Daelim Corporate Sustainability Report 2009Daelim has worked together with the economic development of Korea in its history of past 70 years. With endless creativity and challenging

Daelim Corporate Sustainability Report 2009

CONTENTS

Message from the CEO 04 | SUSTAINABILITY MANAGEMENT | Company Introduction 08 • Management Principle 09 • Business Area 10 •

Vision and Strategy 12 • Organization and operation of the BOD 13 • Management Transparency 15 • Sustainability Management 18

| ECONOMIC ASPECT | Economic Performance 24 | ENVIRONMENTAL ASPECT | Environmental Management 30 •

Environmental Performance 38 • Reduction of Greenhouse Gas Emission 47 | SOCIAL ASPECT | Balance of Life and Works 52 •

Customer Satisfaction 61 • Win-Win Cooperation 67 • Social Contribution Activities 70 | APPENDIX | GRI Index 73 • GRI Guideline Application Level 77 •

Accolades and Participation in Association 78 • Financial Data 79 • Corporate History 80

About this report

This report is Daelim’s second sustainability report and includes activities and performances in respect of sustainability management in

economic, environmental and social aspects. We hope this report will be a good material for all stakeholders to understand our sustainability

management principles and activities in 2009.

REPORTING PRINCIPLES _ GRI (Global Reporting Initiative) G3 Guideline

REPORTING PERIOD _ Fiscal year 2009, Every Other Year

COMPOSITION _ CEO’s Message and additional 5 chapters (Sustainability Management, Economic Performance, Environmental

Performance, Social Performance and Appendix)

SCOPE OF REPORTING _ Financial results include the operating performances of E&C Group and Petrochemical Group, and other results

are confined to the business activities conducted by E&C Group.

CURRENCY _ Korean Won

VERIFICATION _ This report was published as a trial version, therefore, has not been verified by an independent institute.

Management Improvement Team, Daelim Industrial, 146-12. Susong-dong, Jongno-gu, Seoul, Korea

Tel: 82-2-2011-8192 Fax: 82-2-2011-8016 Website: www.daelim.co.kr

Message from the CEO

We are committed to becoming an enterprise that contributes to the happiness of customers and the prosperity of society through sustainability management.

To our stakeholders:

Thank you for your constant support and loyalty to Daelim.

Based on recognition and belief that the improvement of stakeholder confidence is the starting point of

securing sustainable growth, Daelim has been implementing sustainability management. This report was

published to announce our efforts for and performances of sustainable management to stakeholders. This report

also contains all the sustainable activities that Daelim has accomplished in environmental and social aspects as

well as economical aspect.

During over the seven decades, Daelim has put forth its best efforts to provide every stakeholder with better

value based on the management philosophy “We are committed to creating pleasant and affluent lives, and

pursuing extensive and unlimited growth and development.”

Daelim has established deep trust from customers and the society by faithfully performing a variety of

construction projects in the fields of civil works, building and housing, and plants at home and abroad. In

addition, we have supported needy people and implemented voluntary works in the local communities to play

our role as a corporate citizen.

Today, the sustainability management is being recognized as an effective managerial strategy for increasing

corporate value and enhancing competitive edge beyond just the meaning as social contribution. To meet this

trend, we will concentrate all capabilities and efforts on providing green construction products with the best

quality and usability through propelling the green management. As part of such efforts, in 2008, we had declared

a vision to complete the development of “Eco House” by 2012 which has zero-standard energy consumption for

cooling and heating. In 2010, we began to provide apartments with the brand “Smart Eco e-Pyunhan Sesang”

that can reduce energy consumption for cooling and heating by 50% for the first time in Korea.

We at Daelim will continue to focus on sustainability management to create more values for customers,

shareholders and employees. Furthermore, environment protection, sharing love with communities and win-

win strategy as well as ethical and transparent management will be running at the same time to fulfill our social

responsibility. By doing so, we will evolve as a great company that is respected by all stakeholders.

We sincerely ask for your unsparing attention and encouragement for the unremitting challenges of Daelim in

the future.

Thank you.

President & CEO Jong-In Kim

Daelim has worked together with the economic development of Korea in its history of past 70 years. With endless creativity and challenging spirit, Daelim will continue to grow and develop in the plant and civil areas which are the foundation of industrial development as well as housing and building areas which are looking for the prosperous life.

08 Company Introduction 09 Management Principle 10 Business Area 12 Vision and Strategy 13 Organization and operation of the BOD 15 Management Transparency 18 Sustainability Management

SUSTAINABILITYMANAGEMENT

8 9

Since the establishment in 1939, Daelim has been a leading company in the fields of engineering & construction and petrochemical businesses in Korea. As the parent company of the Group with a total of 12 subsidiaries, we are providing a variety of services and products in the fields of engineering & construction such as building & housing, civil works and plants, as well as petrochemicals.In 1966, Daelim became Korea’s first company to work on an overseas construction project by entering Vietnam. Since then, the company has successfully completed a variety of projects in the fields of plants, buildings and civil works in 23 countries in the world. Now Daelim is recognized as a global contractor with competitive edge in quality and prices.Daelim’s petrochemical group also boasts its leading position in the aspects of technology and production volume in the domestic petrochemicals market. It produces various petrochemicals from basic distillates to higher value-added products and focuses on securing world-class competitiveness through restructuring and strategic partnerships with competitors at home and abroad.

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SUSTAINABILITY MANAGEMENT

Company Introduction

Chairman

Vice Chairman

President

Audit Office

Civil Works Division

Building & Housing Division Plant Division

Management Support Division

New Order Office Procurement Office R&D Institute

[Organization of E&C Group]

[Overseas Offices]

[Summarized Profile]

Name Daelim Industrial Co., Ltd.

Headquarter 146-12. Susong-dong, Jongno-gu, Seoul

Establishment 1939

Total assets KRW8.34 trillion in 2009

Sales KRW6.28 trillion in 2009

Employees 3,767 persons in 2009

Investee Subsidiaries

Listing KRX (Korea Exchange)

“ Creation of the Future, Respect for Humanity, and Trust in Customers”Daelim is committed to creating pleasant and affluent lives, and pursuing extensive and unlimited growth and development.

Daelim’s management principle stems from the corporate philosophy “Hansoop Spirit”.

