message from ceo - daewoo e&cdwconstir.com/inc/download.asp?filename=2012 daewoo e&c annual...

04 05MESSAGE FROM CEO

strategies to enhance margins and adjust the management of worksites in Korea

and abroad. We will also improve our IT-based integrated project management

system that was put in place last year. We will also ensure profitability in the

housing business by concentrating on in-house development projects in prime

residential areas, such as Wirye New Town and the Hanam Misa District. In

addition, we will enhance our brand image by building local landmarks.

Our management slogan for 2013 is “EPC Innovation,” which reflects our

commitment to taking the necessary steps to ensure sustainable growth and

continued development in global markets. EPC Innovation stands for Efficiency

Innovation, Process Innovation and Cost Innovation.

Efficiency Innovation focuses on preemptively reducing potential risks, openly

and immediately sharing information and effectively adopting a timely decision-

making process. We plan to reach these goals by efficiently managing our entire

project cycle, ranging from estimates, bidding and contracts to construction

and completion. Our processes will be based on our recently upgraded IT

infrastructure to which I have referred.

Process Innovation refers to revamping all business processes to enhance

competitiveness. This includes undertaking exhaustive feasibility studies

of projects and analyzing projects based on several categories, including

procedures, business areas and sectors. Order taking and contract preparation

will be included, in addition to project mobilization and project construction and

completion.

Cost Innovation will be the end result of Efficiency Innovation and Process

Innovation. This strategy is aimed at bolstering cost competitiveness by

innovating project management from order receipt to completion. This includes

enhancing the efficiency of our organizations and human resources and

reinforcing profitability, including lower sales and administrative expenses by

implementing a company-wide integrated management process.

Despite the threat from intensifying competition and reduced orders, Daewoo

E&C has set a 2013 new order goal of KRW 16 trillion. We are also targeting KRW

9.3 trillion in sales and KRW 423.0 billion in operating profit. Given the challenging

environment at home and abroad, it will be difficult to achieve these goals.

However, I am certain we will succeed if we harness all our energies and make

optimal use of our capabilities, expertise and experience. This will be especially

true in relation to our overseas business results.

Last, but not least, Daewoo E&C will continue to build the market’s trust by

fulfilling our corporate social responsibilities and practicing open & ethical

management.

I look forward to your continuing interest and encouragement.

Thank you.

DAEWOO E&C WILL

CONTINUE TO BUILD UP

THE MARKET'S TRUST

BY FULFILLING

ITS CORPORATE SOCIAL

RESPONSIBILITIES AND

PRACTICING OPEN &

ETHICAL MANAGEMENT

DEAR VALUED SHAREHOLDERS:

2012 was an eventful year for the world’s economy. The sovereign debt crisis

continued in the Eurozone, adding even more downward pressure to the global

economic slump.

The world’s economy has become increasingly interconnected so that turbulence

in one country typically expands into regional and potentially global problems.

This was certainly the case in Korea as the slow global economy continued to

erode domestic demand, evidenced by a marked reduction in export volume

and a depressed construction market. More than thirty of the nation’s top one-

hundred construction contractors entered court receivership last year, while

average household debt spiraled upward to over KRW 1,000 trillion and the

bottom fell out of the real estate market.

Given the dire economic conditions, I am proud to announce that Daewoo E&C

posted satisfactory results over the year, including KRW 13,812.4 billion in orders

received, KRW 8,180.3 billion in sales and KRW 365.2 billion in operating profit.

Our overseas business continued to expand last year, becoming an increasingly

important component of our operations. We recorded compound annual growth

rate of 32% in overseas orders over the past five years, both in traditional market,

such as Libya and Nigeria, and new markets, including Algeria and Morocco.

Profitability in our overseas business also continued to grow, recording gross

margins of 8.6% in 2011 and 8.9% in 2012.

Given the ongoing slowdown in the local construction and real estate markets,

we chose to focus on the overseas business. This includes expanding human

resource capabilities and upgrading organizations and systems to bolster our

existing strength in engineering and procurement. Accordingly, we were able to

aggressively pursue order growth for engineering, procurement and construction

(EPC) projects in the Middle East and North Africa. We also diversified our

business portfolio by establishing partnerships with leading EPC players, such as

Japanese corporations. I am confident these decisions will yield excellent results

for our overseas business again in 2013.

