Company-wide Quality Control.

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1 STX Business Group Newsletter news World Best STX with the spirit of Creativity & Challenge No Presentation Festival and Get-Together Ceremony for STX Business Group s New Employees Held STX Business Group held its 'Presentation Festival on January 27th. In attendance were Chairman Kang Duk-soo, presidents of affiliates and all the new employees from the 20 th recruitment. During the festival, 10 teams that had passed the preliminaries during the Group s new employee training showed a variety of development ideas including advancement into a new business, organizational culture activation and sustainable management methods using musical performance, situation drama, etc. These new and fresh presentation methods attracted the attention of the attendees. Of the many awards presented-including the Creativity Award, Challenge Award and Encouragement Award-the top award, the World s Best Award, was given to the Sunny Ten Team for its presentation of a company-wide competitiveness improvement plan through the Group's integrated management system entitled Establishment of a Webpage for Company-wide Quality Control. Chairman Kang Duk-soo said, The presentations made me understand the driving force behind the Korean wave washing over Asia and the world. He praised and encouraged them by saying, I am deeply impressed with the passion you have all shown regarding your work. You all did a good job. In addition, before the festival, the new employees of the Group's 20 th recruitment raised funds for a scholarship by collecting KRW 10,000 from each of their first salaries. Wang Jeong-kyu, the group s representative, delivered KRW 5.5 million (USD 5,000) to Mungyeong Technical High School in Mungyeong City, with Shin Sang-ho, President of STX Offshore & Shipbuilding, Kim Jin-hee, Principal of the Mungyeong Technical High School and others in attendance. The 'STX New Employees' Scholarship', the third time this year after started by new employees recruited in the first half of 2011 has become a part of STX's unique donation culture. STX visits and delivers scholarships raised by new employees to a high school located in Mungyeong during the twice yearly training course.

2 news Accelerates Construction of Diesel Power Generation Plants in Iraq STX Engine finished production of all the generators to be installed in diesel power generation plants in Iraq. STX Engine has now completed production of a total of 196 sets of generators in only three months after delivering 24 sets in the first shipment in October In particular, the company achieved delivery of the engines on time by reducing the production time by approximately 50% through the implementation of piping standardization and continuous assembling work. Jung Dong-hak, President of STX Engine, said, "Now that we have finished the first step of the Iraqi project, let's exert further efforts to become an advance guard for the successful implementation of the project by thoroughly preparing for the next phase of production." In addition, STX Construction started full-scale mechanical installation work by successfully installing diesel engine generation unit #1 (4MW) at Karbala on January 16th (local time). STX plans to complete the first phase construction of the diesel power generation plants with a total capacity of 900MW (the entire plants will total 2,500MW) before this coming June. STX Engine expects that beginning with the completion of the production of the diesel engine generators and the installation of generator unit #1, the construction of the diesel power generation plant will be accelerated. Constructs Green Energy Industrial Park in Samcheok STX Energy concluded an MOU for the construction of a Green Energy Industrial Park at Samcheok City Hall on January 6th, with approximately 20 concerned persons, including Lee Byung-ho, President of STX Energy, and Kim Dae-soo, Mayor of Samcheok City, in attendance. The first Green Energy Industrial Park promoted by STX Energy features the concept of a combined industrial complex that comprehensively covers the energy industry and related manufacturing businesses. This Green Energy Industrial Park consists of a power generation complex, a power generation equipment manufacturing complex, a disaster prevention equipment complex, a new renewable energy complex, a marine bio complex, and a resident cooperation complex, etc. STX plans to invest the Group's manufacturing capability based on shipbuilding, machinery, heavy industries, engine manufacturing, etc., in creating an environmentally friendly combined industrial complex covering energy businesses including clean power generation, new renewable energy, etc., and related manufacturing businesses in order to increase the synergistic effect in its businesses and to positively contribute to the development of the local economy by creating employment, etc. Creativity & Challenge

