Evolution into a Global ConstruCtion lEadEr

Transcription

Evolution
into a Global
Construction
Leader
2013 Annual Report
Hyundai Engineering & Construction
2013 Annual Report
Evolution
into a Global
Construction
Leader
Contents
2013 Annual Report
Evolution into a Global Construction Leader
Profile
1
Message from the CEO
10
corporate chronology
12
Financial HIGHLIGHTS
14
FINANCIAL REVIEW / PLAN FOR 2014
15
2013 News Highlights
16
Review of Operations
Civil & Environment Works
20
Building Works
24
Plant Works
28
Power & Energy Works
32
Procurement
36
Health, Safety and Environment (HSE)
37
Research & Development
38
Financial Statements
Financial Summary
Consolidated Financial Statements
Hyundai Building, 75 Yulgok-ro, Jongno-gu, Seoul, Korea
Tel. 82-2-746-1114 Fax. 82-2-746-4846 www.hdec.kr
42
43
Separate Financial Statements
169
BOARD OF DIRECTORS
176
Organization Chart
176
Global Network
178
Hyundai Engineering & Construction 2013 Annual Report
Contents
Profile
1
Evolution into a Global Construction Leader
Message from the CEO
10
corporate chronology
12
Financial HIGHLIGHTS
14
FINANCIAL REVIEW / PLAN FOR 2014
15
For decades, Hyundai Engineering & Construction has been dominating the Korean construction
16
industry. Established in 1947 by Hyundai Group’s founder, Chung Ju-Yung, Hyundai E&C attracted
worldwide attention in its rise as a key player behind Korea’s economic ascent. Through its
international presence, the company continues to make history with its innovative technologies.
Review of Operations
Hyundai remains at the forefront of global construction expertise, experience, and leadership offering
civil, building, plant and power & energy works.
Civil & Environment Works
20
Building Works
24
Plant Works
28
In April 2011, Hyundai E&C postured itself for a new phase by joining Hyundai Motor Group. This
Power & Energy Works
32
move will increase the company’s efforts toward global construction leadership as a core growth
Procurement
36
engine and stakeholder of the Group.
37
38
In 2013, Hyundai E&C posted outstanding combined results with sales of KRW 13,938.3 billion,
operating income of KRW 792.9 billion, and net income of KRW 569.6 billion. It also bolstered
growth by securing bids in Central and South America as well as in the Middle East to promote the
Financial Summary
42
Consolidated Financial Statements
43
Separate Financial Statements
diversification of its overseas markets and cultivate new growth businesses. Of the company’s total
new orders of KRW 21,617.3 billion, overseas orders made up a majority 79.2%.
169
Hyundai E&C has continuously prioritized the creation of social values and remains committed to the
BOARD OF DIRECTORS
176
needs of society. The company’s philosophy, rooted in management’s sustainability, forms the base
Organization Chart
176
of its intentional and balanced growth, eco-friendly management, and respect for people. Hyundai
Global Network
178
E&C strives to enhance its caring reputation that is devoted to all stakeholders within the community.
15
1
Obtaining visible
results via market
diversification
Diversifying
Markets
1
FEATURE
ect and the Dubai Eye construc-
construction in Uganda, and
tion in the UAE, NNP QEZ3 dredg-
Bosporus bridge construction in
ing in Qatar, Petro Rabigh-Madina
Turkey.
East 380kV OHTL in Saudi Arabia,
New overseas orders received (Unit: In billions of KRW)
2012
2013
15,381.1
17,117.9
In 2013, Hyundai E&C obtained
the Marina South complex devel-
As a result, our new overseas or-
visible results by expanding its
opment in Singapore, the Keells
ders received amounted to KRW
markets to consist of the Middle
City complex development in Sri
17,117.9 billion in 2013, an in-
East, Asia, the CIS, Africa, Central
Lanka, a GTL project and the
crease of 11.3% over the previous
and South America, and Europe.
Talimarjan power plant in Uzbeki-
year. We will continue to pursue
stan, the Kiyanly PE/PP Project in
market diversification by expand-
This achievement included new
Turkmenistan, the Santa Ines oil
ing our business areas going for-
orders for an offshore oilfield proj-
refinery in Venezuela, Jinja bridge
ward.
Sustaining stable
growth through
a diversified
business portfolio
Diversifying
Businesses
FEATURE
2
areas of civil and environmental,
ings, skyscrapers, and complex
building, plant, and power and en-
development projects.
ergy works.
The future will witness our adHyundai E&C is also focused on
vance into independent power
branching into new and renewable
and LNG-related projects, and
energy business by streamlining its
resource development-linked
water treatment and environmen-
infrastructure development and
Hyundai E&C increased its con-
tal business organizations, while
overseas real estate development
solidated sales to KRW 13,938.3
also setting foot into steel structure
projects. Through these efforts,
billion, a 4.6% increase over the
and oil sand businesses. Our pri-
we will stabilize future growth
previous year. Its globally recog-
mary goals exist to strengthen and
foundations, thus contributing to
nized efforts and superior exper-
implement new growth engines,
sustainable growth in all regions of
tise led market changes in the
as well as sustain our green build-
business.
Sales (Unit: In billions of KRW)
2012
2013
13,324.8
13,938.3
Improving profitability
through industryleading performance
and technology
Improving
profitability
2013
760.4
792.9
3
profitability. These achievements
at high profitability. We have also
were backed by its industry-
made visible improvements to our
leading construction performance
profitability, primarily through the
and technologies despite global
steady pursuit of cost reductions.
economic uncertainties and a dull
Operating income (Unit: In billions of KRW)
2012
FEATURE
In 2013, Hyundai E&C was the
housing market at home.
first in the domestic construction
As a result, our operating income
rose by 4.3% over the year to
industry to exceed USD 100.0
In particular, since becoming a
KRW 792.9 billion in 2013. Our
billion in cumulative overseas or-
member of the Hyundai Motor
efforts to reduce cost in the pur-
ders received. Its annual orders
Group, we have ensured positive
chasing and outsourcing process-
received also amounted to KRW
order backlog, based on our se-
es also contributed greatly to the
21.6 trillion, while securing healthy
lective order-taking strategy aiming
improvement of our profitability.
Creating new values
and synergies
within the Group
Group
Synergy
FEATURE
4
Our aim has always been to be
Hyundai E&C is acutely aware of
the global leader in the construc-
the specific needs and diverse en-
tion industry. To achieve this, we
vironmental factors of each client
established three strategic direc-
country. We address these chal-
tions—to advance our business
lenges through our strategic plan-
structure, enter new growth areas,
ning and custom-tailored projects.
Order backlog (Unit: In billions of KRW)
Joining Hyundai Motor Group
and globalize our management
We also focus on strengthened
46,227.9
in 2011 has granted Hyundai
infrastructures. Under these guid-
collaborations with the affiliates of
E&C the opportunity for valuable
ing principles, we intend to build a
the Hyundai Motor Group, includ-
growth. We have progressed with
stable business portfolio by win-
ing Hyundai Engineering and such
new business opportunities in
ning high value-added projects,
partnerships proved beneficial,
automobile, steel, and other areas
enhance R&D in new growth ar-
with the order backlog expanding
while committing to significant
eas, and expand our engineering
by 16.0% over the year to KRW
Group-supported investments.
capabilities.
53,643.5 billion in 2013.
2012
2013
53,643.5
MESSAGE FROM THE CEO
We will continue to make a history of new challenges
and successes as a leading construction company of Korea
without being shaken by changes in the outside environment.
Furthermore, Hyundai E&C has achieved the No. 1 ranking in the Construction Capability Evaluation for five consecutive years
in Korea, and became the first Korean construction company to cumulatively exceed the USD 100 billion mark in the overseas
sector. In particular, as a result of our continued effort to strengthen our ability to win overseas orders and diversify overseas
markets, we were awarded consecutive large-scale construction projects in Central and South America, South Africa, and new
markets including CIS countries.
I am honored to offer my deep felt gratitude to customers and shareholders for their unwavering support and encouragement
despite difficult market conditions, so that we can continue to flourish and grow together as a company. Hyundai E&C’s
challenges will continue into this year as well. Due to the recent tapering of quantitative easing, the economy of emerging
countries are increasingly uneasy about the economy, and as the currency value of emerging countries such as Argentina sharply
declined, Korea has felt its impacts.
President & CEO
Jung Soo-Hyun
Dear valued customers and shareholders,
Within Korea, reduced public construction projects due to lessened SOC budgets and the delayed recovery of the real estate
business have posed a very real struggle. However, Hyundai E&C vows to rise up find new methods for prosperity. As the
representative construction company, we will, as always, continue to write our own history of new challenges and successes.
Hyundai E&C proudly presents its management policy for 2014 to ‘become a leader in global construction.’ Last year our
overseas sales accounted for 64% of total sales, and overseas orders accounted for 79% of total orders. We are steadily rising
as a global construction company both in name and reality. Not ready to just settle for the No. 1 position in Korea, we will do our
best to transform into a world-renowned construction company.
We also embrace the spirit of harmony and mutual prosperity, and carry out our missions with honesty and transparency. As a
respected company, we are committed to fulfilling our corporate social responsibilities to society.
The year 2013 was a year in which a multitude of unfavorable conditions for corporate management occurred due to the
global economic crisis and the stagnant domestic construction business. Undeterred by these odds, Hyundai E&C achieved
considerable results.
The entire team at Hyundai E&C is dedicated to maximizing shareholder values in 2014 based on your trust and confidence, and
we ask for your continued interest and support.
Despite a challenging business environment, Hyundai E&C generated KRW 13,938.3 billion in sales in 2013, up 4.6% over the
previous year. That same year, our operating profit amounted to KRW 792.9 billion and our net profit equaled KRW 569.6 billion,
rising 4.3% and 0.5%, respectively, over the previous year. As of the end of 2013, we have received orders worth KRW 21,617.3
billion, giving us an order backlog of KRW 53,643.5 billion.
I would like to take this opportunity to express my appreciation to you once again, and I wish you and your family good health
and happiness throughout 2014.
10
11
Thank you.
CORPORATE CHRONOLOGY
The history of
Hyundai E&C over
the past 67 years is
also the history of
Korea’s economic
growth. Based on the
directions that we
have taken thus far,
we are now preparing
for the next one
hundred years. We
are creating a rich
narrative, with a farreaching ambition
to be a leader in the
field of green growth,
contributing to a
happier tomorrow for
everyone.
1947-1979
1980-1989
1990-1999
2000-2009
Foundation and
progress
Concentrated on
technology and
quality, targeting
world markets
Continued strategy
of technological
advancement and
globalization
Committed to serving
humankind and our
shared future together
Established as Hyundai Civil
Works Company
Aug. 1980
Oct. 1991
May 1958
Began construction of oil refinery
in Oman
Completed Hyundai
Petrochemical Complex
May 1947
Completed restoration of Han
River Pedestrian Bridge
Sep. 1980
Jul. 1993
Jan. 1962
Began construction of a harbor in
Libya
Ranked first among domestic
contractors
Acquired ISO 9001 certification
in all business fields, a first
among domestic industries
Dec. 1980
Dec. 1965
Began construction of Penang
Bridge in Malaysia
Won order for Pattani Narathiwat
Highway Project in Thailand
Mar. 1982
Jul. 1970
Value of contracts exceeded KRW
1 trillion
Completed full sections of
Gyeongbu Highway
Jun. 1982
Received “USD 10 Billion Export
Tower” award
(overseas orders received: USD
10.5 billion)
Oct. 1973
Completed Soyang River MultiPurpose Dam
Selected as “Company with Best
Quality in 2000” by Korean
Standards Association and
Ministry of Commerce, Industry,
and Energy
Held 60th anniversary ceremony
Began construction of Taean
Corporate City
Dec. 1996
Aug. 2002
Jun. 2008
Acquired ISO 14001 certification
Ranked No. 1 construction
company in Asia
(and 12th in the world) by ENR
Magazine
Hyundai E&C credit ratings
upgraded to “A+”
Apr. 1997
Jun. 1997
Jul. 1983
Completed Wolseong Nuclear
Power Plant’s Unit 2
Completed Kori Nuclear Power
Plant’s Unit 2
Aug. 1997
Advanced into North Korea with
construction of KEDO Nuclear
Power Plant’s Unit 1, 2
Began construction of Jubail
Industrial Harbor in Saudi Arabia
Apr. 1986
Apr. 1999
Jan. 1978
Plant’s Units 3, 4
Began construction of Dubai
Power Plant in UAE
Began the 2nd and the 3rd stage
construction of a gas production
plant in South Pars, Iran
Jun. 1987
Apr. 1978
Completed Yonggwang Nuclear
Power Plant’s Units 1, 2
Ranked first in 2009 construction
capability evaluation
Sep. 2009
Jul. 2004
Credit rating upgraded to “AA-”
(the industry’s highest)
Received Annual Safety
Performance Awards for
Goldenhill Park
Condominiums from Singapore
Land Transportation Authority
Yonggwang Nuclear Power
Plant, Korea
(Jun. 1981 ~ Dec. 2002)
12
Won two grand prizes at
Singapore’s BCA Construction
Excellence Awards
Won contract for nuclear power
plants in the UAE–first Korean
overseas exports of nuclear
plants
Ranked first in construction
capabilities evaluation by Ministry
of Land, Transport and Maritime
Affairs for the fifth straight year
Jung Soo-Hyun appointed as
President & CEO
Jul. 2012
Nov. 2013
Ranked first in construction
capabilities evaluation by the
Ministry of Land, Transport and
Maritime Affairs for the fourth
straight year
Cumulative overseas orders
received exceeded USD 100
billion, a first in the South Korean
construction industry
Mar. 2012
Dec. 2009
Jul. 2013
Sep. 2013
Ranked first in Construction and
Material industry according to the
2013 Dow Jones Sustainability
Indices (DJSI) World, named
“World Leader” in the
Construction and Materials
category in the DJSI assessment
by Robeco SAM
Opened branch in South Africa
Nov. 2012
Total overseas orders exceeded
USD 90 billion, a first for the
Korean construction industry
Apr. 2005
Jubail Industrial Harbor,
Saudi Arabia
(Jun. 1976 ~ Dec. 1980)
May 2013
Won contract for Shin-Ulchin
Nuclear Power Plant’s Units 1&2
Jan. 2012
Jul. 2009
Dec. 2002
Mar. 2010
Aug. 2010 - Ranked 23rd among Top 225
international contractors
by Engineering News Record in
overseas sales category
- Ranked first in construction
capabilities evaluation by Ministry
of Land, Transport and Maritime
Affairs for second straight year
Oct. 2007
Overseas orders received
reached USD 60 billion–a first for
the domestic industry
Completed Phases 4 & 5 onshore
facilities
(worth USD 1.6 billion) of South
Pars Field in Iran
May 2006
Hyundai E&C corporate bonds
and commercial paper credit
ratings upgraded to “A-”
Plant’s Unit 1
Han River Pedestrian Bridge,
Korea
(Sep. 1957 ~ May 1958)
May 2007
May 2008
Apr. 1983
Public Stock Offering
Aug. 2000
Apr. 2001
Completed Wolseong Nuclear
Power Plant’s Unit 1
Jul. 1976
Launched new apartment brand,
Hilstate
Received 2001 Singapore
Construction Excellence Award
for Parc Palais Condominiums
Began construction of Bandar
Abbas mobilization drill shipyard
in Iran
Dec. 1984
Sep. 2006
Named No. 1 in Brand Power in
“apartment” category by KMAC
(Korean-style light-water reactor
model)
Jan. 1975
Began construction of Bahrain
Arab Repair Shipyard
Apr. 2000
Growing into a global
construction leader
towards a bright and
hopeful future
Dec. 1995
Received ASIA TOP 200
Companies award for third
consecutive year from
Far Eastern Economic Review
Oct. 1976
2010 and
Afterwards
Suntec City, Singapore
(Jan. 1991 ~ Jul. 1997)
South Pars Gas Field Development
Phases 4&5 Onshore Facilities,
Iran (Mar. 2002 ~ Feb. 2005)
Zawia Combinde Cycle Power
Plant, Libya
(Feb. 2005 ~ Feb. 2009)
Habshan-5 Utilities & Offshore
Project, UAE
(Jul. 2009 ~ Dec. 2013)
13
Nuclear Power Plants, UAE
(Dec. 2009 ~ )
Financial Highlights
Financial Review
Korean Won (In millions)
2013
U.S. Dollars (In thousands)
2012
2013
2012
ASSETS
SHAREHOLDERS' EQUITY
(Unit: In billions of KRW)
15.6% up
For the Year
Sales
13,324,821
13,938,287
13,207,891
Operating Income
792,870
760,408
751,322
720,560
Income before Income Tax
761,972
737,010
722,043
698,389
Net Income
569,644
566,960
539,793
537,250
503,634
509,856
477,242
483,138
66,010
57,104
62,551
54,112
Owners of the Parent Company
Non-controlling Interests
Total Assets
Current Assets
Non-current Assets
4.6%p up
5,203.1
160.9%
4,755.9
156.3%
12,746.8
2012
At Year End
9.4% up
14,733.2
12,626,572
current ratio
2013
2012
2013
2012
2013
14,733,212
12,746,829
13,961,160
12,078,868
Hyundai E&C is improving the financial health based on the highest level of business competitiveness, profitability-oriented order-taking strategy
11,108,964
9,610,665
10,526,830
9,107,045
and enhanced cost management capabilities. In particular, from the high number of remaining orders received and our apt response to the
3,624,248
3,136,164
3,434,330
2,971,823
changing business environment based on construction work diversification and regional diversification strategy, the company has steadily grown
and our profitability has been greatly improved. As a result, Hyundai E&C is showing excellent financial stability.
9,530,137
7,990,893
9,030,737
7,572,152
Current Liabilities
6,905,974
6,149,756
6,544,086
5,827,495
Non-current Liabilities
2,624,163
1,841,137
2,486,651
1,744,657
Thanks to our continued growth, as of the end of 2013, our assets amounted to KRW 14,733.2 billion, up 15.6% over the previous year. Notably,
5,203,075
4,755,936
4,930,423
4,506,716
our current assets increased by 15.6% over the previous year to KRW 11,109.0 billion. In addition, Hyundai E&C’s overall ability to respond to
4,883,743
4,548,542
4,627,825
4,310,190
319,332
207,394
302,598
196,526
557,273
557,273
528,071
528,071
Total Liabilities
Shareholders' Equity
Non-controlling Interests
Capital Stock
liquidity risks is rated as excellent by credit rating agencies stemming from rich cash and stable level of cash generated from operations. As of the
end of 2013, cash & cash equivalents increased by 1.5% over the previous year to KRW 1,883.6 billion.
Specifically, our current ratio, increased to 160.9% by 2013 year-end, a 4.6%p rise from the end of 2012. In 2013 the net profit of Hyundai E&C
stood at KRW 569.6 billion. Our retained earnings surplus increased by 14.4% over the previous year to KRW 3,522.1 billion, and our equity rose
by 9.4% to KRW 5,203.1 billion. In 2014, as our profits and working capital increased based on our double-digit growth rate, we anticipate that
our financial health will further improve.
Sales
operating Income
Net Income
15,000
800
792.9
13,938.3
600
567.0
760.4
13,324.8
10,000
700
Plan for 2014
569.6
500
Orders received (Unit: In billions of KRW)
Domestic
4,786.3
Domestic
4,722.8
Overseas
17,478.7
Overseas
11,203.7
Total
5,000
600
400
Sales (Unit: In billions of KRW)
22,265.0
Total
15,926.5
In 2014, our plans include successfully diversifying markets by securing quality orders in less competitive markets such as CIS, Central and South
America and Africa, as well as the Middle East and Asia based on our profit-oriented strategy. We intend to increase our 2014 orders received by
3.0% over last year to KRW 22,265.0 billion.
2012
2013
2012
2013
2012
2013
Additionally, despite the uncertain business environment at home and abroad, thanks to the wealth of new and existing orders received due to
our top-tier competitiveness in the industry, our sales are expected to increase by 14.3% over the previous year to KRW 15,926.5 billion.
14
15
1
2
3
4
5
6
Received the Platinum Award in the
Won the order for the Uzbekistan Tali-
Won the contract for the SARB Package
Won two prizes at the ‘BCA Construc-
Ranked first in the Construction Capability
Cumulative overseas orders exceeds
business service category of 2011/12
marjan 2x450MW CCPP project worth
IV project worth USD 1.9 billion
tion Excellence Award hosted by Sin-
Evaluation for the fifth consecutive year
USD 100 billion
Vision Awards six consecutive times
USD 0.82 billion
Hyundai E&C is ranked No.1 in the Con-
On November 22, 2013, Hyundai E&C won
struction Capability Evaluation for five con-
the contract for the construction of the larg-
gapore’s Building and Construction
Hyundai E&C was awarded the contract
Authority
Hyundai E&C won the Platinum Award six
On March 19, Hyundai E&C formed a con-
for the ‘SARB Package 4’ project from the
consecutive times in the business service
sortium with Daewoo International, and
UAE Abu Dhabi Marine Operating Com-
Hyundai E&C was awarded the grand prizes
secutive years. The Ministry of Land, Trans-
est oil refinery in Central and South America
category of the ‘2011/12 Vision Awards,’
signed a contract worth USD 819 million
pany, worth USD 1.9 billion. The capacity of
in the Commercial & Mixed Development
port and Maritime Affairs announced on July
worth USD 1.4 billion, and became the first
which was hosted by world-renowned
with Uzbekenergo of Uzbekistan for the
the crude oil and gas treatment facilities is
Buildings and Residential Buildings catego-
31 that Hyundai E&C achieved the No.1
Korean construction company to see the
marketing research firm LACP (League of
construction of the Combined Cycle Power
equivalent to 200,000 barrels (160,000 units
ries at the [BCA Construction Excellence
ranking in the “2013 General Construction
cumulative orders received exceed USD
American Communications Professionals).
Plant (2x450MW) in Talimarjan, Uzbekistan.
of 200l drums) of crude oil per day and 35
Award] hosted by Singapore’s BCA (Building
Industry Construction Capacity” category
100 billion. We accomplished this impres-
3
million ft of gas (enough to charge about
and Construction Authority). The ‘One Shen-
for the fifth year in a row. Since construction
sive feat 48 years after we took the first step
of the world in LACP’s ‘Top 100 Worldwide
In this project, two 450MW Combined Cycle
6,600 gas buses). Hyundai E&C will conduct
tonway Building,’ which was completed at
contract limits were announced in 1962,
into overseas construction markets in 1965,
Winners’ category. The corporate value and
Power Plants will be constructed in Tali-
all processes for the plant facilities on two
the end of 2010, won the grand prize in the
Hyundai E&C has been rated No.1 with the
when we became the first Korean construc-
potential growth of Hyundai E&C were rec-
marjan near Karshi, Uzbekistan. All aspects
artificial islands and Zirku Island, including
Commercial & Mixed Development Buildings
exception of 1964 and 2004~2007, display-
tion company to build expressways in Thai-
ognized globally, and our status as a global
of this project, including engineering, pro-
engineering, procurement, construction and
category, and the early ‘Pasir Ris Condo-
ing its top-tier status in the country’s con-
land.
construction leader was solidified.
curement and construction, will be carried
commissioning on a Lump-Sum Turn-key
minium, Livia Condominium’ completed in
struction industry for almost half a century.
out on a Turn Key basis. The total installed
basis, and the construction period will be 54
early 2011, won the grand prize in the Resi-
Hyundai E&C received a perfect score on
capacity is 930,000KW, and the estimated
months.
dential Buildings category. In addition, the
According to the Construction Capacity
Group in 2011, Hyundai E&C capitalized on
seven out of eight annual report evaluation
construction period will be 37.5 months af-
‘Asia Square Tower 1, which was completed
Evaluation system for construction com-
the Hyundai Motor Group’s global network
items, winning 99 out of a possible 100
ter breaking ground. We competed against
This contract allowed Hyundai E&C to se-
in 2011, won the Excellence Award in the
panies, the Ministry of Land, Transport and
and competitiveness in various business
points, which secured the Platinum Award in
leading domestic and foreign construction
cure a foothold for making inroads into the
Commercial & Mixed Development Buildings
Maritime Affairs comprehensively evaluates
areas to accelerate our advance into new
the Business Service category. This award is
companies, and won this contract based on
offshore plant construction market, an unex-
category. All three sites entered in the con-
the construction performance, management
markets and create synergies. Our orders
credited to the fact that our growth potential
our construction capability and skills. Win-
plored field that requires highly sophisticated
test won prizes.
status, technical skills and trustworthiness of
received from overseas markets exceeded
as a global engineering leader, based on the
ning the order for the Uzbekistan Talimarjan
technologies. After carrying out the Hapshan
construction companies. These results are
USD 10 billion in 2013 as we continuously
Hyundai Motor Group synergies, was repre-
CCPP project on the back of securing the
5th gas treatment facilities construction, the
Hyundai E&C has won a total of 12 awards
used as the basis for selecting companies
increased the orders received in the new
sented from a modern viewpoint. Using this
Algerian Combined Cycle Power Plant con-
UAE Borouge 3 power and indirect facilities
at the BCA Construction Excellence Awards
when placing construction orders. This year
markets. We are putting forth efforts to ad-
award as momentum, we will do our best to
tract worth USD 1.06 billion last November
construction, NPP construction, and this
since we won the first grand prize in 1997.
the comprehensive construction capacity
vance into new growth engine businesses,
further solidify our position as a world-class
proved our ability to carry out combined
construction, it thereby has solidified our po-
In particular, a total of five sites have won
of No.1 ranked Hyundai E&C was valued
such as NPPs, renewable energy and Oil
construction company.
cycle power plant projects. Additionally,
sition in the UAE plant market.
prizes over a three-year period since 2011,
at KRW 12,037.1 billion, up approximately
Sand. We are also planning to advance into
we expect that this contract will serve as
solidifying the reputation of Hyundai E&C in
KRW 330 billion from last year. Hyundai E&C
Independent Power Plant (IPP) and LNG-
a bridgehead for the country’s power gen-
Singapore once again. Furthermore, Hyundai
is ahead of No.2 ranked Samsung C&T (KRW
related businesses, resource development-
eration industry’s advancement in the CIS,
E&C was the only prizewinner at the BCA
11,251.6 billion) by KRW 785.5 billion.
linked infrastructure business and overseas
including Uzbekistan.
Construction Excellence Award that won the
real estate development business. In particu-
grand prize for two consecutive years (2012
lar, we will actively push ahead and secure
and 2013). Our excellent quality and high
competitiveness in the water and environ-
skill level were recognized, and our status
ment business, which is quickly emerging as
was immensely enhanced in Singapore.
an important new growth business.
We were also ranked No. 26 in all industries
16
After incorporation into the Hyundai Motor
17
Building tomorrow’s reality out of today’s dreams
REVIEW OF OPERATIONS
20 Civil & Environment Works 24 Building Works 28 Plant Works
32 Power & Energy Works 36 Procurement
37 Health, Safety and Environment (HSE) 38 Research & Development
CIVIL & Environment Works
BUILDING WORKS
PLANT works
power & energy works
1
THe leader in core infrastructure solutions
2013 Results
In 2013 the Civil & Environment Division
recorded KRW 2,502.6 billion (domestic KRW 630.1 billion, overseas KRW
1,872.5 billion) in orders received. This
was a remarkable accomplishment considering the difficulties in the domestic
and overseas market. In foreign markets,
it received orders for such mega projects
as of the Third Bosporus Bridge in Turkey. The division has taken a meaningful
first step in the African region through
winning the order of the New Bridge
Across River Nile at Jinja in Uganda. It
also received several orders from our existing markets, i.e. the Middle East/Asia,
which included the QEZ3 and the New
Port Project in Qatar, the Dubai Eye in
UAE, and the Reclamation at Ayer Chawan Phase 2 in Singapore. Domestically,
the division won large projects such as
the Jungang Line Dodam-Yeongcheon
double-track electrification project, the
Incheon Port International Passenger Terminal Phase 2, and the rainwater storage
tank expansion in Sinwol. These deals
offered proof and recognition of Hyundai
E&C’s superb design capabilities and
technology.
The division’s 2013 sales amounted to
KRW 2,527.3 billion (domestic KRW
1,198.2 billion, overseas KRW 1,329.1
billion). Its sales and profits are forecast
to continuously climb as it carries out
construction work on these recently
awarded mega projects.
role as a pioneering
The Civil & Environment Division’s 2014
business plan consists of KRW 4.8 trillion (domestic KRW 0.9 trillion, overseas
KRW 3.9 trillion) in orders received, and
KRW 2.9 trillion (domestic KRW 1.0 trillion, overseas KRW 1.9 trillion) in sales.
force behind the
development of key Korean
industries into a core
infrastructure solutions
provider and driver of the
The Korean market is contracted by
the selective technical proposal-based
tender process and active participation
in the pilot project of the comprehensive review system. Thus, the division is
planning to concentrate its order-taking
capabilities on consolidating its status
in civil engineering, and in the gradually
The maritime and port business is focused on drastically improving its market
leadership in the dredging and port sector, and is therefore intent on establishing
mid-to long-term development plans as
well as identifying front logs. In addition,
the division will carry out the mediumand long-term roadmap for entry into the
2014 Outlook
country’s economic
development.
20
Total
15,411.5
New Orders
Key and new growth
businesses
The Civil & Environment Division is forward planning to secure visible capabilities for its three key and growth engine
businesses, i.e. the maritime and port
business, the water environment/water
treatment business and the resource
development-linked business. It also
intends to reinforce the infrastructure for
technological competition.
The Civil and Environment
Division is evolving from its
expanding overseas market. It plans to
expand its new market projects in Africa,
South America and CIS by building a balanced portfolio based on diversified construction works and actively identifying
profitable technology-oriented projects.
2,502.6
Total
10,591.3
sales
2,527.3
PERFORMANCE IN 2013
✽Hyundai E&C Only (separate entity basis)
21
water environment/water treatment business, and steadily identify and participate
in target projects. In conjunction, the
resource development-linked business,
which is focused on creating synergies
with affiliates, will carry out the Australian
Hillside construction pilot project, and
actively secure projects that the division
can participate in jointly with group affiliates, such as Hyundai Steel.
Additionally, in cooperation with the R&D
division, it will put forth its full efforts to
expand its business horizon based on
technology, and successfully carry out
pilot projects related to new growth businesses, such as the soil purification business and the organic waste-to-energy
business. It also plans to concentrate on
existing strategic products, such as deep
tunnels and super long span bridges.
Proactive response to the changing business environment is at the heart of the division, and it will continuously strengthen
its technological leadership in the global
construction market.
2
BUILDING WORKS
PLANT works
4
3
5
1
Reclamation for Pasir Panjang Terminal Phases 3 and 4,
Singapore
2
Samcheok LNG Terminal and Sea Port Project, Korea
3
Third Bosporus Bridge Project, Turkey
4
Sheikh Jaber Al-Ahmad Al-Sabah Causeway Project
(Main Link), Kuwait
5
Khalifa Port and Industrial Zone (Phase 1A), UAE
Major projects currently underway
22
Major projects completed over the past five years
Domestic
Domestic
- Privately Financed Ulsan Grand Bridge and Access Road Construction
- Geogeumdo ~ Sorokdo Bridge (Phase 2)
- Honam High-Speed Railway [Sections 2 and 3]
- The Big-O of Expo 2012 Yeosu
- Amsa Bridge
- Sungnam ~ Janghowon Expressway [Section 2]
- The Water Purification Center in the Hwaseong Dongtan General
- Incheon International Airport Railroad Construction
- Industrial Complex
- [Sections 1-1A, 1-2B, 2-1, 2-4B]
- Second Yeongdong Expressway [Sections 3, 6, 7]
- Saemangeum Land Reclamation Project [Section 2]
Overseas
Overseas
- Sheikh Jaber Al-Ahmad Al-Sabah Causeway Project (Main Link), Kuwait
- Khalifa Port and Industrial Zone (Phase 1A), UAE
- Link Roads to the Pearl ~ Qatar (Lusail Expressway Package 1), Qatar
- Reclamation at Pulau Ayer Merbau, Jurong Island (Phase 1), Singapore
- Bello Wastewater Treatment Plant, Columbia
- New Oil Pier & Associated Topside Facilities at Mina Al-Ahmadi Refinery,
- Peusangan 1&2 Hydroelectric Power Plant Construction Project
- Kuwait
- Lot 1 – Main Civil Works, Indonesia
- Jebel Ali New Container Terminal, Stage1, Upland Facilities, LCC2, UAE
- Third Bosporus Bridge, Turkey
- Palm Deira Reclamation Project, UAE
23
BUILDING WORKS
PLANT works
1
ADVANCED and comprehensive capabilities
2013 Results
In 2013, the Building Division recorded
KRW 4,409.8 billion (domestic KRW
3,105.9 billion, overseas KRW 1,303.9
billion) in orders received and KRW
3,365.8 billion in sales. The building division and the housing division merged in
2011. Post-merger, the division made
continued efforts to reshuffle the organization, keeping future value and profitability as its primary goal. As a result, it
was able to enhance its business model
and its competitiveness in project execution, and build the infrastructure for
securing stable growth engines in new
businesses and markets. It received orders for such large-scale projects as the
Keells City Project in the new Sri Lankan
market, and the Marina One Project in
the existing Singaporean market.
as the COEX Mall remodeling project,
the STATS ChipPAC Korea project, the
logistics in the southeastern region project and the Munjeong districts 2 and 6
mixed-used development project.
2014 outlook
The Division of Building
Works is helping to build
the future through the
construction of creative,
cutting-edge medical,
educational, residential,
and cultural facilities.
In the domestic market, the division accelerated its efforts to garner both public
and private projects. Showcasing its
design capabilities and technology, it
won large-scale remodeling construction
and technical proposal projects, such
In 2014, it plans to post KRW 4.0 trillion
in received orders and KRW 3.7 trillion in
sales. In the domestic market where the
construction industry is forecast to be
sluggish due to the economic uncertainties and the lingering low growth trends
at home and abroad, it will increase efficiency through customized strategies
related to order-taking. Particularly in the
housing works sector, where such risks
as unsold homes are anticipated, the division will carry out quality projects upon
thorough review of business feasibility
and raise order numbers through product
diversification.
In the overseas market, orders will be
steadily received for quality construction
projects that can contribute to its profitability and technical skills based on its
24
outstanding results and performance
in the Southeast Asia and Middle Eastern regions. In addition, the division will
concentrate its efforts on securing future
growth engines and diversify its business
in the Southeast Asian market by making regional inroads into countries such
as Indonesia and Myanmar. In particular,
the division will develop future growth
engines by securing stable orders and
exploring new business areas, including
environment-friendly buildings and multiuse development projects in the areas
that require a high level of technology,
such as high-rise buildings, hotels, hospitals, airports, exhibition facilities and
premium housing complexes.
Key and new growth
businesses
Total
15,411.5
New Orders
4,409.8
Total
10,591.3
sales
3,365.8
Smart green buildings will drive the division’s active response to the domestic
and overseas market through the development of only those business models
that comply with the compulsory energy
management requirement due to the
tightened green policies, regulations and
systems in Korea and the propagation of
the global green paradigm.
PERFORMANCE IN 2013
The Building Division selected multi-use
development and “smart green” buildings
as its key and new growth businesses,
and will establish future strategic directions as well as new growth engines.
may consist of in-house projects, designbuild projects, and asset management
projects, and will break away from simple
construction by identifying various new
business models and reshuffling the business structure. It will actively carry out
these projects by promoting its technological, marketing and financing capabilities in multiple ways.
The multi-use development business
25
Accordingly, the division will proactively
respond to the changing business environment, and continue to reinforce its
technology leadership in the global construction market.
2
BUILDING WORKS
PLANT works
4
3
5
1
Songdo Global University Campus, Korea
2
The Federation of Korea Industries Tower, Korea
3
Asia Square Tower 1, Singapore
4
Catholic Medical Center, Korea
5
Khoo Teck Puat Hospital, Singapore
26
Domestic
Domestic
- STATS ChipPAC Korea
- The Federation of Korea Industries Tower
- Busan International Financial Center
- Catholic Medical Center
- Incheon Asiad Main Stadium
- Changwon Gamgye Hillstate
- Gwangju Hwajeong Hillstate
- Yonsei Songdo Global University Campus
- The Korea Land & Housing Corporation (LH) Headquarters Office
- Gwangju Kia Champions Field
Overseas
Overseas
- Marina One, Singapore
- JW Marriott Hanoi, Vietnam
- South Beach Mixed Development, Singapore
- Pasir Ris Condominium 2, Singapore
- National Museum, Qatar
- Bitexco Financial Center, Vietnam
- Heart of Doha, phase 1, Qatar
- Khoo Teck Puat Hospital, Singapore
- Keells City Project, Sri Lanka
- Asia Square Tower 2, Singapore
27
BUILDING WORKS
PLANT works
1
The leading epc player in the world plant
construction sector
2013 Results
LNG Terminal #8 and #9 Site project, the
SK Energy Incheon Complex V-Project,
the Hyundai Steel Iron Powder Project
and the Shin-Hanul Nuclear Power Plant
Units 1 & 2.
In 2013, the Plant Division recorded KRW
6,617.5 billion (domestic KRW 137.1 billion, overseas KRW 6,480.4 billion) in
orders received, a significant increase over
the previous year. Its sales amounted to
KRW 3,093.7 billion (domestic KRW 805.9
billion, overseas KRW 2,287.8 billion).
In the overseas market, it was awarded
the Satah Al-Razboot Plant Facilities
Package 4 project in UAE. In addition, after securing the Venezuela Puerto La Cruz
Refinery Project in 2012, it obtained the
Venezuela Batalla De Santa Ines Refinery
Project worth USD 1.3 billion jointly with
Hyundai Engineering and China’s WISON,
expanding into the South American market. The division also won the contract
for the Uzbekistan Gas To Liquid Project
jointly with Hyundai Engineering, accelerating its penetration into the CIS market.
2014 Outlook
The Plant Division is
growing into a global plant
engineering, procurement
and construction (EPC)
leader based on its
competitiveness,
experience, technologies,
and brand awareness.
The Plant Division’s 2014 business plan
anticipates KRW 5.2 trillion in orders received and KRW 3.3 trillion in sales, and
expects to further expand its business
volume. In particular, it will build a stable
business portfolio through diversification
of regions and businesses, and maintain
its competitive edge by actively penetrating not only the Middle East, but also
Central and South America, Southeast
Asia, Africa and the CIS region in such
areas as gas purification, oil refining and
petrochemistry.
Gas To Liquid Project and the Karbala
Refinery Project. Its involvement in the
Hyundai Steel Project, Phase 3 and the
Saudi Ma’aden Alumina Refinery project
will also boost the Division’s active role in
steel/nonferrous metal plant projects to
build a stable portfolio.
