doosan corporation and subsidiaries

Transcription

DOOSAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
AND INDEPENDENT AUDITORS’ REPORT
Independent Auditors’ Report
English Translation of a Report Originally Issued in Korean
To the Stockholders and Board of Directors of
Doosan Corporation:
We have audited the accompanying consolidated statements of financial position of Doosan Corporation and
subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of
operations, changes in stockholders’ equity and cash flows for the years then ended, all expressed in Korean
won.
These financial statements are the responsibility of the Company’s management.
Our responsibility is to
express an opinion on these financial statements based on our audits. We did not audit the financial statements
of certain consolidated subsidiaries, whose statements reflect 49.56% of the consolidated total assets as of
December 31, 2010 and 47.53% of the consolidated total sales for the year ended December 31, 2010.
Those
financial statements were audited by other auditors whose report has been furnished to us, and our report,
insofar as it relates to the amounts included for subsidiaries, is based solely on the report of the other auditors.
We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea.
Those standards require us to we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, the financial statements referred to above
present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009,
and the results of their operations, the changes in its stockholders’ equity and their cash flows for the years then
ended, in conformity with accounting principles generally accepted in the Republic of Korea.
Accounting principles and auditing standards and their application in practice vary among countries.
The
accompanying financial statements are not intended to present the financial position, results of operations,
changes in stockholders’ equity 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 financial statements may differ from those generally accepted and applied in
other countries.
Accordingly, this report and the accompanying financial statements are for the use of those
knowledgeable about Korean accounting procedures and auditing standards and their applications in practice.
March 29, 2011
Notice to Readers
This report is effective as of March 29, 2011, 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 financial statements and may result in
modification to the auditors’ report.
DOOSAN CORPORATION AND SUBSIDARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2010 AND 2009
A
S
S
E
T
S
2010
2009
(Korean won)
CURRENT ASSETS
￦ 2,768,730,812,677
￦ 2,258,946,984,813
Short-term financial instruments (Notes 3 and 17)
407,619,562,398
194,208,302,921
Short-term investment securities (Notes 2, 6 and 17)
152,326,127,862
104,267,169,305
6,037,613,126,352
5,424,633,395,421
Accounts receivable – other, less allowance for doubtful
accounts and present value discount of ￦62,811,712,412
in 2010 and ￦48,098,863,443 in 2009 (Notes 2, 14, 27 and 28)
448,078,844,176
311,850,233,714
Accrued revenues
126,387,752,913
47,154,300,995
Short-term loans, less allowance for doubtful accounts of
￦48,561,408,622 in 2010 and
￦43,965,955,089 in 2009 (Note 2)
603,569,418,845
300,301,635,770
Advanced payments, less allowance for doubtful accounts of
￦3,605,697,735 in 2010 and
￦5,321,542,720 in 2009 (Note 2)
482,673,737,118
694,650,496,903
Prepaid expenses
135,913,408,194
105,456,114,179
28,430,760,784
11,961,604,545
Current derivative instruments assets (Notes 2 and 16)
162,646,785,507
432,913,306,723
Current firm commitments assets (Notes 2 and 16)
345,667,141,806
510,853,460,134
Current deferred income tax assets (Notes 2 and 24)
217,423,057,422
136,910,348,960
2,270,302,872,204
1,850,324,399,420
Other current assets
377,085,216,462
156,634,339,366
Total Current Assets
14,564,468,624,720
12,541,066,093,169
Cash and cash equivalents (Notes 2, 3, 14 and 30)
Accounts receivable – trade, less allowance for doubtful
accounts and present value discount of ￦479,228,885,854
Income tax receivable
Inventories, net (Notes 2, 5 and 9)
(Continued)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)
A
S
S
E
T
S
2010
2009
(Korean won)
NON-CURRENT ASSETS
￦ 60,416,512,454
￦ 20,840,981,613
Long-term investment securities (Notes 2, 6 and 17)
553,662,445,141
501,871,694,819
Equity-method investment securities (Notes 2 and 7)
184,607,947,431
728,912,657,821
84,282,226,862
77,923,900,942
Property, plant and equipment, net (Notes 2, 8, 9, 13 and 17)
7,290,453,617,805
7,116,857,388,749
Intangible assets, net (Notes 2 and 10)
6,314,772,190,846
6,467,736,553,381
10,297,733,009
8,683,997,150
6,492,695,950
18,474,887,638
Non-current guarantee deposits (Notes 3)
199,543,539,780
213,783,780,879
Non-current derivative instruments assets (Notes 2 and 16)
156,608,802,566
98,439,438,651
Non-current firm commitments assets (Notes 2 and 16)
211,039,357,389
919,521,570,428
70,509,526,471
168,389,101,368
228,130,919,988
221,959,327,493
15,370,817,515,692
16,563,395,280,932
2,246,387,684,930
1,854,140,764,193
￦ 32,181,673,825,342
￦ 30,958,602,138,294
Long-term financial instruments (Note 3)
Long-term loans
Long-term accounts receivable – trade, less allowance for doubtful
accounts of ￦1,295,148,566 in 2010 and
￦495,452,000 in 2009 (Notes 2, 27 and 28)
Long-term prepaid expenses
Non-current deferred income tax assets (Notes 2 and 24)
Other non-current assets, less allowance for doubtful accounts of
￦35,420,020 in 2010 and ￦47,466,449 in 2009 (Note 2)
Total Non-current Assets
OTHER FINANCIAL ASSETS
Other financial assets (Note 13)
TOTAL ASSETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
2010
2009
(Korean won)
CURRENT LIABILITIES
￦ 3,022,958,359,621
￦ 2,790,966,960,355
3,785,241,053,318
3,602,063,034,195
704,920,524,566
551,414,970,019
Advances received
3,245,180,665,137
2,719,909,316,149
Unearned revenue
11,501,109,538
4,973,242,112
Accounts payable – trade (Note 14, 27 and 28)
Short-term borrowings (Notes 12, 15, 17 and 18)
Accounts payable – other (Notes 13, 14, 27 and 28)
Withholdings
139,156,299,540
115,122,970,404
Accrued expenses
684,935,848,151
560,484,993,837
Income tax payable (Notes 24)
189,708,025,035
219,998,049,941
73,746,190,087
73,708,036,305
2,394,601,420,788
2,199,883,012,848
230,228,489,732
803,155,414,984
62,888,451,205
4,484,283,246
Current deferred income tax liabilities (Notes 2 and 24)
3,004,854,968
33,971,121,012
Reserve for returned goods (Note 2)
6,051,386,366
6,910,163,593
Other current liabilities
475,428,385,219
182,620,436,740
Total Current Liabilities
15,029,551,063,271
13,869,666,005,740
Bonds, less discount on bond payable of ￦10,599,383,757
3,373,600,941,243
3,650,505,316,308
Long-term borrowings, less discount on borrowings of nil
4,102,139,673,467
4,573,225,717,234
95,859,140,586
112,016,292,461
Accrued severance indemnities (Note 2)
879,660,543,044
853,202,890,051
Non-current derivative instruments liabilities (Notes 2 and 16)
209,877,146,040
309,835,780,320
71,108,305,322
27,681,842,492
793,075,107,519
552,902,396,529
Other non-current liabilities
1,017,383,034,667
910,021,260,811
Total Non-current Liabilities
10,542,703,891,888
10,989,391,496,206
Guarantee deposits received
Current bonds and long-term borrowings, less
discount on bond payable of ￦653,372,523 in 2010
and ￦1,041,807,252 in 2009 (Notes 2, 11, 15, 17 and 18)
Current derivative instruments liabilities (Notes 2 and 16)
Current firm commitments liabilities (Notes 2 and 16)
NON-CURRENT LIABILITIES
Long-term accounts payable – other (Note 13)
Non-current firm commitments liabilities (Notes 2 and 16)
Non-current deferred income tax liabilities (Notes 2 and 24)
TOTAL LIABILITIES
(Continued)
25,572,254,955,159
24,859,057,501,946
LIABILITIES AND STOCKHOLDERS' EQUITY
2010
2009
(Korean won)
STOCKHOLDERS' EQUITY
Capital stock (Notes 1 and 19)
Common stock
￦ 125,213,055,000
￦ 124,379,960,000
Preferred stock
28,849,070,000
28,849,070,000
154,062,125,000
153,229,030,000
746,806,810,454
688,878,030,362
Total capital stock
Capital surplus
Capital adjustments
Treasury stock (Note 20)
(105,928,467,121)
(101,429,063,541)
Stock options (Note 21)
29,343,737,757
26,258,566,196
Loss on sale of treasury stock
(9,076,445,141)
(16,738,425,159)
(82,952,059,600)
(79,340,996,069)
(168,613,234,105)
(171,249,918,573)
(86,414,231,390)
(101,560,749,646)
67,637,683,849
67,509,599,136
(71,755,275,049)
(69,743,780,927)
Other capital adjustments (Note 2)
Total capital adjustments
Accumulated other comprehensive income
Unrealized loss on valuation of long-term investment securities
(Notes 2 and 25)
Increase in equity of associates (Notes 2, 7 and 25)
Decrease in equity of associates (Notes 2, 7 and 25)
Unrealized gain on valuation of derivatives (Notes 2, 16 and 25)
130,914,248,461
145,246,559,569
Unrealized loss on valuation of derivatives (Notes 2, 16 and 25)
(134,934,038,218)
(151,949,587,556)
Gain on translation of foreign operations (Notes 2 and 25)
129,251,422,945
130,708,534,725
Revaluation surplus (Notes 2, 8 and 25)
600,430,449,264
610,994,022,923
65,892,090,699
102,312,097,388
701,022,350,561
733,516,695,612
611,050,811,460
387,457,563,499
Equity attributable to equity holders of the parent
2,044,328,863,370
1,791,831,400,900
Minority interests
4,565,090,006,813
4,307,713,235,448
Total Stockholders' Equity
6,609,418,870,183
6,099,544,636,348
￦ 32,181,673,825,342
￦ 30,958,602,138,294
Other accumulated other comprehensive income (Note 25)
Total accumulated other comprehensive income
Retained earnings
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
2010
2009
(Korean won)
SALES (Notes 2, 22, 27, 28 and 32)
COST OF SALES (Notes 2, 27 and 28)
￦ 23,044,504,558,844
18,458,566,249,502
￦ 20,155,554,431,534
17,042,875,089,464
GROSS PROFIT
4,585,938,309,342
3,112,679,342,070
SELLING AND ADMINISTRATIVE EXPENSES (Notes 2, 23 and 28)
2,960,281,974,563
2,615,282,377,969
OPERATING INCOME (Note 32)
1,625,656,334,779
497,396,964,101
103,853,704,853
132,160,246,123
3,337,879,631
1,624,422,362
NON-OPERATING INCOME
Interest income (Note 2)
Dividend income (Note 2)
Fees revenues
2,232,685,253
1,102,672,100
Foreign currency transaction gain (Note 2)
312,905,228,588
404,122,966,926
Foreign currency translation gain (Note 2)
58,867,870,677
118,430,904,877
Reversal of allowance for doubtful accounts (Note 2)
Reversal of impairment loss on long-term investment securities
(Note 2)
3,168,941,419
26,212,873,450
48,502,600
8,808,355,754
Gain on disposal of investment assets
5,933,138,148
19,100,043,102
Equity in income of associates (Notes 2, 7)
Gain on disposal of equity method investment securities
Reversal of loss on impairment of property, plant and equipment
(Notes 2 and 8)
Gain on disposal of property, plant and equipment
Reversal of negative goodwill (Notes 2 and 10)
10,021,829,002
17,486,817,144
-
194,144,798,395
41,294,049
2,990,900,677
22,829,664,410
5,964,650,670
13,223,986,895
13,001,509,398
Gain on valuation of derivatives (Notes 2 and 16)
219,200,174,703
532,039,539,909
Gain on settlement of derivatives (Note 2)
262,867,887,325
401,994,648,333
93,469,890,048
407,057,760,329
Other non-operating income
324,727,173,318
154,137,425,249
Total Non-operating income
1,436,729,850,919
2,440,380,534,798
Interest expense (Note 2)
686,216,817,780
801,447,581,292
Foreign currency transaction loss (Note 2)
308,191,499,735
456,617,195,877
Foreign currency translation loss (Note 2)
91,117,533,159
84,011,961,649
Loss on disposal of accounts receivable (Note 4)
17,077,886,395
24,956,392,013
3,169,259,589
7,647,834,623
30,306,108,867
15,593,968,135
916,617,141
647,907,062
Gain on valuation of firm commitments (Notes 2 and 16)
NON-OPERATING EXPENSES
Loss on inventory obsolescence
Other bad debt expenses (Note 2)
Loss on disposal of investment assets
(Continued)
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
2010
2009
(Korean won)
Equity in loss of associates (Notes 2 and 7)
Loss on impairment of equity method investment securities (Note 2)
￦ 5,204,299,931
￦ 13,748,933,435
350,000,000
39,466,638
-
187,153,734
Loss on disposal of equity method investment securities
Loss on impairment of property, plant and equipment (Notes 2 and 8)
1,629,290,836
1,277,392,324
Loss on disposal of property, plant and equipment
4,423,845,448
10,543,908,511
Loss on impairment of intangible assets (Notes 2 and 10)
44,680,996,923
5,376,029,993
Loss on impairment of other non-current assets (Note 2)
32,616,500,000
-
194,063,783
399,444,948
Loss on redemption of bonds
Loss on redemption of long-term borrowings
1,516,112,762
-
73,250,067,882
73,828,975,984
Loss on settlement of derivatives (Note 2)
151,815,377,203
639,539,358,087
Loss on valuation of firm commitments (Notes 2 and 16)
542,308,951,242
973,198,304,010
Loss on valuation of derivatives (Notes 2 and 16)
Donations
42,167,128,803
30,872,116,277
Other non-operating expenses
346,011,440,172
194,502,174,889
Total Non-operating Expenses
2,383,163,797,651
3,334,436,099,481
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAX
679,222,388,047
(396,658,600,582)
INCOME TAX EXPENSE ON CONTINUING OPERATIONS
(Notes 2 and 24)
331,134,122,515
128,582,538,204
INCOME (LOSS) FROM CONTINUING OPERATIONS
348,088,265,532
(525,241,138,786)
31,437,675,151
258,418,915,869
￦ 379,525,940,683
(￦ 266,822,222,917)
￦ 265,002,105,872
￦ 231,065,901,280
114,523,834,811
(497,888,124,197)
￦ 379,525,940,683
(￦ 266,822,222,917)
INCOME FROM DISCONTINUED OPERATIONS (Note 31)
(Less tax effect of ￦10,121,543,018 in 2010 and
￦101,282,553,878 in 2009)
NET INCOME (LOSS)
Attributable to:
EQUITY HOLDERS OF THE PARENT (Note 25)
MINORITY INTERESTS
NET INCOME (LOSS) PER COMMON SHARE (Note 26)
Basic income (loss) per common share from
continuing operations
￦
9,873
(￦ 2,474)
Basic net income per common share
￦ 11,349
￦ 9,952
Diluted income (loss) per common share from
￦
9,845
(￦ 2,474)
Diluted net income per common share
￦ 11,318
￦ 9,952
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
Capital stock
Capital surplus
Accumulated
other
comprehensive
income (loss)
Capital adjustments
Retained earnings
Minority interests
Total
(Korean won)
Balance at January 1, 2009
Dividends
￦152,513,030,000 ￦647,270,675,142 (￦160,137,236,935) ￦714,191,975,727 ￦192,216,489,125 ￦4,515,012,419,549 ￦6,061,067,352,608
-
(24,178,900,150)
Retained earnings after appropriations ￦152,513,030,000 ￦647,270,675,142 (￦160,137,236,935) ￦714,191,975,727
168,037,588,975 ￦4,515,012,419,549
6,036,888,452,458
Interim dividends
-
-
-
-
(11,601,619,500)
-
(11,601,619,500)
Net income (loss)
-
-
-
-
231,065,901,280
(497,888,124,197)
(266,822,222,917)
4,782,827,000
Exercise of stock options
-
-
-
-
(24,178,900,150)
716,000,000
6,105,893,000
(2,039,066,000)
-
-
-
Cancelation of stock options
-
-
(80,041,829)
-
-
-
(80,041,829)
Share-based payment
-
-
4,001,986,884
-
-
4,945,079,064
8,947,065,948
Revaluation reserve
-
(4,227,118,741)
-
-
-
-
(4,227,118,741)
Changes in other capital surplus
-
(8,903,340,087)
-
-
-
-
(8,903,340,087)
Disposal of subsidiaries’ equity
-
(3,633,680,886)
-
-
-
205,411,323,021
201,777,642,135
Acquisition of treasury stock
-
-
(3,187,017,673)
-
-
-
(3,187,017,673)
Disposal of treasury stock
-
52,265,601,934
35,701,777,778
-
-
195,370,482,841
283,337,862,553
Loss on capital reduction
-
-
(8,858,014,397)
-
-
(21,218,139,214)
(30,076,153,611)
Changes in other capital adjustments
-
-
(36,652,306,401)
-
-
-
(36,652,306,401)
Unrealized gain on valuation of
long-term investment securities
-
-
-
567,383,042
-
5,647,558,125
6,214,941,167
Decrease in equity of associates
-
-
-
3,246,971,032
-
2,887,732,621
6,134,703,653
Gain (Loss) on valuation of derivatives
-
-
-
(10,540,040,626)
-
2,150,472,723
(8,389,567,903)
Gain (Loss) on translation of
foreign operations
-
-
-
23,104,322,554
-
(30,981,143,109)
(7,876,820,555)
Changes in revaluation of assets
-
-
-
(16,392,242,102)
-
(51,510,495,772)
(67,902,737,874)
Changes in other accumulated other
comprehensive income (loss)
-
-
-
8,293,595,590
-
-
8,293,595,590
Changes in other minority interests
-
-
-
-
-
825,680,348
825,680,348
Changes in consolidated entities
-
-
-
11,044,730,395
(44,307,256)
(22,939,610,552)
(11,939,187,413)
Balance at December 31, 2009
￦153,229,030,000 ￦688,878,030,362 (￦171,249,918,573) ￦733,516,695,612 ￦387,457,563,499 ￦4,307,713,235,448 ￦6,099,544,636,348
￦153,229,030,000 ￦688,878,030,362 (￦171,249,918,573) ￦733,516,695,612 ￦387,457,563,499 ￦4,307,713,235,448 ￦6,099,544,636,348
Dividends
-
(46,690,191,100)
Retained earnings after appropriations ￦153,229,030,000 ￦688,878,030,362 (￦171,249,918,573) ￦733,516,695,612
-
-
-
-
(46,690,191,100)
340,767,372,399 ￦4,307,713,235,448
6,052,854,445,248
Interim dividends
-
-
-
-
(11,646,269,500)
-
(11,646,269,500)
Net income
-
-
-
-
265,002,105,872
114,523,834,811
379,525,940,683
Increase of stockholders’ equity
by merger
Intercompany equity transactions
584,595,000
-
6,128,311,191
44,295,422,882
-
-
-
158,010,491,120
6,712,906,191
202,305,914,002
2,958,321,199
248,500,000
4,147,642,199
(1,437,821,000)
-
-
-
Cancelation of stock options
-
-
(188,443,826)
-
-
-
(188,443,826)
Share-based payment
-
-
4,711,436,387
-
-
4,443,600,937
9,155,037,324
Revaluation reserve
-
(6,029,311)
-
-
-
-
(6,029,311)
Changes in other capital surplus
-
3,363,433,131
-
-
-
-
3,363,433,131
-
-
(6,632,069,420)
-
-
-
(6,632,069,420)
Disposal of treasury stock
-
-
9,794,645,858
-
-
22,845,544,742
32,640,190,600
Changes in other capital adjustments
-
-
(3,611,063,531)
-
-
-
(3,611,063,531)
Unrealized gain on valuation of
long-term investment securities
-
-
-
15,146,518,256
-
38,994,334,672
54,140,852,928
-
-
-
(1,883,409,409)
-
(1,340,174,076)
(3,223,583,485)
Gain (Loss) on valuation of derivatives
-
-
-
2,683,238,230
-
22,370,901,270
25,054,139,500
Gain (Loss) on translation of
foreign operations
-
-
-
(1,457,111,780)
-
(34,775,720,860)
(36,232,832,640)
Changes in revaluation of assets
-
-
-
(10,563,573,659)
-
(1,895,566,617)
(12,459,140,276)
Changes in other accumulated other
comprehensive income (loss)
-
-
-
(29,598,071,880)
-
-
(29,598,071,880)
Changes in other minority interests
-
-
-
-
-
7,870,902,681
7,870,902,681
Changes in consolidated entities
-
-
-
(6,821,934,809)
16,927,602,689
(73,671,377,315)
(63,565,709,435)
￦154,062,125,000 ￦746,806,810,454 (￦168,613,234,105) ￦701,022,350,561
￦611,050,811,460 ￦4,565,090,006,813 ￦6,609,418,870,183
CONSOLIDATED STATEMENTS OF CASH FLOWS
2010
2009
(Korean won)
CASH FLOWS FROM OPERATING ACTIVITIES
￦ 379,525,940,683
(￦ 266,822,222,917)
Severance indemnities
202,000,616,357
139,792,236,108
Share-based payment
8,966,593,498
8,947,065,948
Depreciation
448,645,051,183
430,151,905,049
Amortization
426,880,263,330
477,679,645,326
Commissions
37,200,000,000
-
295,856,173,320
83,095,639,549
3,359,563,745
1,228,537,225
Foreign currency translation loss
82,280,947,726
109,422,532,501
Loss on disposal of accounts receivable
Net income (loss)
Expenses not involving cash payments:
Bad debt expenses
Discount on bonds payable
17,077,886,395
24,976,605,560
Loss on valuation of inventories
-
11,641,794,577
Loss on inventory obsolescence
3,169,259,589
7,687,011,543
30,305,683,009
15,593,370,874
-
1,797,985,640
916,617,141
10,735,988,268
5,204,299,931
17,948,468,764
350,000,000
39,466,638
Other bad debt expenses
Loss on impairment of long-term investment securities
Loss on disposal of investment assets
Equity in loss of associates
Loss on impairment of equity method investment securities
Loss on disposal of equity method investment securities
-
187,153,734
Loss on impairment of property, plant and equipment
1,629,290,836
1,277,392,324
Loss on disposal of property, plant and equipment
4,548,607,056
11,865,891,520
Loss on impairment of intangible assets
44,680,996,923
8,068,137,065
Loss on impairment of other non-current assets
32,616,500,000
-
194,063,783
399,444,948
1,516,112,762
-
73,250,067,882
73,828,975,984
Loss on valuation of firm commitments
542,308,951,242
973,198,304,010
Others
147,501,540,485
93,949,048,842
2,410,459,086,193
2,503,512,601,997
Loss on redemption of bonds
Loss on redemption of long-term borrowings
Loss on valuation of derivatives
Sub-total
(Continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
2010
2009
(Korean won)
Income not involving cash receipts:
Present value discount
￦
-
￦
40,304,526
Foreign currency translation gain
54,462,034,724
Reversal of inventories
14,599,166,610
-
3,168,941,419
26,212,873,450
48,502,600
8,808,355,754
5,933,138,148
19,180,516,480
10,021,829,002
17,442,747,619
-
193,482,921,897
41,294,049
2,990,900,677
Gain on disposal of property, plant and equipment
22,904,013,421
379,963,866,154
Reversal of negative goodwill
13,223,986,895
13,826,754,027
Reversal of allowance for doubtful accounts
Reversal of loss on impairment of long-term investment securities
Gain on disposal of investment assets
Equity in income of associates
Gain on disposal of equity method investment securities
Reversal of loss on impairment of property, plant and equipment
Gain on valuation of derivatives
133,200,812,759
219,200,174,703
532,039,539,909
Gain on valuation of firm commitments
93,469,890,048
407,057,760,329
Others
47,764,366,827
70,135,354,214
(484,837,338,446)
(1,804,382,707,795)
Sub-total
(Continued)
2010
2009
(Korean won)
Changes in assets and liabilities related to operating activities:
Accounts receivable – trade
(￦ 798,350,168,309)
(￦ 348,416,797,688)
Accounts receivable – other
(372,861,666,459)
25,677,243,481
(38,605,865,935)
18,312,003,261
45,941,800,432
(98,376,790,227)
Prepaid expenses
(12,411,401,117)
1,872,675,744
Current derivative assets
252,630,527,032
(623,072,979,829)
Current firm commitments
39,987,643,055
159,486,663,834
Current deferred income tax assets
22,594,323,870
60,911,561,567
(311,133,399,627)
602,692,179,751
Accrued income
Advanced payments
Inventories
Non-current derivative assets
(43,318,647,118)
1,195,242,791
Non-current firm commitments assets.
