

5,824

Distribution

(Lotte.com)

International Business Center Company Limited

50.0

62,577

Real estate lease

Lotte Shopping Holdings
(Hong
Kong) Co., Limited

Lotte Business Management (Tianjin) Co., Ltd.

100.0

66,388

Distribution

(department store)

Lotte Mart China Co., Ltd.

100.0

170,894

Distribution (mart)

Swift Harvest Ltd. and 8 other entities

100.0

0

Distribution (mart)

Hong Fung Ltd. and 2 other entities

100.0

13,574

Distribution (mart)

Nantong Meili Properties Limited

100.0

4,449

Distribution (mart)

Zhuji Decheng Properties Limited

100.0

2,931

Distribution (mart)

Nantong Yaodong Properties Limited

100.0

9,297

Distribution (mart)

Nantong Fuhua Properties Limited. and 1 other entities

100.0

6,053

Distribution (mart)

Nantong Jinyou Properties Limited and 1 other entities

100.0

8,301

Distribution (mart)

Nantong Branda Properties Limited and 1 other entities

100.0

1,854

Distribution (mart)

Nantong Fortune Trade Properties Limited

100.0

3,599

Distribution (mart)

Nantong Fine Spring Properties Limited

100.0

3,232

Distribution (mart)

Nantong Fine Port Properties Limited and 1 other entities

100.0

3,992

Distribution (mart)

Huai An Full Faith Properties Limited

100.0

5,539

Distribution (mart)

LHSC Limited

51.1

0

Investment company

Liaoning LOTTE Mart Co., Ltd.

100.0

0

Distribution (mart)

Qingdao LOTTE Mart Commercial Co., Ltd.

75.2

0

Distribution (mart)

Lotte Department Store (Shenyang) Co., Ltd.

100.0

81,529

Distribution

(department store)

Lotte International Department Store (Weihai) Co., Ltd.

100.0

34,941

Distribution

(department store)

Jilin LOTTE Mart Co., Ltd.

100.0

0

Distribution (mart)

Lotte Shopping Business Management(Hong Kong) Limited

100.0

12

Bond issuances (SPC)

LOTTE DEPARTMENT STORE (TIANJIN) CO., LTD.

100.0

58,235

Distribution

(department store)

Lotte Department Store (Chengdu) Co., Ltd.

100.0

46,588

Distribution

(department store)

Lotte mart (Chongqing) Commercial Co., Ltd.

100.0

23,294

Distribution

(department store)

Lotte Mart Co., Ltd.

100.0

116,843

Distribution

(department store)

LOTTE MART (CHENGDU) COMMERCIAL COMPANY LIMITED

100.0

13,976

Distribution

(department store)

 As of 30 June 2016 (exchange rate of USD 1.00 = KRW 1,164.70)

 Financial statements prepared on a separate basis under Singapore FRS and HK FRS.

 

 

 

k. Kotobuki Holding (HK) Ltd./ Hai Thanh - Kotobuki Joint Venture Company

In October 2012, LOTTE HOTEL & RETAIL VIETNAM PTE. LTD. acquired Kotobuki Holding (HK) Ltd., the holding company of Hai Thanh-Kotobuki Joint Venture Company.  Hai Thanh-Kotobuki Joint Venture Company operates hotels in Ho Chi Minh City, Vietnam, including Lotte Legend Hotel Saigon.  As of 30 June 2016, Kotobuki Holding (HK) Ltd. owned 70% of Hai Thanh-Kotobuki JV Company.

l.     Lotte Properties (Chengdu) Limited/ LOTTE PROPERTIES (CHENGDU) HK LIMITED

LOTTE PROPERTIES (CHENGDU) HK LIMITED was established for the Chengdu Banseongang mixed-use development project in October 2009 with a paid-in capital of US$197 million, 73.5% of which was invested by Lotte Shopping, 16.2% by Lotte Hotel, 5.3% by Lotte Station Building and 5.0% by Lotte Asset Development.

Lotte Properties (Chengdu) Limited, established in May 2012 through a 100% investment by LOTTE PROPERTIES (CHENGDU) HK LIMITED, purchased 21,000 pyeong of land in the Chengdu Banseongang district and is leading a mixed-use development project with 68,000 pyeong for residence and 103,000 pyeong for business.

 

B.        Production and Facilities

1.         Plans for the establishment of new stores

Category

Store

Location

Expected establishment date

Outlets

Jinju

Chungmu joint, Jinju-si, Gyeongsangnam-do

September 2016

Nam-ak

Namak-ri, Samhyang-eup, Muan-gun, Jeollanam-do

November 2016

Discount Store

Jinju Innovation

Jinju Innovation City, Munsan-eup, Jinju-si, Gyeongsangnam-do

September 2016

Siheung Gunja

Jeongwang-dong, Siheung-si, Gyeonggi-do

November 2016

Eunpyeong New Town

Jingwan-dong, Eunpyeong-gu, Seoul

November 2016

Mokpo Namak

Namak-ri, Samhyang-eup, Muan-gun, Jeollanam-do

December 2016

Seoul Yangpyeong

Yangpyeong-dong, Yeongdeungpo-gu, Seoul

December 2016

Cinema

Uijeongbu Minrak

Gyeonggi Province, Millak-dong, Uijeongbu-si, Gyeonggi-do

August 2016

Jinju Innovation

Chungmugong-dong, Jinju-si, Gyeongsangnam-do

September 2016

 The above plans are subject to change based on future business conditions.

2.         Plans for new establishment and purchase of facilities

a.      Investments under progress

                                                                                                                                                                                   (Unit: 100 million Won)

Category

Type

Investment period

Investment asset

Investment effect

Total investment

Prior

Investment

Future investment

Department store

New
investment

2016 - 2018

Tangible assets

Increase in sales

17,022

958

16,064

Discount store

New
investment

2016 - 2018

Tangible assets

Increase in sales

3,116

622

2,494

  The above plans are subject to change based on future business conditions.

 The above plans are for new domestic investments only, and do not include plans for ordinary or overseas investments or capital injections or additional investments to existing investments.

b.      Future investment plans

                                                                                                                                                                                   (Unit: 100 million Won)

Business segment

Project name

Expected investment

Expected annual investment

Effect

Asset type

Amount

2016

2017

2018

Department store

New and ordinary investments

Tangible and other assets

27,097

8,070

9,050

9,977

Increase in sales

Discount store

New and ordinary investments

Tangible and other assets

5,997

1,919

2,039

2,039

Increase in sales

 The above plans are subject to change based on future business conditions.

C.        Sales

(Unit: million Won)

Business segment

Type

Product

47th (2Q)

46th (2Q)

Department Store

Products

Clothing, etc.

Export

238

-

Domestic

3,344,077

3,363,961

Total

3,344,315

3,363,961

Goods


Export

-

-

Domestic

-

-

Total

-

-

Others

Rental fee, etc.

Export

26

-

Domestic

577,067

517,193

Total

577,093

517,193

Total

3,921,408

3,881,154

Discount Store

Products

Food, etc.

Export

-

-

Domestic

3,865,585

3,867,360

Total

3,865,585

3,867,360

Goods


Export

-

-

Domestic

-

-

Total

-

-

Others

Rental fee, etc.

Export

-

-

Domestic

289,895

280,102

Total

289,895

280,102

Total

4,155,480

4,147,462

Finance

Products


Export

-

-

Domestic

3,672

1,996

Total

3,672

1,996

Goods


Export

-

-

Domestic

-

-

Total

-

-

Others

Fees and

commissions, etc.

Export

-

-

Domestic

880,380

880,958

Total

880,380

880,958

Total

884,052

882,954

Electronics

Products

Electronics, etc.

Export

-

-

Domestic

1,830,874

1,819,567

Total

1,830,874

1,819,567

Goods


Export

-

-

Domestic

-

-

Total

-

-

Others

Rental fee, etc.

Export

-

-

Domestic

7,481

7,510

Total

7,481

7,510

Total

1,838,355

1,827,077

 

Convenience store

Products

Food, etc.

Export

-

11

Domestic

1,665,755

1,439,308

Total

1,665,755

1,439,319

Goods

Food, etc.

Export

-

-

Domestic

-

-

Total

-

-

Others

Rental fees, etc.

Export

-

-

Domestic

107,366

131,134

Total

107,366

131,134

Total

1,773,121

1,570,453

Others(1)

Products

Food, etc.

Export

10,005

2,897

Domestic

1,202,669

1,222,660

Total

1,212,674

1,225,557

Goods

Food, etc.

Export

-

-

Domestic

27,081

24,377

Total

27,081

24,377

Others

Rental fees, etc.

Export

-

-

Domestic

597,095

604,315

Total

597,095

604,315

Total

1,836,850

1,854,249

Total

Products

Clothing, food, etc.