Our industry-leading capabilities combined with our successful bids on overseas

megaprojects will cement stable revenue going forward. Our future projects

include the Ras Djinet combined-cycle power plant and the El Harrach river

restoration project in Algeria, the Jazan refinery in Saudi Arabia and the Jorf

Lasfar fertilizer plant in Morocco. We also bolstered our liquidity by disposing

non-core assets, such as the Hanoi Daewoo Hotel in Vietnam and the Guilin

Daewoo Hotel in China.

In 2013, we forecast slow growth for both Korea and the rest of the world, in terms

of business investments and transactions, given the ongoing concerns about the

sovereign debt crisis in Europe and the ongoing slump in the US. Our response to

these conditions will be to focus on stable, profitable and practical management.

We are currently revamping our operations to ensure a sustained focus on both

quantitative and qualitative growth. This includes cutting costs, expanding the

EPC business and bolstering risk management processes, as well as adopting new

SEO, JONG-UK

PRESIDENT & CEO

SEO, JONG-UK

PRESIDENT & CEO

06 07COMPANY HISTORY BUSINESS OVERVIEW

2012- Published sustainability report

- Began construction of Ras Djinet combined-cycle power plant

- Won order for Jazan Refinery, Package 12, in Saudi Arabia

2011- Won the Oman Sur Independent Power Plant (2011~2014)

- Won the Saudi Arabia RTIP Tank Farm Project (PKG 1&2)

(2012~2015)

- Won the Malaysia IB Tower Project (2011~2014)

- Received the Grand Prize for Civil Engineering Structure

of the Year 2011 from the Korean Society of Civil Engineers

(Busan-Geoje Fixed Link(Geoga Daero))

2010- Won the contract for the first overseas export of a research

reactor (Jordan)

- Began construction of Ruwais Refinery Expansion-Tankage project

(2010~2014) in the UAE

- Opened “Busan-Geoje Fixed Link (Geoga Daero)”, the world’s

deepest and Korea’s very first automobiles-only immersed tunnel

- Signed M&A agreement with Korea Development Bank

2009- Won the Seoul DMC Landmark Building (2009~2015)

- Won the Libya Tripoli Waterfront Hotel (2009~2012)

- President and CEO Seo, Jong-uk received Golden Tower Order of

Industrial Medal

2008- Ranked first in the Construction Capability Evaluation (for three

consecutive years)

- Received grand prize in the “Korea Residential Service Award”

2007- Ranked first in the Construction Capability Evaluation (for two

consecutive years)

- Selected as the best in quality service survey by women

consumers for Prugio

- Received grand prize in the Engineering and Construction

Technology Awards of Korea

2006- Ranked first in the Construction Capability Evaluation

- Joined Kumho Asiana Group as an affiliate

2005- Received the Presidential Award in the 9th Most Livable

Apartment Contest (Gireum Prugio)

2004- Began construction of the nation’s 1st and the world’s biggest

tidal power plant (Sihwa Lake Tidal Power Plant, 2004~2009)

- Began construction of the 1st submersible tunnel in Korea

(private-invested Busan-Geoje Fixed Link Project, 2004~2010)

2003- Completed the Corporate Restructuring and Improvement Work

- Launched new apartment complex brand, Prugio

2001- Received Best Knowledge Management Award from Korea

Management Association

2000- Established as an independent corporate entity

- Received Presidential Award for Daewoo Institute of Construction

Technology (DICT)

1999- Began construction of the longest tunnel in Korea

( Yeongdong railway track relocation project between Dongbaeksan &

Dogye, 1999~2007)

1993- Obtained the ISO 9000 certification, a first among construction

companies in Korea

- Began construction of Houay Ho Dam in Laos (1993~1997)

1992- Began construction of motorway in Pakistan (1992~1997)

- Began construction of Wolsong Nuclear Power Plant Units 3 & 4

(1992~1999)

1988- Entered the US construction market, a first among construction

companies in Korea

(residential area for elderly retirees in Seattle, 1988~2003)