310,298,658,939
128,310,212,724
5,390,098,728
(43,164,203,813)
225,504,187,646
162,958,793,673
Deferred income tax assets
Accounts payable – trade
Accounts payable – other
(3,093,653,280)
149,883,636,624
Advances received
232,506,197,799
153,611,686,440
Unearned revenue
(7,963,425,508)
(1,759,380,759)
Withholdings
29,394,335,380
(57,432,529,896)
Accrued expenses
112,143,191,438
45,837,022,087
Income tax payable
(47,637,965,388)
(22,771,187,594)
Current derivative liabilities
(195,931,536,466)
(774,421,518,216)
Current firm commitments
(106,846,423,575)
(59,029,111,353)
Current deferred income tax liabilities
Reserve for returned goods
Other current liabilities
Payment of severance indemnities
Contribution to National Pension Fund
951,016,592
(28,766,772,675)
45,562,670,969
(15,700,668,302)
9,502,231,244
(3,682,208,471)
(147,997,081,921)
(200,173,758,193)
346,190,600
946,680,300
Severance insurance deposits
(29,509,172,556)
5,418,698,868
Non-current derivative liabilities
(72,395,507,305)
(7,025,078,840)
34,038,441,234
(306,577,724)
(54,588,023,789)
(48,521,092,826)
1,542,596,000
4,742,131,000
(79,909,464,781)
(110,526,852,774)
(954,219,292,176)
(921,291,077,035)
1,350,928,396,254
(488,983,405,750)
Non-current firm commitments liabilities
Non-current deferred income tax liabilities
Dividend receipts
Other changes in assets and liabilities related to operating
activities
Sub-total
Net Cash Provided by (Used in) Operating Activities
(Continued)
2010
2009
(Korean won)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash inflows from investing activities:
￦ 3,983,513,375,747
￦ 3,271,687,073,636
6,007,061,643
111,896,031,546
139,606,286,286
417,442,826,153
156,750,000
3,691,399,508
61,384,536,910
109,184,003,681
-
359,048,532,550
681,756,851
2,959,890,112
Decrease in guarantee deposits
48,911,715,746
36,654,788,172
Disposal of property, plant and equipment
79,744,700,135
161,744,605,333
Withdrawal of short-term financial instruments
Disposal of short-term investment securities
Collection of short-term loans
Withdrawal of long-term financial instruments
Disposal of long-term investment securities
Disposal of equity method investment securities
Collection of long-term loans
Disposal of intangible assets
104,345,442,945
26,900,053,824
Disposal of business segment
52,136,819,465
570,589,529,026
Others
18,900,039,053
38,460,928,015
4,495,388,484,781
5,110,259,661,556
Acquisition of short-term financial instruments
4,206,638,210,164
3,298,660,010,814
Acquisition of short-term investment securities
25,188,617,770
118,249,791,208
415,535,629,243
517,689,380,988
Acquisition of long-term financial instruments
16,014,670,346
1,008,000,000
Acquisition of long-term investment securities
71,002,497,380
244,685,156,152
Acquisition of equity method investment securities
16,615,019,736
571,818,603,165
Extension of long-term loans
10,535,827,092
91,892,545,918
Increase in guarantee deposits
39,428,411,951
45,414,837,041
Acquisition of property, plant and equipment
730,124,698,525
731,736,201,086
Acquisition of intangible assets
175,100,034,048
270,936,625,262
20,161,344,850
10,725,394,863
(5,726,344,961,105)
(5,902,816,546,497)
(1,230,956,476,324)
(792,556,884,941)
Sub-total
Cash outflows for investing activities:
Extension of short-term loans
Others
Sub-total
Net Cash Used in Investing Activities
(Continued)
2010
2009
(Korean won)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash inflows from financing activities:
￦ 229,246,715,765
￦ 131,471,026,092
363,493,087,937
-
Proceeds from short-term borrowings
8,157,258,221,228
4,983,269,569,734
Issuance of bonds
2,190,321,679,827
3,651,649,482,108
Proceeds from long-term borrowings
4,426,980,678,741
645,999,498,988
32,640,190,600
283,337,862,553
6,344,309,000
1,161,330,000
Others
1,313,797,865
1,320,498,356
15,407,598,680,963
9,698,209,267,831
415,544,528,539
64,203,448,505
Repayment of short-term borrowings
7,974,080,232,762
5,180,838,649,281
Repayment of current long-term borrowings
1,281,482,690,410
625,330,302,980
Retirement of bonds
2,475,063,069,643
848,060,147,055
Repayment of long-term borrowings
3,278,520,966,330
1,242,947,209,842
6,632,069,420
3,187,017,673
147,201,198,690
128,711,987,424
3,238,986,922
1,271,033,714
(15,581,763,742,716)
(8,094,549,796,474)
(174,165,061,753)
1,603,659,471,357
EFFECT OF CHANGES IN CONSOLIDATED ENTITIES
578,367,110,167
158,086,624,002
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
(14,390,140,480)
57,566,252,859
NET INCREASE IN CASH AND CASH EQUIVALENTS
509,783,827,864
537,772,057,527
2,258,946,984,813
1,721,174,927,286
￦2,768,730,812,677
￦2,258,946,984,813
Increase in capital stock subscribed
Increase in current ABS liabilities
Disposal of treasury stocks
Sub-total
Cash outflows for financing activities :
Repayment of current ABS liabilities
Payment of dividends
Others
Sub-total
Net Cash Provided by (Used in) Financing Activities
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
CASH AND CASH EQUIVALENTS AT END OF THE YEAR (Note 30)
DOOSAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
ORGANIZATION AND DESCRIPTION OF THE BUSINESS
a. Parent
Doosan Corporation (the “Parent”) was incorporated in 1933 under the name of Sohwa-Kirin Beer, Ltd. to
manufacture and sell beer. After changing its name several times, the Parent Company changed its
name to Doosan Corporation on September 1, 1998.
On September 1, 1998, the Parent merged with Doosan Trading Co., Ltd., Doosan Machinery Co., Ltd.,
Doosan Baekwha Co., Ltd., Doosan Electronics Co., Ltd., Doosan Dong-A Co., Ltd. and others. On
December 31, 2001, the Parent merged with Doosan Techpack Co., Ltd. and I.K. Enterprise Co., Ltd. and
then merged with Daehan Liquor Co., Ltd. on December 1, 2002.
The Parent is now primarily engaged in
manufacturing electronics, and has manufacturing facilities in Jeungpyong and Gimcheon.
The Parent
spun off the Publishing segment to establish Doosan Dong-A Co., Ltd. on October 1, 2008 and spun off
the Techpack segment to establish Techpack Solution Co., Ltd. on December 1, 2008.
On December 19,
2008, the Parent sold off shares of Techpack Solution Co., Ltd. to MBK private fund.
On March 2, 2009,
the Parent Company transferred Alcoholic Beverages business segment to Lotte Liquor BG Co., Ltd.
On
January 1, 2009, the Parent Company has become a business-running holding company. On July 1, 2010,
the Parent Company merged with Doosan Mottrol Holdings Co., Ltd. and Doosan Mottrol Co., Ltd. On
December 31, 2010, the Parent Company transferred Apparel business segment to Polo Ralph Lauren
Korea.
Since June 1973, the Parent's shares have been listed in the Korea Exchange (formerly Korea Stock
Exchange). After several capital increases, the Parent’s capital stock as of December 31, 2010 is
￦154,062 million including ￦28,849 million of preferred stock.
The Parent Company’s shares as of December 31, 2010 are owned as follows:
Ownership
Number of shares
percentage (%)
Related party
9,081,691
36.26%
Treasury stock
6,701,890
26.76%
National Pension
Others
Total
643,364
2.57%
8,615,666
34.40%
25,042,611
100.00%
Meanwhile, as of December 31, 2010, the largest shareholder and others hold 51.7% and 48.3% of
preferred stock of the Parent, respectively.
b. Consolidated Subsidiaries
The consolidated financial statements included the subsidiaries of which the Parent is the largest
stockholder with more than 30% of ownership interests. The consolidated subsidiaries as of December 31,
2010 and 2009 are as follows (In millions of Korean won):
(2010)
Companies
Neoplux Co., Ltd.
Neoplux No. 1 Private Equity Fund (Note 3)
Oricom Inc.
SRS Korea Co., Ltd.
Primary business
Subsidiaries’
Number of
Ownership
equity
shares
(%) (Note 1)
Fiscal year
Location
end
₩ 40,005
4,155,910
66.71
Korea
December 31
Financing
68,037
3,300
15.00
〃
〃
Advertising
43,184
1,458,230
69.19
〃
〃
Manufacturing
43,710
1,015,127
50.91
〃
〃
Venture capital
Other
16,503
1,217,514
100.00
〃
〃
Manufacturing
21,929
2,200,000
100.00
〃
〃
Doosan Tower Co., Ltd.
Real estate
161,629
6,000,000
100.00
〃
〃
Doosan Dong-A Co., Ltd.
Publishing
33,065
2,000,000
100.00
〃
〃
Sports
(1,381)
200,000
100.00
〃
〃
Holding company
218,779
284,950
100.00
〃
〃
〃
N Shaper Corp.
Doosan Feed & Livestock Co., Ltd.
Doosan Bears, Inc.
DIP Holdings Co., Ltd.
Manufacturing
382,132
10,181,818
50.91
〃
Wholesale & retail
(5,576)
427,140
100.00
Singapore
Doosan Hong Kong Co., Ltd. (“DSH”)
〃
(15,712)
64,000
100.00
Hong Kong
〃
Doosan Shanghai Chemical Co., Ltd.
Manufacturing
(940)
〃
Doosan DST Co., Ltd.
Doosan Electro-Materials Singapore Pte Co.,
〃
Ltd.
Doosan Heavy Industries & Construction Co.,
(Note 2)
100.00
China
3,536,951 436,452,166
41.25
Korea
1,256,128
82,535,631
72.75
〃
〃
Golf resort
149,165
6,000,000
100.00
〃
〃
Manufacturing
118,451
2,000,000
100.00
〃
〃
〃
〃
Ltd. (“DHC”)
Doosan Engineering & Construction Co., Ltd.
Doosan Cuvex Co., Ltd.
Rexcon Co., Ltd.
Construction
Real estate
(6,214)
100,000
100.00
〃
〃
Financial service
173,010
8,000,000
40.57
〃
〃
Doosan China Financial Leasing Corp.
〃
85,567
(Note 2)
100.00
China
〃
BNG Securities Co., Ltd.
〃
5,562
782,554
97.82
Korea
March 31
Doosan AMC Co., Ltd.
Doosan Capital Co., Ltd.
〃
December 31
China
〃
100.00
U.S.A.
〃
99.76
Romania
〃
90.00
Vietnam
Manufacturing
339,316
29,650,000
42.66
Doosan Marine Industry Co., Ltd.
〃
18,268
(Note 2)
100.00
Doosan Hydro Technology, Inc.
〃
(6,764)
486
S.C. Doosan IMGB S.A. Co., Ltd.
〃
4,696
99,370,787
Doosan Heavy Industries Vietnam Haiphong
〃
24,764
(Note 2)
Electric power
18,666
17,126,866
Doosan Engine Co., Ltd. (“DE”)
〃
Co., Ltd.
Hanjung Power Co., Ltd.
51.00 Papua New
〃
Guinea
HFC Controls. Corp.
Doosan Projects India Co., Ltd.
Doosan Heavy Industries America Co., Ltd.
Doosan Heavy Industries Japan Co., Ltd.
Doosan Heavy Industries Vietnam Co., Ltd.
Manufacturing
6,851
6,000
100.00
U.S.A
〃
〃
6,640
116,997
100.00
India
〃
Wholesale & retail
2,633
600
100.00
U.S.A
〃
〃
2,145
1,000
100.00
Japan
〃
155,540
(Note 2)
100.00
Vietnam
〃
Manufacturing
Companies
Primary business
Subsidiaries’
Number of
Ownership
equity
shares
(%) (Note 1)
Fiscal year
Location
end
December 31
(₩12,640)
2,200
55.00
Indonesia
4,655
(Note 2)
100.00
Luxemburg
Manufacturing
471,696
40,708,646
100.00
U.K
〃
603,038
38
100.00
Czech
〃
Doosan Infracore Co., Ltd. (“DI”)
〃
1,313,276
75,509,366
44.83
Korea
〃
Doosan Infracore China Co., Ltd.
〃
503,696
(Note 2)
100.00
China
〃
Doosan Infracore Belgium S.A. Co., Ltd.
〃
109,975
45,396,845
100.00
Belgium
〃
Doosan Infracore Machine Tools Yantai Co.,
〃
33,229
(Note 2)
100.00
China
〃
Wholesale & retail
5,571
(Note 2)
60.00
〃
〃
Doosan Infracore (China) Investment Co., Ltd.
Holding company
83,576
(Note 2)
100.00
〃
〃
Doosan Infracore Suzhou Co., Ltd.
Wholesale & retail
65,596
(Note 2)
100.00
〃
〃
Doosan Infracore U.K. Co., Ltd.
〃
26,491
2,900,000
100.00
U.K
〃
Doosan Infracore Germany GmbH. Co., Ltd.
〃
19,090
(Note 2)
100.00
Germany
〃
Doosan Infracore America Corp.
〃
60,441
1,529
100.00
U.S.A
〃
Doosan Infracore Japan Corp.
〃
1,261
200
100.00
Japan
〃
Doosan Infracore (Shandong) Co., Ltd.
〃
36,188
(Note 2)
90.00
China
〃
Doosan Infracore India Private Co., Ltd.
〃
1,407
4,511,620
99.99
India
〃
Manufacturing
17,466
(Note 2)
100.00
China
363
99,999
100.00
Brazil
〃
〃
(573)
10,439
90.00
Mexico
〃
Doosan Bobcat Chile Co., Ltd.
〃
8,237
999,999
100.00
Chile
〃
Doosan International India Private Co., Ltd.
〃
16,085
128,251
100.00
India
〃
Doosan International Korea Co., Ltd.
〃
6,979
11,974
100.00
Korea
〃
Bobcat Co., Ltd.
〃
6,749
15,430
100.00
Japan
〃
Doosan Moxy IP Co., Ltd.
〃
(3,989)
100,000
100.00
Norway
〃
Holding company
869,214
21,820
100.00
Ireland
〃
Wholesale & retail
751,502
19,636
100.00
U.S.A
〃
52,642
10,720,000
100.00
Norway
〃
Doosan Heavy Industries Indonesia Co., Ltd.
Manufacturing
Doosan Heavy Industries European Holdings
Holding company
〃
S.a.r.l
Doosan Power Systems Co., Ltd. and 15
〃
overseas consolidated subsidiaries
Doosan Power Systems Czech Investment Co.
Ltd and 2 overseas consolidated subsidiaries.
Ltd.
Doosan Infracore XinJiang Machinery Co., Ltd.
Doosan International Manufacturing China Co.,
〃
Ltd.
Doosan International do Brasil Commercial and
Wholesale & retail
Market Related Consulting Ltda.
Doosan International Mexico S.A. de C.V. Co.,
Ltd.
Doosan Holdings Europe Co., Ltd. (“DHEL”) &
27 overseas consolidated subsidiaries
Doosan Infracore International, Inc. (“DII”) & 12
Doosan Moxy Co., Ltd. & 4 overseas
consolidated subsidiaries
〃
& others
(2009)
Companies
Primary business
Subsidiaries’
Number of
Ownership
equity
shares
(%) (Note 1)
Fiscal year
Location
end
Samhwa Crown & Closure Co., Ltd.
Manufacturing
₩85,627
513,852
24.04
Korea
December 31
Neoplux Co., Ltd.
Venture capital
42,049
4,155,910
66.71
〃
〃
Financing
22,875
3,300
15.00
〃
〃
Advertising
39,187
1,458,230
69.19
〃
〃
Manufacturing
29,265
1,015,127
50.91
〃
〃
〃
16,913
2,200,000
100.00
〃
〃
Real estate
153,534
6,000,000
100.00
〃
〃
Publishing
31,646
2,000,000
100.00
〃
〃
Holding company
140,879
116,000
100.00
〃
〃
22,365,481
95.45
〃
〃
Neoplux No. 1 Private Equity Fund (Note 3)
Oricom Inc.
SRS Korea Co., Ltd.
Doosan Mottrol Holdings Co., Ltd. (Note 4)
Doosan Mottrol Co., Ltd. (Note 4)
Manufacturing
112,629
Holding company
164,402
284,950
100.00
〃
〃
Manufacturing
315,045
10,181,818
50.91
〃
〃
Wholesale & retail
(6,887)
427,140
100.00
Singapore
〃
〃
(17,123)
64,000
100.00
Hong Kong
〃
Manufacturing
(1,841)
(Note 2)
100.00
China
〃
3,319,472
43,645,207
41.28
Korea
〃
Construction
872,742
37,196,484
52.18
〃
〃
Golf resort
148,355
6,000,000
100.00
〃
〃
Manufacturing
114,592
2,000,000
100.00
〃
〃
〃
Doosan Electro-Materials Singapore Pte Co.,
Ltd.
Doosan Hong Kong Co., Ltd.
Doosan Heavy Industries & Construction Co.,
〃
Ltd.
Rexcon Co., Ltd.
Doosan Mecatec Co., Ltd. (Note 4)
〃
354,503
10,968,000
100.00
〃
N Shaper Corp.
Office work Supporting
13,147
1,217,514
100.00
〃
〃
Financial service
205,604
8,000,000
39.97
〃
〃
〃
42,547
(Note 2)
100.00
China
〃
BNG Securities Co., Ltd.
〃
3,966
782,554
97.82
Korea
March 31
Doosan Engine Co., Ltd.
Manufacturing
78,237
6,630,000
53.04
〃
December 31
〃
17,580
(Note 2)
100.00
China
〃
〃
4,979
486
100.00
U.S.A.
〃
〃
23,061
99,370,787
99.76
Romania
〃
〃
24,202
(Note 2)
60.00
Vietnam
〃
Electric power
19,132
17,126,866
51.00
Papua New
〃
Han-Viet Heavy Industries Co., Ltd.
Guinea
HFC Holdings LLC
Manufacturing
5,642
6,000
100.00
U.S.A
〃
〃
2,284
116,997
100.00
India
〃
Wholesale & retail
2,342
600
100.00
U.S.A
〃
1,993
1,000
100.00
Japan
〃
Manufacturing
186,062
(Note 2)
100.00
Vietnam
〃
Manufacturing
(12,038)
2,200
55.00
Indonesia
〃
Doosan Heavy Industries European Holdings
Holding company
76,257
(Note 2)
100.00
Luxemburg
〃
Manufacturing
212,141
40,708,646
100.00
U.K
〃
1,280,922
85,658,265
50.89
Korea
〃
〃
S.a.r.l
Doosan Power Systems Co., Ltd. and 15
Doosan Infracore Co., Ltd.
〃
Companies
Doosan Infracore China Co., Ltd.
Primary business
Manufacturing
Subsidiaries’
Number of
Ownership
equity
shares
(%) (Note 1)
₩409,115
Fiscal year
Location
end
(Note 2)
100.00
China
December 31
135,767
44,000
100.00
Belgium
〃
Doosan Infracore U.K. Co., Ltd.
〃
(826)
2,900,000
100.00
U.K
〃
Doosan Infracore America Corp.
〃
50,843
1,529
100.00
U.S.A
〃
Doosan Infracore Germany GmbH. Co., Ltd.
〃
20,136
(Note 2)
100.00
Germany
〃
Doosan Infracore Europe S.A. Co., Ltd.