First, we pursue far-sighted management to create the better future.Second, we respect and nurture individuals.Third, we provide customers with conveniences and trust.These are Daelim's management principles.

Management Principle

Daelim’s history has been the course of Korea’s economic growth. Daelim has proactively participated in the construction of social overhead capital facilities such as roads, harbors and power plants as well as essential industrial facilities for the production of fertilizers, petrochemicals and steel since the early days of the nation’s founding when the capitals and technologies were still poor. Our performances, as a result, have sincerely contributed to the improvement of people’s lives and the development of Korea’s economy.Furthermore, the company began to take off overseas construction business since the mid 1960’s and has successfully completed a variety of large scale projects in the world, which has greatly contributed to the growth of the company and enhancement of the national prestige. Meanwhile, with the construction business as a pivotal sector, Daelim has expanded its businesses not only into manufacturing sectors such as petrochemicals, concrete and machinery, but also into finance, IT, leisure and educational institutes sectors. Our accomplishments have been based on passionate and hard-working people and sincerity for being on the right path beyond just the external development, in which the company has great pride. Since the foundation, we have worked harder than anybody else, striven to honor the loyalty of our customers and exerted ourselves to create more values, which have been sound corporate culture today. Going forward, the company will make efforts to become ‘an enterprise that grows and develops along with the people and nation.

Trust inCustomers

Creation ofthe Future

Respect for Humanity

IranChina

Saudi Arbia UAEKuwait

India

USAKorea

Malaysia

Indonesia

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Business Area


Daelim has constructed various new roads, bridges, dams, railroads and harbors, which have significantly contributed to the development of the domestic economy. Our major achievements in road projects included Gyeongin Expressway, Korea’s first expressway, Gyeongbu Expressway, Honam Expressway, Muan Airport, industrial railroads and Seoul subway. And our representative civil works are as follows: Yeosu Dolsan Grand Bridge, Korea’s first cable bridge, Seohae Grand Bridge, Korea’s largest cable bridge, Gangreung Multipurpose Dam and Saemangeum Reclamation projects.Based on accumulated experiences and technologies through constructing various SOC projects, Daelim will continue to take the lead in environment-friendly construction works in which people and nature are coexist.

Plant construction requires technical capability of the highest level. Daelim is well known for its professional and technical capability around the world by successfully completing a large number of plant projects in not only Korea, but also in the Southeast Asia, the Middle East, Africa, India and the U.S. With accumulated knowhow and technologies over the past 70 years, the company is also leading the construction of nuclear power plants that require cutting-edge technologies and LNG supply and storage facilities that require elaborate process and quality control. Our plants business will play a key role in the development of Korea’s energy industry in the future.

Civil Works

Plants

Daelim has accumulated advanced construction technologies and knowledge over the past 70 years. Our major achievements include a variety of buildings and facilities in the fields of education, medical care, culture and sports as well as office buildings. Particularly, we have been a leader in the landmarks such as the National Assembly Building and the Jamsil Olympic Main Stadium. Furthermore, the company has constructed many monumental buildings in the world, such as the King Abdul Aziz University Hospital, the U.S.A. embassy in Bangladesh and the Social Security Insurance Building in Saudi Arabia, etc. Daelim will continue to construct the world's best buildings and structures spanning a hundred years and boasting aesthetic value and functionality for the future.

Daelim has been a leader in the construction of apartment complex from the 1960s when it started the business to 2000s when Korea’s first apartment brand ‘e-Pyunhan Sesang’ was launched by the company. The apartments built by Daelim have always opened new chapters in residential spaces. In addition, the company has kept a leading role in improving housing culture by successfully completing various redevelopment projects to create new cities. Daelim will be committed to providing advanced housing culture and residential spaces meeting needs for the environment, welfare, health, society, culture and economy.

Construction (Building & Architecture)

Construction (Housing)

12 13

Daelim establishes and practices long-/mid-term and mid-/short-term strategic tasks reflecting the changes of business conditions and the focuses of the CEO in order to realize our vision and core values.

Daelim operates the board of directors to strengthen management efficiency and transparency, and financial stability. The board of directors has comprehensive authority regarding overall management, and has the function of determining major decision makings, monitoring and execution of businesses. It also makes efforts to reflect the opinions of stakeholders such as shareholders, creditors and employees in the business operation.The company ensures the rights of minority shareholders according to the prescription of the Commercial Code and related laws and regulations. Through a joint labor-management conference (Hansoop Conference), the company shares its management information that affects important influences on the executives and staff, and proceeds using effective communication between management and staff.The board of directors shares the recognition with the company's social responsibility such as the protection of consumer rights and environment. It also tries to fully comprehend the ripple effects in economical, environmental and social aspects. The BOD reflects these performances in the operation and takes responsibility for the results.

The BOD is comprised of 9 directors, of which four are inside directors and five are outside directors. The CEO of the company who is elected by the board also takes the position of the board chairman according to BOD regulations.Directors and Audit Committee members are elected in the general shareholders’ meeting, and the candidates are publicly announced before the date of the meeting so that shareholders can exercise their votes with the information of the candidates. The terms of directors are assured to elect competent persons with professional capability and encourage them to practically contribute to the operation of the company. In particular, outside directors are elected at the general shareholders’ meeting through the recommendation by the Outside Director Nomination Committee in order to select independent members from the company, the management and major shareholders. In the election of Audit Committee members, the voting right of the largest shareholder is restricted according to related laws and regulations so that the opinions of minority shareholders may be reflected.Outside directors of the company are required to have a lot of professional knowledge and experiences in regards to business operation, economy, accounting, laws and technologies for efficient and effective decision making in the economical, environmental and social sectors. However, persons who are shareholders of the company or in special relations with the company are restricted to be outside directors in order to prevent the collision of their interests in the board of directors in advance. The remunerations of directors and the management are differentially paid by regular review and evaluation of operating goals and performances. The remuneration limits are approved at the general shareholders’ meeting every year. The evaluation includes opportunities and risks in the sectors of environment, health, corruption as well as financial results.