1985 - Began construction of the first cogeneration power plant in Korea

(Mokdong Cogeneration Power Plant, 1985~1987)

1984 - Received the US$ 4 Billion Construction Export Tower award

(Ranked 15th among Top Global Contractors by ENR)

1983 - Established Daewoo Institute of Construction Technology (DICT),

an industry first in Korea

- Began construction of Suyeong Bay Olympic Yacht Marina

(the world’s largest, 1983~1987)

1982- Daewoo Co., Ltd. was established (construction / trading sectors)

1979 - Began construction of the first turn-key project in Korea

(Daejeon Depot, 1979~1984)

1978 - Advanced into Libya (Garinius Medical School, 1978~1982)

- Began construction of Dongjak Grand Bridge (1978~1984)

1976 - Obtained international contractor certification

- Advanced into Ecuador, a first among Korean construction companies

1973 - Established as Daewoo Construction Co., Ltd.

Companies across the globe faced significant challenges in 2012. This was particularly true for E&C

companies due to the downturn in construction and property markets and the growing competition

overseas.

Daewoo E&C posted satisfactory results despite these hurdles, securing KRW 13,812.4 billion in

orders, KRW 8,180.3 billion in sales and KRW 365.2 billion in operating profit. Our overseas business

continued to grow, comprising 46% of orders and 42% of sales.

We reinforced worksite management functions by developing a project management system that is

fully integrated with all of our EPC processes. We also upgraded our systems to analyze worksites

promptly and accurately to expedite the decision-making process, in addition to revamping our

operations to ensure a more profit-orientated and practical business management. This includes

making adjustments to our system of categorizing operations by division, and creating a special

office to oversee risk management processes.

Our overall goal is to strengthen our foundation to grow into a global EPC leader via profit-

orientated management and steadily expand our overseas business.

Summary of Three-Year Trailing Business Performance

and Financial Position (Unit: In millions of KRW)

Sales

2010

6,719,0627,031,864

8,180,269

2011 2012

Net profit Total Assets Total Equity

2010

(813,601)

226,757

159,399

2011 2012 2010

9,459,489

8,984,782

9,357,600

2011 2012 2010

3,255,130

3,360,445

3,395,670

2011 2012

BUISNESS OVERVIEW 08 09

01

02 03

01

02 03

The civil project business posted KRW 1,383.2 billion in orders and KRW 1,395.5

billion in sales in 2012, despite difficult domestic market conditions. In 2013,

we are increasing our efforts to maximize operating profit by developing an

emergency management system, and we are targeting KRW 2,670.0 billion in

orders and KRW 1,500.0 billion in sales.

We won the grand prize in the civil engineering facilities segment of the Korean

Civil & Architecture Technology Award for a second consecutive year. This was

awarded for our successful completion of the Sihwa Tidal Power Plant, the

first such facility in Korea and the largest in the world. Other projects we are

conducting in Korea include the Honam and Gyeongbu high-speed railways and

the bio energy project in Daegu that will use the Daewoo Two-Phase Anaerobic

Bio-Gas System. Some of our overseas projects include the Boughzoul urban

development, Djen Djen port and El Harrach river restoration projects in Algeria

and a hydropower plant in Pakistan. Going forward, we plan to further diversify

our overseas business portfolio to include hydro and environmental facilities in

Thailand and environmental undertakings in Algeria.

CIVIL PROJECT BUSINESS

01 Hydropower Plant in Pakistan

02 Gyeongbu High-speed Railways

03 Sihwa Tidal Power Plant

The architecture business recorded KRW 3,502.3 billion in orders in 2012. This

success resulted from efforts to expand overseas operations, which will hopefully

emerge as a growth engine for the overall company. Our overseas expansion

included signing deals for new projects, such as the Scotts Tower in Singapore,

government facilities in Boughzoul, Algeria and the Matrade Center in Malaysia.

We also focused on securing orders for medical and educational facilities and

studio apartments.

Our “Prugio City” brand ranked first in the studio apartment category in the 2012

Korea Standard Premium Brand Index survey, reinforcing our position as Korea’s

leader in building studio apartments.