3 Receives an Order for Flue Gas Desulfurization Systems STX announced that they concluded an agreement for the supply of flue gas desulfurization systems for Dangjin Thermal Power Plant Units #9 and #10 with Korea East-West Power Co., Ltd., on January 19th. These flue gas desulfurization systems for two units of 1,000MW power plants amount to a total of KRW 85.7 billion (Approximately USD 75 million). Including the flue gas desulfurization systems for this order, STX Heavy Industries will supply flue gas desulfurization systems for six of 10 units for the Dangjin Thermal Power Plants. Beginning with the delivery of equipment and materials for Power Plant Unit #9 on March 2013, the company will proceed with construction of the flue gas desulfurization systems and complete them in June A flue gas desulfurization system is an environmental protection facility that removes sulfur oxides (SOx), which are hazardous to humans, contained in the flue gas exhausted from the boilers in a thermal power plant. Its market is rapidly expanding as concern for the environment increases. STX Heavy Industries plans to continuously receive orders for environmentally friendly plants based on its technical power recognized by its implementation of the flue gas desulfurization projects for Dangjin Thermal Power Plants. View of Dangjin Thermal Power Plants STX Heavy Industries will implement this project on an EPC (Engineering, Procurement and Construction) basis taking responsibility for the entire construction work except for civil and architectural works. Selected as the Best Ships of 2011 FSU VLCC Side Dumping Vessel STX Offshore & Shipbuilding s three vessels-an offshore plant (FSU), special platform supply vessel and a super-large ship- were recently selected as the Most Outstanding Ships of 2011 by Marine Log (USA) and Naval Architect (England), shipbuilding and shipping magazines. The FSU(Floating Storage Unit) which STX Offshore & Shipbuilding was commissioned to build in 2008 is the world s largest FSU to be operated in Persian Gulf. With this FSU being selected as the most outstanding ship, STX Offshore & Shipbuilding has had its specialized design and production technology recognized. The side dumping vessel is a special platform supply vessel that performs landfill of the seabed by dumping stones on the seabed, and is a product created by the officers and staff of Busan Shipyard. Through the construction of this special vessel, STX Offshore & Shipbuilding s Busan Shipyard turned on a green light for the expansion of its portfolio of offshore plants. The 300,000 ton class VLCC MAERSK SARA, selected as the Most Outstanding Ship for 2011, is an environmentally friendly vessel into which environment protection technology and energy efficiency management technology (Green Technology) are integrated to respond to the trend of environmental regulations being reinforced. It significantly reduced the energy efficiency design index, which is the weak point of a super-large crude oil carrier, by applying a low vibration propelling system and heat recovery system generator that reuses thermal energy from the exhaust gas into electric energy. In particular, it reduces CO2 emissions by 7% compared to that of existing VLCCs by not only reusing the waste heat from its engine but also converting the steam from the boiler into electric energy. With its shipbuilding capability and technology for super-large ships including the FSU being selected as the Most Outstanding Ship for 2011 and recognized by the world's leading shipping magazines, STX Offshore & Shipbuilding plans to continuously promote aggressive order securing activities.

