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DAELIM Sustainability Report 2013, which is the fifth publication of its kind,

contains the efforts and performance of Daelim Industrial in year 2013.

Reporting Period and Scope

This report is prepared in reference to the domestic and overseas data collected from Jan. 1 to Dec. 31, 2013.In some instances, the report mainly focuses on domestic performances.For environmental and social performances, content mostly covers construction business.As for the quantitative performance analysis in comparison with the past performance,the data collected over the past three years (2011-2013) has also been represented.

Reporting Principles

This report is prepared in accordance with the Global Reporting Initiative (GRI) G3.1 and ISO 26000 guidelines.On the basis of IIRC (International Integrated Reporting Council) considerations,financial and non-financial information are reported in a mutually related andbalanced way through an Integrated Reporting format.Additional information is given with reference to the CRE Index specified for the construction industry.All the data used in this report has been computed following the GRI G3 protocol with the exception ofa few cases not covered by the protocol,which have been analyzed according to the management standards of Daelim Industrial.

Verification

To ensure the objectivity and validity of the Sustainability Report, a third party verification was conducted,and the results are included on page 78 of this report.

Daelim Industrial Sustainability Report is also available on the company’s website,and we greatly appreciate your feedback.For further information or inquiries, please contact us.

AboutThis Report

Planning 1 Team, Daelim Bldg., 36 Jongno-1-gil, Jongno-gu, Seoul, KoreaTEL 02 - 2011 - 8543 / FAX 02 - 2011 - 8017 / E - mail [email protected] http://www.daelim.co.kr

Contents

CEO Message

Company Overview

Business Areas

Sustainability Management of Daelim

Stakeholder Engagement

Materiality Matrix

Sustainability Performance Highlights

Economic Performance

DMA Disclosure on Management Approach

Foundation for Sustainable Growth

Stable Profit Creation

Distribution of Economic Values

Corporate Governance

Management Transparency

Risk Management

Quality Management

Environmental Performance


Low-carbon Management System

Climate Changes Response through GHG Management

Development of Eco-friendly Technologies

Eco-friendly Business

Eco-friendly Construction

Flow of Material Goods

Social Performance


Human Resources Development

Compensation and Benefits

Corporate Culture of Trust and Communication

Safety Management

Customer Satisfaction

Win-win Cooperation

Social Contribution : 5 Sharing Campaigns

Appendix

GHG Verification Statement

Third Party Verificationv Statement

GRI INDEX

Awards/ Memberships

Financial/ Environmental/ Social Data

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June 2014CEO & President

Cheolgyun Lee

Dear stakeholders that have encouraged and supported Daelim Industrial,

I would like to extend my heartfelt gratitude for extending generous interest and encouragement for the growth and development of Daelim Industrial last year.

Despite the market environment that is more challenging than ever in 2013, we diversified overseas order portfolios including the construction of a 1,000MW coal-fired power plant in Malaysia and a refinery expan-sion project in Sohar, Oman, and solidified our strong presence in the plant sector. And yet, our management performance was sluggish in some overseas projects year-on-year due to higher project cost. We will do the utmost to manage the cost rate and risks by enhancing profitability covering from bidding to selective order acquisition, and improving all the processes ranging from construction work to completion.

In terms of environmental sustenance, we have consistently controlled the greenhouse gas emissions and succeeded in reducing the amount of emissions by 22% as a way of signing a pilot project against the Target Management Scheme for Greenhouse Gas Emission and Energy Consumption with the Ministry of Land, Infrastructure and Transport. As such, we are recognized as a leading company in response to climate change. We have taken the lead in eco-friendly construction by having 7 green construction technologies certified by the government.

Through the on-site safety management through SORA (Safety Operation Module & Risk Assessment), which was independently developed by the company in 2005, our top priority is on employee’s safety and health. Our accident rate in 2013 was the lowest in the construction industry. Meanwhile, 124 hours of training were performed per head through our continued investment and efforts in talent development. Our sharing and volunteering activities were consistently underway for community in alignment with the construction industry.

As a result of such economic, environmental and social performance, Daelim Industrial was included in the 2013/14 DJSI World Index, broadening our prestige as a company that excels in sustainable management throughout the world.

Daelim Industrial has led the development of construction culture in Korea based on the trust robustly built with shareholders & customers and business partners as well as traditions of corporate management pur-suant to ‘basics and principles’ for the past 75 years. We have overcome fierce competitions with world-re-nowned construction companies. Each and every employee at Daelim Industrial will fulfill their responsibil-ities and roles to enhance the stakeholder value for you by joining competencies together. We sincerely ask your unyielding interest and support.

Thank you.

Our prestige will broaden as a company that excels insustainable management by complying with the basic norms andprinciples that have been maintained for the past 75 years

02 DAELIM 2013 Sustainability Report

Message from the CEOManagement Principles

Message from the CEO

*As of the 2013-end K-IFRS consolidated balance sheets*Credit Rating Agencies: Korea Investors Service, Korea Ratings Corporation, National Information & Credit Evaluation

Established on Oct. 10, 1939 Sale 9.8 trillion Won

Total Assets 10.8 trillion won Orders(Construction) 8.8 trillion Won

Credit Rate AA- Number of Employees 5,456

Daelim Industrial founded in 1939 offers diverse services and products in the construction sector including plant, civil and building & housing, and the petrochemical sector. It is home to perfect business portfolios covering not only plant design, construction and pilot operation but also production, sales and export of petrochemical products. Daelim Industrial has distributed surplus dividends for 34 consecutive years as one of Korea’s top 100 companies for 58 years from 1955, and is Korea’s representative global contractor with seasoned experiences in construction in 35 countries across the globe.

- First company to make profits from an overseas construction project

- First company to enter the Kuwaiti, Iranian, and African markets

- First company to establish an R&D center in the construction industry (Year 1980)

- First company to launch an apartment brand, e-PyunhanSesang, in Korea (Year 2000)

- First company to localize suspension bridge technology in Korea

- Included in the 2013/14 DJSI World Index (2013/14)

An Ambitious Construction Company that Takes Initiatives and Pursues the Best

*As of March 1, 2014 *As of March 1, 2014

ConstructionBusiness

Petrochemical Business

Plant Business Division Head Office

Building & HousingBusiness Division

Public Business Office

Civil Business Division Plants

Research InstituteDevelopment &Investment Office

Yeosu PE

Yeosu PB

Jeonju FILMManagement CorporateDivision

Technology R&D Institute

Organization ofConstruction Business

Organization Chart forthe Petrochemical Business Division

4 divisions, 17 offices, 1 institute, 102 teams 1 division, 28 teams

Head Office : 36 Jongno-1-gil, Jongno-gu, Seoul, KoreaHead Office : 11F, Korea Chamber of Commerce and Industry, 39 Sejongdaero, Jung-gu, Seoul, Korea

03

Company Overview

The Plant Business Division possesses the world’s topnotch technological prowess in var-ious fields including oil & gas, refinery, petro-chemical, and power generation. Since we penetrated overseas plant markets in 1973 for the first time ever as a Korean engineering & construction company, we have positioned our-selves as a global contractor recognized in the international markets by implementing 483 proj-ects in the Middle East, Southeast Asia, Africa, and China for decades

The Civil Works Business Division has Korea’s top-tier track records in various fields such as bridge, dam, port, railway, road, and water re-source, and it has secured the world’s topnotch technological prowess through which Daelim can build a suspension bridge on its own in the special bridge field. Based on all these, we en-deavor to take a great leap forward as a global company by expanding our project performing areas to overseas.

Plant Civil- The only company in Korea capable of generating synergies in the EPC and petrochemical O&M

- Acquired the overseas order volume of KRW 5.2 trillion (in plant) in 2013

- No.1 in the record of overseas projects : 483 Projects ·Petrochemical : 170 ·Oil/ Gas/ Refinery : 193 ·Power plant : 120

- Construction of the world's 4th longest suspension bridge (span length : 1,545m) with proprietary technology : Yi Sun-sin Bridge (Year 2013)

- Construction of the largest dam in Iran : Karun Dam (Year 2001)

- Korea’s first RCD-applied exclusive flood-controlling dam (Hantan River Dam expected in 2015)

- Construction of the largest advanced sewage treatment facility and its modernization (2 million tons/day) : Seonam Sewage Treatment Plant (Year 2009)

- Selected as the representative company in the Sangju-Yeongcheon Highway Project, the largest private investment project in Korea (completed in 2012, total investment volume of KRW 2.2 trillion)

- No. 1 in the order volume in the civil engineering in Korea in 2013

*As of March. 1, 2013*Units : 100 million won

Algeri

Singapore

Russia

Hungray

Iran

Kuwait

Oman

Vietnam

Philippines

China

Pakistan

Moscow Office

Daelim Hungary Kft

Tehran Office

DALIN(Nanjing) Construction Project Management Co.,LtdBeijing Office

48

1,380

578

674

7,731

18,355

11,1471,198

563

Kuwait Office

Muscat Office

Hanoi Office

Daelim Philippines Inc.

12,951

MalaysiaDaelim (Malaysia) Sdn. Bhd

Brunei Indonesia

356 1,069Brunei Office PT.Daelim Utama Construction

U.A.EAbu Dhabi Office

Saudi ArabiaDaelim-Dar Co., LtdDaelim Saudi Arabia Co., Ltd

Libya

224


Business Areas

Business Areas

Daelim’s Building & Housing Division has se-cured advanced technological capabilities, vari-ous construction experiences, and data in APTs and general building & housing fields. Since we adopted a brand APT for the first time ever in Ko-rea, we have supplied 110,000 units of APTs for the past 13 years, and we distinguish ourselves in various fields ranging from business facilities, hotels, medical facilities, and educational facili-ties to sports and logistics facilities.

Daelim’s Petrochemical Business Division bo-asts of high competitiveness in terms of tech-nological prowess and production field in the polyethylene, polybutene, and film businesses. This is actually proven through the polyethylene business, where we boast of the world’s top-tier metallocene catalyst technology, polybutene business where we are no. 1 in terms of mar-ket share based on the open market, and film business where we take pride in having Korea’s largest BOPP film production capacity.

Building & Housing Petrochemical Business - Construction of the first BIM-based facility in Korea : Yongin Civil Athletics Park (Year 2010)

- Construction of Korea’s largest office/hotel/shopping multi-functional building: Korea Center for International Finance in Yeouido (Year 2011)

- Construction of Korea’s largest exhibition facility: Yeosu Expo International Pavilion (Year 2012)

- Construction of Korea’s highest-tier housing landmark : Acro River Park in Banpo (Year 2014)

- As of 2013, No.1 in construction of hotels in Korea, and supplied Apartment houses complex with 110,000 units

Owning Asia’s No.4 NCC- Production capacity : 1.91 million tons/year as for ethylene Touting Innovative Technologies- Developing and commercializing metallocene PE for the first time in Korea, touting the source technology- Owning the source technology for catalyst and process for CON-PB, HRPB- Commercializing HRPB for the second time in the world (in 2009)

Holding the World-class Capacity for Operation and Facility Management - Maintaining the NCC operation rate of over 95% a year- Holding the plant expansion capacity of the top level in the industry (as for ethylene: 950,000 tons/year 1.91 million tons/year)- For NCC, conducting the world’s top-level energy efficiency operation (according to the evaluation of Solomon Study)

Ranking 2nd in the World (28% of market share) - 140,000 tons/year - Designated as the world’s top product by the Ministry of Trade, Industry and Energy (in 2007)

Outstanding Process Management andFacility Management Capacity - Holding experiences in over 50 petrochemical project O&M- O&M in POLYMED Plant in Algeria - South Pars Plant CSU O&M in Iran

U.S.AHouston OfficeDaelim USA Inc.

We Create,Finance,Build andOperate the World

Materiality Analysis (Global Daelim)Customers,Shareholders &Investors

41

Suppliers

56

Unit : Point

Employees

78

LocalCommunities

67

PublicSectors

45

05

Daelim Industrial has a firm belief that providing stakeholders with the highest level of value and satisfaction is the best way to realize the corporate philosophy of 'future creation,' 'respect for humanity' and 'customer trust' and enhance the company's competitive edge. In 2008, Daelim Industrial established CSR Committee in order to listen to the voices of stakeholders and facilitate communication for sustainability management strategies.

Sustainability Management StrategiesWith a growing recognition that 'change' and 'innovation' are only feasible when the underlying values such as 'basics,' 'principle' and 'promise' are painstakingly implemented, Daelim Industrial has announced 'basics,' 'principle' and 'promise' as the driving force for sustainability management. The corporate philosophy of Daelim Industrial to achieve affluence, happiness and the infinite progress of human society contains the concept of sustainability management, which enables the company to plan for a sustainable future and generate values for all stakeholders.

Core Tasks Initiatives Major Activities Expert Interviews

IntegrityManagement

Transparency management,Ethical management, Social responsibilities

Ethical Management - The Charter of Ethics, The Code of Ethics, Cyber Shinmungo, Operation of the Compliance Program

p.25

EnvironmentalManagement

Eco-friendly constuction projects Climate Change Response, Development of eco-friendly technologies,Eco-friendly Site Management, Green Business, Green Habits

p.38

SafetyManagement

No industrial accident!Start from the basics

SORA (Safety Operation Module & Risk Assessment), Safety monitoring system

p.65

SharingManagement

Social responsibilities through5 Major Sharings

Sharing of Happiness, Friendship, Clarity, Culture, and Hope p.74

Win-win CooperationManagement

Growth of suppliers equals the growth ofDaelim Industrial

Win-win cooperation strategies, support for shared growth

Training/workshops for suppliers

p.71

Core Tasks for Sustainability Management

Respect to theHumanity

Creation for theFuture

Faith withCustomer

Corporate Philosophy =Vision forSustainability Management VISION

Create a comfortable, affluent way of life and promote infinitegrowth and progress of humanity.




Director of DNV GL

Seung-Hyeon Gwak

How do you see any changes in the recent trend for sustainable management?

Wide-ranging issues on sustainable management have emerged in different sectors, but many stakehold-ers have recently paid attention to sustainability and anti-corruption in a supply chain.

In the same pipeline, what is your expert view for companies to respond tothe trend of sustainable management?

Companies can make more effective responses to major issues through a risk-based approach. Measures to ease risks must be taken, first and foremost, including risk assessment for pending issues and due dili-gence for high-risk areas.

What are Daelim Industrial’s strengths and weaknesses in a risk-based approach?

For a general construction company like Daelim Industrial where overseas projects take a big portion, one of the big strengths is seasoned experiences with major clients in advanced countries in numerous projects. However, more efforts are needed for subcontractors and suppliers involved in a project to protect human rights due to complexities of the supply chain. It would be also conducive to establish a management sys-tem to comply with anti-corruption laws that are getting harsher throughout the world.

One of the major issues in sustainable management is‘strengthening governance for sustainable management.’ Could you share your insights onDaelim Industrial’s strategies, e.g. reinforcing the participation of the board of directors andthe top management in sustainable management and establishing a reporting system?

It would be essential to have a system for the board of directors to monitor sustainable management issues regularly and make prompt decisions. Some solutions would include incorporating sustainability issues on the board’s top agenda pursuant to the Articles of Incorporation or the operational rules for the board; indi-cating the monitoring intervals; and ensuring that the topic of sustainable management could be discussed and reviewed in the top decision-making body of the company. In order to strengthen governance, a greater focus must be on the eligibility of decision-makers. Their eligibility could be complemented through training on major issues and meetings with stakeholders. A measure for proactive stakeholder engagement could be inviting major stakeholders by the CEO on a regular basis, explaining about corporate sustainable man-agement and listening to stakeholders’ advice and ideas.

In sustainable management,

it is a must to establish a

management system to

protect human rights in overseas

construction projects and

comply with global anti-corruption

laws and regulations

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Expert Interviews

Daelim Industrial has open channels of communication for all stakeholders in order to provide a constant exchange of economic, environmental and social values, and we strive to improve our internal processes to generate better values.

Stakeholders of Daelim IndustrialDaelim Industrial selects stakeholders through media analysis and interviews with companies in the same industry, suppliers and internal employees and makes a continuous effort to provide channels of communication and collect opinions from diverse stakeholder groups.

Customers· Company website (Cyber Shinmungo)

· Customer Satisfaction Center at e-PyunhanSesang

· Orange service

· Assessment of levels of customer satisfaction

· Homemaker's Council

· On-line Communities

Employees· Hansup Broadcasting

· Hansup TalkTalk

· Hansup Speech Podium

· Hansup Council

· Hansup Club

· Conflict Resolution Group

Shareholders & Investors· General Meeting of Shareholders

· Company Website (IR inquiry)

· Investor Relations Conference

· Data Analysis, Retrieval and Transfer System (DART)

· Annual Report Annual Performance Report

Suppliers· EohkkaeDongmu (Close Partnership)

· SCMS (suppliers)

· Award for outstanding suppliers

· Supplier meeting

· D&P Association

Public Sector· Industry meeting

· Public Meetings for laws and regulations Construction Association

· Participation in government assignment/conference

Major Issues and Expectations of StakeholdersDaelim Industrial conducted a survey to reflect major areas of interest for stakeholders to corporate management in a broader sense, and selected the following areas. Moreover, activities under each issue are reflected and practiced in actual management activities.

Classification Economic Issues Environmental Issues Social Issues

Customers Quality products/servicesCustomer satisfaction

Eco-friendly, low-energy technology andproducts

Customer management activities Quality Management

Shareholders &Investors

Capital and investment Distribution of management performance

Eco-friendly TechnologyGreen Business

Ethical managementDevelopment of new technologies

Suppliers Shared growth Green purchase, Green Procurement Win-win management strategies

Employees Wages and compensationsIncrease in productivity

Green HabitRegistration and awards fornew technologies/patents

Human resources developmentWelfare and benefitsZero accident rates

Local Communities Donations Eco-friendly construction and bio-diversity Engagement in regionalenvironmental conservation activities

Social contributions

Public Sector Tax payment Compliance with environmental laws andregulations

CP (Compliance Program)

Values Shared with Stakeholders

Daelim Industrial’s Stakeholder Communication Channels

Local Communities· Company Website

· Contributions to local communities Sharing of Happiness, Culture, Friendship, Hope, and Clarity

· Charity Bazaar, close relationship


Stakeholder EngagementMateriality Analysis

Stakeholder Engagement

Daelim Industrial has performed a materiality assessment in order to systematically manage issues that can affect sustainable growth and development of the company. Cores issues have been structuralized to finalize on the issues to be reported and reflected in this report. Core issues that are selected will be subject to continued management through relevant indicators.

An analysis has been made of the current status, major sustainability management issues, social interest level and business effect level of Daelim Industrial from the perspectives of stakeholders.

Survey for Internal Stakeholders

· Time period : 2014. 4. 17 ~ 4. 23· Method : Survey made through the company's intranet· Response : 2,303 people (valid : 2,143 people)

· Time period : 2014. 4. 17 ~ 4. 25· Method : On-line survey, e-mail questionnaire, interviews· Response : 141 people (valid : 138 people)

· Time period : April ~ May, 2014· Expert interviews were conducted on sustainable management and five core tasks – integrity management, green management, safety management, sharing management and win-win cooperation management. The outcome was reflected in this report.

Survey for External Stakeholders Stakeholder Interviews (expert interviews)

Assessment Process

Step . 1 Defining Sustainability Issues Step. 2 Stakeholder Review Step. 3 Materiality Assessment and Section of Issues to be Reported

External Issues · International standards/guidelines on sustainable management (including G4/DJSI(2014)· Issues of companies that excel in sustainable management · Major issues in the construction industry · Media research

Internal Issues· Strategic tasks for Daelim Industrial (2012~2014)

Stakeholder Survey· Period : April 17 ~ 25, 2014· Methodologies · Internal : Intranet · External : Online surveyinterviews

Expert Interview (Draft)· External experts relevant for core issues on sustainable management · Questionaire design

Materilaity Assessment· Materilaity Assessment· Materiality Matrix

Selection of Issues to be Reported· Reporting prioritization and selection of issues to be reported· Selection of special features· Reflection in the Sustainability Report

STEP. 2 Stakeholder Review

Analysis ofExternal Issues

1. Analysis of International Standards Pertaining to Sustainability ManagementIn order to understand the issues of global social responsibilities of a corporation, an analysis has been made of international standards and benchmark indexes related to sustainability management such as ISO2600, GRI, and DJSI, and a list of core issues about global sustainability management has been made.

2. Company AnalysisInclination of stakeholders and major issues in the construction industry were identified through the cases of sustainable management of excellent companies in sustainable management as well as construction companies of home and abroad, and the analysis of the Sustainability Report.

3. Media AnalysisAn analysis of 1,037 articles about Daelim Industrial, which appeared in major daily newspapers in 2013, has been conducted for the purpose of uncovering the major issues of interest to the stakeholders. Media analysis has been performed in the order of data collection, analysis of key word issues and categorization and extracting the major issues related to sustainability management.

Extracting 24 Issues forthe Materiality Assessmentof takeholders

Through the internal and external issue analysis, 8 issues were selected from the economic, environmental and social areas, coming up with 24 issues in total. We conducted a stakeholder survey for measuring stake-holder interest on the 24 issues and the materiality of sustainable management.

STEP. 1 Defining Sustainability Issues

Analysis ofInternal Issues

We have analyzed the relation between the management principles and strategic tasks of Daelim Industrial in 2012 and 2014 and the major issues related to sustainability management and their internal impacts.

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Materiality Analysis

Inte

rnal

Sta

keho

lder

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External Stakeholders

Materiality Matrixof Daelim

Major issues related to the sustainability management of Daelim Industrial have been selected on the basis of the data collected through surveys for internal and external stakeholders and disclosed after internal review.Results of the materiality test revealed that the issues of ‘development of eco-friendly technologies’ and ‘laying the foundation for sustainable growth’ with regard to future growth engines of Daelim Industrial were selected as the most material issues again as in the previous year. Due to the impact of environmental issues and demand for the expansion of communication, the materiality of ‘eco-friendly construction’ and ‘expansion of internal communication’ soared year-on-year. Such stakeholder groups as shareholders, customers and those in the public sector selected ‘eco-friendly technologies and construction’ as the most material issue while suppliers found ‘win-win cooperation and shared growth’ as the most material one. Community selected ‘raising customer satisfaction’ as the top priority. The most material issue for internal employees was ‘laying the foundation for sustainable growth’ as in the previous year.

Economic Issues

Environmental Issues

Social Issues

2013 Assessing Materiality

Based on the materiality test, 10 core issues, 20 sustainable management issues and 3 potential issues were selected in the order of material-ity. Results of the materiality test by stakeholder as well as information on major issues in the economic, environmental and social sectors are disclosed in the DMA for each.

01 Development of Eco-friendly Construction Technology 02 Foundation for Sustainable Growth

03 Eco-friendly Construction

04 Climate Change Response

05 Strengthening Global Management

06 Hunting and Development of Talent

07 Working Environment and Welfare for Employees

08 Enhancement of Customer Satisfaction

09 Win-win cooperation and shared growth

10 Expansion of internal communication

10 Core Issues

11 Quality Management

12 Safety and Health Issues of Employees

13 Fair trade

14 Establishment of an Advanced Environmental Management System

15 Compliance with environmental laws

16 Green Communication

17 Ethical Management

18 Expand Sharing Projects such as Social Contributions

19 Improvement in profitability

20 Soundness of Corporate Governance

20 Sustainable Management Issues

21 Financial/Non-financial Risk Management

22 Response to Water Shortage

23 Non-discrimination and Respect for Human Rights

24 Protection of Bio-diversity

Potential Issues for Sustainable Management

STEP. 3 Assessing Materiality & Selecting Reporting Issues

20 Sustainable Management Issues

10 Core Issues

Potential Issues

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The concept of sustainable management seems distant without being related to by employees. It would be better for employees to understand it, if the con-cept is explained through specific case studies, which are shared with employ-ees. It would be also conducive for employees if sustainable management goals and the status of our company are quantified and disclosed in a semi-an-nual and annual basis.

Our Hansup spirit embodies our directions to advance towards a global top-tier player.

01Such an attempt to listen to employees’ ideas deserves highest acclaims. Wouldn’t this be dubbed as sustainable management? It would be also neces-sary to encourage more employees to voice out their thoughts via SNS. Finan-cials would have to be considered at the same time, but if the directions to move forward could be mulled over together, wouldn’t we be able to set a vision for sustainable management?

02

05Corporate sustainable growth can be attained when growth is based on its cor-porate culture and traditions. Traditions of excellence are the driver of growth, which must be passed down lest they vanish at a time when changes and inno-vation are required for a higher leap and growth.