While we anticipate the global economic slowdown will continue, we are laying

the groundwork for sustainable growth by meeting or exceeding our goal

of KRW 3,040 billion in orders. We are also becoming more competitive in

overseas markets, focusing on Asia, the Middle East and Africa. In addition, we

will bid on projects to develop complexes and seek new business opportunities

in other regions. We believe we will reach our goal of KRW 2,100.0 billion in

sales by ensuring all of our operations are practical, profitable, optimized and

standardized.

ARCHITECTUREBUSINESS

01 Matrade Center in Malaysia

02 Scotts Tower in Singapore

03 Songdo I-Tower


01 01

0202 0303

In 2012, we conducted aggressive marketing in areas that we expected higher

housing demand. We were able to generate profits from this situation utilizing our

years of history in the housing sector, coupled with analysis of our DHSF(Daewoo

Housing Sales Forecast) housing demand forecasting tool. As a result, we supplied

13,087 new housing units and secured KRW 3,5431.5 billion in construction orders,

as we retained our leading position in both categories.

We have reinforced our competitiveness by innovating services and products

unique to our projects. This includes applying “My Premium,” a customized

housing product launched in 2011, to the Songpa Prugio and Wirye New Town.

In 2013, we will pursue a broad range of strategies to maximize customer

value and enhance our Prugio brand. We will also reinforce our capabilities by

establishing new inspection and defect detection systems to ensure product

quality. Accordingly, we will lead the housing market that will be increasingly

dominated by well-informed and thriftier buyers.

HOUSING BUSINESS

01 Siheung Prugio

02 Chungju Prugio

03 Songpa Prugio

The plant business secured KRW 3.3 trillion in orders and KRW 1.8 trillion in sales

in 2012, as we maintained our position as one of the leading players in the global

power plant market. Completed projects include the Afam VI power plant in

Nigeria, the Jorf Lasfar power plant in Morocco, the Sur power plant in Oman and

the S3 power plant in the UAE.

As for nuclear power plants, we completed the Shin Wolsong plant, and our work

received an A+ rating from an outside evaluation firm.

We also completed infrastructure construction for the Proton Accelerator

Research Center and the SMART ITL project, firming our position as a leading

NPP builder in Korea.

Plans for 2013 include utilizing our experience and expertise in EPC projects to

sustain our leadership in these markets. We will work with Korea Development

Bank to win more deals for independent power projects, which should emerge as

a growth engine going forward.

POWER PLANT BUSINESS

01 Misurata Power Plant in Libya

02 Afam VI Power Plant in Nigeria

03 Shin Wolsong Nuclear Power Plant


Activities in 2012 include completing an LNG production base in Pyeongtaek,

main piping work in Pyeongtaek and Yongin and LNG loading and uploading

facilities in Tongyeong. We also secured an order for gas and heat supply piping

work in Pocheon. Overseas activities include three more orders in Nigeria – the

Assa-North development, the Indorama fertilizer plant and the SSGGP. We also

won contracts for the Jorf Lafar fertilizer plant in the Sadara storage facility, the

Hout gas treatment plant and the Jazan refinery in Saudi Arabia.

In 2013, we plant to reinforce our position in Nigeria, Algeria and Saudi Arabia,

and explore promising new markets, such as Iraq and Venezuela.

OIL & GAS BUSINESS

01 Escravos GTL Plant in Nigeria

02 LNG Production Base in Pyeongtaek

03 Algeria Fertilizer Plant

We won contracts for Algeria’s Ras Djinet combined-cycle power plant and

El Harrach river restoration projects in 2012. The river restoration project

represented a new milestone in our overseas expansion activities, as this is the

first time Korean water resource management technologies will be implemented

in another country. We also won contracts for the Jazan refinery package 12 in

Saudi Arabia and the Scotts Tower in Singapore, as we extended our operations in

both countries.

Our goals for 2013 include servicing traditional markets in Nigeria, Algeria and

Malaysia, and penetrating new regions, such as South Africa, the CIS and Central

and South America.

OVERSEAS BUSINESS

01 Ras Djinet Combined-cycle Power Plant

02 El Harrach River Restoration Projects

01 01

02 0203

14 15REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of DAEWOO ENGINEERING &

CONSTRUCTION CO., LTD.