Export

10,243

2,908

Domestic

11,912,632

11,714,852

Total

11,922,875

11,717,760

Goods

Clothing, food, etc.

Export

-

-

Domestic

27,081

24,377

Total

27,081

24,377

Others

Rental fees, etc.

Export

26

-

Domestic

2,459,284

2,421,212

Total

2,459,310

2,421,212

Total

14,409,266

14,163,349

 

 

                          

Note:

(1)                Represents adjustments for consolidation.

 

 

D.        Risk Management

See Note 39 of the notes to the attached condensed consolidated interim financial statements of the Company as of and for Six month period ended 30 June 2016.

E.         Derivative Instruments and Hedge Accounting

See Note 21 of the notes to the attached condensed consolidated interim financial statements of the Company as of and for Six month period ended 30 June 2016.

F.         Important Management Contracts

1.         Department store business

The Company has entered into management agreements to manage certain department stores owned by its subsidiary Lotte Station Building.  In return, the Company receives management fees from Lotte Station Building equal to 10% of the operating income (before depreciation expenses) for the relevant department store, which is accounted for as other operating income.

2.         Credit card business

Lotte Card has entered into card issuance agreements with American Express Company, Master Card International, Visa International and UNIONPAY INTERNATIONAL whereby these companies receive from Lotte Card certain percentage of the credit purchase amounts made on the credit cards issued pursuant to such agreements.

3.         Other businesses

a.     Woori Home Shopping

Woori Home Shopping has entered into an operating lease agreement with Lotte Capital, KT Rental Corporation and a joint card issuance agreement with Shinhan Card Co., Ltd., Lotte card wable on an annual basis. It has also entered into delivery service agreements with Lotte Logistics, Hyundai Logistics Co., Ltd. and CJ Korea Express Corporation, as well as broadcasting program supply agreements with multiple cable TV stations.

b.    Korea Seven

Korea Seven has entered into trademark and operational technology licensing agreements with 7-Eleven, Inc., pursuant to which Korea Seven pays 0.6% of net sales amount as license fees.  Also, Korea Seven has granted 7-Eleven, Inc. the right to purchase the shares of Korea Seven up to 10% of its total outstanding shares on January 1 of each year starting from 2003.  Korea Seven has also entered into franchising contracts with franchisees and agency agreements with Lotte Logistics for delivery of products to both company-run and franchise stores.

c.     NCF

NCF has a royalty agreement with Nice Claup Co., Ltd. pursuant to which NCF pays Nice Claup a sales royalty fee of 2.2% of net sales from 1 April 2016 to 1 March 2020.

d.    Buy the Way

Buy the Way has entered into a guarantee agreement with Sportstoto guaranteeing payment of delivered goods and the agreement is renewed every year.



 

III.        Financial Matters

Please refer to the Company's condensed consolidated interim financial statements of the Company as of and for three month period ended 30 June 2016 and the related notes attached to this report.

 



 

IV.       Auditor's Opinion

A.         Audit (Review) Opinion on Consolidated Financial Statements

1.         Name of auditor / accountants

47th fiscal year (2Q)

46th fiscal year

45th fiscal year

KPMG Samjong

KPMG Samjong

KPMG Samjong

2.         Audit (review) opinion

a.     Audit (review) for the current business year

The auditor has reviewed the consolidated statements of financial position as of 30 June 2016 and 31 December 2015, as well as the consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows of Lotte Shopping Co., Ltd. and its subsidiaries for the six months ended 30 June 2016 and 2015.

3.             Audit contracts

(Unit: million Won, hours)

Fiscal year

Auditor

Description

Fee

Total hours

47th fiscal year (2Q)

Samjong KPMG

Review of quarterly and semi-annual financial statements

Audit of non-consolidated and consolidated financial statements

705

4,200

46th fiscal year

Samjong KPMG

Review of quarterly and semi-annual financial statements

Audit of non-consolidated and consolidated financial statements

670

12,100

45th fiscal year

Samjong KPMG

Review of quarterly and semi-annual financial statements

Audit of non-consolidated and consolidated financial statements

670

12,000

4.         Contracts regarding non-audit services with outside auditor

(Unit: million Won)

Fiscal year

Date of contract

Description

Service period

Fee

47th fiscal year (2Q)

16.02.17

Agreed upon proceedings with regard to royalties to Toys"R"Us

16.02.17 ~
16.02.19

9

46th fiscal year

15.03.10

Tax accounting due diligence related to acquisition

15.03.10 ~
15.06.30

25

15.03.16

Agreed upon proceedings with regard to royalties to Toys"R"Us

15.03.16 ~
15.03.20

9

45rd fiscal year

14.07.23

Support and consultation related to the drafting of combined financial statements of Lotte Group

14.07.23~

14.08.31

40

14.12.01

Taxation review on the transaction between Lotte Shopping and FRL Korea

14.12.01~

14.12.31

20

 



 

V.        Corporate Governance and Affiliates

A.         Matters regarding Board of Directors

1.         Overview of Board of Directors

a.     Composition of Board of Directors

Currently, the Company's board of directors (the "Board of Directors") is composed of 11 directors, of whom six are outside directors.

The Board of Directors decides important matters according to the basic management policies of the Company, matters delegated from the general meeting of shareholders and matters required by the Articles of Incorporation or applicable laws.

b.    The Board of Director committees

The Board of Directors may have subcommittees to achieve efficient and timely decision-making.  The Company currently has an Audit Committee, an Outside Director Nomination Committee and an Internal Transaction Committee. Details regarding operations, authority and composition of such committees are decided by the Board of Directors or relevant laws.

2.         Matters regarding Board of Directors committees

a.     Name, directors, objectives and authority

Name of committee

Composition

Name

Objectives and authority

Remarks

Audit Committee

Three or more directors (at least two-thirds of whom must be outside directors)

 

Sukeun Kwak, JaeWan Bahk, SeokYoung Choi
(from 22 March 2016)

The committee audits the Company's accounting and operations.

The committee reviews the appropriateness of its performances and regulations every year. If necessary, it proposes revisions to the Board of Directors.

In addition to carrying out the activities specified in items 1 and 2 above, the committee also carries out activities specified by law, the Company's articles of incorporations and the Board of Directors.

-

Outside Director Nomination Committee

Two or more directors (at least half of whom must be outside directors)

 

Wonjun Lee, Hyeryun Kang

JaeWan Bahk,
(from 22 March 2016)

The committee recommends candidates for outside directors to the general meeting of shareholders.

The committee must recommend those candidates recommended by shareholders with applicable rights under Article 542 Clause 6 of the Commercial Code.

In addition to carrying out the activities specified in items 1 and 2 above, the committee also carries out activities specified by law, the Company's articles of incorporations and the Board of Directors.

-

Internal Transaction Committee

Three or more directors (at least two-thirds of whom must be outside directors)

Wonjun Lee, Chungsook Moon

JaeWon Lee
(from 22 March 2016)

This committee is responsible for reviewing and approving the following:

Internal transactions as defined under Article 11 Clause 2 of the Monopoly Regulation and Fair Trade Act and Article 17 Clause 8 of the related enforcement decree.

Transactions worth more Won 10 billion involving agreements with certain affiliates as defined under Article 2 of the Monopoly Regulation and Fair Trade Act and Article 3 of the related enforcement decree.

Any matters as required for the operation of the other committees.

-

 As of 30 June 2016


B.        Affiliated Companies

1.         Overview of affiliates

a.     Domestic

See list of affiliates on page 2.

b.    Overseas


(As of
30 June 2016)

                         

Name of Investing Company

Name of Invested Company

Share Ratio

Chocolaterie Guylian N.V

Aimee BVBA

99.00%

Rakhat JSC

Almaty Sweets LLC

100.00%

Lotte Confectionary Co., Ltd.

BIBICA Corporation

44.00%

Burger King Japan Holdings Co.,Ltd.

Burger King Japan Co., Ltd.

100.00%

Lotteria Co., Ltd.

Burger King Japan Holdings Co.,Ltd.

100.00%

Hyundai Logistics Co., Ltd.

CHANGWAN CONTAINER SERVICE LIMITED

70.00%

Lotte Chemical Titan International Limited

Chemical Brothers Limited

100.00%

Chocolaterie Guylian N.V

Chocolaterie Guylian Deutschland GmbH

100.00%

Lotte Confectionery Holdings (Europe) B.V.

Chocolaterie Guylian N.V

100.00%

Lucky Pai (Shanghai) Trading Co.,Ltd.

Chongqing Yujia Lucky Pai Commercial Co., Ltd.

51.00%

HYUNDAI LOGISTICS (GERMANY) GMBH

CONTAINER DEPOT UND REPARATUR HAMBURG GMBH

100.00%

Lotte Shopping Co., Ltd.