Doosan Infracore Japan Corp.
Doosan Infracore Machine Tools Yantai Co.,
Wholesale & retail
960
200
100.00
Japan
〃
Manufacturing
〃
22,197
(Note 2)
100.00
China
〃
Wholesale & retail
17,906
(Note 2)
100.00
〃
〃
4,027
(Note 2)
100.00
〃
〃
90.00
〃
〃
Ltd.
Doosan Infracore Suzhou Co., Ltd.
Doosan Infracore XinJiang Machinery Co., Ltd.
〃
〃
Doosan Infracore (China) Investment Co., Ltd.
34,080
(Note 2)
〃
168
4,511,620
99.99
India
〃
〃
8,015
100,000
100.00
Norway
〃
Holding company
68,505
(Note 2)
100.00
China
〃
1,179,914
21,820
100.00
Ireland
〃
Doosan Holdings Europe Co., Ltd. & 37
〃
Doosan Infracore International, Inc. & 8
Doosan Moxy Co., Ltd. & 4 overseas
Wholesale & retail
972,975
19,636
100.00
U.S.A
〃
〃
94,603
10,720,000
100.00
Norway
〃
& others
(Note 1) Ownership is the sum of the Parent and its consolidated subsidiaries’ ownership interests.
(Note 2) No shares have been issued.
(Note 3) A subsidiary, Neoplux Co., Ltd., is a managing partner of Neoplux No. 1 Private Equity Fund;
therefore, it is included in consolidation.
(Note 4) During the year ended December 31, 2010, Doosan Mottrol Holdings Co., Ltd. and Doosan Mottrol
Co., Ltd. were merged with the Parent and Doosan Mecatec Co., Ltd was merged with Doosan
Engineering & Construction Co., Ltd.
c. Main financial information of consolidated subsidiaries (In millions of Korean won):
Year Ended
As of December 31, 2010
December 31, 2010
Net income
Companies
Neoplux Co., Ltd.
Assets
￦61,833
Liabilities
Equity
Sales
(loss)
￦21,828
￦40,005
￦27,205
￦5,072
Neoplux No. 1 Private Equity Fund
68,233
196
68,037
328
(2,772)
Oricom Inc.
99,924
56,741
43,184
86,062
4,299
110,411
66,701
43,710
261,500
14,445
20,843
4,340
16,503
14,810
3,361
SRS Korea Co., Ltd.
N Shaper Corp.
63,660
41,731
21,929
124,167
5,016
522,303
360,674
161,629
57,475
8,095
211,960
178,895
33,065
232,006
1,419
7,763
9,144
(1,381)
27,652
1,205
319,148
100,369
218,779
59,316
54,503
794,689
412,557
382,132
971,030
87,087
9,802
15,378
(5,576)
42,820
1,679
17,698
33,410
(15,712)
65,022
963
Doosan Bears, Inc.
Doosan Electro-Materials Singapore Pte Co., Ltd.
Doosan Hong Kong Co., Ltd.
12,197
13,137
(940)
41,622
908
Doosan Heavy Industries & Construction Co., Ltd.
9,225,557
5,688,606
3,536,951
6,178,335
111,207
Doosan Construction & Engineering Co., Ltd.
4,947,659
3,691,531
1,256,128
2,317,514
5,946
232,227
83,061
149,165
28,488
810
Rexcon Co., Ltd.
248,073
129,622
118,451
185,660
3,860
247,960
254,174
(6,214)
242,898
16,274
2,185,268
2,012,258
173,010
230,669
(42,810)
551,552
465,985
85,567
34,916
7,553
39,756
34,194
5,562
13,340
1,597
1,943,510
1,604,194
339,316
1,730,068
165,457
29,007
10,739
18,268
12,308
1,022
24,635
31,399
(6,764)
20,278
(10,686)
BNG Securities Brokerage Co., Ltd.
198,722
194,026
4,696
121,070
(16,859)
Doosan Heavy Industries Vietnam Haiphong Co., Ltd.
34,213
9,449
24,764
42,039
1,175
25,845
7,179
18,666
40,880
6,424
HFC Controls Corp.
12,658
5,807
6,851
9,030
1,368
210,280
203,640
6,640
56,984
4,307
9,869
7,236
2,633
3,627
354
48,451
46,306
2,145
162,081
(56)
297,162
141,622
155,540
37,237
(23,818)
12,420
25,060
(12,640)
72,887
(331)
1,599,068
1,127,372
471,696
1,521,500
147,514
1,118,361
515,322
603,038
499,194
113,379
4,443,220
3,129,944
1,313,276
4,317,640
38,252
Consolidated subsidiaries of Doosan Infracore Co., Ltd.
5,933,635
4,843,500
1,090,136
3,636,504
(131,490)
Doosan Power Systems Co., Ltd. and 16 overseas
Doosan Power Systems Czech Investment Co. Ltd and
2 overseas consolidated subsidiaries.
d. Adjustment to the Financial statements of consolidated subsidiaries
Details of changes in accounting policies and estimation methods of consolidated subsidiaries and their
effects on their financial statements are as follows (In millions of Korean won):
Net asset before
Companies
adjustment
Adjustment
Net asset after
Reason for
adjustment
Adjustment
Doosan Heavy Industries
& Construction Co., Ltd.
￦3,536,951
(￦38,304)
￦3,498,647
(Note 1)
480,890
(9,194)
471,696
(Note 2)
339,316
(35,738)
303,578
(Note 3)
48,984
(44,288)
4,696
(Note 3)
21,524
(2,858)
18,666
(Note 4)
Doosan Power Systems
Co., Ltd.
S.C. Doosan IMGB S.A.
Co., Ltd.
(Note 1) Doosan Engineering & Construction Co., Ltd. sold Doosan Corporation’s preferred stock and
others.
(Note 2) Valuation of derivative instruments, amortization of goodwill and others
(Note 3) Reversal of building revaluation and others
(Note 4) Reversal of building revaluation
e. Changes in the scope of the consolidated subsidiaries
(2010)
Companies
Doosan Bears, Inc..
Changes
Newly included
Reason for changes
Total assets and liabilities
each over ￦7 billion
〃
Total assets over ￦10 billion
Doosan Power Systems Czech Investment
〃
〃
Skoda Power A.S.
〃
〃
Skoda Power Pvt Ltd.
〃
〃
Co. Ltd
〃
Newly established
Excluded
Merged
Doosan Mottrol Co., Ltd.
〃
〃
Doosan Mecatec Co., Ltd.
〃
〃
〃
Sold
Changes
Reason for changes
Newly included
Total assets over ￦10 billion
〃
〃
Doosan Infracore Norway A.S
〃
〃
Doosan Moxy America LLC.
〃
〃
Doosan Moxy AS
〃
〃
〃
〃
Doosan Moxy U.K. Co., Ltd.
〃
〃
Doosan Moxy US Holdings Inc.
〃
〃
Doosan Heavy Industries Indonesia Co.,
〃
〃
〃
Newly acquired
Doosan International Luxemburg
〃
〃
Doosan Infracore Belgium S.A. Co., Ltd.
Doosan Mottrol Holdings Co., Ltd.
(2009)
Companies
Ltd.
Doosan Bears Inc.
Doosan Infracore Liaoning Machinery Co.
Reclassification of consolidated
subsidiary to equity method investee
Total assets under ￦10 billion
〃
〃
Excluded
Sold
Cyelon Heavy Industry Co., Ltd.
〃
〃
Doosan Japan Co., Ltd.
〃
〃
Sallyditch Holdings Co., Ltd.
〃
〃
Doosan Equipment de Construction SA.
〃
〃
Ltd.
Doosan Babcock Energy and Services
India Private Co., Ltd.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Parent and its domestic subsidiaries (the “Company”) maintain their official accounting records in Korean
won and prepare statutory financial statements in the Korean language (Hangul) in conformity with the
accounting principles generally accepted in the Republic of Korea.
Certain accounting principles applied by
the Company that conform with financial accounting standards and accounting principles in the Republic of
Korea may not conform with generally accepted accounting principles in other countries. Accordingly, these
consolidated financial statements are intended for use by those who are informed about Korean accounting
principles and practices.
The accompanying consolidated financial statements have been condensed,
restructured and translated into English with certain expanded descriptions from the Korean language
financial statements.
Certain information included in the Korean language financial statements, but not
required for a fair presentation of the Company’s financial position, results of operations, change in
stockholders’ equity or cash flows, is not presented in the accompanying consolidated financial statements.
(1) Adoption of Statements of Korea Accounting Standards (“SKAS”)
In 2009, Korea Accounting Institute (“KAI”) and the Financial Supervisory Service issued or revised various
Korea accounting standards, none of which were newly adopted by the Company for the year ended
December 31, 2010.
(2) Significant Accounting Policies for the Company’s Financial Statements
a. Cash and Cash Equivalents
Cash and cash equivalents include cash, substitute securities including checks issued by others, and
checking accounts, ordinary deposits and financial instruments, which can be easily converted into cash
and whose value changes due to changes in interest rates are not material, with maturities (or date of
redemption) of three months or less from acquisition.
b. Allowance for Doubtful Accounts
The Company provides an allowance for doubtful accounts to cover estimated losses on receivables
(account receivable - trade, loans, account receivable - other and other), based on collection experience
and analysis of the collectability of individual outstanding receivables.
c. Inventories
The Company maintains perpetual inventory, which is adjusted to physical inventory count performed at
year end.
Inventories are stated at the lower of cost or market, with cost being determined as follows:
Description
Merchandises and finished goods
Work in process
Raw materials
Supplies
Materials in -transit
Completed construction
Uncompleted construction
Others
Method
Weighted-average method
“
“
“
Specific Identification method
“
“
Weighted-average method or specific identification method
The costs of merchandise of the Glonet business unit of the Parent, raw materials and supplies of Doosan
Heavy Industries & Construction Co., Ltd. and certain supplies and raw materials of Doosan Infracore Co.,
Ltd. and its subsidiaries are determined using the moving-average method.
Doosan Electro-Materials
Singapore Pte Ltd., Doosan Construction & Engineering Co., Ltd., Doosan Heavy Industries Vietnam
Haiphong Co., Ltd. determine their cost of inventories using the first-in, first-out method (FIFO).
The
costs of finished goods and work-in-process of Doosan Heavy Industries & Construction Co., Ltd., work-inprocess and raw materials of Doosan Engine Co., Ltd. and finished goods of Hanjung Power Co., Ltd. are
determined using the specific identification method. When the market value of inventories (net realizable
value for merchandises, finished goods, work-in-process and current replacement cost for raw materials)
is less than the carrying value, the carrying value is stated at the lower of cost or market. The lower of cost
or market method is applied by group of inventories and loss on inventory valuation is presented as a
deduction from inventories and charged to cost of sales. As a result of such inventory valuation, the
Company recognized loss on inventory valuation nil and ￦19,329 million for the years ended December
31, 2010 and 2009, respectively.
However, when the circumstances which caused the valuation loss
cease to exist, the valuation loss is reversed up to the original carrying amount before valuation loss. The
said reversal is deducted from cost of sales. Reversal of loss on inventory valuation is ￦14,599 million
and nil for the years ended December 31, 2010 and 2009, respectively.
d. Securities (Excluding Equity Method Investment Securities)
Debt and equity securities are initially stated at the market value of consideration given for acquisition
(market value of securities acquired if market value of consideration given is not available) plus incidental
costs attributable to the acquisition of the securities and are classified into trading, available-for-sale and
held-to-maturity securities depending on the purpose and nature of acquisition.
In order to calculate
realized gain (loss), securities are stated at cost which is determined by using the specific identification
method for debt securities and the moving average method for equity securities.
- Trading securities
Securities that are bought and held principally for the purpose of selling them in the near term with active
and frequent buying and selling, including securities which consist of a portfolio of securities with the clear
objective of generating profits on short-term differences in price, are classified as trading securities.
Trading securities are recorded at their fair value and unrealized gains or losses from trading securities are
recorded as gain (loss) on valuation of trading securities included in the non-operating income (expense).
- Held-to-maturity securities
Debt securities that have fixed or determinable payments with a fixed maturity are classified as held-tomaturity securities only if the Company has both the positive intent and ability to hold those securities to
maturity.
However, debt securities, whose maturity dates are due within one year from the end of the
reporting period, are classified as current assets.
After initial recognition, held-to-maturity securities are stated at amortized cost in the statements of
financial position.
When held-to-maturity securities are measured at amortized costs, the difference
between their acquisition cost and face value is amortized using the effective interest rate method and the
amortization is included in the cost and interest income.
- Available-for-sale securities
Debt and equity securities that do not fall under the classifications of trading or held-to-maturity securities
are categorized and presented as available-for-sale securities included in investment assets.
However, if
an available-for-sale security matures or it is certain that such security will be disposed of within one year
from the end of the reporting period, it is classified as a current asset.
Available-for-sale securities are recorded at fair value.
Unrealized gain or loss from available-for-sale
securities are presented as gain or loss on valuation of available-for-sale securities included in
accumulated other comprehensive income (loss) of stockholders’ equity.
In addition, accumulated gain or
loss on valuation of available-for-sale securities are reflected in either gain or loss on disposal of availablefor-sale securities or loss on impairment of available-for-sale securities upon disposal or recognition of
impairment of the securities.
However, available-for-sale equity securities that are not marketable and
whose fair value cannot be reliably measured are recorded at acquisition cost.
When there is objective evidence that the available-for-sale securities are impaired and the recoverable
amount is lower than the cost (amortized cost for debt securities) of the available-for-sale securities, an
impairment loss is recognized as loss on impairment of available-for-sale securities in non-operating
expense and the related unrealized gain or loss remaining in stockholders’ equity is adjusted to the
impairment loss.
If the value of impaired securities subsequently recovers and the recovery can be
objectively related to an event occurring after the impairment loss was recognized, the reversal of
impairment loss can be recognized up to the previously recorded impairment loss as a reversal of loss on
impairment of available-for-sale securities in non-operating income.
However, if the fair value increases
after the impairment loss is recognized but does not relate to the recovery of impairment loss as described
above, the increase in fair value is recorded in stockholders’ equity. The Company recorded loss on
impairment of long-term investment securities totaling nil and ￦1,798 million and recovery of loss on
impairment of those totaling ￦49 million and ￦8,808 million for the years ended December 31, 2010 and
2009, respectively.
e. Equity Method Investment Securities
Investments in equity securities of companies, over which the Company exercises significant influence,
are reported using the equity method of accounting.
- Accounting for changes in the equity of the investee
Under the equity method of accounting, the Company records changes in its proportionate equity of the
net assets of the investee depending on the nature of the underlying changes in the investee as follows:
(i) “equity in income (loss) of associates” in the non-operating income (expense) for net income (loss) of
the investee; (ii) “increase (decrease) in retained earnings of associates” in the retained earnings for
changes in beginning retained earnings of the investee; and (iii) “increase (decrease) in equity of
associates” in accumulated other comprehensive income (loss) for other changes in stockholders’ equity
of the investee.
When the equity method investee’s unappropriated retained earnings carried over from prior period
changes due to significant error corrections, the Company records the changes in equity as “equity in
income (loss) of associates” included in the non-operating income (expense) if the impact of the changes
on the Company’s consolidated financial statements is not significant.
If the changes results from the
changes in accounting policies of the equity method investee, they are reflected in unappropriated retained
earnings carried over from prior period in accordance with SKAS on changes in accounting policy and
errors corrections.
When the investee declares cash dividends, the dividends to be received are
deducted directly from equity method investment securities.
- Treatment of investment difference
Difference between the acquisition cost and the Company’s proportionate equity in the fair value of net
assets of the investee upon acquisition (“Investment difference”) are considered (negative) goodwill and
accounted for in accordance with the accounting standards for business combination.
The goodwill
portion is amortized over useful lives (5 years) on a straight line method while the negative goodwill portion
is amortized over the weighted average useful lives of depreciable non-monetary assets of the investee.
The amortization is included in “equity income (loss) of associates”. When the Company’s equity interest
in the investee increases due to an increase (or decrease) in contributed capital with (or without)
consideration, the changes in the Company’s proportionate equity in the investee is accounted for as
investment difference.
If the Company’s equity interest decreases, the changes are accounted for as
“gain (loss) on disposal of the equity method investment securities”.
However, if the investee is the
Company’s subsidiary, those changes are accounted for as capital surplus (capital adjustments).
- Difference between the fair value and book value of net assets of the investee
Upon acquisition of the equity method investment securities, the Company’s proportionate shares in the
differences between the fair values and book values of the identifiable assets and liabilities of the investee
are amortized/reversed and included in “equity in income (loss) of associates” in accordance with the
investee’s methods of accounting for the assets and liabilities.
- Elimination of unrealized gain or loss from intercompany transactions
The Company’s proportionate share in the gain (loss) arising from transactions between the Company and
the investee, which remains in the book value of assets held as of the end of the reporting period is
considered unrealized gain (loss) and adjusted to equity method investment securities.
If the investee is
a subsidiary of the Company, unrealized gain (loss) from sale of an asset by the Company to the investee
(downstream transaction) is fully eliminated and adjusted to equity method investment securities.
- Impairment loss on equity method investment securities
When there is objective evidence that the equity method investment securities is impaired and the
recoverable amount is lower than the carrying amount of the equity method investment securities, an
impairment loss is recognized as “loss on impairment of equity method investment securities” included in
non-operating expense and the unamortized investment difference shall be first reduced.
When the
recoverable amount is recovered after the recognition of impairment loss, the reversal of impairment loss
can be recognized as income up to the previously recorded impairment loss.
The book value of the
equity method investment securities after the reversal of the impairment loss cannot exceed the book
value calculated as if the impairment loss would not been originally recognized.
The reversal of the
impairment loss recognized against the unamortized investment difference is not allowed.
- Translation of financial statements of overseas investees
For overseas investees whose financial statements are prepared in foreign currencies, the equity method
of accounting is applied after assets and liabilities are translated in accordance with the accounting
treatments for the translation of the financial statements of overseas’ subsidiaries for consolidated financial
statements.
The Company’s proportionate share of the difference between assets net of liabilities and
stockholders’ equity after translation into Korean won is accounted for as “increase (decrease) in equity of
associates” included in accumulated other comprehensive income (loss).
f. Property, Plant and Equipment
Property, plant and equipment are stated at cost (acquisition cost or manufacturing cost plus expenditures
directly related to preparing the assets ready for use).
Assets acquired from investment-in-kind, by
donation or free of charge in other ways are stated at fair value.
However, certain assets, for which the
revaluation method in accordance with the Korean Assets Revaluation Act or revaluation model in
accordance with the amendment to SKAS No. 5 is selected, are recorded at revalued amounts.
Expenditures after acquisition or completion that increase future economic benefit in excess of the most
recently assessed capability level of the asset are capitalized and other expenditures are charged to
expense as incurred.
In accordance with the Company’s policy, borrowing costs in relation to the manufacture, purchase,
construction or development of assets are charged to current operations as incurred.
When the expected future cash flow from use or disposal of the property, plant and equipment is lower
than the carrying amount due to obsolescence, physical damage or other causes, the carrying amount is
adjusted to the recoverable amount (the higher of net sales price or value in use) and the difference is
recognized as an impairment loss. When the recoverable amount subsequently exceeds the carrying
amount of the impaired asset, the excess is recorded as a reversal of impairment loss to the extent that
the reversed asset does not exceed the carrying amount before previous impairment as adjusted by
depreciation. The Company recorded loss on impairment of property, plant and equipment totaling
￦1,629 million and ￦1,277 million and recovery of loss on impairment of those totaling ￦41 million and
￦2,991 million for the years ended December 31, 2010 and 2009, respectively.
Depreciation is computed by the straight-line method based on the useful lives of the related units of
property, plant and equipment as summarized below.
Depreciation related to the manufacture of other
assets is included in the manufacturing cost whereas other depreciation is included in selling and
administrative expenses.
Description
Useful lives(years)
Buildings
Structures
Machinery
Others
3~60
2~40
2~20
2~20
g. Intangible Assets
Intangible assets are initially recognized at acquisition cost (purchase cost plus expenditures directly
related to preparing the asset ready for use) and subsequently presented at amortized cost. Development
cost is amortized over 5 ~20 years using the straight-line method when it can be used or sold and
intangible assets other than development cost are amortized using the straight-line method over the useful
lives as summarized below.
Amortization related to the manufacture of other assets is included in the
manufacturing cost of the assets whereas other amortization is included in selling and administrative
expenses.
Description
Useful lives(years)
Goodwill
Industrial rights
Other intangible assets
5~20
5~20
5~20
When the recoverable amount (the higher of net sales price or value in use) of intangible assets is
significantly lower than the carrying amount due to obsolescence and other, the difference is recognized
as an impairment loss. When the recoverable amount subsequently exceeds the carrying amount of the
impaired asset, the excess is recorded as a reversal of impairment loss to the extent that the reversed
asset does not exceed the carrying amount before previous impairment as adjusted by amortization. The
Company recorded loss on impairment of intangible assets totaling ￦44,681 million and ￦8,068 million
for the years ended December 31, 2010 and 2009, respectively.
Doosan Construction & Engineering Co., Ltd., a subsidiary of the Company, recorded the negative
goodwill which was the excess of the market value of the transferred net asset over the acquisition cost
from the merger with other subsidiaries.
The negative goodwill is amortized to net income over the weighted useful lives of non-monetary
depreciation (including amortizing) assets using straight-line method.
h. Government Subsidies and Others
Government subsidies and contributions for construction granted for the purpose of acquisition of certain
assets are recorded as a deduction from the assets granted or other assets acquired for the temporary
use of the assets granted. When the related assets are acquired, they are recorded as a deduction from
the acquired assets and offset against the depreciation of the acquired assets over their useful lives.
In
addition, government subsidies and contributions for construction without any repayment obligation is
offset against the related expenses for which they are intended to compensate, however, if there is no
matching expense, they are recorded as operating or non-operating income depending on whether they
are directly related to the Company’s principal operating activities.
Government subsidies and
contributions for construction with a repayment obligation are recorded as a liability.
i. Present Value Discount for Assets and Liabilities
Receivables or payables from long-term installment transactions, long-term loans/borrowings or the other
similar transactions are stated at present value which is determined by discounting total amounts
receivable or payable in the future using the effective interest rate, if the nominal value is significantly
different from the present value.