We have audited the accompanying separate statements of financial position of

DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. as of December 31, 2012

and 2011, and the related separate statements of income, comprehensive income,

changes in equity and cash flows for the years then ended, expressed in Korean

won. These separate financial statements are the responsibility of the Company's

management. Our responsibility is to express an opinion on these separate

financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally

accepted in the Republic of Korea. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the separate

financial statements are free of material misstatement. An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in

the separate financial statements. An audit also includes assessing the accounting

principles used and significant estimates made by management, as well as

evaluating the overall separate financial statement presentation. We believe that

our audits provide a reasonable basis for our opinion.

In our opinion, the separate financial statements, referred to above, present

fairly, in all material respects, the financial position of DAEWOO ENGINEERING

& CONSTRUCTION CO., LTD. as of December 31, 2012 and 2011, and its financial

performance and cash flows for the years then ended, in accordance with

International Financial Reporting Standards as adopted by the Republic of Korea.

The amounts expressed in U.S. dollars are provided solely for the convenience

of the reader and have been translated on the basis set forth in Note 4 to the

accompanying separate financial statements.

Auditing standards and their application in practice vary among countries. The

procedures and practices used in the Republic of Korea to audit such financial

statements may differ from those gennerally accepted and applied in other

countries. Accordingly, this report is for use by those who are informed about

Korean auditing standards and their application in practies.

This report is effective as of March 19, 2013, the audit report date. Certain subsequent events of circumstances, which

may occur between the audit report date and the time of reading this report, could have a material impact on the

accompanying separate financial statements and notes thereto. Accordingly, the readers of the audit report should

understand that there is a possibillity that the above audit report may have to be revised to reflect the impact of such

subsequent events or circumstances, if any.

SEOUL, KOREA, MARCH 19, 2013

SEPARATE STATEMENTS OFFINANCIAL POSITION

DECEMBER 31, 2012 AND 2011

DEC 31

2012

DEC 31

2011

DEC 31

2012

DEC 31

2011

Assets

Current assets

Cash and cash equivalents 323,572 645,194 302,093 602,366

Financial instrument assets 22,413 42,767 20,925 39,928

Trade receivables 2,712,475 2,594,474 2,532,420 2,422,252

Other receivables 887,792 765,505 828,860 714,690

Advance payments 567,330 371,116 529,670 346,483

Prepaid expenses 332,437 354,279 310,370 330,762

Inventories 1,076,150 712,517 1,004,715 665,220

Assets held for sale 394,305 327,004 368,131 305,297

6,316,474 5,812,856 5,897,184 5,426,998

Non-current assets

Investments in subsidiaries and associates

457,890 472,353 427,495 440,999


Investments in securities 715,942 731,038 668,418 682,511



Investment property 189,874 192,238 177,270 179,477

Property, plant and equipment 175,341 180,491 163,702 168,510

Intangible assets 82,206 68,944 76,749 64,366

Deferred income tax assets 537,266 525,740 501,602 490,841

3,041,126 3,171,926 2,839,254 2,961,371

Total assets 9,357,600 8,984,782 8,736,438 8,388,369 $W W $

(in millions of Korean won and thousands of US dollars)

W $W $

16 17

DEC 31

2012

DEC 31

2011

DEC 31

2012

DEC 31

2011

Liabilities

Current liabilities

Financial instrument liabilities 1,363,846 931,050 1,273,313 869,247

Trade payables 465,412 672,073 434,518 627,461

Other payables 890,948 784,022 831,807 731,978

Advances received 1,081,620 1,036,605 1,009,822 967,795

Withholdings 99,969 83,679 93,333 78,124

Guarantee deposits received 45,582 40,086 42,556 37,425

Income tax payable 48,717 29,733 45,483 27,759

3,996,094 3,577,248 3,730,832 3,339,789

Non-current liabilities

Financial instruments liabilities 1,199,617 1,060,260 1,119,985 989,880

Advances received 433,732 723,155 404,941 675,152

Provisions 135,930 108,875 126,907 101,648


Defined benefit liabilities 167,186 128,546 156,089 120,013

1,965,836 2,047,089 1,835,343 1,911,203

Total liabilities 5,961,930 5,624,337 5,566,175 5,250,992

Equity attributable to owners

of the Parent Company

Capital stock 2,078,113 2,078,113 1,940,167 1,940,167

Capital surplus 548,200 548,200 511,810 511,810

Other components of equity (99,174) (99,174) (92,591) (92,591)