06

Internally, the PDCA cycle must be thoroughly managed for sustainable man-agement strategies could be escalated into execution and performance. Exter-nally, possible impact on external stakeholders including customers and share-holders must be thoroughly managed.

07 08Daelim Industrial has steadily maintained the construction business for 75 years. The company seems to tap into the developer business as its new growth engine, and as long as its fundamentals are kept, the company will thrive for over 100 years. Amid the recent spotlight on safety, I hope the company could take the lead in setting a culture for construction safety based on thorough train-ing on and implementation of safety in and outside the company.

Daelim Industrial Considers Sustainable Economy

Ideas of various stakeholders including customers,

shareholders, investors, suppliers, government and community, are

proactively gathered and reflected in corporate management.

We will work even harder for sustainable development through

your encouragement, support and genuine insights.

PROFITEconomic Growth

PLANETEnvironmentalStewardship

PEOPLESocial Progress

The basis for sustainable management is trust. A company can counter changes in the management environment only when it builds up trust with customers and suppliers, and when employees form trust with the organization. Trust with customers is based on high quality, trust with suppliers is based on sharing management, and trust with employees is based on welfare and stability in em-ployment. Companies’ highest goal is cost reduction in a fierce environment, and they must ensure that trust is not lost for the quality, sharing management, employment welfare and stability in employment throughout the way.

Sustainable management has been recently considered as a corporate stra-tegic goal, because customers strongly prefer companies that fulfill social re-sponsibilities, which is directly linked to corporate competitiveness. Daelim Industrial as a construction company needs to strategically set diverse social responsibilities, including collaboration-based shared growth, contribution to the global environment and re-investment of surplus revenues from public proj-ects.

03 04

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Stakeholders’ Opinions onSustainable

Areas Long-term Strategies 20 Sustainable Management Issues Materiality of Stakeholders Major Performance in 2013 Plans for 2014

Shareholders &

Customers Suppliers

Local Communities

PublicSector

Employees

Economic Foundation forSustainable Growth

Leaping higher as global developerand expanding overseas business

Foundation for Sustainable GrowthM H H M H

· Acquired equity in Millmerran Power Plant, Australia · Established Daelim Energy

· Completion of Korea’s largest power plant, Pocheon Power

Global managementM M H M H

· Advanced into Malaysia and Oman · Expanded overseas orders (64% abroad, 36% domestic)

· Continued expansion of overseas advancement· Profit scale-up and execution risk management through selective order acquisition

Profit scale-upL H M H M

· Revenues : KRW 9.8469 trillion (consolidated) · Operating Income : KRW 39.7 billion (consolidated)

· Revenues : KRW 10.1329 trillion (consolidated)· Operating Income : KRW 360 billion (consolidated)

Corporate Governance Transparent management ofthe board of directors

Soundness ofCorporate Governance M L H M L · Held the 18th board of directors meeting

(attendance rate of outside directors: 91%)· Transparent management of the board of directors, andsharing of information on stakeholders

Integrity Management Embodying integrity management within the organization, and complying with business-related laws

Ethical ManagementH M M M L

· Operated Cyber Shinmungo· Reinforced training for employees to embody integrity managementwithin the organization

· Operation of Cyber Shinmungo· Employee protection (handling reported cases/cases under special commands)

Fair tradeH M M M M

· Improved the corporate culture for sites· Intensified reviews through the Internal Trade Committee

· Continuous execution of compliance programs and embodiment of mindset for fair trade· Reinforcement of risk management for suppliers

Quality management Establishing quality management activities

Quality managementM M L M M

· Improved quality certification & training, and the quality management system· Improved the training and quality of 23 major power plant suppliers

· Continuous maintenance of quality-related certification and acquisition of new certification· Expansion and support for preventive reviews to establish quality control in an early phase

Environmental Environmentalmanagement system

Establishment and certification ofadvanced green management system

Establishment of an advancedenvironmental management system L M M H M · Internal/External review of the Environmental Management System (ISO14001) and

Green Management System· Internal/External review of the Environmental Management System (ISO14001) andGreen Management System

Eco-friendly construction Conducting energy-efficient construction considering the environmental impact

Eco-friendly constructionH H H H H

· Development of technologies on low energies/GHG and application to sites· Acquisition of an award in the Construction Environment Management Contest

· Development of eco-friendly technologies and cost reduction by applying the technologies to sites

· Acquisition of an award in the Construction Environment Management Contest

Compliance with environmental lawsand regulations M M M M M · Response to legislation/amendment of environmental management laws

(training and reflection of internal standards)· Response to legislation/amendment of environmental management laws(training and reflection of internal standards)

Development ofEco-friendly Technology

Securing new growth engines by developing construction technology products of the future

Development of Eco-friendlyTechnology and business H H H H H

· 7 cases of certification of green technologies (in total)· Distribution of eco-friendly multi-housing units by 100%· Continuous participation in national policy researches on Carbon Capture &Storage and water treatment technologies

· Continued development of green technologies and distribution ofeco-friendly Apartment houses- 2 cases for green technologies, 4 cases for application/extension- Distribution of eco-friendly multi-housing units by 100%

Climate ChangeResponse

Reduction of GHG through target management (5% by 2015)

Climate Change Response H H M H H · Reduction of GHG emissions by 22% year-on-year (5% reduction by 2015 for the mid-term goal)· Participation in pilot projects on GHG target management in the construction industry

· Continuous activities to reduce the GHG emissions· Reduction target : 5% by 2015 (compared to 2012)

Response to water shortage M L M L M · Acquisition of technological edge in water treatment (e-Tris)· Operation of real-time monitoring systems for the water used

· Acquisition of technological edge in water treatment (e-Tris)· Operation of real-time monitoring systems for the water used

Social Cultivating Talented Workforce

Recruiting and training global,talented individuals in constructionwith Hansup spirit

Hunting anddevelopment of talent M H M H H

· No. of employees (Construction Business) : 4,944· No. of new employees : 177· No. of training hours per head : 124

· Talent search : Recruitment of new employees (recruited 94 in the first half)· Talent development : Training for 120 hours per individual (maintaining the three year’s average)

Improvement onemployee working conditions

Raising awareness among employees and enhancing the quality of life

Working environment andwelfare for employees M M L L H

· Extension of children’s tuition fees/medical fees, and operation ofselective welfare systems

· Communication on the working environment through Hansup Council

· Continuously gathering employees’ ideas and expanding welfare through Hansup Council

In-house CommunicationM L L L H

· Operation of internal communication channels (Hansup Plaza, Cyber Shinmungo, etc.)· Thank U Campaign (Corporate Management Division)

· Operating internal communication channels (Hansup Plaza, Cyber Shinmungo, etc.)· Thank U Campaign (expanding it company-wide)

Safety and health Continuous improvement onthe safety and health managementsystem to achieve zero percent ofindustrial accident rate

Safety and Health Issues ofEmployees M M M H M

· Disaster Rate of 0.09% (E)· Operation of the SORA (Safety Operation Module & Risk Assessment)

· Maintaining the industry’s lowest disaster rate : Targeting zero accident by 2014· Continuously improving the safety & health management system

Win-win Cooperation Achieving the shared growth through continued cooperation and expansion of support

Win-win CooperationM H L H M

· Selected as the most excellent company in large-enterprise & SME win-win cooperation· Operation of the Idea Contest

· Supporting financial/ technology development/ training/management activities continuously

Customer Satisfaction Expanding the space forcustomer participation and raisingcustomer satisfaction

Enhancement of customer satisfactionM M H M M

· Satisfaction of Orange Service : 95 points · Enhancing customer satisfaction by securing items for Orange Service, etc.

Social Contributions Continuously expanding activities of sharing in conjunction with the construction industry

Increase sharing activitiesM M H H L

· Donations : KRW 3.8 billion· Social contributions per head : 11 hours

· Strengthening social contribution activities aligned with the Group’s· Social contributions per head : 11 hours

H : High M : Medium L : Low


2013 Sustainability Performance Highlights

2013 Sustainability Performance Highlights

Areas Long-term Strategies 20 Sustainable Management Issues Materiality of Stakeholders Major Performance in 2013 Plans for 2014

Shareholders &

Customers Suppliers

Local Communities

PublicSector

Employees

Economic Foundation forSustainable Growth

Leaping higher as global developerand expanding overseas business

Foundation for Sustainable GrowthM H H M H

· Acquired equity in Millmerran Power Plant, Australia · Established Daelim Energy

· Completion of Korea’s largest power plant, Pocheon Power

Global managementM M H M H

· Advanced into Malaysia and Oman · Expanded overseas orders (64% abroad, 36% domestic)

· Continued expansion of overseas advancement· Profit scale-up and execution risk management through selective order acquisition

Profit scale-upL H M H M

· Revenues : KRW 9.8469 trillion (consolidated) · Operating Income : KRW 39.7 billion (consolidated)

· Revenues : KRW 10.1329 trillion (consolidated)· Operating Income : KRW 360 billion (consolidated)

Corporate Governance Transparent management ofthe board of directors

Soundness ofCorporate Governance M L H M L · Held the 18th board of directors meeting

(attendance rate of outside directors: 91%)· Transparent management of the board of directors, andsharing of information on stakeholders

Integrity Management Embodying integrity management within the organization, and complying with business-related laws

Ethical ManagementH M M M L

· Operated Cyber Shinmungo· Reinforced training for employees to embody integrity managementwithin the organization

· Operation of Cyber Shinmungo· Employee protection (handling reported cases/cases under special commands)

Fair tradeH M M M M

· Improved the corporate culture for sites· Intensified reviews through the Internal Trade Committee

· Continuous execution of compliance programs and embodiment of mindset for fair trade· Reinforcement of risk management for suppliers

Quality management Establishing quality management activities

Quality managementM M L M M

· Improved quality certification & training, and the quality management system· Improved the training and quality of 23 major power plant suppliers

· Continuous maintenance of quality-related certification and acquisition of new certification· Expansion and support for preventive reviews to establish quality control in an early phase

Environmental Environmentalmanagement system

Establishment and certification ofadvanced green management system

Establishment of an advancedenvironmental management system L M M H M · Internal/External review of the Environmental Management System (ISO14001) and

Green Management System· Internal/External review of the Environmental Management System (ISO14001) andGreen Management System

Eco-friendly construction Conducting energy-efficient construction considering the environmental impact

Eco-friendly constructionH H H H H

· Development of technologies on low energies/GHG and application to sites· Acquisition of an award in the Construction Environment Management Contest

· Development of eco-friendly technologies and cost reduction by applying the technologies to sites

· Acquisition of an award in the Construction Environment Management Contest

Compliance with environmental lawsand regulations M M M M M · Response to legislation/amendment of environmental management laws

(training and reflection of internal standards)· Response to legislation/amendment of environmental management laws(training and reflection of internal standards)

Development ofEco-friendly Technology

Securing new growth engines by developing construction technology products of the future

Development of Eco-friendlyTechnology and business H H H H H

· 7 cases of certification of green technologies (in total)· Distribution of eco-friendly multi-housing units by 100%· Continuous participation in national policy researches on Carbon Capture &Storage and water treatment technologies

· Continued development of green technologies and distribution ofeco-friendly Apartment houses- 2 cases for green technologies, 4 cases for application/extension- Distribution of eco-friendly multi-housing units by 100%

Climate ChangeResponse

Reduction of GHG through target management (5% by 2015)

Climate Change Response H H M H H · Reduction of GHG emissions by 22% year-on-year (5% reduction by 2015 for the mid-term goal)· Participation in pilot projects on GHG target management in the construction industry

· Continuous activities to reduce the GHG emissions· Reduction target : 5% by 2015 (compared to 2012)

Response to water shortage M L M L M · Acquisition of technological edge in water treatment (e-Tris)· Operation of real-time monitoring systems for the water used

· Acquisition of technological edge in water treatment (e-Tris)· Operation of real-time monitoring systems for the water used

Social Cultivating Talented Workforce

Recruiting and training global,talented individuals in constructionwith Hansup spirit

Hunting anddevelopment of talent M H M H H

· No. of employees (Construction Business) : 4,944· No. of new employees : 177· No. of training hours per head : 124

· Talent search : Recruitment of new employees (recruited 94 in the first half)· Talent development : Training for 120 hours per individual (maintaining the three year’s average)

Improvement onemployee working conditions

Raising awareness among employees and enhancing the quality of life

Working environment andwelfare for employees M M L L H

· Extension of children’s tuition fees/medical fees, and operation ofselective welfare systems

· Communication on the working environment through Hansup Council

· Continuously gathering employees’ ideas and expanding welfare through Hansup Council

In-house CommunicationM L L L H

· Operation of internal communication channels (Hansup Plaza, Cyber Shinmungo, etc.)· Thank U Campaign (Corporate Management Division)

· Operating internal communication channels (Hansup Plaza, Cyber Shinmungo, etc.)· Thank U Campaign (expanding it company-wide)

Safety and health Continuous improvement onthe safety and health managementsystem to achieve zero percent ofindustrial accident rate

Safety and Health Issues ofEmployees M M M H M

· Disaster Rate of 0.09% (E)· Operation of the SORA (Safety Operation Module & Risk Assessment)

· Maintaining the industry’s lowest disaster rate : Targeting zero accident by 2014· Continuously improving the safety & health management system

Win-win Cooperation Achieving the shared growth through continued cooperation and expansion of support

Win-win CooperationM H L H M

· Selected as the most excellent company in large-enterprise & SME win-win cooperation· Operation of the Idea Contest

· Supporting financial/ technology development/ training/management activities continuously

Customer Satisfaction Expanding the space forcustomer participation and raisingcustomer satisfaction

Enhancement of customer satisfactionM M H M M

· Satisfaction of Orange Service : 95 points · Enhancing customer satisfaction by securing items for Orange Service, etc.

Social Contributions Continuously expanding activities of sharing in conjunction with the construction industry

Increase sharing activitiesM M H H L

· Donations : KRW 3.8 billion· Social contributions per head : 11 hours

· Strengthening social contribution activities aligned with the Group’s· Social contributions per head : 11 hours

13

ECOnOMICPERfORMAnCEPRInCIPLE & POLICYThe creation of economic value is the fundamental growth strategy of

Daelim Industrial and serves as a pivotal source for

the pursuit of sustainable growth with all the stakeholders.

Daelim Industrial will continue to make every effort to

increase the economic value of the company and secure a foundation for

sustainable growth through its efficient use.

DAELIM 2013 Sustainability Report

14 Economic Performance

KEY ISSuES

Fair trade

Improvement in profitability

Risk management

Strengthening global management

Ethical management

Corporate governance

Foundation forsustainable growth

Quality management

1

3

5

2

4

6

7

8

P. 24

P. 18

P. 26

P. 04

P. 23

P. 21

P. 16

P. 28

1

4

35

2

8

6

7

KEY fIguRES

PRIORItY SCALE fOR StAKEHOLDERS

Shareholders & Customers

Suppliers LocalCommunities

PublicSector

Employees

Fair trade H M M M MStrengthening global management M M H M HImprovement in profitability L H M H M

Ethical management H M M M L

Risk management L M L M M

Corporate governance M L H M M

Foundation for sustainable growth M H H M H

Quality management M M L M M*H - High M - Medium L - Low

KPI Units 2011 2012 2013

Sustainability DJSI Results of inclusion Asia Pacific Asia Pacific World

Financial Revenues (consolidated) KRW billion 79,881 102,533 98,469

Operating Income (consolidated)

KRW billion 4,375 4,861 397

CorporateGovernance

Board of Directors Times 27 23 18

Attendance rate, % 90 89 91

EthicalManagement

Disciplinary Number 7 6 8Level of external interest

Level of internal materiality

15

Leaping Higher as A Global Developer byGathering the Existing Business Competencies Without any complacency about the existing title of a strong EPC player, we are about to make a leap forward as ‘a developer in the power generation and petrochemicals’ by gathering our 35-year competencies in the petrochemicals as well as our tested-and-proven construction capabilities in the global market. The year 2013 was significant in that we paved the way for developer projects by expanding and realigning business portfolios as a total solution provider, cover-ing all the processes, let alone our existing strength in construction – planning, designing, financing and operation, which used to be handled exclusively by global major developers. In Korea, we conducted the Pocheon combined cycle thermal power plant, which enabled us to secure internal capacities to fulfill all the processes in the power generation for the first time as a domestic construction company. In-ternationally, we plan to acquire operational know-how of a coal-fired thermal power plant by acquiring equity of Millmerran Power Station in Australia. Higher synergies are to be generated in our existing business sector driven by our experiences in power generation. Moreover, our accumulated operational know-how on fuel procurement, maintenance of power plants and efficient power supply will serve as an important stepping stone for Daelim’s roadmap to grow as a global developer.

Tongsuh Petrochemical

OuR VALuE IS

The vision for Daelim Industrial is to become

‘a developer in the power generation and petrochemicals.’

Our plan is on developer business based on the

know-how built through the operation of the

petrochemicals business for decades along with a

competitive advantage in the EPC sector

– tested and proven in the global market.


Foundation for Sustainable Growth

foundation for Sustainable growth

Pocheon Combined Cycle Thermal Power Plant– Korea’s largest scale power plant project where the value chain hasbeen completed by a construction company for the first time in the power generation industryPocheon Power Project to be completed in 2014 will be Korea’s largest in scale as a sinel private power plant (2 units of 1,560MW-780MW). It is Daelim Indus-trial’s landmark project where the value chain in the power generation industry has been completed.We have acquired flexibility in selecting main machinery taking up the biggest portion in the initial investment cost thanks to our independent design compe-tencies accumulated through seasoned experiences in EPC. As a result, project cost was lowered by about KRW 200 billion more than our expectations. It is significant indeed that vertical integration has been achieved through the proj-ect from design to operation, driven by project financing of KRW 1 trillion, differ-entiated competencies in EPC, and securing of competencies in O&M through collaboration with Korea Southern Power (KOSPO).Having our excellence in the project recognized in 2013, we could successfully refinance the subordinated borrowings of KRW 646.5 billion, through which, the financial cost saving of about KRW 75 billion is expected.

Pocheon combined cycle thermal power plant

Daelim Industrial’s First Cross-border Deal- Acquisition of equity of millmerran power station in australia Acquisition of the equity of Millmerran Power Station in Australia is the first-of-its-kind cross-border deal for Daelim Industrial. It was a big trigger for us to tap into the overseas power market. Millmerran Power Station (851MW) is a mine-mouth power plant where coals are procured from the nearby Commodore mine. Its commercial operation kicked in 2003, ranking third as a base power station in the merit order within Queensland, supplying electricity to about 1.1 million households. Believing that Australia is a strategic region for the power generation industry as one of the biggest producers of bituminous coal in the world, we formed an SPC with domestic financial investors and ended up acquiring 35% of the equity of the plant from Marubeni and Tohoku. Through the equity acquisition, we expect to build up our understanding of the ever-expanded merchant market, and competencies in coal O&M. We also plan to find more business opportunities through the partnership with our partner and global top-tier InterGen, and business network with Marubeni and GE.

Establishing Daelim Energy to Maximize Core CompetenciesBusiness Plan Daelim Energy will focus on energy projects, especially do-mestic and international power generation and petrochemical development projects. The company seeks to become a company specialized in energy ser-vices by developing resources and tapping into infrastructure businesses. Tar-get markets of Daelim Energy will mostly include the Southeast Asian market where the power infrastructure is lacking, given the increasing power demand. From then on, the company plans to make inroads into MENA, Latin America and South Africa on a gradual basis to make a robust presence as a global major developer.

Contribution to the Growth of the Group by Establishing Daelim Energy With the development of the power generation and petrochemicals, Daelim Energy will be capable of generating synergies with the existing competencies in the plant & civil and petrochemicals in the construction business.Tapping into power-related infrastructure will be made possible, including LNG terminals and railways. Resources development business including re-sources trading and equity investment in minefields will be jointly carried out with Daelim Corporation equipped with trading competencies. This will bring about business portfolio diversification and improved profitability in resources trading. Based on successful operation experiences in the petrochemicals for the past 35 years and competencies in m-PE and as PB licensor, a plan is underway for global expansion based on the entry into cracker & downstream and higher competitiveness in technologies and the market in MENA and North America.

Materiality Analysis Customers,Shareholders &Investors

57

Suppliers

78

Unit : Point

Employees

85

LocalCommunities

75

PublicSectors

55

17

125

397

88,259

79,881

98,469

2011

The construction business of Daelim Industrial in 2013 made a success in diversifying the overseas market by advancing into the power generation market in Ma-laysia and the chemical engineering market in Oman. We laid the foundation to tap into overseas private power generation business through equity acquisition of Millmerran Power Station in Australia. However, management performance was lower than the previous year’s due to higher cost in some overseas projects. We will strive for cost rate management while raising profitability through selective order acquisition. The petrochemical business witnessed a drop of 0.4% year-on-year for sales due to fiercer market competitions and plant accidents despite the recovery phase of the global economy. However, year-on-year profitability improved as a result of expansion of sales for high value-added products, development of highly functional specialized products, continued quality innovation and cost improvement activities.

Construction Business Plant

5.7

Construction Business Plant

Construction Business Civil

5.6 1.5

1.8 1.3

1.1 1.6

Construction Business Building & Housing

Construction Business Civil

PetrochemicalsBusiness

139

3,798

4,375

101,849

2013

2013

2013

2013

2013

127

4,008

4,861

84,753

102,5332012

2012

2012

2012

2012

*including overseas subsidiaries

2011

-103

2011 2011

2011

Key Financial Performance Indicators

Order acquisitions in 2013 Sales in 2013

Sales Account

Debt Ratio

Net Profit during the Term Obtain Order _Including overseas subsidiaries

Operating Profit

*Numbers based on K-IFRS

Units : 100 million won Units : 100 million won

Units : 100 million won

Units : trillion won Units : trillion won


Construction Business Building & Housing


28

Suppliers

63

Unit : Point

Employees

45

LocalCommunities

42

PublicSectors

64

*Domestic : KRW 3.8 trillion, Overseas : KRW 4.6 trillion


Stable Profit CreationDistribution of Economic Values

Stable Profit Creation

Local Communities : DonationThe amount of donations according to the 2013 income statement stands at KRW 3.8 billion, covering not only direct donations but also continued social contribution activities centered on five sharing programs (sharing of happiness, love, hopes, culture and brightness).

Suppliers : Procurement/ ServiceProducts and services are purchased from suppliers, and corresponding value in return is paid. Shared growth with suppliers is sought after through various means of support.

Government : TaxCorporate tax of Daelim Industrial in 2013 stood at minus KRW 3.3 billion. With shrinkage in the before-tax income, the corporate tax expenditures plum-meted.

382013

1182012

202011

OuR VALuE IS

Daelim Industrial shares the economic value,

which is generated through its diverse business operations,

with all the stakeholders including shareholders,

employees, the government and local communities in

various ways. We will continue to make an effort to

share more economic values with

our shareholders and all the other stakeholders in the future.

1,396

2013

1,5932012

-33

2011

Shareholders : DividendsAt the shareholders’ meeting held in March 2013, the cash dividends were set at KRW 4.05 billion. An appropriate dividend payout ratio will be maintained as a part of our policies for maximizing corporate value and focusing on sharehold-ers.

4,0502013

19,4902012

4,0502011

Employees : WagesThe number of employees stands at 5,456 in 2013, and KRW 444.3 billion was paid in forms of wages, retirement benefits and welfare benefits.

*Wages : Construction Business + Petrochemicals Business

3,046

3,791

4,112

349

365

331

2011 3,395

2012 4,155

2013 4,443

Construction Business Petrochemicals Business

Total wages Units : 100 million won

Monetary Donation

Outsourcing Fees/ Procurement Expenditures

Cash Dividend


49,6782013

77,1152012

68,4632011

Outsourcing Fees/ Procurement Expenditures Units : 100 million won



19

Distribution ofEconomic Values

Strengthening Corporate Competitiveness byFulfilling Tax Payment Duties Daelim, as a global leading construction and petrochemical company, main-tains a very competitive position as an EPC contractor in overseas construction market. Business environment is vastly and rapidly changing as competitions among EPC contractors increase and foreign tax authorities strengthen their taxable rights. Especially with the recent launch of BEPS(base erosion and profit shifting) project by OECD in July 2013, more countries are focusing on foreign companies to secure tax base putting pressure on global competitors like Daelim. Daelim, with a strategic approach that “taxpayer has the right to make optimal decisions to minimize tax liabilities within the boundaries of the tax law”, strives to minimize tax costs in conformity with domestic and foreign tax policies. In this regard Daelim pursues two main objectives, which are “to fulfil tax obli-gations as a global company” and “to strengthen company competitiveness”. These objectives are developed into our tax policies which are as follows :

Fulfil Foreign Tax Policies while Carrying Out Global Businesses Our first policy is about thoroughly studying local tax policies and tax treaties when en-tering into new foreign markets. This enables Daelim to verify types and volume of taxes to be paid during business execution phases and increase price com-petitiveness. Based on the study results, Daelim fulfils foreign tax obligations.

