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DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. And DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. and Subsidiaries Consolidated Financial Statements December 31, 2014 and 2013 DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. and Subsidiaries Index December 31, 2014 and 2013 Page(s) Independent Auditor’s Report .................................................................................................... 1 - 2 Consolidated Financial Statements Consolidated Statements of Financial Position............................................................................... 3 - 4 Consolidated Statements of Income .................................................................................................... 5 Consolidated Statements of Comprehensive Income............................................................................6 Consolidated Statements of Changes in Equity.............................................................................. 7 - 8 Consolidated Statements of Cash Flows ............................................................................................. 9 Notes to Consolidated Financial Statements .......................................................................... 10 - 108 Independent Auditor’s Report (English Translation of a Report Originally Issued in Korean) To the Board of Directors and Shareholders of DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. We have audited the accompanying consolidated financial statements of DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. and its subsidiaries (collectively “the Group”), which comprise the consolidated statements of financial position as of December 31, 2014 and 2013, and the consolidated statements of income, comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the Korean Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Samil PricewaterhouseCoopers, LS Yongsan Tower, 191, Hangangno 2-ga, Yongsan-gu, Seoul 140-702, Korea (Yongsan P.O Box 266, 140-600), www.samil.com 1 Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. and its subsidiaries as of December 31, 2014 and 2013, and their financial performance and cash flows for the years then ended in accordance with the Korean IFRS. Other Matters The consolidated financial statements of the Group as of and for the year ended December 31, 2013, were audited in accordance with the previous Korean Standards on Auditing. The amounts expressed in U.S. dollars are provided solely for the convenience of the reader and have been translated on the basis set forth in Note 4 to the accompanying consolidated financial statements. Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such financial statements may differ from those generally accepted and applied in other countries. Seoul, Korea March 19, 2015 This report is effective as of March 19, 2015, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any. 2 DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. and Subsidiaries Consolidated Statements of Financial Position December 31, 2014 and 2013 (in millions of Korean won and thousands of US dollars (Note 4)) Notes 201420142013 2013 Assets Current assets Cash and cash equivalents 5,6,9,37 ₩ 325,690 ₩ 409,596 $ 296,298 $ 372,631 Financial instrument assets 5,6,12,13,24,37 196,564 124,540 178,825 113,301 Trade receivables 5,6,8,10,37 3,263,114 3,087,670 2,968,626 2,809,016 Other receivables 5,6,10,37 619,349 659,513 563,454 599,994 Advance payments 527,535 458,026 479,926 416,690 Prepaid expenses 255,818 293,150 232,732 266,695 Inventories 11 1,231,598 1,482,592 1,120,449 1,348,792 Assets held for sale 14,24 568,247 433,753 516,964 394,608 6,987,915 6,948,840 6,357,274 6,321,727 Non-current assets Investments in associates 15,24 54,003 39,586 49,129 36,013 Financial instrument assets 5,6,13,24,37 73,184 13,946 66,579 12,687 Investments in securities 5,6,12,24,37 351,144 493,774 319,454 449,212 Other receivables 5,6,8,10,37 969,635 858,965 882,128 781,446 Prepaid expenses 39,863 32,200 36,265 29,294 Investment property 18,24 178,460 190,373 162,354 173,192 Property, plant and equipment 16,24 797,642 698,143 725,657 635,137 Intangible assets 17,24 115,191 110,382 104,795 100,420 Deferred income tax assets 33 693,181 736,104 630,623 669,672 3,272,303 3,173,473 2,976,984 2,887,073 Total assets ₩ 10,260,218 ₩ 10,122,313 $ 9,334,258 $ 9,208,800 3 DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. and Subsidiaries Consolidated Statements of Financial Position December 31, 2014 and 2013 (in millions of Korean won and thousands of US dollars (Note 4)) Notes 2014 2013 20132014 Liabilities Current liabilities Financial instrument liabilities 5,6,13,20,37 ₩ 1,569,890 ₩ 1,665,382 $ 1,428,211 $ 1,515,086 Trade payables 5,6,37 480,967 486,496 437,561 442,591 Other payables 5,6,19,37 1,124,445 1,045,481 1,022,967 951,129 Advances received 8,19 830,175 1,265,331 755,254 1,151,138 Withholdings 149,395 131,025 135,911 119,200 Guarantee deposits received 5,6 61,079 62,553 55,567 56,908 Income tax payable 33 17,750 66,817 16,148 60,787 Debt held for sale 14 - 33,976 - 30,910 4,233,701 4,757,061 3,851,619 4,327,749 Non-current liabilities Financial instruments liabilities 5,6,13,20,37 1,319,551 1,455,526 1,200,465 1,324,168 Other payables 5,6,19 250 610 227 555 Advances received 8,19 923,250 463,137 839,929 421,340 Provisions 22 572,417 537,422 520,758 488,921 Guarantee deposits received 5,6 271,163 74,038 246,691 67,356 Defined benefit liabilities 21 198,029 164,658 180,157 149,798 Deferred income tax liabilities 33 16,262 16,267 14,794 14,799 3,300,922 2,711,658 3,003,021 2,466,937 Total liabilities 7,534,623 7,468,719 6,854,640 6,794,686 Equity attributable to owners of the Parent Company Capital stock 1,25 2,078,113 2,078,113 1,890,569 1,890,569 Capital surplus 25 548,907 548,200 499,370 498,726 Other components of equity 26 (99,174) (99,289) (90,224) (90,328) Accumulated other comprehensive income 26 (154,967) (112,603) (140,982) (102,441) Retained earnings 27 256,819 181,820 233,642 165,411 2,629,698 2,596,241 2,392,375 2,361,937 Non-controlling interest 95,897 57,353 87,243 52,177 Total equity 2,725,595 2,653,594 2,479,618 2,414,114 Total liabilities and equity ₩ 10,260,218 ₩ 10,122,313 $ 9,334,258 $ 9,208,800 The U.S. dollars figures are provided for information purpose only and do not form part of the consolidated financial statements. Refer to Note 4. The accompanying notes are an integral part of these consolidated financial statements. 4 DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. and Subsidiaries Consolidated Statements of Income Years Ended December 31, 2014 and 2013 (in millions of Korean won and thousands of US dollars, except per share amounts (Note 4)) Notes 2014 2013 2014 2013 Sales 7,8 ₩ 9,995,023 ₩ 8,782,196 $ 9,092,998 $ 7,989,625 Cost of sales 8,29 9,231,385 8,442,194 8,398,276 7,680,307 Gross profit 763,638 340,002 694,722 309,318 Selling and administrative expenses 29,30 336,665 584,666 306,282 531,901 Operating income (loss) 7 426,973 (244,664) 388,440 (222,583) Income from associates 15 12,757 8,828 11,606 8,031 Other income 31 439,400 328,372 399,745 298,737
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