Coralis S.A.

45.00%

Coralis S.A.

Coralis Vietnam Co.,Ltd.

100.00%

Daehong Communications Co., Ltd.

DAEHONG COMMUNICATIONS VIETNAM CO., LTD.

95.00%

BIBICA Corporation

East BIBICA One Member Co.,Ltd

100.00%

Chocolaterie Guylian N.V

Guylian Asia Ltd

99.90%

Chocolaterie Guylian N.V

Guylian Iberia, LDA

99.30%

Chocolaterie Guylian N.V

Guylian UK Ltd

100.00%

Chocolaterie Guylian N.V

Guylian USA, Inc

100.00%

Kotobuki Holding (HK) Ltd

Hai Thanh-Kotobuki Joint Venture Co.

70.00%

Lotte Shopping Co., Ltd.

Hemisphere Film Investors II, LLC

100.00%

Hemisphere Film Investors II, LLC

Hemisphere Film Investors LLC

50.00%

HYUNDAI LOGISTICS (UK) HOLDINGS LTD.

HLC (GERMANY) GmbH

51.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Hong Fung Ltd.

100.00%

Hotel Lotte Co., Ltd.

Hotel & Resort Joetsumyoko Co., Ltd.

100.00%

Hotel Lotte Co., Ltd.

HOTEL LOTTE Holdings HK Limited

100.00%

Hyundai Information Technology Co., Ltd.

Hyundai Information Technology Vietnam Corporation

100.00%

HYUNDAI LOGISTICS (AMERICA), INC.

Hyundai Intermodal, INC

70.00%

HYUNDAI LOGISTICS (UK) HOLDINGS LTD.

HYUNDAI LOGISTICA BRASIL LTDA

51.00%

Hyundai Logistics Co., Ltd.

HYUNDAI LOGISTICS (AMERICA), INC.

100.00%

HYUNDAI LOGISTICS (HK) HOLDINGS LIMITED

HYUNDAI LOGISTICS (CAMBODIA) CO.,LTD.

51.00%

Hyundai Logistics Co., Ltd.

HYUNDAI LOGISTICS (GERMANY) GMBH

100.00%

Hyundai Logistics Co., Ltd.

HYUNDAI LOGISTICS (HK) HOLDINGS LIMITED

100.00%

HYUNDAI LOGISTICS (HK) HOLDINGS LIMITED

HYUNDAI LOGISTICS (HK) INT'L LIMITED

51.00%

HYUNDAI LOGISTICS UK LIMITED

HYUNDAI LOGISTICS (ITALY) SRL

100.00%

Hyundai Logistics Co., Ltd.

HYUNDAI LOGISTICS (MALAYSIA) SDN. BHD.

100.00%

HYUNDAI LOGISTICS (UK) HOLDINGS LTD.

HYUNDAI LOGISTICS (NETHERLANDS) B.V.

51.00%

HYUNDAI LOGISTICS (HK) HOLDINGS LIMITED

HYUNDAI LOGISTICS (SINGAPORE) PTE. LTD.

51.00%

Hyundai Logistics Co., Ltd.

HYUNDAI LOGISTICS (UK) HOLDINGS LTD.

100.00%

HYUNDAI LOGISTICS (AMERICA), INC.

HYUNDAI LOGISTICS (USA), INC.

70.60%

HYUNDAI LOGISTICS (HK) HOLDINGS LIMITED

HYUNDAI LOGISTICS INDIA PRIVATE LIMITED

51.00%

HYUNDAI LOGISTICS (UK) HOLDINGS LTD.

HYUNDAI LOGISTICS UK LIMITED

51.00%

Hyundai Logistics Co., Ltd.

HYUNDAI VINATRANS LOGISTICS CO.,LTD

51.00%

Lotte Shopping Holdings (Singapore)Pte., Ltd

INTERNATIONAL BUSINESS CENTER COMPANY LIMITED

50.00%

Lotte Europe Holdings B.V.

JSC Lotte RUS

100.00%

Lotteria Co., Ltd.

KKD Lotte Holdings

100.00%

Lotte Chemical Corporation

Kor-Uz Gas Chemical Investment Ltd.

49.00%

Lotte Hotel & Retail Vietnam Pte. Ltd.

Kotobuki Holding (HK) Ltd

100.00%

Lotte Holdings Co., Ltd.

LS(Thailand) Co.,Ltd.

49.00%

LOTTE Chemical USA Corporation

LACC, LLC

90.00%

Lotte Food Holding Co.,Ltd.

LH Foods Co.,Ltd

50.00%

Lotte Shopping Holdings (Hong Kong), Ltd

LHSC Limited

51.10%

Lotte Co., Ltd.

Lotte (MALAYSIA) Sdn., Bhd.

100.00%

Lotte International Co., Ltd.

Lotte Agro Holdings B.V.

100.00%

Lotte Agro Holdings B.V.

Lotte Agro RUS LLC

99.00%

Lotte Asset Development Co., Ltd.

LOTTE ASSET MANAGEMENT (HK) LIMITED

100.00%

Lotte Chilsung Beverage Co., Ltd.

LOTTE BEVERAGE AMERICA CORP.

100.00%

Lotte Chilsung Beverage Co., Ltd.

LOTTE Beverage Holdings (Singapore) Pte. Ltd.

100.00%

Lotte Chemical Corporation

Lotte Chemical Alabama Corporation

100.00%

LOTTE Chemical USA Corporation

LOTTE Chemical Louisiana, LLC

100.00%

Lotte Chemical Corporation

Lotte Chemical Pakistan Limited

75.00%

Lotte Chemical Corporation

LOTTE CHEMICAL POLAND SP. ZO.O

100.00%

Lotte Chemical Titan (M) Sdn. Bhd.

Lotte Chemical Singapore Pte. Ltd.

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Lotte Chemical Titan (M) Sdn. Bhd.

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Lotte Chemical Titan Capital (L) Limited

100.00%

Lotte Chemical Corporation

Lotte Chemical Titan Holding Sdn. Bhd.

100.00%

PT. Lotte Chemical Titan Tbk

Lotte Chemical Titan International Limited

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Lotte Chemical Titan International Sdn. Bhd.

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Lotte Chemical Titan Trading Sdn. Bhd.

100.00%

Lotte Chemical Corporation

Lotte Chemical UK Limited

100.00%

Lotte Chemical Corporation

LOTTE Chemical USA Corporation

60.00%

Lotte Confectionary Co., Ltd.

Lotte Confectionery (S.E.A.) Pte Ltd

100.00%

Lotte Confectionary Co., Ltd.

Lotte Confectionery Holdings (Europe) B.V.

51.00%

Lotte Co., Ltd.

Lotte Confectionery Pilippinas Corp.

100.00%

Lotte Europe Holdings B.V.

Lotte Confectionery RUS

100.00%

Lotte Information Technology Co., Ltd.

Lotte Data Communication Company Limited Vietnam

100.00%

Woori Home Shopping

Lotte DatViet Homeshopping Co.,Ltd.

90.00%

Lotte Holdings Co., Ltd.

Lotte Do Brasil Alimentos, Ltda.

99.00%

LOTTE DUTY FREE SINGAPORE PTE. LTD.

Lotte Duty Free (Thailand) Co., Ltd

49.00%

LOTTE HOTEL HOLDINGS USA CO., LTD.

Lotte Duty Free Guam, LLC

0.00%

HOTEL LOTTE Holdings HK Limited

Lotte Duty Free Hong Kong Ltd.

100.00%

LOTTE DUTY FREE SINGAPORE PTE. LTD.

Lotte Duty Free Japan Co., Ltd.

80.00%

LOTTE DUTY FREE SINGAPORE PTE. LTD.

Lotte Duty Free Kansai Co., Ltd.

100.00%

Hotel Lotte Co., Ltd.

LOTTE DUTY FREE SINGAPORE PTE. LTD.

100.00%

Lotte Engineering & Construction Co., Ltd.

Lotte E&C Malaysia Sdn. Bhd.

100.00%

Lotte Shopping Holdings (Singapore)Pte., Ltd

LOTTE E-COMMERCE VIETNAM CO., LTD

100.00%

Lotte Engineering & Construction Co., Ltd.

Lotte Engineering and Construction India Pvt. Ltd.

100.00%

Lotte Engineering & Construction Co., Ltd.

Lotte Engineering and Construction Vietnam Co., Ltd

100.00%

Lotte Engineering & Construction Co., Ltd.

Lotte Engineering Construction Mongolia LLC

100.00%

Hotel Lotte Co., Ltd.

Lotte Europe Holdings B.V.

37.90%

Lotte Europe Holdings B.V.

Lotte Europe Investment

100.00%

Lotte fine Chemical Corporation

LOTTE Fine Chemical Europe GmbH

100.00%

Lotte fine Chemical Corporation

LOTTE Fine Chemical Trading(Shanghai) Co., Ltd.