Total
15,411.5
New Orders
6,617.5
Key and new growth
businesses
The division thoughtfully reflected the
changed business environment based on
its existing strategic system, reduced the
number of candidates, and selected oil
and gas, steel plant, and nuclear power
plant (NPP) performance improvement
projects as its key and new growth businesses in consideration of its internal capabilities, marketability, growth potential,
and compatibility.
On the domestic front, it made vast inroads into a multitude of project areas, including industrial facilities/petrochemical/
steel-making, including the Samcheok
28
The steel plant new growth business will
utilize the synergies of the Hyundai Motor
Group to participate in steel-making and
other industrial facilities projects.
Total
10,591.3
sales
3,093.7
PERFORMANCE IN 2013
In the NPP performance improvement
project sector, it will continue to maintain
its specialized competitive advantages by
developing the capacity required for NPP
performance improvement and decommissioning projects for which orders are
forecast to increase due to the aging of
existing NPPs.
Further, it will capitalize on its construction experience, such as the Qatar Pearl
GTL – Liquid Processing Unit (C5) Project, the RPLC Deep Conversion Project
and the QAFCO 5&6 Fertilizer Project,
to successfully carry out the Uzbekistan
such as mid-to long-term market forecasts. In 2013, the division expanded
into Uzbekistan and Southeast Asia, and
penetrated into the GTL and Petrochemical business. In 2014 it is planning to
make inroads into Russia, and more.
In its key businesses of oil and gas, it is
improving its business structure by diversifying regions and businesses, expanding its planning and sales capabilities,
and enhancing the ability to investigate
and to analyze business information,
29
As a result, the division will take a future
initiative as a global Engineering, Procurement, and Construction (EPC) leader by
responding proactively to increasing uncertainties in the business environment,
and by expanding its technological leadership in the global construction market.
2
BUILDING WORKS
PLANT works
3
1
Habshan-5 Utilities & Offsites Project, UAE
2
Hyundai Steel Project (Phase 3), Korea
3
Hyundai Oil Bank #2 HOU Project, Korea
4
QAFCO 5&6 Fertilizer Project, Qatar
5
KOC Oil & Gas Pipelines Project, Kuwait
4
5
Domestic
Domestic
- Shin-Hanul Nuclear Power Plant Units 1 & 2 (Capacity : 1400MW X 2)
- Yeosu Oil Tank Terminal Project
- SK Energy Incheon Complex V-Project
- Hyundai Oil Bank #2 HOU Project
- Samcheok LNG Terminal #8 and #9 Site
- Incheon LNG Storage Tank Units 19 and 20
- Hyundai Steel Project (Phase 3)
- Tongyeong LNG #13 and #14
- Shinkori Nuclear Power Plant Units 1 & 2 (Capacity : 1000MW X 2)
Overseas
- Satah Al-Razboot Plant Facilities Package 4, UAE
Overseas
- Braka Nuclear Power Plant Units 1 ~ 4, UAE
- Habshan-5 Utilities & Offsites Project, UAE
- Ma’aden Alumina Refinery, Saudi Arabia
- Karan Gas Facilities Project, Saudi Arabia
- Gas To Liquid Project, Uzbekistan
- QAFCO 5&6 Fertilizer Project, Qatar
- Karbala Refinery Project, Iraq
- Qatar Pearl GTL – Liquid Processing Unit (C5) Project, Qatar
- Batalla De Santa Ines Refinery Project, Venezuela
- Khurais Central Processing Facilities Project – Gas Contract Package,
- Saudi Arabia
30
31
BUILDING WORKS
PLANT works
1
meeting the high-tech future as
a total power & utility provider
2013 Results
In 2013, the Power & Energy Division
recorded KRW 1,859.8 billion in orders
received and KRW 1,588.1 billion in
sales. In the power generation sector, it
acquired the Uzbekistan Talimarjan 2x
450MW CCPP project, taking the first
step into the CIS power generation market, and won the contract for the Saudi
Petro Rabigh-Madinah 380kV T/L Project, the Hail&Qassim–New Hadco 380kV
T/L Project and the Shedgum-2 380kV
S/S Project in Saudi Arabia, maintaining
its competitive advantage in the Saudi
transmission and Substation market. The
Power & Energy Division successfully entered into new markets, and made constant growth in existing markets in 2013.
advanced engineering capabilities, and
companies in emerging countries like
China, India and Turkey are making large
attempts at inroads into overseas markets, and power demands and development/operation business in new markets
are expanding.
Hyundai E&C is becoming a
leading global player by
creating future values
based on its world-class
expertise in power
generation, transmission,
and substation projects.
2014 Outlook
Analysis of the current market situation and measures to achieve its business plan
In the current market, global competition
is intensifying. Leading companies that
monopolize original technologies and
The Power & Energy Division intends to
break away from the limitations of the
EPC business by expanding the infrastructure for the EPC and independent
power producers (IPP) business in new
markets, reinforcing global business
competencies and building professional
manpower. It will also secure order-taking
competitiveness by building the foothold
for the development/operation business
and new markets, and make thorough
preparations for the changing market by
enhancing engineering and technological
competitiveness, thus implementating
competitiveness.
In 2014, it plans to post KRW 2.0 trillion
in orders received and KRW 2.2 trillion
in sales. To achieve this business plan,
the division will maximize profits by effi-
32
ciently cooperating with HEC to mutually
supplement engineering, technical business and construction competitiveness.
It also hopes to bolster its synergies, and
to enhance the order-taking and implementation competitiveness to become
one of the Global Top 10 construction
companies. Diversifying overseas markets by expanding into new markets,
such as Asia, Central and South America
and CIS, based on existing construction
contracts will also serve as an important
factor in enhancing order-taking competitiveness.
In addition, it will intensively manage risks
in each project phase, i.e. new, underway
and completed, as well as the initial risks
of construction projects in new markets.
It will also make full use of the ongoing
project management system to manage
all project histories and profitability. This
comprehensive system will boost the efficiency and management of projects it
carries out.
Key and new growth
businesses
Total
15,411.5
New Orders
1,859.8
Total
10,591.3
sales
1,588.1
PERFORMANCE IN 2013
Invigoration of independent power
producers (IPP) and Operation &
Maintenance (O&M), and strengthening the commissioning organization
The division will expand into IPP investment and operation business by ensuring business cooperation among organizations carrying out projects. As the
demands for overseas Private Finance
Initiatives are increasing, it will depart
from simple EPC and expand into IPP
accompanied by investments, and invigorate the power plant operation business
by participating in O&M projects. It is also
planning to secure its own implementation capabilities by reinforcing the commissioning organization and providing
education for commissioning manpower.
Enhancing the circulating fluidized
bed combustion (CFBC) technology
To actively respond to the coal power
plant market that is rapidly emerging as a
low-price heat source, the division seeks
to build a linkage system with IPP and
33
2
BUILDING WORKS
PLANT works
4
3
5
1
Ras Laffan C IWPP Project, Qatar
2
Hail - Al Jouf 380kV Transmission Lines, Saudi Arabia
3
Qassim-Madinah 380kV Transmission Line, Saudi Arabia
4
Al-Jalamid Power Plant & Main Substation Works,
Saudi Arabia
5
Shuaiba North IWAPP Project, Kuwait
other power plant operation projects by forming a mid-to long-term task force team for CFBCs. It will also establish detailed goals
by construction type from the engineering to the commissioning. Concurrently, in order to secure technological competencies, it
will build technological cooperation systems with the world’s leading companies and build IT systems by area for each business.
Independent engineering technologies including the Tower & Foundation Design
The transmission area of the division possesses such exceptional tower and foundation design capabilities that they are being
benchmarked by a number of its overseas clients. It is regularly winning new contracts for power transmission works based on
this technological advantage, and consolidating its status as the world’s leading player in this area.
Domestic
Domestic
- Samcheok Green Power Boiler Project
- Koyang Samsong Co-generation Power Plant Project
- Dangjin No. 9 & 10 Power Plant Project
- Yeosoo Co-generation Power Plant Project
- Yulchon II Combined Cycle Power Plant Project
- Busan Jungkwan Co-generation Power Plant Project
- Hyundai Green Power Plant Project
- Yongheung Coal Fired Power Plant Units 3 & 4
- Incheon International Airport E&M Project
Overseas
- Mong Duong-I 1,000MW Thermal Power Plant Project, Vietnam
Overseas
- UTE Punta Del Tigre 530MW CCPP, Uruguay
- Manifa Power Transmission and Substations, Saudi Arabia
- Talimarjan 900MW CCPP, Uzbekistan
- Sarir 3 x 250MW Gas Turbine Project, Libya
- Azito Add-on 139MW CCPP, Cote d’Ivoire
- Shuaiba North IWPP Project, Kuwait
- Al-khalij 4 x 350MW Power Plant Project, Libya
- Ras Laffan C IWPP Project, Qatar
- Tripoli West 4 x 350MW Power Plant Project, Libya
- Power Network Expansion (Phase VIII), Qatar
- Sarir–Ajdabia 400kV Transmission Lines, Libya
- Jebel Ali Power and Desalination Station ‘L’-Phase II, UAE
- Madain–Duba Transmission Lines, Saudi Arabia
- Al-Jalamid Power Plant & Main Substation Works, Saudi Arabia
- Al-Lith–Muhayel Transmission Lines, Saudi Arabia
- Qassim-Madinah 380kV Transmission Line, Saudi Arabia
- Petro Rabigh–Madinah Transmission Lines, Saudi Arabia
- Hail-Al-Jouf 380kV Transmission Lines, Saudi Arabia
- Hail&Qassim–New Hadco Transmission Lines, Saudi Arabia
- Al-Fardous 380kV Substation, Saudi Arabia
- Al-Sanabil 380kV Substation, Saudi Arabia
- Shedgum-2 380/115kV Substation, Saudi Arabia
34
35
Procurement
Construction materials and subcontracts comprise more than
70% of Hyundai E&C’s expenses. Tasked with the management of these expenses, the Procurement Division uses a
variety of processes and procedures to deliver high-quality
materials in a timely manner and enhance the company’s profitability. Sourcing materials overseas is becoming increasingly
important due to a rise in orders from the Middle East and
other parts of the world, and a concomitant increase in the
company’s ratio of overseas sales to total sales.
In 2014, the Division is adding stabilization and other additional functions to the electronic bidding system, allowing it to be
accessed easily and conveniently from anywhere in the world.
In turn, the Division deals with world-leading manufacturers and suppliers. Going forward, it will develop competitive,
prime-quality companies and build cooperative relations with
them in many countries of the world by utilizing overseas networks of the company and other Hyundai Motor Group units.
Because the company has been advancing briskly into new
overseas markets, the importance is emphasized on selecting only the most qualified business partners. The selection
is done by closely examining and systematically analyzing the
characteristics of each nation and project. On this note, the
Division operates a pool of qualified overseas subcontractors
through a Web site that fosters specialists by overseas region,
and registers and manages its overseas business partners
since 2010.
Hyundai E&C launched the Division in 2011 by integrating its
procurement and outsourcing functions following its incorporation into the Hyundai Motor Group. The overall goal was to
facilitate the company’s procurement processes and enhance
its efficiency.
The total value of the company’s procurement and subcontracting operations in 2013 was KRW 8,808 billion. This included KRW 5,225 billion in procurements and KRW 3,583
billion in subcontracting. These figures are expected to increase by about 13% in 2014, to approximately KRW 9,950
billion. Since the company is continuing to win orders in new
markets including Southeast Asia, Africa, Commonwealth of
Independent States Country and South America in addition to
the Middle East, this amount is expected to grow concomitantly.
Hyundai E&C is preventing industrial accidents and ensures
industry-leading HSE management by non-stop improvement
and application of the safety and health management system
(OHSAS18001, KOSHA18001) and the environmental management system (ISO14001). In addition, we became the first
construction company in the world to acquire the energy management system (ISO 50001) certification and introduce the
Green Management System, and we proactively responded
to such global issues as energy, greenhouse gases and global
warming. We are proudly transforming ourselves into a global
enterprise both in name and reality.
Awards and certificates
Construction environment management best practice competition
(Chairman of the National Assembly Environment & Labor Committee Award)
HSE innovation office, improvement of business based on
environmental guidelines of individual countries
Construction environment management best practice competition
(Minister of Land, Infrastructure and Transport Award)
Seonjang~Yeomchi local road pavement construction work,
Noise reduction utilizing rolled rice straws
2013 Hyundai E&C Innovation Award
(Organizational culture innovation category)
Improving business according to the HSE Innovation Office’s
overseas site HSE Guideline
Selected as the leader in the CDP(Carbon Disclosure Project)
We are reinforcing preventive activities by continuously identifying and improving risk factors in worksites, and focusing on
creating our own safety culture by providing emotional wellness education regarding workplace respect, discussion-style
safety education, and safety and health activities faithful to
basics and principles.
industrial product category
Zero-accident achievements
Zero accidents in all processes (14 sites)
Incheon Geomdan Hill State 6, Saudi Hail-jouf 380kV, and 12 other sites
10 times zero accidents (4 sites)
Saudi Ma’aden Alumina Refinery, UAE Borouge 3 power and indirect facilities,
We are also expanding the pool by diversifying our subcontractor lines, adding China, Eastern Europe, as well as Central
and South America to such traditional sources as Europe, the
United States, and Japan. In addition to assisting us in identifying high-quality local suppliers, this program helps to ensure
our cost competiveness and quality, meet our deadlines, and
further upgrade our project execution capabilities.
Our purchasing and outsourcing data are processed through
a computerized enterprise resources planning system. We
have also put an electronic bidding system in place to maximize our business efficiencies. Electronic bids are operated
on a web basis, enabling all companies in the world to access
with ease by using e-Procurement/e-Subcontract systems.
In processing bids by such systems, we are ensuring that our
business transactions are both transparent and standardized
while minimizing human errors.
and 2 other sites
To accomplish our goal of drastically reducing serious accidents, top management participates in the monthly Safety
Inspection Day event, showing their strong will to reduce industrial accidents.
Shinhanul Nuclear Power Plant Units 1 & 2, Qatar Hamad Medical City and 1
other site
Honam KTX section 2-3, Singapore Jurong Rock Cavern Project
In addition, we operate the “Permit to Work(P.T.W)” system,
and the “Out System” to penalize employees who do not
adhere to our safety rules. We try to reinforce the global HSE
competitiveness by managing the risks of individual processes
and building preventive systems, such as a preemptive risk
management and response system based on standardization
of HSE data.
the Federation of Korean Industries Tower,
the Qatar National Museum and 9 other sites
Innovation activities including system improvements
- Monthly Safety Inspection Day with the participation of top management
- Zero-Accident Flag Delivery Campaign in each division
- The Permit to Work (PTW) system for all processes
- The Out System for penalizing workers breaking safety rules
- HSE evaluation and inspection of domestic and overseas sites
- Establishment of standards for safety management expenses of
overseassites
- Establishment of the HSE Work Guide for individual countries
- Publishing environmental standards for individual countries and e-books
- Integration of the greenhouse gas management system
36
37
RESEARCH & DEVELOPMENT
ROLES
R&D achievements in 2013
In 2013, the R&D Division focused on three goals, which included ‘securing the basis for future growth businesses,’ ‘reinforcing global business competencies’ and ‘establishing a risk
management system’ under the vision of 「Securing technologies to become a global leader in construction industry」. To
this end, the division identified the technological needs of other
divisions, increased commercialization of research results,
developed customized technologies for overseas markets,
provided technical support, and concentrated its efforts on
increasing synergies among group affiliates and enhancing the
research management system.
In 2013 the R&D Division conducted researches for the reinforcement of existing business, such as advanced materials,
super long span bridges, underground space, and high-rise
buildings and green cities, and advanced technological researches for securing new growth engines, such as offshore,
water/environment and plants.
The division conducted a total of 58 projects, including 31 inhouse projects, 17 government projects and 10 consigned
projects. Major achievements of 2013 include 55 patent applications, 49 patent registrations, 17 published papers, 73
academic presentations, and 227 cases of technical support.
In addition, the New Excellent Technology was acquired for
‘Technology for reducing riverbed landforming using furrow
shape’ and ‘Remediation technology for arsenic contaminated
soil comprised by zero-discharge washing method’. ‘Domestic
water-saving technology using digital thermo-valve and recirculation system’ also garnered the Green Certification.
In particular, the division conducted research through selection and concentration based on the R&D roadmap, and
contributed to not only technological problemsolving, but also
supported orders and cost reduction by providing technical
support for each construction site. It has also made great efforts to reinforce its technological competencies at home and
abroad by securing intellectual property rights through the ‘the
invention related to the duties and new technology compensation system.’
Research Projects in 2013
Building R&D GROUP
Super tall building
- Design and construction technologies of tall
- buildings
- Lateral load resisting structural system
- Design and construction automation in
- freeform structure
- High-tech. construction material and
- methods
- Rapid construction under extreme climate
- conditions
Green city
- Zero energy building
- Green remodeling
- 4-Free technology (Atopy, Odor, Noise,
- Vibration)
- Eco friendly material
- BIM technology
- Micro energy grid
More than anything else, R&D contract award of ‘Development
of sustainable solution for contaminated sediment remediation’
in Singapore was rated as a cornerstone for making inroads
into the contaminated soil cleanup business in Southeast Asia
and the Middle East, which will be worth several trillions of Korean won in the future.
Awards
Research COOPERATIONS and
technology TRANSFERS
In 2013, the R&D Division won the Minister of Science, ICT &
Future Planning Award in the R&D Performance Evaluation,
and received the Research Paper Award and the Technology Award from ‘the Korea Concrete Institute’. Internally, it
won the Encouragement Award in the Hyundai Motor Group
Academic Contest, received awards in three categories in the
Hyundai E&C Innovation Awards, including the grand prize for
‘Development of the mass concrete using automated curing
system,’ and received the Excellence Award with biogas purification technology in the Group Leaders Awards.
In March 2013, the division entered into an MOU with Finland’s
VTT for building a global network and exchanging human resources, and built a total of nine global cooperative systems,
including Lawrence Berkeley National Laboratory (USA) and
Siemens Wind Power (Denmark). It entered into three technology transfers, i.e. ‘Intelligent multigrouting system,’ ‘Autocontrolled cement mineral-based accelerator injection system’
and ‘Pressurizing support tunneling method.’
Green Smart building
38
CIVIL R&D GROUP
PLANT R&D GROUP
Long span bridge
- Design and construction of super structures
- in long span bridges
- Large diameter long pile foundation system
- High-strength PPWS cable system and
- erection technology
- High-speed railway system
- Innovative infra-structures
Underground space
- Subsea tunnel
- Trenchless tunneling method
- Intelligent grouting
- High performance shotcrete
- Compressed air energy storage & carbon
- capture storage
- Rapid tunneling
Advanced material
- Resource recycling low-carbon composite
- materials
- Intelligent transportation system
- Composite materials
- Sustainable long-life pavement
- Durable high-performance concrete
Rehabilitation of Contaminated Soils
39
Offshore
- Support system for offshore wind turbine
- Tidal current-wave ocean energy
- Foundation for offshore plant
- Very large floating structure for harbor
- New type armour unit for breakwater
- Dredging and reclamation work
Water & environment
- Ecological river restoration
- Soil remediation
- Wastewater treatment & reuse
- Seawater desalination
- Biogas production & purification
- Waste treatment & energy recovery
Plant
- Upgrading of low rank coal
- Optimization of combined cycle power plant
- performance
- Analysis of circulating fluidized bed boiler
- performance
- Very high temperature gas-cooled reactor
- system concepts
- Decommissioning of nuclear power plants
- and construction technology
Rotary Cutting Machine
Our promise to you - engineering and construction for a better world
42 Financial Summary 43 Consolidated Financial Statements
169 Separate Financial Statements
FINANCIAL SUMMARY
Independent Auditors’ Report
English Translation of a Report Originally Issued in Korean
Korean won
2013
2012
2013
(In millions)
Sales
￦
Cost of Sales
Gross profit
Selling & administrative expenses
Operating Income
Gain (Loss) on valuation using Equity Method
Financial Income (Expense)
Other Income (Expense)
Income Before income tax expense
Income tax expense
To the Shareholders and the Board of Directors of
U.S. dollars
Hyundai Engineering & Construction Co., Ltd.
2012
(In thousands)
We have audited the accompanying consolidated financial statements of Hyundai Engineering & Construction Co., Ltd. (the “Company”) and its
13,938,287 ￦
13,324,821 $
13,207,891 $
12,626,572
12,729,837
12,075,949
12,062,766
11,443,143
1,208,450
1,248,872
1,145,125
1,183,429
415,580
488,464
393,803
462,869
792,870
760,408
751,322
720,560
-12,617
-11,165
-11,956
-10,580
8,035
30,689
7,614
29,082
of certain subsidiaries, including Hyundai Engineering Co., Ltd., whose statements reflect 25.32% and 23.89% of the consolidated total assets as
of December 31, 2013 and 2012, respectively, and 24.28% and 22.16% of the consolidated total sales for the years ended December 31, 2013
subsidiaries. The consolidated financial statements consist of the consolidated statements of financial position as of December 31, 2013 and
2012, respectively, and the related consolidated statements of comprehensive income, consolidated statements of changes in shareholders’
equity and consolidated statements of cash flows, all expressed in Korean won, for the years ended December 31, 2013 and 2012, respectively.
The Company’s management is responsible for the preparation and fair presentation of the consolidated financial statements and our
responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the financial statements
-26,316
-42,922
-24,937
-40,673
761,972
737,010
722,043
698,389
and 2012, respectively. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it
192,328
170,050
182,250
161,139
relates to the amounts included for those entities, is based solely on the reports of the other auditors.
569,644
566,960
539,793
537,250
503,634
509,856
477,242
483,138
66,010
57,104
62,551
54,112
14,733,212
12,746,829
13,961,160
12,078,868
11,108,964
9,610,665
10,526,830
9,107,045
3,624,248
3,136,164
3,434,330
2,971,823
9,530,137
7,990,893
9,030,737
7,572,152
Current Liabilities
6,905,974
6,149,756
6,544,086
5,827,495
Non-current Liabilities
2,624,163
1,841,137
2,486,651
1,744,657
In our opinion, based on our audits and the reports of other auditors, the consolidated financial statements referred to above present fairly, in all
Shareholders' Equity
5,203,075
4,755,936
4,930,423
4,506,716
material respects, the financial position of the Company and its subsidiaries as of December 31, 2013 and 2012, respectively, and the results
4,883,743
4,548,542
4,627,825
4,310,190
of their operations and their cash flows for the years ended December 31, 2013 and 2012, respectively, in conformity with Korean International
319,332
207,394
302,598
196,526
Net Income
Owners of the parent company
Non-controlling interests
Total Assets
Current Assets
Non-current Assets
Total Liabilities
Owners of the parent company
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 consolidated financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
Financial Reporting Standards (“K-IFRS”).
Our audits also comprehended the translation of Korean won amounts into U.S. dollar amounts and, in our opinion. such translation has been
made in conformity with the basis in Note 2. Such U.S. dollar amounts are presented solely for the convenience of readers outside of Korea.
Accounting principles and auditing standards and their application in practice vary among countries. The accompanying consolidated financial
statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and
practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of
Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries. Accordingly, this
report and the accompanying consolidated financial statements are for use by those knowledgeable about Korean accounting principles and
auditing standards and their application in practice.
March 6, 2014
Notice to Readers
This report is effective as of March 6, 2014, the auditors’ report date. Certain subsequent events or circumstances may have occurred between the auditors’ report date
and the time the auditors’ report is read. Such events or circumstances could significantly affect the accompanying consolidated financial statements and may result in
modifications to the auditors’ report.
42
43
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)
HYUNDAI ENGINEERING & CONSTRUCTION CO., LTD. AND ITS SUBSIDIARIES
AS OF DECEMBER 31, 2013 AND 2012
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
Korean won
ASSETS
Notes
December 31,
2013
Translation into U.S. dollars (Note 2)
December 31,
2012
December 31,
2013
(In millions)
Korean won
LIABILITIES AND EQUITY
December 31,
2012
Short-term financial instruments
4,23,39,40
￦
23,40
1,883,560 ￦
1,854,859 $
1,784,857 $
16,23,36,40
Other payables
16,23,36,40
1,032,720
837,673
978,603
793,777
29,36
1,755,516
1,533,432
1,663,523
1,453,077
106,619
252,288
101,032
1,244,420
1,336,266
Advances from customers
1,189,072
1,072,492
Due to customers for contract work
3,893,243
2,682,220
Short-term borrowings
Current portion of long-term borrowings and
debentures
Current derivative liabilities
1,254,828
1,131,801
29
4,108,539
2,830,547
Held-to-maturity financial assets
9,23,40
22,661
23,503
21,473
22,271
Current derivative assets
22,23,40
4
1,982
4
1,878
6,14
1,285,689
1,128,456
1,218,316
1,069,322
825
93
782
88
7,36
969,178
1,122,644
918,391
1,063,816
4,204
-
3,984
-
11,108,964
9,610,665
10,526,830
9,107,045
54,123
89,131
51,287
84,460
Current tax assets
Assets held for sale
Total current assets
NON-CURRENT ASSETS:
Long-term accounts receivable
23,37,40
5,23,40
349,296
354,519
330,992
335,941
5,23,29,36,37,40
567,922
516,393
538,162
489,333
Available-for-sale financial assets
8,23,37,40
408,322
558,496
386,925
529,231
9,23,40
72,790
79,284
68,976
75,130
10,36
128,800
99,246
122,051
94,045
Long-term other receivables
Investments in associates
Investment property
Property, plant and equipment
12
13,41
64,154
26,475
60,792
25,088
1,638,221
1,144,030
1,552,375
1,084,080
Intangible assets
15
84,646
76,780
80,210
72,757
Deferred tax assets
34
194,225
154,015
184,047
145,944
Other non-current assets
7
61,749
37,795
58,513
35,814
3,624,248
Total non-current assets
Total assets
(In thousands)
Trade payables
1,410,161
5,23,29,36,40
Long-term financial instruments
December 31,
2012
1,757,660
266,240
Other receivables
Other current assets
December 31,
2013
(In millions)
1,313,236
5,23,36,40
Inventories
December 31,
2012
CURRENT LIABILITIES:
Trade receivables
Due from customers for contract work
December 31,
2013
(In thousands)
CURRENT ASSETS:
Cash and cash equivalents
Notes
￦
(Continued)
14,733,212 ￦
3,136,164
12,746,829 $
3,434,330
13,961,160 $
2,971,823
12,078,868
￦
2,418,312 ￦
2,204,102 $
2,088,602
29
917,408
706,489
869,334
669,467
17,23,40
239,094
185,900
226,565
176,158
17,23,37,38,40
413,978
439,399
392,285
416,374
22,23
Income tax payable
-
626
-
593
90,737
125,676
85,982
119,090
Other financial liabilities
19,23,36,37,38,40
17,890
15,861
16,953
15,030
Other current liabilities
20
20,319
100,598
19,254
95,327
6,905,974
6,149,756
6,544,086
5,827,495
Total current liabilities
NON-CURRENT LIABILITIES:
Long-term other payables
Debentures issued
Long-term borrowings
Non-current derivative liabilities
Retirement benefit obligation
16,23,40
17,23,38,40
17,23,37,38,40
22,23
317,835
215,256
992,273
803,149
601,358
223,380
569,846
211,674
-
18
-
17
173,542
210,336
164,448
11,818
16,043
11,199
15,202
18
351,944
322,685
333,502
305,777
4,342
125
4,114
118
Deferred tax liabilities
Other non-current liabilities
227,160
847,563
221,968
Provision for long-term employee benefits
Provisions
335,411
1,047,146
21
19,23,36,37,38,40
37,262
18,397
35,309
17,433
20
12,914
12,224
12,237
11,583
Total non-current liabilities
2,624,163
1,841,137
2,486,651
1,744,657
Total liabilities
9,530,137
7,990,893
9,030,737
7,572,152
25,40
557,273
557,273
528,071
528,071
782,881
EQUITY:
Capital stock
Other contributed capital
25,40
826,320
826,174
783,019
Components of other capital
26,40
(21,944)
85,856
(20,794)
81,357
Retained earnings
27,40
3,522,094
3,079,239
3,337,529
2,917,881
4,883,743
4,548,542
4,627,825
4,310,190
Equity attributable to the owners of the Parent
Company
Total equity
Total liabilities and equity
￦
319,332
207,394
302,598
196,526
5,203,075
4,755,936
4,930,423
4,506,716
14,733,212 ￦
12,746,829 $
(Concluded) See accompanying notes to consolidated financial statements.
44
2,291,587 $
45
13,961,160 $
12,078,868
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Korean won
Notes
2013
2012
2013
(In millions, except per share amounts)
28,29,36
SALES
￦
33,36
COST OF SALES
30,33,36
SELLING AND ADMINISTRATIVE EXPENSES
OPERATING INCOME
2012
(In thousands, except per share amounts)
13,324,821 $
13,207,891 $
12,626,572
12,729,837
12,075,949
12,062,766
11,443,143
1,248,872
1,145,125
Other
contributed
capital
Capital
stock
13,938,287 ￦
1,208,450
GROSS PROFIT
Korean won
1,183,429
Components
of other
capital
Noncontrolling
interests
Retained
earnings
Total
amount
(In millions)
Balance at January 1, 2012
￦
557,273 ￦
822,809 ￦
148,268 ￦
2,674,725 ￦
160,399 ￦
4,363,474
Dividends
-
-
-
(55,732)
(4,020)
(59,752)
-
-
-
509,856
57,104
566,960
415,580
488,464
393,803
462,869
Net income
792,870
760,408
751,322
720,560
Other capital surplus
-
2,159
-
-
(2,475)
(316)
Other capital adjustments
-
1,206
-
(1,205)
(1)
-
Gain (loss) on valuation of AFS financial
assets, net
-
-
(12,235)
-
32
(12,203)
Gain (loss) on valuation of equity method
investments, net
-
-
(148)
-
-
(148)
-
-
(50,029)
-
(1,191)
(51,220)
GAIN ON VALUATION USING EQUITY METHOD
10
1,544
3,109
1,463
2,946
LOSS ON VALUATION USING EQUITY METHOD
10
14,161
14,274
13,419
13,526
24,31
154,999
171,916
146,877
162,907
24,31,33
146,964
141,227
139,263
133,825
32,36
166,495
153,509
157,770
145,465
32,33,36
192,811
196,431
182,707
186,138
Gain (loss) on foreign operation translation,
net
761,972
737,010
722,043
698,389
Remeasurements of defined benefit plans
192,328
170,050
182,250
161,139
Balance at December 31, 2012
￦
557,273 ￦
826,174 ￦
85,856 ￦
3,079,239 ￦
207,394 ￦
4,755,936
569,644 ￦
566,960 $
539,793
537,250
￦
557,273 ￦
826,174 ￦
85,856 ￦
3,079,239 ￦
207,394 ￦
4,755,936
FINANCIAL INCOME
FINANCIAL EXPENSES
OTHER INCOME
OTHER EXPENSES
INCOME BEFORE INCOME TAX EXPENSE
INCOME TAX EXPENSE
34
NET INCOME
27
￦
$
OTHER COMPREHENSIVE INCOME (LOSS):
Items that will not be reclassified subsequently to profit or loss:
Loss on valuation of equity method investments, net
21
￦
(259) ￦
(148)
$
(245)
$
(140)
24,26
Loss on foreign operation translation, net
26
TOTAL COMPREHENSIVE INCOME
Dividends
-
-
-
(55,732)
(4,619)
(60,351)
Net income
-
-
-
503,634
66,010
569,644
-
(2,589)
(2,348)
(48,334)
-
-
(95,209)
-
20
(95,189)
(11,564)
investments, net
-
-
(259)
-
-
(259)
net
-
-
(12,332)
-
8,873
(3,459)
-
-
-
(5,047)
1,602
(3,445)
Acquisition of subsidiaries
-
(95)
-
-
42,641
42,546
(3,703)
(51,007)
(3,509)
(95,189)
(12,203)
(90,201)
(51,220)
(3,278)
(48,536)
(93,479)
(60,100)
￦
467,293 ￦
452,530
$
442,805
$
428,816
￦
503,634 ￦
509,856
$
477,242
$
483,138
66,010
57,104
62,551
54,112
390,787
399,039
370,308
378,128
76,506
53,491
72,497
50,688
￦
557,273 ￦
826,320 ￦
(Continued) TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
BASIC EARNINGS PER SHARE TO OWNERS OF THE
PARENT COMPANY
35
￦
4,522 ￦
4,578
$
4
$
4
See accompanying notes to consolidated financial statements.
46
(50,859)
-
(63,423)
(2,454)
241
(48,194)
(3,459)
(48,405)
-
(3,264)
(98,648)
-
(50,859)
NET INCOME ATTRIBUTABLE TO:
-
assets, net
(3,444)
Items that may be reclassified subsequently to profit or loss:
Loss on available-for-sale financial assets, net
-
47
(21,944) ￦
3,522,094 ￦
319,332 ￦
5,203,075
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Korean won
Other
contributed
capital
Capital
stock
Components
of other
capital
Noncontrolling
interests
Retained
earnings
Notes
Total
amount
$
528,071 $
779,692 $
140,498 $
2,534,564 $
151,994 $
4,134,819
Cash generated from operations:
-
-
-
(52,811)
(3,810)
(56,621)
Net income
Net income
-
-
-
483,138
54,112
537,250
-
2,046
-
-
(2,344)
(298)
Additions of expenses not involving cash outflows and
others
-
1,143
-
(1,142)
(1)
-
assets, net
Deduction of income not involving cash inflows and
others
-
-
(11,594)
-
30
(11,564)
-
-
(140)
-
-
(140)
net
-
-
(47,407)
-
(1,129)
(48,536)
-
-
-
(45,868)
(2,326)
(48,194)
$
528,071 $
782,881 $
81,357 $
2,917,881 $
196,526 $
4,506,716
$
528,071 $
782,881 $
81,357 $
2,917,881 $
196,526 $
4,506,716
Dividends
-
Net income
2013
2012
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Dividends
investments, net
2012
(In millions)
(In thousands)
2013
351,647 ￦
193,619 $
333,221 $
183,473
569,644
566,960
539,793
537,250
39
676,080
689,052
640,652
652,944
39
(276,985)
(249,436)
(262,469)
(236,365)
￦
Changes in operating assets and liabilities:
(617,092)
(812,957)
(584,755)
(770,356)
Decrease (increase) in trade receivables
99,017
(478,280)
93,828
(453,217)
Decrease (increase) in other receivables
Increase in due from customers for contract work
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase in long-term other receivables
Decrease in other non-current assets
(119,053)
190,322
(112,813)
180,349
(1,261,789)
(413,658)
(1,195,669)
(391,981)
(39,451)
223,248
(37,384)
211,549
18,557
(179,311)
17,585
(169,915)
(128,446)
(88,690)
(121,715)
(84,042)
450
11
426
10
1,989
7,595
1,885
7,197
-
-
(52,811)
(4,377)
(57,188)
-
-
-
477,242
62,551
539,793
-
228
-
-
(2,454)
(2,226)
assets, net
-
-
(90,220)
-
19
(90,201)
investments, net
-
-
(245)
-
-
(245)
net
Decrease in other current liabilities
(72,577)
(2,916)
(68,774)
(2,763)
-
-
(11,686)
-
8,408
(3,278)
Increase (decrease) in long-term other payables
112,430
(16,351)
106,538
(15,494)
-
-
-
(4,783)
1,519
(3,264)
Decrease in derivative liabilities
(595)
(1,905)
(564)
(1,805)
-
(90)
-
-
40,406
40,316
Acquisition of subsidiaries
$
528,071 $
783,019 $
(20,794) $
3,337,529 $
302,598 $
4,930,423
Decrease in derivative assets
Increase in trade payables
209,702
12,468
198,713
11,815
Increase in other payables
191,305
221,603
181,280
209,991
Increase (decrease) in advances from customers
240,686
(59,184)
228,075
(56,083)
Increase (decrease) in due to customers for contract
work
238,226
(82,137)
225,742
(77,833)
Decrease in provisions
(32,695)
(45,552)
(30,982)
(43,165)
Decrease in retirement benefit obligation
(27,060)
(19,760)
(25,642)
(18,725)
Decrease in provision for long-term employee benefits
Decrease in components of other capital
Interest income received
Dividend income received
Interest expense paid
Income taxes paid
(Continued) 48
49
(2,214)
(1,964)
(2,098)
(1,861)
(45,574)
(78,496)
(43,186)
(74,383)
58,787
62,539
55,706
59,262
4,379
1,451
4,150
1,375
(65,745)
(57,548)
(62,300)
(54,532)
(231,600)
(171,926)
(219,464)
(162,917)
117,468
28,135
111,313
26,661
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
Korean won
Notes
2013
2012
2013
(In millions)
1. GENERAL INFORMATION:
2012
(1) The Parent Company
(In thousands)
CASH FLOWS FROM INVESTING ACTIVITIES:
Hyundai Engineering & Construction Co., Ltd. (the “Company” or the “Parent Company”), was incorporated on January 10, 1950, under the
Cash inflows from investing activities:
Withdrawal of short-term financial instruments
￦
Decrease in other receivables
Withdrawal of long-term financial instruments
Decrease in long-term other receivables
430,510 ￦
397,307 $
407,950 $
376,487
66,466
64,623
62,983
61,237
1,250
307
1,184
291
264
264
250
250
Disposal of available-for-sale financial assets
23,303
130
22,082
123
Disposal of held-to-maturity financial assets
23,677
19,246
22,436
18,237
-
281
-
266
79,976
8,370
75,785
7,931
350
3,859
332
3,657
(510,152)
(321,964)
(483,418)
(305,091)
Disposal of investments in associates
Disposal of property, plant and equipment
Disposal of intangible assets
Cash outflows for investing activities:
Acquisition of short-term financial instruments
Increase in other receivables
(12,647)
(8,171)
(11,984)
(7,742)
Acquisition of long-term financial instruments
(45,500)
(90,000)
(43,116)
(85,284)
(23,788)
(58,547)
(22,541)
(55,478)
Acquisition of available-for-sale financial assets
(13,106)
(4,055)
(12,419)
(3,843)
Acquisition of held-to-maturity financial assets
(16,341)
(15,970)
(15,485)
(15,133)
Acquisition of investments in associates
(43,009)
(31,439)
(40,755)
(29,792)
Net cash outflow on acquisition of subsidiary
(12,695)
(68,164)
(12,030)
(64,592)
Acquisition of property, plant and equipment
(163,977)
(97,084)
(155,384)
(91,997)
Acquisition of intangible assets
(5,809)
(7,070)
(5,505)
(6,700)
(221,228)
(208,077)
(209,635)
(197,173)
CASH FLOWS FROM FINANCING ACTIVITIES:
its shares on the Korea Stock Exchange. Total common stock and preferred stock as of December 31, 2013, are ￦556,779 million ($527,603
thousand) and ￦494 million ($468 thousand), respectively. The details of the Company’s shareholders as of December 31, 2013, are as
follows:
Number of shares
Shareholders
Proceeds from short-term borrowings
1,304,621
1,212,909
1,236,256
398,506
298,833
377,623
283,174
Proceeds from long-term borrowings
915,542
272,344
867,566
258,073
(1,251,175)
(1,229,130)
(1,185,611)
(1,164,721)
Repayment of current portion of long-term borrowing
and debentures
(635,982)
(264,814)
(602,655)
(250,937)
Repayment of long-term borrowings
(534,268)
(44,840)
(506,271)
(42,490)
(2,349)
-
(2,226)
-
(60,351)
(59,752)
(57,188)
(56,621)
-
(44)
-
(43)
134,544
185,506
127,494
175,785
30,784
5,564
29,172
5,273
CASH AND CASH EQUIVALENTS, AT BEGINNING OF
YEAR
1,854,859
1,861,917
1,757,660
1,764,349
EFFECT OF EXCHANGE RATE ON CASH AND CASH
EQUIVALENTS
(2,083)
Cash outflows for financing activities:
Cash outflows for additional acquisition of subsidiary’s
equity instruments
Payment of dividends
Stock issue cost
NET INCREASE IN CASH AND CASH EQUIVALENTS
39
￦
1,883,560 ￦
(12,622)
1,854,859 $
(1,975)
1,784,857 $
(11,962)
1,757,660
Ownership (%)
Preferred
stock
Common
stock
23,327,400
-
20.95
-
9,719,750
-
8.73
-
Kia Motors Corporation
5,831,850
-
5.24
-
Korea Finance Corporation
3,654,985
-
3.28
-
68,821,780
98,856
61.80
100.00
111,355,765
98,856
100.00
100.00
Other shareholders
(2) Subsidiaries
A summary of the Parent Company’s 13 subsidiaries including Hyundai Engineering Co., Ltd., as of December 31, 2013, and 2012, are as follows:
Nature of business
Location
End date of
reporting
period
The proportion of ownership
and voting rights owned by
companies in the Group (%)
December 31, December 31,
2013
2012
Architectural design and construction
supervision
Korea
Dec. 31
Hyundai Architects & Engineers Assoc.
