Our Sustainable Performance
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GS E&C INTEGRATED REPORT 2012 www.gsconst.co.kr GS E&C INTEGRATED REPORTING CEO Message 02 04 This report aims to incorporate our strategies and financial and non-financial achievements and to share with stakeholders. Company Profile 06 Vision OUR BUSINESS Integrated Reporting Map Plant 12 Power & Environment 14 ELEMENTS FOR INTEGRATED REPORTING Civil Engineering 16 Architecture & Housing 18 •Business Models of GS E&C •Crises and Opportunities of the Construction Industry •Sound Corporate Governance Technology 20 •Concerns of Stakeholders •Our Promise for the Better Future GREAT CHALLENGE Securing New Growth Engines 24 INTEGRATED THINKING Strengthening Overseas Business 27 Reinforcing the Existing Core Businesses 30 Corporation Strategy Value Adding Activities •Management Principles & Vision 2020 •Creating Financial Results and • Economic Values GREAT INNOVATION Securing New Growth Engines INTEGRATED FINANCIAL • •Cost Reduction Strengthening Overseas Business STRATEGY PERFORMANCE: Green Technology 36 •Our Business •Reinforcing the Existing Core Sustainable Construction 40 Businesses Response to Climate Change 50 Safety & Health Management 54 Shared Our Values Strengthening Our Values ACTIVITIES AS NON FINANCIAL •Stakeholder Management A CORPORATE •Ethical Management, GREAT PARTNERSHIP PERFORMANCE: Win-Win Management •Customer Satisfaction CITIZEN Management •Environment Management, Customer 60 •Social Contribution Activities Safety & Health Management Suppliers 62 •Talent Management Employees 66 Local Communities 70 OUR SUSTAINABLE INTEGRATED REPORTING PERFORMANCE Participation of Stakeholders and Materiality Test 75 Governance 77 Ethic Management & Compliance 78 Cover Story Risk Managment 80 Operational Data 82 2010 2011 2012 Report of Independent Auditors 85 GS E&C has drawn the nine major The current Integrated Report GS E&C has set the goal and Financial Performance 86 issues reflecting a variety of incorporates our Annual Report with action plans based on our vision stakeholder interest to link with our annual Sustainability Report, for achieving sustainability is Report of Independent Accountants’ Review of 90 its core values. We commissioned providing stakeholders with a to “pursue growth by creating a third party to audit and verify balanced and comprehensive sustainable value together with Internal Accounting Control System the accounts for sustainability disclosure of the economic, stakeholders.” Relevant details Report on the Operations of the Internal Accounting 91 achievements to ensure the environmental and social value are covered in this integrated trustworthiness of the content. that GS E&C has created. report. Control System (IACS) A separate Annual Report will not be published starting from 2012, 3rd Party Assurance Statement on Integrated Report 92 and the information that previously 3rd Party Assurance Statement on Greenhouse 94 was covered in the Annual Report will be presented in this Integrated Gas Inventory Report. GRI Index 96 UNGC / ISO26000 100 Establishment of Green Management System 102 Associations/Awards 104 CEO's Message Greetings, Stakeholders GS E&C has been providing values needed for our customers and community while making a solid growth thanks to well-balanced portfolio covering plant, power, environment, architecture, and housing business since its foundation in 1969. The year 2012 was extremely challenging for us. Although sales increased slightly, profit declined from the previous year due to a rise in cost rate of the projects won over fierce competition since 2010. As global economic recession persists and growth slows down, competition in the construction industry is expected to become even harsher in 2013. However, GS E&S has grown as a global company overcoming numerous difficulties in business environment for the last 44 years. We are certain that we are able to survive the current adversity as long as we take this crisis as an opportunity to look back on our past, grow, and respond to the challenge together with all our members. We will make our GS E&C Growth Strategy is based on Vision 2020. We are implementing action plans in the direction of the three main strategies of “Reaching full potential of the current operations,” “Nurturing new growth drivers,” and “Securing core competence” and having visible results best effort to become including the M&A of the Spanish desalination facility maker Inima, and the signing an MOU with the Algerian state energy firm Sonatrach. a sustainable For a successful achievement of our Vision 2020, strong corporate culture is more important than anything else. Corporate culture is one of the core competitiveness of a company to unite its members. We are committed to instilling our core values –“Great Challenge,” “Great Innovation,” and “Great Partnership”- into our employees’ way of thinking and doing their jobs. Communication is also important. We can prove our trust and sincerity only global leader when we listen to the voice of our stakeholders including customers, shareholders, suppliers, and workers on the construction site as well as our employees and apply their opinions to management activities. that grows with you. We will continue our best effort to become a sustainable global leader that grows with you. July 2013 GS E&C Corp. President & CEO Byeong-Yong Lim COMPANY PROFILE GS E&C has been making a constant growth thanks to a well-balanced portfolio covering plant, power, environment, architecture, and the housing business since its foundation in 1969. We will remain committed to advancing toward a top-tier company that puts the priority on creating great customer value and being the best partner, growing together with stakeholders. General Information Corporate Name GS Engineering & Construction Corp. (GS E&C) Date of Establishment December 19, 1969 Representative Byeong-Yong Lim Head Office GS Yeokjeon Tower, 537 Namdaemun-ro 5-ga, Jung-gu, Seoul No. of Major Domestic Domestic: 251 sites, Overseas: 49 sites, and Overseas Sites Total: 300 sites Main Businesses Plant, power & environment, civil engineering, housing, architecture, and development Location of the Sites Overseas Subsidiaries Credit Ratings AA- by Korea Ratings (as of Dec. 2012) Overseas Branches No. of Employees 6,727(as of Dec. 2012) Spain Domestic & Overseas Subsidiaries GS Inima Environment S.A England Iraq Division Name Main Businesses London Baghdad Parnas Hotel Co., Ltd. Hotels & travel Italy Iran Russia EziVille Inc. Value-added networks Milano Poland Tehran Moscow GS E&C Poland SP.ZO.O Xi service Construction Kuwait Canada Kuwait City G-Estec Co., Ltd. Construction Saudi Arabia GS E&C Construction Canada Ltd. Kazakhstan GS Construction Arabia Co.,Ltd. China GLS Service Services Astana GS Saudi Co., Ltd. GS E&C Nanjing Co.,Ltd. Domestic Turkey United States Al-Khobar Beijing GCS Plus Services Istanbul Riyadh Shanghai Houston Taiwan BSM Processing services Texas Bahrain U.A.E GS O&M Services Manama Thailand Abu Dhabi GS E&C Thai Co.,Ltd. Contract food service Dubai Sanglak Food Co., Ltd. Algeria Bangkok management Panama Algiers GS E&C Panama S.A. Eunpyeong Saegil Co., Ltd. Construction Libya Cambodia GS E&C Nanjing Co.,Ltd. Construction Tripoli GS (Cambodia) Development Co.,Ltd. Colombia GS Nha Be Development One-Member LLC Construction Bogota Egypt India GS Saigon Development One-Member LLC Construction GS E&C India Private Ltd. Cairo Vietnam New Delhi Indonesia GS E&C India Private Ltd. Construction GS Nha Be Development One-Member LLC Ecuador Qatar Jakarta GS Saigon Development One-Member LLC Overseas GS (Cambodia) Development Co.,Ltd. Construction Quito Doha Hanoi GS Construction Arabia Co.,Ltd. Construction Oman GS Saudi Co., Ltd. Construction Muscat Singapore GS E&C Poland SP.ZO.O Construction Singapore GS E&C Construction Canada Ltd. Construction GS E&C Panama S.A. Rental GS Inima Environment S.A Construction GS E&C Integrated Report 2012 4•5 VISION Mission Statement Vision 2020 The mission statement of GS E&C is to Create Value of New Lifestyles and Dreams of a Better Tomorrow with Customers. Our vision aims to become the Best Partner and the First Company by creatively and passionately building value for the world and earn The statement demonstrates our commitment to creating value that can be shared among various stakeholders and fulfilling trust to grow as a sustainable global company. responsibilities as a corporate citizen. Best Partner & First Company Creatively and Passionately Build Value for the World and Earn Trust BEST PARTNER, FIRST Company Customers are part of the GS E&C family. GS E&C realizes the dream for a better future. Vision We think and act from the customers’ perspective, We cultivate and realize the potential of businesses Global BEST & FIRST and want to be near them always. and people, and our passion and readiness to face Together Dream for challenges help create a better future. with a Better Customers Tomorrow Sustainable Global Company Vision 2020 New orders of KRW 35 trillion, Revenue of KRW 27 trillion, and Goal Operating Profit of KRW 2 trillion Creation New Ideas of Value of GS E&C stays ahead of the times. Lifestyle GS E&C leads to improve the value of life. GREAT innovation We respond well to the demands of the time with an We create tangible and intangible value to make Great CHALLENGE open mindset and lead progress. life more comfortable and pleasant, helping all in Core society to enjoy a higher quality of life. Values GREAT PARTNERSHIP Strategic Directions and Blueprint for GS E&C 2020 Core Values Three main strategic