Accumulated other comprehensive income (57,897) 43,231 (54,054) 40,361

Retained earnings 926,428 790,075 864,931 737,630

Total equity 3,395,670 3,360,445 3,170,263 3,137,377

Total liabilities and equity 9,357,600 8,984,782 8,736,438 8,388,369 $W W $


SEPARATE STATEMENTS OFFINANCIAL POSITION


SEPARATE STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2012 AND 2011

W $W $

DEC 31

2012

DEC 31

2011

DEC 31

2012

DEC 31

2011

Sales 8,180,269 7,031,864 7,637,260 6,565,086

Cost of sales 7,374,679 6,363,202 6,885,145 5,940,810

Gross profit 805,590 668,662 752,115 624,276

Selling and administrative expenses 440,374 357,604 411,142 333,866

Operating income 365,216 311,058 340,973 290,410

Other income 347,776 404,317 324,691 377,478

Other expenses 420,328 341,162 392,426 318,516

Financial income 41,662 63,213 38,896 59,017

Financial costs 118,776 177,213 110,892 165,449

Profit before income tax 215,550 260,213 201,242 242,940

Income tax expense 56,151 33,456 52,424 31,235

Profit for the year 159,399 226,757 148,818 211,705

Earnings per share attributable to the equity holders of the Companyduring the period

Basic earnings per share 388 552 0.36 0.52

Diluted earnings per share 387 551 0.36 0.51

(in millions of Korean won and thousands of US dollars, except per share amounts)

W $W $

W $W $

W $W $

18 19

DEC 31

2012

DEC 31

2011

DEC 31

2012

DEC 31

2011

Cash flows from operating activities

Cash generated from operations (1,127,581) (6,411) (1,052,732) (5,985)

Interest received 43,112 57,438 40,250 53,625

Interest paid (86,692) (125,672) (80,937) (117,330)

Income tax refund (paid) (48,104) 1,157 (44,911) 1,080

Dividends received 9,212 11,632 8,601 10,860

Net cash used in operating activities (1,210,053) (61,856) (1,129,729) (57,750)

Cash flows from investing activities

Decrease in current financial instrument assets 22,774 31,093 21,262 29,029

Increase in current financial instrument liabilities (derivatives)

87,216 15,047 81,427 14,048

Decrease in current other receivables 186,226 98,380 173,864 91,850

Disposal of assets held for sale 232,090 1,183,328 216,684 1,104,778

Decrease in investments securities 190,196 151,702 177,571 141,632

Decrease in investments in subsidiaries and associates 20,941 202 19,551 189

Decrease in non-current other receivables 88,429 160,330 82,559 149,687

Disposal of investment property - 12,009 - 11,212

Disposal of property, plant and equipment 994 3,100 928 2,894

Decrease in non-current financial instrument assets 162,541 - 151,751 -

Increase in current financial instrument assets (9,197) (25,322) (8,586) (23,641)

Decrease in current financial instrument liabilites (derivatives)

(277,289) (7,797) (258,882) (7,279)

Increase in current other receivables (164,911) (264,721) (153,965) (247,149)

Increase in investments securities (203,756) (84,647) (190,231) (79,028)

Increase in investments in subsidiaries and associates (8,157) (32,523) (7,616) (30,364)

Increase in non-current financial instrument assets - (42,257) - (39,452)

Increase in non-current other receivables (164,232) (157,031) (153,330) (146,606)

Acquisition of investment property - (1,265) - (1,181)

Acquisition of property, plant and equipment (35,253) (84,098) (32,913) (78,516)

Acquisition of intangible assets (13,467) (8,277) (12,573) (7,729)

Net cash provided by investing activities 115,145 947,253 107,501 884,374

Cash flows from financing activities

Increase in current financial instrument liabilities 1,570,000 1,299,359 1,465,783 1,213,107