The discount or premium resulting from the determination of present
value is reported in the statements of financial position as a direct deduction from or addition to the
nominal value of the related receivables or payables and the amortization by the effective interest rate
method is included in the period income (loss).
j. Bonds and Discounts on Bonds
Discounts on bonds are amortized over the redemption period of the bonds using the effective interest rate
method, which are recognized as interest expense.
k.
Accrued Severance Indemnities
In accordance with the Company's policy, all employees with more than one year of service are entitled to
receive lump-sum severance payments upon termination of their employment, based on their current rates
of salary and length of service. The accrual for severance indemnities is computed as if all employees
were to terminate at the end of the reporting period and amounted to ￦1,161,625 million and
￦1,111,993 million as of December 31, 2010 and 2009, respectively.
The Company has insured a portion of its obligations for severance indemnities by making deposits with
Dongyang Life Insurance and other, which will be directly paid to employees, and records them as
deposits for severance insurance which are directly deducted from accrued severance indemnities.
Actual payments for severance indemnities amounted to ￦147,997 million and ￦200,174 million for the
years ended December 31, 2010 and 2009, respectively.
l. Provisions
The Company recognizes a provision for a liability with uncertain timing or amount when (i) there is a
present obligation of the Company arising from past events, (ii) it is highly likely that an outflow of
resources will be required to settle the obligation, and (iii) the amount for the settlement of the obligation
can be reliably measured. If there is a significant difference between the nominal value and present
value of such provision, the provision is stated at the present value of the expenditures expected to be
required to settle the obligation.
Where the expenditure required to settle a provision is expected to be reimbursed by another party, the
reimbursement is recognized as a separate asset when, and only when, it is virtually certain that
reimbursement will be received if the Company settles the obligation.
The expense generated by the
provision is presented net of the amount of expected reimbursement.
m. Translation of Assets and Liabilities Denominated in Foreign Currency
Transactions denominated in foreign currencies are recorded in Korean won translated at the exchange
rate prevailing on the transaction date and the resulting gain (loss) from foreign currency transactions is
included in non-operating income (expense).
Monetary assets and liabilities denominated in foreign
currency are translated into Korean won at the Base Rates announced by Seoul Money Brokerage
Services, Ltd. at the end of the reporting period, which were ￦1,138.90 and ￦1,167.60 to USD 1.00 at
December 31, 2010 and 2009, respectively, and the resulting gain (loss) from foreign currency translation
is included in non-operating income (expense).
n. Derivative Instruments
The Company records rights and obligations arising from derivative instruments in assets and liabilities,
which are stated at fair value.
Gains and losses that result from the changes in the fair value of derivative
instruments are recognized in current earnings.
However, for derivative instruments that cash flow hedge
accounting applies to, the effective portion of the gain or loss on the derivative instruments are recorded
as gain (loss) on valuation of derivatives included in accumulated other comprehensive income (loss).
o. Leases
A lease is classified as a finance lease or an operating lease depending on the extent of transfer to the
Company of the risks and rewards incidental to ownership.
criteria, it is accounted for as a finance lease:
If a lease meets any one of the following

The lease transfers ownership of the asset to the lessee by the end of the lease term;

The lessee has the option to purchase the asset at a bargain price and it is certain that the option will
be exercised;

The lease term is for the major part (75% or more) of the economic life of the asset even if title is not
transferred;

At the date of lease commencement the present value of the minimum lease payments amounts to at
least substantially all (90% or more) of the fair value of the leased asset; or

The leased assets are of such a specialized nature that only the Company can use them without major
modifications.
All other leases are treated as operating leases.
(1) Lessees
For operating leases, lease payments excluding guaranteed residual value are recognized as an expense
on a straight-line basis over the lease term and contingent rent is expensed as incurred. Finance leases
are recognized as assets and liabilities at the lower of fair value of the leased property or the present value
of the minimum lease payments discounted using the implicit interest rate of the lessor (or the Company’s
incremental borrowing rate if the implicit interest rate is not practicable to determine). Any initial direct
costs incurred by the Company are added to the amount recognized as an asset. The depreciation policy
for depreciable leased assets is consistent with that for the similar depreciable assets that are owned by
the Company. Annual minimum lease payments excluding guaranteed residual value is allocated to
interest expense, which is calculated using the effective interest rate, and finance lease repayment amount.
Contingent rent relating to financing are charged as expenses in the periods in which they are incurred,
however, if the amount is material, it is allocated to principal and interest, respectively, over the remaining
lease term.
(2) Lessors
For operating leases, lease payments on a lease contract are recognized as other income on a straightline basis over the lease term. For finance leases, lessors are required to present finance lease assets
as receivables in statements of financial position, at an amount equal to the fair value of the leased
property at the inception of lease and required to recognize the lease payments received as repayment of
the finance lease receivables and interest income.
p. Revenue Recognition
Revenue generated from sale of goods is recognized upon delivery; however, revenue is recognized when
the terms of the sales have been fully met if there are sales terms related with post-delivery.
In the case of returnable sales, revenue and cost generated from sale of goods are eliminated respectively
and gross margin is appropriated as reserve for returned goods.
The costs expected from returned
goods is additionally reflected in the provision related. Reserve for returned goods for refund amounted
to ￦6,051 million and ￦6,910 million for the years ended December 31, 2010 and 2009, respectively.
Interest is recognized on a time proportion basis that takes into account the effective yield on the asset.
Dividend is recognized when the stockholders’ right to receive payment is established. Royalties is
recognized on an accrual basis in accordance with the economic substance of the relevant agreement.
Revenue from construction projects is recognized using the percentage-of-completion method, measured
by the ratio of actual costs incurred to estimated total costs for each project. Revenue from housing
projects is recognized using the percentage-of-completion method starting after the sales contracts is
made. When loss from service or construction contract is probable, the loss is immediately recognized as
provision for construction losses and charged to cost of sales or cost of construction in the same period.
In addition, when the Company has an obligation for construction warranty after the construction or service
is completed, total estimated construction warranty expense is included in cost of construction or service in
the fiscal year during which the construction is completed or service is rendered, and records the provision
for construction warranty liability in the statements of financial position.
q. Loss on Impairment
Real estate for the purpose of investment is recorded as other non-current investments.
When the
recoverable amounts of investments in properties are significant below the book value caused by
obsolescence, physical impairment and sharp decrease in market value, the difference is reflected in
current earnings. The Company recorded loss on impairment of other non-current investments amounted
to ￦32,617 million for the year ended December 31, 2010.
r. Income Tax
The Company recognizes deferred income tax assets or liabilities for the temporary differences between
the carrying amount of an asset and liability for the financial reporting purposes and the amounts used for
income tax purposes. A deferred tax liability is generally recognized for all taxable temporary differences
with some exceptions and a deferred tax asset is recognized to the extent when it is probable that taxable
income will be available against which the deductible temporary difference can be utilized in the future.
Deferred income tax asset (liability) is classified as current or non-current asset (liability) depending on the
classification of related asset (liability) in the statements of financial position. Deferred income tax asset
(liability), which does not relate to specific asset (liability) account in the statements of financial position
such as deferred income tax asset recognized for tax loss carryforwards, is classified as current or noncurrent asset (liability) depending on the expected reversal period. Deferred income tax assets and
liabilities in the same tax jurisdiction and in the same current or non-current classification are presented on
a net basis. Current and deferred income tax expense are included in income tax expense in the
statement of operations and additional income tax or tax refunds for the prior periods are included in
income tax expense for the current period when recognized. However, income tax resulting from
transactions or events, which was directly recognized in stockholders’ equity in current or prior periods, or
business combinations, is directly adjusted to equity account or goodwill (or negative goodwill).
s. Currency Translation for Foreign Operations
Assets and liabilities of a foreign branch or company subject to the equity method of accounting for
investments are translated into Korean won at the rates of exchange in effect at the end of the reporting
period, while their equity is translated at the exchange rate at the time of transaction, and statement of
operations’ accounts at the average rate over the period.
Resulting translation gains and losses are recorded as accumulated other comprehensive income (loss).
Corresponding gains and losses are recognized as gain or loss when the foreign branch or company is
liquidated or sold.
t. Use of Estimates
The Company’s management uses reasonable estimates and assumptions in preparing the accompanying
consolidated financial statements in accordance with accounting principles generally accepted in the
Republic of Korea. The estimates and assumptions can change according to additional experience,
changes in circumstances, new information and other and may be different from actual results.
(3) Basis for Presenting Consolidated Financial Statements
a. Offset of Investments in Subsidiaries against Stockholders’ Equity
As of the date of initial investment in subsidiaries, the Company’s investments in subsidiaries are offset
against their corresponding stockholders’ equity of subsidiaries. Difference between the acquisition cost
and the Company’s proportionate equity in the fair value of net assets of subsidiaries upon acquisition
(“Investment difference”) is considered (negative) goodwill.
When investment in subsidiaries is acquired during a period, the Parent prepares the consolidated
financial statements using the subsidiaries’ financial statements (including the interim financial statements)
as of the closest date to the date of acquisition of the investment.
b. Treatment of Investment Difference
The excess of the acquisition cost over the Company’s proportionate equity in the fair value of net assets
of the investee upon acquisition are considered goodwill and the Company amortized goodwill over useful
lives on a straight-line method. The excess of the Company’s proportionate equity in the fair value of net
assets of the investee upon acquisition over the acquisition cost are considered negative goodwill, which is
reversed over the weighted average useful lives of depreciable non-monetary assets of the investee and is
reversed at the time of disposal of non-depreciable non-monetary assets.
c. Elimination of Inter-company Unrealized Gains and Losses
Significant unrealized gains and losses from inter-company transactions are fully eliminated.
d. Translation of Financial Statements of Subsidiaries
For overseas subsidiaries whose financial statements are prepared in foreign currencies, accounts of
consolidated statements of financial position are translated by the exchange rate at the end of the
reporting period, accounts of consolidated statements of income are translated by the average exchange
rate of the reporting period. Net translation adjustments are recorded as a component of stockholders’
equity.
For consolidated statements of cash flows, beginning balance of cash are translated by the exchange rate
at the end of the prior reporting period and ending balance of cash are translated by the exchange rate at
the end of the reporting period. Net translation adjustments are recorded as changes in cash according to
translation.
3.
RESTRICTED DEPOSITS
Details of restricted deposits as of December 31, 2010 and 2009 are as follows (In millions of Korean won):
Account
Institution
Cash and Cash
Woori
equivalents
Bank
2009
Description
￦ 15,918
￦ 143,091
Pledged as collateral
134,638
83,326
and others
Short-term Financial
instruments
Shinhan Bank
and others
Long-term financial
instruments
Woori
and others
Bank
2,455
320
Guarantee deposits for
and others
Deposits provided
checking account
Shinhan Bank
Total
4.
2010
15
15
￦ 153,036
￦ 226,752
TRANSFERS OF RECEIVABLES
Trade receivables sold at discount with recourse by the Company were ￦1,618,057 million and ￦1,114,542
million for the years ended December 31, 2010 and 2009, respectively. Loss on disposal of trade
receivables totaling ￦17,078 million and ￦24,977 million for the years ended December 31, 2010 and 2009,
respectively, was recorded in non-operating expense.
5.
INVENTORIES
Inventory valuations as of December 31, 2010 and 2009 are summarized as follows (in millions of Korean
won):
Account
2010
￦
Merchandise
2009
71,000
￦
247,303
Finished goods
709,353
339,280
Work in process
384,430
435,603
Raw materials
768,222
675,325
Materials in-transit
272,527
217,718
Other
182,833
67,756
Sub total
2,388,365
1,982,985
Less: Valuation allowance
(118,062)
(132,661)
Total
￦
2,270,303
￦
1,850,324
6.
SECURITIES (EXCLUDING EQUITY METHOD INVESTMENT SECURITIES)
(1) Short-term investment securities
Details of short-term investment securities as of December 31, 2010 and 2009 are as follows (In millions
of Korean won):
Details
Available-for-sale securities
(Equity securities and others)
Held-to-maturity securities
Total
2010
￦
2009
￦
112,066
101,832
40,260
￦
2,435
￦
152,326
104,267
(2) Long-term investment securities
Details of long-term investment securities as of December 31, 2010 and 2009 are as follows (In millions
of Korean won):
Details
Marketable equity securities
Non-marketable equity securities
Debt securities
Total
2010
￦
2009
5,286
￦
12,443
493,528
54,848
￦
553,662
396,681
92,748
￦
501,872
1) Marketable equity securities
Details
Hana Financial Group Inc.
2010
￦
HTC
KSP
SK energy Co., Ltd
Pharma Foods International
Others
Total
2009
1,624
￦
1,210
239
578
717
918
￦
5,286
1,104
2,311
316
350
902
7,460
￦
12,443
2) Non-marketable equity securities
Details
Shinbundang Railroad Co., Ltd.
Kyunggi Highway Co., Ltd.
GK Fixed Link Corp.
The Third Kyungin Highway Corp.
Pusan New Port Company
KPCL(ex, LKPL)
Alpha Dome City Co., Ltd.
Pohangsinhang
Kangnam Beltway
Pentaport Development Co., Ltd.
Daegu South Circulation Road Corp.
Incheongimpo Linking High way Co., Ltd.
2010
￦
83,981
￦
60,412
94,024
24,727
16,164
12,050
19,668
8,143
5,166
3,300
3,083
3,151
3,938
26,738
6,377
4,750
3,000
12,029
4,899
11,843
6,826
4,000
400
4,721
24,015
46,123
The 2nd Seoul-Incheon Linking Highway Co., Ltd.
Construction Guarantee
Korea Defense Industry Association
Machinery Financial Cooperative
Cheonan Hermeca Development Co., Ltd.
Interpark Performance Fund
Ekonhil Co., Ltd.
Kyunggi South Road Co., Ltd.
Seoul Lite Tower Co., Ltd.
Korea Housing Guarantee Co., Ltd.
Dream Hub PFV Co., Ltd.
Samsong Bromex Development Co., Ltd.
Korea-China Future City Development
Cheongna IBT Co., Ltd
Others
Total
2009
￦
493,528
62,552
60,412
58,480
24,727
16,164
12,050
11,800
8,447
5,166
3,300
2,948
1,576
3,938
21,539
324
3,750
3,000
811
9,577
5,672
4,620
8,760
4,000
300
2,046
60,722
￦
396,681
(3) Debt securities
Details of debt securities as of December 31, 2010 and 2009 are as follows (In millions of Korean won):
(2010)
Fair
value
Details
(Government and public bonds)
1 to 5 years to maturity
￦
Amortized
cost
3,632
￦
3,632
Book
value
￦
3,634
(Bonds)
28,850
16,700
28,850
16,700
28,850
16,700
(Others)
5,571
100
5,571
100
5,571
93
38,053
16,800
38,053
16,800
38,055
16,793
(Sub total of debt securities)
Total
￦
54,853
￦
54,853
￦
54,848
(2009)
Fair
value
Details
(Government and public bonds)
￦
Amortized
cost
1,911
￦
1,911
Book
value
￦
1,911
(Bonds)
In 1 year to maturity
4,200
35,144
16,800
4,200
35,144
16,800
4,200
34,986
16,802
(Others)
55,562
55,562
34,849
(Sub total of debt securities)
In 1 year to maturity
4,200
92,617
16,800
4,200
92,617
16,800
4,200
71,746
16,802
Total
￦
113,617
￦
113,617
￦
92,748
7.
EQUITY METHOD INVESTMENT SECURITIES
Investments in securities accounted for using the equity method as of December 31, 2010 and 2009 are
summarized as follows (in millions of Korean won):
Acquisition cost
Percentage of
Companies
ownership (%)
2010
Equity in net
Book
asset value (Note 7)
value
2009
2010
2009
2010
2009
21.05
￦1,853
￦1,853
￦4,456
￦4,109
￦4,229
-
-
1,000
-
(2,371)
-
-
DB E&S (Note 2)
100.00
4,803
4,803
8,119
7,022
7,228
6,339
Doosan E&S (Note 2)
100.00
6,918
6,918
4,934
4,435
4,934
4,435
80.00
3,600
3,600
1,941
2,626
-
2,492
DPSCI (Note 1)
-
-
560,108
-
560,108
-
560,108
Casco (Note 4)
16.21
4,010
4,010
2,506
3,544
2,748
3,802
10.64
98,716
98,716
65,210
57,380
104,995
99,316
14.30
2,675
2,675
3,583
3,854
3,583
3,854
50.00
16,376
8,070
15,923
8,073
15,923
8,175
Sunduk Steel Inc
Doosan Bears (Note1)
Haman Industrial Complex (Note 3)
￦3,854
Korea Aerospace Industries Co., Ltd.
(Note 4)
Dalian Samyoung Doosan Metal
Product Co., Ltd. (“DSMP”) (Note 4)
Xuzhou Xugong Doosan Engine Co.,
Ltd.(Note 5)
Doosan Power System (Scotland) Ltd.
Partnership (“SLP”) (Note 6)
Others
Total
31.25
6,682
-
7,360
-
7,397
-
-
49,382
37,285
34,390
39,322
33,571
36,538
￦194,888
￦729,038
￦148,422
￦688,102
￦184,608
￦728,913
(Note 1) Newly consolidated subsidiaries in the current period
(Note 2) Excluded from the scope of the consolidated subsidiaries due to the fact that the investees are not
subject to external audit according to Enforcement Decree of the Act on External Audit of stock
Companies
(Note 3) Excluded from the scope of the consolidated subsidiaries due to the Company does not have control
over these investees according to agreements.
(Note 4) Although the Company has ownership of investee below 20%, the Company applied the equity
method of accounting as the Company can exercise voting right at the board of directors’ meetings.
(Note 5) Excluded from consolidated subsidiaries as it is a joint venture.
(Note 6) Classified as equity method investment securities as the Company is not the largest stockholder.
(Note 7) These securities were accounted for using the equity method of accounting based on unaudited
financial statements as of and for the year ended December 31, 2010 as the audited financial
statements on these companies could not be obtained at the Company’s year-end closing.
In order
to verify the reliability of such unaudited financial statements, the Company has performed the
following procedures and found no significant exceptions:
① Obtained the unaudited financial statements signed by the investee’s chief executive officer and
statutory auditor
② Identified whether the major transactions or accounting events, including those disclosed to public by
the investee, which were acknowledged by the Company, are properly reflected in the unaudited
financial statements
③ Identified the major accounting issues under discussion between the investee and its external
auditors and the investee’s plan to resolve such issues
④ Analyzed the effect of potential difference between the unaudited and audited financial statements
Changes in carrying amount resulting from the equity method of accounting for the years ended December
31, 2010 and 2009 are as follows (In millions of Korean won):
(2010)
January 1,
Change in
Acquisition
2010
scope
(disposal)
Companies
Sunduk Steel Inc.
￦
3,854
￦
-
￦
Dividends
-
￦
-
DB E&S
6,339
-
-
-
Doosan E&S
4,435
-
-
-
Haman Industrial Complex
2,492
-
-
-
DPSCI
560,108
(560,108)
-
-
Casco
3,802
-
-
Ltd.
99,316
-
DSMP
3,854
Equity in
Other increase
December 31,
income (loss)
(decrease)
2010
￦
337
￦
998
38
￦
4,229
(109)
7,228
617
(118)
4,934
(1,938)
(554)
-
-
-
-
-
(1,079)
25
2,748
-
(352)
5,982
49
104,995
-
-
-
50
(321)
3,583
8,175
-
8,306
-
(558)
-
15,923
Korea Aerospace Industries Co.,
Xuzhou Xugong Doosan Engine
Co., Ltd.
SLP
-
-
6,682
-
715
-
7,397
36,538
-
1,627
(1,191)
(306)
(3,097)
33,571
￦ 728,913
(￦ 560,108)
16,615
(￦1,543)
￦
January 1,
Change in
Acquisition
Equity in
Other increase
December 31,
2009
scope
(disposal)
Dividends
income (loss)
(decrease)
2009
￦
(￦
Others
Total
￦
4,818
(￦
4,087)
￦
184,608
(2009)
Companies
Sunduk Steel Inc.
￦
4,838
￦
-
￦
-
-
683)
(￦
303)
￦
3,854
DB E&S
4,274
-
1,025
-
2,456
(1,416)
6,339
Doosan E&S
3,278
-
3,640
-
(2,583)
100
4,435
3,379
-
-
-
(887)
-
2,492
DPSCI
-
-
560,108
-
-
-
560,108
Casco
5,086
-
-
-
(1,244)
(40)
3,802
Ltd.
90,850
-
(3,019)
-
11,163
322
99,316
DSMP
3,987
-
-
-
163
(296)
3,854
Korea Aerospace Industries Co.,
Xuzhou Xugong Doosan Engine
Co., Ltd.
Others
Total
-
-
8,070
-
-
105
8,175
78,851
(45,918)
(1,704)
(4,742)
(4,851)
14,902
36,538
45,918)
￦ 568,120
(￦4,742)
￦194,543
(￦
￦
3,534
￦
13,374
￦
728,913
Changes in investment differences from the equity method investment securities for the years ended
December 31, 2010 and 2009 are as follows (In millions of Korean won):
(2010)
Increase (Decrease)
January 1,
Change in
arising from acquisition
Realized gains or
December 31,
2010
scope
or disposal
losses on disposal
2010
Companies
￦
Others
41,945
￦
-
￦
-
(￦
￦
2,140)
39,805
(2009)
Increase (Decrease)
January 1,
Change in
arising from acquisition
Realized gains or
December 31,
2009
scope
or disposal
losses on disposal
2009
Companies
￦
Others
4,788
(￦
￦
4,790)
43,011
￦
￦
1,065
41,945
The condensed financial information of the investees as of and for the years ended December 31, 2010 and
2009 is as follows (In millions of Korean won):
(2010)
Companies
Sunduk Steel Inc.