Minimize Foreign Tax Obligations Utilizing Double Tax Treaties Second policy involves intensive examination of double tax treaties and acquiring tax exemptions on works performed outside the country by taking advance mea-sures such as submitting tax exemption applications to the foreign tax author-ities.

Minimize Tax Costs by Utilizing Foreign Tax Credit Method Third policy fo-cuses on maximum utilization of foreign tax credit method rather than forcing too much on minimization of foreign tax obligations to optimally minimize tax costs while fulfilling local tax obligations.

Compute and Compare Tax Saving Contractual Schemes by Utilizing Tax Policies Given Forth policy involves forming tax strategies to be implemented specific to each project from very early stages of business by comparing several contractual schemes to minimize tax costs within the boundaries of domestic and foreign tax policies and treaties.

Tax Optimization in Cooperation with Local Tax Consultants Fifth policy fo-cuses more on practical issues rather than just the letters of the law. Daelim, in cooperation with local tax consultants, tries to optimize its tax policies in confor-mity with local practices by foreign tax authorities. Daelim carefully examines practical application of tax laws and treaties by each tax authorities in advance to minimize unpredicted situations.

Saudi Arabia SAMAPCO


Distribution of Economic ValuesCorporate Governance

Distribution ofEconomic Values

Ownership Structure and Legal StatusDaelim Industrial is a public company, which consists of General Shareholders' Meeting, a Board of Directors and an Auditing Committee. The total number of shares issued by Daelim Industrial as of the end of the year 2013 is 38,600,000 including preferred stock. Based on the number of common stocks issued, the ownership status shows that foreigners hold a 40.1% share, institutional in-vestors with a 27.2% share, affiliated individuals with a 24.0% share, and the remaining 8.7% is owned by other individuals and entities.

Organization of the Board of DirectorsThe Board of Directors at Daelim Industrial consists of 9 members: 4 internal directors and 5 external directors. The Board of Directors elects the CEO, who also serves as the chairman of the board according to the board regulations. Directors and members of the Audit Committee are appointed by the General Meeting of Shareholders with the relevant information about the candidates released in advance, helping shareholders fully exercise their voting rights. At the same time, qualified experts are appointed as directors so that the Board of directors can make practical contributions to corporate management. In partic-ular, external directors are appointed with the recommendation of the Outside Director Nominating Committee so that they can make decisions independent from the company, management or large shareholders.Outside directors are to be qualified with expertise and experiences in man-agement, economy, accounting, law and related skills to guarantee efficient and rational decision-making and expertise in the economic, environmental and social aspects. Cross-job GAP analysis is made in consideration of the diversity and complementary features of jobs, correlations can be found, which are then used as data to verify candidates. In case they are majority shareholders or have a special stake with the company, their appointment is restricted to prevent possible conflicts of interest within the board of directors.

OuR VALuE IS

Daelim Industrial practices

sustainable management through the establishment of

sound and transparent governance

and responsible management.OtherAffiliated IndividualsInstitutional InvestorsForeigners

40.1% 27.2% 24.0%

Bases on the Number of Common Stocks Issue

Classification Name Major Responsibilities

Internal Directors

Hae-Wook Lee CEO

Dong-Su Kim CEO, Chair of the Board of Directors, Chair of the Financial Committee, Member of the Compensation Committee

Chul-kyoon Lee CEO, Member of the Outside Director Nominating Committee

Jae-Yul Kim CEO, Member of the Finance Committee

ExternalDirectors

Soo-Geun Oh Member of the Audit Committee

Yeong-Jun Michael Shin Member of the Audit Committee, Member of the Compensation Committee

Sung-Kyun Lim Member of the Audit Committee, Member of the Finance Committee, Member of the Outside Director Nominating Committee

Dal-Joong Jang Member of the Compensation Committee

Tae-Hi Kim Member of the Outside Director Nominating Committee

Organization of the Board of Directors _as of March 31, 2014


57

Suppliers

22

Unit : Point

Employees

33

LocalCommunities

67

PublicSectors

45

21

Corporate governance

Operation of the Board of DirectorsThe Board of Directors holds comprehensive authority regarding corporate management including major decision-making process, manage-ment super-vision and business execution. The Board of Directors tries to share their aware-ness of corporate responsibilities for social issues such as consumer protection or environmental preservation, and analyze their pervasive effects in economic, environmental and social sectors. The Board of Directors is expected to make decisions on corporate vision and strategy, conduct business accordingly and be held responsible for performance management. The Board of Directors holds a regular meeting every quarter, and a special meeting can be called anytime as needed. A total of 18 meetings were held in 2013 with the external directors' attendance rate of 91.1%. (Attendance rate of members in the board of directors : 88.3%) Through a regular review of man-agement target and performance, the Compensation Committee of the Board of Directors sets the limit for directors' annual compensation, which is subject to an approval by the General Meeting of Shareholders. Daelim Industrial makes every effort to incorporate all the opinions of stake-holders including shareholders and employees in its management process. Mi-nor shareholders are entitled to call for a shareholders' meeting in accordance with the proper standards and procedures and can also suggest agendas to be discussed in the meeting. In addition, Daelim Industrial operates a labor-man-agement council (Han-Sup Council), which contributes towards better commu-nication and information sharing between labor and management.

Committees in the Board of DirectorsFinance Committee The Finance Committee consists of 2 internal directors and 1 external director. The main responsibilities of the committee include de-liberating and making decisions on major financial issues and issues delegated by the Board of Directors.

Audit Committee The Audit Committee has 3 external directors as its mem-bers and is held responsible for accounting audits, operation audits and appoint-ment of external auditors.

Outside Director Nominating Committee The Outside Director Nominating Committee consists of 1 internal director and 2 external directors and makes recommendations for candidates for external directors.

Compensation Committee The Compensation Committee consists of 1 inter-nal director and 2 external directors. It is held responsible for com-pensation planning for registered board members and preparing agendas pertaining to the limit on board members' annual wages to be decided in the general share-holder's meeting.

Board of Directors

On major financial issues

Finance Committee

2 internal directors1 external director

Accounting audit

Operation audit

Appointment of external auditors

3 external directors

Recommendation forexternal director candidates

Audit Committee Outside DirectorNominating Committee

1 internal director2 external directors

Planning forregistered board members

Deliberating on thelevel of compensation

Compensation Committee

1 internal director2 external directors

Organization and Functions of Committees in the Board of Directors

Funcion

Organization


Corporate GovernanceManagement Transparency

Corporategovernance

Organization Daelim Industrial operates the Auditing & Legal Office to pro-mote employees' understanding of ethical management and tries to build transparent organizational culture by performing fair management. The Audit-ing & Legal Office oversees compliance with the regulations, evaluates man-agement and is engaged with anti-corruption activities and performance audit.

Inscribing the Code of Ethics We inscribed the Code of Ethics based on our management vision and principles to be in tandem with the government’s polit-ical will for anti-corruption as well as social awareness of a need for eradication of corruption and irregularities and for transparency in all walks of society, and to enhance employee’s ethical awareness. Ethical management, as a result, is consistently put into practice.

Ethical Management Training and Activities While prioritizing integrity man-agement as Daelim Industrial’s core value in corporate culture, we continue to expand consensus on the integrity of corporate culture through online ethical training.Information on ethical management is shared via the in-house electronic board. The ‘Cyber Ethical Counseling Center’ is open to be used as a place such pur-poses as strengthening management supervision for the internal organization; reviewing ethical feasibility of particular work practices and counseling and idea exchanges to resolve possible conflicts with seniors and ill-adjusted opera-tions. Such a space will continuously be expanded so that activities to establish an ethical corporate culture could flourish enterprise-wide.

Cyber Sinmungo Daelim Industrial operates Cyber Sinmungo to allow all its stakeholders, including employees, customers and suppliers, to conveniently report without regard to time and place unethical operations such as unfair transactions and corruption. Cyber Sinmungo helps the company to detect em-ployees' violations of ethical codes at an early stage, cope with the problems and come up with measures to prevent any future violations. It also serves as a window for addressing some complaints. For all the cases reported through Sinmungo, anonymity is strictly enforced and a thorough investigation and ap-propriate subsequent measures are guaranteed.

Ethical ManagementIn May, 2000, Daelim Industrial announced its firm resolution to practice ethical management in order to grow into a socially responsible and respectable cor-poration. Daelim Industrial seeks to promote the CEO's strong commitment to ethical management and comply with domestic and international laws and regulations and bring the corporate culture to a level that can be welcomed by all communities.

Legal Support

· Legal guideline · Compliance Supervision

Auditing & Monitoring

· Corruption prevention · Regular inspection· Investigation of tipped-off information

· Ethical Management Office · Compliance Council

CEO

Auditing & Legal Office

OuR VALuE IS

The corporate philosophy of Daelim Industrial can be

summarized in 'Hansup Spirit.' Hansup means an abundant

forest, a pleasant forest and an infinite forest by combining

'han,' which denotes the most precious and desirable state

in the traditional Korean mentality, and 'sup,'

a forest made by the mother nature. In order to put

'Hansup Spirit' into practice, Daelim Industrial practices ethics

and shared growth with customers and communities.

At the core lie ethical management, transparent management

and fair trade based on enterprise-wide ethical awareness.

Operation Status of Cyber Sinmungo Unit : Case

Classification Number of reports made to Cyber Shinmungo

Total Actions taken False accusations

Mean number ofreports made in 3 years

114 84 30

2011 105 89 16

2012 120 82 38

2013 118 81 37

Disciplinary Actions on Non-Ethical Behaviours Unit : Case

Classification Disciplinary actions

Total Dismissal Suspension Pay cut Reprimand Written apology

Mean numberof actionstaken in 3 years

7 2(29%) - 2(29%) 2(29%) 1(13%)

2011 7 - - 3 3 1

2012 6 4 - 1 1 -

2013 8 3 - 2 3 -

Materiality Analysis (Ethical Management)Customers,Shareholders &Investors

60

Suppliers

48

Unit : Point

Employees

29

LocalCommunities

58

PublicSectors

55

23

Managementtransparency

Fair Trade Daelim Industrial introduced the Fair Trade Compliance Program in 2004 to further practice and stabilize ethical management. We also distributed the Fair Trade Compliance Guideline in August, 2004 to help employees easily practice ethical management with their daily tasks. The Compliance Office Manager, who is in charge of the Fair Trade Compliance Program, reports the status on the operation of the Fair Trade Compliance Program to the Audit Committee annually.

Operational Scheme for Fair Trade Compliance

Training/ Campaign

Inspection/ Feedback

Exchange Q&A/ Advice

Sharing Lessons

· Conducting employee training, providing manuals and guidelines for each compliance category· Conducting a campaign against gift exchanges during traditional holidays · Signing a pledge of action for ethics by all employees· Making resolutions for autonomous practice for all teams/sites

· Conducting regular/non-regular monitoring for the organization in charge (corporate ethics, fair trade, compliance of business laws, etc.)· Identifying the fundamental causes for problems through the analysis of review outcome and conducting activities to make improvement, etc.

· Exchanging Q&A/advice on issues on ethics/fair trade · Sharing competitive policies within the organization, etc.

· Spreading the basic guideline for compliance throughout the enterprise · Introducing the cases of review results and striving for prevention of recurrence, etc.

Fair Trade Compliance Guideline The Fair Trade Compliance Guideline was de-signed for all employees to understand and comply with the relevant laws for fair trade internally, and induce and facilitate liberal and fair trade in the market, amid a need to adopt the Compliance Program for us to comply with the rele-vant laws of fair trade. As a result, we could achieve such objectives as to take the lead in creating an atmosphere for fair trade, prevent or reduce enormous damage and cost expected upon the violation of relevant laws of fair trade, and enhance our image as ‘a company that touches the hearts of customers.’

Training Program Daelim Industrial offers an on-line training course on fair trade for all employees and has also added a course on fair trade as part of a new employee training program, and training programs on related business prac-tices. We have also extended the scope of the company's fair trade program to cover the training of its contractors and suppliers and continues to implement fair trade compliance by inviting experts from external organizations such as the Fair Trade Commission to give lectures and offer hands-on training.

Departmental Self-monitoring System Internal supervision on illegal busi-ness practices and operations is provided through the "Departmental Self-Monitoring and Consulting System," which makes it possible for managers to voluntarily review the operations of their department through monitoring their performance and consulting with experts in case there are any potential viola-tions of fair trade rules and regulations.

Classification Performance in Year 2013 Major Plans for Year 2014

Practicing IntegrityManagement

· Extensive training on honest management· Internal Trade Council· Dealing with reports in Cyber Sinmungo

· Specialized training in each business division (civil/building & housing/plant)· Stronger inspection of legal internal trade (optional contracts)· Dealing with reports in Cyber Sinmungo

ConsistentRisk Management

· Regular inspection of overseas projects· New organizational culture in project sites(inspection of potential factors for decreased productivity)

· Inspection of materials suppliers under long-term ongoing contracts· Customer service management, delayed payment of suppliers, etc.

CostCompetitiveness

· Special inspection of restricted expenses· Thorough inspection of Project Cash Flow

· Focused inspection of sites subject to cost growth/aggravation in payment receipts· Identification and improvement of categories for cost growth that repeatedly occurs

Compliance Council The Compliance Council is made up of team leaders from contract, outsourcing, financing and sales departments, which require practice of fair trade in many business aspects. The Council deliberates on significant is-sues raised by the Fair Trade Compliance Program in regular or special sessions of meetings and advises the Official Compliance Managers. Each team under the supervision of the Fair Trade Compliance Council appoints a 'Compliance Manager,' who oversees compliance with the relevant regulations and proce-dures, practically supports council members and provides consulting services.

1st stageConsulting with

CP/Ethics evaluation

2nd stageConsulting with

CP/Ethics evaluation

RelevantDepartment

Management Audit Office

Fair Trade Council

Performance and Future Plans for Management Transparency

ComplianceOffice

Manager

Compliance Manager

· Contracts with suppliers and purchasing · Announcement, advertisement, provision · Investment financing, internal trade · Major policies of the company · Legal support and consulting· Public disclosure of management performance · Regulation compliance · Business operations · Voluntary compliance

Fair Trade Council Q & A

Fair Trade Q&A Process

*Penalties for anti-trust acts in 2013: KRW 3.5 billion (Gwangju wastewater treatment facility)

Materiality Analysis (Fair Trade)Customers,Shareholders &Investors

66

Suppliers

44

Unit : Point

Employees

37

LocalCommunities

42

PublicSectors

55


Management Transparency

Managementtransparency

Issues on fair competitions have been spotlighted more than ever amid a higher frequency ofunethical corporate acts. What tops the recent agenda when it comes to fair competitions?

Top agenda include unfair joint actions (collusions), unfair supporting acts (unfair insider trading) and sharing management. We strongly advocate anti-collusion, fair insider trading and sharing management.

What would be the top considerations for construction companies to initiate fair competitions?

They boil down to unfair joint actions (collusion). Sustainable growth can be attained only through fair com-petitions in business activities and pursuit of common good and mutual development through fair trade.

What would be Daelim Industrial’s strengths and weaknesses in initiating fair competitions?

Our strengths would include an operational system for integrity management and firm commitment of the corporate. Daelim Industrial’s operational system for integrity management has been up and running since the 2000s, while the corporate are fully committed for continued actions. Of particular note, Daelim Indus-trial is well equipped with an inquiry/consultation system, so when issues of the Competition Act arise, things are cleared up through collaboration. Moreover, training and campaigns are carried on continuously so that all employees from the CEO to staff are fully aware of and act out integrity management. Meanwhile, since the current Fair Trade Act strongly prohibits collusion, information exchange among com-panies is determined as collusion. Employees at Daelim Industrial strive to acquire order portfolios based on fair competitions, being committed to embody a mindset for fair trade by dissipating training sessions on case studies (e.g. cases of violation of laws on exchange of critical corporate data as well as sales data).

Audit & Monitoring Team ofDaelim Industrial

in charge of fair transactions

Park Byeong-hwan

We will strive eradicate unfair

collusive acts and embody a

mindset for fair trade based

on firm commitment of

the corporate to

integrity management

25

Expert InterviewsIntegrity Management

Risk ManagementWe recognize the importance of risk management to respond to the diversi-fied business environment as a result of diversification of work and target re-gions. As such, we set a comprehensive response system by establishing an integrated risk management framework, and operate a monitoring system for major risks.

Risk Management SystemWe operate an integrated risk management system enterprise-wide by classi-fying risks as financial and business ones. We operate an early warning system through trend analysis of major financial indicators, thus making preemptive responses to major risks.

OuR VALuE IS

Risk management is indispensable to

today's corporations to pursue profitability and growth in a

diverse and complicated business environment.

We have a comprehensive risk management approach to

enhance our corporate value and maximize

the stakeholder profit at this time of

greater uncertainties.

e-PyunhanSesang

Financial Risk Management The financial risk management system is sub-cat-egorized in three ways : market analysis, KRI (key risk indicator) management and financial risk management on the company level.- Market analysis : macroeconomics, financial market, government policies, business environment (country, region) etc. - KRI management : financial flexibility, working capital (receivable/loan), financial exposure(net debt + project financing), funding structure, etc. - Financial risk management at the company level : Integrated management of financial risks for subsidiaries of Daelim Group

Business Risks At Daelim Industrial, business risks are classified into business development, overseas plant/civil, SOC, building & housing and petrochemi-cals, and managed accordingly. Guideline for each business is established, along with thorough risk management for each stage of business review, initi-ation and engagement. For work-in-progress projects, continuous monitoring takes place as we manage a systematic management system for early detec-tion of risks and prompt responses through continuous monitoring.


Risk Management

Risk Management

Hig

hLo

w

HighLow

Association Analysis for RisksWe draw a risk map and analyze risks based on the risk frequency and the im-pact on the company. The risk map is used for correlation analysis between cli-mate, water shortage, strategy risks and reputational risks and financial risks, let alone the market environment, and macroeconomic indicators (interest rate/exchange rate) that might impact financial risks.

Classification Key Performance in 2013 Major Plans for 2014

Report onFinancial Risk

· Provided reports on financial risk of Daelim Industrial and its subsidiaries Industrial and its subsidiaries and monitoring of key risk factors

· Improve KRI indicators reflecting changes in macroeconomics, etc.· Operate a system for early risk detection and response through monthly report on financial risk factors

Guidelinesfor Business Development

· Introduce the RMC(Risk Management Committee) Voting System· Establish the standard for deliberation of business feasibility ofDaelim Group

· Amend guidelines as need arises(major changes in business environment, etc.)

Deliberationson Business Proposals

· 3 business proposals(overseas IPP projects)· 4 overseas civil engineering project· 3 domestic SOC projects(road/ environment)· 11 construction projects

· Plan to deliberate each stage of business review/promotion/performance· Expect deliberations on many developer projects including overseasIPP and renewable energy

Key Performance in 2013 and Major Plans for 2014

Financial Risk Management

· Market analysis· KRI management (Key Risk Indicator)· PCF management (Project Cash Flow)· Financial Risk Management

Business Risk Management

· Business development· Overseas power plants/ Civil engineering· SOC· Building & Housing· Petrochemicals

Risk Management System

Usage of the Risk Map

Risk Management System

Cost (rate)

Exchange Rate

Oil Price

Subsidiaries

Security(intellectual property, etc.)Politics

(elections, etc.)

Economic Growth Rate

Country

Region

Corporate Governance

Reputation (media)

Climate(greenhouse gas) Disaster/

Accident

Human Rights

Water Resources (water)

Natural Disaster

Bus

ines

s Im

pact

Frequency of Risks


34

Suppliers

37

Unit : Point

Employees

46

LocalCommunities

33

PublicSectors

36

27

OuR VALuE IS

Seeking to provide products and services that

customers and the market demand in a preemptive and

proactive manner through systematic and innovativ

quality management, we established quality

management activities to set and implement quality

targets and action plans for each site unit.

Moreover, efforts are poured in in a multifaceted

way from design to maintenance for

quality improvement.

Quality AssuranceIn order to prove the company's capacity for quality management and promote customer satisfaction, Daelim Industrial obtained the quality management sys-tem certification (ISO9001) in 1994 and have since maintained it. Our certifica-tion in the “NA”, ”NPT”, and ”NS” in the nuclear energy sector of ASME, and also in the “MN”, ”SN”, ”EN” and ”MH” in KEPIC have been renewed, newly acquir-ing the certification of “S” & “PP” in the non-nuclear energy sector of ASME. As a result, our competitiveness went up in the power generation, petrochemicals and nuclear energy.

NHN Pangyo


Quality Management

Quality Management

General Employees Employees Engaged in Quality Management Process

Main Office

ConstructionSites

Practice-oriented Quality TrainingSeeking to raise employees’ awareness about quality and enhance the training effect, the status quo in the enterprise and business divisions has been reviewed. Then, 13 courses have been made available for the Group (main office and sites) and specific targets (general employees, and quality-driven work managers) for us to conduct practice-oriented training.

Improvement of the Data Quality Management System (DQMS)We have operated the Daelim Data Quality Management System (DQMS) for efficient on-site quality management since 2006. Our work has been stream-lined through operation catering to the site-specific conditions and adjustment of assessment through operational reviews in 2013. The usefulness of manag-ing the performance records of the quality management plans has gone up by making an e-book for the construction technology-related laws, and inscribing and posting the statement for model quality management plans.

Enhancement of the Quality Management System through Quality AuditQuality audit took place for 51 teams in the main office and 66 sites to maintain/improve the quality management system and prevent penalties (by complying with the Construction Technology Management Act). For major points subject to criticism, relevant standards have been amended and training took place as a part of corrective measures.

Alignment of the In-house StandardIn 2013, we aligned the technology standard in the Engineering Division, and the accumulated know-how of the division was standardized (for 605 cases 100%) through a three-tier inspection and timeline management in the pro-cesses of writing, registering and implementing. Integrated search functions have been reinforced to raise the utilization of the in-house standard system and accessibility. Moreover, team-specific documents have been newly estab-lished/modified/disposed of, so the format streamlining was underway from 1,156 cases to 714 cases.

Integrated Management of the Site Testing Equipment andReduction of Testing CostProcesses for testing equipment and outsourced testing cost have improved and made applicable to sites to secure trust for the on-site quality management, and reduction of quality testing cost.

Corporate Training In-house Training Organized by Other Teams

Process for Quality Training

Training ofnew

employees

13Courses

KOM Trainingduring audit

Division trainingin winter

Task traininfor wintertime

qualitysupervisor

Training ofnew

qualitymanagers

Association ofquality

supervsorsin each

geographicalregion

Trainingon

legal affairs

Training ofin-house standardmanagers

Trainingduring audit

Training forthe

maintenanceof

qualificationfor audit

OJT training fornew recruits

Working groupin

the main office


57

Suppliers

52

Unit : Point

Employees

47

LocalCommunities

17

PublicSectors

45

29

Development of Plant Design PartnersAiming to enhance the competencies of plant design suppliers, training and audit were implemented for 23 major companies. For categories analyzed as major find-ings, relevant standards were set and training took place as corrective measures, thus enhancing the level of quality to the extent of acquiring the ISO certification.

Retention and New Acquisition of Certification : We are planning to acquire the “SN”, a design certification in KEPIC’s structural sector by diversifying order portfolios for power plants.

Support Prior to External Inspection : We plan to prevent any penalties by establishing a preventive review process through the distribution of work scope with the main office.

Establishing a Preventive Inspection System

Reinforcement of Quality Management for New SitesIn 2013, stage-specific supporting processes were applied to establish the on-site quality management system for an early phase so that the on-site quality manage-ment could be implemented autonomously.