Increase in non-current financial instrument liabilities 773,748 315,445 722,386 294,506

Decrease in current financial instrument liabilities (1,569,727) (2,175,247) (1,465,528) (2,030,853)

Decrease in non-current financial instrument liabilities - (139,981) - (130,689)

Others - (91) - (85)

Net cash provided by (used in) financing activities

774,021 (700,515) 722,641 (654,014)

Exchange loss on cash and cash equivalents (735) (19) (686) (18)

Net increase (decrease) in cash and cash equivalents (321,622) 184,863 (300,273) 172,592

Cash and cash equivalents at the beginning of year 645,194 460,331 602,366 429,774

Cash and cash equivalents at

the end of year

323,572 645,194 302,093 602,366

SEPARATE STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2012 AND 2011

W $W $

W $W $


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


DEC 31

2012

DEC 31

2011

DEC 31

2012

DEC 31

2011

Assets

Current assets

Cash and cash equivalents 388,440 713,827 362,656 666,443


Trade receivables 2,671,793 2,593,441 2,494,438 2,421,287


Advance payments 580,555 382,171 542,018 356,802


Inventories 1,426,787 1,015,597 1,332,076 948,181

Assets held for sale 394,304 329,171 368,130 307,321

6,716,706 6,196,612 6,270,849 5,785,278

Non-current assets

Investments in associates 96,290 103,524 89,898 96,652


Investments in securities 717,286 732,321 669,672 683,709



Investment property 189,874 192,238 177,270 179,477

Property, plant and equipment 697,829 773,858 651,507 722,489

Intangible assets 113,627 105,101 106,084 98,124

Deferred income tax assets 543,341 513,516 507,274 479,429

3,142,613 3,271,967 2,934,004 3,054,771

Total assets 9,859,319 9,468,579 9,204,853 8,840,049 $W W $


W $W $

20 21CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


DEC 31

2012

DEC 31

2011

DEC 31

2012

DEC 31

2011

Liabilities

Current liabilities

Financial instrument liabilities 1,380,132 955,585 1,288,518 892,153

Trade payables 467,643 687,978 436,601 642,310

Other payables 898,399 795,623 838,763 742,809

Advances received 1,175,821 1,056,548 1,097,770 986,414

Withholdings 129,783 109,637 121,167 102,358


Income tax payable 59,491 41,615 55,542 38,853

4,156,860 3,686,696 3,880,926 3,441,971

Non-current liabilities

Financial instruments liabilities 1,473,239 1,347,752 1,375,445 1,258,288

Other payables 5,451 5,584 5,089 5,213

Advances received 433,732 723,155 404,941 675,152

Provisions 144,370 117,323 134,787 109,535


Defined benefit liabilities 170,163 130,721 158,868 122,044

Deferred income tax liabilities 16,258 - 15,179 -

2,291,479 2,369,693 2,139,371 2,212,392

Total liabilities 6,448,339 6,056,389 6,020,297 5,654,363

Equity attributable to owners

of the Parent Company

Capital stock 2,078,113 2,078,113 1,940,167 1,940,167

Capital surplus 548,200 548,200 511,810 511,810

Other components of equity (99,203) (99,203) (92,618) (92,618)

Accumulated other comprehensive income (59,051) 84,611 (55,131) 78,994

Retained earnings 885,419 732,396 826,645 683,779

3,353,478 3,344,117 3,130,873 3,122,132

Non-controlling interest 57,502 68,073 53,683 63,554

Total equity 3,410,980 3,412,190 3,184,556 3,185,686

Total liabilities and equity 9,859,319 9,468,579 9,204,853 8,840,049


CONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED DECEMBER 31, 2012 AND 2011