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Vision and Strategy Organization and operation of the BOD

Role and Responsibility of the BOD

Organization of the BOD

Long, Mid and Short-term Strategic

Management Plans

[Tasks for Marketing Driven Change]

Change Management

- Securing consistency in customer and market-oriented activities by all organizations

- Open to all the innovative activities internally and externally

- Establishing organizational culture that all members share ownership

CREATION OF SUSTAINED COMPETITIVENESS

Securing effective methods for sharing market intelligence

Establishing systematic market response strategy process

PREEMPTIVE RESPONSE TO MARKET CHANGES

MDCMarketing Driven Changing

MDCMarketing Driven Changing

SECURING INSIGHT INTO THE MARKET

Strengthening market intelligence *MI: Strategic information on the market, customers, competitors and ourselves

ENHANCEMENT OF COMPETITIVENESS

Bolstering marketing capability

Marketing intelligence ability

Marketing driven strategies

Fostering execution competitiveness

Project management competitiveness

Differentiated technological advantage

Instillation of VE (value engineering)

Upgrading financial soundness

Improvement of surplus cash flows

(Profitability/asset efficiency)

REINFORCEMENT OF MARKET RESPONSE

Fostering risk management ability

Management of risk profiles

Reorganization of business portfolio

Decrease of the portion of housing sector

Expansion of overseas and public projects

Green Daelim

Securing green business opportunities

IMPROVEMENT OF ORGANIZATION AND MANPOWER

Building marketing driven organizations

Establishment of marketing driven decision-

making process

PBM driven management

Improvement of application of strategic

execution measures

Smart Daelim

Better use of information technologies

[Strategy for Marketing Driven Change]

MARKETING DRIVEN CHANGE

14 15

The board of directors convenes regular meetings every quarter, and extraordinary meetings when necessary. In 2009, a total of 24 meetings were convened including regular meetings, and the participation rate of outside directors was 100%. Outside directors are able to ask the company to provide assistance of executives, staffs or outside professionals for the prompt offering of information necessary for the understanding of management status. In this case, expenses are supported in a reasonable scope by the company. Daelim also gets liability insurances for them at its own expenses.There are three subcommittees (Finance Committee, Audit Committee and Outside Director Nomination Committee) in the board of directors. Daelim is committed to activating the role of the board of directors and improving comprehensive management system by enhancing rationality, transparency and objectivity in the process of decision making.

[BOD Members]

Classification Name Position

Inside Director

Yong-Koo Lee President & CEO, Chairman of the Board, Chairman of Outside Director Nomination Committee

Jong-In Kim President & CEO, Chairman of Financial Committee

Joo-Hee Han President & CEO, Member of Outside Director Nomination Committee

Jong-Kook Park Member of Financial Committee

Outside Director

Jin-Woong Lee Chairman of Audit Committee

Jeong-Sik Shin Member of Audit Committee

Soo-Keun Oh Member of Audit Committee, Member of Outside Director Nomination Committee

Ik-Soo Kim Member of Outside Director Nomination Committee

Gong-Hee Lee Member of Financial Committee

* As of the fiscal year 2009

The corporate spirit of Daelim is rooted in the ‘Hansoop Spirit.' The ‘Hansoop’ represents the abundant, pleasant, vast and unlimited forest in Korean. To embody this spirit, the company practices the ethics and cooperation with customers and neighbors. And we are committed to fulfilling 'righteous management' on the basis of value-centered operation and higher business competitiveness, which lays the foundation for winning confidence from employees, customers and shareholders and building future-oriented corporate culture. Ethical management, transparent management and fair transaction are also placed at the center of this spirit.

To grow as a globally respected company that fulfills social responsibility, Daelim declared the ethical management in May 2005. It will be pursued on the basis of our corporate spirit and our management principles – creation of the future, respect for humanity, and trust in customers. And according to the CEO’s determination to promote the ethical management, we are striving to instill it into the corporate culture up to the level that the society expects and the domestic and foreign regulations requires.

OrganizationOur auditing team, as a wholly responsible department for the ethical management, strives to make aware of the importance of ethics and build a clean organization by practicing the 'righteous management'. The auditing team is in charge of management diagnosis, prevention of corruption and regular audit activities.

Establishment of the Code of Ethics Daelim established the Code of Ethics on the basis of the company’s management philosophy and principles in order to proactively meet the needs of the society and the government for eradicating corruption, establishing transparency and encouraging the basic ethical consciousness of executives and employees. Based on the Code of Ethics, Daelim puts the ethical management into practice continuously.

Ethical Management Education and Activity A variety of education programs and activities are promoted to strengthen the ethical management. The company launched the 'cyber education on ethical management' program and encouraged executives and staffs to take it as a mandatory course. Ethical management activities are spread internally through the message board and the newly opened ‘cyber ethics consultation center’ also serves as an efficient tool to enhance the control and oversight on the internal organization, review the ethical validity on specific works, solve the conflict with the boss in higher-level and communicate with each other. These activities contribute to the instillation of the ethics throughout the company. In addition, Daelim published the ethical management manual called ‘Hansoop Ethics Tales’, and distributed it to all employees so that they can easily understand the ethics. This book contains the charter and code of ethics, episodes of ethical management, practical instructions of ethical management, and the injustice report form.

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Management Transparency

Righteous Management

Ethical Management

Operation of the BOD

FINANCIAL COMMITTEE

• Review and decision of significant

management agendas

•�Two inside directors and an outside

director

AUDIT COMMITTEE

•�Audit of financial accounting

and operations, and selection of

independent auditors

•Three outside directors

NOMINATION COMMITTEE

•�Nomination of outside director

candidates

•Two inside directors

[Subcommittees under the BOD]

BOARD OF DIRECTORS

16 17

Cyber Complaint System ‘Sinmungo’Daelim operates the cyber complaint system ‘Sinmungo’ that enables all stakeholders including customers, business partners and employees to easily report information on unethical acts, such as unfair transactions of executives and staff, corruption and injustice that may arise out of commercial transactions at any time and at any place. Informers are able to give information through the website, e-mail and an exclusive hotline.The cyber complaint system ‘Sinmungo’ helps to find and solve the violations of executives and staffs on the code of ethics at an early stage, and prevents a recurrence of violations. It is also utilized partly as a window for solving civil complaints. When the information is given to the ‘Sinmungo’, the company investigates thoroughly under the principle of protecting the informants and takes proper measures in compliance with the results.