Input

Output

A statement of plan for model

quality manage-ment (testing)

A statement of plan for qual-

ity management (testing)

Audit recordsfor

DQMSoperation

Operationalperformance

report

Measures for quality

management

Requirements to improve

the participant records

KOMtimeline

Review of the application of relevant cases

Documentation on measures

for on-sitequality

management

Revision of measures to manage thesite quality

Monitoring of performance

Improvement ofperformance analysis

Notification of theKOM timeline Review of

measures tomanage thesite quality

Result reporting

Analysis ofspecific

features of sites

Negotiationon theKOM

timeline

Support for a statement of modelquality management plan

immediately after site opening

Application of quality guidelineand cases

Confirmation ofquality management measures

Monitoring ofquality management measures

KOM Imple-menta-

tion

Acquisition of information on new sites Support forquality information

Decision-making onquality management Monitoring feedback

Plans for 2014

KOM Process

Notification of the inspection ofoutside agenciesClients Site

Registration of the inspection plan in the DQMSPreventive review or internalin-house inspection for the site

Identification of the quality matters in the SEQ Team,and relevant in each division andon-site support

DQMS registration of theinspection results ofoutside agenciesSpreading the outcome to other sites

Sending of inspectionoutcome5 days beforethe groundbreaking

Prior inspection8 days beforethe groundbreaking

Identification of the status quo of new sites

Notice on prior inspection Preparation team

Receipt of documents for inspection10 days before the expected groundbreaking day

Documentation of a statement of plan for qual-

ity management (testing),

Negotiation on theKOM

meetings

Opening of a site preparation team

Site for new construction

Execution bythe plan

Reference materials on defect cases

of the guideline of the main office

Operational cases of enterprise-wide

guideline/qualitymanagement plans

Prior Support for Documents on Quality :We plan to implement prior inspection support for quality-related documents for penalty prevention and mature development of quality management


Quality Management

Quality Management

CORE VALUE

I hope the company could proactively advance into untapped construction markets in new countries where Daelim has no presence. Profitability has been starkly low due to neck-and-neck competitions with domestic construction companies in the existing construction market. Moreover, construction cost has soared rapidly due to higher stringency for construc-tion contracts of clients and due conditions for implementa-tion. Profits can still be maximized in such untapped markets as Africa, and competitions with domestic companies were meager. Contractual conditions set by clients are not strict ei-ther. Therefore, cost saving can be achieved relatively easily.

In order for Daelim Industrial to acquire competitiveness in the construction market where profitmaking through order acquisitions is inevitable, a new market for construction must be explored, and business activities (market survey, forging partnerships, etc.) with a long-term approach in the existing market are needed.

01 02

Simply put, sustainable management is all about ‘how to steadily carry on profit-making activities?’ True, companies jump on the bandwagon, meeting changes in the external en-vironment and societal needs. However, what is more critical is to stick with what a company is all about – making ‘profits.’ I hope that Daelim Industrial could become a company that generates sound profits in core business as all employees can find causes for higher cost and weaker competitiveness amongst themselves and share insights thereof.

Sustainable management can only be achieved by companies that walk on the path of integrity management. When not walking on the very path, companies end up being investi-gated by the Fair Trade Commission for collusions and paying penalties as it has been recently, As a consequence, it is time to devise institutional measures and commitment lest these practices occur.

03 04

Growth engines must be steadily searched that are with po-tential values over the long term without being stuck with the current management performance so that sustainable perfor-mance can be attained. To this end, aggressive investment is essential for such areas of business.

We live in a business world where ethical management and quality management are emphasized more than ever. When companies generate higher quality in their products/services and conduct transparent management, customers’ loyalty will go up, which will help Daelim Industrial enjoy a higher level of competitive edge.

05 06

Daelim Industrial Considers Sustainability


shareholders, investors, suppliers, government and community,

are proactively gathered and reflected

in corporate management.

We will work even harder for sustainable development

through your encouragement, support and genuine insights.

Economic Growth

EnvironmentalStewardship

Social Progress

PROFIT

31

Stakeholders’ Opinions onGenerating Economic Values

EnVIROnMEntAL PERfORMAnCEPRInCIPLE & POLICYIt is a corporate responsibility to think about the future of the earth.

Daelim Industrial will continue to make every effort to improve the quality of

our customer's life by preserving nature and environment through

implementing systematic low-carbon green management and minimizing

the impacts on the environment resulting from our business operations

through preventing and controlling pollution.


32 Environmental Performance

KEY ISSuES

1

3

5

2

4

6

7

8

Green communication

Environmental management system

Eco-friendly Construction Technology

Response to water shortage

Climate change response

Eco-friendly construction

Compliance with environmental laws

Protection of bio-diversity

P. 35

P. 34

P. 39

P. 43

P. 36

P. 45

P. 47

P. 48

1

43

5

2

8

6

7

KEY fIguRES



PublicSector

Employees

Green communication M M H L M

Response to water shortage M L M L M

Environmental management system L M M H M

Climate change response H H M H H

Eco-friendly Construction Technol-ogy

H H H H H

Eco-friendly construction H H H H H

Compliance withenvironmental laws

M M M M M

Protection of bio-diversity L L L L L

*H - High M - Medium L - Low

KPI Units 2011 2012 2013


TechnologyDevelopment

Green Technologies No. of accumulated cases

1 3 7

ClimateChange

Amount ofgreen gas emissions

tCO2 - e 268,800 239,099 193,272

Amount of Energy Used TJ 4,026 3,636 2,967

Waste Generated Ton 297,850 415,120 310,785

EnvironmentalManagementSystem

ISO Certification Presence ofcertification

ISO 14001 ISO 14001 ISO 14001


Level of external interest


*Scope of reporting on environmental data : Data of 180 business sites out of 218 at home and abroad (83%)

33

OuR VALuE IS

Green management has become a key strategy for the

enhancement of corporate competitive edge,

and the socioeconomic system is evolving into a new system for

sustainable production and consumption.

To cope with these changing paradigms,

Daelim Industrial pledged Green Management in 2009 and

made an announcement for visions and strategies to become

a corporation that actively practices

low-carbon management and green growth.

Daelim Industrial strives to fulfill our social,

ethical responsibilities by saving energy and resources and

using them efficiently in all business areas including

business models, production process and overall corporate

culture and minimizing greenhouse gas emission and

environmental pollution.

Green Management SystemDaelim Industrial has been engaged in various construction projects worldwide on the basis of the management philosophy of respect for humanity since its foundation in 1939 and continue to make efforts to save energy and resources at construction sites and minimize greenhouse gas emissions and negative en-vironmental impacts. In 1997, we obtained ISO 14001, a certification for an en-vironmental management system. In 2011, Daelim Industrial became the first construction company to be officially certified in green management system.

Safety & GreenManagement System

Certificate forGreen System

Certificate for EnvironmentalManagement System

Tongyeong International Music Foundation




Environmental TrainingDaelim Industrial offers diverse training programs fit for all employees from new recruiters to site managers based on their respective job requirements and management tasks. Since 2005, with an addition of an on-line environmen-tal training program, individualized courses have been offered for all manage-ment-level employees, and continuous efforts have been made to promote environmental awareness.In 2013, training took place for 2,599 employees including 2,031 supervisors, and managers of the environmental affairs and new employees. In order to ex-pand environmental management and raise environmental awareness of sup-pliers, environmental training was provided for 1,253 supervisors of suppliers.

Environmental Training at New Construction SitesEarly stage in the projectAll site workers and managers/supervisors from sub-contracting companies

On-line Environmental Education/ TrainingYear roundNew recruits

Training for Green Management Supervisors on Sites Twice a yearGreen management supervisors on sites

Training for Green Management Supervisors in Main Offices Twice a yearGreen management supervisors in main offices

Task Training by Work Scope By requestPlanning engineers, architect, etc.

Supervisor training January-FebruaryAll site workers and managers/ supervisors from sub-contracting companies

New Recruit Training When training programs for new recruits are offeredNew recruits

Green DaelimIn celebration of its 70th anniversary in October, 2009, Daelim Industrial pro-claimed 'the First Year of Green Management' and announced visions and strat-egies to become a corporation that actively practices low-carbon management and green growth. We are intensively implementing innovations in all business areas from business models and production process to overall corporate cul-ture, and all these low-carbon, green management activities are being widely performed under the catchphrase 'Green Daelim'.

IT System for Environmental ManagementIn 1997, Daelim Industrial became the first construction company in Korea to develop an IT system for environmental management, which has been since upgraded to a web-based version in 2005, and under operation to date. With the introduction of the IT system, operational efficiency has been greatly improved as all the environmental tasks can be handled within the system. The IT system also makes it possible to share current information such as outstanding cases of green management. We systematically manage internal environmental in-formation by adding a data collection and analysis module to the existing sys-tem to efficiently manage the green management performance result.

Cultivatinggreen mindset

throughgreen habits

Greenprocurement

Decrease ingreenhouse gas

emissions

Eco-friendlyinformation

Enhancement ofeco-friendly

corporate image

Competitiveedge in

Green Technology

Greenbusiness model

Creating Green Living Spaces

GreenCulture

GreenPartnership

GreenBusiness

GreenCommunication

Philosophy and Vision of Green Daelim

Efforts to save resources byreducing excessive consumption without making any compromise to

the quality of life bymaintaining original functions and convenience

Philosophy

Environmental Training Program

Screen capture of Environmental Cyber Training


33

Suppliers

44

Unit : Point

Employees

53

LocalCommunities

42

PublicSectors

73

35

OuR VALuE IS

There has been a constant increase of worldwide interests

and efforts to prevent global warming as is documented in the

UN Framework Convention on Climate Change (UNFCCC).

At the same time, the Korean government is enforcing

more strict environmental regulations such as Energy and

Greenhouse Gas Target Scheme. In accordance with the global

efforts to cope with climate change and in response to

the environmental regulations that continue to become

more and more strict, Daelim Industrial makes every

effort at the whole company level to reduce greenhouse gas

emissions by introducing Greenhouse Gas Target Scheme to

construction sites and main offices, which will enable us

to efficiently and systematically respond to CDP

(Carbon Disclosure Project) and assessment of

DJSI (Dow Jones Sustainability Index) and lay a groundwork

for Energy and Greenhouse Gas Target Scheme.

Greenhouse Gas Inventory SystemIn order to progressively respond to the international trends to enforce cross-na-tional regulations against greenhouse gas emission, Daelim Industrial has been monitoring the company's greenhouse gas emission since 2008 and maintains a greenhouse gas inventory. In 2009, we started to take a real-time inventory of greenhouse gas emission from all domestic construction sites and the main office. Since 2010, we have made further efforts to reduce greenhouse gas emissions through voluntary target scheme for greenhouse gas emission. Data reliability has also been guaranteed since 2010 through a voluntary verification of the greenhouse gas emissions inventory.

Current Status of Greenhouse Gas EmissionsThe amount of greenhouse gas emitted by Daelim Industrial per cumulative sales in 2013 was 6.34 tCO2-e/100 million won and has showed 22.3% de-crease compared to the amount of emission per cumulative sales in 2012, which was 8.16t CO2-e/100 million won. An analysis shows that the decrease is a result of the completion of construction projects with a high level of green-house gas emission and the implementation of the inernal greenhouse gas target scheme. With the introduction of the greenhouse gas target scheme in 2010, Daelim Industrial has been engaged in diverse activities to reduce green-house gas emission at construction sites by using energy-efficient equipment, prohibiting idling of machinery, installing low-energy temporary facilities, moni-toring energy used at construction site offices and riding bicycles for site patrol.

Greenhouse Gas Emissions

Classification Scope 1Direct

emissions

Scope 2Indirect

emissions

Scope 3Other indirect

emissions

Total

2011 23,338 31,350 214,112 268,800

2012 22,205 35,270 181,624 239,099

2013 20,718 33,149 139,405 193,272

*Scopes 1&2 are subject to the Energy and Greenhouse Gas Target Scheme, and for Scope 3, data are compiled for voluntary management.

Scope 1

250,000200,000150,000100,00050,0000

Scope 2

Scope 3

20,718

33,149

139,405

22,205

35,270

181,624

23,338

31,350

214,112

Unit : tCO2 - e

2011 2012 2013


Climate Change Response through GHG Management

Climate Change Response throughgHg Management

Signing an MOU for a Pilot Project under the Greenhouse Gas Target Scheme in the Construction BusinessDaelim Industrial signed an MOU with the Ministry of Land, Transport and Mari-time Affairs and Korea Infrastructure Safety Corporation that are in charge of pi-lot projects under the Greenhouse Gas Target Scheme on July 19, 2013. The pur-pose of the agreement is to identify and discover improvements to be made for the legitimacy of the scheme prior to officially introducing the Greenhouse Gas Target Scheme. To this end, we set the target for greenhouse gas, make efforts to achieve the target, submit a performance report and verify the performance.

Efforts to Reduce Greenhouse Gas Emission Daelim Industrial reduced the level of CO2 emission by 16,000 tons in 2013 and saved 2.2 billion won of costs by applying eco-friendly technology and equipment to main offices and construction sites. At the same time, we are promoting a campaign of "Green Habit" targeted for main offices and all domes-tic and overseas constructions sites to reduce the level of CO2 generated in our daily lives. "Green Habit" has been pursued at the whole company level and expanded itself into various activities suited for each subsidiary

Cost saving thank to activities to reduce GHG

Action Themes for Green Habits by Month

Classification Detailed information CO2 reduction(ton CO2 - e)

Expectedannual savings(Unit : Won)

Saving Electricity Facility Timers to reduce the amount of electric power (50 sites) 1,312 186,000,000

Solar Energy Generator Supply of electric power for offices by installing solar panels (60 sites) 775 168,000,000

Geothermal Energy Facility Supply of cooling/heating by installing thermal energy systems (10 sites) 85 14,160,000

UCD Lamp Reduction of electric power by installing the Ultra Constant Discharge (UCD) (35 sites) 9,170 10,950,000

Electricity Heating System Reduction of greenhouse gas by using electric films and boilers (80 sites) 2,966 1,209,600,000

Renewable EnergyElectricity Facility

Application of new and renewable energy facilities for construction (Solar, Wind, Geothermal heat facility for main structure)

1,653 538,920,000

Use Hybrid Car Reduction of greenhouse gas by using hybrid vehicles instead of diesel and gasoline-driven ones 45 87,294,036

Total 16,006 2,214,924,036

January

OnmapsiCampaign

(warm clothinin winter) +

electricity saving

May

Practicingeco-driving

September

Using publictransportation

March

Savingwater

July

Writing a diaryon energy

consumption

November

Shutting offstand-by power

February

Recyclingresources

June

Reducingfood leftover

October

Eatinggreen food

April

Plantingtrees

August

CoolmapsiCampaign(clothing insummer) +

electricity saving

December

Makingeco-friendly

consumption


65

Suppliers

67

Unit : Point

Employees

64

LocalCommunities

50

PublicSectors

82

37

Environmental responsibilities in the construction industry are highly evaluated more so than inother industries. What would be the area of biggest interest recently in the construction industry when it comes to green management?

The construction industry has been recognized as an industry that destroys the environment. Recently, clients and consumers have more diversified, complicated and specialized needs. Therefore, construction companies must seek for eco-friendly design and construction methods to attain environmentally sound and sustainable development, while catering to environmental customer needs. Furthermore, it would be better if green management and green accounting are linked to corporate management so that environ-mental benefits could be generated through such means as energy saving, green purchase, eco-friendly design and construction green marketing.

What would be the biggest priority in initiating green management on construction sites?

The bottom line on construction sites is that all employees on sites perceive green management not as a choice but as an option. Green management-considered design must take place from the bidding phase in construction. However, unless all of them act in unity in applying the design, the plans will end up futile. In particular, pre-identification and environmental pollution reduction activities are critical for areas of possible complaints about the environmental impacts around sites – houses, shopping malls and livestock stables. A genuine attitude is needed by explaining to residents about the project and engaging in constant dialogue through seminars for residents before the work begins by putting the company in their shoes.

Eco-friendly design and construction have been recently gaining a greater attention.So, Daelim Industrial is striving to develop diverse technologies. How do you see Daelim Industrial’s activities as such?

Daelim Industrial is well-known in the industry as a company that pours in multifaceted efforts to develop eco-friendly technologies. The company is showing a strong performance every year at the Construction En-vironment Management Contest organized by the Society for Environmental Construction. The company’s green management vision of ‘turning our living space green’ embodies motives for CSR of a company that is to lead the eco-friendly construction market.I expect to see more innovative technology development based on Daelim’s already developed eco-friendly technologies as a leader of eco-friendly construction. Given the construction environment where the por-tion of revenues abroad is on the rise, the company can further strive for competitive technology develop-ment and investment in the international community.

Advisor ofthe Society for Environmental Construction

Kim Jin-ho

I hope that Daelim Industrial

could strive to genuinely conduct

activities to ease the

environmental load on sites and

secure competitiveness for

global environmental technologies

Expert InterviewsGreen Management

OuR VALuE IS

We seek to obtain technological competitive edge

in the environment by devising technology portfolios that

respond to business strategies to cater to technology

strategies through continued investment in R&D.

We also hope to secure new growth engines by generating

new profitable values and explore new markets by

developing products of construction

technologies for the future,

thus garnering new growth engines.

Infrastructure for Technology DevelopmentThe Technology Research & Development Institute of Daelim Industrial has strived for technology development since its foundation in January 1980 as the first-of-its-kind R&D center of a construction company. It was established to ca-ter to technological demands of construction sites and apply more efficient and safe construction technologies. Under the vision of ‘Global Technology Leader and Value Creator,’ the institute conducts researchers to develop differentiated technological products (researches aimed at making technologies practical and commercial as products). The institute is leading eco-friendly low-energy build-ing & housing technologies represented as the ‘eco house’ in the building & housing environment sector. The ‘eco house’ concept refers to forward-looking building & housing that considers not only a pleasant living environment but also the nature. The institute adopted the concept of 3L house for the first time in Korea. With outstanding eco-friendly low-energy technologies, the funda-mental paradigm on energy consumption in the existing residential space has been transformed, thus proposing a vision in building & housing. As a leading company in water treatment, the water treatment performance has reached a high level through technology development, and special values have been added to water treatment technology products equipped with low energy and operational convenience.

Status Quo of Eco-friendly Technology Development

Eco-friendly Design· LCCO2 Assessment of BIM-based Construction· Earthquake control design technologies for Apartment houses subject to the remodeling of vertical extension

Eco-friendly Construction· Development of outside heat insulation wall method· Setting of the standard for plumbing diameter and zoning· High-efficiency and large-capacity open geothermal power system · Development of heat-insulating construction components that prevent condensation and combined heat-insulation system· Low-cement production technology using performance improving agents

Eco-friendly Water Treatment· e-Tris II (The Membrane Bio-Reactor (MBR) technology for advanced sewage treatment that reduces sludge)


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Development ofEco-friendly technologies

Eco-friendly Design Eco-friendly Construction

LCCO2 Assessment of BIM-based ConstructionDaelim Industrial has developed an environmental construction assessment system in connection with BIM (Building Information Modeling), a new con-struction designing tool. It is based on indexes obtained from calculating the amount of CO2 emission during the life cycle of a construction composed of construction, maintenance and demolition stages. With the assessment system in place, the environmental impact of a construction can be easily as-sessed, and efficient decision-making is possible by saving cost.

Setting of the Standard for Diameter and Zoning of Plumbing PipeThis research aims to review the diameter of the plumbing pipe (cold & hot water supply, heating, waste water) for Apartment houses and general building & housing (hotel, office, etc.) and its zoning. The data of the amount used by a time unit for the flux and energy in buildings can now be identified. As a consequence, the standard for the diameter of plumbing pipe can be reviewed, which has, for long, been neglected. Cost of equipment including pumps and the amount of energy usage are expected to be reduced by reducing the diameter of the plumbing pipe, and reviewing the flow and pump-up head again by analyzing the adequate flux by plumbing pipe. We plan to research on a design standard to reduce the volume for plumbing pipe through the analysis of the plumbing zoning stan-dard.

Setting a design standard by reviewing the diameter of the plumbing pipe and zoning

Application to Jeju Aerospace Hotel

Analysis of CO2 Emissions throughout the Lifecycle of Buildings

Tools for Analysis of CO2 Emissions throughout the Lifecycle of Buildings

Completion of seismic performance assessment

National LCI DB

Industrial linkage analysis

Calculation of the amount transported

and travelled

LCI of transport equipment

Amount ofoil used

Amount ofelectricity used

Energysimulation

Building informationArchiCAD + gbXML + eQUEST

LCI DBBuilding materials + construction process +

waste + energy

Project – building(data on building area, durability, etc.)

CO2 emission by phase

Amount of CO2 emissions and energy used throughout

the course

G - BEEM Assessment tools

Amount of waste materials

LCI of transport equipment

Seismic Performance Assessment

Reflecting the asymmetrical features of dampers

Experts’ technical review

Perform 3-D Modeling (FEMA 356/440 Fundamentals)

Inelastic static analysis(verification of interpretation models)

Re-setting the damper locationand yield strength

Interpretation of time records of the 3-D Modeling inelasticity(performance level-specific interpretation for

seismic design loads and maximum seismic loads)

OK

NG Performance assessment (displacement responses,

review of element capacity)

Earthquake Control Design Technologies for Apartment houses Sub-ject to the Remodeling of Vertical ExtensionThis technology enables us to secure the earthquake-resistant function of Apartment houses construction subject to vertical extension by applying an earthquake control system within the structure of the Apartment houses. As a result, the amount of using natural resources is reduced and cost is saved. The existing structure can also be used without excessive reinforce-ment, thus lowering energy and greenhouse gas that might enter in the construction process.

Development of Outside Heat Insulation Wall MethodThe outside heat insulation wall method is two-fold: the wet system used mostly for wall column structure and the dry one for column structure. As for the former, an optimized system is formed for each insulation material and a construction manual is developed, and applied to sites. As for the latter, meanwhile, the stick wall where the system is assembled/installed on sites, and the unit wall where the system is installed on sites following its as-sembly in a plant have been developed, and a pilot project is underway. The EPS-based wet method whose applicability has been assessed since 2012 was applied to the Sejong Annex Building of e-PyunhanSesang. It was also applied to Jeju Aerospace Hotel in 2013 as the first successful commercial attempt. Continuous researches take place to distribute and spread the de-velopment technologies. The external insulation system is an eco-friendly technology to save cooling and heating energy by shutting off heat bridge and condensation where the indoor hot or cool air is discharged to outside through floors and walls.


Eco-friendly Design and Technology


High-efficiency and Large-capacity Open Geothermal Power SystemThe geothermal system is a technology to conduct an effective heat ex-change of the heat energy in the underground soil and subterranean water and use it as a heat source for cooling and heating of a building. The system is two-fold: an open type where the subterranean water is directly used, and a closed type where plastic pipes are used for indirect heat exchange. We have conducted researches on our exclusive technology for the build-ing-augmented open geothermal power system as well as enhancement of efficiency for the large-capacity open type amid an increasing need for geothermal power. We do the utmost to ensure that the geothermal system serves as a heat source of cooling and heating for not only the buildings subject to its manda-tory application but also private residential buildings.

Development of Heat-insulating Construction Components thatPrevent Condensation and Combined Heat-insulation SystemDue to the extreme cold in winter in Korea, concerns are high over the occur-rence of condensation on edges, fire-resistant doors and entrance gates. Given such needs, the Ministry of Land, Infrastructure and Transport en-acted the Design Standard for Condensation Prevention for the Apartment houses Complex according to Article 14.3.3 of the Regulations on the Hous-ing Construction Standard, which will be enforced from May 2014.Against this backdrop, we are researching on developing heat-insulating construction components to make ‘e-Pyunhansesang free of condensation’ and optimize the design of heat-insulating system. Based on the research, we are developing high-insulation, high-airtightness fire-resistant doors and entrance gates, heat-insulating construction components for edges and combined heat-insulating panels.

Open geothermal power system 500m perforation construction

Analysis of the heat bridge by part for Apartment houses complex

Low-cement Production Technology Using PerformanceImproving AgentsThis technology was developed to exert the equal level of constructability, strength and durability to ordinary concrete’s, while using a large amount of industrial by-product like ground granulated blast-furnace slag(GGBS) and fly ash. Since the material used to improve strength and durability originates from industrial byproduct, the amount of greenhouse gas emissions is low-ered compared to ordinary cement: the amount of usage for the natural re-sources as raw materials for cement is reduced; waste is recycled; and the amount of cement used is reduced.The technology developed also excels in reducing cracks and cost, so its application rate has continuously increased on sites, and its excellence has been fully recognized through various technological certifications.