100.00%

Lotte Confectionary Co., Ltd.

Lotte Food Holding Co.,Ltd.

100.00%

Lotte Co., Ltd.

Lotte Four Seas Ltd.(MKG)

70.00%

Lotte Properties(Shenyang) Ltd.

Lotte Glory Properties(Shenyang) Ltd.

100.00%

Hotel Lotte Co., Ltd.

Lotte Hotel & Retail Vietnam Pte. Ltd.

40.00%

LOTTE HOTEL HOLDINGS USA CO., LTD.

Lotte Hotel Guam LLC.

100.00%

Hotel Lotte Co., Ltd.

LOTTE HOTEL HOLDINGS USA CO., LTD.

100.00%

LOTTE HOTEL HOLDINGS USA CO., LTD.

LOTTE HOTEL NEW YORK PALACE, LLC

100.00%

Lotte Europe Holdings B.V.

Lotte Hotel Saint Petersburg LLC

100.00%

LOTTE DUTY FREE SINGAPORE PTE. LTD.

LOTTE HOTEL VIETNAM COMPANY LIMITED

100.00%

Lotte Confectionary Co., Ltd.

Lotte India Co., Ltd.

98.60%

Lotte International Co., Ltd.

Lotte International America Corp.

100.00%

Lotte International Co., Ltd.

LOTTE INTERNATIONAL OCEANIA PTY LTD.

100.00%

Lotte Confectionary Co., Ltd.

Lotte Kolson(Private) Limited

96.50%

Lotte Asset Development Co., Ltd.

Lotte Land (Singapore) Private Limited

100.00%

Lotte Chilsung Beverage Co., Ltd.

LOTTE LIQUOR JAPAN CO.,LTD

100.00%

Lotte (Beijing) Logistics Co., Ltd.

LOTTE Logistics (HongKong) Co., Limited

90.00%

Lotte Logistics Corporation

Lotte Logistics Vietnam CO.,LTD

100.00%

Lotte Shopping Holdings (Singapore)Pte., Ltd

Lotte Mart C&C India Private Limited

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte Mart China Co., Ltd.

100.00%

Lotte Card Co., Ltd.

Lotte Members Vietnam Co.,Ltd.

100.00%

LOTTE Beverage Holdings (Singapore) Pte. Ltd.

LOTTE MGS Beverage (Myanmar) Co., Ltd.

76.60%

Nugget Food Corporation

Lotte Philippines Co.,Ltd.

49.00%

Lotte Shopping Co., Ltd.

LOTTE PROPERTIES (CHENGDU) HK LIMITED

73.50%

Lotte Asset Development Co., Ltd.

LOTTE PROPERTIES (HANOI) SINGAPORE PTE. LTD.

100.00%

Lotte Asset Development Co., Ltd.

Lotte Properties(Shenyang) Ltd.

37.20%

Lotte Rental Co., Ltd.

LOTTE Rent-A-Car (Thailand) Co.,Ltd.

49.00%

Lotte Rental Co., Ltd.

Lotte Rental (Vietnam) Company Limited

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte Shopping Business Management (Hong Kong) Limited

100.00%

Lotte Shopping Co., Ltd.

Lotte Shopping Holdings (Hong Kong), Ltd

100.00%

Lotte Shopping Co., Ltd.

Lotte Shopping Holdings (Singapore)Pte., Ltd

100.00%

Lotte Shopping Holdings (Singapore)Pte., Ltd

Lotte Shopping India Pvt.,Ltd

90.00%

Lotte Shopping Holdings (Singapore)Pte., Ltd

Lotte Shopping Plaza Vietnam Co.,Ltd.

100.00%

Lotte Europe Holdings B.V.

Lotte Shopping RUS

100.00%

Lotte Holdings Co., Ltd.

Lotte Singapore pte. Ltd.

100.00%

Lotte Confectionary Co., Ltd.

Lotte Taiwan Co.,Ltd.

50.00%

Lotte Co., Ltd.

Lotte U.S.A. INC.

100.00%

Lotte Chemical Corporation

LOTTE UBE SYNTHETIC RUBBER SDN. BHD.

40.00%

Lotte Co., Ltd.

Lotte Vietnam Co., Ltd.

60.50%

Lotte Shopping Holdings (Singapore)Pte., Ltd

Lotte Vietnam Shopping Co.,Ltd

100.00%

Lotte International Co., Ltd.

Lotte Vina International Co., Ltd.

100.00%

Lotte Netherlands Holdings B.V.

Lotte wedel SP. ZO. O

100.00%

Lotte Shopping Co., Ltd.

LotteCinema Vietnam

90.00%

Hyundai Information Technology Co., Ltd.

Lotte-HPT High Tech. Vietnam Shareholding Company

50.00%

Lucky Pai Ltd.

Lucky Pai (Shanghai) Information Technology Co.,Ltd.

100.00%

Lucky Pai Ltd.

Lucky Pai (Shanghai) Network Technology Co.,Ltd.

100.00%

Lucky Pai Ltd.

Lucky Pai (Shanghai) Trading Co.,Ltd.

100.00%

LHSC Limited

Lucky Pai Ltd.

100.00%

Lucky Pai Ltd.

Lucky Pai(Shanghai) Commercial Co.,Ltd.

100.00%

Lotte Chilsung Beverage Co., Ltd.

Pepsi-Cola Products Philippines, Inc.

38.90%

Lotte Wedel sp.zo.o

Pijalnie Czekolady Wedel Sp.zo.o.

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

PT LOTTE CHEMICAL INDONESIA

99.67%

Chemical Brothers Limited

PT LOTTE CHEMICAL TITAN NUSANTARA

99.90%

Lotte Confectionary Co., Ltd.

PT LOTTE RND CENTER INDONESIA

33.00%

Lotte Shopping Holdings (Singapore)Pte., Ltd

PT LOTTE SHOPPING AVENUE INDONESIA

99.00%

Daehong Communications Co., Ltd.

PT. Daehong Communications Indonesia

99.00%

Lotte Capital Co., Ltd.

PT. LOTTE CAPITAL INDONESIA

78.10%

Lotte Chemical Titan International Sdn. Bhd.

PT. Lotte Chemical Titan Tbk

95.20%

Lotte Logistics Corporation

PT. Lotte Logistics Indonesia

99.00%

Lotte Aluminium Co., Ltd.

PT. Lotte Packaging

99.40%

Lotte Shopping Holdings (Singapore)Pte., Ltd

PT. Lotte Shopping Indonesia

80.00%

LOTTE DUTY FREE SINGAPORE PTE. LTD.

PT. SJ Indonesia

90.00%

PT. Lotte Chemical Titan Tbk

PT. Titan Trading

99.60%

Lotte Information Technology Co., Ltd.

PT.Lotte Data Communication Company Indonesia

99.80%

Lotte Co., Ltd.

PT.Lotte Indonesia

98.30%

Lotte Shopping Holdings (Singapore)Pte., Ltd

PT.Lotte Mart Indonesia

99.00%

Lotte Card Co., Ltd.

PT.LOTTE MEMBERS INDONESIA

99.00%

Lotte Co., Ltd.

PT.Lotte Trade and Distribution

60.00%

Lotteria Co., Ltd.

PT.Lotteria Indonesia

51.00%

Lotte Confectionary Co., Ltd.

Rakhat JSC

92.40%

Rakhat JSC

Rakhat TR

99.90%

Rakhat JSC

Rakhat Trading House LLP

100.00%

Rakhat JSC

Rakhat-Aktau LLP

100.00%

Rakhat JSC

Rakhat-Aktobe LLP

100.00%

Rakhat JSC

Rakhat-Astana LLP

100.00%

Rakhat JSC

Rakhat-Karaganda LLP

100.00%

Rakhat JSC

Rakhat-Oral LLP

100.00%

Rakhat JSC

Rakhat-Shymkent LLP

100.00%

Rakhat JSC

Rakhat-Shymkent Trading House LLP

100.00%

Rakhat JSC

Rakhat-Taldykorgan LLP

100.00%

Hyundai Logistics Co., Ltd.

Shaghai Hyundai Asia Shipping International Freight Forwarding Co.Ltd.

66.00%

Lucky Pai (Shanghai) Information Technology Co.,Ltd.

Shanghai Jijie Commercial Trading Co.,Ltd.

100.00%

Lucky Pai (Shanghai) Information Technology Co.,Ltd.

Shanghai Jirong Commercial Trading Co.,Ltd.

100.00%

Lucky Pai (Shanghai) Information Technology Co.,Ltd.

Shanghai Wenxuan Co., Ltd.

100.00%

Chemical Brothers Limited

South Wealth Finance Limited

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Swift Harvest Ltd.