DB E&S
Doosan E&S
Casco
DSMP
￦
Total
Total
Net
assets
liabilities
assets
Revenue
income (loss)
22,966
￦ 21,171
￦ 81,085
2,701
8,119
12,259
7,041
2,107
4,934
14,911
617
162,205
159,779
2,426
-
(859)
44,137
10,820
￦
Net
￦
1,469
970
67,069
51,611
15,458
49,026
(6,566)
1,502,677
888,374
614,303
1,263,368
78,987
52,780
27,731
25,049
44,035
347
55,014
23,169
31,845
-
(913)
41,834
18,280
23,554
107,225
2,323
196,480
15,177
181,303
37,242
145
Ltd.
SLP
Others
(2009)
Companies
￦
Total
Total
Net
assets
liabilities
assets
Revenue
income (loss)
19,941
￦ 19,523
￦ 71,519
Doosan Bears
8,168
10,754
(2,586)
26,052
DB E&S
9,890
2,868
7,022
14,851
1,772
Doosan E&S
5,706
1,271
4,435
5,877
(1,969)
Sunduk Steel Inc.
DPSCI
Casco
DSMP
￦
Net
39,464
￦
(3,373)
(89)
82,995
79,712
3,283
-
(803)
796,889
206,781
560,108
-
-
58,918
37,048
21,870
54,949
(7,580)
1,274,962
725,401
549,561
1,086,575
12,888
44,211
25,558
18,653
26,279
787
Ltd.
Others
8.
16,278
132
16,146
-
(223)
648,593
460,263
188,330
204,804
(29,615)
PROPERTY, PLANT AND EQUIPMENT
The standard value of land declared by the government as of December 31, 2010 and 2009 are as follows (In
millions of Korean won):
Book value
Details
2010
￦
Plant and Others
Standard value
2009
3,942,823
￦
2010
￦
3,902,483
2009
2,203,641
￦
2,263,152
Changes in property, plant and equipment for the years ended December 31, 2010 and 2009 are as follows
(In millions of Korean won):
(2010)
Account
Land
Buildings
January 1,
2010
Change of
consolidated
scope
Acquisition
Disposal
￦ 3,902,483
(￦ 33,448)
￦ 70,682
(￦ 22,224)
Depreciation
￦
Others
December 31,
2010
-
￦ 25,330
￦ 3,942,823
1,611,366
42,917
63,461
(4,101)
(102,158)
64,820
1,676,305
Structures
162,569
(242)
5,125
(482)
(17,860)
37,696
186,806
Machinery
1,004,732
50,457
150,089
(39,527)
(208,421)
140,730
1,098,060
257,304
(10,902)
102,493
(7,959)
(120,206)
6,387
227,117
Others
Constructionin-progress
Total
178,403
(8,166)
338,275
(4,260)
-
(344,909)
159,343
￦ 7,116,857
￦ 40,616
￦ 730,125
(￦ 78,553)
(￦ 448,645)
(￦ 69,946)
￦ 7,290,454
(2009)
January 1,
2009
Change of
consolidated
scope
￦ 4,035,304
(￦ 152,849)
1,437,605
(21,597)
Structures
170,887
(7,199)
12,415
(1,701)
(15,597)
3,764
162,569
Machinery
860,218
44,091
261,024
(73,270)
(255,989)
168,658
1,004,732
Others
327,158
(89,607)
87,479
(7,813)
(89,472)
29,559
257,304
Constructionin-progress
493,410
6,584
346,824
(33,236)
(911)
(634,268)
178,403
￦ 7,324,582
(￦ 220,577)
731,736
(￦ 148,442)
(￦ 430,152)
(￦ 140,290)
Account
Land
Buildings
Total
Acquisition
￦
4,498
19,496
￦
Disposal
(￦
Depreciation
7,067)
￦
(25,355)
Others
-
December 31,
2009
￦ 22,597 ￦
(68,183)
269,400
The Company adopted the revaluation model to measure its land after the date of acquisition.
3,902,483
1,611,366
￦
7,116,857
Details of the
land revaluation are as follows:
a. Date of revaluation: December 31, 2008
b. Use of specialist
In connection with the revaluation process, the Company utilized the valuation results from a specialist
who is an independent property appraiser.
c. Significant assumptions and methodologies used in the revaluation
The Company utilized the market price or the amount for which the land can be exchanged between
willing parties in an arm’s length transaction in the revaluation method.
d. Details of book value using the cost model are as follows (In millions of Korean won):
Revaluated amounts
Account
Land
Dec. 31, 2010
Dec. 31, 2009
￦
￦
3,602,008
3,769,470
Acquisition costs
Dec. 31, 2010
Dec. 31, 2009
￦ 1,361,616
￦ 1,476,720
e. Details of changes in other comprehensive income related to the revaluation are as follows (In millions of
Korean won):
(2010)
Details
Land
Less tax effect
Net
Change of
Increased
Decreased
January 1,
consolidated
amount due to
amount due to
2010
scope
the revaluation
the revaluation
￦ 2,292,750
(￦ 36,385)
(558,452)
8,005
￦ 1,734,298
(￦ 28,380)
￦
-
￦
￦
-
￦
December 31,
Disposals
2010
-
(￦ 15,973)
￦ 2,240,392
-
3,514
(546,933)
-
(￦ 12,459)
￦ 1,693,459
(2009)
Increased
Details
Land
Less tax effect
Net
9.
Decreased
January 1,
amount due to
amount due to
2009
the revaluation
the revaluation
￦ 2,379,805
￦
(577,604)
￦ 1,802,201
-
￦
￦
-
￦
December 31,
Disposals
2009
-
(￦ 87,055)
￦ 2,292,750
-
19,152
(558,452)
-
(￦ 67,903)
￦ 1,734,298
INSURANCE
As of December 31, 2010, the Company is insured with Hyundai Marine and Fire Insurance Co., Ltd. and
others as follows (In millions of Korean won):
Insurance policy
Fire Insurance and
Others
Insured items
Property, plant and
Insurance company
Hyundai Marine and Fire
equipment and
Insurance Co., Ltd and
Inventories
Others
Insured amount
￦10,513,043
In addition, the Company carries general loss and comprehensive liability insurance coverage on its vehicles.
10.
INTANGIBLE ASSETS
Changes in intangible assets for the years ended December 31, 2010 and 2009 are as follows (In millions of
Korean won):
(2010)
Change of
consolidated
Account
January 1,
scope
2010
(Note 1)
￦4,811,916 ￦
Goodwill
Disposal
Increase
468,532
Negative goodwill
(145,614)
-
Industrial rights
￦
(Note 2)
Transfers
￦
- (￦ 104,345)
-
-
-
Amortization
Impairment
(Reversal)
loss
(￦ 267,886) (￦
-
13,224
December 31,
Others
2010
22,115) (￦137,865) ￦
4,748,237
-
-
(132,390)
1,276,593
-
890
-
-
(89,300)
-
(65,995)
1,122,188
Development costs
315,203
-
142,281
-
(20,786)
(27,344)
(22,566)
504
387,292
Others
209,639
(191)
31,929
-
4,823
(42,350)
-
(14,405)
189,445
￦6,467,737 ￦
Total
468,341
￦ 175,100 (￦ 104,345) (￦
15,963)
(￦ 413,656) (￦
44,681) (￦217,761) ￦
(Note 1) Doosan Power Systems Czech Investment and its two foreign affiliates (“DPSCI”) are newly included
in the consolidation.
(Note 2) The Parent and its subsidiaries sold some of their shares of Doosan Infracore Co., Ltd. to minority
interest holders.
(2009)
Change of
Account
Goodwill
January 1,
consolidated
2009
scope
￦5,307,482
(￦
Increase
283,794)
Negative goodwill
(159,440)
-
Industrial rights
￦
Disposal
91,297
￦
-
Amortization
Impairment
(Reversal)
loss
- (￦ 304,806)
-
13,826
(￦
December 31,
Others
979)
￦
-
2009
2,716 ￦
4,811,916
-
(145,614)
1,487,352
(114,534)
1,712
(92)
(98,905)
(73)
1,133
1,276,593
Development costs
211,441
10,993
147,421
(10,033)
(33,028)
(7,008)
(4,583)
315,203
Others
182,612
16,908
30,506
2,973
(40,940)
(8)
17,588
209,639
Total
￦7,029,447
(￦
370,427)
￦ 270,936 (￦
7,152) (￦ 463,853) (￦
8,068) ￦
16,854 ￦
6,467,737
6,314,772
11.
BONDS AND LONG-TERM BORROWINGS
Details of bonds and long-term borrowings and repayment schedule as of December 31, 2010 and 2009 are
as follows (In millions of Korean won):
(1) Bonds
Interest
Details
The 273 th
Issue date
Maturity
rate (%)
2007.2.6
2010.2.6
5.92
2010
￦
2009
-
￦
50,000
The 277 th
2008.8.7
2011.8.7
7.25
50,000
50,000
The 279-1st
2009.5.26
2011.5.26
6.05
50,000
50,000
The 279-2nd
2009.5.26
2011.11.26
6.30
50,000
50,000
The 279-3rd
2009.5.26
2012.5.26
6.55
97,000
100,000
The 280-1st
2010.12.13
2013.12.13
4.44
50,000
-
The 280-2nd
2010.12.13
2015.12.13
5.64
50,000
-
347,000
300,000
1,140,000
1,357,009
1,357,667
1,144,600
Sub total (The Parent)
994,360
735,000
1,142,840
1,130,000
295,000
895,000
Sub total (Consolidated subsidiaries)
4,929,867
5,261,609
Total
5,276,867
5,561,609
1,892,667
1,904,008
(653)
(1,041)
(10,599)
(7,095)
Others
Less: Current bonds
Less: Discount on current bonds
Less: Discount on non-current bonds
Bonds balance, net
￦
3,373,601
￦
3,650,506
(2) Long-term Borrowings
a. Long-term borrowings in domestic currency (In millions of Korean won):
Interest rate
Details
General loans
Bloom loans
Lender
per annum(%)
Hana Bank & others
1.00~5.40
KDB & others
1.00~5.94
85,563
76,300
KDB
3.52
1,100
2,100
129,567
81,304
Technology loans
2010
￦
Sub total (The Parent)
Doosan Heavy Industries Construction Co., Ltd
2009
42,904
￦
2,904
50,000
121,061
100,000
40,000
21,406
4,087
Doosan Engineering & Construction Co., Ltd
105,387
7,267
Others
283,296
441,880
Sub total (Consolidated subsidiaries)
560,089
614,295
Total
689,656
695,599
248,060
2,746
-
(2,405)
Less: Current portion
Less: Present value discount
￦
Long term borrowings balance, net
441,596
￦
690,448
b. Long-term borrowings in foreign currency (In millions of Korean won):
Details
Lender
Interest rate(%)
Construction Co., Ltd.
KDB & others
4.08 ~ 4.13
KB & others
6M Libor+1.60
KDB & others
Libor+1.60
Korea Exim Bank
2.17
2010
2009
Doosan Heavy Industries &
￦
-
￦
60,615
3,159,861
3,480,121
273,336
350,280
Doosan Engineering &
Construction Co., Ltd
Others
Total (the consolidated subsidiaries)
Less: current portion
Long term borrowings balance, net
￦
15,147
-
466,728
285,932
3,915,072
4,176,948
254,528
294,170
3,660,544
￦
3,882,778
(2) Repayment Schedule
Repayment schedule of the Company’s bonds and long-term borrowings as of December 31, 2010 is as
follows (In millions of Korean won):
Year ending
December 31,
12.
Long – term
borrowings
Bonds
2011
2012
2013
2014
2015 and thereafter
￦
Total
￦
1,892,667
￦
1,655,000
1,594,360
25,000
109,840
5,276,867
Total
502,588
￦
2,395,255
1,590,806
1,336,009
1,151,086
24,239
￦
4,604,728
3,245,806
2,930,369
1,176,086
134,079
￦
9,881,595
ABS LIABILITIES
The Company transferred certain accounts receivables, such as Class 1 beneficiary certificates, receivables
from real estate sales and construction receivables, to a special purpose company (SPC). The SPC issued
asset-backed securities (“ABS”).
Liabilities from issuing ABS as of December 31, 2010 and 2009 are
summarized as follows (In millions of Korean won):
Details
Beginning balance
2010
￦
2009
-
￦
64,203
Changes in the scope of the consolidated
subsidiaries
280,000
Issuance
Less: redemption
Ending balance
Less: current portion
Long term portion
￦
-
363,493
-
(415,545)
(64,203)
227,948
-
(227,948)
-
-
￦
-
13.
LEASES
(1) Lessee
Property and equipment acquired through capital lease agreements with Lotte Capital and others as of
December 31, 2010 and 2009 are as follows (In millions of Korean won):
1) Financial Lease
Details
2010
￦
Acquisition cost
2009
6,539
Accumulated depreciation
￦
1,226
￦
Balance, net
5,313
6,255
544
￦
5,711
Annual future lease payments of such leases as of December 31, 2010 are as follows (In millions of
Korean won):
Year ending December 31
2011
Amounts
￦
1,242
2012
559
2013
256
2014 and thereafter
439
Total
2,496
Less: Account payable – other
Balance, net
(1,242)
￦
1,254
2) Operating Lease
Doosan Bears Inc. entered into operating lease agreements with Hyosung Capital, Orix Capital, and
Hyundai Capital. Lease payment in 2010 is ￦188 million, within a year is ￦88 million and from year 2
to year 5 is ￦34 million.
Doosan Power Systems Co., Ltd., Doosan Hydro Technology, Inc. and
Doosan Heavy Industries America Co., Ltd executed operating lease agreements. Lease payment
within a year is ￦1,749 million, from year 2 to year 5 is ￦4,458 million and over year 5 is ￦7,133
million.
(2) Lessor
1) Financial Lease
The present values of gross investments and minimum lease receipts provided to the Company as of
December 31, 2010 are as follows (In millions of Korean won):
Year ending
December 31
Minimum lease receipts
￦
2011
581,410
2012
447,098
2013
255,772
2014
71,005
2015 and thereafter
115,159
Total
1,470,444
Less: Amounts representing interest
(128,193)
￦
Net
1,342,251
2) Operating Lease
Annual future lease receipts from operating lease arrangements to be recognized by the Company as of
December 31, 2010 are as follows (in millions of Korean won):
Year ending
December 31
2011
Minimum lease receipts
￦
33,425
2012
21,882
2013
12,160
2014
2,848
Total
￦
70,315
14.
ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
Major assets and liabilities denominated in foreign currencies as of December 31, 2010 and 2009 are
summarized as follows (In thousands of foreign currencies and millions of Korean won):
2010
Foreign
currencies
Account
Assets:
Cash and cash equivalents
USD
JPY
EUR
CNY
114,913
43,143
2,755
789
Other
Accounts receivable – trade
USD
JPY
EUR
CNY
880,443
3,084,301
106,876
772
USD
JPY
EUR
CNY
102,049
28,477
548
3,857
Other
Others
USD
JPY
EUR
CNY
353,980
273,008
6,359
344
Total
Korean won
equivalent
USD
122,607
￦ 143,156
603
JPY
924,613
11,676
4,170
EUR
4,723
7,908
136
CNY
720
1,002,737
Other
916,598
43,090
3,208,305
40,515
161,768
EUR
91,963
153,974
133
CNY
45
8
1,070,220
49,822
Other
116,224
USD
JPY
41,512
48,469
398
2,823
36
829
EUR
1,524
2,552
665
CNY
-
532
Other
403,148
84,141
971
378,552
3,814
USD
JPY
9,690
122
9,625
EUR
723
1,211
59
CNY
342
Other
1,451,385
USD
1,459,269
JPY
3,428,929
JPY
4,145,431
EUR
116,538
EUR
98,933
CNY
5,762
CNY
1,107
￦2,032,417
Other
441,998
59
31,402
USD
Other
123
43,245
USD
JPY
61,799
Other
Foreign
currencies
￦ 130,874
41,991
Other
Accounts receivable – other
2009
Korean won
equivalent
￦2,081,786
2010
Account
Foreign
currencies
2009
Korean won
equivalent
Foreign
currencies
Korean won
equivalent
Liabilities:
USD
JPY
EUR
Other
168,768
3,461,042
67,150
￦ 192,210
Accounts payable – other
USD
JPY
EUR
CNY
Other
Others
Accounts payable – trade
96,040
5,574,558
59,224
￦ 112,137
48,354
101,638
21,830
USD
JPY
EUR
Other
78,407
4,720,482
79,071
764
89,288
65,949
119,682
132
16,254
USD
JPY
EUR
CNY
Other
80,868
1,481,627
44,634
901
94,422
18,710
74,729
154
8,459
USD
JPY
EUR
Other
1,324,382
10,698,353
260,800
1,508,339
149,465
394,747
36,473
USD
1,626,441
JPY
16,863,416
EUR
160,893
Other
1,925,691
209,275
246,497
66,238
USD
JPY
EUR
CNY
1,571,557
18,879,877
407,021
764
70,397
99,159
6,252
Total
Other
USD
JPY
EUR
CNY
￦2,744,361
Other
1,803,349
23,919,601
264,751
901
￦2,932,120
15.
COMMITMENTS AND CONTINGENCIES
(1) Notes and Checks Provided as Collateral
As of December 31, 2010, the Company has provided related banks with several notes and checks as
collateral for its borrowings. Also, as of December 31, 2010, Oricom Co. Ltd., a subsidiary, shall proceed a
legal proceeding to nullify three missing checks.
(2) Trade Receivables Sold or Discounted
The amount of trade receivables sold by the Company to financial institutions including banks, which have
not matured as of December 31, 2010, amounted to ￦25,099 million. Export receivables discounted
under condition of D/A or D/P (including L/C) during 2010, which have not matured as of December 31,
2010, amounted to ￦179,803 million.
(3) Overdrafts
As of December 31, 2010, the Company has entered into bank overdraft agreements with various financial
institutions and details are as follows (In millions of Korean won):
Financial institution
Credit limit
Overdrafts
Standard Chartered First Bank Korea Ltd. and
Others
￦
259,127
￦
1,784
(4) Claim
As of December 31, 2010, the Company is a defendant in a lawsuit claiming compensation of ￦173,872
million, and the final outcome of this suit cannot be reasonably determined.
(5) Technology Transfer Contract
The Parent has technical license agreements for the purpose of manufacturing specific products with
Nabtesco, Rotzler, and Horstman Co., Ltd.
Oricom Co., Ltd., a subsidiary, has entered into a copyright and trademark license agreement with Conde
Nast Co., Ltd. for Vogue and other Magazines.
According to such contract, royalties paid by the
company are based on net sales (6.5%, 10%).
As of December 31, 2010, Doosan Heavy Industries Construction Co., Ltd., a subsidiary, has entered into
several technical assistance agreements with GE and others whose terms range from March 28, 1977 to
September 2, 2033, and for which royalties of ￦15,721 million and ￦22,812 million were paid for the
years ended December 31, 2010 and 2009, respectively.
Doosan Engine Co., Ltd., a subsidiary, has seven technical license agreements with MAN Diesel and
Wartsila for the purpose of manufacturing engines. In accordance with the agreements, the Company is
committed to pay a royalty calculated based on the cumulative horse power of engines manufactured
during the year. The royalty paid ￦138,513 million and ￦143,289 million for the years ended December
31, 2010 and 2009, respectively.
SRS Korea Co., Ltd., a subsidiary, has technical license agreements with Yum Restaurants International
and BurgerKing Corporation.
(6) Contract of Asset-Backed Securitization
Doosan Engineering & Construction Co., Ltd., a subsidiary, is bound to provide asset-backed
securitization companies including DS Marine the 1st Co., Ltd. with liquidity not exceeding ￦360,000
million in accordance with the consignment contracts of asset management and operations.
loans to those companies are ￦224,438 million as of December 31, 2010.
Short-term
(7) Contract of Stock Purchase
1) Doosan Infracore Co., Ltd.
Doosan Infracore Co., Ltd. (“Doosan Infracore”), a subsidiary, formed a consortium which includes
Doosan Engine Co., Ltd. and financial investors, to acquire shares of Doosan Infracore International,
Inc., a special purpose holding company established in the United States, and Doosan Holdings
Europe Ltd., a special purpose holding company established in Ireland.
On November 11, 2007, the consortium consummated the acquisition of the Compact Equipment
Business from Ingersoll-Rand Ltd. through these holding companies whose foreign subsidiaries that
are continuing the Compact Equipment Business of Ingresoll-Rand Ltd. In relation to above transaction,
the financial investors have put options to sell their unconverted portion of convertible preferred shares
during five years at the price based on their invested amount compounded at 9% annually. Doosan
Infracore has made loan agreements with lenders, including Korea Development Bank and nine other
financial institutions, to finance an aggregate principal amount of USD 560 million for the acquisition of
Doosan Infracore International, Inc. and Doosan Holdings Europe Ltd. This agreement requires
Doosan Infracore to ensure that the ratio of EBITDA to net interest expense will not be less than 1.5
and the ratio of financial debt to EBITDA will not exceed 6.0.
2) Doosan Engineering & Construction Co., Ltd
Doosan Construction & Engineering Co. Ltd. (“Doosan E&C”), a subsidiary, as one of the construction
investors relating to Chung-ra International Business Town (CIBT), Gwang-gyo Power Center (GPC)
and Sang-am DMC, has entered into the following option contracts on financial investors' shares.
The option contracts have unlisted shares as an underlying asset and are exercisable at a fixed price
rather than fair value, for which a seller retains the ownership risks related to the shares. Therefore, the
Company accounted for these contracts as secured borrowings.
As a result, Doosan E&C recorded its proportionate share of total investment of financial investors
(CIBT: ￦ 21,969 million, GPC: ￦2,452 million and Sang-am DMC: ￦ 7,223 million) as long-term
investment securities and long-term/ short-term borrowings. In addition, Doosan E&C recorded
interest expense and accrued expense (CIBT : ￦ 2,463 million, GPC : ￦ 245 million, Sang-am
DMC : ￦ 830 million) for the expired portion of future profit guarantee to the financial investors.
Project
Cheongna
Counterparty
Option
Put Option
IBT (CIBT)
Pangaea Capital
Effective date
2012.1.1 ~ 2012.1.30
Management L.P.