Architectural design and facility maintenance
Korea
Hyundai Engineering & Steel Industries Co., Ltd.
Steel structure manufacturing and installation
Korea
Hyundai Farm Land & Development Co., Ltd.
Agricultural management and livestock industry
Korea
Dec. 31
84.67
72.00
Hyundai City Corporation
Real estate suppliers
Korea
Dec. 31
100.00
100.00
Hyundai Engineering & Construction (Wuxi)
Co., Ltd.
Construction
China
Dec. 31
100.00
100.00
Hyundai Asian Technics (Pte) Ltd.
Construction
Singapore
Dec. 31
100.00
100.00
Hyundai Consulting & Information Co., Ltd.
Software development and sales
Korea
Dec. 31
100.00
100.00
Hatay RNC Co., Ltd.
Real estate developer
Korea
Dec. 31
100.00
51.00
Hyundai Rnc HATAY Co., Ltd.
Real estate developer
Vietnam
Dec. 31
100.00
100.00
Hyundai Engineering Co., Ltd.
Middle East Engineering & Development Co., Ltd. Construction
Hyundai E&C Vina Song Gia Co., Ltd.
Management of resort condominium
Hyundai Energy Inc.(*)
Production of steam, cold and hot water, airconditioning
72.55
72.55
Dec. 31
84.79
80.40
Dec. 31
100.00
99.92
Saudi Arabia
Dec. 31
95.00
95.00
Vietnam
Dec. 31
100.00
100.00
Korea
Dec. 31
49.00
-
(*) The Company and its subsidiaries (the “Group”) own 49.00% of common stocks and 51.81% in consideration of convertible preferred stocks.
50
Preferred
stock
Hyundai Motor Company
1,149,350
Issuance of debentures
Repayment of short-term borrowings
Common
stock
Hyundai Mobis Co., Ltd.
Name of subsidiaries
Cash inflows from financing activities:
CASH AND CASH EQUIVALENTS, AT END OF YEAR
laws of the Republic of Korea to engage in civil engineering and construction business. On December 22, 1984, the Parent Company listed
51
(3) Subsidiaries newly included in consolidation for the year ended December 31, 2013, are as follows:
(5) Condensed financial performance of subsidiaries of which non-controlling interests are material to the Group’s consolidated
financial statements for the years ended December 31, 2013 and 2012, are summarized as follows:
Company
Description
Hyundai Energy Inc.
For the year ended December 31, 2013
Obtained control by additional acquisition of convertible preferred stocks
Description
(4) As of December 31, 2013, and 2012, condensed financial position of subsidiaries of which non-controlling interests are
material to the Group’s consolidated financial statements is summarized as follows:
Sales
December 31, 2013
Description
Korean won
Translation into U.S.
dollars (Note 2)
(In millions)
Current assets
￦
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Equity attributable to the owners of the Parent Company
Total equity
(In thousands)
2,179,652 $
￦
252,354
2,445,962
2,317,788
1,421,027
1,346,562
63,808
60,464
1,484,835
1,407,026
697,251
660,714
263,876
250,048
961,127
910,762
Non-current assets
Korean won
dollars (Note 2)
(In millions)
(In thousands)
1,644,281 $
(In thousands)
2,616,187 $
2,479,093
265,455
251,545
Net income
219,928
208,403
Other comprehensive income
30,530
28,930
Total comprehensive income
250,458
237,333
Description
Sales
￦
1,558,117
Korean won
dollars (Note 2)
(In millions)
(In thousands)
2,271,269 $
2,152,250
Operating income
231,205
219,089
Net income
190,812
180,813
(8,309)
(7,874)
182,503
172,939
Total comprehensive income
￦
(In millions)
2,065,434
266,310
December 31, 2012
Current assets
dollars (Note 2)
Operating income
Description
Korean won
Fair value adjustment and the adjustment made in adopting the Parent Company’s accounting policies arising from business combination
are reflected in the summary of financial performance. However, the intercompany transactions are not eliminated.
(6) Condensed cash flows of subsidiaries of which non-controlling interests are material to the Group’s consolidated financial
statements for the years ended December 31, 2013 and 2012, are summarized as follows:
250,911
237,763
1,895,192
1,795,880
1,150,042
1,089,777
38,256
36,252
1,188,298
1,126,029
Equity attributable to the owners of the Parent Company
512,817
485,944
194,077
183,907
Cash flows from operating activities
706,894
669,851
Cash flows from investing activities
(103,641)
Cash flows from financing activities
(3,628)
(3,438)
Net increase in cash and cash equivalents
140,168
132,823
Cash and cash equivalents, at the beginning of year
543,845
515,346
Total assets
Current liabilities
Total liabilities
Total equity
Fair value adjustment and the adjustment made in adopting the Parent Company’s accounting policies arising from business combination are
reflected in the summary of financial position. However, the intercompany transactions are not eliminated.
Description
￦
Effect of exchange rate on cash and cash equivalents
dollars (Note 2)
(In millions)
(In thousands)
247,437 $
(3,780)
Cash and cash equivalents, at the end of year
52
Korean won
￦
53
680,233 $
234,471
(98,210)
(3,582)
644,587
Description
Cash flows from operating activities
Korean won
dollars (Note 2)
(In millions)
(In thousands)
220,215 $
￦
208,675
Cash flows from investing activities
(120,186)
(113,888)
Cash flows from financing activities
(415)
(393)
Net increase in cash and cash equivalents
Cash and cash equivalents, at the beginning of year
Effect of exchange rate on cash and cash equivalents
Cash and cash equivalents, at the end of year
99,614
94,394
453,345
429,589
(9,114)
(8,636)
543,845 $
￦
Hyundai Architects
Hyundai
Hyundai Farm Land
&
Engineering & Steel & Development Co., Hatay RNC Co., Ltd.
Engineers Assoc. Industries Co., Ltd Ltd. consolidation
515,347
Fair value adjustment and the adjustment made in adopting the Parent Company’s accounting policies arising from business combination are
(In millions)
(In thousands)
Ownership percentage before transaction(%)
80.40
99.92
72.00
51.00
Ownership percentage after transaction(%)
84.79
100.00
84.67
100.00
Purchase consideration (A)
(78) $
$
Changes in non-controlling interests (B)
Changes in other contributed capital (A-B)
(251) $
(967) $
(928)
(718)
(308)
(3,987)
2,560
641
57
3,019
(3,488)
The ownership percentage of equity attributable to the owners of the Parent Company for subsidiaries has increased because of obtaining
shares from non-controlling shareholders
reflected in the cash flow summary. However, the intercompany transactions are not eliminated.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(7) Details of non-wholly owned subsidiaries of the Company that have material non-controlling interests as of December 31,
2013, are as follows:
The Company maintains its official accounting records in the Republic of Korean won (“won”) and prepares its consolidated financial
statements in conformity with Korean statutory requirements and Korean International Financial Reporting Standards (“K-IFRS”), in the
Korean language (Hangul). Accordingly, these consolidated financial statements are intended for use by those who are informed about
K-IFRS and practices. The consolidated financial statements have been condensed, restructured and translated into English with certain
Description
Korean won
dollars (Note 2)
(In millions)
(In thousands)
Ownership percentage of non-controlling interests(%)
27.45
statements, but not required for a fair presentation of the Company and its subsidiaries’ financial position, comprehensive income, changes
in equity or cash flows, is not presented in the consolidated financial statements.
27.45
263,876 $
expanded descriptions from the Korean language financial statements. Certain information included in the Korean language financial
250,048
The consolidated financial statements are stated in Korean won, the currency of the country in which the Company is incorporated and
Net income attributable to non-controlling interests
60,381
57,217
Total comprehensive income attributable to non-controlling interests
68,763
65,160
operates. The translation of Korean won amounts into U.S. dollar amounts is included solely for the convenience of readers outside of the
555
526
￦
Dividends paid to non-controlling interests
(8) Increase in the Company’s ownership interests in one of its subsidiary with maintaining control and the consequent effects
U.S. dollars at that or any other rate.
(1) Basis of preparing consolidated financial statements
on the equity attributable to the owners of the Parent Company for the year ended December 31, 2013, is as follows:
The Group has prepared the consolidated financial statements in accordance with K-IFRS for the annual period beginning on January 1, 2011.
Korean won
The significant accounting policies used for the preparation of the consolidated financial statements are summarized below. These
Hyundai Architects
Hyundai
Hyundai Farm Land
&
Engineering & Steel & Development Co., Hatay RNC Co., Ltd.
Engineers Assoc. Industries Co., Ltd Ltd. consolidation
accounting policies are consistent with those applied to the consolidated financial statements for the year ended December 31, 2012,
(In millions)
Ownership percentage before transaction(%)
99.92
84.79
100.00
(82) ￦
￦
Changes in non-controlling interests (B)
Changes in other contributed capital (A-B)
except for the adoption effect of the new accounting standards and interpretations described below.
The accompanying consolidated financial statements have been prepared on the historical cost basis. except for certain non-current assets
(In thousands)
80.40
Ownership percentage after transaction(%)
Purchase consideration (A)
Republic of Korea and has been made at the rate of ￦1,055.30 to $1.00 at December 31, 2013, the base rate announced by Seoul Money
Brokerage Service, Ltd. Such translations should not be construed as representations that the Korean won amounts could be converted into
72.00
51.00
84.67
100.00
and financial instruments that are measured at revalued amounts or fair values at the end of each reporting period. Historical cost is generally
(265) ￦
(1,021) ￦
(979)
(758)
(325)
(4,207)
2,702
676
60
3,186
(3,681)
based on the fair value of the consideration given.
1) New and revised K-IFRSs affecting amounts reported and/or disclosures in the financial statements
The Group has applied a number of new and revised K-IFRSs that are mandatorily effective for an accounting period that begins on or after
January 1, 2013.
54
55
- K-IFRS 1001 (Amendment): ‘Presentation of Financial Statements’
The amendments to K-IFRS 1001 require items of other comprehensive income to be grouped into two categories in the other
comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified
subsequently to profit or loss when specific conditions are met. Other than this presentation change, the application of the amendments
to K-IFRS 1001 does not result in any impact on the Group’s financial position and financial performance. The amendments have been
applied retrospectively for the comparative period, and hence the presentation of items of other comprehensive income has been modified
to reflect the changes.
- K-IFRS 1019 (Amendment): ‘Employee Benefits’
The amendments to K-IFRS 1019 require the recognition of changes in defined benefit obligations and in fair value of plan assets when
they occur and, hence, eliminate the ‘corridor approach’ permitted under the previous version of K-IFRS 1019 and accelerate the
recognition of past service costs. Expected return on plan assets is computed by using the discount rate used to calculate defined benefit
obligation, rather than expected rate of return. and it is included in interest cost of defined benefit obligation. Unrecognized past service
cost is required to be recognized immediately as an expense at an earlier date of recognizing termination benefits or restructuring costs.
The effect of the amendment is not significant on the Group’s consolidated financial statements.
- K-IFRS 1107 (Amendment): ‘Financial Instruments: Disclosures’
The amendments to K-IFRS 1107 are mainly focusing on presentation of the offset between financial assets and financial liabilities
and require entities to disclose information about rights of offset and related arrangements (such as collateral agreements) for financial
instruments under an enforceable master netting agreement or similar arrangement, irrespective of whether they would meet the offsetting
criteria under K-IFRS 1032. The amendments have been applied retrospectively for the comparative period, and hence the information
about the offset between financial assets and financial liabilities has been modified to reflect the changes.
- K-IFRS 1110 (Enactment): ‘Consolidated Financial Statements’
K-IFRS 1110 replaces the parts of K-IFRS 1027 ‘Consolidated and Separate Financial Statements’ that deal with consolidated financial
statements and K-IFRS 2012 ‘Consolidation – Special Purpose Entities’, and establishes a single basis for consolidation for all entities,
including structured entities (the term from K-IFRS 2012, ‘special- purpose entities’, is no longer used). Under K-IFRS 1110, an investor
controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. The effect of the enactments is not significant on the Group’s consolidated
financial statements.
- K-IFRS 1111 (Enactment): ‘Joint Arrangements’
K-IFRS 1111 deals with how a joint arrangement of which two or more parties have joint control should be classified either as a joint
operation or a joint venture. The classification of joint arrangements under K-IFRS 1111 is determined based on the rights and obligations
of parties to the joint arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by
the parties to the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the
parties that have joint control of the arrangement (i.e., joint operators) have rights to the assets, and obligations for the liabilities, relating to
the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e., joint ventures)
have rights to the net assets of the arrangement. If the Group is a joint operator, the Group is to recognize assets, liabilities, revenues and
expenses in relation to its interest in a joint operation and if the Group is a joint venturer, the Group is to account for that investment using
the equity method. The effect of the enactments is not significant on the Group’s consolidated financial statements.
- K-IFRS 1112 (Enactment): ‘Disclosure of Interests in Other Entities’
K-IFRS 1112 is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates, or
unconsolidated structured entities. This standard requires an entity to disclose the nature of, and risks associated with, its interests in other
entities and the effects of those interests on its financial position, financial performance and cash flows. The enactments have been applied
retrospectively for the comparative period, and hence the information has been modified to reflect the changes.
56
- K-IFRS 1113 (Enactment): ‘Fair Value Measurement’
K-IFRS 1113 establishes a single source of guidance for fair value measurements and disclosure about fair value measurements. The
standard defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements.
K-IFRS 1113 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Fair value is measured by taking into account the characteristics of the asset or
liability that market participants would take when pricing the asset or liability at the measurement date. A fair value measurement under
K-IFRS 1113 requires an entity to determine the particular asset or liability that is subject of the measurement, the principal (or most
advantageous) market for the asset or liability, and the valuation technique(s) appropriate for the measurement. In addition, K-IFRS 1113
requires extensive disclosures about fair value measurements. The effect of the enactments is not significant on the Group’s consolidated
financial statements.
In addition to the new accounting standards described above, new standards have been applied since January 1, 2013, such as the
amendments to K-IFRS 1032 ‘Tax effect of distribution to holders of equity instruments’ and others. The effect of the amendments is not
significant on the Group’s consolidated financial statements.
2) New accounting standards that have been issued but are not yet effective as of December 31, 2013, and that have not yet
been applied are as follows:
- K-IFRS 1032 (Amendment): ‘Financial Instruments: Presentation’
The amendments to K-IFRS 1032 clarify existing application issue related to the offset of financial assets and financial liabilities requirements.
Specifically, the amendments clarify the meaning of ‘currently has a legally enforceable right of set off’ and ‘simultaneous realization and
settlement.’ The Group’s right to offset must not be conditional on the occurrence of future events but enforceable anytime during the
contract periods, during the ordinary course of business with counterparty, a default of counterparty and master netting agreement or in
some forms of non-recourse debt. The amendments to K-IFRS 1032 are effective for annual periods beginning on or after January 1, 2014.
- K-IFRS 1039 (Amendments): ‘Financial Instruments: Recognition and Measurement’
The amendments to K-IFRS 1039 allow the continuation of hedge accounting when a derivative is novated to a clearing counterparty or an
entity acting in a similar capacity and certain conditions are met. The amendment to K-IFRS 1039 is effective for annual periods beginning
on or after January 1, 2014.
- K-IFRS 1110, K-IFRS 1112 and K-IFRS 1027 (Amendment): ‘Investment Entities’
The amendments introduce an exception to the principle under K-IFRS 1110 that all subsidiaries shall be consolidated and require a
reporting entity that meets the definition of an investment entity not to consolidate its subsidiaries but instead to measure its subsidiaries at
fair value through profit or loss (“FVTPL”) in its consolidated and separate financial statements. In addition, consequential amendments have
been made to K-IFRS 1112 and K-IFRS 1027 to introduce new disclosure requirements for investment entities. The investment entities
amendments are effective for annual periods beginning on or after January 1, 2014.
- K-IFRS 2121 (Enactment): ‘Levies’
K-IFRS 2121 defines a levy as a payment to a government for which an entity receives no specific goods or services. The interpretation
requires that a liability is recognized when the obligating event occurs. The obligating event is the activity that triggers payment of the
levy and is typically specified in the legislation that imposes the levy. The interpretation is effective for annual periods beginning on or after
January 1, 2014.
The list above does not include some other amendments such as the amendments to K-IFRS 1036 ‘Impairment of Assets’ related to
recoverable amount disclosures for non-financial assets that are effective from January 1, 2014 with earlier application permitted.
The Group is in the process of evaluating the impact on the consolidated financial statements upon the application of new and revised
K-IFRSs that have been issued but are not yet effective.
57
The consolidated financial statements of the Parent Company as of and for the year ended on December 31, 2013, to be submitted at the
ordinary shareholders’ meeting were authorized at the board of directors’ meeting on February 26, 2014.
(3) Business combination
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination
is measured at fair value, which is calculated as the sum of the fair values of the assets transferred by the Group, liabilities incurred by
(2) Basis of consolidation
the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree.
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities)
controlled by the Company (and its subsidiaries). Control is achieved where the Company 1) has the power over the investee 2) is exposed,
or has rights, to variable returns from its involvement with the investee and 3) has the ability to use its power to affect its returns. The
Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the
Acquisition-related costs are generally recognized in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date,
except that:
• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in
three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are
sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:
• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.
accordance with K-IFRS 1012 ‘Income Taxes’ and K-IFRS 1019 ‘Employee Benefits’ respectively;
• liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of
the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with K-IFRS 1102
‘Share-Based Payment’ at the acquisition date; and
• assets (or disposal groups) that are classified as held for sale in accordance with K-IFRS 1105 ‘Non-current Assets Held for Sale and
Discontinued Operations’ are measured in accordance with that standard.
Goodwill is measured as the excess of the sum of: a) the consideration transferred, b) the amount of any non-controlling interests in the
acquiree, and c) the fair value of the acquirer’s previously held equity interest in the acquiree (if any); over the net of the acquisition-date
amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the
Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive
identifiable assets acquired and liabilities assumed exceeds the sum of: a) the consideration transferred, b) the amount of any non-controlling
income from the date the Company gains control until the date when the Company ceases to control the subsidiary. Profit or loss and
interests in the acquiree, and c) the fair value of the acquirer’s previously held interest in the acquiree (if any) the excess is recognized
each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total
immediately in profit or loss as a bargain purchase gain.
comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in
the non-controlling interests having a deficit balance.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in
the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognized
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s
amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other
accounting policies.
types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another K-IFRS.
All intragroup transactions and related assets and liabilities, income and expenses are eliminated in full on consolidation
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted
for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes
in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the
fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss on disposal is calculated as the difference between (i) the aggregate of the fair
value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including
goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts
or fair values and the related cumulative gain or loss has been recognized in other comprehensive income and accumulated in equity, the
amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Company had directly
disposed of the relevant assets (i.e., reclassified to profit or loss or transferred directly to retained earnings). The fair value of any investment
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the
consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurementperiod adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement-period adjustments are
adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the
acquisition date) about facts and circumstances that existed at the acquisition date
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement-period
adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not
remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is
classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with K-IFRS 1039, or K-IFRS 1037 ‘Provisions,
Contingent Liabilities and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognized in profit or loss.
retained in the former subsidiary at the date when control is lost is recognized as the fair value on initial recognition for subsequent
When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to fair value
accounting under K-IFRS 1039 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
at the acquisition date (i.e., the date when the Group obtains control) and the resulting gain or loss, if any, is recognized in profit or loss.
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Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive
income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the
applies K-IFRS 1105 to a portion of investment in an associate or a joint venture that meets the criteria to be classified as held for sale.
The requirements of K-IFRS 1039 are applied to determine whether it is necessary to recognize any impairment loss with respect to the Group’s
investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for
Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during
impairment in accordance with K-IFRS 1036 by comparing its recoverable amount (higher of value in use and fair value, less costs to sell) with
the measurement period (see above), or additional assets or liabilities are recognized, to reflect new information obtained about facts and
its carrying amount, any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is
circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.
recognized in accordance with K-IFRS 1036 to the extent that the recoverable amount of the investment subsequently increases.
The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an
(4) Investments in associates and joint ventures
investment in a joint venture becomes an investment in an associate. There is no remeasurement to fair value upon such changes in
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint control over those policies.
ownership interests.
When a Group’s entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint
associate or joint venture are recognized in the Group’s consolidated financial statements only to the extent of interests in the associate or
arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
joint venture that are not related to the Group.
relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements using the
equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with
K-IFRS 1105 ‘Non-current Assets Held for Sale and Discontinued Operations’. Under the equity method, an investment in an associate
(5) Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and
obligations for the liabilities, related to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
or a joint venture is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
Group’s share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group’s share of losses of
When a Group’s entity undertakes its activities under joint operations, the Group as a joint operator recognizes in relation to its interest in a
an associate or a joint venture exceeds the Group’s interest in that associate or joint venture (which includes any long-term interests that, in
joint operation:
substance, form part of the Group’s net investment in the associate or joint venture), the Group discontinues recognizing its share of further
losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments
on behalf of the associate or joint venture.
• its assets, including its share of any assets held jointly;
• its liabilities, including its share of any liabilities incurred jointly;
• its revenue from the sale of its share of the output arising from the joint operation;
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of
• its share of the revenue from the sale of the output by the joint operation; and
an associate or a joint venture recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount
• its expenses, including its share of any expenses incurred jointly.
of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the
cost of acquisition, after reassessment, is recognized immediately in profit or loss.
Upon disposal of an associate or a joint venture that results in the Group losing significant influence over that associate or joint venture, any
retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial
asset in accordance with K-IFRS 1039. The difference between the previous carrying amount of the associate or joint venture attributable
to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate or joint venture. In
addition, the Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate or joint
The Group accounts for the assets, liabilities, revenues and expenses related to its interest in a joint operation in accordance with the
K-IFRSs applicable to the particular assets, liabilities, revenues and expenses.
When a Group’s entity transacts with a joint operation in which the Group’s entity is a joint operator (such as a sale or contribution of assets),
the Group is considered to be conducting the transaction with the other parties to the joint operation, and gains and losses resulting from
the transactions are recognized in the Group’s consolidated financial statements only to the extent of other parties’ interests in the joint
operation.
venture on the same basis we would be required if that associate or joint venture had directly disposed of the related assets or liabilities.
When a Group’s entity transacts with a joint operation in which the Group’s entity is a joint operator (such as a purchase of assets), the
Therefore, if a gain or loss previously recognized in other comprehensive income by that associate or joint venture would be reclassified
Group does not recognize its share of the gains and losses until it resells those assets to a third party.
to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as
reclassification adjustment) when it loses significant influence over that associate or joint venture.
(6) Cash and cash equivalents
When the Group reduces its ownership interest in an associate or a joint venture but continues to use the equity method, the Group reclassifies
Cash and cash equivalents include cash, including checks issued by others; checking accounts; ordinary deposits; and financial instruments
to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income related to that reduction in
with maturities (or date of redemption) of three months or less from acquisition, which can be easily converted into cash and whose value
ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities. In addition, the Group
changes are not material due to changes in interest rates.
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(7) Financial Instruments
4) AFS financial assets
Financial assets and financial liabilities are recognized when a Group’s entity becomes a party to the contractual provisions of the
instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
AFS financial assets are non-derivatives that are either designated as AFS or are not classified as (a) loans and receivables, (b) held-tomaturity investments or (c) financial assets at FVTPL.
acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial
They are subsequently measured at fair value at the end of each reporting period. Changes in the carrying amount of AFS monetary financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities
assets relating to changes in foreign currency rates (see below), interest income calculated using the effective interest method and dividends
at FVTPL are recognized immediately in profit or loss.
on AFS equity investments are recognized in profit or loss. Other changes in the carrying amount of AFS financial assets are recognized in
All regular way purchases or sales of financial assets are recognized and derecognized on a trade-date basis. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in
the marketplace.
other comprehensive income and accumulated under the heading of investments revaluation reserve. When the investment is disposed of or is
determined to be impaired, the cumulative gain or loss previously accumulated in other comprehensive income is reclassified to profit or loss.
Dividends on AFS equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established.
Financial assets are classified into the following specified categories: ‘financial assets at FVTPL,’ ‘held-to-maturity investments,’ ‘available-for-
The fair value of AFS monetary financial assets denominated in a foreign currency is determined in that foreign currency and translated
sale (“AFS”) financial assets’ and ‘loans and receivables.’ The classification depends on the nature and purpose of the financial assets and is
at the spot rate prevailing at the end of the reporting period. The foreign exchange gains and losses that are recognized in profit or loss
determined at the time of initial recognition.
are determined based on the amortized cost of the monetary asset. Other foreign exchange gains and losses are recognized in other
comprehensive income.
1) Effective interest method
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid
or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected
life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and
derivatives that are linked to, and must be settled by, delivery of such unquoted equity investments are measured at cost, less any identified
impairment losses at the end of each reporting period.
5) Loans and receivables
Trade receivables, loans and other receivables that have fixed or determinable payments and are not quoted in an active market are
classified as ‘loans and receivables’. Loans and receivables are measured at amortized cost using the effective interest method, less any
2) Financial assets at FVTPL
impairment. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the effect of
Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL. A financial asset
discounting is immaterial.
is classified as held for trading if it has been acquired principally for the purpose of selling it in the near term. Derivatives, including embedded
derivatives that are not designated as a hedging instrument, are classified as held-for-trading financial assets. Financial assets at FVTPL are
6) Impairment of financial assets
stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss.
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets
are considered to be impaired when there is objective evidence that more events have occurred after the initial recognition of the financial
A financial asset is classified as held for trading if:
asset and the estimated future cash flows of the investment have been affected.
• It has been acquired principally for the purpose of selling it in the near term; or
• On initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual
pattern of short-term profit-taking; or
• It is a derivative that is not designated and effective as a hedging instrument.
For listed and unlisted equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is
considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment include:
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net
• Significant financial difficulty of the issuer or counterparty,
gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘[financial
• Default or delinquency in interest or principal payments,
income and expenses]’ line item in the consolidated statement of comprehensive income.
• It becoming probable that the borrower will enter bankruptcy or financial reorganization or
• The disappearance of an active market for that financial asset because of financial difficulties.
3) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and ability
to hold till maturity are classified as held-to-maturity investments. Held-to-maturity investments are measured at amortized cost using the
effective interest method, less any impairment, with revenue recognized on an effective yield basis.
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For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed
for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of
collecting payments, as well as observable changes in national or local economic conditions that correlate with default on receivables.
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For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
(8) Inventory
Inventories are stated at the lower of cost or net realizable value. The cost of inventories is determined using the first-in, first-out method
For financial assets that are carried at cost, the amount of the impairment loss recognized is the difference between the asset’s carrying
for merchandise, supplies and raw materials; specific identification method for land for construction and materials in transit; and weighted-
amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset.
average method for finished and unfinished housing units. The cost of construction support materials is determined at cost, less an
Such impairment loss will not be reversed in subsequent periods.
accumulated expense incurred. The amount of any write-down of inventories to net realizable value due to obsolescence or excess inventory
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets, with the exception of trade
receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered
uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the
allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss. When an AFS financial asset is
and other losses of inventories occurring in the normal course of business are recognized as cost of revenues, and such valuation losses are
deducted from the inventories as allowance for valuation losses.
(9) Investment property
considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss
Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at
in the period.
cost, including transaction costs. Subsequent to initial recognition, investment properties are reported at cost, less accumulated depreciation
For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease
and accumulated impairment losses.
can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed
Subsequent costs are recognized in carrying amount of an asset or as a separate asset if it is probable that future economic benefits
through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what
associated with the assets will flow into the Group and the cost of an asset can be measured reliably. Routine maintenance and repairs are
the amortized cost would have been had the impairment not been recognized.
expensed as incurred.
In respect of AFS equity securities, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any
While land is not depreciated, all other investment property is depreciated based on the respective assets estimated useful lives ranging from
increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of AFS debt securities,
five to 50 years using the straight-line method.
impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related
to an event occurring after the recognition of the impairment loss.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any
changes in estimate accounted for on a prospective basis.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future
7) Derecognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers
economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference
the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor
between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is
retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognizes its retained
derecognized.
interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of
ownership of a transferred financial asset, the Group continues to recognize the financial asset and also recognize a collateralized borrowing
for the proceeds received.
(10) Property, plant and equipment
Property, plant and equipment are stated at cost, less subsequent accumulated depreciation and accumulated impairment losses. The
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration
cost of an item of property, plant and equipment is directly attributable to their purchase or construction, which includes any costs directly
received and receivable and the cumulated gain or loss that had been recognized in other comprehensive income and accumulated in equity
attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by
is recognized in profit or loss.
management. It also includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is
On derecognition of a financial assets other than in its entirety (e.g., when the Group retains an option to repurchase part of a transferred
located.
asset, or it retains a residual interest and such an retained interest indicates that the transferor has neither transferred nor retained
Subsequent costs are recognized in carrying amount of an asset or as a separate asset if it is probable that future economic benefits
substantially all the risks and rewards of ownership and has retained control of the transferred asset), the Group allocates the previous
associated with the assets will flow into the Group and the cost of an asset can be measured reliably. Routine maintenance and repairs are
carrying amount of the financial asset between the part it continues to recognize under continuing involvement and the part it no longer
expensed as incurred.
recognizes on the basis of the relative fair value of those parts on the date of the transfer. The difference between the carrying amount
allocated to the part that is no longer recognized and the sum of the consideration received for the part that is no longer recognized and any
cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in profit or loss. A cumulative
gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the
part that is no longer recognized on the basis of the relative fair value of those parts.
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The Group does not depreciate land and construction in progress. Depreciation is computed using the straight-line method based on the
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and
estimated useful lives of the assets as follows:
whenever there is an indication that the asset may be impaired.
Estimated useful lives (years)
Buildings
5–60
Recoverable amount is the higher of fair value, less costs to sell, and value in use. If the recoverable amount of an asset (or a cashgenerating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or the cash-generating unit) is reduced to
its recoverable amount and the reduced amount is recognized in profit or loss.
Structures
2–48
Machinery and equipment
1–30
Vehicles
3–7
estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been
Tools, furniture and fixtures
3–20
determined had no impairment loss been recognized for the asset (or the cash-generating unit) in prior years. A reversal of an impairment
Ships
3–15
Others
4–50
The Group reviews the depreciation method, the estimated useful lives and residual values of property, plant and equipment at the end of each
annual reporting period. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the
Where an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised
loss is recognized immediately in profit or loss.
(13) Financial liabilities and equity instruments
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual
arrangement and the definitions of financial liability and an equity instrument.
continued use of the asset. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.
1) Equity instruments
(11) Intangible assets
instruments issued by the Group are recognized as the proceeds are received, net of direct issue costs.
Intangible assets are initially recognized at acquisition cost (purchase cost, plus expenditure directly related to preparing the assets ready for
Repurchase of the Group’s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or
its use) and subsequently presented at amortized cost. In relation to intangible assets with indefinite useful lives, the estimated useful life and
loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity
amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for
2) Financial liabilities
as change in accounting estimates.
In relation to intangible assets with definite useful lives, depreciation is computed using the straight-line method based on the estimated
useful lives (usually 3–70 years) of the assets.
Financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments. Financial liabilities
are initially measured at fair value. Transaction cost directly attributable to the issue of financial liabilities is deducted from the fair value of
the financial liabilities on initial recognition. Transaction cost directly attributable to acquisition of financial liabilities at FVTPL is recognized
Intangible assets that are acquired in a business combination are recognized separately from goodwill and are initially recognized at their
immediately in profit or loss.
fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business
combination are reported at cost, less accumulated amortization and accumulated impairment losses, on the same basis as intangible
3) Financial guarantee contracts
assets that are acquired separately.
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses
because a specified debtor fails to make payments when due in accordance with the terms of a debt instruments.
arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of
Financial guarantee contract liabilities are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured
the asset, are recognized in profit or loss when the asset is derecognized.
at the higher of:
(12) Impairment of tangible and intangible assets other than goodwill
• The amount of the obligation under the contract, as determined in accordance with K-IFRS 1037 and
• The amount initially recognized, less cumulative amortization recognized in accordance with the K-IFRS 1018 ‘Revenue’.
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is
4) Financial liabilities at FVTPL
estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as FVTPL. The net gain or
asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and
loss recognized in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item
consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise, they are
in the consolidated statement of comprehensive income.
allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
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5) Other financial liabilities
(15) Retirement benefit obligation
Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized
on an effective yield basis.
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations
being carried out at the end of each reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the
The effective interest method is a method of calculating the amortized cost of a financial liability, and of allocating interest expense over the
asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the consolidated statement of financial
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments, including all fees and points
position, with a charge or credit recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in
paid or received (that form an integral part of the effective interest rate) and transaction costs and other premiums or discounts through the
other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is
expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the
period to the net defined benefit liability or asset. Defined benefit costs are composed of service cost (including current service cost and past
6) Derecognition of financial liabilities
service cost, as well as gains and losses on curtailments and settlements), net interest expense (income) and remeasurement.
The Group derecognizes financial liabilities when the Group’s obligations are discharged or canceled or they expire. The difference between
the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.
The Group presents the service cost and net interest expense (income) components in profit or loss and the remeasurement component in
other comprehensive income. Curtailment gains and losses are accounted for as past service costs.
A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit or
(14) Derivative financial instruments
Derivatives are initially recognized at fair value at the date the derivative contract is entered into and transaction cost is immediately
recognized as gain/loss.
when the entity recognizes any related restructuring costs.
(16) Provisions
The Group designates certain derivatives either as hedges of recognized assets or liabilities or firm commitments (fair value hedges),
hedges of highly probable forecast transactions, hedges of foreign currency risk of firm commitments (cash flow hedges) or hedges of net
investments in foreign operations (net investment hedges).
A provision is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present
Derivatives are measured to their fair value subsequently and gain/loss following changes of fair values is recognized as follows:
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those
1) Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or loss immediately,
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The change in the fair value
cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable
is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
of the hedging instrument and the change in the hedged item attributable to the hedged risk are recognized on the line of the consolidated
At the end of each reporting period, the remaining provision balance is reviewed and assessed to determine if the current best estimate is
statement of comprehensive income relating to the hedged item.
being recognized. If the existence of an obligation to transfer economic benefit is no longer probable, the related provision is reversed during
the period.
2) Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other
comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the
‘other gains and losses’ line item. Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified
to profit or loss in the periods when the hedged item is recognized in profit or loss on the same line of the consolidated statement of
comprehensive income as the recognized hedged item. However, when the forecast transaction that is hedged results in the recognition of
a non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and included
in the initial measurement of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the Group revokes the hedging relationship; the hedging instrument expires or is sold, terminated
or exercised; or it no longer qualifies for hedge accounting. Any gain or loss accumulated in equity at that time remains in equity and is
recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to
occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.
Changes in fair values of derivatives that do not qualify the requirements of hedge accounting or designate as hedge are recognized as gain/loss.
68
(17) Revenue recognition
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognized by reference to the stage of
completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work
performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion.
For revenues from lotting-out contracts, material risks and compensations in relation to title and control of uncompleted contracts are
transferred to buyer. When the criteria for revenue recognition requirements are met, revenue is recognized based on the stage of completion
of a contract. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured
reliably and its receipt is considered probable.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs
incurred that it is probable will be recoverable. Contract costs are recognized as expenses in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.
69
When the billings on uncompleted contracts are less than the income earned to date, the difference is presented as due from customers
In the case of a partial disposal (i.e., no loss of control) of a subsidiary that includes a foreign operation, the proportionate share of
for contract work. When the billings are greater than the income earned on uncompleted contracts, the difference is presented as due
accumulated exchange differences are reattributed to non-controlling interests in equity and are not recognized in profit or loss. For all other
to customers for contract work. Received payment before the corresponding construction is processed is recognized as advance from
partial disposals (i.e., partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint
customers. Billing that is sent, but not received is recognized as trade receivables in the consolidated statement of financial position.
control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.
Revenues from other than the above are recognized when the Group’s revenue-earning activities have been substantially completed, the amount
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign
of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow into the Group.
operation and translated at the closing rate. Exchange differences arising are recognized in other comprehensive income.