100.00%

Lotte Co., Ltd.

Thai Lotte Co., Ltd.

98.20%

Lotte Four Seas Ltd.

Thai Okashi Land Ltd.

49.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Titan Chemicals International Limited

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Titan Ethylene Glycol Sdn. Bhd.

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Titan Leasing Ltd.

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Titan Petrochemicals Sdn. Bhd.

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Titan Styrene Sdn. Bhd.

100.00%

Lotte Chemical Titan Trading Sdn. Bhd.

Titan Trading Corp. Limited

100.00%

Lotte Chemical Titan Holding Sdn. Bhd.

Titan Vinyl Sdn. Bhd.

100.00%

Lotteria Co., Ltd.

Vietnam Lotteria. Ltd.

99.70%

Swift Harvest Ltd.

Jiaxing Lotte Mart Co., Ltd.

100.00%

Swift Harvest Ltd.

Gang So Lotte Ma Teuk Sang Eop Ltd.

100.00%

Nam Tong Hui Hang Chi Eop Ltd.

Gang Eon Si Gwang Won Chi Eop Ltd.

100.00%

Gang So Lotte Ma Teuk Sang Eop Ltd.

Gyedong Lotte Mart Co., Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Jilin Lotte Mart Co., Ltd.

100.00%

Lotte Logistics Corporation

Lotte (Beijing) Logistics Co., Ltd.

100.00%

LH Foods Co.,Ltd

Lotte Food (Shanghai) Ltd.

90.00%

Lotte Shopping Co., Ltd.

Lotte Corporation Management (China) Ltd.

70.00%

Lotte Confectionary Co., Ltd.

Lotte Food (Shanghai) Ltd.

47.20%

Lotte Food Holding Co.,Ltd.

Lotte Corporation Management (China) Ltd.

100.00%

Lotte Confectionary Co., Ltd.

Lotte Food (Chengdu) Ltd.

90.00%

Lotte Card Co., Ltd.

LOTTE Members China

100.00%

KKD Lotte Holdings

Lotte GaYeJaChanEum Management (Shanghai) Ltd.

100.00%

Lotte Construction (Beijing) Ltd.

Lotte Construction (Shenyang) Ltd.

100.00%

Lotte Chemical Corporation

Lotte GongJeongSoRyo (Gaheung) Ltd.

100.00%

Lotte Chemical Corporation

Lotte GongJeongSoRyo (Shenyang) Ltd.

100.00%

Lotte Chemical Corporation

Lotte GongJeongSoRyo (Hapbi) Ltd.

50.00%

Lotte Confectionary Co., Ltd.

Lotte NaengEum (Shandong) Ltd.

65.00%

Lotteria Co., Ltd.

Lotte LiChanEum Management (Beijing) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte MaTeuk Trade (Sungdo) Ltd.

100.00%

Gang So Lotte Ma Teuk Sang Eop Ltd.

Lotte MaTeuk Mart (Soju) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte MaTeuk Trade (Chungkyung) Ltd.

100.00%

Lotte Properties(Shenyang) Ltd.

Lotte Logistics Management (Shenyang) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte Department Store (Chengdu) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte Department Store (Shenyang) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte Department Store (Tianjin) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte Trade Management (Uihae) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte Trade Management (Tianjin) Ltd.

100.00%

Lotte Engineering & Construction Co., Ltd.

Lotte Sung Construction (Beijing) Ltd.

100.00%

Lotte Information Technology Co., Ltd.

Lotte New Technology (Beijing) Ltd.

100.00%

Lotte New Technology (Beijing) Ltd.

Lotte New Technology (Shenyang) Ltd.

100.00%

Swift Harvest Ltd.

Lotte Younghang Mart (Shanghai) Ltd.

100.00%

Lotte Chilsung Beverage Co., Ltd.

Lotte Oh Deo Ri Beverage Ltd.

100.00%

HOTEL LOTTE Holdings HK Limited

Lotte Yu Rak (Shenyang) Ltd.

100.00%

HOTEL LOTTE Holdings HK Limited

Lotte Duty Free Beijing Co., Ltd.

100.00%

Lotte Capital Co., Ltd.

Lotte Yoong Ja JoIm (China) Ltd.

100.00%

Lotte Chilsung Beverage Co., Ltd.

Lotte Changbaek Beverage Ltd.

100.00%

Lotte Chilsung Beverage Co., Ltd.

Lotte JuEop (Beijing) Ltd.

100.00%

LOTTE PROPERTIES (CHENGDU) HK LIMITED

Lotte Jisan (Chengdu) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Lotte Mart Co., Ltd.

100.00%

Lotte Aluminium Co., Ltd.

Lotte PoJang (Beijing) Ltd.

40.00%

LOTTE ASSET MANAGEMENT (HK) LIMITED

Lotte HangMokJaSoon (Shanghai) Ltd.

100.00%

Lotte Chemical Corporation

Lotte Chemical (Gaheung) Ltd.

100.00%

Nam Tong Gang Poong Chi Eop Ltd.

Nam Tong Gang Poong Changjeo Ltd.

100.00%

Hong Fung Ltd.

Nam Tong Gang Poong Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Nam Tong Geum Woo Chi Eop Ltd.

100.00%

Gang So Lotte Ma Teuk Sang Eop Ltd.

Nam Tong Deok Shin Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Nam Tong Mi Rim Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Nam Tong Bu Mu Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Nam Tong Bu Hwa Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Nam Tong Bun Dal Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Nam Tong Yo Dong Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Nam Tong Chun Hwi Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Nam Tong Hwi Hang Chi Eop Ltd.

100.00%

Daehong Communications Co., Ltd.

Daehong Advertisement (Shanghai) Ltd.

100.00%

Lotte Holdings Co., Ltd.

Lotte Corporation

100.00%

Lotte Strategic Investment Co., Ltd.

Lotte Real Estate Corporation

100.00%

Lotte Holdings Co., Ltd.

Lotte International Co., Ltd.

100.00%

Lotte Chemical Corporation

Samkang Lotte Huagong Ltd.

50.00%

Shaghai Hyundai Asia Shipping International Freight Forwarding Co.Ltd.

Shanghai Hyundai ARyun Logistics Ltd.

100.00%

Gang So Lotte Ma Teuk Sang Eop Ltd.

Seoju Lotte Mart Co., Ltd.

100.00%

Lotte Shopping Co., Ltd.

Shim Yang Shim Lak Jeon Young Investment Management Ltd.

49.00%

NamTong Deok Shin Chi Eop Ltd.

Yeon Woon HangIk Sang Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Yo Nyeong Lotte Mart Co., Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Je Gi Deok Sung Chi Eop  Ltd.

100.00%

Lotte Strategic Investment Co., Ltd.

L 10th Investment Company Co., Ltd.

100.00%

Lotte Strategic Investment Co., Ltd.

L 11th Investment Company Co., Ltd.

100.00%

Lotte Strategic Investment Co., Ltd.

L 12th Investment Company Co., Ltd.

100.00%

Lotte Strategic Investment Co., Ltd.

L 1st Investment Company Co., Ltd.

100.00%

Lotte Holdings Co., Ltd.

L 2nd Investment Company Co., Ltd.

100.00%

L 2nd Investment Company Co., Ltd.

L 3rd Investment Company Co., Ltd.

100.00%

L 2nd Investment Company Co., Ltd.

L 4th Investment Company Co., Ltd.

100.00%

L 2nd Investment Company Co., Ltd.

L 5th Investment Company Co., Ltd.

100.00%

L 2nd Investment Company Co., Ltd.

L 6th Investment Company Co., Ltd.

100.00%

Lotte Strategic Investment Co., Ltd.

L 7th Investment Company Co., Ltd.

100.00%

Lotte Strategic Investment Co., Ltd.

L 8th Investment Company Co., Ltd.

100.00%

Lotte Strategic Investment Co., Ltd.

L 9th Investment Company Co., Ltd.

100.00%

Lotte Holdings Co., Ltd.

Ginza Cozy Corner Corp.

100.00%

Lotte Holdings Co., Ltd.

Lotte Co., Ltd.

100.00%

Lotte Co., Ltd.

Lotteria Co., Ltd.

100.00%

Lotte Co., Ltd.

Lotte Service Co., Ltd.

100.00%

Lotte Holdings Co., Ltd.

Lotte Strategic Investment Co., Ltd.

31.00%

Lotte Holdings Co., Ltd.

Lotte Ice Co., Ltd.

100.00%

Kwangyoon Co., Ltd.

Lotte Holdings Co., Ltd.

28.10%

Lotte Holdings Co., Ltd.

Meri Chocolate Company Co., Ltd.

100.00%

Lotte Co., Ltd.

Chiba Lotte Marines Corp.

81.80%

Lotte Strategic Investment Co., Ltd.

Family Corp.