Our company respects the purpose and intent of the Monopoly Regulation and Fair Trade Act pursuing the promotion of fair and free competition between businesses, the encouragement of creative business activity, consumer protection, and balanced development of the domestic economy. To meet these needs and practice the righteous management that the company has pushed ahead continuously, Daelim introduced the ‘Compliance Program’ in 2004 and has implemented detailed tasks.Our CEO’s strong will and policies on the Compliance Program are stated in the Code of Ethics and its practical instructions. In August 2004, the company published and disseminated the Compliance Program Handbook for all employees to have easy access in their daily works.The administrator in charge of the Compliance Program was changed to an executive of the auditing team due to the reorganization in January 2008. The administrator regularly reports the operation results of the Compliance Program to the Audit Committee every year.

Compliance Program Council The Compliance Program Council comprised of the heads of business departments that are responsible for fair transactions such as receiving new orders, outsourcing, selling apartments and financing. The council reviews significant items of the Compliance Program through regular or extraordinary meetings, and offers the administrator consultation services. Under the council, a person in charge of the Compliance Program is appointed to check whether each department complies with laws and regulations or not, and implement additional works such as self-examination and consultation services.

Compliance Program ManualThe Compliance Program Manual was published to let all employees be well-acquainted with the Monopoly Regulation and Fair Trade Act and its related laws internally and to pave the way for fair transactions by encouraging and promoting fair competition in the market externally. It also aims to enhance the company image of giving a moving impression to the customers as well as to prevent or reduce damages and expenses when violating the laws and regulations.

Education ProgramsAll executives and staffs received educations for the Compliance Program through the cyber education programs and employees engaged in works in relation to fair transactions participate in additional education programs every year. These programs are also included in the basic and practical courses for new employees and given to business partners.In addition, the company is providing additional access to education for the Compliance Program by inviting professionals of external institutes such as the Fair Trade Commission.

Self-checking by DepartmentWe are operating the self-checking and consultation system by department to internally monitor violations against the laws and regulations. Working staffs of the departments related with the fair transactions implement self-checking procedures and have consultations with the professional department upon the cases with the possibility of violation.

Future PlansTransparent and ethical management becomes more and more important, and all employees are furthers required to comply with laws and regulations than ever. Therefore, the company will continue to enhance the activities of an exclusive department for the Compliance Program, regularize the meetings of the council, and enforce sanctions against violations on the transparent and ethical management. By doing so, the Compliance Program will be efficiently operated and instilled into the organization.

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Fair Transactions

1.

Please inform us if you were

harmed or harassed due to the

unjust requests or unfair acts in any

transaction with our company.

UNFAIR ACTS OF EMPLOYEES 2.

Please give us your suggestions for

a clean and transparent Daelim..

HOW TO USE THE ‘SINMUNGO’ 3.

Please give us other

recommendations and any

questions.

OTHER RECOMMENDATIONS

[How to use the ‘Sinmungo’]

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Sustainability Management

While the efforts to connect the management activities with the sustainable development are active, stakeholders’ needs for socially and environmentally responsible operations are continuously increasing today. To proactively meet this trend, Daelim is improving internal processes to collect a variety of opinions of stakeholders and establishing vision and strategies on the company level.

Stakeholders and their key issues exerting significant influences on the company’s sustainability management were selected and classified through media analysis, peer review and interview with business partners and employees.

Our stakeholders are comprised of six categories: customers, shareholders, employees, business partners, local communities and public affairs. We are collecting their opinions and requests through diverse communication channels tailored to the characteristics of stakeholders. The company will continue to improve and complement the processes by the feedbacks of stakeholders.

Daelim’s Sustainability Management

Classification of Stakeholder

Communication with Stakeholders

Daelim heard the voices of diverse stakeholders in commemoration of the 70th anniversary of the foundation.

Overseas Contractors

“We will join in Daelim’s growing in the next seven decades. Because you have perfectly completed our projects and we believe Daelim will

build a new future with the strength of the past experiences.”

Seyfollah Jashnsaz | Assistant Secretary of Iran Oil Dept. / President of Iran National Oil Company (NIOC)

Daelim has successfully performed a lot of oil & gas plant projects over the past three decades and played a leading role in the

development of Iranian economy. In particular, the South Pars project has greatly contributed to the industrial development in the

southern area of Iran. This project was a monument in our country.

Abdullah S.Al-Rabeeah | President of Saudi Kayan Petrochemical

Daelim is recognized as a promising global contractor with excellent management abilities in Saudi Arabia. It also accomplished the

record of no accidents for 28 million man hours at the Kayan construction site. Daelim has perfectly completed our projects and we

believe Daelim will build a new future with the strength of the past experiences.

Rick Roberts | Vice President of Saudi NCP Chevron

Chevron Phillips and Daelim started a new project for our company not long ago. We hope our relationship to be continuously

developed by accomplishing more performances. As the leaders in the industry, Chevron Phillips and Daelim will proceed with more

ambitious projects. Nothing can do damage to our relationship as companions.

Mazen Al Sardi | Deputy Managing Director of Kuwait Oil Company

Recently Daelim has set a new record in Kuwait. The 9 Crude Filling Lines project, one of our major projects, was successfully

completed a year ahead of schedule by Daelim. We think of this very highly. And we looked at their endeavors, devotion, and

excellent capability in admiration, and were happy with feeling very comfortable when working together

Customers

“I believe that the philosophy of the ‘e-Pyunhan Sesang’ with high quality and practicability was not built in a day, but built on the history.”

Shi-Ra Chae | Actress

I accepted the offering without hesitation when Daelim offered an advertisement job for the e-Pyunhan Sesang brand in 2000.

I'm still very proud about that decision. I think it has remained the most outstanding among apartment advertisements until now.

Resident-oriented design and contents gave me a deep impression of the excellence and comfortableness of the e-Pyunhan Sesang.

Choon-Gi Han | President of Clover Chemical Co., Ltd.

We have grown by working in concrete partnership with Daelim over the two decades. With an adventurous spirit and unlimited

concerns for customers, Daelim has developed into the leading and promising company in the industry. We believe Daelim will

continue to lead in providing high quality and valuable services to customers in the future.

�

Moo-Woong Son | Representative of Residents in Mt. Bookhan e-Pyunhan Sesang

I believe that the philosophy of the ‘e-Pyunhan Sesang’ with high quality and practicability was not built in a day, but built on the

history.

Hye-Sung Kim | Chairperson of Women’s Society in Dang-Dong e-Pyunhan Sesang in Gunpo

Dang-Dong e-Pyunhan Sesang has been a representative apartment complex in which any citizen of Gunpo city would like to

reside even if just one time. I think this development resulted from continuous efforts of all employees of Daelim.