4 Leading the Ocean & Beyond Acquires an AEO Certification for Safe and Secure Trading inspection. In addition, they also benefit from benefits regarding customs clearance procedures in countries with which the KCS has entered into a mutual recognition agreement. Therefore, acquisition of AEO certification saves on logistics costs, develops new overseas markets and reinforces competitiveness. Currently, the enterprises designated as outstanding AEOs by the KCS include 181 companies in 255 sectors, including STX Metal. Of large businesses engaged in exports and imports, only approximately 70 companies, acquired the AEO certification. STX Metal was certified as an AEO certified enterprise after being officially recognized by the KCS(Korea Customs Service) at the 'AEO Certificate Awarding Ceremony' held in the main conference room of Busan Main Customs on January 16th. The AEO(Authorized Economic Operator) certification is awarded to an enterprise officially recognized by the KCS as a safe and reliable export and import enterprise satisfying the international standards of the WCO(World Customs Organization) regarding safety and security for trading. Enterprises designated as an AEO will be given customs administration related benefits such as exemption from audit by the Korea Customs Service as well as export and import STX Metal was also designated as an outstanding enterprise for its employment creation and labor-management's social responsibility. On January 13th, the company was awarded a '100 Outstanding Enterprises for Employment Creation' certification plaque at the Blue House and had the honor of being selected as an outstanding enterprise with labor-management's social responsibility. Of particular note is the fact the Ministry of Employment and Labor has granted this award only twice since 2010, and it is significant that only five enterprises including STX Metal were granted this award. Regarding the consecutive grants of awards in the new year, Yoo Chun-il, President of STX Metal, said, The value of a sustainable enterprise comes from cooperative and stable development of labor-management. He added, I will exert efforts to make STX Metal an enterprise that can steadily contribute to the development of local communities. Develops the 'Bridge Navigational Watch Alarm System (BNWAS)' STX Engine completed the development of the BNWAS (Bridge Navigational Watch Alarm System) which must be installed in all ships according to international agreements and obtained approval from the Ministry of Land, Transport and Maritime Affairs. BNWAS is a device that prevents marine accidents caused by negligence (drowsiness, etc.) by watch-keepers on the bridge during navigation. The BNWAS/STX-7000 model was developed to a higher quality and greater price competitiveness compared to similar products from other companies by securing flexibility in responding to customers' requirements through various interfaces and modular design. Owing to the development of this BNWAS model, STX Engine has added a new product to its product lineup. The company plans to continuously increase its portfolio of ship automation products. Dream & Future

5 news Provides Various Corporate Social Activities Leading the Ocean & Beyond STX Business Group participated in a number of neighborly activities when greeting the New Year and lunar New Year holidays by providing donations and voluntary services. Having donated one billion won to the Community Chest of Korea, STX Business Group positively provided support to the underprivileged and social welfare facilities. STX held a ceremony for its neighborhood support donation on January 11th at the Community Chest of Korea, with approximately 30 concerned persons including Chu Sung-yup, President of STX Corporation, and Lee Dong-gun, Chairman of the Community Chest of Korea, in attendance. STX recently established Yegrina, an affiliate type of standard workplace for the handicapped, in order to create jobs for the physically challenged. Yegrina plans to become a social enterprise after receiving approval from the Ministry of Employment and Labor by increasing employment opportunities for the vulnerable. In particular, in order to increase employment of those with physical handicaps, it will practice its responsibility as a social enterprise by producing and selling bread in connection with STX Resort. Before the Seol Holidays, the STX Family Volunteer Group in South Gyeongnam Province visited and delivered various daily necessities to Junghyewon, a welfare facility for the aged, Jinhae Rehabilitation Facility for handicapped children, and Jinhae House of Hope, a facility for the protection of youth. The STX Family Volunteer Group in Seoul provided voluntary services by making dumplings and rice cakes for the Seol festive days at the Seoul Senior Welfare Center located in Jongro on January 17th. In addition, STX Construction's Quality Management Team delivered a variety of goods to Yangjae General Senior Welfare Center for the Seol festive days. They bought 40 boxes of Ramyun (instant noodles) with prize money from the achievement award for 2011 that they received at the kick-off meeting for the year. These goods will be delivered to 40 elderly men of low income who live alone. Under the motto, Creating a World with Dreams and Future, STX Business Group is practicing its social responsibility by performing social contribution activities and providing actual support to the underprivileged from every corner of society. Holds the First Naming Ceremony of 2012 STX Offshore & Shipbuilding successfully held a naming ceremony at Jinhae Shipyard on January 4th for two 50,000 DWT class product oil chemical tankers [ NISI- DA (S1736) and MISENO (S1737)] ordered by L.G.R. in Italy. Carlo Pontecorvo, President of L.G.R., was in attendance along with his wife and family. President Carlo Pontecorvo expressed his sincere gratitude to officers and staff of STX Offshore & Shipbuilding for having exerted great effort to build high quality ships and deliver them on time under a difficult world economic situation and conveyed his desire to cooperate on additional contracts. Address: STX Namsan Tower, 631 Namdaemunno 5-ga, Seoul, Korea / Tel: / Fax:

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