25.00%

NanTong Bu Hua Chi Eop Ltd.

Ji Ju Shibu Hua Chi Eop Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Chengdu Lotte Mart Co., Ltd.

75.20%

NanTong Bun Dal Chi Eop Ltd.

Chi Bak Bun Dal Chi Eop Ltd.

100.00%

Lotte Co., Ltd.

Krispy Kreme Doughnuts Japan Corp.

20.00%

Lotte Chemical Corporation

Ho Seok Chemical Trade (Shanghai) Ltd.

100.00%

Lotte Shopping Holdings (Hong Kong), Ltd

Hoe An Man Shin Chi Eop Ltd.

100.00%

NanTong Bu Hua Chi Eop Ltd.

Heung Hwa Shi Baek Chang Chi Eop Ltd.

100.00%

 The data is current as of late June, 2016. Share ratio is based on the biggest investor.
The investor with highest share in Kwangyoon Co., Ltd., Midori Trade Co., Ltd., Lotte Green Service Co. Ltd., Market Vision Co., Ltd., LOTTE HOTEL BEVERAGE (NYP), LLC are individuals.
9 overseas affiliates of Lotte Advanced Materials Co., Ltd.. have been incorporated into the Lotte Group on 1 July 2016 by Fair Trade Commission. (Lotte Advanced Materials Tianjin Co., Ltd., Lotte Advanced Materials Dongguan Co., Ltd., Lotte Advanced Materials Shanghai Co., Ltd., Lotte Advanced Materials (Thailand) Co., Ltd., Lotte Advanced Materials hungary LLC., LOTTE ADVANCED MATERIALS EUROPE GMBH, LOTTE ADVANCED MATERIALS USA, INC.,, Lotte Advanced Materials Mexico S.A. de C.V., Lotte Advanced Materials Japan Co., Ltd.)




c.       Executives holding concurrent positions in affiliates

Name

Name of Affiliates

Positions

Full-time/Part-time

Kyukho Shin

Busan Lotte Hotel, Co., Ltd.

Internal Director

Part-time

Lotte Construction Co., Ltd.

Non-standing Executive Director

Part-time

Lotte Giants Co., Ltd.

Internal Director

Part-time

Lotte Aluminium Co., Ltd.

Non-standing Executive Director

Part-time

Dongbin Shin

Hotel Lotte Co., Ltd.

Representative Director

Full-time

Canon Korea Business Solution INC.

Internal Director

Part-time

FLR Korea Co., Ltd.

Non-standing Executive Director

Part-time

Lotte Chemical Co., Ltd.

Representative Director

Full-time

Lotte Confectionary Co., Ltd.

Representative Director

Full-time

Lotte Culture Foundation

Director

Part-time

Youngja Shin

Hotel Lotte Co., Ltd.

Internal Director

Part-time

Busan Lotte Hotel Co., Ltd.

Internal Director

Part-time

Lotte Construction Co., Ltd.

Non-standing Executive Director

Part-time

Lotte Giants Co., Ltd.

Internal Director

Part-time

Daehong Communications Co., Ltd.

Non-standing Executive Director

Part-time

Lotteria Co., Ltd.

Non-standing Executive Director

Part-time

S&S International Co., Ltd.

Representative Director

Full-time

Lotte Welfare Foundation

Director

Full-time

Lotte Scholarship Foundation

Director

Full-time

Lotte Samdong Welfare Foundation

Director

Full-time

 

 

 

 

 

 

 

 

 

 

 

 

 

d.    Share ratio of affiliates

 (As of 31 March 2016)                                                                                                                                                        (Unit: %)

Division

Investee company

Lotte Confectionery

Lotte Chilsung Beverage

Lotte

Food

Lotte

Aluminium

Lotte Construction

Hotel Lotte

Lotte International

Lotte Shopping

Lotte Giants

Lotteria

Lotte Chemical

Korea Fuji Film

Daehong Communications

Canon Korea Business Solutions

Lotte Station Building

Lotte Corporation

Lotte. com

Lotte Logistics

Lotte Capital

Lotte Data Communication

  Investor company

Lotte Confectionary


18.3

9.3





7.9

30.0

13.6





8.9


8.5

4.6


6.1

Lotte Chilsung Beverage



9.3


3.2



3.9

20.0

2.2


5.0





5.3

4.6

1.5

1.5

Lotte Food



0.0






5.0




10.0


7.5



5.0

1.8


Lotte Aluminium

15.3

8.4



9.6


6.2


5.0



2.6


5.6







Lotte Construction








1.0











11.8


Hotel Lotte

3.2

5.8

8.9

25.0

41.4

0.2

34.6

8.8


18.8

12.7

8.0

16.3

28.9


31.1

13.1

8.8

26.6

2.9

Hotel Lotte Pusan



4.4

3.9


0.6


0.8


11.3





1.0




11.5


Lotte International












56.8


1.0





0.2


Lotte Shopping



3.4




27.7

6.2

30.0

38.7



34.0


25.0


50.0

4.6

22.4


Lotte Logistics







13.7







9.0







Lotteria









1.0



2.1

12.5





17.3

2.6

34.5

Lotte Chemical



1.0

13.2

33.9






1.7







4.6



Korea Fuji Film








7.9

9.0










1.7


Daehong Communications

3.3














2.9


13.9


8.2

28.5

Lotte Corporation











31.3










Lotte Capital





















Lotte Data Communication





5.1



4.8






5.6

0.2






Lotte Card





















Lotte.com





















Lotte Station Building





















Lotte Insurance





















Sambark LFT





















MYbi





















Korea Seven





















Lotte Asset Development





















Buy the Way





















Lotte DF Global





















eB Card





















Hyundai Information Technology





















Chungbuk Soju





















Lotte Incheon Development





















Canon Korea Business Solutions





















Lotte

Hi-mart





















Aegis First





















Hyundai Logistics





















Lotte rental





















Woori Home Shopping





















Lotte Members





















Total

21.8

32.6

36.4

42.1

93.1

0.7

82.2

41.2

100.0

84.5

45.7

74.5

72.8

50.0

45.5

31.1

90.8

49.7

88.3

73.6

 



 

Division

Investee Company

Korea Seven

Lotte Asahi

Liquor

Lotte

Card

Seetec

KP Chemtech

FRL

Korea

Lotte MRC

Woori Home Shopping

Lotte JTB

Lotte Assets Development

DCinema of Korea

Lotte Insurance

Lotte PS Net

CH Beverage

MJA Wine

Sambark

LFT

MYbi

Busan Hanaro Card

Hotel Lotte Pusan

Han Paysys

  Investor Company

Lotte Confectionary

16.5









7.2











Lotte Chilsung Beverage


50.0








14.2




100.0

100.0






Lotte Food





















Lotte Aluminium





















Lotte Construction










11.8











Hotel Lotte










7.2


23.7









Hotel Lotte Pusan



1.0









5.5





3.9


0.0


Lotte International





















Lotte Shopping

51.1


93.8



49.0


53.0


39.1

50.0










Lotte Logistics

13.8




















Lotteria





















Lotte Chemical




50.0

100.0


50.0



20.5






99.5





Korea Fuji Film





















Daehong Communications












16.2









Lotte Corporation





















Lotte Capital



4.6


















Lotte Data Communication













31.3




43.3



36.3

Lotte Card



0.0













0.2

4.8




Lotte.com









50.0




31.3








Lotte Station Building












7.1









Lotte Insurance












0.9









Sambark LFT





















MYbi


















80.0


22.6

Korea Seven













32.3








Lotte Asset Development





















Buy the Way





















Lotte DF Global





















eB Card

















22.7




Hyundai Information Technology





















Chungbuk Soju





















Lotte Incheon Development





















Canon Korea Business Solutions





















Lotte

Hi-mart





















Aegis First





















Hyundai Logistics





















Lotte rental





















Woori Home Shopping





















Lotte Members





















Total

81.4

50.0

99.4

50.0

100.0

49.0

50.0

53.0

50.0

100.0

50.0

53.4

94.9

100.0

100.0

99.7

74.7

80.0

0.0

58.8

 



 