DEC 31

2012

DEC 31

2011

DEC 31

2012

DEC 31

2011

Sales 8,223,433 7,019,592 7,677,559 6,553,629

Cost of sales 7,403,857 6,336,765 6,912,386 5,916,128

Gross profit 819,576 682,827 765,173 637,501

Selling and administrative expenses 473,889 385,272 442,432 359,698

Operating income 345,687 297,555 322,741 277,803

Income from associates 234 2,413 218 2,253

Other income 344,037 395,408 321,200 369,161

Other expenses 367,923 351,510 343,500 328,177

Financial income 41,596 62,118 38,835 57,995

Financial costs 135,683 195,967 126,676 182,959

Profit before income tax 227,948 210,017 212,818 196,076

Income tax expense 54,919 36,463 51,273 34,043

Profit for the year 173,029 173,554 161,545 162,033

Profit (loss) for the period attributable to:

Equity holders of the Parent Company 176,902 177,074 165,159 165,320

Non-controlling interest (3,873) (3,520) (3,614) (3,287)

Earnings per share attributable to the equity holders of the Parent Company during the period

Basic earnings per share 431 431 0.40 0.40

Diluted earnings per share 430 430 0.40 0.40

(in millions of Korean won and thousands of US dollars, except per share amounts)

$W W $

W $W $

W $W $

W $W $

W $W $

22 23

DEC 31

2012

DEC 31

2011

DEC 31

2012

DEC 31

2011

Cash flows from operating activities

Cash generated from operations (1,034,731) (27,574) (966,045) (25,744)

Interest received 43,101 56,262 40,240 52,527

Interest paid (103,647) (144,426) (96,767) (134,839)

Income tax paid (56,542) (2,269) (52,789) (2,118)

Dividends received 9,011 11,633 8,413 10,861

Net cash used in operating activities (1,142,808) (106,374) (1,066,948) (99,313)

Cash flows from investing activities

Decrease in current financial instrument assets 22,774 33,202 21,262 30,998

Increase in current financial instrument liabilities (derivatives)

87,216 15,047 81,427 14,048

Decrease in current other receivables 186,225 98,449 173,863 91,914

Disposal of assets held for sale 228,142 1,183,328 212,998 1,104,778

Decrease in investments in securities 190,197 151,829 177,572 141,751

Disposal of investments in associates 7,149 202 6,674 189

Decrease in non-current finacial instrument assets 162,541 - 151,751 -

Decrease in non-current other receivables 88,428 163,869 82,558 152,991

Disposal of investment property - 12,009 - 11,212

Disposal of property, plant and equipment 7,058 3,765 6,589 3,515

Net cashflow by acqusition of subsidiaries - 14,042 - 13,110

Increase in current financial instrument assets (23,797) (26,792) (22,217) (25,014)

Decrease in current financial instrument liabilities (derivatives)

(277,289) (7,797) (258,882) (7,279)

Increase in current other receivables (162,831) (264,721) (152,022) (247,149)

Acquisition of investments in securities (203,821) (84,739) (190,291) (79,114)

Acquisition of investments in associates (4,946) (2,754) (4,618) (2,571)

Increase in non-current financial instrument assets - (42,457) - (39,639)

Increase in non-current other receivables (164,231) (157,031) (153,329) (146,607)

Acquisition of investment property - (1,265) - (1,181)

Acquisition of property, plant and equipment (62,725) (99,481) (58,561) (92,877)

Acquisition of intangible assets (13,527) (9,117) (12,629) (8,512)

Net cash provided by investing activities 66,563 979,588 62,145 914,563

Cash flows from financing activities

Increase in current financial instrument liabilities 1,585,230 1,355,935 1,480,002 1,265,928

Increase in non-current financial instrument liabilities 762,101 574,092 711,512 535,984

Decrease in current financial instrument liabilities (1,595,738) (2,231,741) (1,489,812) (2,083,597)

Decrease in non-current financial instrument liabilities - (339,702) - (317,152)

Others - (91) - -

Net cash provided by (used in) financing activities

751,593 (641,507) 701,702 (598,837)

Exchange loss on cash and cash equivalents (735) (19) (686) (18)

Net increase (decrease) in cash and cash equivalents (325,387) 231,688 (303,787) 216,395

Cash and cash equivalents at the beginning of year 713,827 482,139 666,443 450,048

Cash and cash equivalents at

the end of year

388,440 713,827 362,656 666,443

CONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2012 AND 2011


W $W $

W $W $

message from ceo - daewoo e&cdwconstir.com/inc/download.asp?filename=2012 daewoo e&c annual...

Documents