Exercise price
Stock purchase
price +
S.C First Bank Korea
committed
amount
Call Option
〃
Doosan Engineering
〃
& Construction Co., Ltd
and others
Sangam
Put Option
KDB and four others
DMC
3 months or less after
〃
construction completion
Put Option
The Korean Teachers
Credit Union(SI)
1 year or less after
〃
(expected completion
date : 2016.04.23)
Gwang-gyo
Put Option
KDB Life Insurance
1 month or less after
Power
execution of loan
Center
agreement
〃
(GPC)
Put Option
KDB
6 months or less after
〃
(2016.12.31)
(8) Agreements with the project financiers of the SOC projects
Doosan E&C, a subsidiary, is obligated to infuse additional capital investments into Kangnam beltway., Co
and other SOC-purpose affiliated companies, which were established for the SOC projects, under the
project financing agreements with those companies. Based on the agreements, additional investments of
￦65,930 million are expected as of December 31, 2010.
(9) Payment guarantees on project financing (“PF”)
As of December 31, 2010 and 2009, Doosan E&C has provided payment guarantees for domestic
construction projects as follows (In millions of Korean won):
Type of PF
2010
￦
ABS
2009
￦
-
140,000
ABCP
554,500
687,200
Other PF Loans
900,365
1,134,852
￦
Total
￦
1,454,865
1,962,052
As of December 31, 2010, details of top ten loans of project financing are follows (In millions of Korean
won):
Business Area
Ilsan Zenith
Bonds
Agencies
Bank
Cheonan
Securities
Business Park
Company
Cheonan
Securities
Cheongdang-
Company
Loan
Amount
Loan
Balance
￦ 666,265
￦ 576,265
175,000
Warranty
Loan Period
Type
Joint liability
2006.06.30
Loan
on guarantees
~2011.06.30
〃
175,000
2010.11.26
ABCP
~2011.05.26
150,000
〃
150,000
2010.04.20
ABCP
~2011.04.20
dong
Hwaseong
Bank
130,000
〃
130,000
Banwol-dong
Yongin
Securities
110,000
〃
110,000
Company
Ulsan
Loan
Securities
Bank
2010.12.23
ABCP
~2011.06.23
178,100
108,100
Debt acceptance
2006.11.26
ABCP/
~2011.03.16
Loan
Joint liability
2006.12.20
Loan
on guarantees/
~2011.12.20
Company
Haeundae
2008.03.31
~2012.03.31
245,000
65,000
Zenith
Debt acceptance
Incheon
Bank
65,000
39,000
Hagik-dong
Gongju
Securities
Singwan-dong
Company
Daegu
Bank
34,500
2008.06.30
on guarantees
~2011.11.26
〃
34,500
2010.10.19
Loan
ABCP
~2011.04.19
28,000
28,000
M World
Total
Joint liability
Other
2010.04.13
~2011.04.13
￦1,781,865
￦1,415,865
Loan
(10) Repurchase Agreement
Doosan E&C made a general installment or lease financing contract with Doosan Capital Co., Ltd. in order
to promote the sales of its machine tools. Under the contract, if a user of the installment or lease financing
service is in default, Doosan E&C has to assume the default receivable. The amounts of principal that
have not matured as of December 31, 2010 are as follows. (In millions of Korean won):
Type of contract
Amount
Ceiling amounts
￦
Installment financing
32
Lease financing
￦
25
￦
Total
57
30,000
10,000
￦
40,000
16. DERIVATIVE INSTRUMENTS AND HEDGING ACCOUNTING
(1) For the years ended December 31, 2010 and 2009, the Company entered into various derivatives
contracts with financial institutions.
Type of transaction
Currency forwards
Details of these derivatives contracts are as follows:
Description
On expiration date, exchange foreign currency for local currency at a fixed rate of
exchange.
Foreign exchange risk Exchange gains and losses that may occur in a process where the Company
insurance
acquires foreign currencies through its export activities and receives the export
proceeds in local currency in advance
Interest rate swap
Exchange fixed interest rate for variable interest rate for a specified period
Currency swap
Exchange foreign currency cash flow for local currency cash flow for a specified
period
Long-term borrowings
The Company designated the foreign currency denominated loans as a hedging
in foreign currency
instrument to the exposure of fluctuating expected future cash flows due to foreign
currency risk.
(2) Gain (loss) on valuation of derivatives
Gain (loss) on valuation of derivatives as of December 31, 2010 is as follows (In millions of Korean won):
Type of derivative
Currency forwards
Gain (loss) on
Accumulated other
valuation in income
comprehensive income
statement
(loss)
Fair value
(￦
28,697)
￦
129,514
(￦
Firm commitment
26,802)
￦
351,103
Foreign exchange risk
insurance
Currency swap
Interest rate swaps
(58,722)
8,926
(3,639)
54,792
(27,112)
7,512
6,756
-
(6,317)
-
(10,104)
-
-
-
(53,480)
16,815
Long-term borrowings in
foreign currency
Total
(￦
120,849)
￦
145,951
(￦
87,269)
￦
422,710
(3) Hedging with non-derivatives
Doosan Infracore Co., Ltd., a subsidiary, designates long-term borrowings of USD 560,000 thousand as
cash flow hedging instruments to hedge the risk of variability of future cash flows from forecasted
sales. As a result, the Company recorded ￦41,420 million, net of tax of ￦12,060 million, in other
comprehensive loss as foreign currency translation loss for cash flow hedge as of December 31, 2010.
The expected period to be exposed to changes in future cash flow is until Nov 21, 2014 as the Company
designated a non-derivative financial instrument as a hedging instrument.
Doosan Engine Co., Ltd., a subsidiary, designates long-term borrowings of USD 240,000 thousand as fair
value hedging instruments to hedge the risk of variability of future cash flows from forecasted sales. As a
result, the Company recorded ￦16,815 million in firm commitment assets as foreign currency translation
gain for fair value hedge as of December 31, 2010.
(4) Fair value hedge accounting related to forecasted transaction
Doosan Heavy Industries Construction Co., Ltd., Doosan Infracore Co., Ltd., Doosan Engine Co., Ltd. and
Doosan Construction & Engineering Co., Ltd. adopted “Opinion on Financial Reporting Practice 2008-2”.
The consolidated subsidiaries, Doosan Heavy Industries Construction Co., Ltd., Doosan Infracore Co., Ltd.,
Doosan Engine Co., Ltd. and Doosan Engineering & Construction Co., Ltd., changed their application of
accounting on derivatives associated with their sales contracts from cash-flow hedge to fair value hedge
accounting since they judged that sales contracts as hedged items fulfill conditions as firm commitments
as the contracts are legally bound, and contract amounts and collection timing are stipulated in the
contracts.
17.
COLLATERAL
The Company’s assets pledged as collateral to financial institutions for its short-term and long-term
borrowings as of December 31, 2010 are as follows (In millions of Korean won):
Financial institution
Woori Bank and others
Borrowings
General loans and
others
Collateral
Maximum pledged amount
￦
Property, plant and
4,638,001
equipment; Investment
securities; Short-term
financial instruments and
others
18.
GUARANTEES
As of December 31, 2010, guarantees received from financial institutions are as follows (In millions of Korean
won):
Description
Guarantee of payment
Guarantor
Woori Bank and others
Amount
￦
Guarantee
10,386,751 12 subsidiaries including
the holding company
Performance guarantee
and others
Seoul Guarantee
5,000,913 8 subsidiaries including the
Insurance and others
holding company
￦
Total
15,387,664
As of December 31, 2010, guarantees indemnified for third parties are as follows (In millions of Korean won):
Description
Guarantee
Euljiro complex and others
GS Construction &
and others
Amount
￦
8,517,008 5 subsidiaries including DHC
1,981,228 2 subsidiaries including DHC
Engineering Co., Ltd.
and others
Total
Guarantor
￦
10,498,236
As of December 31, 2010, guarantees indemnifying for affiliated companies are as follows (In thousands of
foreign currency, in millions of Korean won):
Guarantor
Doosan Corporation
〃
Guarantee
Description
DSH
〃
Doosan Shanghai Chemical
Co., Ltd.
DHC
〃
Amount
Subsidiaries of DHC
〃
Subsidiaries of DI
DHEL
DII
Subsidiaries of DII
DHEL
Subsidiaries of DHEL
USD 5,000
USD 1,000
￦
652,600
〃
627,300
101,629
〃
204,931
〃
USD 3,000
GBP 675
USD 9,000
Total
￦
GBP 675
1,568,460
19. CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL
(1) Capital stock
Capital stock details as of December 31, 2010 and 2009 are summarized as follows (In Korean won,
Share):
Details
2010
Number of shares authorized
2009
400,000,000
￦5,000
400,000,000
￦5,000
Common stock
25,042,611
24,875,992
Preferred stock
5,769,814
5,769,814
Face value per share
Number of shares issued:
Voting rights and dividends
st
1 class preferred stock :
No voting rights but preferred dividends at a rate of one
percent
more
than
the
dividends
paid
to
common
stockholders.
2
nd
class preferred stock :
No voting rights but preferred dividends at a rate approved by
the Board of Directors (minimum dividend rate: 2% of a par
value)
Restrictions in voting rights due to
law
Treasury stock and exchange account as allowed by the
Korean Commercial Code 369th
(2) Changes in capital stock and additional paid-in capital
Changes in capital stock and additional paid-in capital for the years ended December 31, 2010 and 2009
are as follows (In millions of Korean won, Share):
Capital stock
Common
Details
stock
Preferred stock
Paid-in capital
￦
447,642
24,732,792
5,769,814
143,200
-
6,822
24,875,992
5,769,814
454,464
Issue of new stocks for stock
option and stock warrants
Issue of new stocks for stock
49,700
-
4,396
Issue of new stocks for merger
option and stock warrants
116,919
-
6,713
25,042,611
5,769,814
￦
465,573
20. TREASURY STOCK
Details in treasury stock for the year ended December 31, 2010 are as follows (In millions of Korean won
except for share data):
Financial
Details
institution
Stock
Woori Bank
Common stock/
and others
Preferred stock
BNG Securities
Common stock/
Exchange
Direct purchase
Co., Ltd.
Shares
Amount
7,223,890
Preferred stock
￦
99,350
224,109
Total
7,447,999
6,578
￦
105,928
21. STOCK OPTIONS
(1) The Parent
1) As of December 31, 2010, total stock options granted are summarized as follows:
Details
Date of grant
Number of shares
5th
6th
7th
8th
Exercisable period
10th
11th
12th
2005.3.18
2006.2.27
2006.11.2
2007.3.16
2008.3.21
2009.3.27
2009.7.28
2010.3.26
2,800
120,300
22,200
103,300
43,900
9,800
5,400
103,360
Method of grant
Exercise price
9th
issuance of new shares
￦13,300
2008.3.18
￦32,700
2009. 2.27
￦40,000
￦59,600
2009.11. 2
2010. 3.16
￦165,100
2011.3.21
￦106,500
2012. 3.27
￦89,500
2012.7.28
￦116,500
2013.3.26
~2015.3.17 ~2016. 2.26 ~2016.11.1 ~2017. 3.15 ~2018. 3.20 ~2019. 3.26 ~2019. 7.27 ~2020.3.26
2) Changes in the number of stock options granted for the years ended December 31, 2010 and 2009 are
as follows:
Details
5th
6th
7th
8th
9th
10th
11th
12th
Balance at
January 1, 2009
Granted in 2009
2,800
120,300
22,200
103,300
43,900
-
-
-
-
-
-
-
-
9,800
5,400
-
Cancelled in 2009
-
-
-
2,400
300
-
-
-
Exercised in 2009
2,800
118,200
22,200
-
-
-
-
-
-
2,100
-
100,900
43,600
9,800
5,400
-
Granted in 2010
-
-
-
-
-
-
-
103,360
Cancelled in 2010
-
-
-
-
2,600
350
-
-
Exercised in 2010
-
-
-
49,700
-
-
-
-
-
2,100
-
51,200
41,000
9,450
5,400
103,360
Balance at
December 31, 2009
Balance at
December 31, 2010
3) Computation of stock option compensation
Stock compensation cost for options granted is based on the fair value of stock options estimated on
the date of grant using the Black-Scholes option pricing model.
The stock option compensation cost
recorded as of December 31, 2010 and stock option compensation expense recorded subsequent to
December 31, 2010 is as follows (In millions of Korean won):
9th
Details
Stock option
compensation cost
recorded as of
December 31, 2010
Stock option
compensation
expense to be
recorded subsequent
December 31, 2010
Total
￦
10th
145
￦
11th
253
￦
145
￦
60
￦
313
￦
12th
Total
114
￦ 2,235
￦ 2,747
66
3,605
3,731
180
￦ 5,840
￦ 6,478
4) Stock option compensation cost was calculated under the following assumptions:
8th
9th
10th
11th
12th
4.79%
5.18%
3.71%
4.17%
3.82%
3yrs
3yrs
3.5yrs
3.3yrs
3.3yrs
Expected volatility
46.73%
58.89%
69.82%
70.11%
71.67%
Expected dividend
0.00%
0.00%
2.62%
3.17%
4.03%
0.00%
0.00%
0.00%
0.00%
0.00%
Details
Risk-free interest rate
Expected life
Expected ratios of noexercise
(2) Subsidiaries
Such consolidated subsidiaries as Oricom Inc., Doosan Heavy Industries Construction Co., Ltd., Doosan
Infracore Co. Ltd. and Doosan Construction & Engineering Co., Ltd. granted stock options to their
executives. The compensation costs of stock options amounted to ￦6,219 million and ￦6,972 million
for the years ended December 31, 2010 and 2009, respectively.
22.
CONSTRUCTION CONTRACT
Details of change in major construction contracts amounts for the years ended December 31, 2010 and 2009
are as follows (In millions of Korean won):
(2010)
Revenue
Description
Increase
recognized
December 31,
January 1, 2010
(Decrease)
(Note 1)
2010
￦ 14,872,873
￦12,796,283
544,493
(544,493)
-
-
11,480,273
1,337,371
2,297,636
10,520,008
￦ 26,897,639
￦13,589,161
￦
4,176,416
￦
23,492,740
(Note 2)
Total
￦
6,474,052
￦
34,012,748
(2009)
Revenue
Description
January 1, 2009
Increase
recognized
December 31,
(Decrease)
(Note 1)
2009
￦13,393,948
￦5,511,682
636,381
470,609
562,497
544,493
11,964,400
1,795,743
2,279,870
11,480,273
￦25,994,729
￦7,778,034
￦
4,032,757
￦
14,872,873
Total
￦
6,875,124
￦
26,897,639
(Note 1) The amounts of sales recognized do not reflect the elimination of intercompany transaction.
(Note 2) The Company was merged with Doosan Engineering & Construction Co., Ltd., a subsidiary,
during the current period.
23.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses for the years ended December 31, 2010 and 2009 are as follows (in
Account
2010
￦
Salaries
Severance benefits
Share-based payment
Employee welfare
Travel
Communications
Utilities
Sales commission
2009
769,769
￦
654,505
57,494
32,003
8,150
4,383
164,537
127,297
75,803
71,679
9,613
9,635
16,276
13,843
101,362
60,209
Maintenance on office
10,823
7,062
Miscellaneous administrative
10,082
7,341
Taxes and dues
30,754
24,561
Rent
84,083
86,719
Depreciation
46,892
52,825
Repairs and maintenance
1,931
13,067
Supplies
35,823
37,751
Insurance
18,250
18,102
Entertainment
16,755
14,380
Advertising
95,612
96,848
7,073
6,407
Automobile maintenance
Packaging
Research and development
Education and training
Freight and custody
Promotion
8,553
5,223
208,044
158,618
25,086
18,484
126,018
85,388
7,581
11,999
Service fees
153,455
232,330
Bad debt
221,832
81,773
23,724
24,095
Overseas marketing
Warranty
7,711
7,205
Amortization
414,553
427,443
Other
202,643
224,107
Total
￦
2,960,282 ￦
2,615,282
24.
INCOME TAX EXPENSE (BENEFITS)
(1) Components of income tax expense (benefits) for the years ended December 31, 2010 and 2009 are as
Details
Current income tax expense
(including additional income taxes and tax refunds)
Changes in deferred income tax assets and liabilities related
to temporary differences (Note 1)
Changes in deferred income tax assets and liabilities related
to loss carryforward
2010
￦
Total
Income tax expense directly reflected in stockholders’ equity
(Note 2)
Income tax payable directly added to (deducted from)
stockholders’ equity
Income tax expense on discontinued operations (Note 3)
Income tax expense on continuing operations
￦
2009
176,571
￦
376,854
179,390
(88,277)
(2,148)
(71,589)
353,813
216,988
(69,184)
48,869
56,626
(35,992)
10,121
101,282
331,134
￦
128,583
(Note 1) Changes in deferred income tax assets (liabilities) related to temporary differences for the years
ended December 31, 2010 and 2009 are as follows (In millions of Korean won):
Details
2010
Ending deferred income tax assets (liabilities)
Changes in consolidated subsidiaries
Decrease arising from merger
Beginning deferred income tax assets(liabilities)
(￦
Changes in deferred income tax assets(liabilities)
￦
508,147)
2009
(￦
(25,072)
(22,112)
(281,574)
179,390
281,574)
100,764
(470,615)
(￦
88,277)
(Note 2) Changes in deferred income tax assets (liabilities) directly added to (deducted from) stockholders’
equity for the years ended December 31, 2010 and 2009 are as follows (In millions of Korean
won):
Details
2010
Ending deferred income tax assets(liabilities)
Beginning deferred income tax assets(liabilities)
(￦
Changes in deferred income tax assets(liabilities)
(￦
807,185)
2009
(￦
(738,001)
69,184)
738,001)
(786,870)
￦
48,869
(Note 3) Income tax expense on discontinued operations for the years ended December 31, 2010 and
2009 is as follows (In millions of Korean won):
Details
Current income tax expense
Changes in deferred income tax assets (liabilities) related to
temporary differences
Changes in deferred income tax assets (liabilities) directly
added to (deducted from) stockholders’ equity
Income tax expense on discontinued operations
2010
￦
￦
2009
3,526
￦
112,723
6,595
19,865
-
(31,306)
10,121
￦
101,282
(2) Changes in accumulated temporary differences and deferred income tax assets (liabilities) for the years
ended December 31, 2010 and 2009 are as follows (In millions of Korean won):
(2010)
Deferred income
January 1,
tax assets (liabilities)
2010
Increase
Decrease
December
(Note 1)
(Note 1)
(Note 1)
31, 2010
￦ 249,943
￦ 502,917
￦ 287,507
￦ 465,353
￦ 465,353
699,653
220,311
144,123
775,841
-
775,841
Provision for severance indemnities
402,336
95,015
104,812
392,539
-
392,539
71,562
61,855
76,848
56,569
56,569
-
Details
Current
Non-current
Deductible temporary differences and other :
Allowance for doubtful accounts
Accrued expenses
Depreciation
￦
-
87,402
24,421
66,370
45,453
-
45,453
Loss carryforward
1,010,609
64,797
709,469
365,937
-
365,937
Others
1,446,185
1,037,796
1,689,785
794,196
580,809
213,388
3,967,690
￦2,007,112
￦3,078,914
2,895,888
1,102,731
1,793,158
(2,875,838)
(1,710,726)
(204,288)
(1,506,438)
Sub total
Not recognized as deferred income
tax assets
Recognized as deferred income tax
1,091,852
1,185,162
898,443
286,720
Tax rate (Note 3)
assets
(Note 3)
(Note 3)
(Note 3)
(Note 3)
Deferred income tax assets(Note2)
296,983
280,501
217,423
63,078
8,316
7,431
-
7,431
305,299
287,932
217,423
70,759
Tax credit carried forward deferred
income tax assets
Total deferred income tax assets
Taxable temporary differences :
Reserve for land revaluation
￦
-
(￦264,915)
(380,325)
-
(380,325)
(2,203,262)
(279,377)
(624,057)
(1,858,581)
-
(1,858,581)
(178,383)
(38,063)
(39,864)
(176,581)
-
(176,581)
(138,957)
-
(138,957)
-
-
-
Others
(320,984)
(2,374,417)
(586,844)
(2,108,557)
(12,417)
(2,096,140)
(3,486,826) (￦2,691,856) (￦1,654,637)
(4,524,045)
(12,417)
(4,511,628)
Equity method investment
securities
Deposits for severance indemnities
Sub total
(645,240)
tax liabilities
(1,336,049)
(906,740)
-
(906,740)
RRecognized as deferred income tax
liabilities
Tax rate (Note 3)
(2,150,777)
(Note 3)
(3,617,305)
(Note 3)
(12,417)
(Note 3)
(3,604,888)
(Note 3)
(586,874)
(796,079)
(3,005)
(793,075)
(￦281,574)
(￦508,147)
￦214,418
(￦722,566)
Deferred income tax liabilities
(liabilities) -net
(2009)
Deferred income
January 1,
Details
2009
Increase
Decrease
December 31,
(Note 1)
(Note 1)
(Note 1)
2009
￦ 369,429
￦ 220,185
￦ 339,671 ￦
tax assets (liabilities)
Current
Non-current
Deductible temporary differences and other :
Allowance for doubtful accounts
249,943
￦249,943 ￦
-
54,097
650,387
4,831
699,653
-
699,653
343,650
66,115
7,429
402,336
-
402,336
Accrued expenses
66,791
69,953
65,182
71,562
71,562
-
Depreciation
38,149
114,386
65,133
87,402
-
87,402
Provision for severance indemnities
Loss carryforward
425,566
585,754
711
1,010,609
168,435
842,174
Others
552,879
1,844,850
951,543
1,446,185
91,615
1,354,570
1,850,561
￦3,551,629
￦1,434,500
3,967,690
581,555
3,386,136
405,278
2,875,838
106,512
2,769,326
Sub total
tax assets
1,445,283
1,091,852
475,042
616,810
Tax rate (Note 3)
assets
(Note 3)
(Note 3)
(Note 3)
(Note 3)
Deferred income tax assets (Note 2)
335,718
296,983
128,594
168,389
3,445
8,316
8,316
-
339,163
305,299
136,910
168,389
(396,666)
(40,344)
(52,478)
(2,838,726)
(645,240)
(2,203,262)
(178,383)
(138,957)
(320,984)
(126,034)
(645,240)
(2,203,262)
(178,383)
(138,957)
(194,951)
(4,705,745) (￦2,284,424) (￦3,503,343)
(3,486,826)
Tax credit carried forward deferred
income tax assets
Total deferred income tax assets
Taxable temporary differences :
Reserve for land revaluation
Equity method investment securities
Deposits for severance indemnities
Others
Sub total
tax liabilities
liabilities
Tax rate (Note 3)
Deferred income tax liabilities
(liabilities) -net
(503,400)
(976,825)
(156,384)
(3,069,136)
(￦ 316,970) (￦ 175,130)
(1,623,102)
(62,343)
(191,435)
(90,574)
(126,034) (3,360,792)
(991,813)
(1,336,049)
(540)
(1,335,509)
(3,713,933)
(Note 3)
(2,150,777)
(Note 3)
(125,494)
(Note 3)
(2,025,284)
(Note 3)
(809,778)
(586,874)
(33,971)
(552,902)
281,574)
￦102,939
(￦384,513)
(￦470,615)
(￦
(Note 1) Of the tax effects from the true-up to the prior year tax return, tax effects of temporary differences
and non-temporary differences were adjusted to deferred income tax assets (liabilities) and
current earnings, respectively.