(18) Borrowing costs
(20) Non-current assets held for sale
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale
a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets
transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current
are substantially ready for their intended use or sale.
asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should
Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from
be expected to qualify for recognition as a completed sale within one year from the date of classification.
the borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all the assets and liabilities of that subsidiary are
(19) Foreign currency translation
its former subsidiary after the sale.
The consolidated financial statements of the Group are presented in the currency of the primary economic environment in which the entity
When the Group is committed to a sale plan involving disposal of an investment, or a portion of an investment, in an associate or joint
classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in
operates (its functional currency). The Parent Company’s functional currency, as well as the reporting currency for the consolidated financial
venture, the investment or the portion of the investment that will be disposed of is classified as held for sale when the criteria described
statements is Korean won.
above are met, and the Group discontinues the use of the equity method in relation to the portion that is classified a held for sale. Any
In preparation of the Group’s consolidated financial statements, any transaction occurred in currency other than its functional currency will be
recorded in translated amount using the exchange rate of the transaction. At the end of the reporting period, all monetary assets and liabilities
will be translated using the exchange rate. Meanwhile, non-monetary assets and liabilities measured at fair value will be retranslated using the
exchange rate on the day of fair value evaluation, whereas non-monetary assets and liabilities measured at historical cost will not be translated.
Exchange differences are recognized in profit or loss in the period in which they arise, except for:
• Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included
in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings and
• Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned
nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognized initially in other
comprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment.
retained portion of an investment in an associate or a joint venture that has not been classified as held for sale continues to be accounted for
using the equity method. The Group discontinues the use of the equity method at the time of disposal when the disposal results in the Group
losing significant influence over the associate or joint venture.
After the disposal takes place, the Group accounts for any retained interest in the associate or joint venture in accordance with K-IFRS 1039,
unless the retained interest continues to be an associate or a joint venture, in which case the Group uses the equity method.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair
value, less costs to sell.
(21) Income tax expense and deferred tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
For the consolidated financial statements, assets and liabilities in foreign business are translated to Korean won using the year-end exchange
1) Current tax
rate of that period. Profit and loss are translated with average exchange rate for the period, unless the exchange rate during the period
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of
has materially fluctuated, in which case the transaction-date exchange rate will be used. The foreign currency difference that arises is
comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable
accumulated in equity as other comprehensive income (distribute to non-controlling interests, if appropriate).
or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of
On the disposal of a foreign operation (i.e., a disposal of the Group’s entire interest in a foreign operation, a disposal involving loss of control
the reporting period.
over a subsidiary that includes a foreign operation or partial disposal of an interest in a joint arrangement or an associate that includes a
foreign operation of which the retained interest becomes a financial asset), all of the accumulated exchange differences in respect of that
operation attributable to the owners of the Company are reclassified to profit or loss. Any exchange differences that have previously been
attributed to non-controlling interests are derecognized, but they are not reclassified to profit or loss.
70
71
2) Deferred tax
Level 1:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial
Level 2:
Inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for
Level 3:
Inputs are unobservable inputs for the asset or liability
Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date
all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is
probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets
and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business
3. SIGNIFICANT ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTIES:
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and
interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the
on historical experience and other factors that are considered to be relevant. Actual results may be different from those estimates. The
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated
with such investments and interests are only recognized to the extent it is probable that there will be sufficient taxable profits against which
the benefits of the temporary differences can be utilized and they are expected to reverse in the foreseeable future.
the carrying amounts of assets and liabilities that cannot be identified from other sources. The estimation and assumptions are based
estimates and underlying assumptions are continually evaluated. Revisions to accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current
and future periods.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
4. CASH AND CASH EQUIVALENTS:
Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied in the period in which the liability is settled or
Cash and cash equivalents as of December 31, 2013 and 2012, are as follows:
the asset is realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Korean won
The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow the manner in which the Group
December 31, 2013 December 31, 2012 December 31, 2013
expects to recover or settle the carrying amount of its assets and liabilities at the end of the reporting period.
(In millions)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities
Cash on hand
and when they relate to income tax levied by the same taxation authority. Also, they are offset when different taxable entities that intend
Checking deposits
either to settle current tax liabilities and assets on a net basis, or realize the assets and settle the liabilities simultaneously, in each future
Ordinary deposits
1,848 ￦
￦
period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
3) Current tax and deferred tax for the year
Current tax and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive
income or directly in equity or items arising from initial accounting treatments of a business combination. The tax effect arising from a
business combination is included in the accounting for the business combination.
Translation into U.S. dollars(Note 2)
￦
December 31, 2012
(In thousands)
1,506
$
1,751
$
1,427
415,127
417,645
393,373
395,759
1,466,585
1,435,708
1,389,733
1,360,474
1,883,560 ￦
1,854,859
$
1,784,857
$
1,757,660
5. TRADE, OTHER RECEIVABLES, LONG-TERM ACCOUNTS RECEIVABLES AND LONG-TERM OTHER RECEIVABLES:
(1) Trade, other receivables, long-term accounts receivables and long-term other receivables as of December 31, 2013 and
(22) Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if
market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based
payment transactions that are within the scope of K-IFRS 1102; leasing transactions that are within the scope of K-IFRS 1017 ‘Leases’; and
measurements that have some similarities to fair value, but are not fair value, such as net realizable value in K-IFRS 1002 ‘Inventories’ or
value in use in K-IFRS 1036.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which
are described as follows:
72
Korean won
Description
Accounts
(In millions)
Trade receivables
Trade receivables
40,132 ￦
￦
Allowance for doubtful accounts
December 31, 2012
(In thousands)
28,915
$
38,029
$
27,400
(199)
(531)
(189)
(503)
49,758
102,656
47,151
97,277
(171)
(171)
(162)
(162)
Construction work t rade receivables
1,283,828
1,340,258
1,216,552
1,270,025
Receivables from real estate sales
(60,112)
(60,966)
(56,961)
(57,771)
1,313,236
1,410,161
1,244,420
1,336,266
73
Korean won
Description
Accounts
(In millions)
Other receivables
Short-term guarantee deposits
386,026
$
332,412
$
365,797
(2,156)
(9,899)
(2,043)
43
1,474
41
1,397
Accounts receivable
711,750
505,800
674,452
479,295
(16,081)
(15,885)
(15,238)
(15,053)
Construction work trade receivables
Present value of discount
(2,213)
(654)
(2,097)
(620)
Accrued income
16,408
14,269
15,548
13,521
Current portion of long-term loan
$
Accounts receivable
(503) $
(185) $
499 $
- $
- $
- $
(162)
-
-
-
-
-
(162)
(57,771)
(318)
784
-
-
344
(56,961)
(2,043)
(8,222)
30
-
-
336
(9,899)
(8,425)
6,387
1,168
154
531
(15,238)
193,853
230,198
1,072,492
349,306
354,541
331,001
335,961
(10)
(22)
(9)
(20)
349,296
354,519
330,992
335,941
55,795
133,893
52,871
126,877
(14,391)
(14,391)
(13,637)
(13,637)
Korean won
Long-term loan
(1,709)
(8,599)
(1,618)
(8,148)
105,302
85,634
99,784
81,147
(58,802) ￦
￦
(57,818)
$
(55,722)
$
Long-term loan
$
Description
(54,789)
(2,515)
(2,043)
(2,383)
(1,936)
Guarantee deposits
507,887
397,606
481,273
376,771
(23,645)
(17,889)
(22,406)
(16,952)
Trade receivables
567,922
516,393
538,162
489,333
(20)
-
11
-
-
-
(9)
(13,637)
-
-
-
-
-
(13,637)
(54,789)
(520)
-
1,863
(2,276)
-
(55,722)
(17,670) $
7,711 $
3,031 $
(2,122) $
1,211 $
(151,817)
(143,978) $
Beginning
balance
Reversal of
allowance
for doubtful
accounts
Disposal
of accounts
receivable
Impairment
loss
- ￦
- ￦
(531)
-
-
-
(171)
(16,846)
(57,054)
5,044
5,269
2,621
(60,966)
(2,021)
(351)
-
11
205
(2,156)
Accounts receivable
(17,022)
(4,795)
2,175
3,513
244
(15,885)
(53,290)
(23)
-
52,069
1,222
(22)
-
(14,391)
-
-
-
(14,391)
Transfer
Long-term loan
Ending
balance
(543) ￦
(839) ￦
(56,202)
￦
(146,095) ￦
(6,374)
(83,827) ￦
(In millions)
Trade receivables
￦
Accounts receivable
Long-term loan
(531) ￦
- ￦
- ￦
- ￦
(171)
-
-
-
-
-
(171)
(60,966)
(336)
827
-
-
363
(60,112)
(2,156)
(8,677)
32
-
-
355
(10,446)
(15,885)
(8,891)
6,739
1,233
163
560
(16,081)
(22)
-
12
-
-
-
(10)
(14,391)
-
-
-
-
-
(14,391)
(548)
-
1,966
(2,402)
(18,647) ￦
8,137 ￦
3,199 ￦
(2,239) ￦
(57,818)
￦
(151,940) ￦
(195) ￦
527 ￦
74
(199)
-
(58,802)
1,278 ￦
(160,212)
Ending
balance
-
Effect of
exchange
differences
Effect of
exchange
differences
(171)
Korean won
Reversal of
allowance
for doubtful
accounts
Disposal
of accounts
receivable
Impairment
loss
(In millions)
￦
(2) The changes of allowance for doubtful accounts for the years ended December 31, 2013 and 2012, are as follows:
(189)
(15,053)
1,189,072
Ending
balance
(In thousands)
Trade receivables
242,927
Beginning
balance
Effect of
exchange
differences
Transfer
1,131,801
Description
Reversal of
allowance
for doubtful
accounts
Disposal
of accounts
receivable
Impairment
loss
204,573
Long-term accounts r eceivable
Beginning
balance
1,254,828
Long-term other r eceivables
Description
(10,446)
Short-term loan
December 31, 2012
(In thousands)
350,794 ￦
￦
75
851 ￦
3,494
11,564 ￦
1,264
62,126 ￦
-
(57,818)
4,292 ￦
(151,940)
Description
Beginning
balance
Reversal of
allowance
for doubtful
accounts
Disposal
of accounts
receivable
Impairment
loss
Accounts
Effect of
exchange
differences
$
(515) $
(795) $
Receivables
Trade receivables
- $
- $
-
-
-
-
(162)
(54,064)
4,779
4,993
2,484
(57,771)
(1,915)
(333)
-
10
195
(2,043)
Accounts receivable
(16,130)
(4,543)
2,061
3,329
230
(15,053)
(50,496)
(22)
-
49,340
1,158
(20)
-
(13,637)
-
-
-
(13,637)
(53,258)
(6,040)
3,311
1,198
-
(54,789)
4,067 $
(143,978)
Long-term loan
$
(138,439) $
(79,434) $
10,958 $
58,870 $
Individual analysis
Korean won
December 31, 2013
Receivables
Receivables
Allowance
Trade receivables
Individual analysis
120 ￦
￦
Collective analysis
Accounts receivable
Individual analysis
Individual analysis
(120) ￦
478 ￦
(79)
11,399
(53)
(199)
11,877
(531)
49,296
(171)
85,503
(171)
49,296
(171)
85,503
(171)
397,216
(60,112)
500,900
(60,966)
397,216
(60,112)
500,900
(60,966)
Individual analysis
10,500
(10,439)
2,228
(2,156)
Collective analysis
610
(7)
115
-
11,110
(10,446)
2,343
(2,156)
Individual analysis
56,601
(15,377)
32,072
(14,989)
Collective analysis
37,574
(704)
20,234
(896)
94,175
(16,081)
52,306
(15,885)
10
(10)
22
(22)
10
(10)
22
(22)
(14,391)
14,391
(14,391)
Individual analysis
Individual analysis
14,391
14,391
(14,391)
14,391
(14,391)
Long-term loan
Individual analysis
72,872
(54,598)
59,146
(54,164)
Collective analysis
26,541
(4,204)
25,153
(3,654)
99,413
(58,802)
84,299
(57,818)
76
19,200
(75)
10,802
(50)
19,314
(189)
11,255
(503)
46,713
(162)
81,022
(162)
46,713
(162)
81,022
(162)
376,401
(56,962)
474,652
(57,771)
(56,962)
474,652
(57,771)
9,950
(9,892)
2,111
(2,043)
Collective analysis
578
(7)
109
-
10,528
(9,899)
2,220
(2,043)
Individual analysis
53,635
(14,571)
30,391
(14,204)
Collective analysis
35,605
(667)
19,174
(849)
89,240
(15,238)
49,565
(15,053)
9
(9)
20
(20)
9
(9)
20
(20)
13,637
(13,637)
13,637
(13,637)
13,637
(13,637)
13,637
(13,637)
Individual analysis
69,053
(51,737)
56,047
(51,326)
Collective analysis
25,151
(3,984)
23,835
(3,462)
94,204
(55,721)
79,882
(54,788)
Accounts receivable
Individual analysis
Individual analysis
(478)
20,382
(453)
376,401
Long-term loan
20,262
453 $
Individual analysis
(In millions)
(114) $
December 31, 2012
Allowance
Allowance
Individual analysis
and long-term other receivables) that are considered to be impaired as of December 31, 2013 and 2012, are as follows:
Description
Receivables
(3) Details of allowance for doubtful accounts on receivables (trade receivables, other receivables, long-term accounts receivable
Accounts
Allowance
114 $
$
(503)
(162)
Individual analysis
Collective analysis
807 $
December 31, 2012
(In thousands)
(15,963)
December 31, 2013
Ending
balance
(In thousands)
Trade receivables
Description
The Group performs impairment by individual test for each receivable with separate collaterals and defaulted receivables. For other
receivables, the Group performs impairment test as a group based on collection rate in the past.
(4) Aging analysis of receivables that are past due, but not impaired
The balances of receivables overdue, but not impaired as of December 31, 2013 and 2012, are zero.
77
6. INVENTORIES:
(2) The changes in allowance for valuation of inventory for the year ended December 31, 2013, are as follows:
(1) Inventories as of December 31, 2013 and 2012, consist of the following:
Korean won
Description
Korean won
Description
December 31, 2013
Acquisition
cost
Valuation
allowance
￦
Finished housing
832,321 ￦
Acquisition
cost
Book value
Valuation
allowance
(36,858) ￦
506,071 ￦
(36,858) ￦
469,213
(15,391)
138,834
314,117
(46,776)
267,341
Unfinished housing
96,233
-
96,233
104,247
-
104,247
Merchandise
17,751
-
17,751
19,494
-
19,494
608
-
608
616
-
616
126,924
-
126,924
125,173
-
125,173
50,089
-
50,089
45,205
-
45,205
Work in process
Raw materials
￦
39,195
-
39,195
82,371
-
82,371
-
13,558
6,926
-
6,926
Land for construction
6,043
-
6,043
7,074
-
7,074
Finished housing
991
-
991
796
-
796
1,337,938 ￦
(52,249) ￦
1,285,689 ￦
1,212,090 ￦
(83,634) ￦
- ￦
(36,858)
(46,776)
31,385
(15,391)
(83,634) ￦
31,385 ￦
(52,249)
Description
13,558
￦
(36,858) ￦
Construction support materials
Others
￦
Finished housing
Materials in transit
Korean cattle
Ending balance
(In millions)
795,463 ￦
Disposals
Book value
154,225
Supplies
Beginning
balance
December 31, 2012
(In millions)
Beginning
balance
Disposals
Ending balance
(In thousands)
$
$
(34,927) $
- $
(34,927)
(44,325)
29,741
(14,584)
(79,252) $
29,741 $
(49,511)
1,128,456
(3) The changes in allowance for valuation of inventory for the year ended December 31, 2012, are as follows:
Description
December 31, 2013
Acquisition
cost
Valuation
allowance
Korean won
December 31, 2012
Book value
Acquisition
cost
Valuation
allowance
Book value
Description
788,706 $
(34,927) $
753,779 $
479,552 $
(34,927) $
444,625
146,143
(14,584)
131,559
297,657
(44,324)
253,333
Unfinished housing
91,190
-
91,190
98,784
-
98,784
Merchandise
16,821
-
16,821
18,472
-
18,472
576
-
576
584
-
584
$
Finished housing
Supplies
Work in process
Loss on
valuation
of inventories
Beginning
balance
(In thousands)
Disposals
Ending balance
(In millions)
￦
Finished housing
￦
(35,479) ￦
(1,391) ￦
12 ￦
(12,885)
12,094
(46,776)
(81,464) ￦
(14,276) ￦
12,106 ￦
(83,634)
120,273
-
120,273
118,614
-
118,614
Raw materials
47,464
-
47,464
42,836
-
42,836
Materials in transit
37,141
-
37,141
78,055
-
78,055
Construction support materials
12,847
-
12,847
6,563
-
6,563
5,726
-
5,726
6,703
-
6,703
940
-
940
753
-
753
Korean cattle
Others
$
1,267,827 $
(49,511) $
1,218,316 $
1,148,573 $
(79,251) $
1,069,322
Description
Beginning
balance
Loss on
valuation
of inventories
Disposals
Ending balance
(In thousands)
$
Finished housing
$
78
(36,858)
(45,985)
79
(33,620) $
(1,318) $
11 $
(34,927)
(43,575)
(12,210)
11,461
(44,324)
(77,195) $
(13,528) $
11,472 $
(79,251)
7. OTHER CURRENT ASSETS AND OTHER NON-CURRENT ASSETS:
Korean won
(1) Other current assets and other non-current assets as of December 31, 2013 and 2012, consist of the following:
Korean won
Description
Accounts
Advance payments
Reversal of
allowance for
doubtful
accounts
Bad debt
expenses
543,321 ￦
￦
Advance payments
(In thousands)
680,744 $
514,850 $
645,072
Allowance for the doubtful accounts
(12,796)
(37)
(12,125)
(35)
Prepaid construction cost
282,016
312,700
267,238
296,314
Prepaid expenses
150,873
119,228
142,966
112,981
(2,236)
(2,410)
(2,119)
(2,284)
8,000
12,419
7,581
11,768
969,178
1,122,644
918,391
1,063,816
61,749
37,795
58,513
35,814
Repaid value-added tax
Long-term prepaid expenses
(75) ￦
￦
Prepaid expenses
￦
Ending
balance
- ￦
- ￦
38 ￦
(37)
(2,297)
(329)
1
215
(2,410)
(2,372) ￦
(329) ￦
1 ￦
253 ￦
(2,447)
Description
Beginning
balance
Reversal of
allowance for
doubtful
accounts
Bad debt
expenses
Effect of
exchange
differences
Ending
balance
(In thousands)
Advance payments
(71) $
$
Prepaid expenses
(2) The changes in allowance for doubtful accounts for the year ended December 31, 2013, are as follows:
Effect of
exchange
differences
(In millions)
December 31, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Allowance for the doubtful accounts
Beginning
balance
(In millions)
Description
$
- $
- $
36 $
(35)
(2,177)
(312)
1
204
(2,284)
(2,248) $
(312) $
1 $
240 $
(2,319)
Korean won
Description
Beginning
balance
Bad debt
expenses
Effect of exchange
differences
Ending
balance
(4) Allowance for impaired other current and non-current assets as of December 31, 2013 and 2012, are as follows:
(In millions)
Advance payments
(37) ￦
￦
Prepaid expenses
(12,765) $
(2,410)
(2,447) ￦
￦
-
6
$
(12,796)
$
(15,032)
174
(12,765) $
180
(2,236)
Korean won
Accounts
December 31, 2013
Description
Receivables
December 31, 2012
Allowance
Receivables
Allowance
(In millions)
Advance payments
Description
Beginning
balance
Bad debt
expenses
Effect of exchange
differences
Ending
balance
Prepaid expenses
Individual analysis
￦
Individual analysis
(In millions)
Advance payments
(35) ￦
￦
Prepaid expenses
(2,284)
(2,319) ￦
￦
(12,096) $
(12,096) $
6
$
(12,125)
$
(14,244)
165
171
12,796 ￦
(12,796) ￦
37 ￦
12,796
(12,796)
37
(37)
(37)
2,298
(2,236)
2,481
(2,410)
2,298
(2,236)
2,481
(2,410)
(2,119)
Accounts
December 31, 2013
Description
(3) The changes in allowance for doubtful accounts for the year ended December 31, 2012, are as follows:
Receivables
December 31, 2012
Allowance
Receivables
Allowance
(In millions)
Advance payments
Prepaid expenses
80
Individual analysis
$
Individual analysis
81
12,125 $
(12,125) $
35 $
12,125
(12,125)
35
(35)
(35)
2,178
(2,119)
2,351
(2,284)
2,178
(2,119)
2,351
(2,284)
8. AFS FINANCIAL ASSETS:
Korean won
Description
(1) Available-for-sale(“AFS”) financial assets as of December 31, 2013 and 2012, are as follows:
Korean won
Description
Beginning balance
(In thousands)
￦
Non-marketable equity securities
￦
142,763 ￦
275,210 $
135,282 $
260,789
265,559
283,286
251,643
268,442
408,322 ￦
558,496 $
386,925 $
529,231
(16,458) ￦
￦
- ￦
- ￦
(16,458)
(145,022)
(4,668)
34
(149,656)
(161,480)
(4,668)
34
(166,114)
Description
(2) Disposal of AFS financial assets that are measured by using acquisition costs as fair values and cannot be reliably obtained
Beginning balance
Impairment
for the year ended December 31, 2013, is as follows:
Removal
Ending balance
(In thousands)
Korean won
Description
Ending balance
Non-current:
Non-current:
Removal
(In millions)
Marketable equity securities
(In millions)
Impairment
Book value
Loss on disposal
Book value
(In millions)
Loss on disposal
Non-current:
(15,596) $
$
(In thousands)
- $
- $
(15,596)
(137,423)
(4,423)
32
(141,814)
(153,019)
(4,423)
32
(157,410)
Non-current:
12,768 ￦
￦
2,525 $
12,099 $
2,393
9. HELD-TO-MATURITY FINANCIAL ASSETS:
(3)Details of impairment loss on AFS financial assets for the years ended December 31, 2013 and 2012, are as follows:
Held-to-maturity financial assets as of December 31, 2013 and 2012, are as follows:
Korean won
Korean won
Description
Beginning balance
Impairment
Transfer
Ending balance
Accounts
Description
(In millions)
(In millions)
Non-current:
(16,458) ￦
￦
- ￦
- ￦
(16,458)
(149,656)
(22,289)
(573)
(172,518)
(166,114)
(22,289)
(573)
(188,976)
Held-to-maturity financial asset (current)
Government and p
ublic bonds
Held-to-maturity financial asset(non-current)
Government and p
ublic bonds
￦
Description
Beginning balance
Impairment
Transfer
Ending balance
(In thousands)
Non-current:
(15,596) $
$
- $
- $
(15,596)
(141,814)
(21,121)
(543)
(163,478)
(157,410)
(21,121)
(543)
(179,074)
82
83
(In thousands)
22,661 ￦
23,503 $
21,473 $
22,271
72,790
79,284
68,976
75,130
10. INVESTMENTS IN ASSOCIATES:
(1) Investments in associates as of December 31, 2013 and 2012, are as follows:
Company
Main operating activity
Korean won
Company
Main operating activity
End date December 31, 2013 December 31, 2012
of
Location
Ownerreporting Ownership Book value
ship
Book value
period
(%)
(%)
(In millions)
Busan Jungkwan Energy Co., Ltd. (*1)
Electricity production
Korea
Dec. 31
56.76
Busan Exhibition & Convention Center LTD.
Business facility management service
Korea
Dec. 31
21.70
PT. Hyundai Citra (*2)
Equipment maintenance
Songdo Landmark City, LLC
Korea
Dec. 31
-
The 2nd Youngdong Highway Co., Ltd.
Real estate development
Production of steam, cold and hot water
and air-conditioning
Construction of road
Korea
Dec. 31
The Gyeongnam Highway Co., Ltd.
Korea
Hyundai Energy Inc.
Indonesia Dec. 31
Korea
Dec. 31
15,177
95.00
89
41.13
14,896
-
49.00
2,556
24.83
38,451
24.40
12,318
Dec. 31
29.50
21,569
28.73
13,883
-
Korea
Dec. 31
Korea
Dec. 31 100.00
Arian International Contractors Company
Construction
Dec. 31
Philippine Dec. 31
Korea
56.76 ￦
21.70
1,091
Vocational training center
Service for treatment of water and sewage
15,180
14,380
Oriental Hyundai Quarry Development Corporation Mine development
(In millions)
95.00
ERail Co., Ltd.
Uljuchongchun Co., Ltd. (*3 and 4)
(In thousands)
41.38
Hyundai Resource Development Institute (*2)
Iran
￦
Dec. 31
49.00
-
20.43
2,142
160
66.67
100
-
49.00
-
40.00
-
40.00
-
18.50
-
18.50
172
Buhyun Development Co., Ltd.
Non-residential building development
Korea
Dec. 31
30.00
-
30.00
-
Suwon Convention City Co., Ltd.
Korea
Dec. 31
29.00
1,450
29.00
1,450
Cheonan Hermeca Development Co., Ltd.
Residential building
Korea
Dec. 31
28.40
142
28.40
142
Daejeon Clean Water Co., Ltd. (*4)
Service for treatment of sewage
Korea
Dec. 31
28.01
-
28.01
428
The Ulsan Harbour Bridge Co., Ltd.
Korea
Dec. 31
24.50
13,367
24.50
16,366
Incheon Tower Design Limited Company
Design and consulting for real estate
Korea
Dec. 31
22.81
1,874
22.81
1,874
Ganghwa Tidal Power Corporation Co., Ltd.
Other electricity production
Korea
Dec. 31
22.00
11
22.00
11
Seotan ICD. Co., Ltd.
Korea
Dec. 31
20.00
1,000
20.00
1,000
Korea
Dec. 31
4.50
-
4.50
-
Jinju Chongchun Co., Ltd. (*3)
Construction of waste treatment and
antipollution facility
Sewage treatment
Korea
Dec. 31
7.77
-
7.77
-
Seosan Chongchun Co., Ltd. (*3 and 4)
Sewage treatment
Korea
Dec. 31
14.70
-
14.70
-
Ulsan Chongchun Co., Ltd. (*3)
Busan Finance Center AMC Co., Ltd. (*3)
Real estate management
Korea
Dec. 31
18.48
82
16.38
82
Halla Wind Energy Co., Ltd.
Korea
Dec. 31
22.64
600
28.57
600
Ohsang Construction Corporation
Construction
Korea
Dec. 31
28.93
-
28.93
-
Yulchon 2 Industrial Complex Development Inc.
Other real estate construction
Korea
Dec. 31
48.00
1,920
48.00
1,920
Korea
Dec. 31
21.63
16,196
22.86
12,746
The 2nd Seoul-Incheon Linking Highway Co., Ltd. Construction of road
The 2nd Beltway Co., Ltd.
Korea
Dec. 31
20.00
2
20.00
2
Miraeseum 3rd (*3 and 4)
Construction of building
Korea
Dec. 31
2.00
7
2.00
33
Hyundai Engineering (Thailand) Co., Ltd.
Engineering service
Thailand
Dec. 31
49.00
-
49.00
-
PT Hyundai Engineering Indonesia (*2)
LHT International Engineering Joint Stock
Company
Hyundai Engineering India Pvt. Limited (*2)
Engineering service
Indonesia Dec. 31
95.00
98
95.00
98
30.00
555
30.00
555
Engineering service
Vietnam
Engineering service
Dec. 31
India
Dec. 31
99.99
2
99.99
2
Hyundai Engineering Pakistan (Private) Limited (*2) Engineering service
Pakistan
Dec. 31
99.99
604
99.99
604
Subic Clean Energy & Infra, Inc.
Philippine Dec. 31
Miraseum the fourth Co., Ltd. (*3)
Korea
Dec. 31
40.00
48
-
-
11.11
11
128,800
-
99,246
￦
84
￦
End date December 31, 2013 December 31, 2012
of
Location
Ownerreporting Ownership Book value
ship
Book value
period
(%)
(%)
Busan Jungkwan Energy Co., Ltd. (*1)
Korea
Dec. 31
56.76
Korea
Dec. 31
21.70
PT. Hyundai Citra (*2)
Equipment maintenance
Production of steam, cold and hot water
and air-conditioning
Hyundai Energy Inc.
Indonesia Dec. 31
Korea
Dec. 31
(In thousands)
14,385
56.76 $
21.70
14,382
95.00
1,034
95.00
84
41.38
13,626
41.13
14,115
Korea
Dec. 31
-
-
49.00
2,422
Korea
Dec. 31
24.83
36,436
24.40
11,672
20,439
28.73
13,156
-
20.43
2,030
152
66.67
95
Korea
Dec. 31
29.50
ERail Co., Ltd.
Korea
Dec. 31
-
Hyundai Resource Development Institute (*2)
Vocational training center
Korea
Dec. 31 100.00
Arian International Contractors Company
Construction
Iran
Oriental Hyundai Quarry Development Corporation Mine development
$
Dec. 31
49.00
-
49.00
-
Philippine Dec. 31
40.00
-
40.00
163
Uljuchongchun Co., Ltd. (*3 and 4)
Service for treatment of water and sewage
Korea
Dec. 31
18.50
-
18.50
Buhyun Development Co., Ltd.
Non-residential building development
Korea
Dec. 31
30.00
-
30.00
-
Suwon Convention City Co., Ltd.
Korea
Dec. 31
29.00
1,374
29.00
1,374
Cheonan Hermeca Development Co., Ltd.
Residential building
Korea
Dec. 31
28.40
135
28.40
135
Daejeon Clean Water Co., Ltd. (*4)
Service for treatment of sewage
Korea
Dec. 31
28.01
-
28.01
406
Korea
Dec. 31
24.50
12,667
24.50
15,508
Incheon Tower Design Limited Company
Design and consulting for real estate
Korea
Dec. 31
22.81
1,776
22.81
1,776
Ganghwa Tidal Power Corporation Co., Ltd.
Korea
Dec. 31
22.00
10
22.00
10
Seotan ICD. Co., Ltd.
Construction of waste treatment and
antipollution facility
Sewage treatment
Korea
Dec. 31
20.00
948
20.00
948
Ulsan Chongchun Co., Ltd. (*3)
Jinju Chongchun Co., Ltd. (*3)
Korea
Dec. 31
4.50
-
4.50
-
Korea
Dec. 31
7.77
-
7.77
-
Seosan Chongchun Co., Ltd. (*3 and 4)
Sewage treatment
Korea
Dec. 31
14.70
-
14.70
-
Busan Finance Center AMC Co., Ltd. (*3)
Real estate management
Korea
Dec. 31
18.48
78
16.38
78
569
Halla Wind Energy Co., Ltd.
Korea
Dec. 31
22.64
569
28.57
Ohsang Construction Corporation
Construction
Korea
Dec. 31
28.93
-
28.93
-
Yulchon 2 Industrial Complex Development Inc.
Other real estate construction
Korea
Dec. 31
48.00
1,819
48.00
1,819
12,077
The 2nd Seoul-Incheon Linking Highway Co., Ltd. Construction of road
Korea
Dec. 31
21.63
15,346
22.86
The 2nd Beltway Co., Ltd.
Korea
Dec. 31
20.00
2
20.00
2
Miraeseum 3rd (*3 and 4)
Korea
Dec. 31
2.00
7
2.00
31
Engineering service
Thailand
Dec. 31
49.00
-
49.00
-
PT Hyundai Engineering Indonesia (*2)
LHT International Engineering Joint Stock
Company
Hyundai Engineering India Pvt. Limited (*2)
Engineering service
Indonesia Dec. 31
95.00
93
95.00
93
30.00
526
30.00
526
Engineering service
Vietnam
Engineering service
Dec. 31
India
Dec. 31
99.99
2
99.99
2
Hyundai Engineering Pakistan (Private) Limited (*2) Engineering service
Pakistan
Dec. 31
99.99
572
99.99
572
Subic Clean Energy & Infra, Inc.
Philippine Dec. 31
Miraseum the fourth Co., Ltd. (*3)
Korea
Dec. 31
40.00
45
-
-
11.11
10
122,051
-
94,045
$
$
(*1) Busan Jungkwan Energy Co., Ltd., is classified as an associate considering potential voting right.
(*2) They are considered as associate as they do not have significant influence on the Group’s consolidated financial statements.
(*3) Although ownership percentage is less than 20%, the Group exercises significant influence on the affiliate classified as investments in associates as an employee of the Group is
also working as a chief executive officer of the associates.
(*4) Impairment loss of ￦683 million ($647 thousand) on Uljuchongchun Co., Ltd., Daejeon Clean Water Co., Ltd., Seosan Chongchun Co., Ltd. and Miraeseum 3rd is recognized on
a collective basis.
85
(2)The changes in investment in associates for the years ended December 31, 2013 and 2012, are as follows:
Korean won
Korean won
Company
Beginning
of year
Gain (loss)
on
Impairment
valuation
loss on
using the investments
equity
in associates
method
Acquisition
Disposal
Company
Change in
accumulated
other
comprehensive
income(loss)
Transfer
- ￦
- ￦
- ￦
15,177
-
3
-
-
-
-
15,180
14,896
787
(1,299)
-
-
-
(4)
14,380
2,556
3,920
(6,457)
-
-
(275)
256
-
Hyundai Energy Inc.
- ￦
(2,401) ￦
2,401 ￦
- ￦
-
12,318
27,182
(909)
-
-
-
(140)
38,451
13,883
7,442
304
-
-
-
(60)
21,569
The Ulsan Harbor Bridge Co., Ltd.
16,366
-
(2,916)
-
-
-
(83)
13,367
The 2nd Seoul-Incheon Linking Highway Co.,Ltd.
12,746
3,504
(180)
-
144
-
(18)
16,196
174
1,238
-
(2,166)
(210)
9,657
Others
11,304
￦
99,246 ￦
43,009 ￦ (12,617) ￦
(683)
(683) ￦
144 ￦
(40) ￦
Change in
accumulated
other
comprehensive
income(loss)
Disposal
End of
year
(In millions)
Busan Jungkwan Energy Co., Ltd.
￦
Acquisition
End of
year
(In millions)
Beginning
of year
Gain (loss) on Impairment
valuation
loss on
using the investments in
equity method associates
- ￦
- ￦
- ￦
- ￦
14,780
-
397
-
-
-
15,177
16,687
1,150
(2,935)
-
-
(6)
14,896
Hyundai Energy Inc.
11,400
-
(8,844)
-
-
-
2,556
￦
- ￦
- ￦
-
6,901
2,830
2,600
-
-
(13)
12,318
3,140
11,464
(685)
-
-
(36)
13,883
16,366
-
-
-
-
-
16,366
-
13,829
(1,014)
-
-
(69)
12,746
Others
15,438
￦
2,166
84,712 ￦
(684)
31,439 ￦
(11,165) ￦
(4,689)
(903)
(4,689) ￦
(903) ￦
(24)
(148) ￦
11,304
99,246
(259) ￦ 128,800
Company
Beginning
of year
Gain (loss)
on
Impairment
valuation
loss on
using the investments
equity
in associates
method
Acquisition
Disposal
Company
Change in
accumulated
other
comprehensive
income(loss)
Transfer
$
- $
- $
(2,275) $
- $
- $
2,275 $
- $
-
14,382
-
3
-
-
-
-
14,385
14,115
746
(1,231)
-
-
-
(4)
13,626
2,422
3,715
(6,119)
-
-
(261)
243
-
11,672
25,758
(861)
-
-
-
(133)
36,436
13,156
7,052
288
-
-
-
(57)
20,439
15,508
-
(2,763)
-
-
-
(78)
12,667
12,078
3,320
(171)
-
137
-
(17)
15,347
-
(2,052)
Others
10,712
$
94,045 $
164
1,173
40,755 $
(11,956) $
(647)
(647) $
137 $
(38) $
(199)
(245) $
Change in
accumulated
other
comprehensive
income(loss)
Disposal
End of
year
(In thousands)
Hyundai Energy Inc.
Acquisition
End of
year
(In thousands)
Beginning
of year
Gain (loss) on Impairment
valuation
loss on
using the investments in
equity method associates
- $
- $
- $
376
-
-
-
14,382
1,090
(2,781)
-
-
(6)
14,115
-
(8,381)
-
-
-
2,422
6,538
2,682
2,464
-
-
(12)
11,672
2,975
10,864
(649)
-
-
(34)
13,156
15,508
-
-
-
-
-
15,508
-
13,104
(961)
-
-
(65)
12,078
- $
- $
14,006
-
15,812
Hyundai Energy Inc.
10,803
Others
14,631
$
9,151
122,051
$
80,273 $
2,052
29,792 $
- $
(648)
(10,580) $
(4,443)
(857)
(4,443) $
(857) $
(23)
(140) $
-
10,712
94,045
The Group used unaudited financial statements of associates when using the equity method of accounting. The Group does not anticipate
that the difference between unaudited and audited financial statements will have a significant effect on the Group’s consolidated financial
statements and disclosures.
86
87
(3) Unrecognized equity method loss and accumulated loss due to discontinuation of equity method as of December 31, 2013
and 2012, are as follows:
Korean won
Description
December 31, 2013
Company
Current
loss
Accumulated
loss
Accumulated
equity
Current
loss
Accumulated
loss
(In millions)
￦
6,279 ￦
-
Accumulated
equity
- $
12,360
-
5,950 $
-
$
Accumulated
equity
￦
32,901 ￦
379
13,403
(1,308) $
(8)
47,076
101
150,037
257,684
194,285
67,594
144,368
89,794
62,492
160,033
268,575
201,726
71,267
86,788
7,214
29,439
10,040
12,156
5,482
142
$
Total liabilities
Accumulated
equity
Operating income
Net loss
Other comprehensive income(loss)
313 $
31,177 $
359
12,701
(1,239)
Total comprehensive loss
139,214 $
3,673 $
123 $
10,041
197,449
140,894
209
26,497
21,836
-
-
4,442
-
-
(1,729)
(1,334)
(1,164)
(637)
(716)
(634)
(1,075)
(10,524)
(774)
(2,886)
(621)
(677)
(634)
(274)
-
-
-
-
-
-
-
(10,524)
(774)
(2,886)
(621)
(677)
(634)
(274)
Korean won
Description
Busan
Jungkwan
Energy Co., Ltd.
The 2nd SeoulThe Ulsan
Incheon Linking
Harbor Bridge
Highway Co.,
Co., Ltd.
Ltd.
The 2nd
Gyeongnam
Songdo
Youngdong
Highway Co.,
Landmark City,
Highway Co.,
Ltd.
LLC
Ltd.
Busan
Exhibition &
Convention
Center Ltd.