41

Front view of e-Tris II pilot plant

e-Tris II (The Membrane Bio-Reactor (MBR) technology foradvanced sewage treatment that reduces sludge)The e-Tris II technology is Korea’s first-of-its-kind Membrane Bio-Reactor (MBR) technology for advanced sewage treatment. Here, the sludge reduc-tion inducement tank is applied to the continuous advanced sewage treatment technology so that the excess sludge is reduced within the process from the onset, and the pressured membrane is applied for the first time in Korea.Excess sludge is reduced by over 50% compared to the existing activated sludge technique, enabling economical sewage treatment. Moreover, Korea’s first pressured membrane is used to eliminate the burden of migrating or re-moving the membrane and still do chemical cleaning. As a result, the main-tenance burden has been eased, which used to be a setback for the existing submerged MBR. Compared to 10~20 LMH, the existing MBR treatment flux, performance has improved by about 2.5 times to 40~50 LMH, thus saving the amount of land required. It has been applied to the pilot plant of a sewage treat-ment plant in Uijeongbu, and is expected to acquire certification and verification as a new eco-friendly technology and certification as a green technology.

geothermal systems and wind power generation systems. As an example of energy reduction technologies, we applied super-windows and doors and su-per-outside insulation systems whose performance increased four-fold versus the existing types and insulating materials in order to improve the heat environ-ment that impacts energy saving the most. As a result, the amount of energy used for cooling and heating was reduced by one seventh. We have established a resource cyclical infrastructure by reducing the amount of construction waste and recycling resources in the construction phase, let alone using energy saving technologies in the maintenance phase. Eco-friendly construction materials were developed such as low-carbon concrete to reduce the GHG and energy consumed, being applied to our housing construction. Green technology certification is issued by the government to recognize and certify technologies that can minimize greenhouse gas emission and pollut-ant discharge. Daelim Industrial has been recognized as the most outstanding company in Korea for its eco-friendly certification. A green certification entitles a corporation to a privileged status when being qualified for construction projects with the government as a client or making purchases for material goods. Daelim Industrial has made great contributions to the green growth of domestic construction industry by obtaining a total of 7 green technology certifications as of 2013-end.

Contribution to Green Growth through the Certification ofGreen Technologies As the government reinforces its building energy policies, our future core value-driven technologies encompass the construction of Apartment houses driven by the concept of super-energy saving. For this program, Ph.D. holders are in-jected in such fields as heat & light environments, noise & vibration, water treat-ment, indoor air quality and new & renewable energies, seeking to develop an active residential environment. As a result, measures to save cost are being applied to each project. Specifically, roofs of households living on the highest floor and the flooring of households living on the lowest floor which lack heat insulation are to have a stronger performance. To enhance the heat insulation performance inside each household, high-performance windows and doors are used. Not only the passive design techniques such as walls with a lesser building load, and stronger insulation functions of windows and doors, but also energy self-sufficient active houses are developed by applying new and renewable energies including PV systems, PV-based water heating systems,

Technology Title Date ofCertification

Certifiers

Heat-insulating systemtechnology using frame unit panels

2011.10.13 · Saving energy for cooling and heating by 12% and reducing the LCCO2 throughout the life cycle by 15% by applying toe-PyunhanSesang Yongsan Singae

Sewage treatment system with sludge-reducingcapacity (e-Tris)

*SBR (Sequencing BatchReactor) process

2012.02.23 · Plan to apply the system to STP site in Laos- Expected to save 1.2 billion won of construction cost

· Expect to earn an approximately 2% of the revenue generated by Kyungwoo Cleantech

Single layer sheet made by combining properties of synthetic polymers such asLLDPE(linear low-density polyethylene)and EVA(Ethylene-vinyl acetate). Technology for integrating root-resistant and waterproof properties

2012.08.09 · Reducing cost by about 10% andshortening the construction period by about 30% by applying to KoreaElectric Power Corporation andthe Presidential Archives

High-insulation,air-tight door systempreventing condensationthrough blockingthe thermal bridge effect

2013.01.31 · Double the insulation capacity of conventional front doors. Saves costs by approximately 20% when compared to doors with the same insulation capacity.Expected to be efficient for low-energy buildings in the future

Manufacturing technology for non-sinteredcement floor mortar made with inorganic composite

2013.02.21 · Reduce manufacturing cost by 500won/ m²,Reduce repair cost for cracks

Manufacturing technology for eco-friendly, low-carbon concrete using composite with better initial strengthand durability

2013.03.14 · Save the construction cost of 90 million wonfrom a site for Apartment houses complex with 850 units - Save manufacturing cost for concrete and crack repair cost compared tocompetitors' cost

High-performancevacuum-baseddouble-layered windows and doors technology

2013.09.12 · e-PyunhanSesang Yongsan Singae· e-PyunhanSesang Gwanggyo

(revenues of KRW 100 million)· Head office of KEPCO Engineering &

Construction Company(revenues of KRW 300 million)

Eco-friendly Water Treatment


Eco-friendly Design and TechnologyEco-friendly Business


Development of CCS Technology (Carbon Capture and Storage)In the power generation and industry for the next 50 years, the usage of fossil fuel that is commonly used and relatively cheap will soar worldwide, leading to a significant increase in CO2 emissions. As such, the Intergovernmental Panel On Climate Change (IPCC) forecasts that the CO2 emission level must be more than halved from that of 2002 by 2050 to avoid the most devastating conse-quences of climate change. The CCS technology is one of the top three low-carbon technologies for reducing CO2 for sustainable economic development, while reducing CO2 emissions in today’s world laden with carbon challenges. We take part in a project to develop sources technologies as a co-organizer with Korea Electric Power Research Institute.The technology under research is the core technology for CCS (Carbon Cap-ture and Storage), a process in which CO2 discharged from burning fossil fuels such as exhaust emissions from power plants is absorbed and stored using liquid absorbents. Daelim Industrial created software for process simulation that is proper to use with newly created absorbent, which is expected to com-pensate for the shortcomings of the existing absorbents. We have finished the basic design of 10MW large scale pilot plant and completed its construction in Boryung Coal Thermal Power Plant. Short-term operation has taken place including the performance verification since the completion, and continuous operation of 1,000 hours is our target starting from April 2014. The final goal for this project is to develop proprietary technology for a commercial facility with a scale of 100~300MW, considering the feedback on the operation of 10MW pilot operation, while minimizing space and conducting economical design for the ultra-large facility. Another goal is to contribute to the clean thermal power gen-eration and create a new environmental technology market applying Korea’s first and largest CO2 CCS facility to plants.

A Leading Company in Water TreatmentWe have offered a full line-up of services for decades, ranging from design, con-struction and operation of environmental infrastructure. We have been involved in numerous projects including sewage treatment, production of used water, development of water resources, water and sewage pipe network system and waste treatment. Such seasoned experiences will push us to make a success in completing challenging projects. Since the formation of the Water/Wastes Regeneration Team in 2010, certification for one new technology and one green technology has been completed. In 2014, two new technologies and two green ones will be additionally certified. R&D has been made to play leading roles in such various fields as a system for advanced sewage treatment that reduces sludge, advanced water treatment system, intelligent integrated water man-agement system, water pipe, desalination and treatment of organic waste. Our unyielding efforts will be made for business initiation and technology develop-ment based on successful business experiences and R&D.

Competitive Edge in Water Treatment Technology_ Initiation and Future Strategies for e-TrisThe e-Tris technology is a sewage treatment system that reduces the SBR-type sludge suitable for a small-scale sewage treatment plant. Meanwhile, the e-Tris II is a technology maximizing the convenience of operation by not only acquiring the filtering function that is about 2.5 times higher than the immersion process by applying the pressurized membrane to the sewage treatment technique for the first time in Korea. Moreover, the membrane is not cleaned up outside the system and is made to operate automatically, thus maximizing operational con-veniences. New environmental and green technologies are in the pipeline, and once the main technologies are developed, we will be able to secure technolog-ical competitive edge at home and abroad.

Initiation of the Advanced Water Treatment System forMembrane Filtration to Remove CECs and Future Strategies The advanced water treatment system for membrane filtration to remove CECs enables the skipping of discharge balance and sludge thickener in treating the backwash water in the immersion membrane filtration process. The backwash water might be generated in the pressurized membrane filtration process that can be operated with mixing and coagulation without an immersion sheet. The recovery rate is 99.9%, which maximizes the efficiency of the overall water treatment system. As a result, initial investment cost and operational cost can be reduced by 10%, respectively, compared to other water treatment technol-ogies using the membrane filtration. This technology is now in the process of the assessment of new environmental technologies. Moreover, operational stability has gone up by introducing an advanced oxidation process based on user-friendly UV and hydrogen peroxide instead of the existing ozone-based advanced oxidation system. This increased operational stability as a result. We are expected to secure competitive edge in the advanced water treatment sec-tor with membrane filtration based on know-how in design, construction and operation. This is thanks to the seasoned experience in operating a pilot plant of 1,000m3/day where the membrane filtration process is combined.

Inside the pilot plant


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Eco-friendly Business

Sales of Eco-friendly Products in 2013

Status of Participation in National Research TaskA significant amount of investment is made in the development of future tech-nologies to generate new growth engines. Recently, we have passionately taken part in national research tasks on eco-friendliness of the government to respond to a higher interest of the international community in the reduction of greenhouse gas, low-carbon green growth, and energy-saving industrial struc-tures. We strive to commercialize the performance generated through the pro-active participation.

Sales of Eco-friendly Products in 2013Daelim Industrial has become a leader of the eco-friendly construction market in Korea through eco-friendly construction, low-energy Apartment houses proj-ects and eco-friendly transportation business and is expected to make great contributions to national economy by enhancing competitive edge in domestic construction technologies through promoting competitions among domestic construction companies.

*Level of contribution to sales: As of KRW 3.5725 trillion for the domestic sales in 2013

Unit : billion won

Classification 2011 2012 2013

Budget (Unit: million won) 1,842 1,486 1,097

Classification Sales of green productsin 2013

Contribution to Sales

LEED certification forenergy-efficient buildings

343.3 9.60%

Eco-friendly constructioncertification

353 9.90%

Technology forlow-energy Apartment houses

31.3 0.80%

Eco-friendlyTransportation Business

451.6 12.60%

Environmental Business 395.8 11.10%

Total 1,575 44.10%

Sejong Government Complex

Distribution of Eco-friendly BuildingsWe strive to enhance the stakeholder value by providing green construction products equipped with high quality and practicality. The distribution rate of en-ergy-saving Apartment houses approved in 2013 is 100%, and 3 out of 4 build-ings are constructed as eco-friendly ones.

Apartment houses

Buk Ahyeon Sections 1-3, Yeongdeongpo Sections 1-4, Uiryae A2-11BL,Hwangseong, Gwangyang, Banpo Acro Ville River Park, Shin Banpo 5-cha, Masan Hwewon District 2, Heukseok District 7, Oksu District 13, Geumho District 15, Bagumeol District 1

Ordinaryhousing

Business facilities in Janggyo District 4,Pangyo Techno Valley R&D Center, Korean National Police University

Distribution Status of Eco-friendly Buildings


Eco-friendly BusinessEco-friendly Construction

Eco-friendly BusinessEco-friendly Business

OuR VALuE IS

As construction projects inevitably yield environmental

impacts such as tampering of natural environment,

use of natural energy and resources and generation of

environmental pollution, corporate responsibilities for

environmental preservation are

indispensable to today's society.

Daelim Industrial tries to minimize environmental impacts

resulting from the construction works by minimizing tampering

with nature and implementing an efficient use of

natural energy and resources through an advance study of

environmental concerns arising from construction projects.

We also try our best to avoid causing inconveniences for

local residents by facilitating open communication with

the local communities involved. Efforts are also being made to

cultivate eco-friendly construction culture that respects

environment and humanity by promoting environmental

campaigns for local communities.

Eco-friendly Site PlanningAll construction projects performed by Daelim Industrial aim at preserving natural environment and minimizing environmental complaints by estimating environmental impacts from the planning stage and reflecting the opinions of the internal and external environmental experts in the construction design. De-pending on the scales of construction projects, we continue to observe and control environmental impacts on nearby ecosystems through an assessment of environmental impacts and a survey of environmental changes after project completion.

Applying eco-friendly technologies including high-efficiency facilities and new and renew-able energies to a project of reinforcing the functions of mainline railway by turning Jungang Line into a double-line and express one

Case Study 01. Construction of sub-base course for Section 6 for Dodam-Yeongcheon double lines subway for Jungang Line

Installation of Top LightSaving the power consumed by using natural sunlight – cutting electric cost by 16%

Direct Expansion AHU for the Recovery of Waste HeatRecovering and using the exhaust heat, saving KRW 3.2 million/year for the electricity cost

Case Study 02. Construction of sub-base course for Section 3 of Gimpo Urban Railway


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Acquiring the highest rating given to ‘an eco-friendly building’ by reflecting a rational eco-friendly plan under the government’s project to transfer its agencies to Sejong City, access-ing the natural sunlight & ventilation and formation of an eco-friendly eco-complex.

Enhancing the in-door pleasant feel through a building plan that considersthe usage of natural sunlight & ventilation

Case Study 03. Sejong Government Complex

Building plan in consideration ofa ventilation path

A plan to utilize the natural airflow

Establishing green infrastructure that considers eco-friendly pavement, expansion ofgreen transportation and the socially vulnerable

Establishing an eco-friendly circulation system aligning rainwater and the water systemTurning the soil eco-system healthier under a plan on pavement with water permeability andnatural water drainage

Formation of an eco-friendly eco-complex to maintain andrestore ecological functions

Sejong Government Complex




Eco-friendly Site ManagementAtmospheric Environment Control Daelim Industrial strives to make our con-struction sites free of scattering dust through the identification and control of the processes that generate dust in construction works. In compliance with strict regulations against scattering dust, we install dust-proof covers on vehi-cles and open-storage materials, operate wheel-washing facilities and sprinkler trucks, install dustproof walls and sprinklers during demolition, use sprinkler curtains for tunnel works, change blasting methods and install dustproof nets. We also make efforts to reduce the amount of toxic gas generated by construc-tion works through installing exhaust fume reduction equipment as carbon monoxide (CO), hydrocarbon(HC), nitric oxides(NOx) and diesel particles from heavy equipment pollute the air and threaten the health of our employees.

Water Management Daelim Industrial collects and keeps a track of monthly data for water supply and subterranean water usage to minimize the amount of water used in construction. We perform construction site repair and floodgate examination and analysis before embarking on a construction process to mini-mize environmental impacts on surrounding streams and flowing water deten-tion basin. We also try to prevent water pollution systematically by hiring com-panies specialized in on-site wastewater treatment. Waste water generated by the operation of concrete manufacturing equipment and tunnel construction are treated by an on-site wastewater treatment system before being released into nearby streams. Wastewater treatment systems with a large capacity are equipped with an automatic water quality measuring device, which monitors the quality of water being released in real time. We have also installed rainwater reservoir to put rainwater into use and reduced the use of water supply and subterranean water at construction sites

Soil Pollution Control To prevent byproducts from construction works from being released into soil, Daelim Industrial adjusts construction methods, takes strict preliminary measures, prohibit on-site equipment repair or petroleum ex-change and operates on-site soil pollution prevention facilities to handle inevi-table pollution.

Construction Waste Control Daelim Industrial performs a continuous study on waste prevention and control methods through a research on new design and engineering methods and makes every effort to save natural resources by recy-cling waste matters as much as possible. Since 2010, we have been maintaining a real-time database of waste release in our electronic boards, which is directly connected to the government waste control system (Olbaro).

Noise and Vibration Control In compliance with the strict regulations against noise and vibration, Daelim Industrial uses eco-friendly engineering methods, installs noise prevention facilities and discloses the levle of noise and vibration at urban construction sites to prevent civil complaints pertaining to noise and vibration.

· Clean-up of roads surrounding a construction site· Control of fugitive dust by planting halophytes

· Install soundproof air dome near drilling equipment· Prior checking of noise level during construction work

Reduce air pollution by installing a precipitator

Atmospheric Environment Control

Precision controlled vibration blasting using a small amount of explosives

Installation of the multi-level detritus tank to purify polluted water

Noise and Vibration Control

Water Management

47

Green PurchaseWide-ranging green purchase activities have unfolded so that our culture for low-carbon, green production and consumption could spread out, e.g. expan-sion of R&D in green technologies, continuous discovery of green materials companies and support for R&D in green products for suppliers.

Preservation of Ecological Diversity Daelim Industrial performs a preliminary study on natural wetlands, protected species, endangered species and wild animals in surrounding environments before starting a construction project, shares the relevant information with site supervisors and manage the construc-tion sites in a way that can minimize negative impacts on environment. In case of Busan Outer Ring Expressway Site #9, a preliminary study of environmental impacts discovered protected species (whooper swan and common kestrel) and endangered species class II (wildcat, Korean Buzzard and Rambur's Folk-tail) in the area. In order to prevent a road kill and facilitate escape of small ani-mals, Daelim Industrial installed animal guide fences and side gutters, thereby mini-mizing negative impacts on the ecosystem. The Hantan River Dam site opened a way for active preservation efforts through raising interest in wild an-imals and promoting environmental awareness by holding a joint event to feed wild animals in winter time with the cooperation from local animal and plant protection groups.

Monitoring wild animals by installing a still camera

Indicator Unit 2013

First Half Second Half Total

Ratio of green products % 25 28 26.5

Portion of revenues forgreen products

% 30 35 32.5

Numun-dong Building of Kyobo Gwangju




PLANETEnvironmentalStewardship

CORE VALUE

The recognition level of Daelim and its brand value must be raised in least developed countries and the Third World through the investment and project expansion in the environ-ment. The company must jump on the bandwagon with the latest global changes in the market environment.

Researches are to be done for areas to contribute to the en-vironmental sector, while fulfilling its inherent duties. For in-stance, what about a model where housing is constructed us-ing eco-friendly technologies and reducing the usage of raw materials, and supplied to the homeless via some social fund?

I hope that the company can identify the industrial trends on environmental matters such as water shortage and climate change, and devise countermeasures, thus coming up with measures to align with the industrial scope of Daelim Indus-trial.

01 02

Eco-friendly design is required through the proactive and lead-ing engagement of environmental experts in civil design. It is a must to bring a harmony for all living species including mountains, rivers and flora & fauna and restore the nature over the passage of time.

03 04

It is deemed critical to discover new growth engines (water treatment technologies, plant factories, etc.) that cater to changes in the earth environment.

It is time for the company to work harder to respond to climate change to look towards the construction industry of the fu-ture, e.g. eco-friendly construction, reduction in carbon emis-sions and energy saving, etc.

The company must be proactive in R&D investment, while focusing on forward-looking technological buildup for eco-friendly technologies and water treatment, etc. and talent discovery.

05 06

07 08Recently in the U.S., companies are obliged to brief on the sta-tus quo and disclose information on ‘minerals under disputes’ produced in countries of disputes undergoing geopolitical or environmental destruction. Since there is a demand for dis-puted minerals in the construction sector, the company con-tinuously review on reinforcement of transparency in a supply chain so that it can prepare itself against future regulations and fulfil social responsibilities.

Daelim Industrial Considers the Environment







Economic Growth

Social Progress

49

Stakeholders’ Opinions onGenerating Environmental Values

Major Eco-friendly Materials Unit 2011 2012 2013

Steel ton 216,264 199,511 203,437

Remicon m3 2,301,049 1,789,262 1,519,838

Cement ton 172,031 179,121 158,171

Sand m3 105,816 355,357 415,672

Aggregate m3 259,679 301,522 570,667

Ascon ton 374,229 258,937 293,768

Type Unit 2011 2012 2013

Subterranean water m3 224,292 178,158 84,380

Water supply m3 408,880 460,801 354,897

Construction Material Usage

Total Amount of Water Intake by Supply Source

Energy Consumption

Amount of Eco-friendly Materials Used

INPUT

*Scope of data collection: Daelim Industrial*Scope of data collection: Daelim Industrial and suppliers (considering only the amount of usage of equipment within suppliers, excluding the amount of energy usage in supporting facilities, and making corrections for the redundant calculation of the amount of usage of electric power with equipment)

*Scope of data collection: Daelim Industrial *Since 2012, the amount of purchase pursuant to the Voluntary Agreement on Green Purchase has been compiled

Unit : m3 Unit : KRW million

*Scope of data collection: Daelim Industrial and suppliers

Total 4,026 3,636 2,967

Classification Unit 2011 2012 2013

Scope 1Direct emissions

TJ 345 335 312

Scope 2Indirect emissions

TJ 646 726 679

Scope 3Other indirect emissions

TJ 3,035 2,575 1,976

Recycled AggregateSheets, adhesives,water taps, paints, etc.

100,934

33,039

32,071 m3 68,863

43,947

2012 2012

19,222

42,449

2011 20112013 2013

23,374KRW million


Flow of Material Goods

flow of Material goods

Direct/Indirect Greenhouse Gas Emissions_ Total

Direct/Indirect Greenhouse Gas Emissions_ Scope 1, Scope 2

Direct/Indirect Greenhouse Gas Emissions_ Scope 3

OUTPUT

*Scope of data collection: Daelim Industrial and suppliers (excluding the amount of energy usage in supporting facilities)

Unit : tCO2 - e Unit : tCO2 - e Unit : tCO2 - e

Unit 2011 2012 2013

Waste Generated ton 297,850 415,120 310,785

*Scope of data collection: Daelim Industrial (excluding emissions of clients)

193,272

53,867

139,405

239,099

57,475

181,624

2012 2012 2012

268,800

54,688

214,112

2011 2011 20112013 2013 2013

Waste Generated

51

SOCIAL PERfORMAnCEPRInCIPLE & POLICYSmiling at each other entails warm interests and sharing.

Daelim Industrial hopes to become a corporation that can continuously create

social values and realize win-win cooperation through diverse

social contributions and management activities with

respect for humanity in order to create a

beautiful world where everyone helps one another.


52 Environmental Performance

KEY ISSuES

1

3

5

2

4

6

7

8

Customer satisfaction

Social Contributions

Hunting and development of talent

Internal communication

Safety and Health Issues

Welfare for employees

Respect for human rights

Shared growth

P. 67

P. 72

P. 54

P. 60

P. 62

P. 58

P. 61

P. 68

1

4

3

52

8

6

7

KEY fIguRES



PublicSector

Employees

Customer satisfaction M M H M M

Internal communication M L L L H

Social Contributions M M H H L

Safety and Health Issues M M M H L

Hunting and development of talent M H M H H

Welfare for employees M M L L H

Respect for human rights M L M L L

Shared growth H L H M M

KPI Units 2011 2012 2013


HumanResourcesDevelopment

Number of employees Person 4,324 4,932 4,944

New recruitment Person 264 302 177

No. of training hoursper head

Hours 112 121 124

Safety Industrial accident rate Converteddisaster rate

0.05 0.05 0.09 (E)

SocialContributions

Monetary donations KRW billion 20 118 38

Social contributions per head

Hours - - 11


*H - High M - Medium L - Low

Level of external interest


*Scope of reporting on social data : All business sites of home and abroad

53

Ratio (%) 17 36 30 16 2

OuR VALuE IS

Daelim Industrial offers systematic and

diverse training programs to enhance employees' capacities

to attain the goal of "cultivating talented global

construction experts with the mindset of Hansup spirit."

In particular, we provide support for shared growth

of employees and corporation by offering individualized

training programs tailored

for individual work scope and tasks.

Current Status of EmployeesAs of the end of the year 2013, Daelim Industrial has a total of 4,944 employees; 4,012 employees work in the main office and domestic sites and 933 workers are at overseas sites.

The majority of workforce (66%) at Daelim Industrial consists of employees in their 30s and 40s, who provide a groundwork for steady growth of the company. However, we also maintain highly skilled workforce composed of employees over the age of 50, which accounts for 18% of the entire workforce. The per-centage of female employees is relatively low due to the nature of construction industry which has many actors against maternity.

Classification Domestic Overseas Total

Mainoffice

Local branches

Constructionsites

Total Local branches

Constructionsites

Total

General 2,146 12 942 3,100 34 568 602 3,702

Professional 566 9 337 912 3 327 330 1,242

Total 2,712 21 1,279 4,012 37 895 932 4,944

Type 20s 30s 40s 50s 60s Total

GeneralEmployees

Men 635 1,263 1,165 449 - 3,512(95%)

Women 101 46 39 4 - 190(5%)

Sub-total 736 1,309 1,204 453 - 3,702 (75%)

ProfessionalEmployees

Men 66 428 249 314 106 1,163 (94%)

Women 14 44 18 3 - 79 (6%)

Sub-total 80 472 267 317 106 1,242 (25%)

Total Men 701 1,691 1,414 763 106 4,675 (95%)

Women 115 90 57 7 - 269 (5%)

Sub-total 816 1,781 1,471 770 106 4,944

Unit : No. of people


Human Resource Development


Total 0.80%0.60%2.10%

Total 91530

Employment for Talented IndividualsDaelim Industrial employs talented individuals who can grow into talented global construction experts and create the future of Daelim. The ideal person Daelim Industrial seeks for employment is an individual who can realize "Han-sup Image," which included 7 essential properties: 'Look ahead,' 'Look for something new,' 'Be the best in your area,' Be a team player,' 'Know the cus-tomers,' Keep the promise,' and 'Be economical'.

Status of New RecruitsWe recruit talented new employees twice a year in the first and second half. In 2013, 177 new recruits joined us.