(Note 2) A deferred tax asset for deductible temporary difference is recognized to the extent that it is
almost certain that taxable profit will be available against which the deductible temporary
difference can be utilized.
(Note 3) Tax rate is the enacted marginal tax rate which is expected to apply to taxable income in the
periods the deferred tax liability or asset is expected to be settled or realized.
25.
COMPREHENSIVE INCOME
Comprehensive income for the years ended December 31, 2010 and 2009 is as follows (In millions of Korean
won):
Description
Net income attributable to equity holders of the parent
2010
￦
2009
265,022
￦
231,066
Other comprehensive income (loss):
Gain (loss) on valuation of available-for-sale securities
Increase in equity of associates
15,147
567
128
2,786
(2,011)
461
(14,332)
(26,606)
Loss on valuation of derivative instruments
17,015
16,066
Cumulative effect of foreign currency translation
(1,457)
23,104
Increase in revaluation of property, plant and equipment
(10,564)
(16,392)
Others
(29,598)
8,294
Gain on valuation of derivative instruments
Comprehensive income attributable to equity holders of
the Parent
￦
239,330
￦
239,346
26.
INCOME (LOSS) PER COMMON SHARE
The Company’s net income (loss) per common share for the years ended December 31, 2010 and 2009 are
computed as follows (In Korean won except for share data):
(1) Basic Net Income (Loss) per Common Share
(2010)
Description
Continuing operations
￦
Net income
Discontinued operations
230,521,335,000
(-)Dividends for preferred stock
￦
34,480,770,872
Net income
￦
265,002,105,872
(49,774,666,363)
(7,445,162,792)
(57,219,829,155)
180,746,668,637
27,035,608,080
207,782,276,717
18,308,008
18,308,008
18,308,008
Net income available for common
stockholders
Weighted average number of
common shares outstanding
Basic net income per common share
￦
9,873
￦
1,477 ￦
11,349
(2009)
Description
Net income (loss)
(￦
(-)Dividends for preferred stock
44,907,047,739)
￦
275,972,949,019
Net income
￦
231,065,901,280
-
(50,407,447,999)
(50,407,447,999)
(44,907,047,739)
225,565,501,020
180,658,453,281
18,152,094
18,152,094
18,152,094
Net income (loss) available for
common stockholders
Weighted average number of
common shares outstanding
Basic net income (loss) per common
share
(￦
2,474)
￦
12,426
￦
9,952
Weighted average number of common shares outstanding for the years ended December 31, 2010 and
2009 are as follows:
(2010)
Description
Numbers of shares
Beginning
Days
Weighted number of shares
18,219,134
365
18,219,134
49,700
(Note 1)
31,402
Issuance of capital stock
116,919
184
58,940
Acquired treasury stock
(45,032)
(Note 1)
(1,468)
Stock options
18,340,721
Total
18,308,008
(2009)
Description
Numbers of shares
Days
Weighted number of shares
18,110,555
365
Stock options
143,200
(Note 1)
67,920
Acquired treasury stock
(34,621)
(Note 1)
(26,381)
Beginning balance
18,110,555
18,219,134
Total
18,152,094
(Note 1) Weighted average number of days
(2) Diluted Income (Loss) per Common Share
(2010)
Description
Basic net income
￦
(+)Stock option expense
Adjusted net income
27,035,608,080
￦ 207,782,276,717
-
-
-
180,746,668,637
27,035,608,080
207,782,276,717
18,359,331
18,359,331
18,359,331
180,746,668,637
￦
Net income
Diluted weighted average number of
common shares
Diluted income per common share
￦
9,845
￦
1,473
￦
11,318
(2009)
Description
Basic net income (loss)
Net loss from
Net income from
discontinued operations
(￦
225,565,501,020
￦180,658,453,281
(Note 1)
(Note 1)
(Note 1)
(48,051,204,657)
228,709,657,938
180,658,453,281
18,152,094
18,152,094
18,152,094
44,907,047,739)
(+)Stock option expense
Adjusted net income (loss)
￦
Net income
Diluted weighted average number of
common shares
Diluted income (loss) per common share
(￦
2,647)
￦
12,600
￦
9,952
Diluted weighted average number of shares outstanding for the years ended December 31, 2010 and 2009
is computed as follows:
Description
Basic weighted average number of common shares
Exercise of stock purchase option (Note 2)
Diluted weighted average number of common shares
2010
2009
18,308,008
18,152,094
51,323
(Note 1)
18,359,331
18,152,094
(Note 1) Stock options have no dilutive effect and are excluded from the calculation of diluted net income
(loss) per share.
(Note 2) The weighted average number of common shares is calculated using the treasury stock method
which assumes that any proceeds would be used to purchase common stock at the average
market price during the period.
27.
SIGNIFICANT TRANSACTIONS AND ACCOUNT BALANCES WITH RELATED PARTIES
Significant transactions with related parties for the years ended December 31, 2010 and 2009 are
summarized as follows (In millions of Korean won):
Sales and others
Companies
Related party
Doosan
Oricom Inc.
Corporation
2010
￦
Purchases and others
2009
1,655
4,637
￦
2010
1,556
￦
2009
3,021
￦
3,789
3,141
212
289
1,021
956
7,505
7,097
39,531
24,766
-
-
1,261
1,131
-
544
(Note 1)
Neoplux Co., Ltd.
327
313
1,242
785
8,950
8,497
594
634
938
1,511
-
-
35
7
-
-
6,642
5,574
1,651
2,479
DSES
40,548
34,282
145
-
DSH
59,070
58,673
-
-
Doosan Engineering & Construction Co.,
21,183
9,195
1,989
59
7,151
7,044
663
803
399
331
1,257
1,000
SRS Korea Co., Ltd.
Doosan Mottrol Co., Ltd.(Note 1)
Doosan Mottrol Holdings Co., Ltd.(Note 1)
Ltd.
Doosan Mecatec Co., Ltd.(Note 1)
Rexcon Co., Ltd.
Doosan Heavy Industries & Construction
424
351
-
-
76,967
54,590
911
520
20,530
15,523
948
918
923
656
1,041
784
Co., Ltd.
N Shaper Corp.
DHT
Doosan Vina
IMGB
DHIJ
DHIA
31
28
-
-
528
864
-
-
7,229
2,209
-
-
2
2
-
-
1
-
-
-
2,629
5,579
-
-
101
89
-
-
41
43
2
1
166,583
57,607
3,639
789
160
78,436
-
-
14,159
5,367
-
-
526
241
30
15
-
3
-
-
DHIVH
13
90
-
-
HFC
12
12
-
-
DPS
117
-
105
290
Doosan Capital Co, Ltd.
DCFL
Doosan Bears., Inc.
DMI
Sales and others
Companies
Related party
2010
￦
Purchases and others
2009
234,591 ￦
2010
252,201 ￦
2009
- ￦
280
Doosan Heavy
Industries &
DHIA
-
-
46,710
52,958
Construction Co., DHIJ
-
-
159,435
158,039
Ltd.
24,456
1,006
26,406
2,065
Ltd.
-
-
5,606
4,844
Rexcon Co., Ltd.
-
-
7,099
6,050
-
193
1,163
186
N Shaper Corp.
Oricom
51
4,191
3,799
35
8,005
5,973
2,259
4,833
6,312
8,420
-
802
849
1,082
275
107
54,111
15,135
53,393
8,857
IMGB
-
-
103,747
122,452
HFC
-
-
1,458
1,112
Doosan Vina
16,464
13,781
35,032
14,539
HPL
10,472
3,417
-
-
DHT
2,761
-
1,123
2,056
122
2,506
30,942
44,434
-
-
141
66
Neoplux Co., Ltd.
-
-
2,050
200
DPS
DHIVH
-
-
-
-
1,862
1,581
6,081
1,595
-
-
SRS Korea Co., Ltd.
-
-
-
1
Doosan Bears, Inc.
-
-
6,814
-
DPSCI
Oricom Inc.
60
443
147
-
9,958
-
49,682
-
-
-
3,212
4,043
339
208
4,862
5,215
-
-
7
21
-
-
14
38
266
257
21
37
-
281
94
197
-
-
3
9
-
-
818
574
-
-
Ltd.
(Note 1)
Neoplux Co., Ltd.
SRS Korea Co., Ltd.
Doosan Mottrol .Co., Ltd. (Note 1)
9
46
-
-
356
311
7,980
7,449
272
464
1
-
158
177
221
235
Rexcon Co., Ltd.
N Shaper Corp.
9
9
-
-
1,016
751
-
-
4
6
126
117
Sales and others
Companies
Oricom Inc.
Related party
Doosan Bears, Inc.
DHIEH
DPSCI
Doosan
Engineering &
￦
Purchase and others
2009
36 ￦
1
2010
40 ￦
2009
-
￦
-
1
-
-
7
-
50
-
237
-
-
-
29
-
-
-
39,697
15,333
-
-
-
-
563
564
-
1
63,750
49,323
-
13,602
178
39
SRS Korea Co., Ltd.
8
7
-
23
80
94
-
8
227
-
18,711
-
22
29
511
402
Doosan Dong-A Co., Ltd
5
-
685
553
-
-
25
13
Doosan Bears, Inc.
-
-
2,013
-
Doosan Vina
-
-
516
-
Construction Co., Rexcon Co., Ltd.
Ltd.
2010
(Note 1)
N Shaper Corp.
Doosan Infracore DIA
Co., Ltd.
162,438
147,292
1,260
263
DICC
1,244,643
723,012
53,062
28,685
DIEU
101,819
97,181
3,433
4,862
DIBE
61,148
-
2,308
-
DIG
57,379
56,951
1,574
1,534
DIJ
-
-
3,463
1,897
DIU
22,879
43,215
576
1,296
DIY
69,953
52,588
9,045
8,809
DISC
-
-
175
207
DISD
1,034
21
-
-
DIIPL
2
-
-
-
DBC
-
10
-
-
89,617
15,123
16,679
2,884
56,819
14,209
8,576
178
406
1,622
15,497
13,079
361
279
-
-
20
19
9,920
9,188
7,048
70,362
15
15
-
-
6,942
5,751
DHEL and 27 overseas consolidated
subsidiaries
DII and 12 overseas consolidated
subsidiaries
Doosan Moxy and 4 overseas
Doosan Mottrol .Co., Ltd. (Note 1)
Neoplux Co., Ltd.
-
-
586
545
1,160
2,064
69,562
69,568
-
-
7,784
25,849
46
-
976
1,007
-
-
3,940
3,460
Sales and others
Companies
Related party
2010
￦
Doosan Infracore Doosan Bears, Inc.
Co., Ltd.
-
SRS Korea Co., Ltd.
Purchase and others
2009
￦
2010
2009
￦
-
- ￦
2,814
-
-
34
4
-
323,746
-
-
N Shaper Corp.
8
8
2,506
1,660
-
47
-
-
-
-
-
134
(Note 1)
(Note 1) Intercompany transactions until merger or disposal.
Significant account balances with related parties as of December 31, 2010 and 2009 are summarized as
Receivables
Companies
Related party
2010
￦
Doosan
Oricom Inc.
Corporation
Doosan Shanghai Chemical
Co., Ltd.
Neoplux Co., Ltd.
SRS Korea Co., Ltd.
Payables
2009
470
￦
2010
409
￦
2009
10,315
￦
6,839
543
205
45
32
3,177
4,966
133
136
89
185
-
-
-
228
-
-
22
33
-
11
2,874
2,814
55
59
Doosan Mottrol .Co., Ltd.
-
305
-
-
1,296
1,178
474
451
DSES
2,718
1,951
4
-
DSH
2,412
1,300
-
-
111
116
-
-
14,744
4,843
788
58
Doosan Bears, Inc.
Ltd.
Doosan Mecatec, Ltd.
Rexcon Co., Ltd.
-
2,938
-
70
4,567
4,780
108
114
114
91
-
-
19,271
13,678
1,015
215
2,809
4,182
178
112
Doosan Heavy Industries & Construction
Co., Ltd.
N Shaper Corp.
35
31
-
8
53
127
-
-
85,946
20,337
-
754
3,423
2,691
4,606
-
DCFL
25
45
-
-
IMGB
1,883
1,492
-
-
DHIVH
6
6
-
-
Doosan Vina
92
66
-
-
DPS
60
-
22
28
Receivables
Companies
Related party
2010
￦
Payables
2009
27,859 ￦
2010
37,904
￦
2009
-
￦
-
Doosan Heavy
Industries &
DHIA
-
135
6,748
18,524
Construction Co., DHIJ
-
-
32,711
23,272
14,444
1,072
6,076
1,573
4,961
3,946
596
571
Rexcon Co., Ltd.
-
-
2,394
2,788
Doosan Capital Co.
-
-
-
410
Ltd.
Ltd.
N Shaper Corp.
Oricom
DPS
IMGB
Doosan Vina
DHIVH
DHT
3
-
49
-
8,014
9,100
-
569
-
2,851
25
2
4
1,102
-
21,807
166,728
35,192
23,647
20,150
395
1,397
-
-
-
5,490
805
266
10,573
4,989
-
-
337
-
91
72
3
10
-
-
918
804
SRS Korea Co., Ltd.
-
-
2
2
635
-
391
-
4,300
13,675
43
16
2,337
3,686
-
-
Oricom Inc.
3
18
Ltd.
Neoplux Co., Ltd.
SRS Korea Co., Ltd.
4
17
-
-
196
161
4
5
-
14
-
-
48
136
-
-
1
2
-
-
2,530
1,968
-
24
Doosan Mottrol .Co.
-
37
-
-
Doosan Dong-A Co.
1,185
1,052
990
714
Rexcon Co., Ltd.
N Shaper Corp.
Doosan Bears, Inc.
-
696
-
-
1,014
1,012
479
600
3
3
-
-
567
1,469
-
-
3
2
-
2
1,121
-
-
-
Receivables
Companies
Related party
Doosan
Engineering &
Construction Co., Rexcon Co., Ltd.
Ltd.
￦
Payables
2009
2010
￦
2009
2,079 ￦
6,271
2,679
4,116
2
12
180
￦
-
-
-
40,092
27,552
110
52
2
1
SRS Korea Co., Ltd.
1
1
15
21
-
9
-
1,483
2
-
483
335
44,939
43,807
1,101
1,782
DICC
137,225
129,708
6,642
2,418
DIEU
81,054
82,126
6,923
1,739
DIBE
22,584
-
284
-
DIG
8,626
7,703
22,333
13,786
Doosan Infracore DIA
Co., Ltd.
2010
DIJ
2
-
19,049
13,234
DIU
15,095
38,283
68
543
DIY
10,353
11,131
2,725
1,807
DISC
72
-
127
355
DISD
237
-
-
-
DICI
6
-
-
-
DBC
-
9
-
237
126,488
28,228
3,151
204
39,257
5,795
1,408
-
39,718
37,841
1,436
430
14
-
1,603
-
DHEL and 27 overseas consolidated
subsidiaries
DII and 12 overseas consolidated
subsidiaries
Doosan Moxy and 4 overseas
-
-
-
176,034
2,130
2,436
86
-
5,741
3,922
118
84
4,449
3,699
11
9
DHIEH
26
-
562
569
Neoplux Co., Ltd.
-
-
1,200
1,826
SRS Korea Co., Ltd.
-
-
-
5
N Shaper Corp.
-
-
3
3
Doosan Power Systems Limited.
-
-
-
50,228
28.
TRANSACTIONS AND BALANCES WITH RELATED PARTIES
(1) Related parties
Details
Companies
Holding company
Subsidiary companies
Equity method investees
Doosan Corporation
Refer to Note 1.(b)
Sunduk Steel Co., Ltd., DB E&S, Doosan E&S, Hamancomplex Co.,
Ltd., Casco Co., Ltd., Korea Aerospace Industries Co., Ltd., DSMP,
Xuzhou Xugong Doosan Engine., Ltd. and others
Donghyun Engineering, Doosan Credit Associate, Yeongang
Foundation, Doosan Eco Biznet and other
Other
(2) Significant transactions with related parties: Refer to Note 27.
(3) Significant account balances with related parties: Refer to Note 27.
(4) Significant transactions for the years ended December 31, 2010 and 2009 and account balances as of
December 31, 2010 and 2009 with equity method investees and other (In millions of Korean won):
Sales & other
Companies
Details
Doosan
2010
Purchases & other
2009
2010
Accounts receivable
2009
2010
Accounts payable
2009
2010
2009
Equity method
Corporation
-
￦ 723
538
388
6,861
6,678
3,806
3,930
330
345
28,159
2,776
17,382
16,123
3,292
-
174
3,581
Other
41
54
4,736
622
716
541
105
55
Other
13
47
8,151
7,073
-
112
844
545
-
208
-
6,855
-
-
-
14
61
-
3,651
2,054
-
-
721
205
-
-
24,529
31,699
-
-
5,401
5,865
-
-
126
8,256
201
-
21
1,888
167
30,103
12,580
24,034
4,476
12,248
1,059
2,289
￦ 16,947 ￦14,399
￦15,553
investees
Other
Doosan Heavy
￦
￦
-
￦
-
￦
-
￦
- ￦
-
￦
-
Equity method
Industries &
investees
Construction Co.,
Ltd.
Doosan Infracore
Co., Ltd.
Doosan Engineering Equity method
& Construction
investees
Co., Ltd.
Other
Doosan Engine Co., Equity method
Ltd.
investees
Other
Other
Equity method
investees and
Other
Total
￦ 28,979
￦ 34,306 ￦ 78,016 ￦ 104,010 ￦ 16,982
(5) Guarantees and collateral provided to related parties: Refer to Notes 17 and 18.
(6) Compensation to key management personnel
Doosan Corporation considers its directors, registered or not, and the heads of each business segment its
key management because they have the authority and responsibility for the plan, operation and control.
Compensations to key management personnel for the year ended December 31, 2010 are as follows (In
Salaries
￦
19,104
Compensation
expenses with stock
option
Severance benefits
Provision for
severance benefits
￦
￦
￦
2,747
3,813
The number of stock options at December 31, 2010 is 212,510 shares.
to management personnel.
29.
6,647
These stock options are granted
DIVIDENDS
Details of dividends for common (preferred) stock declared in the annual stockholders’ meeting for the years
ended December 31, 2010 and 2009 are as follows:
(1) Interim dividends (In Korean won and shares):
2010
Description
2009
Preferred
Preferred
Common
Preferred
Preferred
Common
stock (old)
stock (new)
stock
stock (old)
stock (new)
stock
Dividends per share
(dividend ratio)
￦500(10%)
￦500(10%)
￦500(10%)
￦500(10%)
￦500(10%)
￦500(10%)
4,090,262
933,443
18,268,834
4,090,262
933,443
18,179,534
Number of shares
outstanding (Note 1)
Dividend (In millions of
Korean won)
￦
2,045
￦
467
￦
9,134 ￦
￦
2,045
467
￦
9,090
(2) Dividends (In Korean won and shares):
2010
Description
2009
Preferred
Preferred
Common
Preferred
Preferred
Common
stock (old)
stock (new)
stock
stock (old)
stock (new)
stock
Dividends per share
(dividend ratio)
￦2,050(41%) ￦2,000(40%) ￦2,000(40%) ￦2,050(41%) ￦2,000(40%) ￦2,000(40%)
Number of shares
outstanding (Note 1)
4,090,262
933,443
18,340,721
4,090,262
933,443
18,219,134
Dividend (In millions of
Korean won)
￦
8,385 ￦
1,867 ￦
36,681 ￦
8,385 ￦
(Note 1) Shares of treasury stock as of December 31, 2010 and 2009, are excluded.
1,867 ￦
36,438
(3) Dividend Payout Ratios (In millions of Korean won):
2010
Description
Preferred
Preferred
Common
Preferred
Preferred
Common
stock (old)
stock (new)
stock
stock (old)
stock (new)
stock
￦
Dividends
2009
10,430 ￦
2,334 ￦
￦
45,816
10,430 ￦
2,334 ￦
45,528
Net income
265,002
265,002
265,002
231,066
231,066
231,066
Payout ratio
3.94%
0.88%
17.29%
4.51%
1.01%
19.70%
(4) Dividend Yield Ratios (In Koran won):
2010
Description
Dividends per share
2009
Preferred
Preferred
Common
Preferred
Preferred
Common
stock (old)
stock (new)
stock
stock (old)
stock (new)
stock
￦
2,550 ￦
2,500 ￦
2,500 ￦
2,550 ￦
2,500 ￦
2,550
Stock price at the end
of the year
Dividend yield ratio
49,850
51,000
154,000
29,600
40,500
95,400
5.12%
4.90%
1.62%
8.61%
6.17%
2.67%
30. STATEMENTS OF CASH FLOWS
(1) The Company's statements of cash flows are prepared using the indirect method.
Significant non-cash
transactions for the years ended December 31, 2010 and 2009 are described as follows (In millions of
Korean won):
Description
2010
2009
Reclassification of construction-in-progress
to buildings, machinery and others
￦
68,782
￦
225,330
Reclassification of current maturities of
bonds & long term borrowings
2,395,255
2,200,924
(2) The cash and cash equivalents in the statements of cash flows are the same as the cash and cash
equivalents in the statements of financial position.