20 21

To implement our sustainability management more systematically and efficiently, Daelim has been operating the CSR Committee since 2008.

[Organization Chart of CSR Committee]

Economy SubcommitteeEthical Management

SubcommitteeSocial Contribution

SubcommitteeEnvironmental Management

Subcommittee

Executive Office

ChairmanPresident & CEO: Jong-In Kim

SecretaryHead of Management Support HQ: Jong-Kook Park

Sustainability Management Organization

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Major Issues of Stakeholders

Communication Channels with

Stakeholders

Daelim is continuously and widely communicating with stakeholders through a variety of methods and channels.

· General Shareholders’ Meeting

· Homepage of Daelim

· IR Conference

· Dart System · Homepage of Daelim

· SCMS for Partners

· Award to Excellent Partners

· Meeting with Partners

· D&P Council


· Social Contribution Activities

- Sharing Happiness (Love House)

- Sharing Culture (Mecena)

- Sharing Love (Voluntary Works)

- Sharing Hope (Donation of PCs)

- Sharing Cleanness (Environmental

Activities)


· Public Hearing for Laws

· Construction Council

(Construction Association of

Korea, Korea Construction Council,

etc.)

· Green Growth related Council

(Green Growth Korea, etc.)


· Hansoop Council

· Company Intranet

· Grievance Procedure System


· e-Customer Center

· Orange Service

· Evaluation of Customer Satisfaction

· Household Advisory Panel

· Online Café (Community)

Communication Channels

Shareholder

Employee

Customer

Community

Business Partner

Public Sector

• Products and services• Customer satisfaction management

• Operating performances and financial statements

• Promotion of projects

• Salary and pension plan

• Support to business partners

• Donations

• Taxes

• Development of environment-friendly and low energy technologies and supply of apartment houses

• Development of environment-friendly and low energy technologies and supply of apartment houses

• Promotion of green business

• Green habit• Education of green business

• Green procurement

• Environmental protection

• Management of construction wastes• Compliance of environmental laws

• Customer satisfaction management

• Ethical management• Right management• Quality management

• Nurturing professionals (Training)• Employee benefits (System)• Sound labor and management relations

• Win-win management

• Social contribution activity

• CP (Compliance Program)

Economic Aspect Environmental Aspect Social Aspect

Customer

Shareholder

Employee

Business Partners

Community

Public Sector

22 23

24 Economic Performance

The creation of economic value is the fundamental strategy for our growth, and at the same time, becomes a foundation that enables us to pursue sustainable growth for all stakeholders. Daelim will further strive to increase economic value and consolidate the foundation of sustainable growth by efficiently using the economic resources that were created.

ECONOMIC PERFORMANCE

24 25

Daelim has been achieving stable operating performances through transparent and reliable management activities. Based on this, we are focusing on market-oriented strategic business restructuring and the establishment of business portfolio in order to grow sustainably.Despite the depression of the domestic construction market for the past three years, Daelim has generated more than KRW800 billion in net sales increase every year. In 2009, we achieved KRW5.42 trillion in total sales and KRW324.8 billion in operating income. Meanwhile, cost of sales slightly rose mainly due to depression of the domestic housing market and strong prices of raw materials.The company achieved new orders more than KRW2 trillion in civil works and more than KRW3.8 trillion in overseas plant business in 2009. And we successfully received the CA/EDC and LDPE projects from Saudi Arabia. These accomplishments have offset the sluggishness in the domestic market and contributed to the enhancement of financial stability and the consolidation of groundwork for future growth.

Our economic performances are distributed to local communities, the government and shareholders as well as in the processes of procurement, production and sales.

In 2009, our engineering & construction group realized KRW5.42 trillion in sales, of which KRW3.91 trillion and KRW1.51 trillion were generated from the domestic and overseas markets, respectively. Our sales have been continuously increasing and net income reached KRW238.2 billion in 2009, despite the recession of the domestic�real�estate�market.

New orders of our engineering & construction group decreased about 14% year on year to KRW7.06 trillion in 2009. Order backlogs surpassed KRW18.1 trillion as of the end of 2009, which enables us to operate the businesses stably.

4,22

7.7

2007

421.

4

Sales

Net income(Unit: KRW in billions)

3,59

0.3

2005

315.

8

3,62

7.1

2006

253.

6

4,94

8.9

2008

67.1

5,41

8.9

2009

238.

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(Unit: KRW in billions)Building & HousingCivil works Plant Overseas Total

(Unit: KRW in billions)Building & HousingCivil works Plant Overseas Total

[New Orders]

Economic Performance

Distribution of Economic Performance

Customers: Sales

Customers: New Orders

2,3982,138 2,189

333

2009

3,473

1,128

2,654

977

2008

2,198655

3,530

867

2007

341

1,206

3,097

466

2006

394926

2,506

2005

361

4,187

5,110

7,251

8,232

7,058

[Order Backlogs]

1,022

2009

4,1554,530

8,393

1,269

2008

3,2503,654

8,241

2007

2,3543,583

7,754

871

2006

694

3,893

6,224

686

2005

580

3,801

4,831

806

10,01711,497

14,517

16,414 18,100

26 27

Government Subsidies: Budgets for National

Tasks

(KRW in millions)

Classification 2007 2008 2009 2010 TotalBudgets for National Tasks 244 331 742 912 22,229

Employees: Salary of Executives and Staffs

Local Communities: Donations

Government: Tax

Shareholders: Dividends

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In 2009, the expenses on salary of executives and staffs were KRW88.4 billion and expenses on welfare benefits and allowances for severance and retirement benefits were KRW13.5 billion and KRW8.5 billion, respectively.

20072005 2006 2008

3.73.7

4.7

3.1

5.1

2009

Donations

Income Tax Expense

20072005 2006 2008

146.4150.5

91.5

40.0

94.0

2009

Dividends

92.8

2007

77.4

2005

52.3

2006

4.1

2008

4.1

2009

(KRW in billions)

•PLANTS

•CIVIL WORKS

•BUILDING

& HOUSING

•PETROCHEMICAL

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Donations to local communities were KRW5.1 billion in 2009. Daelim continuously participates in a variety of social contribution activities based on ‘Five Sharing Campaign’ (sharing happiness, sharing love, sharing hope, sharing culture, sharing serenity).