Unit : No. of people

Ideal Employee of 'Hansup'

Lookahead

Knowthe

customers

Look forsomething

new

Keepthe

promise

Be the bestin

your area

Beeconomical

Be ateam player

Number and Rate of TurnoverThe number of turnovers in 2013 was 31, that is, 0.8% of the total of 3,702 general employees as of the end of the previous year. Our turnover rate is the lowest in the construction industry through our continued talent development activities and improved welfare system.

Diversity in Human ResourcesDaelim Industrial pursues diversity in workforce and employs talented individu-als from diverse areas and countries. We have an individualized welfare system for these employees of varying backgrounds.

Employment of Local WorkforceOur projects stretch out to Saudi Arabia, Iran, the Philippines, Kuwait, China, Vietnam, Brunei, Nepal, Libya and Hungary. Local workforce in each of these countries is subject to prior employment according to our localization strategies for major workforce.In order to employ talented local people, we post job opportunities and help-wanted ads in cooperation with local business owners, labor-related govern-ment offices and human resources agencies. With the rapid growth of overseas business, Daelim Industrial currently has 30 manager-level local employees and 915 supervisor-level local employees with a total of 945 local workers. We plan to keep the foreign/local workforce in the future and provide them with ade-quate compensations and diverse training opportunities in compliance with the local regulations.

Year 2009 2010 2011 2012 2013

Number of new recruits 67 146 264 302 177

Type 2011 2012 2013

No. of turnovers (voluntary) 73 24 31

No. of total employees as ofthe end of the previous year

3,376 3,553 3,702

Task Manager Level Supervisor Level

Saudi Arabia 16 199

Iran 9 137

Philippines 0 503

Kuwait 1 1

China 0 49

Vietnam 1 6

Brunei 1 7

Nepal 0 4

Libya 2 2

Hungary 0 7

Search for talented individualsand maintain a talentpool

Qality Growth· Intensive retention program for talented individuals

2012 Performances Long-term plansPlans for 2014

Quantifiable Growth· Increased the number of foreign employees at the main office and overseas sites

· Increase rate : Year 2009 : 340 Year 2013 : 1,472

Task assignment system and performanceassessment system for foreign employees

Intensive management of a talent poolDiversification of humanresources

Efficient and systematic managementof a talent pool throughhuman resources database


55

Suppliers

67

Unit : Point

Employees

64

LocalCommunities

50

PublicSectors

64

55

Cultivating Talented WorkforceTalented workforce is cultivated to execute our management strategies through systematic training in four areas : Character Buildup, Leadership Competency, Global Competency and Job Competency. We will continue to make investment and efforts to cultivate talent to secure steady competitiveness.

Development of Global TalentsThe portion of overseas projects is gradually on the rise, so securing an overseas pool of workforce is one of the key issues we confront. We conduct overseas OJT training and language proficiency screening as we aim to secure internal workforce capable of conducting overseas projects. Overseas OJT training sessions are either conducted internally or externally, covering contractual management for overseas projects, risk management, project management and overseas site and branch management. Language proficiency screening is done internally, intensively training on business communication and writing. Seeking to level up the lan-guage proficiency, training has been conducted for managers and general managers, the core workforce for overseas projects.

*Self-development training course

Status of Training in 2013Approximately KRW 620,000 was invested for average training fees per employee in 2013, and 124 hours of training were provided for each.

*The number of trainees is based on the current status of the whole year, which might be different from that of 2013-end

Executives

DeputyGeneral Manager

AssistantManager

General Manager

Manager

Staff

Training Roadmap

Type Corporate Training

Basic Character Buildup Leadership Competency Global Competency

Year

Number of New Recruits

Course to enhance a problem

-solving competency

Job training in the main office (2013 : 4 courses)

Safety/E

nvironment/Q

uality manager training

Legal job training (construction engineers)

Other legal training (personal inform

ation/information security

/sexual harassment)

Off-the-Job training (sem

inar)

Hansup e-cam

pus (online job training course)

English im

mersion course

Biz W

riting Skill up

Global W

inning PT

Hansup e-cam

pus(on-line language course)

Global Zone

Written exam

in a program to enhance em

ployee competency

Financial support for language training (foreign language course via phone/invita-tion of instructors/taking courses in outside academ

ies/TOE

IC)

SE

RI Pro

Training for new executives

Customized training for individuals

e-MBA (employeecompetency

enhancement program)

Ethics/Accounting/Safety(employee competency enhancement program)

Adaptation program for new recruits

TOEIC Speaking (employee

competencyenhancement

program)

Hansup Academy II

Global LeaderCourse

Hansup Academy I

CEO morning seminar

On-board program

for experienced employees (Interm

ediate/OJT/w

orkshop)

Written exam

in a program to enhance em

ployee competency

(core values)

Enterprise-w

ide morning sem

inar

New Hire Training

Hansup e-cam

pus (online leadership course)

Hansup e-cam

pus (online general managem

ent course)Lifestyle

Mentoring

Type No. of trainees No. of hours completed No. of training hours per head Total training fees Training fees per head

Current Status 5,024 625,392 124 3,111,247,917 619,277




Hansup e-CampusAt Daelim Industrial, ‘Hansup e-Campus’ is available as a newly aligned exclu-sive online training system in 2013. The course enables employees to diagnose competencies they are lacking, and take the corresponding training. We offer 1,706 courses in four fields, namely, job functions, foreign language, general management and IT. In 2013, an average of two courses was completed by head, and 52 hours, on average, were consumed per head. ‘Global Zone’ is another exclusively developed program designed to induce em-ployees to learn English expressions often used in the construction industry. All employees can freely down load diverse English content that is useful in construction. In 2013, the program was accessed 26 times per head.

Support for Retired EmployeesDaelim Industrial operates "Daelim Industrial OB (Old Boy) Club" to promote mutual cooperation and extended friendship among retired employees. Daelim Industrial OB Club is an on-line community which makes it possible for retired em-ployees to share the news about Daelim Industrial, the family event notices of the Daelim employees and employment opportunities. We also hold regular meetings and a year-end meeting to facilitate communication between current employees and "OBs" for the purpose of mutual cooperation and the progress of the company.

Knowledge ManagementWe applied the concept of ‘a learning team’ by staying from the existing individ-ual-oriented knowledge production and sharing, while introducing ‘a knowledge expert system’ to improve the quality of knowledge. We are at a stage of advanced knowledge for knowledge integration & recreation, reinforcement of knowledge network and acquisition of core knowledge. Numerous innovation and cost reduc-tion cases have been generated based on the Knowledge Management. Such cases have been applied in practice, leading to cost reduction on sites. An intangi-ble asset of knowledge generates financial performance through the production & reproduction, advancement and application of knowledge.In 2013, the total number of ‘knowledge’ posted on our Intranet stood at 2,566. Some examples of key knowledge applied to sites are ‘cost reduction as a result of changes in the standard for calculating the number of glass’, and ‘online cable monitor’ and ‘application of couplers for reinforcing bar joint.’ Cost of about KRW 140 million was saved through the knowledge applied, and the construction period of 650 hours was shortened. It also contributed to higher quality and site safety.

Type Knowledge Applied Amount of Cost Saved (KRW 1,000)

BuildingConstruction

Changing the standard for calculating the number of glass

35,527

BuildingConstruction

Applying protective sheets after completing the asphalt construction of hybrid water-proof system

16,000

FacilityConstruction

Saving temporary pumps and water tanks 10,560

Building Construction

Applying couplers for reinforcing bar joint 27,278

Electrical Design

Changing the engine starting mechanism foremergency generators

10,000

Electrical Design

Online cable monitor 30,000

Electrical Design

Single Core Cable Sheath Voltage Calculation 10,000

Major Knowledge Applied and the Amount of Save Saved in 2013

Hansup e-Campus

GLOBAL ZONE

Daelim Industrial OB Club

57

OuR VALuE IS

Daelim Industrial provides adequate compensations and

welfare benefits to help the employees further their values,

lead a comfortable life and improve the

quality of their life. We make a substantial investment t

improve working conditions and provide supports so

that we can raise the level of employee satisfaction and

our employees can focus on growing into a person

with the "Hansup" spirit.

Performance-based based on Fair StandardsDaelim Industrial tries to increase the employee satisfaction and improve the overall performance of the company by conducting an annual assessment of the performances and capacities of all employees along the guidelines of hu-man resources evaluation and using the result in human resource administra-tion including performance-based bonuses, promotion, job rotation, employee training and award and reprimand.

Assessment of and Compensation for Employee Competencies The com-pensation plan of Daelim Industrial is based on the experience level, job re-quirement and the work location of the employees. The average annual wage was KRW 85.00 million for male employees and KRW 58.00 million for female employees at Daelim Industrial in 2013. The difference in wages between male and female employees was due to the difference in job levels and does not result from gender discrimination; Daelim Industrial offers an identical level of compensation to any employee with similar work experience and the same job requirement. The performance-based bonuses, which is a way of promoting performance-oriented corporate culture, only reflects differences in perfor-mance and capacity and is not affected by gender discrimination. With the com-pensation plan without discrimination, Daelim Industrial continues to offer the employees with incentives and feelings of fulfillment from achieving their job requirement, thereby enhancing the competitive edge of the company.

The monthly salary for new recruits in 2013 was at the same level in all locations of Daelim Industrial including the main office, local branches and construction sites and was approximately 3.6 times higher than the monthly salary required by the Minimum Wage Council.

*Based on 209 hours of working per month

Type Gender No. of employees Average length

ofservice

Annualtotal

wage

Average wage per

headRegular Contract-based

Total

Construction Business

Men 3,512 1,163 4,675 8.81years

KRW 395.6 billion

KRW85

million

Women 190 79 269 5.85years

KRW15.6

billion

KRW58

million


Compared to the minimumwage required by law

394% 386% 364%




Retirement PensionAs of 2013-end, the amount of defined benefit retirement pension stands at KRW 116.1 billion, taking up 89% of the total allowance for severance and retire-ment benefits. As such, employees’ entitlement to severance and retirement benefits is fully guaranteed.

Return to Work and Retention Rates After Maternity LeaveEmployees are induced to enjoy stability in life and employment by easing their childcare burden and supporting continuous service of work. We also guaran-tee maternity leave for us to secure the skilled workforce. Recently, the number of application for maternity leave among male employees is gradually going up as well, and 100% of them return to work and continue working.

Employee BenefitsDaelim Industrial has a diverse system of employee benefits including insur-ance policies for the employees, support for children's tuition, support for medical check-ups and expenses and support for vacation facilities in order to help the employees focus on developing into a person with the "Hansup" spirit through achieving a comfortable life and improving the quality of life. In particu-lar, we have adopted optional benefit plans that can be implemented according to the individual preference of the employees.

Classification Details

Insurance policies Support for unexpected death, accident and sickness

Support forchildren's tuition

Support for children's tuition to ease financial burdens of the employees

Optional benefit plans Benefits plans that can be selectively added by each employee

Support forvacation facilities

Support for vacation accommodations (3 days per year)

General medicalcheck-up

Annual medical check-up provided at 60 major clinics across the country

Support formedical expenses

Reimbursement for the medical expenses (family included) up to 3 million won per year

In-house clubs Subsidizing operating fees for in-house clubs forbetter networking among employees

Operation ofa company restaurant

Main office offers lunch and dinner and sites offer breakfast, lunch and dinner

Operation ofshuttle buses

Operation of 10 bus routes for convenient commutes for employees

Intra-corporate loans Extension of loans at low interest rate through intra-corporate employees welfare fund to stabilize employees’ livelihood

Financial support for house moving

Extension of fees for employees who have to move to a far region to job transfers

Disastercompensation benefits

Payment of compensation benefits for employees hit by a natural disaster

Payment of fees for congratulations andcondolences &corresponding leave

Payment of fees for congratulations and condolences &corresponding leave for oneself and family occasions

Childbirthcongratulatory grants

Payment of KRW 3 million per childbirth for employees who gave birth to 3 children and more

Overseas trip forlong-servingemployees

Offering of overseas trips for long-serving employees to refresh themselves

Support forself-development

Extension of various support for self-development, e.g. financial support to register language academies and acquire certificates

Employees’ Family Event


44

Suppliers

52

Unit : Point

Employees

75

LocalCommunities

33

PublicSectors

27

59

OuR VALuE IS

Daelim Industrial has opened up a wide variety of

communication channels in order to

promote understandings between a corporation and

an individual and understandings between

individuals and realize creative,

transparent corporate culture.

In-house Communication ChannelsWe seek to facilitate communication between employees or of individual em-ployees through diverse in-house communication channels so that our corpo-rate culture could be more innovative and organizational efficiency could scale up. Our communication channels have been expanded in tandem with the changes in the environment in and outside the organization, while focusing on harmony and dialogue based on horizontal communication.The Hansup Plaza and Conflict Resolution Group are iconic communication channels between individuals or for individuals. Hansup Speech Podium, Han-sup Broadcasting, Cyber Shinmungo and Knowledge Management are up and running throughout the year as internal channels enabling the eradication of wrong practices of the organization and the company, and direct communica-tion with the corporate.

Hansup CouncilWe operate Hansup Council, a consultative body of employees that are se-lected in each unit so that employees can proactively adapt to a new corporate environment and induce corporate development based on their engagement and cooperation. Hansup Council visits domestic and overseas sites regularly to collect the employee opinions and is engaged with various activities related to compensation, employee welfare and benefits, job stability, social contribu-tions, health and safety, employee incentives, improvement on working condi-tions and overall progress of the company through regular and special meetings of the central operation committee in the council.

Current Status of the Channels of Internal Communication

Channel Outline

HansupPlaza

· A ground for communication· Operating Hansup TalkTalk, Hansup Clubs and the family event notices of the Daelim employees

Conflict Resolution Group

· Individual complaint consulting · Refer to the chair of the Hansup Council

Cyber Shinmungo

· Accusation / tip-off · Suggestions on ethical management

HansupSpeech Podium

· Eradicating wrong practices and soul-searching· Suggesting policies for the progress of the company

Hansup Broadcasting

· Offering Daily News covering weekly news, policies,performance sharing, understanding of foreign cultures, etc.

· Evaluating the employee satisfaction levels forcorporate management

KnowledgeManagement

· Proposing and utilizing engineering techniques and skills· Operating discussion rooms and learning teams

Hansup Broadcasting

Understanding of a Foreign Culture (Hungary) Interview of an internal expert

Ind

ividu

alsO

rganizatio

ns


Corporate Culture of trust and Communication

Corporate Culture of Trust and Communication

Cultural Diversity and Human RightsWe respect the exercise of cultural rights, diversity, belief and human rights as a global company, and hold strict standards for diverse types of social corrup-tion and human rights issues. We comply with principles demanded in the UN Universal Declaration of Human Rights, those of the ILO and OECD, and the Ruggie Framework. In other words, we tolerate no acts that hamper or restrict corporate social responsibilities, that is, the dignity of the mankind. We also do the utmost to spread and practice within the company the importance of complicity and due diligence. Such endeavors are in the same line of reinforcing training and auditing lest the rights of stakeholders be violated or damaged.The fundamental principle for all business operations at Daelim Industrial is respect for individual human rights of each employee and we have diverse programs for this purpose such as windows for complaints that guarantees anonymity and breast feeding facilities for nursing employees. In addition, we offer training programs against sexual harassment to improve the work environ-ment for female employees and cultivate sound and clean corporate culture. Our efforts also include training for security personnel on the job requirement pertaining to human rights and adequate etiquettes for the purpose of creating human-friendly corporate culture. Child labor and forced labor are strictly prohibited at the domestic and over-seas workplaces of Daelim Industrial; we do not hire employees under the legal working age specified by the local government.

Sharing Thank U messages in each team

Hands-on experience of writing Thank U letters

Thank U Campaign It is our belief that employees’ personal life must be happy for our corporate competitiveness to grow further. The <Thank U Campaign> that kicked off in October 2013 accompanies various training and sub-campaigns for our mem-bers to live a happy life through acts of gratitude and sharing in their workplace and at home.A pilot campaign took place for six months for the Corporate Management Di-vision and two sites, garnering a significant feedback, while bringing about the performance of ‘spreading a positive culture of the organization and enhancing communication within teams.’ The campaign as a result was expanded to be-come an enterprise-wide one in May 2014.

“As our mutual understanding improved, our team atmosphere got brighter.”

There were few opportunities for communication due to different job functions in different parts within the same team, but the Thank U Note helped us to share our personal daily life and understand each other better.

“We start our day cheerfully. ”

With an interesting episode on each of our Thank U Note, we could start our day cheerfully. I felt shy to express gratitude, but it’s good to share our thoughts under the campaign.

“Complaints are all gone on the site.”

There used to be undesirable acts that never got corrected through guidance of all sorts, e.g. neatly using bathrooms and no throwing away of cigarette butts. However, bathrooms turned cleaner and no cigarette butts were found on our site after the campaign began. I could feel the power of the Thank U Card sent to our workers.

Activities


44

Suppliers

30

Unit : Point

Employees

63

LocalCommunities

25

PublicSectors

9

61

Compliance with Domestic andInternational StandardsWe acquired the certification of the OHSAS 180016, the international safety & health management sys-tem, in 2009 to continuously enhance the level of safety & health, and operate an optimized one as a result. In September 2013, post inspection was con-ducted for the main office and sites at LRQA Korea, and the excellence of our safety & health manage-ment activities was fully recognized.

Strategies for No Industrial AccidentJoint Rally to Remove Industrial Accidents among 3 Construction Com-panies The three construction companies under Daelim Group, that is, Daelim Industrial, Korea Development Corporation and Samho Internationalgathered together for a rally. It was to remove industrial disasters to establish a safety culture and achieve a zero accident rate through the reform of awareness about safety among employees in 200 sites nationwide on April 4. The rally had the presence of 20,000 people including the CEOs, all employees of the three com-panies and those from their suppliers. The employees and those from suppliers made a resolution to comply with safety regulations and proactively prevent disasters.

OHSAS 18001 Certificate

OuR VALuE IS

Each and every employee at Daelim Industrial strives to

achieve a zero accident rate and create a safe and pleasant

working environment based on the management

principle of the respect for people. To this end, safety is

considered as our top priority in our construction work,

believing, ‘Safety is not a choice but a must.’

Preventive activities have been reinforced as a result :

operating a safety & health management system,

conducting safety warning activities via smart phone,

conducting continued training & review and

creating a safety-oriented atmosphere where

Daelim Industrial, suppliers and employees are united.

Safety MeasuresDaelim Industrial has announced the following safety guidelines and put theminto practice for a better future.

Daelim Industrial hasearned a deep trust from the customers and the society by successfully complet-ing a variety of domestic and overseas construction projects under the manage-ment philosophy of "creating an affluent and comfortable way of life, and seeking for infinite growth and development." In order to achieve the vision of the com-pany, "Green living space" and implement the safety & health and green manage-ment system, we now pledge for the following principles of the safety & health and green management :

·Seek for humanism based on the respect for humanity. ·Comply with the domestic and overseas regulations for safety & health and green management and integrate the stakeholders' views proactively. ·Minimize the negative safety & health and green impact, and fulfill our social responsibilities. ·Provide adequate training programs to promote the awareness of the safety & health and green management to the employees and the suppliers in order to encourage their active participation in the safety and green management. ·Develop the technologies for optimum safety & health and green management.

We disclose these principles to all stakeholders and will continue to improve our safety & health and green management system by selecting and pursuing the goals to help us practice the safety and green management and conducting a regular review of the performance result.

March 21, 2014


Safety Management

Safety Management

Promoting the Atmosphere of Safety through the Participation of Board Members Daelim Industrial practices safety management by having board members participate in a monthly event of "Check-up Day for Safe Environ-ment," conducts safety check, and promotes the atmosphere of safety at con-struction sites by leading the safety management activities.

Concentrated Management Policy for Safety Management We set a con-centrated management policy by analyzing accident cases of Daelim Industrial and other construction companies of the past five years on an annual basis. The 2013 policy selected the top agenda under the slogan of ‘Back to the Basic’: site-oriented safety activities, prior elimination of critical risks and establish-ment of an autonomous and safe atmosphere. Constant monitoring takes place on whether to apply to sites.

Activities forsite-oriented safety

I practice safety

Removal ofcritical risks beforehand

Establishment of anautonomous

safety-orientedatmosphere

Safety is the top priority! Back to the Basic

Implement corrective measures Inspect and double-check the resultConducted on a weekly basis

Training on information sharing/ Decide on job tasks

Establish the plans of improvement for risk management

Decide on the permissible range

Decide on the level of danger

Understand objective situations pertaining to each work processSelect danger factors

Risk Assessment : SORA Daelim Industrial performs safety management by predicting and eliminating dangerous factors in each construction work process through the SORA (Safety Operation Module & Risk Assessment), which was independently developed by the company in 2005. We eliminate dangerous factors in advance through a thorough analysis of work process such as work environment, construction method, work orders, work-force, equipment and interference with other work process. Preventive mea-sures are announced in the daily TBM (Tool Box Meeting) and strictly enforced under the supervision of site managers. In addition, Daelim Industrial held a promotion contest for SORA in 2013, select-ing 6 outstanding suppliers and trying to improve the quality of safety manage-ment and the capacity for voluntary safety inspection.

SORA(Safety Operation Module & Risk Assessment) Work Process

Select work process

Safety Warning Activities through Mobile Devices Our ‘safety warning activ-ities during work’ lead to immediate actions to be taken, analysis of the content and type of the warning, and generation of directions for improvement. We en-courage our suppliers to make improvement accordingly by imposing penalties to those with a high violation rate based on the evaluation of such activities. Since 2012, real-time safety warning has been made available via the mobile safety & health management system. Safety warning via smart phone can be ubiquitously carried out regardless of time and space, leading to the discovery and removal of risks. This contributes to accident prevention, especially by min-imizing the hours of exposure to risks for workers.

Safety Point System for Suppliers In order to promote suppliers' voluntary and continuous participation in safety management activities, Daelim Industrial has implemented a safety point system since 2011, in which merit points are given for advance activities against dangerous factors and demerit points are given in case of industrial accidents or inadequate safety activities. In 2013, 2 Champions, 5 Safety Masters and 10 Safety Leaders were recognized and awarded with compensation.

Training Tailored for Job Requirement Daelim Industrial offers safety training programs tailored to fit individual job requirement and work level from site man-agers to general office managers and foremen. In wintertime, there are 3,284 safety managers/supervisors and 1,192 fore-men/superintendent from suppli-ers participating in the safety training program with cyber safety training pro-vided to 527 employees and hands-on training on construction safety offered to 714 workers. Through the training programs tailored for job requirement and work level, we try to raise awareness of the basic knowledge about safety man-agement and promote on-site safety management by having employees recog-nize their individual responsibilities. In particular, we continue to help safety managers improve their capacities through training on job requirement and various workshops. We also strive to derive im-provement strategies for safety management and apply them at construction sites.

Training Performance for 2013

Hands-on training for construction safety

Cyber training for safety

Training for the foremen from the suppliers

Training for site managers in wintertime

297

247

1,192

1,253

417

280

2,031

SuppliersDaelim Industrial


58

Suppliers

48

Unit : Point

Employees

41

LocalCommunities

42

PublicSectors

73

Operation of the Industrial Safety & Health CommitteeWe regularly operate the Labor-Management Council attended by the labor and management in an equal number or the Industrial Safety & Health Committee to enhance health and safety conditions for workers on sites. On each site, various agenda to secure safety and health are discussed and im-proved to contribute to the prevention of near-misses. For instance, we prevented industrial near-misses, trained on ways for escape upon the occurrence of near-misses, improved the working environment and set up resting facilities. We will continue on with our safety and health activities participated by the both entities.

63

Charter for the Record of No Industrial Accident We achieved the record of 5,000 hours of no industrial accident as of January 28, 2014 for the RMP-2 site in the Philippines. The record went up to reach 6,000 hours on April 2, 2014, hinting how our safety management capabilities have been fully recognized.

Awards & Prizes

Prize of Excellence in the 1st‘Construction Safety Award’(Section 3-2 of Honam Express Railway)

Prize of Excellence in the 2013 Safety &Health Seminar on Cases of Excellence(Section 3 of Sinbundang Line Extension Project)

Gold Award for the HSE Performance in 2012/13(Kuwait LPG Train 4 Project)

Gold & Silver BannerAward in the Client’s HSE Audit in 2013(Saudi YERP- 3,4 Project)

Grand Prize in the 21st Safety Management Award(H2 Hotel of Incheon International Airport)

Certificate for the Record of 5,000 Hours of No Industrial Accident

Systematic Inspection Daelim Industrial makes a constant improvement on safety management through the voluntary site inspection and the regular in-spection of the main office. We also try to improve the quality of on-site safety management and lay a groundwork for voluntary safety activities by conduct-ing inspections by external construction safety experts. In addition, in order to prevent serious accidents caused by construction equipments, inspections by internal and external experts are made before and after equipment is brought in and we make every effort to prevent accidents resulting from equipment malfunction.