Division

Investee Company

Universal Studios Korea Resort Development

Lotte Gimhae Development

Buy the Way

Lotte Suwon Station Shopping Town

Lotte DF Global

Lotte DF Retail

eB Card

Gyeonggi Smartcard

Inchon Smartcard

Universal Studios Korea Resort Asset Management Corporation

DACC Aerospace

NCF

Lotte Mitsui

Mobizap Media

Hyundai Information Technology

M.Hub

Lotte Songdo Shopping Town

Chungbuk Soju

HUI

STL

 Investor Company

Lotte Confectionary





















Lotte Chilsung Beverage


















100.0



Lotte Food





















Lotte Aluminium





















Lotte Construction





















Hotel Lotte

46.1




100.0
















Hotel Lotte Pusan





















Lotte International





















Lotte Shopping


100.0


95.0








99.8





56.3



50.0

Lotte Logistics





















Lotteria





















Lotte Chemical











100.0


50.0








Korea Fuji Film





















Daehong Communications














70.0


99.9





Lotte Corporation





















Lotte Capital





















Lotte Data Communication







5.0








59.7






Lotte Card







95.0














Lotte.com





















Lotte Station Building

















30.0




Lotte Insurance





















Sambark LFT





















MYbi





















Korea Seven



100.0


















Lotte Asset Development

20.2



5.0






30.2







9.4




Buy the Way





















Lotte DF Global






97.7















eB Card







-

100.0

100.0












Hyundai Information Technology















0.0






Chungbuk Soju



















90.0


Lotte Incheon Development

















4.3




Canon Korea Business Solutions





















Lotte

Hi-mart





















Aegis First





















Hyundai Logistics





















Lotte rental





















Woori Home Shopping





















Lotte Members





















Total

66.2

100.0

100.0

100.0

100.0

97.7

100.0

100.0

100.0

30.2

100.0

99.8

50.0

70.0

59.7

99.9

100.0

100.0

90.0

50.0

 



 

Division

Investee Company

CS Mart

Jangkyo PFV

Lotte  Hi-mart

Lotte Incheon Development

Angel With

Versalis Elastomers

Dongyocheongkiwa PFVI

Baekhak Beverage

Lotte Incheon Town

Lotte-Nestle Korea

Magok District PFV

Eunpyeong PFV

Lotte Department Store Masan

Aegis First

Hyundai Logistics

Hyundai Costco Logistics

Lotte Members

Lotte Shopping Town Daegu

Lotte Duty Free Jeju

Lotte rental

Lotte Auto Lease

Lotte Auto Care

Green Car

Lotte Town Dongtan

JG Industrial development

  Investor Company

Lotte Confectionary














1.8












Lotte Chilsung Beverage








86.1






1.8












Lotte Food










50.0




1.9












Lotte Aluminium


























Lotte Construction




4.8





14.9















40.0


Hotel Lotte


85.5


28.8



85.0


12.5





6.9





100.0

20.8






Hotel Lotte Pusan

















1.0



10.8






Lotte International


























Lotte Shopping

99.9


65.3

28.8





27.5



17.5

100.0

1.8



93.8







50.0


Lotte Logistics














5.5












Lotteria














6.7












Lotte Chemical






50.0








8.6












Korea Fuji Film


























Daehong Communications


























Lotte Corporation


























Lotte Capital

















4.6









Lotte Data Communication


























Lotte Card


























Lotte.com


























Lotte Station Building


























Lotte Insurance




















4.9






Sambark LFT


























MYbi


























Korea Seven


























Lotte Asset Development


9.5





10.0




95.0

69.5






100.0






10.0


Buy the Way


























Lotte DF Global


























eB Card


























Hyundai Information Technology


























Chungbuk Soju


























Lotte Incheon Development


























Canon Korea Business Solutions





100.0





















Lotte

Hi-mart




















4.9






Aegis First















88.8











Hyundai Logistics
















51.0










Lotte rental





















100.0

100.0

92.0


100.0

Woori Home Shopping




















8.6






Lotte Members

















0.0









Total

99.9

95.0

65.3

62.5

100.0

50.0

95.0

86.1

54.9

50.0

95.0

87.0

100.0

35.0

88.8

51.0

99.4

100.0

100.0

50.0

100.0

100.0

92.0

100.0

100.0

Cinema Trading, S&S International, Cinema Food and SDJ are excluded from the list of investee companies as they have no shares owned by other affiliates.

 

2.         Equity investments

(As of 30 June 2016)                                                                                                                                                                       (Unit: Shares, million Won, %)

Name of company

Date of initial acquisition

(yyyy.mm.dd)

Purpose

Amount of initial acquisition

Beginning balance

Increase (decrease)

Ending balance

Financial status of the most recent fiscal year

Number of shares

Equity ratio

Book value

Acquisition (disposal)

Evaluation

Number of shares

Equity ratio

Book value

Total assets

Current year

net income

Quantity

Amount

Gain/loss

Lotte Station Building (unlisted)

1986.09.15

Equity investment

250

900,000

25

157,380

-

-

-

900,000

25

157,380

728,223

42,185

Daehong Communications (unlisted)

1996.12.23

Equity investment

6,277

13,600

34

28,785

-

-

-

13,600

34

28,785

681,051

14,572

Lotte.com (unlisted)

2000.01.05

Equity investment

2,000

3,064,000

50.01

23,177

-

-

-

3,064,000

50.01

23,177

194,553

3,878

Lotte Card (unlisted)

2002.11.30

Equity investment

34,701

70,088,853

93.78

1,000,089

-

-

-

70,088,853

93.78

1,000,089

9,402,558

119,811

Lotte Capital (unlisted)(2)

2001.12.31

Equity investment

6,259

7,445,072

22.36

77,413

-

-

-

7,445,072

22.36

77,413

6,360,125

88,858

Lotteria (unlisted)(2)

2001.12.27

Equity investment

39,719

186,062

38.68

112,864

-

-

-

186,062

38.68

112,864

1,067,537

-14,013

FRL Korea (unlisted)

2004.12.16

Equity investment

2,940

2,352,000

49

24,827

-

-

-

2,352,000

49

24,827

654,489

91,461

Woori Home Shopping (unlisted)

2006.07.03

Equity investment

28,600

4,242,796

53.03

393,213

-

-

-

4,242,796

53.03

393,213

839,646

22,317

Lotte Assets Development (unlisted)(2)

2007.07.31

Equity investment

30

15,775,274

39.14

72,890

-

-

-

15,775,274

39.14

72,890

614,741

-14,299

Zara Retail Korea (unlisted)

2007.01.18

Equity investment

130

302,600

20

16,106

-

-

-

302,600

20

16,106

173,144

-2,676

Korea Seven (unlisted)

2009.09.25

Equity investment

28,184

18,526,176

51.14

82,473

-

-

-

18,526,176

51.14

82,473

1,088,339

10,365

Lotte Gimhae Development  (unlisted)

2010.03.18

Equity investment

300

60,000

100

300

-

-

-

60,000

100

300

1,296

157

Lotte Suwon Station Shopping Town (unlisted)

2010.04.30

Equity investment

48

19,000,000

95

94,810

-

-

-

19,000,000

95

94,810

355,624

-12,943

NCF (unlisted)

2010.12.30

Equity investment

18,876

598,800

99.8

20,059

-

-

-

598,800

99.8

20,059

45,827

191

Lotte Giants (unlisted)

1982.04.21

Equity investment

30

6,000

30

823

1,800,000

9,000

-

1,806,000

30

9,823

30,157

-15,931

Lotte Songdo Shopping Town (unlisted)(2)

2011.06.27

Equity investment

40,000

12,000,000

56.3

60,000

-

-

-

12,000,000

56.3

60,000

240,931

-1,911

STL (unlisted)

2011.08.24

Equity investment

1,000

800,000

50

4,000

-

-

-

800,000

50

4,000

4,623

-1,458

Lotte International (unlisted)

2006.11.30

Equity investment

1,000

247,915

27.68

92,782

-

-

-

247,915

27.68

92,782

1,204,857

16,096

CS Mart (unlisted)

2012.01.16

Equity investment

244,880

12,761,250

99.95

255,826

-

-

-

12,761,250

99.95

255,826

156,077

10,119

Lotte Hi-mart (listed)

2012.10.31

Equity investment

1,248,068

15,403,274

65.25

1,248,068

-

-

-

15,403,274

65.25

1,248,068

2,905,213

106,595

D-Cinema of Korea

(unlisted)

2008.01.28

Equity investment

1,500

300,000

50

-

-

-

-

300,000

50

0

35,074

6,931

S.M.CONTENTS INVESTMENT (unlisted)

2009.10.01

Equity investment

2,500

175

25

1,750

-

-

-

175

25

1,750

6,522

-59

Capital One

Diversity Cinema Special Investment Association (unlisted)

2010.03.18

Equity investment

1,000

100

20

364

-

-

-

100

20

364

3,233

-719

UNION INVESTMENT PARTNERS (unlisted)

2011.01.03

Equity investment

4,000

400

26.67

4,000

-

-

-

400

26.67

4,000

14,157

-1,358

Capital One Middle-Low Budget Cinema Fund (unlisted)

2011.05.24

Equity investment

3,000

30

25

3,000

-

-1,350

-

30

25

1,650

10,053

-1,413

TW No.14 Culture Contents Fund

(formerly, CJ Venture Investment No.14 Culture Contents Fund) (unlisted)