(In millions)
Total assets
Current liabilities
Total liabilities
12,111 ￦
140,241
152,352
45,080 ￦
65,841 ￦
49,679
107
94,759
65,948
10,549 ￦
158,334
168,883
11,493 ￦
271,934
283,427
7,853 ￦
205,029
212,882
3,876
71,332
75,208
91,587
7,613
31,067
10,595
12,828
5,785
150
146,913
3,876
130
1
195,540
142,900
71
238,500
11,489
31,197
10,596
208,368
148,685
221
Sales
27,962
23,044
-
-
4,688
-
-
Operating income
(1,825)
(1,408)
(1,228)
(672)
(756)
(669)
(1,134)
(11,106)
(817)
(3,046)
(655)
(714)
(669)
(289)
Net loss
Other comprehensive income(loss)
Total comprehensive loss
67
29,562
Non-current assets
135,412 $
(8)
Korean won
￦
185,293 $
10,887
2013 and 2012, is as follows:
Current assets
1 $
226,002
(4) Condensed financial information of the associates that is material to the Group as of and for the years ended December 31,
Description
3,673
132,892
(In thousands)
330 ￦
7,441 $
Total assets
Accumulated
loss
(In thousands)
10,891 $
Non-current assets
Sales
Current
loss
9,996 $
-
Accumulated
loss
62,391 $
-
December 31, 2012
Current
loss
42,718 $
11,712
Company
11,476 $
34,852 $
Current liabilities
Korean won
Incheon Linking
Harbor Bridge
Highway Co.,
Co., Ltd.
Ltd.
The 2nd
Gyeongnam
Songdo
Youngdong
Highway Co.,
Landmark City,
Highway Co.,
Ltd.
LLC
Ltd.
Busan
Exhibition &
Convention
Center Ltd.
(In thousands)
Current assets
(In thousands)
36,779 ￦
Busan
Jungkwan
Energy Co., Ltd.
-
-
-
-
-
-
-
(11,106)
(817)
(3,046)
(655)
(714)
(669)
(289)
88
Busan
Jungkwan
Energy Co., Ltd.
Busan
Exhibition &
Convention
Center Ltd.
The 2nd
Gyeongnam
Songdo
Youngdong
Highway Co.,
Landmark City,
Highway Co.,
Ltd.
LLC
Ltd.
Incheon Linking
Harbor Bridge
Highway Co.,
Co., Ltd.
Ltd.
(In millions)
Current assets
￦
13,507 ￦
32,003 ￦
65,767 ￦
2,789 ￦
13,375 ￦
9,436 ￦
13,063
Non-current assets
149,240
60,751
116
53,606
180,511
130,035
42,812
Total assets
162,747
92,754
65,883
56,395
193,886
139,471
55,875
38
10,582
5,823
29,469
5,326
11,730
6,589
Current liabilities
227,207
2,845
198
-
129,974
68,000
70
Total liabilities
237,789
8,668
29,667
5,326
141,704
74,589
108
Sales
23,010
22,617
-
-
724
-
-
Operating income
(2,416)
(4,041)
(2,257)
(736)
(1,131)
(465)
(2,303)
Net income(loss)
(10,483)
1,259
(7,049)
(625)
(976)
(464)
(1,670)
(10,483)
1,259
(7,049)
49
(576)
(976)
(464)
(1,670)
Total comprehensive income(loss)
89
Description
Busan
Jungkwan
Energy Co., Ltd.
Incheon Linking
Harbor Bridge
Highway Co.,
Co., Ltd.
Ltd.
The 2nd
Gyeongnam
Songdo
Youngdong
Highway Co.,
Landmark City,
Highway Co.,
Ltd.
LLC
Ltd.
Busan
Exhibition &
Convention
Center Ltd.
Company
Busan
Exhibition &
Convention
Center Ltd.
The 2nd
Songdo
Youngdong
Landmark City,
Highway Co.,
LLC
Ltd.
(In thousands)
Current assets
$
12,799 $
30,326 $
62,321 $
Incheon Linking
Harbor Bridge
Highway Co.,
Co., Ltd.
Ltd.
(In thousands)
2,643 $
12,674 $
8,942 $
12,378
Associates net equity (A)
Non-current assets
141,420
57,568
110
50,797
171,052
123,221
40,569
Ownership percentage (B) (%)
Total assets
154,219
87,894
62,431
53,440
183,726
132,163
52,947
Net share amount (A*B)
Current liabilities
Gyeongnam
Highway Co.,
Ltd.
$
78,907 $
32,930 $
149,992 $
71,126 $
60,833 $
71,058
21.70
41.38
24.83
29.50
24.50
21.63
17,124
13,626
37,243
20,982
14,904
15,370
10,027
5,518
27,925
5,047
11,115
6,244
36
(-) Removal of internal transaction
(2,739)
-
(807)
(543)
(2,237)
(23)
215,301
2,696
188
-
123,163
64,437
66
Book value
14,385
13,626
36,436
20,439
12,667
15,347
Total liabilities
225,328
8,214
28,113
5,047
134,278
70,681
102
21,804
21,432
-
-
686
-
-
Operating income
(2,289)
(3,829)
(2,139)
(697)
(1,072)
(441)
(2,182)
Net income(loss)
(9,934)
1,193
(6,680)
(592)
(925)
(440)
(1,582)
-
-
-
46
-
-
-
(9,934)
1,193
(6,680)
(546)
(925)
(440)
(1,582)
Sales
Total comprehensive income(loss)
(5) Adjustment to the carrying amount of investment in associates that is material to the Group as of December 31, 2013 is as
11. INTERESTS IN JOINT OPERATIONS:
Joint arrangement projects that are material to the Group as of and for the year ended December 31, 2013, are as follows:
Name of the Project
Jubail Polysilicon Project
Marina South Mixed Development
follows:
Bello Wastewater Treatment Plant
Korean won
Venezuela Puerto Lacruz Refinery Project
Company
Busan
Exhibition &
Convention
Center Ltd.
The 2nd
Songdo
Youngdong
Landmark City,
Highway Co.,
LLC
Ltd.
Gyeongnam
Highway Co.,
Ltd.
Construction of Third Bosporus Bridge
Incheon Linking
Harbor Bridge
Highway Co.,
Co., Ltd.
Ltd.
Associates net equity (A)
Net share amount (A*B)
￦
83,270 ￦
34,751 ￦
158,287 ￦
75,059 ￦
64,197 ￦
74,987
21.70
41.38
24.83
29.50
24.50
21.63
18,070
14,380
39,303
22,142
15,728
16,220
(-) Removal of internal transaction
(2,890)
-
(852)
(573)
(2,361)
(24)
Book value
15,180
14,380
38,451
21,569
13,367
16,196
90
Proportion of participating (%)
Saudi Arabia
50.00
Singapore
60.00
Colombia
65.00
Bolivarian Republic of Venezuela
69.30
Turkey
60.00
Sri Lanka
65.00
Moreover, joint arrangement projects are undertaken to complete constructions that are located in the Middle East, Asia, South America, etc.
The Group has a right to construction revenue and an obligation to incurred expenses according to the proportion of participating share held
(In millions)
Ownership percentage (B) (%)
Sri Lanka Keels City Project
Country of incorporation
by the Group.
91
12. INVESTMENT PROPERTY:
(2) The changes in investment property for the year ended December 31, 2012, are as follows:
(1) The changes in investment property for the year ended December 31, 2013, are as follows:
Korean won
Description
Korean won
Description
Land
Buildings
1,080 ￦
￦
(In millions)
Beginning of year
26,749 ￦
27,829
38,766
-
38,766
-
(560)
(560)
39,846
26,189
66,035
Beginning of year
-
(1,354)
(1,354)
Effect of exchange rate
End of year
Total
Acquisition cost:
(In millions)
Transfer(*)
Buildings
Total
Acquisition cost:
Beginning of year
Land
Accumulated depreciation:
Depreciation
-
(540)
(540)
-
13
13
End of year
-
(1,881)
(1,881)
Book value:
Beginning of year
￦
1,080 ￦
25,395 ￦
26,475
End of year
￦
39,846 ￦
24,308 ￦
64,154
1,080 ￦
￦
166 ￦
1,246
Changes in scope for consolidation
-
28,975
28,975
Transfer(*)
-
(431)
(431)
End of year
-
(1,961)
(1,961)
1,080
26,749
27,829
Beginning of year
-
(41)
(41)
Depreciation
-
(503)
(503)
-
(895)
(895)
Transfer(*)
-
16
16
-
69
69
End of year
-
(1,354)
(1,354)
Book value:
Beginning of year
￦
1,080 ￦
125 ￦
1,205
End of year
￦
1,080 ￦
25,395 ￦
26,475
Description
Land
Buildings
Total
Description
(In thousands)
Land
Buildings
Acquisition cost:
Beginning of year
$
Transfer(*)
End of year
1,023 $
25,348 $
26,371
36,735
-
36,735
-
(532)
(532)
37,758
24,816
62,574
Beginning of year
-
(1,283)
(1,283)
Depreciation
-
(512)
(512)
-
13
13
End of year
-
(1,782)
(1,782)
Book value:
Beginning of year
$
1,023 $
24,065 $
25,088
End of year
$
37,758 $
23,034 $
60,792
(*) The book value of ￦38,766 million ($36,735 thousand) is transferred from property, plant and equipment to investment property.
Total
(In thousands)
Acquisition cost:
Beginning of year
$
1,023 $
157 $
-
Transfer(*)
-
(408)
(408)
-
(1,858)
(1,858)
1,023
25,348
26,371
End of year
27,457
1,180
27,457
Beginning of year
-
(38)
(38)
Depreciation
-
(477)
(477)
-
(848)
(848)
Transfer(*)
-
15
15
-
65
65
End of year
-
(1,283)
(1,283)
Book value:
Beginning of year
$
1,023 $
119 $
1,142
End of year
$
1,023 $
24,065 $
25,088
(*) The book value of ￦415 million ($393 thousand) is transferred from investment property to property, plant and equipment.
92
93
13. PROPERTY, PLANT AND EQUIPMENT:
(3) Recognized gain on investment property for the years ended December 31, 2013 and 2012, is as follows:
Korean won
Description
2013
2012
2013
(In millions)
Revenues-rental
￦
Direct operating expenses
(1) The changes in property, plant and equipment for the year ended December 31, 2013, are as follows:
2012
Korean won
(In thousands)
1,024 ￦
472 $
1,153
959
Description
970 $
447
1,093
Land
Buildings
Machinery
and
equipment
Structures
909
Tools,
furniture
and
fixtures
Vehicles
Ships
Construction
in progress
Others
Total
(In millions)
Acquisition cost:
(4) The book value and fair value of investment property as of December 31, 2013, are as follows
Korean won
Description
Book value
Fair value(*)
(In millions)
Land
￦
Buildings
Beginning of year
Book value
Fair value(*)
(In thousands)
Acquisition
Disposal
Transfer (*)
34,223 ￦ 315,097 ￦
45,837 ￦
106,866 ￦
320,099 ￦
26,600 ￦
99,637 ￦ 1,728,266
39,128
8,230
218
24,911
8,018
20,533
14,081
-
48,964
164,083
-
41,966
46,718
435,215
-
73
-
78
13,496
537,546
(9,273) ￦
(94,124)
￦ (24,513) ￦ (25,086) ￦
(1,215) ￦ (12,426) ￦
(8,240) ￦
(13,338) ￦
- ￦
(33) ￦
(781)
(1,048)
-
(765)
620
830
(3,748)
1,012
(48,181)
-
103
-
257
(1,267)
(646)
-
(531)
-
(2,084)
578,440
239,466
79,944
762,289
44,968
114,318
330,432
27,126
104,643
2,281,626
Beginning of year
-
(46,368)
(10,074)
(199,463)
(23,456)
(71,030)
(216,074)
(6,324)
-
(572,789)
Depreciation
-
(5,258)
(1,446)
(44,465)
(7,465)
(14,490)
(13,980)
(1,991)
-
(89,095)
-
(1,070)
(1,191)
(11,098)
-
(56)
-
(25)
-
(13,440)
Disposal
-
7,126
153
11,404
5,941
11,648
-
14
-
36,286
Transfer (*)
-
1,643
-
850
(16)
(37)
3,644
565
-
6,649
-
93
-
93
836
618
-
110
-
1,750
End of year
-
(43,834)
(12,558)
(242,679)
(24,160)
(73,347)
(226,410)
(7,651)
-
(630,639)
39,846 ￦
39,899 $
37,758 $
37,808
24,308
25,379
23,034
24,049
End of year
64,154
65,278
60,792
61,857
(*) The fair value of investment property is classified as Level 3 (unobservable inputs for the asset or liability) based on inputs that were used in valuation technique.
￦ 564,606 ￦ 215,301 ￦
(52,061)
Accumulated impairment loss:
Beginning of year
-
(5,367)
(5,840)
(240)
-
-
-
-
-
(11,447)
Impairment loss
-
-
(1,559)
-
-
-
-
-
-
(1,559)
Disposal
-
-
-
240
-
-
-
-
-
240
End of year
-
(5,367)
(7,399)
-
-
-
-
-
-
(12,766)
Book value:
94
Beginning of year
￦ 564,606 ￦ 163,566 ￦
18,309 ￦ 115,394 ￦
22,381 ￦
35,836 ￦
104,025 ￦
20,276 ￦
99,637 ￦ 1,144,030
End of year
￦ 578,440 ￦ 190,265 ￦
59,987 ￦ 519,610 ￦
20,808 ￦
40,971 ￦
104,022 ￦
19,475 ￦
104,643 ￦ 1,638,221
95
(2) The changes in property, plant and equipment for the year ended December 31, 2012, are as follows:
Description
Land
Buildings
Machinery
and
equipment
Structures
Tools,
furniture
and
fixtures
Vehicles
Ships
Construction
in progress
Others
Korean won
Total
Description
Land
(In thousands)
Buildings
Machinery
and
equipment
Structures
Acquisition cost:
Beginning of year
$
Acquisition
Disposal
Transfer (*)
End of year
535,019
$
204,019
$
32,430
$
298,585
$
43,435
$
101,266
$
303,325
$
25,206
$
94,416
$ 1,637,701
37,078
7,799
207
23,606
7,598
19,457
13,343
-
46,397
155,485
-
39,767
44,269
412,409
-
69
-
74
12,789
509,377
(23,228)
(23,771)
(1,151)
(11,775)
(7,808)
(12,639)
-
(31)
(8,787)
(89,190)
(741)
(993)
-
(726)
588
786
(3,551)
958
(45,656)
(49,335)
-
98
-
244
(1,201)
(612)
-
(503)
-
(1,974)
548,128
226,919
75,755
722,343
42,612
108,327
313,117
25,704
99,159
2,162,064
Beginning of year
-
(43,938)
(9,546)
(189,011)
(22,227)
(67,308)
(204,751)
(5,993)
-
(542,774)
Depreciation
-
(4,982)
(1,370)
(42,135)
(7,074)
(13,731)
(13,247)
(1,887)
-
(84,426)
-
(1,014)
(1,129)
(10,516)
-
(53)
-
(24)
-
(12,736)
Disposal
-
6,753
145
10,806
5,630
11,038
-
14
-
34,386
Transfer (*)
-
1,556
-
806
(15)
(35)
3,452
536
-
6,300
-
88
-
88
792
586
-
104
-
1,658
End of year
-
(41,537)
(11,900)
(229,962)
(22,894)
(69,503)
(214,546)
(7,250)
-
(597,592)
-
(5,086)
(5,534)
(227)
-
-
-
-
-
(10,847)
Beginning of year
Impairment loss
-
-
(1,477)
-
-
-
-
-
-
(1,477)
Disposal
-
-
-
227
-
-
-
-
-
227
End of year
-
(5,086)
(7,011)
-
-
-
-
-
-
(12,097)
Book value:
Beginning of year
$
535,019
$
154,995
$
17,350
$
109,347
$
21,208
$
33,958
$
98,574
$
19,213
$
94,416
$ 1,084,080
End of year
$
548,128
$
180,296
$
56,844
$
492,381
$
19,718
$
38,824
$
98,571
$
18,454
$
99,159
$ 1,552,375
Ships
Construction
in progress
Others
Total
(In millions)
Acquisition cost:
Beginning of year
￦
Acquisition
508,574 ￦
41,378 ￦
99,171 ￦
95
200,434 ￦
37
26,913 ￦
-
292,540 ￦
28,513
15,745
13,700
96
350
38,548
97,084
-
10,264
-
529
921
2,758
-
21,330
-
35,802
334,883 ￦
6,593 ￦
137,250 ￦ 1,647,736
Disposal
(1,877)
(435)
-
(11,866)
(7,766)
(5,363)
(55)
-
-
(27,362)
Transfer (*)
57,814
5,637
7,310
6,379
25
(1,909)
(14,825)
(351)
(76,161)
(16,081)
-
(636)
-
(998)
(4,466)
(1,491)
-
(1,322)
-
(8,913)
564,606
215,301
34,223
315,097
45,837
106,866
320,099
26,600
99,637
1,728,266
-
(40,650)
(9,158)
(172,158)
(23,024)
(63,497)
(204,047)
(3,430)
-
(515,964)
Depreciation
-
(5,164)
(916)
(39,408)
(7,708)
(13,127)
(14,450)
(2,014)
-
(82,787)
-
(688)
-
(103)
(172)
(394)
-
(1,848)
-
(3,205)
Disposal
-
73
-
10,089
5,765
4,597
123
-
-
20,647
End of year
Beginning of year
Transfer (*)
-
(4)
-
1,336
-
-
2,300
808
-
4,440
-
65
-
781
1,683
1,391
-
160
-
4,080
End of year
-
(46,368)
(10,074)
(199,463)
(23,456)
(71,030)
(216,074)
(6,324)
-
(572,789)
Beginning of year
-
(5,367)
(5,840)
(240)
-
-
-
-
-
(11,447)
End of year
-
(5,367)
(5,840)
(240)
-
-
-
-
-
(11,447)
Book value:
Beginning of year
￦
508,574 ￦
154,417 ￦
11,915 ￦
120,142 ￦
18,354 ￦
35,674 ￦
130,836 ￦
3,163 ￦
137,250 ￦ 1,120,325
End of year
￦
564,606 ￦
163,566 ￦
18,309 ￦
115,394 ￦
22,381 ￦
35,836 ￦
104,025 ￦
20,276 ￦
99,637 ￦ 1,144,030
(*) The book value of ￦4,204 million ($3,984 thousand) is transferred from property, plant and equipment to assets held for sale. The book value of ￦38,766 million ($36,735
thousand) is transferred from property, plant and equipment to investment property. The book value of ￦4,865 million ($4,610 thousand) is transferred from inventories to
property, plant and equipment. The book value of ￦7,030 million ($6,662 thousand) and ￦277 million ($264 thousand) is transferred from property, plant and equipment to
intangible assets and other assets, respectively.
96
Tools,
furniture
and
fixtures
Vehicles
97
Description
Land
Buildings
Machinery
and
equipment
Structures
Tools,
furniture
and
fixtures
Vehicles
Ships
Construction
in progress
Others
14. BORROWING COSTS:
Total
Capitalization of borrowing costs for the years ended December 31, 2013 and 2012, is as follows:
(In thousands)
Korean won
Acquisition cost:
Description
Beginning of year
$
481,924
Acquisition
$
189,931
$
25,503
$
277,210
$
39,209
$
93,975
$
317,334
$
6,248
$
130,058
$ 1,561,392
90
35
-
27,019
14,920
12,982
91
332
36,528
91,997
-
9,726
-
501
873
2,614
-
20,212
-
33,926
Disposal
(1,779)
(412)
-
(11,244)
(7,359)
(5,082)
(52)
-
-
(25,928)
Capitalized interest expenses
Transfer (*)
54,784
5,342
6,927
6,045
24
(1,809)
(14,048)
(333)
(72,170)
(15,238)
Capitalization rate
-
(603)
-
(946)
(4,232)
(1,414)
-
(1,253)
-
(8,448)
535,019
204,019
32,430
298,585
43,435
101,266
303,325
25,206
94,416
1,637,701
-
(38,520)
(8,678)
(163,137)
(21,817)
(60,170)
(193,354)
(3,251)
-
(488,927)
Depreciation
-
(4,893)
(868)
(37,343)
(7,305)
(12,439)
(13,693)
(1,908)
-
(78,449)
-
(652)
-
(98)
(163)
(373)
-
(1,750)
-
(3,036)
Disposal
-
69
-
9,560
5,463
4,356
117
-
-
19,565
Transfer (*)
-
(4)
-
1,266
-
-
2,179
766
-
4,207
-
62
-
741
1,595
1,318
-
150
-
3,866
End of year
-
(43,938)
(9,546)
(189,011)
(22,227)
(67,308)
(204,751)
(5,993)
-
(542,774)
End of year
Beginning of year
2013
2012
2013
Inventory, etc.
Inventory, etc.
(In millions)
Qualifying assets
Inventory, etc.
11,164 ￦
￦
3.75%-4.73%
2012
(In thousands)
8,953 $
3.27%-4.03%
Inventory, etc.
10,579 $
3.75%-4.73%
8,484
3.27%-4.03%
15. INTANGIBLE ASSETS:
(1) Changes in intangible assets for the year ended December 31, 2013, are as follows:
Korean won
Description
Goodwill
Other intangible
assets
Membership
Total
(In millions)
Acquisition cost:
Beginning of year
-
$
End of year
$
-
(5,086)
$
(5,086)
(5,534)
$
(5,534)
(227)
-
$
(227)
-
$
-
-
$
-
$
-
-
-
$
-
$
-
(10,847)
Beginning of year
(10,847)
Acquisition
Book value:
6,761 ￦
￦
36,140 ￦
47,484 ￦
90,385
-
3,352
2,457
5,809
3,252
-
-
3,252
Beginning of year
$
481,924
$
146,325
$
11,291
$
113,846
$
17,392
$
33,805
$
123,980
$
2,997
$
130,058
$ 1,061,618
Disposal
-
(419)
-
(419)
End of year
$
535,019
$
154,995
$
17,350
$
109,347
$
21,208
$
33,958
$
98,574
$
19,213
$
94,416
$ 1,084,080
Transfer (*)
-
-
7,030
7,030
-
-
(307)
(307)
10,013
39,073
56,664
105,750
Beginning of year
-
-
(12,973)
(12,973)
Amortization
-
-
(3,632)
(3,632)
-
-
3
3
- ￦
- ￦
(*) The book value of ￦415 million ($393 thousand) is transferred from investment property to property, plant and equipment. The book value of ￦8,518 million ($8,071
thousand) is transferred from property, plant and equipment to inventories. The book value of ￦3,538 million ($3,353 thousand) is transferred from property, plant and
equipment to intangible assets.
(3) Allocation of depreciation on property, plant and equipment for the years ended December 31, 2013 and 2012, is as follows:
Korean won
Description
2013
2012
2013
(In millions)
Cost of sales
80,273 ￦
￦
Selling and administrativ expenses
Other expenses
￦
98
End of year
2012
76,067 $
Beginning of year
70,559
8,818
8,302
8,356
7,867
4
24
3
23
89,095 ￦
82,787 $
84,426 $
￦
(16,602) ￦
(16,602)
(In thousands)
74,461 $
End of year
Accumulated amortization:
78,449
-
(631)
-
(631)
Impairment loss
(3,252)
(619)
-
(3,871)
End of year
(3,252)
(1,250)
-
(4,502)
Book value:
Beginning of year
￦
6,761 ￦
35,509 ￦
34,511 ￦
76,781
End of year
￦
6,761 ￦
37,823 ￦
40,062 ￦
84,646
99
(2) Changes in intangible assets for the year ended December 31, 2012, are as follows:
Description
Goodwill
Other intangible
assets
Membership
Total
Korean won
Description
(In thousands)
Goodwill
Acquisition cost:
Beginning of year
6,407 $
$
Acquisition
34,245 $
44,997 $
85,649
-
3,177
2,328
5,505
3,082
-
-
3,082
Disposal
-
(397)
-
(397)
Transfer (*)
-
-
6,662
6,662
-
-
(292)
(292)
9,489
37,025
53,695
100,209
End of year
Beginning of year
-
-
(12,293)
(12,293)
Amortization
-
-
(3,442)
(3,442)
-
-
3
3
End of year
-
-
(15,732)
(15,732)
Beginning of year
-
(599)
-
(599)
Impairment loss
(3,082)
(586)
-
(3,668)
End of year
(3,082)
(1,185)
-
(4,267)
Book value:
Beginning of year
$
6,407 $
33,646 $
32,704 $
72,757
End of year
$
6,407 $
35,840 $
37,963 $
80,210
(*) The book value of ￦7,030 million ($6,662 thousand) is transferred from property, plant and equipment to intangible assets.
100
Other intangible
assets
Membership
Total
(In millions)
Acquisition cost:
Beginning of year
5,851 ￦
￦
Acquisition
-
35,621 ￦
14,542 ￦
56,014
4,938
2,132
7,070
910
-
27,792
28,702
Disposal
-
(4,419)
-
(4,419)
Transfer (*)
-
-
3,538
3,538
-
-
(520)
(520)
6,761
36,140
47,484
90,385
Beginning of year
-
-
(10,101)
(10,101)
Amortization
-
-
(2,513)
(2,513)
- ￦
- ￦
-
-
40
40
End of year
-
-
(12,973)
(12,973)
Beginning of year
-
(1,638)
-
(1,638)
Impairment loss
-
(582)
-
(582)
Reversal of impairments
-
1,589
-
1,589
End of year
-
(631)
-
(631)
End of year
￦
(399) ￦
(399)
Book value:
Beginning of year
￦
5,851 ￦
33,983 ￦
4,441 ￦
44,275
End of year
￦
6,761 ￦
35,509 ￦
34,511 ￦
76,781
101
(3) Allocation of amortization on intangible assets for the years ended December 31, 2013 and 2012, is as follows:
Description
Goodwill
Other intangible
assets
Membership
Total
Korean won
Description
(In thousands)
2013
2012
Acquisition cost:
Beginning of year
5,544 $
$
Acquisition
33,754 $
13,780 $
53,078
-
4,679
2,021
6,700
863
-
26,336
27,199
Disposal
-
(4,188)
-
(4,188)
Transfer (*)
-
-
3,353
3,353
-
-
(493)
(493)
6,407
34,245
44,997
85,649
End of year
2013
(In millions)
Cost of sales
(In thousands)
2,219 ￦
￦
Selling and administrative expenses
1,557 $
1,413
2,513 $
Korean won
-
-
(9,572)
(9,572)
Amortization
-
-
(2,381)
(2,381)
-
-
(378)
(378)
-
-
38
38
End of year
-
-
(12,293)
(12,293)
-
(1,552)
-
(1,552)
Beginning of year
Impairment loss
-
(552)
-
(552)
Reversal of impairments
-
1,505
-
1,505
End of year
-
(599)
-
(599)
Description
2013
5,544 $
32,202 $
4,208 $
41,954
End of year
$
6,407 $
33,646 $
32,704 $
72,757
2012
62,059 ￦
￦
2013
2012
(In thousands)
73,874 $
58,807 $
70,003
Trade, other and long-term other payables as of December 31, 2013 and 2012, are as follows:
Korean won
Accounts
December 31, 2013 December 31, 2012
(In millions)
Trade payables
Accounts payable-trade
Other payables
Accounts payable-other
(*) The book value of ￦3,538 million ($3,353 thousand) is transferred from property, plant and equipment to intangible assets.
￦
2,418,312 ￦
2,204,102
2,418,312
2,204,102
797,172
661,272
Present value of discounts
(3,359)
-
Accrued expenses
22,153
8,351
Withholdings
216,754
168,050
1,032,720
837,673
Long-term accounts
67,365
-
payable-other
(2,054)
-
283,412
240,318
102
2,381
16. TRADE, OTHER AND LONG-TERM OTHER PAYABLES:
Book value:
$
906
3,442 $
(In millions)
Description
Beginning of year
1,475
1,339
(4) Recognized research and development expenses for the years ended December 31, 2013 and 2012, are as follows:
Beginning of year
2,103 $
956
3,632 ￦
￦
2012
Deposits received
(13,312)
(13,158)
335,411
227,160
103
(2) Long-term borrowings as of December 31, 2013 and 2012, are as follows:
Description
Accounts
Description
(In thousands)
Trade payables
Accounts payable-trade
Other payables
$
Accounts payable-other
2,088,602
2,291,587
2,088,602
755,398
626,620
(3,183)
-
Accrued expenses
20,992
7,913
205,396
159,244
Withholdings
2,291,587 $
978,603
793,777
Long-term accounts
63,835
-
payable-other
(1,947)
-
268,561
227,725
Deposits received
(12,614)
(12,469)
317,835
215,256
Annual interest rate
at Dec. 31, 2013
Lender
Korean won
(In millions)
Manufacturing loans
The Export-Import Bank of Korea
General loans
Woori Investment & Securities Co., Ltd.,
and others
Credit loans
Korea Housing Guarantee
Facility loans
Korea Development Bank and others
Commercial paper
You-First Hanoi the 1st Co., Ltd., and others
2.92%-3.57%
￦
146,679
157,936
1.00%
44,667
44,667
3.95%-8.10%, Return of non-guaranteed bond (due in three years) of AAgrade+1.60%
438,920
-
-
38,000
823,175
320,617
-
Less: current portion
(1) Short-term borrowings as of December 31, 2013 and 2012, are as follows:
at Dec. 31, 2013
Lender
Korean won
Trade financing
Woori Bank and others
0.25%-0.98%
￦
139,984 ￦
139,955
General loans
Construction Guarantee Cooperative
1.65%
30,000
45,044
Guarantee loans
New Hanoi the 1st Co., Ltd.
3.34%
39,300
-
Operating loans
Construction Guarantee Cooperative and
others
1.65%-7.90%, three-month (“3M”) London Inter-Bank Offered Rate (“LIBOR”)+1.39%
29,810
901
￦
Description
at Dec. 31, 2013
Lender
at Dec. 31, 2013
Lender
239,094 ￦
185,900
The Export-Import Bank of Korea
General loans
Woori Investment & Securities Co., Ltd.,
and others
Credit loans
Korea Housing Guarantee
Facility loans
Commercial paper
You-First Hanoi the 1st Co., Ltd., and others
2.92%-3.57%
0.25%-0.98%
Woori Bank and others
1.65%
28,428
42,684
Guarantee loans
New Hanoi the 1st Co., Ltd.
3.34%
37,241
-
Operating loans
Construction Guarantee Cooperative and
others
1.65%-7.90%, 3M LIBOR+1.39%
28,247
853
$
$
104
132,649 $
226,565 $
$
(89,691)
223,380
182,800 $
75,821
3.85%, 3.92%, 3M LIBOR+2.85%
138,993
149,660
1.00%
42,326
42,326
3.95%-8.10%, return of non-guaranteed bond (due in three years) of AAgrade+1.60%
415,920
-
-
36,009
780,039
303,816
-
Less: current portion
(7,289)
(7,151)
772,750
296,665
(202,904)
$
Trade financing
601,358 ￦
(In thousands)
Manufacturing loans
(In thousands)
General loans
313,071
Less: present value of discounts
Translation into U.S. dollars
(7,546)
815,482
(In millions)
(7,693)
(214,124)
￦
17. BORROWINGS AND DEBENTURES:
Description
80,014
3.85%, 3.92%, 3M LIBOR+2.85%
Less: present value of discounts
Description
192,909 ￦
132,621
176,158
105
569,846 $
(84,991)
211,674
(3) Debentures issued as of December 31, 2013 and 2012, are as follows:
Description
Year issued
Maturity
Annual
interest rate
Dec. 31, 2013
Korean won
Maturity
Annual
interest rate
Dec. 31, 2013
Privately placed bonds
12/31/2012
12/31/2013
-
Unsecured public offered bonds
06/17/2010
06/17/2013
-
-
189,520
10/28/2010
10/28/2013
-
-
142,139
94,760
(In thousands)
(In millions)
12/31/2012
12/31/2013
-
06/17/2010
06/17/2013
-
-
200,000
10/28/2010
10/28/2013
-
-
150,000
10/28/2010
10/28/2015
5.15%
100,000
100,000
05/09/2011
05/09/2014
4.54%
100,000
100,000
06/23/2011
06/23/2015
4.49%
150,000
150,000
09/07/2011
09/07/2014
4.29%
100,000
100,000
09/07/2011
09/07/2016
4.57%
100,000
100,000
03/06/2012
03/06/2017
4.28%
100,000
100,000
10/30/2012
10/30/2017
3.35%
200,000
200,000
04/11/2013
04/11/2018
3.07%
100,000
-
04/11/2013
04/11/2020
3.40%
100,000
-
10/11/2013
10/11/2016
3.39%
110,000
-
10/11/2013
10/11/2018
3.80%
90,000
-
09/17/2013
09/17/2018
3.90%
￦
Discount on bonds
Current portion of debentures issued
Discount on bonds
Debentures issued (non-current)
Discount on bonds
- ￦
10
10
-
1,250,010
1,200,010
(3,011)
(2,739)
1,246,999
1,197,271
200,000
350,010
(146)
(302)
199,854
349,708
1,050,010
850,000
(2,864)
￦
106
Year issued
Description
1,047,146 ￦
$
- $
9
10/28/2010
10/28/2015
5.15%
94,760
05/09/2011
05/09/2014
4.54%
94,760
94,760
06/23/2011
06/23/2015
4.49%
142,139
142,139
09/07/2011
09/07/2014
4.29%
94,760
94,760
09/07/2011
09/07/2016
4.57%
94,760
94,760
03/06/2012
03/06/2017
4.28%
94,760
94,760
10/30/2012
10/30/2017
3.35%
189,520
189,520
04/11/2013
04/11/2018
3.07%
94,760
-
04/11/2013
04/11/2020
3.40%
94,760
-
10/11/2013
10/11/2016
3.39%
104,235
-
10/11/2013
10/11/2018
3.80%
85,284
-
09/17/2013
09/17/2018
3.90%
Discount on bonds
Current portion of debentures issued
Discount on bonds
Debentures issued (non-current)
Discount on bonds
9
-
1,184,507
1,137,127
(2,853)
(2,595)
1,181,654
1,134,532
189,519
331,669
(138)
(286)
189,381
331,383
994,987
805,458
(2,714)
$
(2,437)
847,563
107
992,273 $
(2,309)
803,149
18. PROVISIONS:
19. OTHER CURRENT FINANCIAL LIABILITIES AND NON-CURRENT FINANCIAL LIABILITIES:
(1) The changes in provisions for the year ended December 31, 2013, are as follows:
Other current financial liabilities and non-current financial liabilities as of December 31, 2013 and 2012, are as follows:
Korean won
Company
Beginning
of year
Accrual
Reversals
Korean won
Use
Effect of
exchange
rate
End of
year
￦
252,786 ￦
￦
322,685 ￦
Provision for litigation
52,632 ￦
69,899
(6,701) ￦
26,771
(10,640)
79,403 ￦
(17,341) ￦
(30,943) ￦
(1,752)
(293) ￦
185
(32,695) ￦
(108) ￦
Accounts
(In millions)
(In millions)
Provision for construction warranties
Description
267,481
Other current financial liabilities
Current provision for financial guarantees
Other non-current financial liabilities
Non-current provision for financial guarantees
￦
17,890 ￦
15,861
37,262
18,397
84,463
351,944
Description
Company
Beginning
of year
Accrual
Reversals
Use
Effect of
exchange
rate
End of
year
(In thousands)
$
239,541 $
49,874 $
66,236
$
305,777 $
(6,350) $
25,368
(10,082)
75,242 $
(16,432) $
(29,322) $
(278) $
(1,660)
175
(30,982) $
(103) $
Accounts
(In thousands)
Other current financial liabilities
Current provision for financial guarantees
Other non-current financial liabilities
Non-current provision for financial guarantees
￦
16,953 ￦
15,030
35,309
17,433
253,465
80,037
333,502
20. OTHER CURRENT LIABILITIES AND NON-CURRENT LIABILITIES
Other current liabilities and non-current liabilities as of December 31, 2013 and 2012, are as follows:
(2) The changes in provisions for the year ended December 31, 2012, are as follows:
Korean won
Description
Korean won
Company
Beginning
of year
Accrual
Reversals
Use
Effect of
exchange
rate
End of
year
￦
251,807 ￦
59,683 ￦
27,663
￦
279,470 ￦
56,978
(9,853) ￦
(12,188)
116,661 ￦
(1,922)
(22,041) ￦
Value-added tax withheld
￦
Other advance receipts
(43,630) ￦
(5,221) ￦
(632)
(45,552) ￦
(5,853) ￦
Unearned income
252,786
Other non-current l iabilities
Long-term unearned income
Company
Beginning
of year
Accrual
Reversals
Use
Effect of
exchange
rate
End of
year
(In thousands)
$
238,612 $
56,555 $
26,213
$
264,825 $
53,992
110,547 $
108
(9,337) $
(11,549)
(20,886) $
(41,342) $
(1,821)
(43,163) $
(4,947) $
(599)
(5,546) $
239,541
66,236
305,777
109
(In thousands)
9,945 ￦
26,193 $
9,424 $
24,820
5,729
69,137
5,428
65,514
4,645 ￦
￦
69,899
322,685
(In millions)
(In millions)
Accounts
5,268 $
4,402 $
4,993
20,319
100,598
19,254
95,327
12,914
12,224
12,237
11,583
12,914
12,224
12,237
11,583
21. RETIREMENT BENEFIT PLAN:
(3) The changes in fair value of plan assets for the years ended December 31, 2013 and 2012, are as follows:
The Group operates a retirement benefit plan for its employees, and according to the plan, the employees will be paid their average salary
Korean won
Description
amount of the final three months multiplied by the number of years vested, adjusted for payment rate and other. The actuarial valuation of
2013
plan assets and the retirement benefit liabilities is performed by a reputable actuary using the pension actuarial method.