Income tax expense in 2009 was KRW94.0 billion. There were no subsidy and tax exemption benefit regarding business activities from the government during the same period.

Daelim decided to pay a total of KRW4.1 billion of cash dividends which were equivalent to the results of the previous year to shareholders at the general shareholders’ meeting in March 2010. The dividend level was minimized in order to cope with unfavorable market conditions such as economic recession and increasing unsold apartments caused by the global financial turmoil, and to get better business opportunities at the time of economic recovery in the future.

28 29

Every company should have the responsibility to pursue environmental sustainability for the sake of future generations. Daelim committed to preserving nature and environment and minimizing the environmental effects from our business activities through systematic environmental management, thereby, raising the quality of customers’ lives.

30 Environmental Management ��38 Environmental Performance��47 Reduction of Greenhouse Gas Emission

ENVIRONMENTALPERFORMANCE

30 31

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ENVIRONMENTAL PERFORMANCE

Since the establishment in 1939, Daelim has conducted a variety of construction projects at home and abroad under

the corporate motto “To be the Creator of Pleasant and Comfortable Lives”, and received deep trust of customers and the

society.

To reply their trust and lay the groundwork for sustainable growth, all of our executives and staffs clarify the following

safety and environment policy in addition to keeping the importance of safety and environment in mind.

_ We will put "humanism" as the top priority in all business activities with respect for human beings.

_ We will strictly comply with laws and regulations for safety and environment protection at home and abroad, and

actively meet with stakeholders’ opinions

_ We will carefully plan and design all the business activities, products and services to minimize adverse environmental

impacts, and do our best to reduce resources consumption, maximize resources recycling and avoid environmental

pollution.

_ We will make ourselves trained in order to instill safety and environment consciousness into all employees and

encourage business partners to take part in this activity.

_ We will try our best efforts to care for employees and develop environment-friendly construction technologies.

This policy should be publicly announced to all stakeholders, and the company has to establish substantial goals for

the safety and environment and implement them sincerely. The safe and environmental management should be

continuously improved by regular inspection of the implementation.

We at Daelim put the environmental protection and respect for people as a top priority of our businesses. The company

enacted detailed rules for practicing environmental protection activities in 1993, which has laid the foundation for the

participation of all employees.

Daelim attained the ISO 14001 certificate in 1997, and established the environmental management system with the

proclamation of environment policy.

Environmental Management

Environment�policy

Vision and Strategy of the Green DAELIM

[Strategic Directions for Green Daelim]

• Establishment of Green Mindset through Green Habit

• Development of Green-partnership with Business Partners

• Application of Green/Low-Energy Materials and Methods

• Development of Carbon Reduction Activities through Green Site Management

• Securing Competitiveness in Green Technology

• Development of Green Business Models

• Green-minded Lifestyle through Providing Green Information

• Enhancement of the Image as a Frontrunner in Green and Low-energy Business

GreenCulture

VISION STRATEGIC DIRECTIONS

GreenPartnership

GreenBusiness

GreenCommunication

PROVIDING GREEN CONSTRUCTION PRODUCTS TO CREATE GREEN LIFESTYLE

[Vision of Green Daelim]

Proven Technologies in the Construction and Practicality

Components Technologies

Environment-friendly & Low Energy Consumption

Green Construction Products

Differentiated Green Materials

Construction Materials

• CREATING GREEN-LIFESTYLE THROUGH ENERGY SAVING •

32 33

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Daelim attained the ISO 14001 international environmental management system in 1997. The company had reorganized the system on the basis of the ISO 14001:2004 standard and renewed the certification in October 2005. And we improve the performances of environmental management every year and maintain the ISO 14001.

Daelim establishes plans for energy saving and environment-friendly design and procurement in the process of planning stage. And the company focuses on educations, environmental prevention facilities, emergency training and resources recycling to comply with environmental regulations and conduct the green construction.Inspection and monitoring are implemented to verify the reasonability and effectiveness on a series of activities, and the environmental management is continuously improved by publishing review reports and upgrading environment strategies.

The computational system for environmental management had been developed by Daelim in 1997 for the first time in the industry, which was upgraded to a web version in 2005. This system is connected with the groupware and provides up-to-date information such as outstanding case studies of environmental management. It is also possible for employees to monitor the green construction activities at the sites in real time.

Environmental Management System

(ISO 14001)

Environmental Management Process

Computational System for Environmental

Management

We are striving to provide opportunities for environmental educations to business partners as part of the win-win cooperation. Our education programs are provided to all employees ranging from new recruits to on-site mangers in accordance with their work and management capabilities. In addition, we have been offering tailored education programs for all on-site managers including business partners to improve the compliance with environmental regulations through our online education programs since 2005.

The domestic and overseas environmental regulations are more and more intense due to the climate change. To meet this trend and establish correspondence strategy, the company conducted a survey on the environmental perceptions of all employees.

Classification Details

Survey Contents Awareness of environmental conditions in Korea and understanding of environmental affairs at home and abroad

Survey Items 18 items

Survey Period Oct 15, 2009 ~ Oct 28, 2009

Survey Targets All Employees (Participants: 1.068 persons)

Environmental Education

Survey on the Environmental

Perceptions of All Employees

ISO14001 Certification

Configuration of Computational System for Environmental Management

Environmental Education on the Cyber Space

• Global Warming and Climate Change

_ 89% of participants agreed that Korea should enter the Annex I._ 68% of participants replied that the greenhouse gas reduction target of Korea by 2020 is appropriate for over 4%

compared to 2005. Most participants showed active tendency for greenhouse gas reduction.

- 71% of participants agreed to adopt carbon tax but need the adjustment of time.

• Green Procurement

_ 71% of participants replied that they have intention to purchase green products.

• Green Habit and Others

_ 54% of participants agreed that our company ranked the top for the environmental management in the industry._ Among the green habit activities, “lights-out at lunch break and shutting off standing power (53%)” is considered as

the most effective to prevent global warming.

_ Participants evaluated that green habit performances in the workplace are more outstanding than in the house. It seems that companywide green habit campaign has influenced in the result.

_ All the participants consider the vision of green management of our company.

Survey Results

• Awareness of Environmental Affairs

_ A lot of participants were concerned about the ‘global warming and climate change (80%)’ and recognized the seriousness of greenhouse gases and environmental pollution.