Status of Industrial Accident Rate for the Past 5 Years

Construction industry averageDaelim Industrial

*Average in the construction industry: Average of top 1,000 construction companies in terms of construction capabilities

0.12

0.11

0.05

0.05

0.09

2009

2010

2011

2012

2013 (Expectation)

0.50

0.41

0.46

0.43

0.43

2009

2010

2011

2012

2013 (Expectation)

Voices of On-site Employees Daelim Industrial listens to the 'voices of the employees working on-sites' to encourage employees' participation in safety activities and promote the atmosphere of voluntary safety inspection by elimi-nating risk factors detected and reported by the on-site workers. In 2013, a total of 91,955 complaints were received and recorded in the safety management system together with respective corrective measures, which makes it possible for the whole company to share the content and use it as an advance inspection material for a similar work process.

Industrial Accident Rate Our industrial accident rate is in the range of 0.1% or less, which is significantly lower than the industrial average, exerting such a sta-ble trend. In particular, the rate was 0.05% consecutively from 2011 to 2012 (ac-cording to the Ministry of Employment and Labor) – the highest record among the top 50 companies in terms of the valuation of construction capabilities. The rate is expected to reach 0.09% in 2013 – a stronger performance against the industrial average.

Systematic Safety Inspection

Voluntary site inspection Regular inspectionof the main office

Outsourced inspection forthe prevention ofconstruction accidents

Equipment inspection

ConstantImprovements


Safety Management

Safety Management

Safety has been continuously assessed as a core issue in the construction business.To practice safety on construction sites, what must a company prioritize on?

Safety on construction sites must be an independent task so that relevant staff on safety can voice out their thoughts. In the construction environment in Korea where shortening of a construction period outweighed safety, it is critical to guarantee independency of safety managers on sites. However, with the number of ‘contractual’ safety managers on the rise following the 1997 financial crisis, they have been walking on eggs shells around the head of their construction or their senior supervisors, as we all know.Despite the excellence of a safety management system, a company must listen to any safety-related ad-vice: otherwise, the system will be a dead one in reality.

The importance of safety training has recently boosted further. What would be some of the ways forconstruction sites to benefit from safety training sessions and efficiently carry them out?

Training is an essential step that is most critical to set the stage for fundamentals for the society. In discuss-ing safety, safety training is the first step to establish a safety culture, whose importance has been recog-nized by all. However, companies tend to have a formalistic approach to safety training: planning on safety training without securing budget for it, and cutting budget for safety training, first and foremost, as a means for budget tightening amid the recent economic trouble. As such, safety training is put on the back burner despite its seemingly essential element. Therefore, sufficient investment is needed to develop safety training courses for stronger efficiency and practicality.

How do you see the level of safety management activities of Daelim Industrial,including its safety training? What must be top considerations for its future safety activities?

In retrospect, Daelim Industrial has brought due decision-making and actions to make its workplaces safe and pleasant. Among them, the ‘SORA (Safety Operation Module & Risk Assessment)’ is a classic example. It is a risk assessment technique, which was implemented much earlier than the one institutionalized by the Ministry of Employment and Labor, and has established itself in full swing. This trend will be carried on without any doubt. However, one disclaimer is that the company could further prosper in safety as one of a few examples in Ko-rea that fulfills the construction period based on safety lest safety be neglected due to a shorter construction period which sprang from Koreans’ tendency to hurry in what we do.

Director of Training ofSafety Training Division,

Korea Industrial Safety Association

Choi Jong-deok

I hope that Daelim Industrial could

act out ‘Safety First and Completion of

Construction Period’, while scaling up

investment in developing

safety training courses lest

safety actions get neglected for

a shorter construction period

Expert InterviewsSafety Management

Happy Call

Repair service

Record the expected repair dateand notify the customers

Understand the problem anddouble-checkthe A/S registration status

OuR VALuE IS

With the construction philosophy of

'creating happy spaces,' Daelim Industrial continues to

conduct research with various experts not to

provide customers with an apartment unit as a

mere physical space but with the pride of

living in e-PyunhanSesang by offering

'culture and art program,' and 'convenience services.'

Our construction philosophy is conveyed to

the customers through the communication tools of

"House means rest" and "Built with heart.”

Voluntary Activities for the Customer Health and Safety

The Most Trusted Brand Awards Since 2010, Daelim Industrial has consecutively won the grand prize awards in the area of apartment construction for 4 years in the 'Most trusted Brand Awards,' which recognizes the best brand in each business area that has succeeded in building customer trust by moving customers' heart through marketing methods based on customers' feelings.

Customer Contact Center and VOC (Voice of Customers) System Daelim In-dustrial opened the first integrated customer contact center that has combined other customer-related operations and database in the construction industry in September, 2003. We also established the VOC (Voice of customers) system on the company's website in order to ensure the prompt and systematic response to the customers' inquiries and complaints. In May, 2009, we have implemented a call matching system for the first time in construction industry and were able to reduce waiting time on the part of customers, thereby providing customers with more convenient service envi-ronment.

Reservation System for Defect Repairs at Apartment houses Complexes Dae-lim Industrial has established BASS (Before & After Service System) and a reservation system for defect repairs based on mobile devices (smart phone) and provides customers with prompt A/S once defect claims are made through the Internet or phone calls.

CS Master System We conduct an advance inspection of each apartment unit from the perspective of customers starting from 70 days before move-in by inspecting any potential inconveniences and repair needs and conducting test drives for electrical and other devices

VOC System Process Flowchart

A/S Reservation System Process (Bass)

Classifycustomer complaints and assign to the proper team

Search for Corrective measures

Answercompleted

Evaluation of customers satisfactionlevel,recommend-ation index

Feedbackmarketing,products, sales techniq-ues, housing subscription, etc.

PreliminaryA/S registration

Manage the satisfaction level/Manage the commitment compliance rate

Manage suppliers/Manage materials

Manage the rate of double-checking theA/S registration status

The MostTrusted Brand Awards

Identify the registration status / Timeline management

Manage the process rate/Manage the promptness




Quality Assurance Activities to Enhance Customer ValuesSpecial Experience for Residents in e-PyunhanSesang : 'Quality Assur-ance Event' There is a special quality assurance event in which a team of an advance quality inspection from the CS department operated by the Building & Housing Project Management Team inspects apartment units before the family visit day. They inspect each apartment unit from the perspectives of the cus-tomers and make defect claims, hence contributing to minimizing the customer complaints in the family visit day event and raising the level of quality perfection.

Apartment Unit Inspection by Customers : Family Visit Day One month be-fore the move-in date, we hold an event of the family visit day in which custom-ers are allowed to visit the actual apartment unit they will be moving into and inspect the unit and make defect claims. By taking prompt corrective measures against defect claims made by the customers, Daelim Industrial strives to im-prove customer satisfaction.

Cultural Activities for Customer Satisfaction

Orange Art School The Orange Art School invites children living in the e-PyunhanSesang in the cap-ital region to the Daelim Fine Arts Museum for special culture and art programs. Through cultural events at the museum, we provide the cultural ben-efits fit for our customers in the e-PyunhanSesang. We will continue to promote these events for cus-tomer values and specialize in providing lifestyles incorporating culture and art.

Assessment of Customer Satisfaction Residents of e-PyunhanSesang gave us their satisfactory feedback on the Orange Service. The average score from respondents overall was 95 points, with 99 points for cleaning services and 92 points for landscaping in their unit. Such high scores are results of our mul-tifacted efforts: documenting and utilizing a manual for higher service quality; conductign prior training to prevent safety accidents and placing & utilizing a safety management guideline; and enhancing the service quality by securing seasoned workforce. We will continue to strive for higher customer satisfaction by securing service portfolios, puttign the top priotity on service quality.

Family Visit Day Orange Checklist

Indoor Cleaning Service Old Soil Replacement forFlower Pots

Cleaning Service for Windows

Orange Art School

Clean Services(n = 12,592)

Landscaping in Units (n = 1,574)

Very satisfied 11,720 (93%) 1,036 (66%)

Satisfied 826 (7%) 470 (30%)

Neutral 44 (0%) 64 (4%)

Unsatisfied 2 (0%) 3 (0%)

Very unsatisfied 0 (0%) 1 (0%)

Satisfaction level(points) 92.298.5

A List for an Advance Inspection by Customers : Orange Checklist Daelim Industrial provides 'Orange Checklist' prepared by the construction and design experts on the family visit day as a standard checklist for the preliminary in-spection of an apartment unit. Orange Checklist is a unique customer service provided by Daelim Industrial, which provides customers with over 90 items to inspect before they move in. Customers make comments on the Orange Checklist about their complaints and Daelim Industrial provides comprehensive corrective measures not to cause any inconveniences incurred by defect re-pairs after customers have moved into their new residences.

Orange Service : the First Customer Service Brand Daelim Industrial intro-duced "Orange Service" in 2003, which is the first service brand in the con-struction industry and aims at enhancing customer values through differenti-ated customer service. In order to provide customers with comfortable living spaces, we develop new service programs annually such as the indoor cleaning service, the cleaning service for windows and the replacement of old soil in a flower pot. As for the flower pot replacement, training and practice sessions are offered for customers to have hands-on experiences, and such pots are offered as promised to each unit.


57

Suppliers

48

Unit : Point

Employees

57

LocalCommunities

83

PublicSectors

55

67

OuR VALuE IS

Based on the philosophy that the growth of the suppliers

equals the growth of Daelim Industrial,

we operate a team dedicated to shared growth and offer

a shared growth program in order to strengthen

the capacities of suppliers from a long-term perspective.

We also signed the "Agreement for Fair Trade and Shared

Growth between Large and Small Companies"

which was enforced by the Fair Trade Commission and

make an effort to establish fairness in sub-contracting and

pursue shared growth with suppliers.

Financial SupportCash Payment on Subcontracting Cost Daelim Industrial makes cash pay-ments for all expenses incurred at the construction sites with the exception of some sites, which are paid with B2B plus with the maturity days of 60 (Secured loan of electronic type on account receivable without resource to the suppliers, cash-type payment).

Reduction or Exemption of Contract Performance Deposit Daelim Indus-trial reduces the amount of contract performance deposit by 50% for the sub-contractors registered. We select outstanding suppliers annually based on the domestic regulations for sub-contracting and offer benefits such as exemption from contract performance bond, preferred performance-based compensation and primary right for bidding (April 1, 2013 ~ March 31, 2014).

Support for Operating Expenses Daelim Industrial provided 15 suppliers with a financial support of a total of KRW 10 billion to help the suppliers with emer-gency operating expenses and the purchase of materials, machinery and equip-ment. In addition, we have created a win-win cooperation fund of KRW 33.2 billion and offered the suppliers with a benefit of the 2% interest rate, resulting in a loan amount of KRW 20 billion.

Support for Technological Development Daelim Industrial provides suppliers with support for technology development, and supports patent application for new technologies for joint development with suppliers. Moreover, sessions of the Win-Win Cooperation Academy took place to enhance technological prowess of suppliers. Best practices on cost innovation were also selected and shared in seminars to share best practices on cost innovation, thus boosting technological competitiveness.

Joint PatentApplication

Joint Patent Registrations

PatentTransfer

Designationof New

Transportation Technologies

Cases of SupportExtended

2 10 8 1


Win-win Cooperation

Win-win Cooperation

Support for Training In order to strengthen the employee capacities at the sup-pliers, Daelim Industrial provides training programs for management innova-tion, cost reduction, job performance training, quality, safety and environment.

OJT Training A total of 202 employees completed the training conducted by CAK (Creating Advanced Korea), a certified training institution to reinforce job performance competencies of employees from suppliers, and 247 completed the cyber online training on safety (consigned to Samsung SDS) via Cyber Train-ing Institute of Daelim Industrial.

Status of Safety Training We offer training with Cyber Training Institute to pre-vent near-misses on sites and attain a zero accident rate. As for hands-on train-ing on construction safety, 297 employees took the courses from 127 suppliers. 1,253 from 308 suppliers completed the supervisor training in wintertime and 1,192 foremen and superintendent from suppliers took the relevant courses.

QA Enhancement Training for Power Plant Contractors Amid a higher aware-ness about the importance of the quality system of power plant contractors, we paved the way for quality improvement by reviewing the power plant con-tractors’ quality system beforehand, and implementing the quality operations. Moreover, training took place on writing a quality management manual and de-sign plans, other companies’ practices and quality prevention. It is proven that the suppliers that took continuous training exerted a higher level of design.

Support for Business OperationsFinancial Consulting and Management Diagnosis Program for Suppliers Financial Consulting and Management Diagnosis Program for Suppliers. - Title : Financial consulting for major suppliers (13 companies including Pyeongchang Construction) - Organized by : Managers in charge in Daelim Industrial and e-Credible Co., Ltd.

Idea Contest We hold an idea contest to cut cost so that solutions can be found for overcoming the construction downturn and achieving win-win cooperation growth. Any ideas on cost reduction including excellent technologies, changes in materials and system improvement are accepted without limits for eligibility of applicants. Once ideas submitted by an SME are adopted, preferential treat-ment is offered in evaluating suppliers of excellence, and if unregistered, an opportunity to take part in a bidding is offered.


41

Suppliers

85

Unit : Point

Employees

52

LocalCommunities

33

PublicSectors

73

69

Sustainability Risk Management of the SuppliersSelection of Suppliers Daelim Industrial operates a fair and transparent pro-cess for the registration of suppliers. The first round of selection is made based on diverse factors specified with regard to the international standards such as quality, environment, safety and credit. Among the suppliers selected in the first round, a final selection is made through a general qualification process in-cluding credit verification and individual interviews.

Management of Suppliers Daelim Industrial guarantees a fair bidding oppor-tunity to all the registered suppliers that meet the initial qualifications for the construction process, relevant license and the scale of the project and bidding qualification. We offer an electronic bidding system to more than 5 suppliers in order to ensure the fairness and transparency in bidding. In case of the lowest bidding which falls below the standard cost, a committee on the evaluation of the lowest bidding is organized and deliberates on the possibility of selecting a new supplier to prevent general problems in the construction process and en-sure secure and responsible construction work. We also impose bidding limits on the suppliers that cannot meet the standards for sustainable companies in the areas of safety, quality, environment and bidding.

Evaluation of the Suppliers In order to control and enhance the sustainability management capacities of the suppliers, Daelim Industrial operates an assess-ment system which evaluates construction sites (2 times/year) and the main office (once a year) in the areas of construction works, quality, safety, environ-ment and finance. In order to obtain the independence and fairness of each person engaged with the assessment, an on-line evaluation system is imple-mented; the evaluation result is used to select outstanding suppliers for an an-nual reward, bidding selection and the evocation of registration for suppliers.

Selection of Companies of Highest Excellence inLE-SME Win-Win Cooperation Daelim Industrial was selected as the Company of the Year with points of over 95 in the ‘2013 Assessment on Win-Win Cooperation among Construction Companies’ conducted among 2,903 construction companies. Among large enterprises, five companies were selected including Daelim Industrial, and for the winners, preferential treatment is offered upon the prequalification (PQ), performance capability evaluation of a local government, and assessment of construction capabilities for one year from June 1, 2013.

Suppliers Meeting of the Building & Housing Business Division

Award Ceremony for the 2014 Company of the Year

Protecting the Human Rights of the SuppliersDaelim Industrial makes the following stipulations in making a sub-contract and tries to protect the human rights of the employees at the sub-contracting com-panies and suppliers.

Safety of the employees from the suppliers(No. 2) Safety guidelines to pro-tect the mental and physical health of the employees

Joining employment insurance and mutual benefit fund for retirement of construction workers(No. 4, 5) Joining employment insurance and mutual benefit fund to provide the employees with job stability and stable way of life

Prioritized payment of worker salary and subrogation(No. 7) Payment of worker salary prioritizes all other payments for expenses. Subrogation by Daelim Industrial in case of delay in salary payment due to accidents by the suppliers, etc

Acquisition Rate of Environmental/ Safety Certifications Among Suppliers in 2013

Acquisition ofenvironmental certifications

(ISO 14001, production ofeco-friendly products, etc.)

Acquisition ofsafety certifications

(OHSAS, KOSHA,etc.)

Rate of Suppliers (%)

95.6 10.8


Win-win Cooperation

Win-win Cooperation

CEO ofSungjunsa Co., Ltd.

Kim Cheol

I hope Daelim Industrial could ensure

a sound construction culture by

strongly acting against collusive

deliberation and low bid-price

deliberation so that subcontracting

orders could be

placed at an appropriate price

Tell me about your company.

Sungjunsa Co., Ltd. founded in 1968 has been technologically based in the electrical & instrumental engi-neering field for plants, covering refineries, steel mills, LNG undertaking bases and automobile in tandem with the industrial development of Korea. We have taken part in facility construction of social infrastructure projects including nuclear power plants and thermal power plants, accumulating experiences and expertise in such fields. We now have a global presence with globally-competitive technological standards. All of us at Sungjunsa Co., Ltd. will do the utmost for the company to be fully recognized by customers at all times.

Issues on win-win cooperation growth are a part of critical corporate social responsibilities.What is the biggest topic of interest recently onwin-win cooperation growth in the perspective of suppliers?

Win-win cooperation growth refers to the mutual growth of large enterprise and SMEs. Its outcome is de-termined by how willingly large enterprises support SMEs, believing it is a part of its CSR. Some essential activities for the development and survival of SMEs, that is, win-win cooperation growth are: protecting the business areas for SMEs by selecting business categories and items for SMEs, and engaging in the Excess Profit Sharing Scheme whereby the excess profits made versus targets are to be shared with SMEs.

In a supplier’s point of view, what needs to be paid attention byDaelim Industrial or clients in pursuing win-win cooperation growth?

For government-contracted construction projects, the government must undergo improvement for insti-tutions by abolishing the Lowest Bid Price Scheme for bidding so that orders can be acquired at an appro-priate price level. In this case, when a primary contractor takes part in a bidding at an appropriate price for government and private-contracted construction works, there won’t be unfair trading boiling down to a sub-contractor. Low bidding price would be led to illegal sub-contracting, causing near-misses. This might also significantly impact the construction quality for failing to complete the construction period due to reduction in labor cost and injection of unskillful workers to save cost. Lower construction quality will lead to failures, bringing about enormous repercussions. Shoddy construction of a sub-contractor will cause the primary contractor to lose trust from a client, hampering its order acquisition strategies. The prime contractor, as a result, must prohibit collusive deliberation and low bid-price deliberation so that subcontracting orders could be placed at an appropriate price, thus forming a sound construction culture.

Expert InterviewsWin-Win Cooperation Management

OuR VALuE IS

As a responsible corporate citizen,

Daelim Industrial has a firm philosophy about social contributions.

We pursue a variety of social contribution activities based

on the Hansup spirit of

'creating a pleasant and abundant life'

in order to achieve sustainable growth together with

the local communities.

Social ContributionsIn order to help our neighbors in need to lead a happier and more comfortable life, Daelim Industrial has been promoting five sharing campaigns: sharing of happiness, sharing of friendship, sharing of culture, clean sharing and sharing of hope.Our social contributions fully utilize competencies of the Group’s affiliates as well as features of the construction industry. The programs are based on offer-ing practical help by the main office and sites nationwide to people in need by engaging closely with community. In 2013, the average number of hours for social contribution per individual stood at 11 hours, and voluntary participation of employees is on the rise. Of particular note, social contribution activities aligning cultural contribution programs with the Group were reinforced as we take the lead in reaching out to the culturally neglected and enabling a broader access to arts.

Continuous and voluntary participation of the employees

Habitat

Repair work for houses/Improvement of the living conditions

Sharing ofHappiness

PC donations

Scholarship organization

Sharing of Hope

Tend to1 mountain,1 streamand 1 street

CleanSharing

Joint projects with local communities

Happy Together

Mecenat activities

Sharing of Culture

Volunteer works by the employees at the main office

Volunteer works by the construction site workers

Volunteer work from clubs

Blooddonation

Charity bazzar, etc

Sharing of Friendship

Vision for social contributionPartnership with local communities for shared growth

Create an affluent and comfortable way of life

Hansup Spirit

Major activities

Social Contribution Strategies of Daelim Industrial


Social Contribution :5 Sharing Compaigns

Social Contribution : 5 Sharing Campaigns

Sharing of Happiness (Improvement of living conditions toprovide tenants with a happy home)We have played out ‘sharing of happiness’ to improve living conditions to pro-vide tenants, leveraging our expertise in construction since 2005. In 2013, along with the Seoul Branch of Habitat for Humanity, we have repaired and conducted maintenance services in clusters of salvage/old houses and for facilities of wel-fare centers in Seoul and the metropolitan area. We put the new wallpaper, in-stalled insulations, replaced the existing lights with LEDs, taking full advantage of the capabilities of our employees, which, can enhance the overall energy efficiency.

Clean Sharing (Environmental activities to protect mountains andstreams from pollution)Daelim Industrial promotes environmental awareness and conducts environ-mental purification activities across the country to leave the future generation with the clean earth. We have organized "clarity sharing team," which promotes the campaign of "tending to 1 mountain, 1 stream and 1 street" in a close con-nection with the local governments in 10 different geographic zones including Seoul.Since 2005, we have held various environmental events such as tending to Namsan with the employees from Building & Housing Business/Civil Business/Plant Business/Corporate Management division and their family members.

Sharing of Friendship (Volunteering at local welfare facilities)Daelim Industrial promotes a campaign for love sharing and visits orphanages and nursing homes across the country to offer facility cleaning, assistance with the meal and company with lonely senior citizens with a variety of clubs inside the Daelim Industrial offering talent donations too. At construction sites, work-ers from Hansup Bongsadae also volunteer to help local people in need.

Sharing ofHappiness

Repair of Welfare Center Facilities

Sharing ofFriendship

Volunteering ofEmployees’ Families

Sharing of Culture

Community-linked Program

Clean Sharing

Namsan Clean-up

Sharing of Hope

Giving Out Free PCs

Sharing of Hope (Support for the handicapped andresearch through scholarship organizations)Daelim Industrial has been engaged with providing the handicapped and so-cially-disadvantaged people with material goods and monetary donations and proving support for college students and professors who are responsible for the bright future of our society through the campaign of 'hope sharing.' Since 2004, we have continued to donate the personal computers not used at work places in a connection with rehabilitation facilities to provide help to the handicapped and the workers in a rehabilitation process. Some of the used PCs are donated overseas to help developing countries with the training for information technol-ogy. In addition, in celebration of the 50th anniversary in 1989, Daelim Suam Foundation was founded as a non-profit organization to provide scholarships and support for academic research.

Sharing of Culture (Cultural activities for culturally-deprived people)Daelim Industrial provides culturally-deprived children and adolescents with opportunities to experience diverse cultural activities such as the participation in education programs in culture and arts and hands-on training program for cul-tural experiences. Since 1994, when Daelim Industrial became a member in the Korea Mecenat Association, we have provided cultural support for the children in the orphanages located in Seoul and Kyunggi area for 19 years. In addition, in a joint en-deavor with Daelim Fine Art Museum, we have offered social contribu-tion programs including free admission to art exhibitions and creation activities for more than 10 times a year with approximately 400 children involved.There are a diversity of community-linked programs so that youths, employees and college students in community to take a greater interest in arts.


57

Suppliers

56

Unit : Point

Employees

24

LocalCommunities

83

PublicSectors

73

73

Social Service Worker atNamsanwon

Ryu Deok-rye

We would like to thank you for

your generosity and love in taking part

in social contributions with consistent

interest and communication

for the past 6 to 7 years

Please tell us about your organization.

Namsanwon is a social welfare organization accommodating 60 people, including infants, babies up to youths. We provide them with a stable living space to give equal opportunities of education to orphaned children, guide them so that they could properly grow up as members of the society, and train them for character buildup.

There are concerns about possible shrinkage in corporate social contributions amidthe recent economic downturn. How do you find it?

There are numerous inquiries on short-term social contributions. Companies tend to initiate volunteering due to their higher recognition and need for it. One-time visits on weekends have recently scaled up. And yet, I sincerely wish that such activities could be carried on continuously with steady interest and commu-nication just like Daelim Industrial has done for the past 6~7 years. I personally think that it depends on how a company recognizes social contribution in its corporate management policies, instead of the economic downturn.

What would be the top priorities for companies’ social contribution activities andwhat needs to be improved in the perspective of a social welfare center?