2012
2013
(In millions)
(1) The amounts recognized in the consolidated statements of financial position related to retirement benefit obligation as of
December 31, 2013 and 2012, are as follows:
Fair value of plan assets
Changes in financial assumptions
Transfer in between affiliates
(In thousands)
547,740 ￦
￦
506,502 $
519,037 $
479,960
(325,772)
(332,960)
(308,701)
(315,512)
221,968
173,542
210,336
164,448
(2) The changes in present value of defined benefit obligation for the years ended December 31, 2013 and 2012, are as follows:
Korean won
Description
2013
2013
(In millions)
Beginning of year
506,502 ￦
￦
421,894 $
479,960 $
399,786
47,800
Interest expenses
17,310
18,235
16,403
17,279
(888)
(3,682)
(841)
(3,489)
(16,883)
41,562
(15,998)
39,384
23,513
30,219
22,281
28,635
259
-
244
-
Transfer in between affiliates
520
-
493
-
(46,249)
(52,169)
(43,825)
(49,435)
547,740 ￦
506,502 $
519,037 $
479,960
Remeasurements:
End of year
￦
10,765
14,340
147
-
139
215
34
227
32
1,156
-
1,095
-
18,849
2,678
17,861
2,538
(37,879)
(34,505)
(35,894)
(32,697)
(855)
-
325,772 ￦
￦
(809)
332,960 $
-
308,701 $
315,512
(4) Income and loss related to defined benefit plan for the years ended December 31, 2013 and 2012, are as follows:
2013
2012
2013
(In millions)
Current service cost
2012
(In thousands)
63,656 ￦
￦
Interest expenses
Expected return on plan assets
50,443 $
60,320 $
47,800
17,310
18,235
16,403
17,279
(11,360)
(15,133)
(10,765)
(14,340)
69,606 ￦
53,545 $
65,958 $
50,739
16,294
15,532
15,440
14,718
Manufacturing costs
53,312
38,013
50,518
36,021
￦
(5) The changes in remeasurements of defined benefit plan recognized as other comprehensive income(loss) for the years
ended December 31, 2013 and 2012, are as follows:
Korean won
Description
2013
2012
2013
(In millions)
Beginning of year
￦
(111,051) ￦
￦
(In thousands)
(105,232) $
(57,038)
(67,872)
(5,409)
(64,315)
2,264
17,013
2,145
(114,495) ￦
(111,051) $
(108,496) $
Less: tax effect
End of year
2012
(5,708)
Changes
110
331,116
15,133
(In thousands)
60,320
Benefits paid
315,512 $
11,360
Korean won
50,443
Experience adjustments
Transfer
End of year
Description
63,656
Changes in financial assumptions
Benefits paid
2012
Current service cost
Changes in demographic assumptions
Contributions from the employer
2012
349,427 $
Remeasurements:
(In millions)
Present value of defined benefit obligation
(In thousands)
332,960 ￦
￦
Expected return on plan assets
Korean won
Description
Beginning of year
2012
111
(60,192) $
16,121
(105,232)
(6) The fair value of the plan assets as of December 31, 2013 and 2012, consists of the following:
Korean won
Description
2013
22. DERIVATIVE INSTRUMENTS:
2012
2013
2012
(In millions)
Korean won
(In thousands)
116 ￦
￦
(1) Fair values of derivatives as of December 31, 2013 and 2012, are as follows:
810 $
Description
110 $
768
Financial instruments
182,992
201,391
173,403
190,838
Insurance contracts
139,400
127,123
132,095
120,461
3,264
3,636
3,093
3,445
332,960 $
308,701 $
Others
325,772 ￦
￦
315,512
December 31, 2013
Assets
(current)
Assets
(non-current)
December 31, 2012
Liabilities
(current)
Liabilities
(non-current)
Assets
(current)
Assets
(non-current)
Liabilities
(current)
Liabilities
(non-current)
(In millions)
Currency forwards
￦
Range forward
￦
4 ￦
- ￦
- ￦
- ￦
-
-
-
-
1,066
916 ￦
-
- ￦
4 ￦
- ￦
- ￦
- ￦
1,982 ￦
- ￦
626 ￦
18
-
-
626 ￦
18
Investment strategies and policies for plan assets seek a balanced approach of minimization of risk and return of the highest profit.
Moreover, actual profit from plan assets as of December 31, 2013 and 2012, is ￦11,394 million ($10,797 thousand) and ￦15,360 million
($14,555 thousand), respectively.
Description
(7) Actuarial assumptions used as of December 31, 2013 and 2012, are as follows:
Description
December 31, 2013
3.48%-4.04%
3.39%-3.65%
Expected rate of salary increase
5.00%-5.13%
5.00%
Liabilities
(current)
Liabilities
(non-current)
Assets
(current)
Assets
(non-current)
Liabilities
(current)
Liabilities
(non-current)
4 $
- $
- $
- $
868 $
- $
$
-
-
-
-
1,010
-
$
4 $
- $
- $
- $
1,878 $
- $
593 $
17
-
-
593 $
17
(2) Gain (loss) included in net income related to the derivative instruments for the years ended December 31, 2013 and 2012, are
as follows:
Korean won
Increase
Decrease
(In millions)
(42,020) ￦
1% change in expected rate of salary increase
$
Range forward
holding all other assumptions constant as of December 31, 2013.
￦
Assets
(non-current)
(In thousands)
Currency forwards
(8) The sensitivity analysis below has been determined based on reasonably possible changes in actuarial assumptions while
1% change in discount rate
Assets
(current)
December 31, 2012
December 31, 2012
Discount rate
Description
December 31, 2013
47,687
Increase
Korean won
Decrease
2013
Accounts
(In thousands)
47,498 $
(42,927)
(39,818) $
45,188
Gain (loss) on
transaction of
derivatives
45,009
(40,678)
2012
Gain on
valuation of
derivatives
Gain on
transaction of
derivatives
Gain on
valuation of
derivatives
(In millions)
The above sensitivity analysis does not demonstrate actual fluctuations in defined benefit obligation as there actuarial assumptions are
Currency forwards
correlated and adjustment to a single set of assumption would not occur independent of others. Moreover, the present value of defined
Range forward
(124) ￦
￦
benefit obligation in the above sensitivity analysis was calculated using the projected unit credit method, which was used to calculate
22 ￦
400 ￦
235
893
-
2,527
1,019
769
22
2,927
1,254
retirement benefit obligation in the consolidated statement of financial position.
2013
Accounts
Gain (loss) on
transaction of
derivatives
2012
Gain on
valuation of
derivatives
Gain on
transaction of
derivatives
Gain on
valuation of
derivatives
(In millions)
Advance payments
(118) $
$
Range forward
112
113
21 $
379 $
223
846
-
2,395
965
728
21
2,774
1,188
23. FAIR VALUE AND OFFSET OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES:
(2)The book value and fair value of financial liabilities as of December 31, 2013 and 2012, are as follows:
(1) The book value and fair value of financial assets as of December 31, 2013 and 2012, are as follows:
Korean won
Category
Korean won
Category
Consolidated statements of
financial position
December 31, 2013
Book value
Cash and cash e
quivalents
￦
Fair value
1,883,560 ￦
Short-term financial i nstruments
Book value
Financial liabilities carried at
amortized cost
1,883,560 ￦
1,854,859 ￦
266,240
106,619
106,619
Trade receivables
1,313,236
1,313,236
1,410,161
1,410,161
Other receivables
1,254,828
1,254,828
1,131,801
1,131,801
349,296
349,296
354,519
354,519
567,922
567,922
516,393
516,393
54,123
54,123
89,131
89,131
408,322
408,322
558,496
558,496
AFS financial assets (non-current)
Held-to-maturity fi nancial assets
(current)
22,661
22,661
23,503
23,503
(non-current)
72,790
72,790
79,284
79,284
4
4
1,982
1,982
Current derivative a
ssets
￦
6,192,982 ￦
6,192,982 ￦
6,126,748 ￦
financial position
December 31, 2013
Book value
Book value
Cash and cash e
quivalents
$
1,784,857 $
Short-term financial i nstruments
2,418,312 ￦
2,204,102
1,032,720
1,032,720
837,673
837,673
239,094
239,094
185,900
185,900
Current portion of long-term
borrowings and debentures
413,978
416,554
439,399
444,384
Long-term other p
ayables
335,411
335,411
227,160
227,160
1,047,146
1,060,709
847,563
870,498
601,358
601,358
223,380
223,380
Other financial liabilities (current)
17,890
17,890
15,861
15,861
(non-current)
37,262
37,262
18,397
18,397
Current derivative l iabilities
-
-
626
626
-
-
18
18
Debentures issued
Derivative liabilities
2,204,102 ￦
￦
6,143,171 ￦
6,159,310 ￦
5,000,079 ￦
5,027,999
Category
financial position
December 31, 2013
Book value
Fair value
December 31, 2012
Fair value
Book value
Fair value
(In thousands)
1,757,660 $
1,757,660
Financial liabilities carried at
amortized cost
Trade payables
$
2,291,587 $
2,291,587 $
2,088,602 $
2,088,602
252,288
252,288
101,032
101,032
Other payables
978,603
978,603
793,777
793,777
1,244,420
1,336,266
1,336,266
226,565
226,565
176,158
176,158
Other receivables
1,189,072
1,189,072
1,072,492
1,072,492
330,992
330,992
335,941
335,941
Current portion of long-term
borrowings and debentures
392,285
394,726
416,374
421,097
538,162 $
Long-term other p
ayables
317,835
317,835
215,256
215,256
Debentures issued
992,273
1,005,126
803,149
824,882
Derivative assets
2,418,312 ￦
1,244,420
$
Long-term financial i nstruments
Fair value
Trade receivables
AFS financial assets
1,784,857 $
Book value
(In thousands)
Loans and receivables
Fair value
6,126,748
December 31, 2012
Fair value
￦
Category
Trade payables
Other payables
1,854,859
Derivative assets
Book value
December 31, 2012
(In millions)
Fair value
266,240
Long-term financial i nstruments
December 31, 2013
December 31, 2012
(In millions)
financial position
538,162
489,333
489,333
51,287
51,287
84,460
84,460
386,925
386,925
529,231
529,231
(current)
21,473
21,473
22,271
22,271
(non-current)
68,976
68,976
75,130
75,130
4
4
1,878
1,878
Current derivative a
ssets
$
5,868,456 $
5,868,456 $
5,805,694 $
5,805,694
Derivative liabilities
569,846
569,846
211,674
211,674
Other financial liabilities (current)
16,953
16,953
15,030
15,030
(non-current)
35,309
35,309
17,433
17,433
-
-
593
593
Current derivative l iabilities
$
114
5,821,256 $
115
5,836,550 $
17
4,738,063 $
17
4,764,519
(3) The Group estimates that the acquisition cost or amortized cost of financial assets and financial liabilities is close to the fair
value, except AFS financial assets, derivative assets and liabilities. As the fair value is not reliably measurable for the non-
Description
marketable equity securities (￦32,789 million ($31,071 thousand)) among AFS financial assets, those non-marketable equity
Level 1
securities are reported at acquisition cost.
Level 2
Level 3
Total
(In thousands)
(4) Financial instruments that are measured at fair value subsequent to initial recognition are grouped into Level 1, 2 or 3, based
on the degree to which the fair value is observable, as described below:
① The standard classification of fair value
Level 1:
Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2:
Inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly
Level 3:
Inputs are unobservable inputs for the asset or liability
260,788 $
$
95,353 $
39,401 $
-
1,878
-
1,878
-
593
-
593
-
17
-
17
The Group recognizes transfers between levels of the fair value hierarchy at the date of the event or change in circumstances that caused
the transfer.
④ Financial liabilities that are not measured subsequent to initial recognition at fair value, but are disclosed according to fair value hierarchy
②Financial instruments that are measured subsequent to initial recognition at fair value according to fair value hierarchy levels as of
levels as of December 31, 2013, are as follows:
December 31, 2013, are as follows:
Korean won
Description
Level 1
Level 2
142,763 ￦
￦
Level 3
98,701 ￦
-
Korean won
dollars (Note 2)
Level 1
Level 2
(In millions)
(In thousands)
Description
Total
(In millions)
395,542
134,069 ￦
4
375,533
-
4
Current portion of long-term borrowings and debentures
￦
Debentures issued
202,430 $
1,060,709
191,822
1,005,126
⑤ Details of valuation techniques and inputs for measuring fair values of the financial instrument classified as Level 2 are as follows:
Description
Level 1
Level 2
- AFS financial assets
Level 3
Total
AFS financial assets classified as Level 2 are valued using observable inputs rather than a quoted price in an active market.
(In thousands)
135,282 $
$
93,529 $
-
127,044 $
4
355,855
-
4
③ Financial instruments that are measured subsequent to initial recognition at fair value according to fair value hierarchy levels as of
The Group’s derivative financial instrument solely consists of currency forwards. Fair value of the currency forwards is measured based
on forward market exchange rates of the same remaining terms at the end of the reporting period. If the forward exchange rate,
which has the same period with remaining period of currency forward, is not quoted in the current market, fair value is measured using
estimates of similar period of forward exchange rate by applying interpolation method with quoted forward exchange rate. Discount
rate used in the valuation was determined by yield curve derived from market interest rates as of the reporting date. Fair value
Korean won
Description
Level 1
Level 2
measurement for the currency forwards are categorized within Level 2 as inputs used for valuation are derived from observable market
Level 3
forward rates and the yield curve.
Total
- Current portion of long-term borrowings and debentures and debentures issued
(In millions)
- Derivative assets
275,210 ￦
￦
100,626 ￦
41,580 ￦
417,416
-
1,982
-
1,982
-
626
-
626
-
18
-
18
116
The fair value of unsecured debentures is calculated by discounting the future cash flow at the market interest rate that is applied to
other companies that have similar credit ratings as the issuer of debt security.
117
⑥ The valuation methods used to evaluate fair values of each non-marketable securities of AFS financial assets in Level 3 as of December
31, 2013, are as follows:
Description
values on a recurring basis in the consolidated statement of financial position, for other accumulated comprehensive income is as follows:
Korea Housing
Guarantee Co., Ltd.
Kwanak Construction
& Equipment Service
Co., Ltd.
Hyundai Finance
Corporation
Seoul-Chuncheon
Highway Co., Ltd.
Busan Newport Co.,
Ltd
Fair value(Korean won(In millions))
￦
21,859 ￦
4,855 ￦
10,613 ￦
32,102 ￦
55,771
Fair value (Translation into U.S.
dollars (Note 2) ( In thousands))
$
20,714 $
4,601 $
10,057 $
30,420 $
52,848
Valuation approaches
Earnings capitalized
approach
approach and
Comparable company
approach
approach
approach
approach
Discounted free cash
flow model
flow model and
Relative valuation model
flow model
flow model
flow model
Discounted interest rate (%)
Cost of equity
(4.02)
Weighted-average cost
of capital (6.35)
Cost of equity
(6.09)
Cost of equity
(11.00)
Weighted-average cost
of capital (7.33)
Relationship between unobservable
inputs and fair value estimates.
Fair values of unlisted
shares will increase
if cost of equity
decreases.
shares will increase if
weighted-average cost
of capital decreases
In addition, the fair value
will increase if the stock
price of comparable
company or PBR (Price
Book-value Ratio) and
PER (price earning ratio)
increases
if cost of equity
decreases.
if cost of equity
decreases.
shares will increase if
weighted-average cost
of capital decreases.
Valuation techniques
⑧ The influence of significant but unobservable inputs, related to the fair value measurement of Level 3 financial instruments found as fair
Description
Unobservable inputs
Reasonable
fluctuations of
unobservable
inputs
Korean won
Positive
fluctuation
respectively, as of December 31, 2013.
⑦There are no changes in the valuation techniques for measuring fair value of financial instrument that are classified as Level 2 and Level 3
during the current accounting period.
Negative
fluctuation
Positive
fluctuation
(In millions)
Negative
fluctuation
(In thousands)
7,266 ￦
Korea Housing Guarantee Co., Ltd.
Discounted interest rate
+/- 1.00%
Kwanak Construction & Equipment
Service Co., Ltd.
+/- 1.00%
405
(294)
384
(279)
Hyundai Finance Corporation
+/- 1.00%
680
(488)
644
(462)
￦
(4,364) $
6,885 $
(4,135)
Seoul-Chuncheon Highway Co., Ltd.
+/- 1.00%
5,687
(4,726)
5,389
(4,478)
Busan Newport Co., Ltd.
+/- 1.00%
5,073
(4,550)
4,807
(4,312)
⑨ The changes of book values of AFS financial assets in Level 3 for the year ended December 31, 2013, are as follows:
Korean won
Description
Beginning of year
Valuation
Transfer(*)
End of year
(In millions)
41,580 ￦
￦
5,670 ￦
86,819 ￦
134,069
Description
Beginning of year
Valuation
Moreover, Pusan Finance Center PFV Co., Ltd. is valuated at its recent public offering price of paid-in capital increase and the fair value
per stock is ￦5,000 ($4). The acquisition cost and fair value are ￦8,567 million ($8,118 thousand) and ￦8,869 million ($8,404 thousand),
Transfer(*)
End of year
(In thousands)
39,401 $
$
5,373 $
82,269 $
127,043
(*) It is the acquisition cost of Seoul-Chuncheon Highway Co., Ltd., Busan Newport Co., Ltd. and Pusan Finance Center PFV Co., Ltd., that initially evaluated non-marketable equity
securities as a fair value for the years ended December 31, 2013.
⑩ The changes in book values of AFS financial assets in Level 3 for the year ended December 31, 2012, are as follows:
Korean won
Description
Beginning of year
Valuation
End of year
(In millions)
￦
40,284 ￦
1,296 ￦
41,580
Description
Beginning of year
Valuation
End of year
(In thousands)
118
$
119
38,173 $
1,228 $
39,401
⑪ The change in accumulated other comprehensive income from AFS financial assets in Level 3 for the year ended December 31, 2013, is as follows:
Korean won
Korean won
Description
Beginning of year
Valuation
Description
End of year
Gross amounts of
Gross amounts of
recognized financial recognized financial
assets
liabilities set off
(In millions)
Amount before tax
￦
Tax effect
9,496 ￦
(2,298)
Amount after tax
￦
5,670 ￦
15,166
(1,372)
7,198 ￦
(3,670)
4,298 ￦
11,496
(In millions)
Trade receivables
￦
Other receivables
￦
Description
Beginning of year
Valuation
$
Tax effect
8,998 $
(2,178)
Amount after tax
$
(11,682) ￦
5,418
216,038
(48,834)
167,204
233,138 ￦
(60,516) ￦
172,622
5,373 $
(1,300)
6,820 $
17,100 ￦
End of year
(In thousands)
Amount before tax
Net amounts of
financial assets
presented in the
consolidated
statement of
financial position
14,371
(3,478)
4,073 $
Description
10,893
Gross amounts of
Gross amounts of
assets
liabilities set off
(5) The offset between financial assets and financial liabilities
Financial assets that are subject to offsetting, enforceable master netting arrangement or other similar agreements as of December 31, 2013
and 2012 consist of the following:
Net amounts of
financial assets
presented in the
consolidated
statement of
financial position
(In thousands)
Trade receivables
$
Other receivables
$
Korean won
16,204 $
(11,070) $
5,134
204,717
(46,275)
158,442
220,921 $
(57,345) $
163,576
Description
Gross amounts of
Gross amounts of
assets
liabilities set off
Net amounts of
financial assets
presented in the
consolidated
statement of
financial position
Financial liabilities that are subject to offsetting, enforceable master netting arrangement or other similar agreements as of December 31,
2013 and 2012 consist of the following:
Korean won
(In millions)
Trade receivables
￦
Other receivables
￦
6,967 ￦
(4,663) ￦
2,304
261,348
(56,571)
204,777
268,315 ￦
(61,234) ￦
207,081
Trade payables
Gross amounts of
Gross amounts of
assets
liabilities set off
Gross amounts of
Gross amounts of
liabilities
assets set off
￦
Other payables
Net amounts of
financial assets
presented in the
consolidated
statement of
financial position
￦
(In thousands)
Trade receivables
$
Other receivables
$
120
6,602 $
(4,419) $
Net amounts of
financial liabilities
presented in the
consolidated
statement of
financial position
(In millions)
Description
Description
2,183
247,653
(53,607)
194,046
254,255 $
(58,026) $
196,229
121
6,259 ￦
(2,614) ￦
86,849
(58,619)
8
(1)
93,116 ￦
(61,234) ￦
3,645
28,230
7
31,882
24. FINANCIAL INCOME (EXPENSES) AND OTHER COMPREHENSIVE INCOME (LOSS) BY CATEGORIES OF FINANCIAL
ASSETS AND LIABILITIES:
Description
Gross amounts of
Gross amounts of
liabilities
assets set off
Net amounts of
presented in the
consolidated
statement of
financial position
(1) Financial income (expenses) and other comprehensive income (loss) by categories of financial assets and liabilities for the
year ended December 31, 2013, are as follows:
Korean won
(In thousands)
Trade payables
$
Other payables
$
5,931 $
(2,477) $
82,298
(55,547)
7
(1)
88,236 $
Description
3,454
Accounts
26,751
Loans and AFS financial
receivables
assets
6
(58,025) $
30,211
Interest income (expenses)
Korean won
Gross amounts of
Gross amounts of
liabilities
assets set off
Net amounts of
presented in the
consolidated
statement of
financial position
￦
Trade payables
Other payables
￦
6,141 ￦
(2,911) ￦
64,746 ￦
- ￦
(57,604)
28,354
8
(1)
7
92,107 ￦
(60,516) ￦
$
Other payables
$
122
5,819 $
Description
2,369
-
-
-
2,369
(2,205)
-
-
(3,640)
-
(5,845)
Gain (loss) on foreign currency translation
(6,582)
-
-
4,967
-
(1,615)
Gain (loss) on disposal
-
2,735
-
-
769
3,504
Gain (loss) on valuation
-
-
-
-
22
22
Reversals (impairment loss)
-
(22,289)
-
-
-
(22,289)
55,959
(17,185)
2,735
(68,680)
791
(26,380)
-
(95,189)
-
-
-
(95,189)
Accounts
receivables
assets
3,061
(54,585)
26,868
7
(1)
6
(57,344) $
$
Dividend income
81,453
87,279 $
Financial
liabilities
carried at
amortized
cost
Held-tomaturity
financial
assets
Derivative
instruments
Total
(In thousands)
Gain (loss)
Net amounts of
presented in the
consolidated
statement of
financial position
(2,758) $
(2,526)
31,591
(In thousands)
Trade payables
- ￦
-
Gross amounts of
Gross amounts of
liabilities
assets set off
2,735 ￦ (70,007) ￦
3,230
85,958
Description
Total
Gain (loss) on foreign currency
transactions
Other comprehensive income (loss) Gain (loss) on valuation
(In millions)
￦
Derivative
instruments
(In millions)
Gain (loss)
Dividend income
Description
Financial
liabilities
carried at
amortized
cost
Held-tomaturity
financial
assets
29,935
61,353 $
- $
2,592 $
(66,338) $
- $
(2,393)
-
2,245
-
-
-
2,245
Gain (loss) on foreign currency
transactions
(2,089)
-
-
(3,450)
-
(5,539)
(6,237)
-
-
4,706
-
(1,531)
-
2,592
-
-
728
3,320
-
-
-
-
21
21
-
(21,121)
-
-
-
(21,121)
53,027
(16,284)
2,592
(65,082)
749
(24,998)
-
(90,201)
-
-
-
(90,201)
123
(2) Financial income (expenses) and other comprehensive income (loss) by categories of financial assets and liabilities for the
year ended December 31, 2012, are as follows:
25. CAPITAL STOCK AND OTHER CONTRIBUTED CAPITAL:
(1) Capital stock as of December 31, 2013 and 2012, is as follows:
Korean won
Description
Accounts
receivables
assets
Financial
liabilities
carried at
amortized
cost
Held-tomaturity
financial
assets
Derivative
instruments
Total
￦
Dividend income
67,563 ￦
- ￦
3,602 ￦ (56,569) ￦
- ￦
14,596
-
5,452
-
-
-
5,452
(4,322)
-
-
20,548
-
16,226
(36,391)
-
-
9,395
-
(26,996)
-
27,209
-
-
2,927
30,136
-
-
-
-
1,254
1,254
Gain (loss) on foreign currency transactions
No. of shares
authorized
Korean won
No. of shares
issued
Par value
(In millions)
(In millions)
Gain (loss)
Description
-
(4,668)
-
-
-
(4,668)
26,850
27,993
3,602
(26,626)
4,181
36,000
-
(12,203)
-
-
-
(12,203)
Common stock
6,925,000,000
111,355,765
Preferred stock
75,000,000
98,856
5,000 ￦
￦
5,000
No. of shares
authorized
Accounts
receivables
assets
Financial
liabilities
carried at
amortized
cost
Held-tomaturity
financial
assets
Total
(In thousands)
Common stock
6,925,000,000
111,355,765
Preferred stock
75,000,000
98,856
￦
4 $
4
$
Dividend income
Gain (loss) on foreign currency transactions
64,023 $
- $
3,413 $
527,603
468
528,071 $
468
528,071
Korean won
Description
(53,605) $
- $
13,831
-
5,166
-
-
-
5,166
(4,096)
-
-
19,472
-
15,376
(34,484)
-
-
8,902
-
(25,582)
-
25,784
-
-
2,774
28,558
-
-
-
-
1,188
1,188
-
(4,423)
-
-
-
(4,423)
25,443
26,527
3,413
(25,231)
3,962
34,114
-
(11,564)
-
-
-
(11,564)
527,603 $
(2) The details of other contributed capital as of December 31, 2013 and 2012, are as follows:
(In thousands)
Gain (loss)
557,273
Par value
$
Derivative
instruments
557,273 ￦
494
No. of shares
issued
Description
556,779
494
￦
Description
556,779 ￦
(In millions)
Capital surplus
￦
Gain from reduction of capital
Gain on disposal of treasury stocks
287,481 ￦
287,481
532,974
532,974
217
217
9,909
9,668
(4,261)
￦
826,320 ￦
(4,166)
826,174
Description
(In thousands)
Capital surplus
$
Gain from reduction of capital
Gain on disposal of treasury stocks
272,416
505,045
505,045
206
206
9,390
9,161
(4,038)
$
124
272,416 $
125
783,019 $
(3,947)
782,881
26. COMPONENTS OF OTHER CAPITAL:
(3) The changes in components of other capital for the year ended December 31, 2012, are as follows:
(1) The details of components of other capital as of December 31, 2013 and 2012, are as follows:
Korean won
Description
Korean won
Description
Beginning of year
Changes
(In millions)
Gain (loss) on valuation of AFS financial assets
(In millions)
34,421 ￦
￦
Gain (loss) on valuation of equity method investments, net
Translation gain(loss) on foreign operation
129,630
(1,570)
(1,311)
(54,795)
(42,463)
(21,944) ￦
￦
85,856
End of year
￦
187,157 ￦
(16,141) ￦
171,016
Less: tax effect
(45,292)
3,906
(41,386)
Amount after tax
141,865
(12,235)
129,630
Less: tax effect
Amount after tax
(1,163)
(148)
(1,311)
9,982
(66,001)
(56,019)
(2,416)
15,972
13,556
7,566
(50,029)
(42,463)
Description
Description
(In thousands)
Capital surplus
32,617 $
$
(1,488)
(1,242)
(51,923)
(40,238)
(20,794) $
$
Beginning of year
81,357
$
Beginning of year
(15,295) $
162,054
(42,918)
3,701
(39,217)
Amount after tax
134,431
(11,594)
122,837
Less: tax effect
Amount after tax
Changes
177,349 $
Less: tax effect
Korean won
End of year
(In millions)
(2) The changes in components of other capital for the year ended December 31, 2013, are as follows:
Description
Changes
122,837
(1,102)
(140)
(1,242)
9,459
(62,542)
(53,083)
(2,290)
15,135
12,845
7,169
(47,407)
(40,238)
End of year
(In millions)
￦
171,016 ￦
(125,606) ￦
45,410
Less: tax effect
(41,386)
30,397
(10,989)
Amount after tax
129,630
(95,209)
34,421
Less: tax effect
Amount after tax
(1,311)
(259)
(1,570)
(56,019)
(16,270)
(72,289)
13,556
3,938
17,494
(42,463)
(12,332)
(54,795)
Description
Beginning of year
Changes
27. RETAINED EARNINGS:
(1) Retained earnings as of December 31, 2013 and 2012, are as follows:
Korean won
Description
$
162,054 $
Legal reserve
Voluntary reserve
Reserve for financial structure improvements
End of year
(119,024) $
43,030
Less: tax effect
(39,217)
28,804
(10,413)
Amount after tax
122,837
(90,220)
32,617
(1,242)
(245)
(1,487)
(53,083)
(15,418)
(68,501)
Less: tax effect
Amount after tax
126
12,845
3,732
16,577
(40,238)
(11,686)
(51,924)
(In millions)
Statutory reserve
(In millions)
Accounts
￦
28,393
61,810
61,810
Reserve for overseas business losses
840,000
770,000
Reserve for technology development
770,000
700,000
Reserve for business expansion
860,000
790,000
Reserve for research development
Other voluntary reserves
Retained earnings b
efore appropriations
33,966 ￦
Retained earnings before appropriations
127
34,334
34,000
378,000
343,000
2,944,144
2,698,810
￦
543,984 ￦
352,036
￦
3,522,094 ￦
3,079,239
② Dividends to net income
Description
Accounts
Korean won
Description
(In millions)
Statutory reserve
Legal reserve
32,187 $
26,904
Voluntary reserve
Reserve for financial structure improvements
58,571
58,571
Reserve for overseas business losses
795,982
729,650
Reserve for technology development
729,650
663,318
Reserve for business expansion
814,934
748,602
$
Reserve for research development
Other voluntary reserves
Retained earnings b
efore appropriations
Retained earnings before appropriations
32,535
32,219
358,192
325,027
2,789,864
2,557,387
$
515,478 $
333,590
$
3,337,529 $
2,917,881
2013
2012
55,732 ￦
￦
Net income attributable to owners of the Parent Company
Dividends to net income
Preferred shares
10.93%
Common shares
11%
Number of shares issued
2012
Common shares
Preferred shares
Common shares
(In thousands)
(In millions)
550 ￦
￦
500 ￦
32,300
550 ￦
60,700
1.70%
500
28,900
0.82%
70,000
1.90%
0.71%
Common shares
2013
Description
500 ￦
550 ￦
11%
111,355,765
54 ￦
￦
10.93%
2013
Description
Dividend yield ratio
Preferred shares
10%
98,856
Dividends declared
11.07%
2012
550 ￦
￦
Dividend ratio
483,138
Korean won
(In millions)
Dividends per share
52,811
477,241
③ Dividend yield ratio
Market price per share
2013
2012
52,811 $
509,856
11.07%
Dividends per share
Description
55,732 $
503,634
(2) The computation of the proposed dividends of Parent Company for the years ended December 31, 2013 and 2012, is as follows:
Korean won
2013
(In thousands)
Dividends declared
Preferred shares
① The computation of the proposed dividends
98,856
55,678 ￦
500
Preferred shares
10%
111,355,765
54 ￦
55,678
2012
Common shares
Preferred shares
(In thousands)
(In millions)
Dividends per share
0.52 $
$
Market price per share
0.47 $
30.61
Dividend yield ratio
1.70%
Common shares
0.52 $
57.52
0.82%
0.47
27.39
1.90%
66.33
0.71%
2013
Description
Preferred shares
2012
Common shares
Preferred shares
Common shares
(In thousands)
Dividends per share
0.52 $
$
Dividend ratio
11%
Number of shares issued
Dividends declared
10%
98,856
51 $
$
0.47 $
111,355,765
52,760 $
0.52 $
11%
0.47
10%
98,856
51 $
28. REVENUES:
Profit from continuing operation except for financial income and other income (Notes 31 and 32) for the years ended December 31, 2013
and 2012, is as follows:
111,355,765
Korean won
52,760
Description
2013
2012
2013
(In thousands)
(In millions)
Sales of goods
Service revenue
￦
128
419,699 ￦
￦
2012
262,167 $
397,706 $
248,429
13,518,588
13,062,654
12,810,185
12,378,143
13,938,287 ￦
13,324,821 $
13,207,891 $
12,626,572
129
29. CONSTRUCTION CONTRACTS:
(3) Cumulative cost and income related to construction in progress or finished construction as of December 31, 2012, are
summarized as follows:
(1) Recognized contract income related to construction contracts for the years ended December 31, 2013 and 2012, is as follows:
Korean won
Description
2013
2012
2013
￦
Building works
Plant works/electrical works
2,884,731 $
2,697,851 $
2,733,565
3,044,831
2,994,352
2,885,275
2,837,441
7,559,624
7,140,698
7,163,483
6,766,510
13,451,497
13,019,781
12,746,609
12,337,516
153,428
174,735
145,389
165,579
67,091
42,873
63,575
40,626
13,672,016 ￦
13,237,388 $
12,955,573 $
Others
Accumulated Accumulated
cost
income
12,543,720
￦ 10,604,755 ￦
Building works
Plant works/ electrical works
Housing units lotting-out construction
Others
1,328,794 ￦ 11,933,549 ￦ 11,440,166 ￦
233,611 ￦
570,215 ￦
509,259
6,123,870
5,693,755
112,936
490,681
84,818
105,937
17,841,768
1,938,519
19,780,287
18,346,891
1,181,621
1,760,377
478,795
378,191
34,061,134
3,776,572
37,837,706
35,480,812
1,528,168
2,821,273
675,930
549,789
574,851
88,529
663,380
691,015
-
-
27,635
-
65,412
12,244
77,656
71,938
12
9,274
2,924
3,877,345 ￦ 38,578,742 ￦ 36,243,765 ￦
Korean won
Progress
billing
Due from
Due to
customers for customers for
contract work contract work
Advance
￦
Building works
9,958,767 ￦
6,167,756
27,401,112
43,527,635
Others
1,391,128 ￦ 11,349,895 ￦ 10,495,669 ￦
Civil works
Building works
536,774
2,201,932
4,129,834
6,704,530
29,603,044
47,657,469
449,297 ￦
5,835,579
65,071
27,930,826
959,380
1,241,137
44,262,074
984,789 ￦
2,155,812
1,755,505
4,099,981
105,383 ￦
94,348
814,650
164,461
24,633
189,094
281,931
-
-
92,837
94,576
14,122
108,698
110,237
11
8,558
9,921
￦ 43,786,672 ￦
4,168,589 ￦ 47,955,261 ￦ 44,654,242 ￦
1,755,516 ￦
4,108,539 ￦
98,190
119,179
614,919
532,557
749,926
Others
-
cost
income
Progress
billing
Total
$ 10,049,043 $
cost
income
Progress
billing
Total
Due from
Due to
Advance
Building works
Others
$
9,436,906 $
1,318,230 $ 10,755,136 $
9,945,674 $
425,753 $
933,184 $
221,369 $
540,335 $
107,018
464,968
80,373
100,386
16,906,821
1,836,936
18,743,757
17,385,474
1,119,702
1,668,129
453,705
358,373
32,276,257
3,578,671
35,854,928
33,621,541
1,448,089
2,673,432
640,509
520,979
544,728
83,890
628,618
654,804
-
-
26,187
-
61,984
11,603
73,587
68,168
11
8,788
2,771
2,682,220 $
669,467 $
3,674,164 $ 36,557,133 $ 34,344,513 $
749,926
93,045
5,844,552
508,646
6,353,198
5,529,782
61,661
909,106
89,404
25,965,235
2,086,546
28,051,781
26,467,190
1,176,099
2,042,843
582,696
504,649
41,246,693
3,913,422
45,160,115
41,942,646
1,663,513
3,885,133
771,961
710,628
155,843
23,342
179,185
267,157
-
-
87,972
-
89,620
13,382
103,002
104,460
10
8,110
9,401
3,893,243 $
869,334 $
$ 41,492,156 $
3,950,146 $ 45,442,302 $ 42,314,263 $
130
1,663,523 $
Deferred
collection
5,395,390
Deferred
collection
99,861 $
Due from
Due to
Advance
5,802,966
(In thousands)
Civil works
549,789
482,573
Description
-
706,489 ￦
5,320,393
$ 32,882,969 $
1,259,162 $ 11,308,205 $ 10,840,677 $
-
917,408 ￦
2,830,547 ￦
65,661
(In thousands)
Deferred
collection
(In millions)
Civil works
1,528,180 ￦
112,317 ￦
Description
Total
Deferred
collection
5,614,611
￦ 34,701,397 ￦
summarized as follows:
cost
income
Due from
Due to
Advance
(In millions)
Civil works
(2) Cumulative cost and income related to construction in progress or finished construction as of December 31, 2013, are
Description
Progress
billing
Total
(In thousands)
2,847,042 ￦
￦
Description
2012
(In millions)
Civil works
Korean won
112,934
710,628
131
1,448,100 $
106,431 $
62,220
520,979
30. SELLING AND ADMINISTRATIVE EXPENSES:
(2) Financial expenses for the years ended December 31, 2013 and 2012, are as follows:
The details of selling and administrative expenses for the years ended December 31, 2013 and 2012, are as follows:
Korean won
Description
2013
2012
2013
211,791 ￦
￦
219,351 $
200,693 $
207,857
16,294
15,532
15,440
14,718
Employee welfare
28,296
30,763
26,813
29,151
Travel
4,572
5,054
4,332
4,789
Utility expenses
6,415
5,785
6,079
5,482
Taxes and dues
6,342
5,919
6,010
5,609
Depreciation
8,818
8,302
8,356
7,867
Amortization of intangible assets
1,413
956
1,339
906
Advertising
10,024
11,506
9,499
10,903
Ordinary development expense
62,059
73,874
58,807
70,003
Commissions and fees
20,348
12,801
19,282
12,130
8,357
7,809
7,919
7,400
531
58,130
503
55,084
30,320
32,682
28,731
30,970
Bad debt expenses
Others
415,580 ￦
￦
488,464 $
393,803 $
2012
2013
(In thousands)
61,046 $
66,338 $
Loss on foreign currency transaction
40,369
32,136
38,254
30,452
Loss on foreign currency translation
13,310
37,159
12,613
35,212
13
49
12
46
Impairment loss on AFS financial assets
22,289
4,668
21,121
4,423
Loss on disposal of investments in associates
-
622
-
589
Impairment loss on investments in associates
683
4,689
647
4,443
Loss on transaction of derivatives
293
707
278
670
Loss on valuation of derivatives
-
151
146,964 ￦
￦
Korean won
2013
2012
2013
Korean won
2013
2013
67,481 ￦
￦
Dividend income
(In thousands)
75,642 $
63,945 $
71,678
5,452
2,245
5,166
Gain on foreign currency transaction
34,524
48,362
32,715
45,828
Gain on foreign currency translation
11,695
10,163
11,082
9,630
2,748
27,258
2,604
25,830
35,098
-
33,259
-
1,062
3,634
1,006
3,444
Gain on disposal of AFS financial assets
Gain on disposal of investments in associates
Gain on transaction of derivatives
Gain on valuation of derivatives
￦
132
22
1,405
154,999 ￦
171,916 $
21
146,877 $
49,332 $
67,435 $
46,747
21,565
3,446
20,435
3,265
Reversal of allowance for bad debts
3,199
62,127
3,031
58,871
27,680
2,675
26,230
2,535
697
Gain on disposal of intangible assets
2,369
2012
Gain on foreign currency translation
Reversal of loss on foreign operation translation
(In thousands)
(In millions)
133,825
2012
71,164 ￦
￦
Gain on disposal of property, plant and equipment
2012
143
139,263 $
(1) Other income for the years ended December 31, 2013 and 2012, consists of the following:
(In millions)
Description
-
141,227 $
32. OTHER INCOME AND EXPENSES:
Gain on foreign currency transaction
(1) Financial income for the years ended December 31, 2013 and 2012, is as follows:
57,847
Loss on disposal of AFS financial assets
462,869
31. FINANCIAL INCOME AND EXPENSES:
2012
70,007 ￦
￦
Description
Interest income
(In millions)
Interest expenses
Postemployment benefits
Rental
2013
2012
(In thousands)
(In millions)
Salaries
Korean won
Description
Miscellaneous revenues
-
736
-
3,201
-
3,033
-
39,686
35,193
37,606
33,350
166,495 ￦
￦
1,331
162,907
133
153,509 $
157,770 $
145,465
(2) Other expenses for the years ended December 31, 2013 and 2012, consist of the following:
Korean won
Description
2013
34. INCOME TAX EXPENSE:
2012
2013
￦
Loss on foreign currency translation
Commission expenses
2012
Korean won
Description
(In thousands)
(In millions)
Loss on foreign currency transaction
(1) The components of income tax expense for the years ended December 31, 2013 and 2012, are as follows:
64,683 ￦
41,867 $
61,293 $
39,673
22,790
14,316
21,596
13,566
957
1,006
907
953
30,881
26,026
29,263
24,662
Donations and contributions
5,232
2,478
4,958
2,348
Loss on disposal of property, plant and equipment
4,288
1,013
4,063
960
Other bad debt expenses
69
1,296
65
Impairment loss on property, plant and equipment
Loss on disposal of intangible assets
1,559
-
1,477
1,228
-
Impairment loss on intangible assets
3,871
582
3,668
552
Depreciation expenses on assets not in use
4
24
4
23
Loss on foreign operation translation
-
672
-
637
58,477
107,151
55,413
101,536
Miscellaneous expenses
192,811 ￦
￦
196,431 $
182,707 $
2013
2012
2013
(In thousands)
(In millions)
Income tax currently payable
184,708 ￦
￦
Adjustments for past income tax expenses
Change in deferred income tax due to temporary differences
Income tax expense directly charged to equity
Income tax expense
212,846 $
(4,935)
9,906
(4,676)
(35,993)
(71,911)
(34,107)
(68,143)
33,159
34,050
31,421
170,050 $
Korean won
Description
2013
2012
2013
2013
5,386,478 ￦
Changes in other inventories
5,055,917 $
2012
5,104,215 $
4,790,976
123,631
40,217
117,152
38,110
Salaries and employee benefits
1,256,200
1,074,651
1,190,372
1,018,337
Outside processing expenses
4,885,076
4,709,127
4,629,087
4,462,359
Depreciation and amortization and others
93,267
85,803
88,380
81,307
Bad debt expenses
31,412
84,156
29,766
79,746
Financial expenses
216,292
224,645
204,958
212,873
1,492,836
1,627,555
1,414,608
1,542,268
Others
￦
13,485,192 ￦
134
12,902,071 $
12,778,538 $
Disallowed expenses
Tax credit and tax exempt for the period
(In thousands)
(In millions)
￦
Disallowed income
2012
2012
(In thousands)
761,972 ￦
737,010 $
722,043 $
698,389
189,324
176,406
179,403
167,162
(3,501)
(3,183)
(3,318)
(3,016)
Adjustments:
The classification of expenses by nature for the years ended December 31, 2013 and 2012, is as follows:
Use of inventories
￦
Income tax expense calculated at applicable tax rates
2013
161,139
(In millions)
Korean won
32,266
182,250 $
accounting and income tax expense pursuant to Corporate Income Tax Law of Korea are as follows:
Income before income tax expense
Description
201,692
10,454
192,328 ￦
￦
175,030 $
(2) For the years ended December 31, 2013 and 2012, the differences between income before income tax expense in financial
186,138
33. CLASSIFICATION OF EXPENSES BY NATURE:
2012
9,334
13,099
8,845
12,413
(24,497)
(20,590)
(23,213)
(19,511)
Adjustments for past income tax expense
10,454
(4,935)
9,906
(4,676)
The changes in unrecognized deferred tax assets/liabilities
10,654
10,216
10,096
9,681
560
(963)
531
(914)
Others
Income tax expense
Effective tax rate
192,328 ￦
￦
25.24%
12,225,976
135
170,050 $
23.07%
182,250 $
25.24%
161,139
23.07%
(3) The changes in deferred income tax due to temporary differences for the year ended December 31, 2013, are as follows:
Description
Korean won
Description
Beginning of year
Changes
￦
(2,456) ￦
Asset revaluation
424 ￦
(2,032)
Trade receivables and other receivables
33,341
(10,782)
22,559
Inventories
12,310
(952)
11,358
36,647
6,582
43,229
Investment property
18,753
(7,703)
11,050
1,381
723
2,104
23,684
-
23,684
Impairment loss on long-term investment securities, etc.