_ The effect of construction industry to the environmental pollution is similar to other industries (46%) or more significant (44%).

_ Construction wastes (70%) are the most significant environmental pollution in the construction industry._ Development of environment-friendly construction technologies (70%) is the most important for the industry to

reduce environmental pollution.

34 35

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Reduction of Environmental Impacts in the Construction

Environment-friendly Design

Clean Development Mechanism

Development of Environment-friendly Technologies

2%15%

13%

70%

Global Warming and Climate Change

Wastes

Water Pollution

Soil Pollution

80%

2%8%

10%

8%

23%

40%

28%

4% Decrease of Greenhouse Emission compared to 2005

Over 4% Decrease of Greenhouse Emission compared to 2005

No Change of Greenhouse Emission compared to 2005 (Freezing)

8% Increase of Greenhouse Emission compared to 2005

14%

53%

20%

13%

Use of Reusable Papers

Casual Wear

Lights-out at Lunch Break and Shutting off Standing Power

Reduction of Leftover Foods

36 37

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Consumption of General Materials

2008

2008

2009

2009

190,063 tons

322,885 tons

• Steel Bar

1,449,958 ㎥310,641 ㎥

• Sand

3,156,268 ㎥2,016,238 ㎥

• Ready-mixed Concrete

607,227 ㎥574,878 ㎥

• Aggregate

127,270 ㎥83,238 ㎥

• Cement

736,778 ㎥259,663 ㎥

• Asphalt

Consumption of Green Materials

2008

2009 40,894 tons

123,986 tons

• Recycled Aggregate

Total Quantity of Water Intake by Source (Daelim and Business Partners in 2009)

Groundwater Water Supply

384,663㎥ 806,741㎥

Consumption of Energy (Daelim and Business Partners)

Classification

Diesel(ℓ) Gasoline(ℓ)Electricity

(kwh)LPG(㎏) LNG(㎥)

Kerosene(ℓ)

Ignite(㎏)

District Heating(Gcal)

for Construction

Machineryfor Vehicles for Vehicles

2009First Half 41,510,687 1,427,064 1,221,985 20,597,813 413,415 274,175 3,790 145,969 231

Second Half 36,987,819 1,009,293 3,219,790 34,755,831 2,118,197 ㎥ - - 356

2008 80,656,293 1,949,767 2,299,201 68,486,734 3,660,677 ㎥ - - 629

2007 66,825,667 1,463,489 2,286,294 40,860,636 3,186,948 ㎥ - - 613

Materials Flow Chart


Use of Environment-friendly Materials(KRW in millions)

Item 2008 2009

Pre-pasted Wallpaper, Adhesive, Plywood (Common Furniture, Kitchen Furniture) 39,472 76,302

Shower Tap, Faucet, Toilet Bowl 9,094 7,482

Floor-coverings 32,386 30,597

Transformer 4,378 2,742

Paint 3,654 3,544

Total 88,984 120,667

Paint0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

TransformerFloor-coverings Shower Tap, Faucet, Toilet Bowl

Pre-pasted Wallpaper, Adhesive, Plywood

20092008

Expenditures and Investment for Environmental

Protection

Frame

Mesh

Fixed Bar

1,00

010

0

2,000

30 ̊

200

200

H

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All of our construction projects are previewed in the design stage to prevent environmental impacts, and the opinions of internal and external experts are reflected in the design once again. This process contributes not only to the conservation of environment but also to the minimization of public complaints on the environment. Naengjeong-Busan Section 5 of Namhae Expressway The Naengjeong-Busan Section 5 of Namhae Expressway is a road-widening project to solve the shortage of crossroads and bottleneck after the launch of the Busan-Daegu Expressway, which will contribute to the improvement of accessibility to Gyeongsangnam-do. This project aims at environment-friendly road construction. • Plans for Building Animal Inducement Fence and Escapable Drain for Small Animals

Environmental Performance

Environment-friendly Design

Animal Inducement Fence Escapable Drain for Small Animals

• Bird Inducement Screen Plantation

Nakdong River Restoration Project Section 23

This project is one of the government-led four rivers project and aims to construct Round Crest Weirs, clean rivers and secure abundant water resources in harmony with humans and the environment. Our construction design intended to install fish ways to protect fish stocks, preserve existing habitat in the river and prepare wetland for self-purification.

• Installation of Fish Ways

_ Establishment of fish ways by anticipating ecological changes of fish _ Consideration of the movement of fish by installing Ice Harbor Type and Artificial Water Flow Fish Ways _ Preparation of slope less than 1/20 gradient easy to move for all kinds of fish

• Habitat Preservation

Providing Relax Spaces for Fish through Water Type Fish Ways

• Ice Harbor Type Fish Ways

Installation of Gentle Slope for All Fish

• Artificial Water Flow Fish Ways

Conservation of Rock-face that Eagle-owl lives / Installation of Bird Observation Posts

• Habitat Conservation for Eagle-owl in Dongrakgol

Restoration of Otter Habitat and Minimization of Damage

• Restoration Planning of Otter Habitat in Habin District

Installation of 2 Ways: Leftside Artificial Primer Type and Rightside Ice Harbor Type

• Decision of Location for Fish Ways

Layout Plan for Migration Routes of Representative Fish Species

Critical Slope for Run1/10

Critical Slope for Run1/30

54 9 5 5 3 4 20

(Unit: %)

Ggeuri Carp

Black Gobiidae

Secret Fish

Largemouth Bass

Others

Goby Minnow

• Fish Survey

Main Pillar

Screen of Vegetation Belt

Inhabiting TunnelArrangement of Stones

Habitat Space Living and Resting Place

Feeding Space

Yong-in Sports Park

This project is to construct a environment-friendly sports park with a total floor area of 228,920m2 on the land spaces of 89,885.91m2 in Cheoin-gu, Yongin City, Gyeonggi-do.

Technology Development System

• R&D infrastructure

Daelim established a technology research center in 1981 for the first time in the industry in order to evolve as a global leading construction company and contribute to creating pleasant and comfortable lives. Based on accumulated experiences and technological competitiveness, we have focused on self-reliance of advanced construction technology to shape a better future. Our Seoul Technology Institute, 3 Liter House of the Yongin Technology Institute and Daedeok Construction Environment Research Institute are doing their utmost to develop new environment-friendly technologies and construction methods today.Total expenses for R&D including the environment sector reached KRW106.7 billion in 2009, and R&D investments are rising every year.