31.
DISCONTINUED OPERATIONS
The Company discontinued business segments of Manufacturing Crown Cap, Apparel, FA, Reinforcing Bars,
ITS and Alcoholic Beverage and details of the discontinued operations are as follows:
(1) Details of discontinued operations
Manufacturing
Crown Cap
(Samwha Crown &
Details
Closure)
Reinforcing
Apparel
FA
bars(CHICO)
Importation and
Main products
Manufacturing
and services
crown cap
Alcoholic
ITS(CMP)
ITS(other)
Production
Production
facilities for
equipment for
Industrial
sale of POLO
Beverage
Alcoholic
Reinforcing bars
robots
berverage
goods
semiconductor
display
Public
December 29,
announcement
September 30, 2010
July 23, 2010
May 5, 2010
May 22, 2009
May 6, 2009
January 6, 2009
2009
date
December 31,
Disposal date
September 30, 2010
October 12,
N/A
2010
June 16, 2009
N/A
Transfer of assets
N/A
Transfer of
Disposal method
Sold off shares
March 2, 2009
2009
Transfer of
N/A
Sold off shares
assets
business
ONYX Heavy
Acquiring
Polo Ralph
Keum Be Co., Ltd.
Company
K. C. Tech Co.,
N/A
Industry &
Lauren Korea
Lotte Liquor BG
N/A
Ltd.
Co., Ltd.
Construction
(2) Initial public announcement
According to a plan for the purpose of business discontinuance, the Company disposed of its business
segments through a sale of shares, asset transfer, and partial or comprehensive business transfer.
However, the Company discontinued operations of FA and ITS (other) without any plan for sale.
(3) Details of book value of disposed assets as of disposal date are as follows (In millions of Korean won):
Samwha Crown &
Closure
₩
Quick assets
Apparel
₩
28,312
CHICO
₩
19,355
ITS(CMP)
Alcoholic Beverage
₩
18,449
₩
-
69,177
Inventories
7,420
8,169
6,721
3,250
34,120
Investments
3,185
-
5
-
7,088
70,297
12,245
33,896
265
139,350
Property, plant and
equipment
Intangible assets
1,345
-
-
327
1,965
-
3,268
801
-
6,040
Other non-current assets
₩
Total assets
Current liabilities
₩
₩
43,037
₩
59,872
₩
3,842
257,740
11,706
29,295
14,907
-
56,010
9,792
176
1,319
-
5,789
Non-current liabilities
Total liabilities
₩
110,559
₩
21,498
₩
29,471
₩
16,226
₩
-
61,799
(4) Details of income (loss) from discontinued operations are as follows (In millions of Korean won) :
(2010)
Samwha crown
Details
& closure
Alcoholic
Apparel
FA
ITS
beverage
Total
Operating income(loss) from
₩
5,423
₩ 28,813
9,542
(₩
₩
-
₩
469)
(₩25,983)
7,784
30,234
52
157
(6,210)
33,775
3,578
14,378
(101)
(6,231)
(1,503)
10,121
₩ 11,387
₩ 44,669
316)
(₩19,595)
(₩ 4,707)
₩ 31,438
Non-operating income(loss) from
Income tax expenses(benefits)
from discontinued operations
Total
(₩
(2009)
Samwha
crown &
Details
closure
Alcoholic
Apparel
FA
CHICO
ITS
beverage
Total
Operating income(loss) from
₩ 10,852
₩26,795
(₩1,458)
(₩4,171)
(₩23,422)
₩ 3,410
₩12,006
(1,098)
221
(2,169)
(9,996)
(3,101)
363,839
347,696
2,893
5,286
294
(544)
(5,920)
99,274
101,283
6,861
₩21,730
(₩3,921)
(₩13,623)
(₩20,603)
₩267,975
₩258,419
Non-operating income(loss)
Income tax expenses(benefits)
Total
₩
(5) Details of net cash flows from operating activities, investing activities and financing activities attributable
to discontinued operations are as follows (In millions of Korean won):
(2010)
Samwha
crown &
Details
Alcoholic
closure
₩
Cash flows from operating activities
Apparel
FA
2,363
₩ 30,034
(3,584)
(1,135)
₩
ITS
beverage
Total
2,565
(₩ 1,087)
(₩ 4,707)
₩ 29,168
(33,319)
107
(1,762)
-
(38,558)
3,286
(100)
-
-
2,051
2,573
(₩ 2,849)
(₩ 4,707)
(₩ 7,339)
Cash flows from investment
activities
Cash flows from financing activities
₩
(₩ 2,356)
Total
-
₩
(2009)
Samwha
crown &
Details
Alcoholic
closure
Apparel
₩
₩
FA
CHICO
ITS
beverage
Total
Cash flows from operating
activities
1,592
₩ 1,118
₩ 2,085
(1,771)
(2,055)
(45)
(2,360)
463
(1,254)
9,813
₩
299
(₩289,345)
(₩274,438)
1,155
(194)
6,669
3,759
(1,055)
(105)
546,545
542,234
-
₩ 263,869
₩ 270,555
Cash flows from investment
activities
Cash flows from financing
activities
Total
₩
4,682
₩
-
(₩
181)
₩2,185
₩
32.
SEGMENT INFORMATION
(1) The Condensed financial information of the consolidated companies, classified by industry as of
December 31, 2010 and 2009, and for the years then ended are as follows (In millions of Korean won):
(2010)
Machinery &
Food &
Wholesale
Maintenance
Groceries
& Retails
Business
Business
Business
Details
￦10,775,710 ￦124,167 ￦497,333
Total sales
Other
Construction Manufacturing
Business
￦2,560,412
Business
Financial
Insurance
Consolidation
Business
adjustment
Total
￦10,380,827 ￦264,127 (￦1,262,508) ￦23,340,068
Less: Inter – segmental
transaction
Net sales
Operating income
(763,820)
(166,675)
325,016
￦ 10,011,890 ￦123,955 ￦330,658
￦2,885,428
￦
Total assets
Total liabilities
(212)
￦31,625 ￦
(628,539)
(28,278)
￦9,752,288 ￦235,849
￦
-
- ￦23,340,068
940,947
￦5,128
14,369,263
63,660
85,821
5,195,619
15,387,803
2,906,642
(5,827,134)
32,181,674
9,448,664
41,731
102,330
3,945,705
10,130,778
2,534,461
(631,414)
25,572,255
109,274
￦
1,262,508
650,148 (￦48,647)
(￦ 55,034) ￦ 1,633,441
(2009)
Machinery &
Food &
Wholesale
Maintenance
Groceries
& Retails
Business
Business
Business
Details
Total sales
￦10,480,950 ￦126,459 ￦269,059
Other
Construction Manufacturing
Business
￦2,310,258
Business
Financial
Insurance
Consolidation
Business
adjustment
Total
￦8,516,534 ￦261,303 (￦1,400,855)
￦20,563,708
Less: Inter – segmental
transaction
(289)
(203,837)
(32,250)
(613,738)
(25,197)
Net sales
￦ 9,955,406 ￦126,170
￦65,222
￦2,278,008
￦7,902,796
￦236,106
Operating income
￦
(￦3,073) ￦
Total assets
Total liabilities
(525,544)
-
-
￦20,563,708
(￦ 67,297)
￦ 536,996
￦
363,167
￦5,849
13,901,562
65,171
109,260
2,986,223
16,613,289
2,913,069
(5,629,972)
30,958,602
9,698,003
48,258
128,935
2,113,481
11,181,741
2,290,748
(602,108)
24,859,058
115,437
￦
1,400,855
157,275 (￦34,362)
(2) Condensed financial information of the consolidated companies, classified by geographical segments as
of December 31, 2010 and 2009, and for the years then ended are as follows (In millions of Korean won):
(2010)
Consolidation
Details
Domestic
Overseas
￦13,810,034 ￦
Total sales
Less : Inter – segmental transaction
(853,061)
(￦
(409,447)
Net sales
￦12,956,973 ￦
Operating income
￦ 1,485,572 ￦
Total assets
10,792,542
adjustment
34,915,228
Total
1,262,508)
￦
23,340,068
1,262,508
-
￦
-
￦
23,340,068
202,903 (￦
55,034)
￦
1,633,441
10,383,095
3,093,581
(5,827,135)
32,181,674
(2009)
Consolidation
Details
Total sales
Less : Inter – segmental transaction
Domestic
￦13,908,415
Overseas
￦
(991,692)
￦12,916,723
￦
Operating income
￦ 1,094,236
(￦
28,336,512
(￦
(409,163)
Net sales
Total assets
8,056,148
adjustment
Total
1,400,855)
￦
1,400,855
20,563,708
-
￦
-
￦
20,563,708
489,943) (￦
67,297)
￦
536,996
7,646,985
8,252,062
(5,629,972)
30,958,602
33.
MERGER
Doosan Corporation merged Doosan Mottrol Holdings Co., Ltd. and Doosan Mottrol Co., Ltd. while Doosan
Construction & Engineering Co. Ltd. merged Doosan Mecatec Co., Ltd. and Doosan Heavy Industries &
Construction Co., Ltd. merged Samhwa Asset Co., Ltd.
In the merger with subsidiaries, the carrying amount
in their consolidated financial statements was transferred, and any additional goodwill was not recognized.
(1) Overview of the merger participating companies is as follows:
Predecessor
Doosan Mottrol Holdings
company
Co., Ltd.
Business summary
Holding Company
Manufacturing
Manufacturing
Lee, Sang Ha
Yoon, Tae Sung
Kim, Young Sik
Choi, Gwang Ju
Controlling – subsidiary
Controlling – subsidiary
Between subsidiaries
Between subsidiaries
Doosan Corp.
Doosan Corp.
Doosan Construction &
Doosan Heavy Industries
Engineering Co., Ltd.
& Construction Co., Ltd.
Representative
director
Samhwa Asset Co., Ltd.
Real estate rental &
domestic investment
Relationship
between
participating
companies
Acquiring company
(2) Merger schedule was as follows:
Doosan Mottrol Holdings
Detail
Date of merger
Date of merger
contract
Approval date by
board of directors
Approval date at a
general meeting
of stockholders
Co., Ltd.
Samhwa Asset Co., Ltd.
July 1, 2010
July 1, 2010
November 1, 2010
December 1, 2009
March 30, 2010
March 30, 2010
August 17, 2010
September 16, 2009
May 27, 2010
May 27, 2010
August 17, 2010
October 27, 2009
Small scale merger
Small scale merger
(Note 1)
(Note 1)
September 28, 2010
Small scale merger
(Note 1)
(Note 1) The mergers were approved by the respective board of directors, which can override the approval of
the stockholders in accordance with Article 3 of the Korean Commercial Code No. 527.
(3) Summary of the statement of financial position of predecessor companies on the date of merger is as
follows(In millions of Korean won):
Doosan Mottrol
Doosan Mottrol Co.,
Doosan Mecatec
Samwha Assets Co.,
Holdings Co., Ltd.
Ltd.
Co., Ltd.
Ltd.
Account
Assets
Current assets
₩
4,738
₩
167,213
₩
642,326
₩
15,785
Non-current assets
(Note 1)
Total assets
209,813
₩
214,551
78,878
₩
246,091
461,326
₩
1,103,652
44,494
₩
60,279
Liabilities
Current liabilities
Total liabilities
₩
55,615
97,615
553,103
80
-
15,546
198,901
2,221
55,615
₩
113,161
₩
752,004
₩
2,301
Stockholders’ equity
Capital stock
Capital surplus
Capital adjustments
1,160
11,716
54,840
8,249
143,823
165
78,091
41,065
(321)
(337)
-
(4,760)
(1,612)
25,105
148,936
10,337
15,886
96,281
69,780
3,087
Accumulated other
comprehensive
income
Retained earnings
Total stockholders’equity
₩
158,936
₩
132,930
₩
351,647
₩
57,978
₩
214,551
₩
246,091
₩
1,103,652
₩
60,279
Total liabilities and
stockholders’ equity
(Note 1) Due to the merger, unamortized goodwill related to DMC amounted to ￦82,277 million that was held
by DMHC was carried to the Company.
(4) Ratio of merger and shares issued are as follows:
The stock price per share for the Company, Doosan Mottrol Holdings Co., Ltd. (DMHC) and Doosan
Mottrol Co., Ltd. (DMC) was estimated at ￦115,254 (face value: ￦5,000), ￦1,737,501 (face value:
￦10,000) and ￦12,944 (face value: ￦500), respectively. Based upon which, the Company issued
15.075407 shares of its common stock for each share of DMHC and 0.112308 shares of its common stock
for each share of DMC.
However, there was no economic effect from the issuance of new common stock because the Company
held 100% shares of DMHC..
Doosan Construction & Engineering Co., Ltd. issued 45,339,147 new shares based on the ratio of
4.1337662 shares of the predecessor company(Doosan Mecatec Co., Ltd.) per share of the acquiring
company.
Doosan Heavy Industries & Construction Co., Ltd. issued 687,467 new shares based on the ratio of
0.4593225 shares of the predecessor company(Samwha Assets Co., Ltd.) per share of the acquiring
company.
34.
TRANSFER OF BUSINESS
(1) Transfer contract
Apparel
Description
ITS (CMP)
Alcoholic Beverage
Importation and sale
Business
Date of Board of Directors’
approval
Date of transfer of business
Transfer
amount
(In
million of Korean won)
a
such as the Polo
Semiconductor
Alcoholic
brand
equipment
beverages
July 23, 2010
May 6, 2009
January 6, 2009
December 31, 2010
June 16, 2009
March 2, 2009
￦ 52,137
￦ 6,150
￦ 564,440
Apparel
ITS (CMP)
Alcoholic Beverage
(2) Business Transfer
Description
Transferee
CEO
Polo Ralph Lauren
Korea
K.C.Tech Co., Ltd.
Jung, Se Hyuk
Lee, Soon Chang
Importation and sale
Main business
such as the Polo
goods
Relationship
with the Company
Semiconductor
equipment
Lotte Liquor BG
Co., Ltd
Kim, Young Kyu
Alcoholic beverages
No relation with the
Company
Company
Company
(3) Condensed financial statements of transferred business : Refer to Note 31
35.
ACQUISITION
In 2009, Doosan Heavy Industries & Construction Co., Ltd.(DHI), one of the subsidiaries of the Company,
invested the capital to its subsidiary, Doosan Heavy Industries European Holdings S.a.r.l (DHIEH) and
acquired Skoda Power a.s. from Skoda Holding a.s. on December 7, 2009. For this acquisition, DHIEH
established Doosan Power Systems Czech Investment Co., Ltd.(DPSCI) in the Czech Republic, which took
over the 100% equity interest of Skoda Power a.s., where DHI provided related guarantees for the purpose of
intending to secure the original technology related to steam turbine and enhancing other technical
competitiveness.
The stock purchase agreement and other contracts for the acquisition of Skoda Power a.s. was approved by
the Board of Directors on September 14, 2009.
Cost of acquisition of DPSCI in exchange for interest of Skoda Power a.s. was EUR 451,607 thousand and
the details are as follows (In thousands of foreign currencies):
Acquirer
Cost of acquisition
DPSCI
EUR
71,607
(formerly DHI
EUR
80,000
EUR
200,000
EUR
30,000
EUR
70,000
Payment date
Sources of fund
December, 2009
Contribution to DHIEH by DHC
DPSCI’s borrowings from banks(KB,CS,CSOB
Czech)
and others)
DHIEH’s borrowings from Korea Exim Bank
(Note 1)
DHIEH’s borrowings from DPS
December, 2010
Contribution to DPSCI by Doosan Power
Systems Limited.
(Note 1) Guarantees provided to financial institutions are as follows (In thousands of foreign currencies):
Lender
Debt Amount
Guarantor
Maturity
December , 2014
Korea Exim Bank
EUR
110,000
DHC, DBEL
Lloyds
EUR
45,000
DHC, Doosan Power Systems
Abbey National Treasury
EUR
15,000
Limited, Korea Exim Bank.
EUR
30,000
Service
Commerzbank
36.
SPIN-OFF
To enhance the competitiveness and efficiency of its business operations, the Company spun off the investing
and leasing business segments.
Facts related to the spin-off of the investing and leasing business segment
are summarized as follows:
(1) Summary of spin-off
1) Date of spin-off : August 18, 2009
2) Date of stockholders’ meeting for approval of spin-off : June 19, 2009
3) General business overview of new spin-off company : The revenue of spin-off business segments
(investing and leasing) is primarily comprised of rental income and equity method income. The vast
majority of equity method stock are shares of Doosan Engineering & construction Co., Ltd.
4) The name and the CEO of new spin-off company : Samwha Assets Co., Ltd. and CEO, Choi Gwang ju
(2) Spin-off method and details
The Company assigned 0.44 stock of new spin-off company per 1 stock of Samwha Crown & Closure Co.,
Ltd. to stockholders who are registered in a stockholders’ list at the date of spin-off. New spin-off
company kept transferred assets and liabilities at book value. Samwha Crown & Closure Co., Ltd.
recognized loss on capital reduction related to the difference between net assets and equity. Details of
assets and liabilities transferred to new spin-off company are as follows (In millions of Korean won):
Existing company after
spin-off
Details
Current assets
(Samwha Crown & Closure
New company after spin-off
Co., Ltd.)
(Sanwha Assets Co., Ltd.)
Before spin-off
￦
35,591
￦
26,964
￦
8,627
Non-current assets
136,200
78,537
62,764
Total assets
171,790
105,501
71,391
Current liabilities
14,718
14,147
571
12,554
9,608
2,947
Total liabilities
27,272
23,754
3,518
144,518
81,747
67,872
Net assets
New spin-off company (Samwha Assets Co., Ltd.) was merged with Doosan Heavy Industries &
Construction Co., Ltd. on December 1, 2009 (Refer to Note 33).
37.
SUBSEQUENT EVENTS OCCURRING AFTER END OF THE REPORTING PERIOD
(1) IMGB
IMGB, a subsidiary, started repaying monthly installments of the borrowing of EUR 10,000,000 from BCR
in March 2011. IMGB is in the process of negotiating with Raffenisen Bank and other local banks for
repayment terms as of the auditor’s report date.
(2) Doosan capital
The board of directors of Doosan Capital., Ltd. approved the issuance of 8 million shares of common stock
at ￦6,250 per share(Face value : ￦5,000) on March 22, 2011. New common stock will be issued on May
4, 2011.
38.
PRE-DISCLOSURES OF IMPACT FROM TRANSITION TO K-IFRS
The Company will begin to prepare its financial statements in accordance with the Korean International
Reporting Standards (“K-IFRS”) from the fiscal year ending December 31, 2011, with January 1, 2010 as its
date of transition. The Company’s approach in transitioning from Korean GAAP to K-IFRS is as follows.
(1) K-IFRS transition plan and the status of progress of the plan
In March 2008, the Company organized a task force team in order to manage K-IFRS implementation
process. Assessing the impact of K-IFRS adoption, formulating its accounting policy, training the
employees and upgrading the accounting and related systems are still in progress.
(2) Significant differences between Korean GAAP and K-IFRS applicable to the Company are as follows:
Issues
FirstBusiness
Adoption
Combination
of Korean
IFRS
Employee benefits
K-IFRS
Korean-GAAP
The Company has elected not to apply K- Not applicable
IFRS
1103,
Business
combinations,
retrospectively
to
past
business
combinations which have occurred prior to
January 1, 2010.
The Company has elected to recognize all Not applicable
cumulative actuarial gains and losses on
defined benefit plans in equity at January 1,
2010.
Special purpose entity
If a special purpose entity is substantially Exclusion from
controlled by the Company, it should be consolidation
consolidated.
scope
of
Employee benefits
Under the Projected Unit Credit Method, the
Company recognizes a defined benefit
obligation calculated using an actuarial
technique and a discount rate based on the
present value of the projected benefit
obligation.
Goodwill and negative goodwill
Goodwill is not amortized and tested for Amortized on a straight line
impairment, every year. Negative goodwill is basis over a reasonable
recognized in income at the time of period.
acquisition.
Elimination of financial assets
Financial assets can be eliminated from Financial assets can be
book only if transferor transfers substantial eliminated if transferor cannot
portion of risk and reward to transferee
exercise
rights
for
the
transferred
assets
and
transferee has a right of
disposition of the assets after
transfer. Also, transferor must
not have effective control over
transferred
assets
after
transfer
Deferred income tax
Deferred income tax is reclassified as non- Deferred tax assets and
current .
liabilities are classified as
either current or non-current
depending on the classification
of their underlying assets and
liabilities, or the time of
expected reversal of temporary
differences if they did not relate
to specific assets and liabilities
The Company establishes an
allowance
for
severance
liability equal to the amount
which would be payable if all
employees left at the end of
the reporting period.
(3) Changes in scope of consolidation
The Company is required to present consolidated financial statements under K-IFRS. Changes in the
scope of consolidation from K-GAAP to K-IFRS as of December 31, 2010 are as follows:
K-GAAP Subsidiary
K-IFRS Subsidiary
Neoplux Co., Ltd.
Neoplux Co., Ltd.
Neoplux No.1 Private Equity Fund
Oricom Inc.
Oricom Inc.
Doosan Advertisement Co., Ltd.
SRS Korea Co., Ltd.
SRS Korea Co., Ltd.
Doosan Bears Inc.
Doosan SRS SPC
Doosan Bears Inc.
N Shaper Corp.
Doosan Electro-Materials Singapore Pte Ltd.
N Shaper Corp.
Doosan Hongkong Ltd.
Doosan Electro-Materials Singapore Pte Ltd.
Doosan Shanghai Chemical Limited
Doosan Hongkong Ltd.
Doosan Electro-Materials (SHEN ZHEN)
& 39 subsidiaries
Limited.
(Exception of Doosan Infracore Co., Ltd
subsidiaries)
Doosan Infracore Co., Ltd. & 66 subsidiaries
Doosan Shanghai Chemical Limited
st
Doosan ABS(1 )
nd
Doosan ABS(2 )
Doosan ABS(3rd)
Total 122
Total 20

doosan corporation and subsidiaries

Transcription

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