(1,826)
1,242
(584)
Retirement benefit obligations
85,322
26,615
111,937
(20,887)
(3,783)
(24,670)
Retirement insurance fee
(57,308)
(15,383)
(72,691)
Provisions, etc.
27,109
2,424
29,533
89,216
(3,097)
86,119
Reserves
(7,814)
(7,709)
(15,523)
Foreign operation translation
(1,725)
(2,204)
(3,929)
Interest income
(6,584)
(623)
(7,207)
Valuation of derivatives
(338)
337
(1)
(12,498)
1,744
(10,754)
Borrowing costs
(2,390)
(1,125)
(3,515)
Revaluation profit
(63,880)
1,593
(62,287)
Gain/loss on foreign currency translation
Carried forward tax credit
410
89
499
Deficit carried forward
101
14,422
14,523
(41,506)
30,392
(11,114)
10,271
503
10,774
Gain on valuation of AFS financial assets
Remeasurements of defined benefit plan
34,557
Deferred tax assets
￦
136
153,890 ￦
2,264
35,993 ￦
Changes
End of year
(In thousands)
End of year
(In millions)
Asset revaluation
Beginning of year
36,821
$
(2,327) $
31,593
Inventories
Investment property
402 $
(1,925)
(10,217)
21,376
11,665
(902)
10,763
34,727
6,237
40,964
17,770
(7,299)
10,471
1,309
685
1,994
22,443
-
22,443
(1,730)
1,177
(553)
80,851
25,220
106,071
(19,792)
(3,585)
(23,377)
(54,305)
(14,577)
(68,882)
Provisions, etc.
25,688
2,297
27,985
84,541
(2,935)
81,606
Reserves
(7,405)
(7,305)
(14,710)
(1,635)
(2,089)
(3,724)
Interest income
(6,239)
(590)
(6,829)
(320)
319
(1)
(11,843)
1,653
(10,190)
Borrowing costs
(2,265)
(1,065)
(3,330)
Revaluation profit
(60,533)
1,510
(59,023)
Deferred tax assets
$
189,883
137
389
84
473
96
13,666
13,762
(39,330)
28,799
(10,531)
9,732
477
10,209
32,746
2,145
145,826 $
34,107 $
34,891
179,933
(4) The changes in deferred income tax due to temporary differences for the year ended December 31, 2012, are as follows:
Description
Korean won
Description
Beginning of year
Changes
￦
(2,456) ￦
- ￦
(2,456)
18,023
15,318
33,341
Inventories
12,051
259
12,310
36,766
(119)
36,647
Investment property
16,281
2,472
18,753
2,451
(1,070)
1,381
23,676
8
23,684
(2,310)
484
(1,826)
68,142
17,180
85,322
(3,139)
(17,748)
(20,887)
(59,938)
2,630
(57,308)
9,967
17,142
27,109
86,365
2,851
89,216
Reserves
(8,426)
612
(7,814)
(625)
(1,100)
(1,725)
(5,476)
(1,108)
(6,584)
Provisions, etc.
Interest income
Borrowing costs
Revaluation profit
(1,487)
1,149
(338)
(14,197)
1,699
(12,498)
(96)
(2,294)
(2,390)
(64,049)
169
(63,880)
-
410
410
320
(219)
101
(45,034)
3,528
(41,506)
(2,583)
12,854
10,271
17,753
16,804
34,557
81,979 ￦
71,911 ￦
Deferred tax assets
￦
138
End of year
(In thousands)
Asset revaluation
Changes
End of year
(In millions)
Asset revaluation
Beginning of year
$
(2,327) $
17,078
Inventories
Investment property
- $
(2,327)
14,515
31,593
11,420
245
11,665
34,839
(112)
34,727
15,428
2,342
17,770
2,323
(1,014)
1,309
22,435
8
22,443
(2,189)
459
(1,730)
64,571
16,280
80,851
(2,975)
(16,817)
(19,792)
(56,797)
2,492
(54,305)
9,444
16,244
25,688
81,839
2,702
84,541
Reserves
(7,984)
579
(7,405)
(592)
(1,043)
(1,635)
Interest income
(5,189)
(1,050)
(6,239)
(1,409)
1,089
(320)
(13,453)
1,610
(11,843)
(91)
(2,174)
(2,265)
(60,693)
160
(60,533)
389
Provisions, etc.
Borrowing costs
Revaluation profit
-
389
304
(208)
96
(42,674)
3,344
(39,330)
(2,448)
12,180
9,732
16,823
15,923
32,746
77,683 $
68,143 $
Deferred tax assets
$
153,890
139
145,826
(5) Unrecognized deferred tax assets (liabilities) as of December 31, 2013 and 2012, are as follows:
(6) Income tax expense directly charged to equity for the years ended December 31, 2013 and 2012, is as follows:
Korean won
December 31, 2013
Description
Deferred income
tax assets
(liabilities)
Temporary
differences
Korean won
Description
December 31, 2012
Temporary
differences
Deferred income
tax assets
(liabilities)
(In millions)
￦
36,095 ￦
￦
26,706 ￦
6,463
24,981
6,046
24,871
6,019
472,368
114,313
472,368
114,313
-
-
2,948
713
15,917
2,068
3,425
829
549,361
131,162
530,318
128,337
8,735 ￦
3,896
503
12,855
2,264
17,299
34,050
Description
2013
2012
(In thousands)
Investments in subsidiaries
(795,019)
(192,395)
(827,371)
(200,224)
(795,019)
(192,395)
(827,371)
(200,224)
Deferred tax assets (liabilities) charged to equity
Loss on valuation of AFS financial assets
$
December 31, 2013
Description
3,692
477
12,182
2,145
16,392
32,266
December 31, 2012
Deferred income
tax assets
(liabilities)
Temporary
differences
28,799 $
31,421 $
$
Temporary
differences
Deferred income
tax assets
(liabilities)
35. EARNINGS PER SHARE:
Basic earnings per share for the years ended December 31, 2013 and 2012, are computed as follows. The Parent Company does not
(In thousands)
compute diluted earnings per share for the years ended December 31, 2013 and 2012, because there is no dilution effect.
Unrecognized deferred tax assets:
$
34,204 $
8,277 $
25,307 $
6,124
23,672
5,729
23,568
5,704
447,615
108,323
447,615
108,323
-
-
2,794
676
15,082
1,960
3,244
785
520,573
124,289
502,528
121,612
Unrecognized deferred tax liabilities:
30,392 ￦
33,159 ￦
￦
Unrecognized deferred tax liabilities:
2012
Deferred tax assets (liabilities) charged to equity
Loss on valuation of AFS financial assets
(In millions)
Unrecognized deferred tax assets:
2013
(753,358)
(182,313)
(784,015)
(189,732)
(753,358)
(182,313)
(784,015)
(189,732)
140
Korean won
Description
2013
2012
2013
Net income attributable to owners of the Parent Company
503,634 ￦
509,856 $
477,241 $
(54)
(54)
(51)
(51)
503,580
509,802
477,190
483,087
111,355,765
111,355,765
111,355,765
111,355,765
￦
Expected dividends on preferred stocks
Net income available to common share
Weighted-average number of common shares outstanding (shares)
Basic earnings per share
2012
4,522 ￦
￦
141
4,578 $
4 $
483,138
4
36. RELATED-PARTY TRANSACTIONS:
2013
(1)Significant transactions, sales, purchases, etc., for the years ended December 31, 2013 and 2012, between the Group and
Description
related parties or affiliates by Monopoly Regulation and Fair Trade Act of the Republic of Korea (“Act”) are as follows:
Disposal of property,
Purchases and other
plant and equipment,
expenses
etc.
Sales and other
income
Korean won
(In thousands)
2013
Description
Entities with significant influence over the Group:
Purchases and other
expenses
etc.
Sales and other
income
Acquisition of
property, plant and
equipment, etc.
91,602 ￦
￦
(In millions)
96,668 ￦
￦
1,036
- ￦
-
18,774 ￦
2,968
201
396
58
-
4,860
-
97,762
-
26,602
597
20,347
-
317
4,605
565
19,281
-
300
-
22,599
-
-
-
Associates:
23,853
-
-
-
6,460
-
-
-
-
Miraeseum 3rd
8,587
-
-
-
Others
17,552
-
(485)
2
98,332
-
(185)
2
10,286
-
281
-
16
-
29,595
14,830
2,221
-
3,407
2
12,523
-
33,283
14,832
-
-
-
-
-
-
Daejeon Clean Water Co., Ltd.
6,817
-
-
-
Miraeseum 3rd
9,062
-
-
-
Hyundai Card Co., Ltd.
Other related parties:
18,523
-
(512)
2
Hyundai Rotem Company
103,770
-
(195)
2
Others
10,855
-
297
-
17
-
31,232
15,650
2,344
-
3,595
2
13,216
-
35,124
15,652
Affiliates by the Act (*)
Hyundai Steel Company
310,356
-
390,979
-
Hyundai Amco Co.,Ltd.
20,917
-
5,628
-
350
19
68,732
8,681
331,623
19
465,339
8,681
Others
327,519
-
412,600
-
22,074
-
5,939
-
369
20
72,533
9,161
349,962
20
491,072
9,161
Others
142
375
25,207
25,172
Others
190
-
23,849
2,812
-
17,790 ￦
55
Others
-
Associates:
- ￦
982
92,639
Acquisition of
property, plant and
equipment, etc.
(*) Included in the group of Hyundai Motor Company under the Act.
143
Korean won
2012
Description
2012
Purchases and other
expenses
etc.
Sales and other
income
Description
Acquisition of
property, plant and
equipment, etc.
Purchases and other
expenses
etc.
Sales and other
income
(In millions)
(In thousands)
Acquisition of
property, plant and
equipment, etc.
7,084 ￦
￦
- ￦
-
2,935
-
-
4,860
-
-
25,321
-
711
-
1,824
9,619
17,526 ￦
Associates:
6,713 ￦
￦
- ￦
674
-
1,728
9,115
16,608 ￦
-
2,781
-
-
4,605
-
-
23,994
-
11,418
-
30
-
6,603
-
-
-
29,832
-
-
-
6,890
-
-
-
473
-
-
-
Associates:
12,049
-
32
-
6,968
-
-
-
31,482
-
-
-
7,271
-
-
-
499
-
-
-
Miraeseum 3rd
Hyundai Energy Inc.
63,705
-
-
-
Hyundai Energy Inc.
60,367
-
-
-
Others
58,038
-
2,832
-
Others
54,996
-
2,684
-
180,012
-
2,864
-
170,579
-
2,714
-
Miraeseum 3rd
6,378
-
320
-
6,044
-
303
-
1,996
-
4
-
1,891
-
4
-
34
-
2,467
-
Others
32
-
2,338
-
8,408
-
2,791
-
7,967
-
2,645
-
213,996
-
344,904
-
118,807
-
1,263
76,300
11,996
-
175,374
825
344,799
-
521,541
77,125
Others
Others
202,782
-
326,830
-
112,581
-
1,197
72,302
11,368
-
166,184
782
326,731
-
494,211
73,084
Others
144
145
(2) Significant fund transactions and equity contribution transactions for the year ended December 31, 2013 and 2012, between
the Group and related parties or affiliates by the Act are as follows:
2012
Description
Loans
Korean won
Lending
2013
Description
Loans
Lending
Borrowing
Investment in
cash
Repayment
Associates:
￦
2,401 ￦
Investment in
cash
Repayment
Associates:
(In millions)
Borrowing
(In thousands)
Borrowings
Collection
Borrowings
Collection
- ￦
- ￦
- ￦
-
-
-
-
-
7,442
-
-
-
-
27,182
The 2nd Seoul-Incheon Linking Highway Co., Ltd.
-
-
-
-
3,503
Others
-
-
-
-
24,363
2,401
-
-
-
62,490
- ￦
- ￦
- ￦
- ￦
-
-
-
-
2,682
-
-
-
-
9,897
Others
-
-
-
-
3,108
-
-
-
-
26,550
￦
10,863
(3) As of December 31, 2013 and 2012, significant balances related to the transactions between the Group and related parties
or affiliates by the Act are as follows:
Korean won
2013
Description
2013
Description
Loans
Lending
Borrowings
Collection
Borrowing
Trade
receivables
Investment in
cash
Repayment
2,275 ￦
- ￦
- ￦
- ￦
-
-
-
-
-
7,052
-
-
-
-
25,758
-
-
-
-
3,319
Others
-
-
-
-
23,086
2,275
-
-
-
59,215
Borrowings
Collection
Borrowing
Investment in
cash
Repayment
(In millions)
- ￦
- ￦
- ￦
- ￦
-
-
-
-
2,830
-
-
-
-
10,444
Others
-
-
-
-
3,280
-
-
-
-
28,018
￦
11,464
45,805 ￦
- ￦
5,527 ￦
144 ￦
- ￦
440
1,819
-
16
-
-
-
47,624
-
5,543
144
-
440
4,222
-
50
-
-
1,326
-
-
-
-
94
9,771
-
-
-
-
-
-
2,401
37
-
-
2
Others
1,049
-
-
-
-
-
651
-
-
-
-
-
4,534
-
8,828
-
-
256
25,644
2,401
8,915
-
-
1,678
1,672
-
-
-
-
7,441
-
-
7,553
14,137
-
1,534
Others
-
-
-
441
-
76
1,672
-
7,553
14,578
-
9,051
Others
146
￦
5,417
Associates:
Others
Miraeseum 3rd
2012
Lending
Borrowings
Korean won
Loans
Trade
payables
Others
Associates:
Busan Jungkwan Energy Co., Ltd
Description
Loans
Associates:
￦
Payables
(In millions)
(In thousands)
Receivables
28,066
-
1,628
56,101
-
4,575
370
-
16,772
-
-
9,783
-
-
555
18,193
-
4,560
28,436
-
18,955
74,294
-
18,918
147
Korean won
2013
Description
2012
Receivables
Trade
receivables
Description
Payables
Loans
Trade
payables
Others
Borrowings
Receivables
Trade
receivables
Others
Payables
Loans
Others
(In thousands)
$
43,405 $
5,237 $
136 $
1,724
- $
-
15
-
- $
-
417
-
45,129
-
5,252
136
-
417
4,001
-
47
-
-
1,257
5,133
-
-
-
-
89
9,259
-
-
-
-
-
-
-
-
-
-
2,744
-
-
-
-
-
574
-
-
-
-
221
-
-
617
-
-
-
-
-
4,296
-
8,366
-
-
242
24,300
2,275
8,448
-
-
1,590
Others
-
-
-
418
-
72
1,584
-
7,157
13,814
-
8,577
Others
50
-
-
-
Hyundai Energy Inc.
Miraeseum 3rd
13,698
-
-
-
Others
72,793
-
3,150
201
-
163
108,461
-
3,418
206
-
1,684
2,402
-
1,543
53,161
-
4,335
351
-
15,893
-
-
9,270
-
Others
26,595
2,231
10,872
Miraeseum 3rd
1,454
-
-
-
7,051
-
580
1,300
-
-
1,958
-
-
-
1
-
-
2
-
-
-
-
13,396
2,002
10,520
5
-
-
-
-
-
7,157
2,231
268
-
-
- ￦
-
-
-
-
580 ￦
-
35
-
-
3,009
-
1,584
1,957 ￦
-
4,721
2,275
- ￦
63
-
8,455 ￦
994
￦
Associates:
Others
Others
Associates:
Borrowings
(In millions)
Trade
payables
721
-
-
-
-
66
-
7,894
13
-
-
-
-
-
187
-
13
787
-
7,894
200
-
2,415
-
-
526
17,240
-
4,322
160,089
-
7,301
108,105
-
28,545
26,946
-
17,962
70,401
-
17,927
6,968
-
68,086
499
-
4,001
Others
8,750
-
352
32,550
-
4,790
175,807
-
75,739
141,154
-
37,336
148
149
2012
Description
Receivables
Trade
receivables
Description
Payables
Loans
Trade
payables
Others
December 31, 2013
Borrowings
Allowance for
doubtful account
Others
December 31, 2012
Bad debt
expenses
Allowance for
doubtful account
Bad debt
expenses
(In thousands)
Associates
(In thousands)
35,285 $
$
- $
33,010 $
3,213
8,012 $
$
1,854 $
550 $
60
- $
-
-
-
1,897
-
1
-
- $
2,114
-
-
(5) Pledged assets provided as collateral for related parties as of December 31, 2013, are as follows:
Korean won
-
9,969
-
1,855
550
-
2,114
2,851
-
-
-
-
1,232
4,474
-
254
5
-
-
10,302
-
-
-
-
-
2,600
-
-
-
-
-
544
-
-
-
-
209
47
-
-
-
-
-
Hyundai Energy Inc.
12,980
-
-
-
Others
68,979
-
2,985
190
-
154
102,777
-
3,239
195
-
1,595
Description
Associates:
Miraeseum 3rd
-
-
-
-
2,276
63
-
7,480
12
-
-
-
-
-
177
-
12
746
-
7,480
189
-
2,288
Others
151,700
-
6,918
102,440
-
27,049
6,603
-
64,518
473
-
3,791
Others
8,291
-
334
30,844
-
4,539
166,594
-
71,770
133,757
-
35,379
38,451
Kookmin Bank and others
Loan guarantee
21,569
Loan guarantee
13,367
Loan guarantee
Others
Pledging of shares
￦
6
73,393
￦
Description
Description of
pledged assets
Book value
-
36,436
Loan guarantee
20,439
Loan guarantee
12,667
Loan guarantee
Others
Pledging of shares
$
6
69,548
$
Korean won
Bad debt
expenses
December 31, 2012
Allowance for
doubtful account
Bad debt
expenses
(In millions)
Associates
37,236 ￦
￦
150
- ￦
34,835 ￦
Remarks
(In thousands)
Allowance for
doubtful account
Security holder
Associates:
(4) Details of allowance for doubtful accounts related to account balances with related parties as of December 31, 2013 and
Description
Remarks
-
(*) Included in the Group of Hyundai Motor Company under the Fair Trade Act.
December 31, 2013
Security holder
(In millions)
-
683
Book value
Associates:
Description of
pledged assets
3,391
151
(6) Supplemental funding arrangements and others provided to related parties as of December 31, 2013, are as follows:
37. PLEDGED ASSETS:
Korean won
Description
Description of
pledged assets
Book value
(1) Pledged assets provided as collateral for the Group’s borrowings and guarantees as of December 31, 2013, are as follows:
Security holder
Remarks
Description of
pledged assets
(In thousands)
(In millions)
Korean won
Detailed title
Book value
Security holder
Associates
￦
4,425 $
4,193
Supplemental funding arrangements of borrowings
Remarks
(In millions)
Financial assets AFS (non-current)
Construction Guarantee
Cooperative
Seosan Chongchun Co., Ltd.
28,235
26,755
Uljuchongchun Co., Ltd.
25,524
24,186
23,025
21,818
Ulsan Chongchun Co., Ltd.
27,847
26,388
Due from financial institution
Korea Exchange Bank and others
Current transaction deposit
Jinju Chongchun Co., Ltd.
28,795
27,286
7,704
First Gulf Bank
For construction warranty
12,250
11,608
17,500
16,583
398
First Gulf Bank
9,960
9,438
Interest on due from financial
institution
Other operation key money
10,369
9,826
Overseas construction guarantee and others
5,375
4,825
4,573
Overseas construction guarantee and others
182,654
Korea Specialty Contractor Financial
Cooperative
(*) Limits on payment guarantee are equal to the amount of guarantee provided as of December 31, 2013.
Cooperative
(7) Compensation for registered directors and unregistered directors of the Group for the years ended December 31, 2013 and
Hyundai Energy Inc.
Miraeseum 3rd
Hyundai Engineering Pakistan (Private) Limited
￦
192,755 $
Korean won
Description
2013
2013
40,657 ￦
5,416
Long-term employee salaries
￦
44,890 $
3,792
38,527 $
21,859
Korea Housing Guarantee Co., Ltd
For construction warranty and others
Seoul Guarantee Insurance Co., Ltd
Deposit for license
For borrowings
20
Deposit for license
1,148
Cooperative
Guarantee for contract and guarantee
for advance payment and others
309
-
Pledging of shares
108,590
Detailed title
Book value
Security holder
5,132
22
371
21
46,095 ￦
49,053 $
43,680 $
Remarks
(In thousands)
42,538
3,593
352
46,483
Cooperative
$
67,919
20,714
Korea Housing Guarantee Co., Ltd
Current transaction deposit
7,300
First Gulf Bank
377
First Gulf Bank
Interest on due from financial
institution
Other operation key money
5,093
Cooperative
Cooperative
Hyundai Energy Inc.
33
63
$
152
(In thousands)
(In millions)
￦
Description of
pledged assets
2012
67
2012
71,675
35
￦
Short-term employee salaries
￦
Deposit for license
For borrowings
19
Deposit for license
1,088
Cooperative
293
-
Pledging of shares
102,899
153
In addition to the above matter, the common stock of Hyundai Energy Inc. is established as a pledge right that is offered by the stockholders,
and the insurance (￦908,216 million ($860,624 thousand)) for plants is established as a pledge right. Plants located in Yeosu will be
Company
Description of
pledged assets
established a pledge right within six months from completion according to contract with lender. The book value of property, plant and
equipment that will be offered a pledge right is ￦505,025 million ($478,561 thousand) as of December 31, 2013, and borrowings that are
related to it are ￦390,000 million ($369,563 thousand).
(2) Pledged assets provided as collateral by the Group to other parties, excluding the Group’s related parties as of December
31, 2013, are as follows:
Korean won
Company
Description of
pledged assets
Detailed title
Book value
Security holder
Remarks
Loan guarantee
(In millions)
2,070
Kangnam Beltway Co., Ltd.
55,771
Loan guarantee
32,102
Loan guarantee
Kaya Railroad Co., Ltd.
-
National Pension Service and others
Loan guarantee
Taekwang-Doksan Project Financial
Investment
Investment
HanWon PFV.
HanWon PFV.
1,592
995
-
National Pension Service and others
Loan guarantee
Arenapark Development Co., Ltd.
-
Loan guarantee
Pusan Finance Center PFV Co., Ltd.
8,404
Loan guarantee
Mileseum Co., Ltd.
Mileseum Co., Ltd.
-
Loan guarantee
Loan guarantee
The Second Mileseun Co., Ltd.
-
Hanwha General Insurance Co., Ltd.,
and others
Heemangsewoom Co., Ltd.
-
Korea Finance Corporation and
others
Loan guarantee
Investment
Investment
Loan guarantee
HanWon PFV.
HanWon PFV.
1,509
943
Hana Bank and others
Loan guarantee
Loan guarantee
Loan guarantee
Korea Finance Corporation and
others
Loan guarantee
Loan guarantee
Loan guarantee
Loan guarantee
Loan guarantee
Seoul integrated freight terminal PFV
Co., Ltd.
Co., Ltd.
3,500
Korea Development Ban
Investment property Land
36,735
$
3,705
38,766
Kimlatiera PFV Co., Ltd
ERail Co., Ltd.
147,370
Loan guarantee
Loan guarantee
￦
Loan guarantee
Hanwha General Insurance Co., Ltd.,
and others
ERail Co., Ltd.
Investment property Land
30,420
Korea Development Ban
Korea Development Bank and
others
Kimlatiera PFV Co., Ltd
52,848
3,317
-
Co., Ltd.
$
Co., Ltd.
-
Loan guarantee
Loan guarantee
Mileseum Co., Ltd.
1,962
3,511
Loan guarantee
(In thousands)
ERail Co., Ltd.
Loan guarantee
Mileseum Co., Ltd.
Remarks
Security holder
ERail Co., Ltd.
-
Book value
Korea Development Bank and
others
8,869
￦
Detailed title
Loan guarantee (*)
139,649
(*) Payment guarantee limits of lands in investment property are ￦59,000 million ($55,908 thousand) for loan guarantee.
38. COMMITMENTS AND CONTINGENCIES:
(1) Guarantees provided by the Group to other parties, excluding the Group’s related parties, as of December 31, 2013, are as
Loan guarantee (*)
follows:
Korean won
Beneficiary
Translation into U.S. dollars
(Note 2)
Remarks
(In millions)
Samchang village rebuilding association and others
￦
1,178,566 $
1,116,807 Business drive expense
Gangseo Hillstate Housing contractors and others
302,216
286,379 Moving expense
Namyangju-si Jigeum-dong reconstruction association and others
847,489
803,079 Middle payment
Heemangsewoom Co., Ltd. and others
256,219
242,793 Fund supplement agreements
Pyeongtaek segyo district development association
3,321
￦
2,587,811 $
3,147 Farmland installment payment guarantee
2,452,205
(*) Payment guarantee limits are ￦4,350,245 million ($4,122,283 thousand).
As part of commercial practice of the Korean construction industry, the Group bears joint guarantee for construction related to housing sales
guarantee provided by Korea Housing Guarantee Co., Ltd., as of December 31, 2013.
154
155
As of December 31, 2013, the Group has provided minimum revenue guarantee to a financial investor as construction investor in connection
with Pusan Finance Center PFV Co., Ltd., and others.
$2,689,008 thousand related to the overseas construction.
(2) In connection with the development company’s project financing (“PF”) borrowing, the major guarantees provided by the
Group as of December 31, 2013, are as follows:
Area
Loan
amount
Loan
amount
(In millions)
Gyeonggi
Nonmonetary institutions
Gyeonggi
￦
(5) As of December 31, 2013, the Group is accused in 166 lawsuit cases pending as a defendant regarding claims for damage,
etc., and these litigations are valued as ￦444,988 million ($421,670 thousand). The outcome of such lawsuits cannot be
dollars (Note 2)
Korean won
Financial
institution
(4) As of December 31, 2013, the Group had credit limit agreements with Korea Exchange Bank and others for LC amounting to
Beginning
date
currently determined. The Group accounted the above lawsuit as litigation provision amounting to ￦84,463 million ($80,037
Maturity
Description
Type
(6) The Group has pledged five blank notes and two notes (￦4,798 million ($4,547 thousand)), seven blank checks and six
(In thousands)
159,237 $
99,500
thousand) as of December 31, 2013.
150,893
06/11/2013
06/10/2014
Joint guarantee
ABCP
94,286
06/10/2013
03/10/2014
Joint guarantee
ABCP
checks (￦25,872 million ($24,516 thousand)) as collateral for borrowings and payment guarantees.
Gyeonggi
82,100
77,798
04/25/2013
02/25/2015
Joint guarantee
ABCP
South of Chuncheong
80,700
76,471
10/18/2012
10/20/2014
Joint guarantee
ABCP
South of Chuncheong
80,700
76,471
10/18/2012
10/20/2014
Joint guarantee
ABCP
800%, collateral is not to exceed 200% of equity and disposal of assets should not to exceed ￦2,000,000 million ($1,895,196
Gyeonggi
62,700
59,414
04/01/2013
06/01/2015
Joint guarantee
ABCP
thousand) a year. If the Parent Company fails to meet such conditions, the parent Company’s rights may be forfeited. Bonds
issued with the above conditions amounted to ￦1,250,000 million ($1,184,497 thousand).
Gyeonggi
60,000
56,856
10/07/2011
10/07/2014
Joint guarantee
ABCP
Gyeonggi
60,000
56,856
06/28/2013
05/16/2014
Joint guarantee
ABCP
Gyeonggi
Bank
Gyeonggi
￦
56,500
53,539
02/14/2012
06/14/2015
Joint guarantee
LOAN
56,420 $
53,463
04/01/2013
05/06/2015
Joint guarantee
ABCP
In addition, the total PF borrowing balances that the Group guaranteed for developer’s PF borrowings are ￦1,701,546 million ($1,612,381
(7) The bond issuance contracts provide for such terms and conditions that the debt-to-equity ratio is to be kept at less than
(8) Long-term contracts of Hyundai Energy Inc. are as follows:
Institution
Description
Period
thousand) including the above major guarantees and consist of ABCP type for ￦1,482,800 million ($1,405,098 thousand) and other PF Loan
Korea South-East Power Co., Ltd.
Real estate lease
27 years from 04/01/2010
type for ￦218,746 million ($207,283 thousand). Moreover, the limits of payment guarantee for the borrowing balances of PF borrowings,
Boim Energy Co., Ltd. and Korea South-East Power
Co., Ltd.
Coal purchases
25 years from coal supply starting
Boim Energy Co., Ltd.
Coal unloading, storage and transit piping
management of heat
27 years from 04/01/2010
Operation and maintenance of integrated energy
business
25 years from two months before completion of the
integrated energy facilities in Yeosu
which are ￦1,701,546 million ($1,612,381 thousand), are ￦1,957,680 million ($1,855,093 thousand).
(3) Guarantees provided to the Group by other parties, excluding the Group’s related parties as of December 31, 2013, are as follows:
Guarantee
Korean won
￦
Seoul Guarantee Insurance Co., Ltd.
Remarks
Hyundai Energy Inc. changed due date on completion of the integrated energy facilities with consent of unsubordinated lender from
(In thousands)
(In millions)
Korea Construction Financial Cooperative
Translation into
U.S. dollars
(Note 2)
6,804,970 $
6,448,375
Guarantee for construction and others
931,002
882,215
1,993,683
1,889,210
79,295
75,140
Guarantee for housing and others
6,207,651
5,882,357
17,903
16,965
Guarantee for contract and others
Engineering Financial Cooperative
59,391
56,279
Guarantee for overseas construction and others
950
900
2,320,416
2,198,821
150
143
33,147
31,410
Pledging of shares
NH Power the 2nd Co., Ltd.
14,402
13,647
Pledging of shares
NongHyup Bank
9,601
9,098
Pledging of shares
Boim Energy Co., Ltd.
1,143
1,083
Pledging of shares
The Export-Import Bank of Korea and others
Korea Exchange Bank
￦
18,473,704 $
the requirement of comprehensive completion is not satisfied until changed due date and it is not solved within 30 days from date of receipt
of corrective notice of Korea Development Bank.
Korea Specialty Contractor Financial Cooperative
06/30/2012 to 12/31/2012. Cause of loss of benefit of time related to ￦408,920 million ($387,492 thousand) for borrowings may happen if
Guarantee for other foreign currency payment
Guarantee for other foreign currency payment
17,505,643
156
157
39. CONSOLIDATED STATSMENTS:
(3)Deduction of income not involving cash inflows and others for the years ended December 31, 2013 and 2012, is as follows:
Korean won
(1) The cash and cash equivalents in the consolidated statements of cash flows are the same as the cash and cash equivalents
Description
in the consolidated statements of financial position.
2013
2012
2013
2012
(In thousands)
(In millions)
(2) Additions of expenses not involving cash outflows and others for the years ended December 31, 2013 and 2012, are as
follows:
Korean won
Description
2013
2012
2013
(In thousands)
(In millions)
Transfer to provision for construction warranties
2012
52,632 ￦
59,683 $
49,874 $
56,555
Transfer to provision for construction loss
46,138
37,002
43,723
35,064
Transfer to provision for litigation
26,771
56,978
25,368
53,992
69,606
53,545
65,958
50,739
Depreciation
89,091
82,763
84,422
78,426
540
503
512
477
4
24
4
23
3,632
2,513
3,442
2,381
531
58,130
503
55,084
30,881
26,026
29,263
24,662
Other long-term employee benefits
(2,011)
1,298
(1,906)
1,230
Loss on foreign currency translation (financial expenses)
12,896
-
12,220
-
￦
Depreciation of investment property
Depreciation expenses on assets not in use
Amortization of intangible assets
Bad debt expenses
Other bad debt expenses
Loss on foreign currency translation (financial expenses)
13,310
37,159
12,613
35,212
Loss on foreign currency translation (other expenses)
22,790
14,316
21,596
13,566
-
672
-
637
Loss on valuation of derivatives
-
151
-
143
4,288
1,013
4,063
960
69
1,296
65
1,228
1,559
-
1,477
-
Impairment loss on intangible assets
3,871
582
3,668
552
13
49
12
46
-
622
-
589
22,289
4,668
21,121
4,423
Loss on disposal of property, plant and equipment
Loss on disposal of intangible assets
Loss on disposal of AFS financial assets
Loss on disposal of investments in associates
Impairment loss on AFS financial assets
Impairment loss on investments in associates
Loss on valuation using equity method
Interest expenses
Income tax expense
￦
683
4,689
647
4,443
14,161
14,274
13,419
13,526
70,007
61,046
66,338
57,847
192,329
170,050
182,250
161,139
676,080 ￦
689,052 $
640,652 $
652,944
Reversal of provision for construction warranties
6,701 ￦
￦
6,350 $
9,337
Reversal of provision for construction loss
73,786
33,793
69,918
32,025
Reversal of provision for litigation
10,640
12,188
10,082
11,549
Gain on foreign currency transaction (financial income)
9,256
-
8,771
-
Gain on foreign currency translation (financial income)
11,695
10,163
11,082
9,630
Gain on foreign currency translation (other income)
3,265
21,565
3,446
20,435
Reversal of loss on foreign operation translation
3,201
-
3,033
-
Reversal of allowance for doubtful accounts
3,199
62,127
3,031
58,871
Gain on valuation of derivatives
Gain on disposal of property, plant and equipment
Gain on disposal of intangible assets
Gain on disposal of AFS financial assets
Gain on disposal of investments in associates
Gain on valuation using equity method
22
1,405
21
1,331
27,680
2,675
26,230
2,535
-
736
-
697
2,748
27,258
2,604
25,830
35,098
-
33,259
-
1,544
3,109
1,463
2,946
Interest income
67,481
75,642
63,945
71,678
Dividend income
2,369
5,452
2,245
5,166
-
1,589
-
1,505
Miscellaneous revenues
276,985 ￦
￦
249,436 $
262,469 $
236,365
(4)Investing and financing activities of non-cash transactions for the years ended December 31, 2013 and 2012, are as follows:
Korean won
Description
2013
2012
(In millions)
Current portion of long-term financial instruments
80,000 ￦
￦
95,020
14,036
251,254
Current portion of long-term borrowings
417,722
178,287
Current portion of long-term debentures issued
200,000
350,010
Description
2013
2012
(In thousands)
Current portion of long-term financial instruments
$
158
9,853 $
75,808 $
90,041
13,300
238,088
Current portion of long-term borrowings
395,832
168,944
Current portion of long-term debentures issued
189,520
331,669
159
40. RISK MANAGEMENT:
The Group deposits cash and cash equivalents, long-term and short-term financial instruments in Korea Exchange Bank and others. As
these financial institutions the Group makes transactions with are reputable financial institutions, the credit risks from them are considered
(1)Capital risk management
limited.