Companies must set their goals/objectives and develop programs in communicating with target organiza-tions to expand the scale of social contributions. Program activities must be implemented befitting their vision, and features of target organizations must be understood by the companies beforehand, which would make social contributions more memorable and meaningful.

Is there any message you would like to give to employees of Daelim Industrial?

I can see your care and love from the time you enter Namsanwon till the time you leave. I appreciate your ef-forts as a social service worker at Namsanwon in charge of corporate social contributions. I also do my best to take care of our children with unyielding love, and what you do for us definitely empowers us to a higher level, even more so than what vitamin supplements do to us. Employees of Daelim Industrial! Thank you very much.

Expert InterviewsWin-Win Management

I wish that experiences and capabilities of seasoned work-force that newly join Daelim Industrial could be leveraged as Daelim’s growth engine.

It would be essential for all employees including contractual ones to devotion and loyalty for the company. All must try hard to minimize discrepancies between the main office and sites, because it is the HR that determines corporate survival and growth.

It is time to invite sea change to the existing problematic prac-tices to attain sustainable management. Customer satisfac-tion driven by profitmaking and quality assurance is the top management goal, but genuine sustainable management is achievable when accompanied with shared growth with sup-pliers and social contributions.

A company is driven by its people, so a continued training en-vironment must be available for employees. The biggest wel-fare can be found in training, so once individual performance is aligned with organizational one in a new training system and measure, long-term sustainable growth can be attained seamlessly.

A practical exchange system is needed for continued mutual understanding of and development with suppliers. I hope that the company can post uniform channels to be shared among suppliers and the working-level at Daelim, while posting data on Daelim’s operations, PR and guidelines, and employees could utilize them fully.

The core of corporate sustainable management lies not in establishing a system to maintain sustainability but in hav-ing workforce that secures and develops such a system and a manual. Continuous development and retention of key tal-ents are the sole prerequisites for sustainable management.

01 02

I wish the top priority could be on safety in construction on sites lest the tragedies like the sunken Sewol ferry’s hit us hard. Corporate development without safety in mind is an empty rhetoric.

03 04

05 06

07 08Sustainable contributions could also take the form of club ac-tivities so that they could develop further in various forms at Daelim Industrial.

Daelim Industrial Considers a Sustainable Society







PEOPLESocialProgress

Economic Growth

EnvironmentalStewardship

CORE VALUE

Stakeholders’ Opinions onGenerating Social Values

APPEnDIXGHG Verification Statement 77

Third Party Verification Statement 78

GRI INDEX 80

Awards/ Memberships 82

Financial/ Environmental/ Social Data 83

Korean Foundation for Quality (hereinafter ‘KFQ’) has been engaged by (DAELIM Industrial Co., Ltd.(Only CONSTRUCTION part) (here-inafter the ‘Company’) to independently verify its 2013 Report on Quantity of emitted Greenhouse Gas from places of business nation-wide (hereinafter ‘Inventory Report’). It is the responsibility of the Company’s management to compile the Inventory Report and the emission quantity report by “Greenhouse Gas and Energy Target Management Scheme” run by the government of Korea and KFQ’s responsibility is provision of opinions on the Inventory Report after verification according to ISO 14064-3 and national scheme.

KFQ’s verification was focused on all of the greenhouse gas emission sources (direct emission and indirect emission) and energy con-sumption controlled by the Company’s places of business nationwide.

Based on verification process according to the ISO 14064-3, KFQ obtained reasonable basis to express the following conclusion on the greenhouse gas emission and energy consumption data in the Inventory Report.

1) The Company’s 2013 Report on Quantity of emitted Greenhouse Gas and energy consumption was documented in accordance with “Greenhouse Gas and Energy Target Management Scheme” run by the government.

2) According to materiality assessment on quantity of greenhouse gas emitted from every Company’s places of business nationwide in 2013, material discrepancy is less than the criteria of 5.0% for an organization that emits under 500,000 tCO2_eq in accordance with “Greenhouse Gas and Energy Target Management Scheme”

3) According to the information and data regarding greenhouse gas emission and energy consumption in the Inventory Report, no unreliable significant error, omission, or impropriety were found. Therefore, KFQ conclude and confirm its verification with total material discrepancy of less than 5.0%.

April 15th, 2014

CEO Daehyun NamKorean Foundation for Quality (KFQ)

* [SCOPE 3 was verified by Company’s GHG Energy Control Instruction (Rev 02)]

Unit : ton CO2 - eq

Introduction

VerificationScope

Conclusion/Opinion

Report Year SCOPE 1 SCOPE 2 SUB TOTAL SCOPE 3 TOTAL

2013.1.1.~2013.12.31 20,718 33,149 53,867 139,404 193,271

77

gHg Verification Statement

The Korea Productivity Center (“The Assurer”) was requested by Daelim to provide independent assurance on the information presented in Daelim’s 2013 Sustainability Report (“Report”) and hereby provides following assurance statement:

Daelim entitles a complete responsibility for the information, opinions, and content of the Report. The Assurer’s responsibility is to provide independent assurance statements on the Report. As an independent assurance provider, the Assurer neither participated in the publication of the Report nor engaged in any conflict or interest that may undermine its state of independence.

The independent assurance was performed in accordance with Type 1 and moderate assurance based on AA1000AS(2008) assurance standards. The assurance statement checked suitability of principles of inclusivity, materiality, and responsiveness by following AA1000APS(2008) assurance principles. Moreover, it checked whether the information on the Report is compliant with GRI G3.1 Guideline standards.

The Assurer conducted an assurance engagement on Daelim’s2013 performances by following the above verification standards. The assurance statement does not include the verification on the reliability of financial performances, environmental data such as GHG (verified separate assurance), and other data provided on Daelim’s website. Moreover, the site inspection was limited to the headquarter in Seoul, Korea and if further assurance process is performed, the result may change accordingly.

The following method was used to provide the assurance on the Report:1. Verified whether requirements of GRI Application level A were fulfilled by reviewing the reporting rate and methods of each indicator based on GRI G3.1 Guideline. 2. Verified the compliancy of principles dictating the content and quality of the Report based on GRI G3.1 Guideline.3. Verified appropriateness of selection of key issues and contents in the Report by conducting media research and benchmarking analysis.4. Verified the appropriateness of contents and errors in expression through comparison analysis with other publication.5. Verified the evidence of data and information and checked internal process and system through the site inspection on Daelim’s headquarter in Seoul, Korea.

The Assurer verified that the Report accurately and fairly illustrates Daelim’s sustainability management activities and performances. In addition, through the assurance, the Assurer verified that the Report fulfilled the requirements of GRI Application level A as Daelim declared. The results of assurance in accordance with the principles of inclusivity, materiality, and responsibility presented in AA1000(2008) are as follows:

1. Inclusivity : Participation of Stakeholders The principle of inclusivity refers to a company's responsibility to make its stakeholders participate in the process of developing and achieving responsible and strategic measures on sustainability. In this regard, Daelim identifies issues that interest core stakeholders. It illustrates the materiality of the issues by scaling each issue according to its importance and thus, Daelim strengthened the connectivity between issues and the Report. Moreover, the Assurer found that Daelim reflects these issues in its management and discloses activities and performances through sustainability reports and company website. In particular, the Assurer commends Daelim’s effort to entail stakeholders’ opinions within each section of the Report.

2. Materiality :Significant Issue Identification and Reporting The principle of materiality refers to a company's responsibility to decide issues which are relevant and material to the organization and its major stakeholders. Subject to this principle, Daelim established an issue-pool and divided into 24 issues using global standards such as GRI and DJSI, media and benchmarking analysis, and internal strategic imperatives. Moreover, through surveys and interviews, the material test verified issues that are important to stakeholders. Daelim used findings from the material test to identify and reflect key issues into the Report. Especially, Daelim’s effort to enhance the understanding of issues by quantifying and illustrating materiality of these issues for each stakeholder is highly commendable.

To Stakeholders of Daelim

Responsibility and Independence

Verification Standards

Limitations

Methodology

Findings and Conclusion


Independent Assurance Statement

Independent Assurance Statement

The Assurer highly values Daelim’s diverse efforts and performance in order to improve its sustainability, and we suggest the following to improve its future sustainability reports and management:

1. We recommend Daelim to build a strategic structure to conduct more systematic sustainability activities. If Daelim manages activities and performance by using a strategic structure to plan and set goals, it will carry out better sustainability management in the future.

2. We recommend Daelim to thoroughly manage each type of data by setting a data collection standard and scope and creating a data management department. We firmly believe that before improving the sustainability system, it is necessary for Daelim to manage the data continuously by establishing a public data collection and management process; data management department needs to check the data in order to disclose them according to the identical standard of the Report.

3. We recommend Daelim to review sustainability activities and performances and find various cases that illustrate the positive relationship between these activities and financial performance. A leading global company endeavors to report the positive relationship between the environmental and social performance and financial performance in order to differentiate itself from the other companies of the same industry. Daelim needs to have a systematic preparation to report in this manner because this can produce good results from different sustainability assessments around the world.

The Sustainability Management Center of Korea Productivity Center is an assurance agency officially certified by AccountAbility [organization established AA1000, the international standard for stakeholder participation and verification] and is qualified to independence assurance engagements. Our Assurance Committee is comprised of competent experts who have in-depth experience in sustainability management consulting and assurance and have completed the relevant training.

Recommendation

3. Responsiveness : Response to Issues The principle of responsiveness refers to a company's responsibility to respond to issues which may have influence on stakeholders' performances. In accordance to this principle, Daelim presents management principles, activities, and performances in response to issues on the Report and fairly reports how the company is responding to these issues. It is the best of the Assurer’s knowledge that if Daelim provides backgrounds, needs, and goals regarding each issue additionally in the future, stakeholders can grasp a better understanding of Daelim’s activities on its sustainability management.

May 2014

Jin, HongKorea Productivity Center Chairman

Dong-Soo KimDirector

Tae-Ho ParkTeam leader

Beom-Taek OhResearcher

79

●: Reported ◐ : Partially reported ○: Not reported N/A : Not Applicable

GRI Indicators Description Level of disclosure PageStrategy and Analysis

1.1 Statement from the most senior decision maker of the organization ● 21.2 Description of key impacts, risks, and opportunities ● 2, 8~10, 16~18

Organizational Profile2.1 Name of the organization ● 32.2 Primary brands, products, and/or services ● 3~52.3 Operational structure of the organization ● 32.4 Location of organization’s headquarters ● 32.5 Number of countries where the organization operates ● 4~52.6 Nature of ownership and legal form ● 212.7 Markets served ● 4~52.8 Scale of the reporting organization ● 32.9 Significant changes during the reporting period ● N/A2.10 Awards received in the reporting period ● 82

Report Parameters3.1 Reporting period ● 13.2 Date of most recent report ● 13.3 Reporting cycle ● 13.4 Contact point for questions regarding the report or its contents ● 13.5 Process for defining report content ● 9~103.6 Boundary of the report ● 13.7 State any specific limitations on the scope or boundary of the report ● 13.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/

or between organizations● 1

3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlyingestimations applied to the compilation of the indicators and other information in the report

● 1

3.10 Readjustment of information provided in previous report ● N/A3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report ● N/A3.12 Table identifying the location of the Standard Disclosures in the report ● 803.13 Policy and current practice with regard to seeking external assurance for the report ● 78~79

Corporate Governance4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks ● 21~224.2 Indicate whether the Chair of the highest governing body is also an executive officer ● 214.3 For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and / or non-executive members ● 214.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governing body ● 224.5 Linkage between compensation for members of the highest governing body, senior managers, and executives and the organization’s performance ● 224.6 Processes in place for the highest governing body to ensure conflicts of interest are avoided ● 214.7 Process for determining the composition, qualifications, and expertise of the members of the highest governing body and its committees ● 214.8 Internally developed statements of mission or values, codes of conduct, and principles ● 214.9 Procedures of the highest governing body for overseeing the organization’s identification and management of economic, environmental, and social performance ● 224.10 Processes for evaluating the highest governing body’s own performance ● 224.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization ● 264.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses ● 9, 614.13 Memberships in associations and / or national / international advocacy organizations ● 824.14 List of stakeholder groups engaged by the organization ● 84.15 Basis for identification and selection of stakeholders with whom to engage ● 8~94.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group ● 8~104.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns ● 8~10

Economic PerformanceDisclosure on Management Approach ● 14~15

EC1 Direct economic value generated and distributed ● 19~20EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change ● 36~44EC3 Coverage of the organization’s defined benefit plan obligations ● 59EC4 Significant financial assistance received from government ● 44EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation ● 58EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation ◐ 55EC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation ● 55EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in- kind, or pro bono engagement ● 4, 16~17, 72~73EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts ◐ 4, 17

Environmental PerformanceDisclosure on Management Approach ● 32~33

EN1 Materials used by weight or volume ● 50EN2 Percentage of materials used that are recycled input materials ● 50EN3 Direct energy consumption by primary energy source ● 50

EN4 Indirect energy consumption by primary source ● 50EN5 Energy saved due to conservation and efficiency improvements ● 37EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives ● 37, 42, 44EN7 Initiatives to reduce indirect energy consumption and reductions achieved ● 37, 42, 44EN8 Total water withdrawal by source ● 50EN9 Water sources significantly affected by withdrawal of water ◐ 47EN10 Percentage and total volume of water recycled and reused ◐ 47EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas ◐ 48EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas ◐ 48EN13 Habitats protected or restored ◐ 48EN14 Strategies, current actions, and future plans for managing impacts on biodiversity ◐ 48EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk ● N/A


GRI INDEX

gRI InDEX

●: Reported ◐ : Partially reported ○: Not reported N/A : Not Applicable

GRI Indicators Description Level of disclosure PageEN16 Total direct and indirect greenhouse gas emissions by weight ● 51EN17 Other relevant indirect greenhouse gas emissions by weight ● 51EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved ● 36~37EN19 Emissions of ozone-depleting substances by weight ● N/AEN20 NOx, SOx, and other significant air emissions by type and weight ◐ 47EN21 Total water discharge by quality and destination ◐ 47EN22 Total weight of waste by type and disposal method ● 51EN23 Total number and volume of significant spills ● N/AEN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and

percentage of transported waste shipped internationally● N/A

EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff ◐ 47~48EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation ● 39~42EN27 Percentage of products sold and their packaging materials that are reclaimed by category ● N/AEN28 Monetary value of significant fines and total number of non-monetary sanctions for non- compliance with environmental laws and regulations ● N/AEN29 Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce ◐ 36~37EN30 Total environmental protection expenditures and investments by type ◐ 36~37, 44

Social PerformanceDisclosure on Management Approach ● 52~53

LA1 Total workforce by employment type, employment contract, and region ● 54~55LA2 Total number and rate of new employee hires and employee turnover by age group, gender, and region ● 55LA3 Benefits provided to full-time employees that are not provided to temporary or part- time employees, by significant locations of operation ● 58~59LA4 Percentage of employees covered by collective bargaining agreements ◐ 60LA5 Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements ◐ 60LA6 Percentage of total workforce represented in formal joint management–worker health and safety committees that help monitor and

advise on occupational health and safety programs● 63

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region ◐ 64LA8 Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases ● 59LA9 Health and safety topics covered in formal agreements with trade unions ● 63LA10 Average hours of training per year per employee by employee category ● 56LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings ● 57LA12 Percentage of employees receiving regular performance and career development reviews ● 58LA13 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership,

and other indicators of diversity● 21, 54

LA14 Ratio of basic salary and remuneration of women to men by employee category ● 58LA15 Return to work and retention rates after parental leave ● 59HR1 Percentage and total number of significant investment agreements and contracts that include clauses incorporating human rights concerns,

or that have undergone human rights screening◐ 61

HR2 Percentage of significant suppliers, contractors, and other business partners that have undergone human rights screening, and actions taken ● 70HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained ● 61HR4 Total number of incidents of discrimination and corrective actions taken ● N/AHR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights ● N/AHR6 Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor ● 61HR7 Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor ● 61HR8 Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations ● 61HR9 Total number of incidents of violations involving rights of indigenous people and actions taken ● N/AHR10 Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments ◐ 61HR11 Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms ● 23, 60SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs ● 45~48SO2 Percentage and total number of business units analyzed for risks related to corruption ● 23SO3 Percentage of employees trained in organization’s anti-corruption policies and procedures ● 23SO4 Actions taken in response to incidents of corruption ● 23SO5 Public policy positions and participation in public policy development and lobbying ● N/ASO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country ● N/ASO7 Total number of legal actions for anti- competitive behavior, anti-trust, and monopoly practices and their outcomes ● 24SO8 Monetary value of significant fines and total number of non-monetary sanctions for non- compliance with laws and regulations ● 24SO9 Operations with significant potential or actual negative impacts on local communities ● 45~48SO10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities ● 45~48PR1 Life cycle stages in which health and safety impacts of products and services are

assessed for improvement, and percentage of significant products and services categories subject to such procedures● 47~48

PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health andsafety impacts of products and services during their life cycle, by type of outcomes

● N/A

PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements ● 4~5PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes ● N/APR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction ● 67, 70PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship ● 23~24PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications,

including advertising, promotion, and sponsorship by type of outcomes● N/A

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data ● N/APR9 Monetary value of significant fines for non- compliance with laws and regulations concerning the provision and

use of products and services● N/A

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Award Name Host/ Provider

Inclusion in the 2013/2014 DJSI World S&P Dow Jones Indices / SAM

Grand Prize in the 9th Korea Civil Engineering & Architecture Awards (civil infrastructure) Ministry of Land, Transport and Maritime Affairs

Grand Prize in the 4th Korea Green Construction Award Ministry of Land, Transport and Maritime Affairs

Safety Management Award Miistry of Employment and Labor/ Maekyung Media Group

Grand Prix in Apartment Construction Area of the 2013 Service Management Award Korea Economy TV

Grand Prize in the 2013 Construction Economy Advertisement Awards Construction News

Grand Prize in the Overseas Construction at the HanKyung Residential Culture Awards(RMP2 in the Philippines)

Korea Economy

Gold Prize in the 2013 Civil Structure of the Year – Cheongpung Bridge Korean Society of Civil Engineers

Grand Prize in the 2013 Consumers’ Most Reliable Brand Award Digital Chosun Ilbo, Inc.

Gold Award for the HSE Performance in 2012/13 (Kuwait LPG Train 4 Project) KNPC (Kuwait National Petroleum Company)

Gold & Silver Banner Award in the Client’s HSE Audit in 2013 (Saudi YERP 3,4 Project) Saudi Aramco

Construction Engineers Association Korea Association for CFO Korea Atomic Industrial Forum

Construction Safety Manager Committee Korea IR Service Korea Nuclear Association for International Cooperation

Construction Environmental Association Korean Society of Steel Construction Korea Electrical Contractors Association

Construction Association of Korea Korea Federation of Construction Contractors Korea Electric Engineers Association

The Korea Chamber of Commerce Korea Construction Engineers Association Korea Housing Association

Korea Electric Association Korea Construction Quality Association The Korea Railway Association

Korea Special Construction Association Korean Fair Competition Federation Korea Association of Waste to Energy Technology

Korea Special Construction Association Korea National Committee on Large Dams Korea Project Management Association

Korea International Trade Association Korea Road & Transportation Association Korea Plant Industries Association

Korean Nuclear Society Korean Society of Road Engineers Korea Plant Engineering Association

Korean Society for Fluid Machinery Korea Water Forum Korea Institute of Plant Engineering & Construction

The Federation of Korean Industries Korea Listed Companies Association Korea Environmental Industry Association

Electrical Contractors Association Korea Fire Facility Association International Contractors Association of Korea

Korea Information & Communication Contractors Association Korea Engineering Association Korea Environmental Preservation Association

Awards

Major Membership


Awards/ MembershipsFinancial Data

Awards/ Memberships

Subject 2011 2012 2013

Assets Total 95,454 101,659 99,292

Current Assets 64,176 67,524 64,904

Noncurrent Assets 31,278 34,135 34,388

Liabilities Total 51,867 53,491 49,763

Current Liabilities 41,284 42,246 38,541

Noncurrent Liabilities 10,583 11,245 11,222

Capital Total 43,587 48,168 49,529

Capital 2,185 2,185 2,185

Other Paid Capital 5,394 5,394 5,394

Earned Surplus 36,003 40,800 42,284

Other Capital Components 5 -212 -334

Subject 2011 2012 2013

Sales 71,874 90,418 84,417

Cost of Sales 63,556 81,045 77,268

Gross Profit on Sales 8,318 9,373 7,150

Sales and Administrative Expenses 4,250 4,710 4,397

Operating Profit 4,068 4,664 2,752

Net Profit Before Income Tax 5,598 6,341 2,142

Current Net Profit 4,314 4,890 1,659

Subject 2011 2012 2013

Sales 79,881 102,533 98,469

Cost of Sales 70,585 92,194 93,382

Gross Profit on Sales 9,297 10,340 5,088

Sales and Administrative Expenses 4,922 5,479 4,691

Operating Profit 4,375 4,861 397

Net Profit Before Income Tax 5,195 5,601 -136

Current Net Profit 3,798 4,008 -103

Subject 2011 2012 2013

Assets Total 107,646 110,065 107,830

Current Assets 71,588 72,921 69,330

Noncurrent Assets 36,058 37,144 38,500

Liabilities Total 61,272 60,879 59,127

Current Liabilities 46,497 47,785 44,604

Noncurrent Liabilities 14,775 13,094 14,523

Capital Total 46,374 49,185 48,703

Capital Owned 44,169 47,787 47,141

Capital 2,185 2,185 2,185

Other Paid Capital 5,127 5,069 5,059

Earned Surplus 36,235 40,047 39,614

Other Capital Components 623 486 283

Uncontrolling Interests 2,205 1,399 1,563

Condensed Balance Sheet (Individual)

Condensed Income Statement (Individual)

Unit: 100 million won Unit: 100 million won

Unit: 100 million won Unit: 100 million won

Condensed Balance Sheet (Consolidated)

Condensed Income Statement (Consolidated)

83

financial Data

*Data coverage : Daelim Industrial

*Data coverage : Daelim Industrial (exc. client volume)

*Data coverage : Daelim Industrial

* Since 2012, the amount of purchase pursuant to the Voluntary Agreement on Green Purchase has been

compiled.

*Data coverage : Daelim Industrial and its supplier

* Data coverage : Daelim Industrial and its supplier (inc. supplier equipment without facilities, Making correc-

tions for dual calculation for the amount of electricity used for equipment)

*Data coverage : Daelim Industrial and its supplier (exc. supplier facilities)

Material Usages Eco-friendly Material Usages

Environmental Data

Social Data

Material Unit 2011 2012 2013

Steel Ton 216,264 199,511 203,437

Remicon ㎥ 2,301,049 1,789,262 1,519,838

Cement Ton 172,031 179,121 158,171

Sand ㎥ 105,816 355,357 415,672

Aggregates ㎥ 259,679 301,522 570,667

Asphalt Concrete Ton 374,229 258,937 293,768

2011 2012 2013

297,850 415,120 310,785

Material Unit 2011 2012 2013

Recycling Material ㎥ 19,222 68,863 100,934

Sheet, Glue,

Water tap, Paint

Million won 42,449 43,947 33,039

Water Usages

Energy Usages GHG Emissions

Waste GeneratedUnit : ㎥

Unit : TJ Unit : tCO2-e

Unit : Ton


Subterranean water 224,292 178,158 84,380

Water supply 408,880 460,801 354,897

Classification Scope 1

(Direct Emissions)

Scope 2

(Indirect Emissions)

Scope 3

(Other Indirect Emissions)

Total

2013 312 679 1,976 2,967

2012 335 726 2,575 3,636

2011 345 646 3,035 4,026

Classification Scope 1

(Direct Emissions)

Scope 2

(Indirect Emissions)

Scope 3

(Other Indirect Emissions)

Total

2013 20,718 33,149 139,405 193,272

2012 22,205 35,270 181,624 239,099

2011 23,338 31,350 214,112 268,800

Classification Unit 2011 2012 2013

Total employees Person 4,328 4,932 4,944

General Person 3,376 3,553 3,702

Professional Person 952 1,379 1,242

Male Person 4,105 4,677 4,675

Female Person 223 255 269

New recruitment Person 264 302 177

Training hours per person Hours 112 121 124

Training cost per person Won 787,840 721,048 619,277

Ratio of wage for new employees (compared to the appropriate

minimum wage)

% 394 386 364

Turnover rate(Voluntary , General ) % 2.10 0.60 0.80

Accident rate % 0.05 0.05 0.09

Social contribution per individual Hours (Not calculated) (Not calculated) 11

Contribution Million won 20 118 38


Environmental Data/ Social Data

Environmental Data/ Social Data

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