2011.11.02

Equity investment

6,000

60

30

6,000

-

-

-

60

30

6,000

16,706

-3,677

BNK Financial Group (formerly, BS Financial Group) (listed)

1987.09.23

Equity investment

2,775

6,561,494

2.56

55,248

1,982,332

14,138

-437

8,543,826

2.62

68,949

90,279,548

530,471

Shinhan Financial Group (listed)

1997.12.31

Equity investment

637

311,118

0.07

12,305

-

-

-483

311,118

0.07

11,822

370,539,622

2,445,958

Bichae Nuri Development

(unlisted)

2008.06.09

Equity investment

150

171,600

3

-

-

-

-

171,600

3

-

3,513

-388

SPARX Asset Management Korea Co., Ltd. (formerly, Cosmo Investment) (unlisted)(2)

2009.03.27

Equity investment

8,165

65,680

7.76

15,107

-

-

-43

65,680

7.76

15,064

50,549

1,733

Lotte Logistics

(unlisted)

2007.09.28

Equity investment

4,000

66,308

4.64

13,865

-

-

1,690

66,308

4.64

15,555

849,151

27,742

TW No.12 Global Contents Fund

(formerly, CJ Venture Investment No.12 Global Contents Fund) (unlisted)

2009.11.20

Equity investment

1,500

15

3.58

1,500

-

-

-

15

3.58

1,500

27,603

-7,178

East Gate Media Contents & Technology Fund (unlisted)

2010.08.30

Equity investment

5,000

50

14.71

5,000

-

-

-

50

14.71

5,000

29,198

-3,199

ISU-Renaissance Contents Fund (unlisted)

2011.01.13

Equity investment

2,000

40

13.33

2,000

-

-

-

40

13.33

2,000

9,325

784

Union Global Contents Fund (unlisted)

2011.11.04

Equity investment

4,000

2,000

16.18

20,000

-

-

-

2,000

16.18

20,000

113,521

-2,794

Michigan Global Contents Fund #3 (unlisted)

2012.08.24

Equity investment

2,000

200

13.33

2,000

-

-

-

200

13.33

2,000

12,204

-2,707

Leading Asia Contents Fund (unlisted)

2012.09.18

Equity investment

4,000

400

21.01

4,000

-

-

-

400

21.01

4,000

15,726

-2,047

D.CAMP (unlisted)

2013.08.29

Equity investment

4,000

40

15.09

4,000

-

-

-

40

15.09

4,000

26,109

-361

LOTTE VIETNAM SHOPPING CO., LTD.

(unlisted)(1)

2006.12.15

Equity investment

3,749

-

100

125,243

-

-125,243

-

-

-

-

435,575

-26,417

Lotte Europe Holdings B.V.

(unlisted)

2008.05.30

Equity investment

124,379

249,395

26.98

87,504

-

-

-

249,395

26.98

87,504

490,633

-105,768

Lotte Shopping Holdings (Hong Kong) Co., Limited (unlisted)

2008.10.27

Equity investment

259

1,150,460,831

100

376,712

158.319.920

68,725

-68,725

1,308,780,751

100

376,712

1,195,329

-430,468

LOTTE SHOPPING HOLDINGS (SINGAPORE) PTE. LTD. (unlisted)

2008.10.28

Equity investment

101

304,975,194

100

298,959

205,757,937

339,311

-

510,733,131

100

638,270

318,693

-37,416

Coralis S.A. (unlisted)

2009.10.29

Equity investment

17,418

787,461

45

55,131

45

4,474

-

787,506

45

59,605

437,966

-55,063

Qingdao LOTTE Mart Commercial Co., Ltd.(unlisted)(1)

2008.01.18

Equity investment

33,219

-

36.79

-

-

-

-

-

28.67

-

20,399

-72,610

Lotte Mart Co., Ltd.(unlisted)(1)

2008.06.02

Equity investment

183,033

-

100

-

-

-

-

-

-

-

149,837

-26,008

Liaoning LOTTE Mart Co., Ltd. (unlisted)(1)

2008.07.24

Equity investment

2,107

-

40

-

-

-

-

-

-

-

61,173

-22,050

PT.Lotte Shopping Indonesia (unlisted)

2008.11.20

Equity investment

219,737

2,622,812

55

214,068

-2,622,812

-214,068

-

-

-

-

269,260

11,039

Lotte Cinema Vietnam Co., Ltd. (unlisted)(1)

2008.05.02

Equity investment

3,000

-

90

19,298

-

10,299

-

-

90

29,597

69,634

-3,509

Lotte Properties (Shenyang) Limited (unlisted)

2009.01.16

Equity investment

29,018

29,928,756

17.93

41,919

-

-

-

29,928,756

17.93

41,919

983,482

-27,991

Shenyang SL Cinema Investment Management Co., Ltd. (unlisted)(1)

2010.11.16

Equity investment

752

-

49

1,496

-

-

-

-

49

1,496

2,470

40

Hubei XL Cinema Co., Ltd. (unlisted) (1)

2011.06.24

Equity investment

2,048

-

49

9,423

-

-

-

-

49

9,423

17,597

791

Hemisphere Film Investors II LLC (unlisted)(1)

2011.07.29

Equity investment

578

-

100

19,727

-

-654

-

-

100

19,073

19,359

-1,043

LOTTE PROPERTIES (CHENGDU) HK LIMITED (unlisted)

2012.02.14

Equity investment

40,878

144,901,152

73.46

160,391

-

-

-

144,901,152

73.46

160,391

436,070

-6,998

Lotte (China) Management Ltd. (unlisted)(1)

2012.03.19

Equity investment

6,232

-

70

6,232

-

-

-

-

70

6,232

7,945

-7

momo.com Inc

(formerly, Fubon Multimedia Technology Co., Ltd.) (unlisted)

2012.03.07

Equity investment

38,771

7,319,420

5.15

55,491

-

-

409

7,319,420

5.15

55,900

322,837

37,796

Shandong Longzhile Cinema Co., Ltd. (unlisted)(1)

2012.09.19

Equity investment

1,735

-

49

7,173

-

884

-

-

49

8,057

18,252

-1,403

Lotte Incheon Development Co., Ltd. (unlisted)

2012.12.11

Equity investment

50

3,000,000

37.5

15,000

-

-

-

3,000,000

37.5

15,000

977,008

-6,897

Lotte Food Co., Ltd.(2)

2013.01.01

Equity investment

-

47,180

3.45

44,774

-

-

-4,577

40,197

3.45

39,537

1,287,586

50,274

Hyundai Green Food Co., Ltd.

2013.01.01

Equity investment

-

132,326

0.14

3,282

-

-

-821

2,461

0.14

2,567

1,954,105

91,455

LOTTE HOTEL & RETAIL VIETNAM PTE. LTD. (unlisted)(2)

2013.01.01

Equity investment

-

12,380,000

20

14,185

-

-

-

12,380,000

20

14,185

72,949

-20

LHSC Limited (unlisted)(2)

2013.01.01

Equity investment

-

27,425,378

16.02

-

-

-

-

27,425,378

16.02

-

30,455

-164,324

Lotte Incheon Town Co., Ltd. (unlisted)

2014.05.19

Equity Investment

50

700,000

35

3,500

-

-

-

700,000

35

3,500

98,994

52

Lotte Department Store Masan (unlisted)

2014.09.16

Equity Investment

4,200

3,300,000

100

16,500

-

-

-

3,300,000

100

16,500

67,825

-4,225

Aegis First (unlisted)(2)

2014.09.25

Equity Investment

6,074

121,477

-

5,477

-

-

-905

121,477

-

4,572

1,150,497

10,089

Eunpyeong PFV (unlisted)

2014.09.12

Equity Investment

3,500

350,000

20.11

3,500

-

-

-

350,000

20.11

3,500

259,180

-6,589

Lotte Members (unlisted)

2015.01.01

Equity investment

12,065

845,537

93.78

12,065

-

-

-

845,537

93.78

12,065

179,446

153

Lotte Town Dongtan (unlisted)

2015.10.22

Equity investment

35,000

3,500,000

50

35,000

-

-

-

3,500,000

50

35,000

69,167

-483

Lotte Accelerator

(unlisted)

2016.01.29

Equity investment

2,500

-

-

-

500,000

2,500

-

500,000

16.67

2,500

-

-

Lotte Ulsan Development

(unlisted)

2016.02.25

Equity investment

10,000

-

-

-

2,000,000

10,000

-

2,000,000

100

10,000

-

-

Busan Lotte Creative Film Fund  (unlisted)

2016.02.26

Equity investment

2,500

-

-

-

250

2,500

-

250

47.62

2,500

-

-

Korea Investment Global Contents Investment Cooperation

(unlisted))

2016.03.01

Equity investment

2,400

-

-

-

240

2,400

-

240

6.15

2,400

-

-