The purpose of capital risk management is to protect its ability to continuously provide profits to shareholders and parties in interest and to
maintain optimum capital structure to reduce capital expenses. To maintain or to adjust capital structure, the Group can adjust dividend,
return capital to shareholders, issue new shares to reduce liabilities and dispose assets.
② The maximum exposed amounts of credit risk
As of December 31, 2013, the maximum exposed amounts of credit risk for financial assets maintained by the Group are as follows.
The Group’s capital structure consists of net liability, which is borrowings less cash and cash equivalents and equity; the overall capital risk
Korean won
Description
management policy of the Group is unchanged from the prior period. Items managed as capital by the Group as of December 31, 2013 and
Book value
Exposed
amount
(In thousands)
(In millions)
Korean won
Description
Less: Cash and cash equivalents
￦
2,301,576 ￦
(In thousands)
1,696,242 $
2,180,969 $
1,607,355
(1,883,560)
(1,854,859)
(1,784,857)
(1,757,660)
418,016
(158,617)
396,112
(150,305)
Total liabilities
9,530,137
7,990,893
9,030,737
7,572,152
Total equity
5,203,075
4,755,936
4,930,423
4,506,716
Net borrowings
The ratio of net borrowings compared to equity
Debt ratio
￦
1,883,560 ￦
(In millions)
Total borrowings
8.03%
-
8.03%
-
183.16%
168.02%
183.16%
168.02%
1,883,560 $
1,784,857 $
1,784,857
266,240
266,240
252,288
252,288
Trade receivables
1,313,236
1,313,236
1,244,420
1,244,420
Other receivables
1,254,828
1,254,828
1,189,072
1,189,072
Long-term accounts receivables
349,296
349,296
330,992
330,992
567,922
567,922
538,162
538,162
54,123
54,123
51,287
51,287
(current)
22,661
22,661
21,473
21,474
(non-current)
72,790
72,790
68,976
68,976
Derivative assets
Financial guarantee
Other financial liability
(2) Financial risk management
Exposed
amount
Book value
￦
4
4
4
4
55,152
4,687,681
52,262
4,442,036
5,533,793 $
9,923,568
5,839,812 ￦
10,472,341 $
The Group is exposed to various financial risks, such as market risk (foreign exchange risk, interest rate risk and price risk), credit risk and
liquidity risk related to financial instruments. The purpose of risk management of the Group is to identify potential risks related to financial
performance and reduce, eliminate and evade those risks to a degree acceptable to the Group. Overall financial risk management policy of
the Group is the same as the prior period.
2) Liquidity risk
The Group establishes short-term and long-term fund management plans. The Group analyzes and reviews actual cash outflow and its
budget to correspond the maturity of financial liabilities to that of financial assets. Management believes that with proper financial liabilities, it
will be able to easily access cash when necessary for its operating activities and financial assets. The Group has overdraft agreements with
1) Credit risk
its main banks to manage liquidity risk, which may temporarily increase.
① Management policy of credit risk
The Group makes transactions with reputable financial institutions to manage credit risk and operate with policy and procedures for credit
enhancement of financial assets. The Group decides credit transaction limits based on evaluation of client’s credit, through information
obtained from the credit bureau and disclosed financial position at committing contracts. Also, the Group is provided collateral or payment
guarantees. The Group continually reviews the credit and the limits of credit of clients to adjust necessary collateral. For delayed collection of
financial assets, current state and collection measures are reported in each quarter and appropriate actions are taken in accordance with the
reason for any delays.
160
161
The maturity analysis of financial liabilities according to their remaining contract expiration as of December 31, 2013, is as follows:
Changes in net assets (before income tax) that are sensitive to changes in Korean won against the foreign currencies by 10% as of
Korean won
Korean won
Remaining contractual undiscounted cash flows
Description
Less than 1 year
More than
5 years
1–5 years
Currency
Total
(In millions)
Interest-bearing liabilities
735,416 ￦
￦
Non-interest-bearing liabilities
3,454,391
Description
1,374,965 ￦
613,194 ￦
350,777
10% increase
against
foreign currency
3,805,168
10% decrease
against
foreign currency
10% increase
against
foreign currency
USD
￦
10% decrease
against
foreign currency
(In thousands)
(In millions)
2,723,575
-
13,515 ￦
(13,515) $
12,807 $
(12,807)
AED
42,693
(42,693)
40,456
(40,456)
KWD
41,775
(41,775)
39,586
(39,586)
LYD
13,355
(13,355)
12,655
(12,655)
Remaining contractual undiscounted cash flows
QAR
12,686
(12,686)
12,021
(12,021)
Others
68,213
(68,213)
64,638
Less than 1 year
More than
5 years
1–5 years
Total
192,237 ￦
￦
(192,237) $
(64,638)
182,163 $
(182,163)
(In thousands)
Interest-bearing liabilities
696,879 $
$
Non-interest-bearing liabilities
3,273,373
1,302,914 $
332,396
581,061 $
-
2,580,854
3,605,769
② Management policy of foreign currency risk
The Group borrows funds with fixed and variable interest rates, and the Group is exposed to interest rate risk arising from financial
The total guarantee amounts related to the financial guarantee contract amounted to ￦4,687,681 million ($4,442,036 thousand).
instruments with variable interest rates. To manage the interest rate risk and to avoid the future cash flow fluctuation risk, the Group mainly
The above maturity analysis is based on the book value and the earliest maturity date by which the payments should be made.
uses fixed interest rate; however, it uses variable interest rates on occasion.
3) Market risk
The Group’s sensitivity to a 1% change in interest rates on income before income tax as of December 31, 2013, is as follows:
Korean won
① Management policy of foreign currency risk
Description
The Group is generally exposed to the risk of foreign currencies in USD, AED and KWD. The Group’s sensitivity to a 10% increase and
Increase by 1%
decrease in Korean won (functional currency of the Group) against the major foreign currencies as of December 31, 2013, is described in
the below table. This 10% is a sensitivity of management’s valuation on rational changes of foreign currency and it is applied when reporting
Decrease by 1%
Increase by 1%
(206) ￦
￦
The sensitivity analysis is conducted on monetary assets and liabilities denominated in foreign currencies other than functional currency as of
￦
Decrease by 1%
(In thousands)
(In millions)
Current position of long-term borrowings
internally the foreign currency risk to management.
206 $
(195) $
195
(11)
11
(10)
10
(2,174)
2,174
(2,060)
2,060
(2,391) ￦
2,391 $
(2,265) $
2,265
December 31, 2013. It only includes unsettled monetary accounts denominated in foreign currencies and adjusts foreign currency translation
expecting changes in foreign currency by 10% at the end of the fiscal year. Positive balance (+) represents increases of gains, losses and
others in equity section due to appreciation of Korean won. When Korean won is depreciated by 10% to other currencies, gains, losses and
other equity accounts are affected by the corresponding amount, which will lead to negative balance (-).
③ Price risks
The Group is exposed to price fluctuation risk arising from AFS equity investments. As of December 31, 2013 and 2012, the amount of
marketable AFS equity investments is as follows:
Korean won
Description
(In thousands)
(In millions)
142,763 ￦
￦
275,210 $
135,282 $
260,788
When the price of marketable equity investments changes by 1%, equity would increase/decrease by ￦1,082 million ($1,025 thousand) (after
income tax).
162
163
41. SEGMENT INFORMATION:
(3) Information related to each operating segment of the Group for the year ended December 31, 2012, is as follows:
(1) The Group’s operations are divided into the following segments by type of products and services:
Segment
Building works
Products
Description
Primary customer
Buildings, structures and others
Civil works
Korean won
Building
works
Civil works
Public Procurement Service, CDPL and others
Roads, bridges, housing site development and others
Korea Highway Corp., ADPC and others
Power stations, gas facilities, electric work and others
Public Procurement Service, Korea Electric Power Corp.
(KEPCO), ARAMCO and others
Others
Real estate leasing and others
KEPCO and others
￦ 3,244,723 ￦ 3,036,446
Gross profit
Others
Consolidation
adjustments
￦ 3,395,630 ￦ 3,059,158
Gross profit
￦ 7,680,797 ￦
(477,591) ￦ 13,324,821
28,305
(14,247)
1,248,872
6,098
86,636
33,492
798,490
219,314
1,144,030
Depreciation
1,611
9,531
10,280
62,276
(911)
82,787
Building
works
Total
(466,963) ￦ 13,938,287
315,131
338,312
540,643
27,789
(13,425)
1,208,450
8,348
139,406
38,923
1,243,834
207,710
1,638,221
Depreciation
1,712
10,401
9,386
65,895
1,701
89,095
Plant works/
electrical
works
Civil works
Others
Consolidation
adjustments
Total
(In thousands)
Sales
$
Gross profit
269,665 ￦
271,384 ￦
(In millions)
Sales
￦ 7,249,859 ￦
652,397
Description
Plant works/
electrical
works
Total
369,508
Korean won
Civil works
Consolidation
adjustments
212,909
(2) Information related to each operating segment of the Group for the year ended December 31, 2013, is as follows:
Building
works
Others
(In millions)
Sales
Plant works/electrical works
Description
Plant works/
electrical
works
3,074,693 $
2,877,330 $
6,869,951 $
257,162 $
(452,564) $ 12,626,572
201,752
350,145
618,210
26,822
(13,500)
1,183,429
5,778
82,096
31,737
756,648
207,821
1,084,080
Depreciation
1,527
9,032
9,741
59,012
(863)
78,449
Reportable segments accounting method is applied by the same measured metrics that applied to the Group.
(4) Geographical analysis of income and performance of the Group for the year ended December 31, 2013, is as follows:
Description
Building
works
Civil works
Plant works/
electrical
works
Others
Korean won
Consolidation
adjustments
Description
Total
Korea
(domestic)
Middle
East/Africa
Asia
Gross profit
$
3,217,692 $
298,617
2,898,852 $
320,584
7,278,307 $
512,312
Consolidation
adjustments
Total
(In millions)
(In thousands)
Sales
Others
255,533 $
26,334
(442,493) $ 13,207,891
(12,722)
Sales
￦ 5,318,021 ￦ 3,041,614
1,145,125
Depreciation
7,911
132,101
36,883
1,178,654
196,826
1,552,375
Depreciation
1,622
9,856
8,894
62,442
1,612
84,426
￦ 5,405,487 ￦
640,128 ￦
(466,963) ￦ 13,938,287
1,208,433
94,646
114,484
12,948
207,710
1,638,221
24,829
18,580
42,870
1,115
1,701
89,095
Reportable segments accounting method is applied by the same measured metrics that applied to the Group.
Description
Korea
(domestic)
Asia
Middle
East/Africa
2,882,227
$
Others
Consolidation
adjustments
Total
(In thousands)
Sales
Depreciation
164
$
5,039,345 $
5,122,228 $
606,584 $
(442,493) $ 13,207,891
1,145,108
89,686
108,485
12,270
196,826
1,552,375
23,528
17,606
40,624
1,056
1,612
84,426
165
(5) Geographical analysis of income and performance of the Group for the year ended December 31, 2012, is as follows:
(2) Fair values of assets acquired and liabilities recognized due to business combination are as follows:
Korean won
Description
Korea
(domestic)
Middle
East/Africa
Asia
Hyundai Energy Inc.
Consolidation
adjustments
Others
Total
(In millions)
￦ 5,501,106 ￦ 2,786,553
Sales
Depreciation
￦ 5,306,029 ￦
208,724 ￦
(477,591) ￦ 13,324,821
698,677
112,923
112,949
167
219,314
1,144,030
22,298
20,989
40,207
204
(911)
82,787
(In millions)
Fair value of identifiable assets:
￦
Description
Korea
(domestic)
Asia
Middle
East/Africa
Consolidation
adjustments
Others
Total
Sales
$
5,212,836 $
2,640,532
662,065
Depreciation
107,006
21,130
19,889
$
5,027,982 $
197,786 $
107,030
158
38,100
(452,564) $ 12,626,572
207,821
193
1,084,080
(863)
78,449
11,789
6,905
6,543
Trade and other receivables
1,832
1,736
Inventories
1,173
1,112
2,531
2,398
524,176
496,708
524,106
496,642
Other non-current receivables
70
66
444,596
421,298
35,564
33,700
Fair value of identifiable liabilities:
Current liabilities:
Trade and other payables
42. BUSINESS COMBINATION:
Non-current liabilities:
Description
Main
operation
Hyundai Energy Inc.
Production of steam, cold and hot
water, air-conditioning
Existing
ownership
percentage
49.00%
Additional
acquisition
date
09/30/2013
Ownership
additionally
acquired(*1)
2.81%
Korean won
Translation into
U.S. dollars
(Note 2)
33,700
409,032
387,598
Consideration
transferred(*2)
Consideration
transferred(*2)
(In millions)
(In thousands)
$
52,728 $
Ownership of Hyundai Energy Inc. is acquired for strengthening foundation about business of combined heat and power plant and
106
387,492
92,021
87,199
(3) Goodwill incurred due to business combination for the year ended December 31, 2013, is as follows:
Hyundai Energy Inc.
Korean won
Description
49,965
(*2) Consideration transferred for acquired ownership includes fair value of ￦33,128 million ($31,392 thousand) for existing common stocks of Hyundai Energy Inc. Acquisition
reward of convertible preferred stocks is ￦19,600 million ($18,573 thousand) that is paid in cash.
112
408,920
Fair value of identifiable net assets
dollars (Note 2)
(*1) Ownership percentage in consideration of potential voting right of convertible preferred stocks.
(In millions)
Consideration transferred
￦
Less: Fair value of acquired identifiable net assets
Goodwill
construction management operation of the energy manufacturing facility. Acquisition extra cost is excluded from the consideration transferred
and recognized as expense in the consolidated statement of comprehensive income for the year ended December 31, 2013.
166
35,564
(1) A summary of business combination for the year ended December 31, 2013, is as follows:
508,497
12,441
Non-current assets:
(In thousands)
(In thousands)
536,617 $
Current assets:
dollars (Note 2)
Korean won
Description
167
(In thousands)
52,728 $
49,965
(49,476)
(46,883)
3,252
3,082
NOTES TO CONSOLIDATED
Independent
Auditors’ Report
FINANCIAL STATEMENTS
English Translation
HYUNDAI
ENGINEERING of
& CONSTRUCTION
a Report Originally
CO., LTD.
Issued
AND ITS
in Korean
SUBSIDIARIES
To the Shareholders and the Board of Directors of
(4) Net cash outflow for business combination is as follows:
Hyundai Engineering & Construction Co., Ltd.
Amounts
Korean won
Description
dollars (Note 2)
(In millions)
Consideration paid in cash
￦
Less: Acquired cash and cash equivalents
(In thousands)
We have audited the accompanying separate financial statements of Hyundai Engineering & Construction Co., Ltd. (the “Company”). The
separate financial statements consist of the separate statements of financial position as of December 31, 2013 and 2012, respectively, and the
related separate statements of comprehensive income, separate statements of changes in shareholders’ equity and separate statements of cash
flows, all expressed in Korean won, for the years ended December 31, 2013 and 2012, respectively. The Company’s management is responsible
19,600 $
18,573
for the preparation and fair presentation of the separate financial statements, and our responsibility is to express an opinion on these separate
(6,905)
(6,543)
12,695
12,030
financial statements based on our audits.
(5) Business combination between Hyundai Energy Inc. and the Group occurred on September 30, 2013; therefore, sales and
net income of the Group include Hyundai Energy Inc.’s sales and deficits, which amounted to ￦16,688 million ($15,814
thousand) and ￦6,474 million ($6,135 thousand), respectively.
If the business combination is occurred on January 1, 2013, sales and net income on continued operations of the Group
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.
are ￦13,954,609 million ($13,223,357 thousand) that is added by ￦16,322 million ($15,467 thousand) and ￦521,565 million
($494,234 thousand) and is deducted by ￦48,079 million ($45,560 thousand), respectively.
In our opinion, the separate financial statements referred to above present fairly, in all material respects, the financial position of the Company as
of December 31, 2013 and 2012, respectively, and the results of its operations and its cash flows for the years ended December 31, 2013 and
2012, respectively, in conformity with Korean International Financial Reporting Standards (“K-IFRS”).
43. SUBSEQUENT EVENTS:
Our audits also comprehended the translation of Korean won amounts into U.S. dollar amounts and, in our opinion, such translation has been
Hyundai Engineering Co., Ltd., subsidiary, will merge with Hyundai Amco Co.,Ltd. on April 1, 2014, to maximize synergies by combining
made in conformity with the basis in Note 2. Such U.S. dollar amounts are presented solely for the convenience of readers outside of Korea.
design and construction ability and to enhance corporate value by reinforcing business execution capabilities and order competitiveness.
This merger will not have an effect to changing in-scope of the Group’s consolidation
Accounting principles and auditing standards and their application in practice vary among countries. The accompanying separate financial
statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and
practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic
of Korea to audit such separate financial statements may differ from those generally accepted and applied in other countries. Accordingly, this
report and the accompanying separate financial statements are for use by those knowledgeable about Korean accounting principles and auditing
standards and their application in practice.
March 6, 2014
Notice to Readers
This report is effective as of March 6, 2014, the auditors’ report date. Certain subsequent events or circumstances may have occurred between the auditors’ report
date and the time the auditors’ report is read. Such events or circumstances could significantly affect the accompanying separate financial statements and may result in
modifications to the auditors’ report.
168
169
SEPARATE
STATEMENTS OFFINANCIAL
FINANCIALSTATEMENTS
POSITION
SEPARATE
FINANCIALSTATEMENTS
POSITION (CONTINUED)
FOROF
AS
THE
DECEMBER
YEARS ENDED
31, 2013
DECEMBER
AND 201231, 2013 AND 2012
Korean won
ASSETS
Notes
December 31,
2013
December 31,
2013
(In millions)
4, 22, 38, 39
￦
22, 39
1,106,067 ￦
1,217,518 $
1,048,107 $
1,153,717
Trade payables
15, 22, 35, 39
Other payables
15, 22, 35, 39
20,000
20,000
18,952
18,952
1,130,192
1,033,814
1,070,967
Advances from customers
1,144,177
1,090,893
Due to customers for contract work
2,922,421
1,945,162
5, 22, 28, 35, 39
1,207,450
1,151,219
28
3,084,031
2,052,729
9, 22, 39
22,471
23,448
21,293
22,219
21, 22, 39
4
1,982
4
1,878
1,013,497
818,110
960,388
775,239
Income tax payable
6, 13
7, 35
Total current assets
752,518
989,797
713,084
937,930
8,297,022
7,404,995
7,862,240
7,016,957
NON-CURRENT ASSETS:
Current portion of long-term borrowings and
debentures
December 31,
2012
(In thousands)
7,734
9,116
7,329
8,638
354,518
330,986
335,940
5, 22, 28, 35, 36, 39
354,413
382,021
335,841
362,002
522,087
Debentures issued
8, 22, 36, 39
400,925
550,958
379,916
9, 22, 39
70,013
78,270
66,344
74,168
1,460,277
1,383,309
1,383,755
1,310,821
10, 35
Investment property
11
349,529
359,784
331,213
340,931
12
345,666
333,177
327,552
315,718
1,765,100 $
1,755,095 $
1,672,605
822,376
741,520
779,282
702,663
1,229,978
1,081,778
1,165,524
1,025,090
593,099
487,129
562,019
461,602
169,984
166,655
161,076
157,922
16, 22, 36, 37, 39
412,902
371,967
391,265
352,475
21, 22
19
349,289
1,852,152 ￦
28
5, 22, 39
Investments in subsidiaries and associates
December 31,
2013
16, 22, 39
Total current liabilities
22, 36, 39
Available-for-sale financial assets
28, 35
18, 22, 35, 36, 37, 39
￦
December 31,
2012
(In millions)
1,090,984
Other receivables
December 31,
2013
CURRENT LIABILITIES:
5, 22, 35, 39
Inventories
Notes
(In thousands)
Trade receivables
Due from customers for contract work
LIABILITIES AND EQUITY
December 31,
2012
CURRENT ASSETS:
Korean won
December 31,
2012
-
626
-
593
41,856
71,411
39,663
67,669
17,890
15,861
16,953
15,030
12,627
84,539
11,965
80,109
5,152,864
4,786,586
4,882,842
4,535,758
NON-CURRENT LIABILITIES:
15, 22, 39
281,571
201,989
266,816
191,404
1,047,136
847,563
992,264
803,149
121,260
180,553
114,906
171,092
-
18
-
17
20
213,945
163,129
202,734
154,581
11,723
15,941
11,109
15,106
17
338,926
312,600
321,166
296,219
18, 22, 35, 36, 37, 39
37,262
18,397
35,309
17,433
16, 22, 37, 39
16, 22, 36, 37, 39
21, 22
Provisions
Intangible assets
14
27,821
26,255
26,363
24,879
Deferred tax assets
33
177,226
135,342
167,939
128,250
7
61,512
37,440
58,289
35,478
12,914
12,224
12,237
11,583
3,458,912
Total non-current liabilities
2,064,737
1,752,414
1,956,541
1,660,584
Total liabilities
7,217,601
6,539,000
6,839,383
6,196,342
24, 39
557,273
557,273
528,071
528,071
784,783
3,604,405
Total non-current assets
Total assets
￦
11,901,427 ￦
3,650,190
11,055,185 $
3,415,527
11,277,767 $
10,475,869
19
SHAREHOLDERS’ EQUITY
(Continued)
Capital stock
Other contributed capital
24, 39
828,181
828,181
784,783
Components of other capital
25, 39
(30,776)
96,528
(29,163)
91,470
Retained earnings
26, 39
3,329,148
3,034,203
3,154,693
2,875,203
4,683,826
Total shareholders’ equity
Total liabilities and shareholders’ equity
￦
(Concluded)
170
171
11,901,427 ￦
4,516,185
11,055,185 $
4,438,384
11,277,767 $
4,279,527
10,475,869
SEPARATE
COMPREHENSIVE
STATEMENTS
INCOME
SEPARATE
CHANGES STATEMENTS
IN SHAREHOLDERS’ EQUITY
Korean won
Notes
2013
2012
2013
SALES
COST OF SALES
27, 28, 35
￦
32, 35
9,762,976
828,332
GROSS PROFIT
SELLING AND ADMINISTRATIVE EXPENSES
FINANCIAL EXPENSES
OTHER INCOME
OTHER EXPENSES
2012
10,433,442 $
10,036,301 $
9,604,835
9,251,375
828,607
(In millions)
￦
828,181 ￦
149,114 ￦
2,783,189 ￦
4,317,757
785,186
-
-
(55,732)
(55,732)
-
-
-
347,019
347,019
352,588
412,973
334,112
391,332
415,634
450,814
393,854
Loss on valuation of available-for-sale financial assets, net
-
-
(12,322)
-
(12,322)
23, 30
156,361
198,024
148,167
187,647
Loss on foreign operations translation, net
-
-
(40,264)
-
(40,264)
23, 30, 32
129,071
119,592
122,307
113,325
-
-
-
(40,273)
￦
557,273 ￦
828,181 ￦
96,528 ￦
3,034,203 ￦
4,516,185
￦
557,273 ￦
828,181 ￦
96,528 ￦
3,034,203 ￦
4,516,185
31, 35
94,931
114,770
89,957
108,755
31, 32, 35
125,157
158,232
118,599
149,940
472,808
450,604
448,032
426,991
33
112,530
103,585
106,633
98,157
NET INCOME
26
360,278
347,019
341,399
328,834
OTHER COMPREHENSIVE INCOME (LOSS):
-
-
-
(55,732)
(55,732)
Net income
-
-
-
360,278
360,278
-
-
(95,269)
-
(95,269)
-
-
(32,035)
-
(32,035)
20
(9,601)
(40,273)
(9,098)
(38,163)
(9,601)
(40,273)
(9,098)
(38,163)
(95,269)
(12,322)
(90,277)
(11,676)
￦
25
TOTAL COMPREHENSIVE INCOME
34
(32,035)
(40,264)
(30,356)
(38,154)
(127,304)
(52,586)
(120,633)
(49,830)
￦
223,373 ￦
254,160
$
211,668
$
240,841
￦
3,235 ￦
3,116
$
3
$
3
-
828,181 ￦
Other
contributed
capital
Capital
stock
(9,601)
(30,776) ￦
3,329,148 ￦
(9,601)
4,683,826
Components
of other
capital
Retained
earnings
Total
amount
(In thousands)
$
528,071 $
784,783 $
141,300 $
2,637,343 $
4,091,497
Dividends
-
-
-
(52,811)
(52,811)
Net income
-
-
-
328,834
328,834
-
-
(11,676)
-
(11,676)
-
-
(38,154)
-
(38,154)
-
-
-
(38,163)
(38,163)
$
528,071 $
784,783 $
91,470 $
2,875,203 $
4,279,527
$
528,071 $
784,783 $
91,470 $
2,875,203 $
4,279,527
Dividends
-
-
-
(52,811)
(52,811)
Net income
-
-
-
341,399
341,399
-
-
(90,277)
-
(90,277)
-
-
(30,356)
-
(30,356)
172
-
557,273 ￦
Items that may be reclassified subsequently to profit or
loss:
23, 25
(40,273)
Dividends
Items that will not be reclassified subsequently to profit or
loss:
BASIC EARNINGS PER SHARE
557,273 ￦
-
INCOME TAX EXPENSE
Loss on foreign operation translation, net
Total
amount
475,744
29, 32, 35
INCOME TAX EXPENSE
Loss on available-for-sale financial assets, net
Retained
earnings
Dividends
INCOME BEFORE
Components
of other
capital
9,886,707
9,101,521
784,926
Other
contributed
capital
Capital
stock
Net income
OPERATING INCOME
FINANCIAL INCOME
10,591,308 ￦
Korean won
$
528,071 $
173
784,783 $
(29,163) $
(9,098)
3,154,693 $
(9,098)
4,438,384
SEPARATE
CASH FLOWS
STATEMENTS
SEPARATE
CASH FLOWS
STATEMENTS
(CONTINUED)
Korean won
Notes
2013
Korean won
2012
2013
(In millions)
Notes
￦
Net income
(128,035) ￦
360,278
38
439,438
38
(45,326) $
347,019
481,758
(121,326) $
341,399
416,410
(42,951)
328,834
456,513
Acquisition of short-term financial instruments
2012
(In thousands)
(7,854)
(11,958)
(7,441)
(58,547)
(22,541)
(55,479)
Acquisition of available-for-sale financial assets
(12,694)
(4,011)
(12,029)
(3,801)
Acquisition of held-to-maturity financial assets
(14,214)
(15,279)
(13,469)
(14,478)
Acquisition of investments in subsidiaries and associates
(81,919)
(135,404)
(77,626)
(128,309)
Movements operating assets and liabilities:
(686,405)
(607,985)
(650,436)
(576,125)
Acquisition of investment property
Decrease (increase) in trade receivables
36,639
(379,405)
34,719
(359,523)
Acquisition of property, plant and equipment
(52,141)
96,693
(49,410)
91,625
(117,737)
(956,279)
(111,567)
Decrease (increase) in inventories
(77,373)
213,283
(73,318)
202,107
Decrease (increase) in other current assets
108,077
(157,098)
102,414
(148,866)
(36,307)
(21,548)
(34,404)
(20,419)
1,989
7,594
1,885
7,196
87,053
(81,583)
82,491
(77,308)
Decrease in derivative assets
Increase (decrease) in trade payables
Increase in other payables
Increase (decrease) in advances from customers
Increase (decrease) in due to customers for contract
work
Decrease in other current liabilities
Increase (decrease) in long-term other payables
Decrease in derivative liabilities
75,193
228,109
71,253
216,156
148,200
(157,588)
140,434
(149,330)
113,496
(58,513)
107,549
(55,447)
(71,912)
(6,228)
(68,144)
(5,902)
80,679
(37,181)
76,451
(35,233)
(595)
(1,905)
(564)
(1,805)
Decrease in provisions
(32,110)
(44,325)
(30,427)
(42,002)
Decrease in retirement benefit obligation
(10,062)
(15,419)
(9,535)
(14,611)
(2,207)
(1,997)
(2,091)
(1,892)
(45,863)
(73,137)
(43,460)
(69,304)
Interest income received
38,768
44,074
36,737
Dividend income received
85,216
41,417
(58,251)
Decrease in provision for long-term employee benefits
Decrease in components of other capital
Interest expense paid
Income taxes paid
Acquisition of intangible assets
(1,484)
(4,261)
(38,478)
(72,770)
1,147,827
1,236,395
1,211,302
1,171,605
Issuance of debentures
Proceeds from short-term borrowings
398,496
298,833
377,614
283,174
Proceeds from long-term borrowings
885,542
229,448
839,138
217,424
(1,232,832)
(1,211,767)
(1,168,229)
(1,148,268)
(568,551)
(264,815)
(538,758)
(250,938)
(534,268)
(44,840)
(506,271)
(42,490)
(55,732)
(55,732)
(52,811)
(52,811)
Cash outflows for financing activities:
Repayment of short-term borrowings
Repayment of current portion of long-term borrowing
and debentures
Repayment of long-term borrowings
Payment of dividends
122,288
153,918
(22,867)
(108,138)
(21,668)
CASH AND CASH EQUIVALENTS, AT BEGINNING OF
YEAR
1,217,518
1,240,865
1,153,717
1,175,841
41,764
EFFECT OF EXCHANGE RATE ON CASH AND CASH
EQUIVALENTS
2,668
(480)
2,528
(456)
80,751
39,247
CASH AND CASH EQUIVALENTS, AT END OF YEAR
(50,556)
(55,199)
(47,907)
(140,261)
(98,110)
(132,911)
(92,969)
(202,563)
(108,501)
(191,948)
(102,816)
- ￦
118,307 $
- $
38
￦
(Concluded)
112,108
1,248
304
1,183
288
Disposal of available-for-sale financial assets
22,588
130
21,404
123
Disposal of held-to-maturity financial assets
23,449
19,026
22,220
18,029
61,231
-
1
-
1
30,084
3
28,508
3
3,831
4,554
3,630
4,315
-
3,859
-
3,657
(Continued)
174
(4,497)
(76,795)
162,429
Withdrawal of long-term financial instruments
Disposal of property, plant and equipment
(1,566)
(40,606)
129,050
62,503
Disposal of intangible assets
(80)
(35,793)
(114,119)
64,617
Disposal of investments in subsidiaries and associates
(1,265)
(37,554)
NET DECREASE IN CASH AND CASH EQUIVALENTS
65,959
Disposal of investment property
(84)
(37,772)
Cash inflows from financing activities:
Cash inflows from investing activities:
￦
(1,335)
(39,631)
CASH FLOWS FROM FINANCING ACTIVITIES:
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in other receivables
(22,883)
(12,618)
(252,173)
(1,009,161)
-
(23,788)
(228,699)
Decrease (increase) in other receivables
(24,148)
Increase in other receivables
(266,118)
Increase in due from customers for contract work
-
(241,346)
Withdrawal of short-term financial instruments
2013
Cash outflows for investing activities:
Cash generated from operations:
Deduction of income not involving cash inflows and
others
2012
(In millions)
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Additions of expenses not involving cash outflows and
others
2013
2012
175
1,106,067 ￦
1,217,518 $
1,048,107 $
1,153,717
Board of Directors
As of May, 2014
Chairman
JUNG SOO HYUN
Director
CHUNG MONG KOO
Director
KIM YONG HWAN
Director
SHIN HYUN YOON
Director
LEE SEUNG JAE
Director
SUH CHEE HO
Director
PARK SUNG DUCK
Civil & Environment
Division
Building Works
Division
Plant
Division
Power & Energy
Division
Domestic Business
Division
International Business
Division
Organization Chart
President / CEO
JUNG SOO HYUN
Auditing Group
Director
RYU CHIL HEE
176
Executive Vice President
Senior Vice President
PARK KYUNG HO
KIM IN SOO
KIM JONG HO
KIM SEUNG HO
KIM HYUNG ILL
KWON OH SHIK
Quality, Scheduling &
HSE Division
Division
Procurement
Division
Finance & Accounting
Division
Management &
Administration Division
Planning
Division
Executive Vice President / CFO
YOON CHUL SOO
KWON OH HYUK
KIM HAN SOO
PARK DONG WOOK
BAEK KYUNG KEE
KIM JUNG CHUL
177
Tehran
Global Network
Tashkent
Baghdad
London
Dubai
Kuwait
Doha
Al Khobar
Beijing
Tokyo
Alger
ASIA
Tripoli
U.A.E.
[Abu Dhabi]P.O. Box 46101, #1601, Makeen Tower, Tourist club Area,
Abu Dhabi, U.A.E.
Tel971-2-643-2865
Fax971-2-643-2928
CHINA
Room 903, Hyundai Motor Tower, No. 38, Xiaoyun Road, Chaoyang
District, Beijing, China 100027
Tel86-10-8453-8032/8042
Fax86-10-8453-8013
[Dubai] P.O.Box 8198, #504, B8 Building, Al Barsha 1st, Dubai, U.A.E.
Tel971-4-325-5508
Fax971-4-325-5851
Muscat
KUWAIT
P.O. Box: 24314, Safat 13104, Kuwait
Tel965-2228-2250/1/2/3
Fax965-2228-2254
INDONESIA
Gedung BRI-II, Suite 1507, Jl.Sudirman, Jakarta, Indonesia
Tel62-21-571-3700
Fax62-21-571-9080/3666
SAUDI ARABIA
[Al Khobar] Al Rakah, P.O. Box 77249 Al Khobar 31952,
King Faisal Street With Khalid Bin Waleed ST., Auto-Moto Centre
Building "H" Office No.10, 1st Floor, Kingdom of Saudi Arabia
Tel966-3-845-1088
Fax966-3-845-1099
MALAYSIA
Suite 10-1, level 10, Menara Binjai, No.2 Jalan Binjai, 50450 Kuala
Lumpur, Malaysia
Tel603-2181-8883/8284/5939
Fax603-2181-7088
VIETNAM
Unit 902, 9th Floor, Sun Red River Building, 23 Phan Chu Trinh Str.,
Hoan Kiem Dist., Hanoi, Vietnam
Tel84-4-3933-3971/3070
Fax84-4-3933-3973
[Riyadh] Terb Establishment Building Ashebliya Area, P.O.Box 2761,
Riyadh 11461, Kingdom of Saudi Arabia
Tel966-1-240-8068
OMAN
Villa No. 2552A, Way No. 6839, Azaiba, Muscat, Sultanate of Oman
Tel968-2449-1201
Fax968-2449-1025
UZBEKISTAN
818, Poytaht Business Center, Rashidov 16 street, Tashkent,
Uzbekistan
Tel998-71-140-9071
Fax998-71-140-7872
Qatar
Villa #19,Wadi Al Qata St. #884, Al Nuaija Area #44
P.O.Box : 24466, Doha, Qatar
Tel974-4455-0668/9
Fax974-4467-8856
BANGLADESH
Apartment #402, 4th Floor, Plot #8, Block-F, Road #1, Banani
Chairmanbari , Dhaka-1213, Bangladesh
Tel880-2-882-9233
Fax880-2-882-3241
IRAQ
Room No, 310, Hyundai Eng. & Const. Company Baghdad Office,
Sadun St. Ishtar Hotel, Iraq
Tel964-780-9171-856
INDIA
Unit No. 508-509 5th Floor, The Courtyard DLF Place, Saket, New
Delhi - 110017, India
Tel91-11-4643-0000
Fax91-11-4643-0088
178
Kuala Lumpur
Caracas
Jakarta
Bogota
Singapore
Johannesburg
IRAN
Room 22, 5th Floor, Building No. 2617
Opposite Mellat Park, ValiAsr Ave., Tehran, Iran
Tel98-21-2205-4212 / 98-21-2203-4670/4671
Fax98-21-2201-6502
SINGAPORE
9 Temasek Boulevard #27-02 Suntec Tower 2, Singapore 038989
Tel65-6337-1577
Fax65-6338-6755
Hanoi
New Delhi
Riyadh
Houston
JAPAN
608, 6th Floor, Yurakucho Building, 1-10-1, Yuraku-Cho Chiyoda-Ku,
Tokyo, 100-0006, Japan
Tel81-3-5288-8291
Fax81-3-5288-9022
Dhaka
Abu
Dhabi
MIDDLE EAST
Montevideo
EUROPE
NORTH AMERICA
UNITED KINGDOM
1st Floor, Chiswick Place, 272 Gunnersbury Avenue, London, UK
Tel44-20-8747-2921
Fax44-20-8747-2929
TURKEY
Kavacik PK 36/37 34813 Beykoz, Istanbul, Turkey
Tel90-530-156-7744
Fax90-772-064-899
U.S.A.
Suite 175, 16365 Park Ten Place, Houston Texas, U.S.A.
Tel1-281-647-8282
Fax1-281-647-8283
SOUTH AMERICA
URUGUAY
Calle Rincon 487 Edificio Artigas Office No. 503, Montevideo, Uruguay
Tel598-2-916-8527
AFRICA
VENEZUELA
Av. Principal de La Castellana, Torre Banco Lara, Piso 6, Oficina D-1,
La Castellana, Caracas 1060, Venezuela
Tel58-212-261-5060
Fax58-212-266-4403
LIBYA
P.O.BOX 80062, Tripoli, Libya
Tel218-21-484-3264
Fax218-21-483-5113
COLOMBIA
CR 11 A 95-44 Apto 201, Bogota, Colombia
Tel57-1-475-8844
Fax57-1-475-8844
ALGERIA
2nd Floor, 16 Rue Hamdani Lahcene, Cooperative Mohamed Boudiaf,
Sidi Yahia, Hydra, Alger, Algeria
Tel213-21-43-5460/5461
Fax213-21-43-5462
SOUTH AFRICA
Ground Floor, Block F, Pinmill Farm 164 Katherine Street, Sandton
2146 Johannesburg, South Africa
Tel27-11-262-4213
Fax27-11-262-6688
179

Evolution into a Global ConstruCtion lEadEr

Transcription

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