• Vision

• Performances of Technology Development

_ Development on environment-friendly and low energy consumption apartments (Eco 3 Liter House) The “Eco-3L House” means a house designed to use just 3l fuel per 1m² for heating and cooling every year. Comparing to existing apartments using annual average of 17.5l kerosene, the Eco-3L House makes it possible to reduce energy consumption up to 80% as well as environment pollution.Daelim had built the 3L House with the passive house concept requiring just 20~30% energy consumption for heating and cooling compared to existing houses in December 2005 for the first time in Korea. And Korea’s first 3L House apartments were built in our Daedeok Construction Environment Research Institute in September 2006. Our 3L House technologies have been introduced to management and community facilities of Daegu Susung, Wonju Musil and Osan Sema apartment complexes. All of our extended-type apartment complexes including the Ulsan Yugok apartment sold in April 2009 will be built to reduce energy consumption up to 30% for heating and cooling. Since 2010, the energy saving target will be raised up to 50% for all of our apartment complexes. We are also focusing on R&D activities to commercialize the Eco-3L House by 2012.

_ Gray water recycling system in the apartment complexesWe are developing a technology to reuse gray water for toilet in the apartment complex. To this end, we are focusing on evaluating and commercializing the AO-micro membrane filtration and advanced oxidation process systems to treat gray water along with analysis of the quality and quantity of gray water.

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Development of Environment-friendly

Technologies


Green flow covering Hannam vein, field, picnic spot, water’s edge park, and 2nd project area

• Outside Place Meeting the Nature

Various three-dimensional access flows to outside places using topography

• Easily Accessible Facilities Using Topography

Green stadium involving gorgeous natural scenery inside

• Stadium in the Nature

• House of Yongin Technology Institute • House of Daedeok Construction Environment Research Institute

TechnologyLeader

ValueCreator

Proposing the direction of R&Dfor new growth engines

Developing future-oriented technologies

Securing core technologies for the commercialization

Leading in technologies by securing business

competitiveness

G

O L

A

[Outline of advanced oxidationprocess system]

[Outline of AO-micro membrane filtration system]

Nuri Square

Mir Square

WaterfrontPark

Pedestrian

Polycarbonate

Natural Ventilation Green Floor

LightRailwayTaxi Bus

Grass Leisure Park

42 43

To boost eco-friendly supply chain management, Daelim is implementing an advance registration system for business partners engaging in waste disposal, construction, supply of materials and architectural design. And we reflect the results of environmental evaluation on ISO14001 and eco-friendly materials certification in the case of selection of business partners.We are also operating regular application, evaluation and education systems to secure excellent business partners and foster cooperative relationships with them. Moreover, we select excellent business partners and join in overseas experiential training programs every year.

Dust scattering Control

Daelim strives to prevent dust scattering at its construction sites by establishing and conducting a variety of countermeasures including the installation of dustproof covers on vehicles and stock yards, operation of tire cleaning devices and sprinkler vehicles and curtains, change of blast method, and equipment of dust net on the outer wall, etc.

Noise and Vibration Control

Various environment-friendly construction methods and noise and vibration control technologies are intensively being introduced to the construction projects in the downtown area. And we thoroughly abide by the noise and vibration control regulations by reflecting the estimation results of noise and vibration to construction works every day.

Water Pollution Control

Water resource becomes more and more important as Korea is recognized as a country with water shortages. Daelim strives to reduce the use of underground water during the construction and discharges used water after legally treating. In addition, the treatments of boiling point pollutants and sewage are mandatorily entrusted to specialized companies to prevent water pollution. Sewage from concrete batch plants and tunnel projects are discharged through specialized waste water treatment facilities in order not to influence neighboring rivers. In 2009, total 15 waste water treatment facilities were installed and operated. And the operation of those facilities and on-site water quality are monitored and inspected regularly or irregularly.

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Eco-friendly Supply Chain Management

(Eco-SCM)

Eco-friendly On-site Management


Soil Pollution Control

Daelim upgrades construction methods and thoroughly conducts pretreatments for byproducts generated in the construction works not to be mixed with soils. On-site machinery repair and oil changes are also generally prohibited. Soil pollution protection facilities are installed just when it’s absolutely necessary.

Construction Waste Control

We are focusing on controlling construction wastes through continuously upgrading design and methods. The wastes are classified and stored by characteristic, of which reusable ones are proactively be used in the site and others are entrusted to specialized companies for recycling, disposal and incineration.A total of 607,667 tons of construction wastes were generated throughout the sites in 2009, of which concrete waste accounted for 51% and mixed construction waste and asphalt concrete waste represented 19% and 15%, respectively. We intend to aggregate the amount of wastes by work type to analyze the trend and establish plans for reducing wastes.

01_ Installation of soundproof wall blending with surrounding scenery

02_ Installation of dust scattering protection shield around the outside of the building

03_ Blast work after the installation of soundproof house

04_ Installation of soundproof tent between breaker works

05_ Monitoring turbidity of neighboring rivers

06_ Installation of drain on the site

01

02

03

04

05

06

[Waste Quantity]

(Unit:�tons)

2008

463,713

607,667

2009

3%6%0.5%

12%

0.5%

33%

45%

Mixed construction waste

Sand and stone waste

Concrete waste

Wood product waste

Asphalt concrete waste

Others

Synthetic resin waste

6%13%

19%

5%

0.5%

15%

51%

[Breakdown of Wastes]

Mixed construction waste

Sand and stone waste

Concrete waste

Wood product waste

Asphalt concrete waste

Others

Synthetic resin waste

20092008

44 45

Our representative housing brand e-Pyunhan Sesang pursues to provide comfortable living spaces to customers. And it was created by professional architectures and boasts excellent quality and practicality. The e-Pyunhan Sesang includes unique philosophy of realizing the ‘convenient world’, ‘healthy world’ and ‘world with culture and art.’To this end, Daelim is dedicated to researching acoustical, sunlit, thermal and airy conditions, and developing new technologies, which will contribute the company to be a leader in creating the living spaces for customers.In addition, the company has various environment-friendly building certifications designated by the Ministry of Environment and the Ministry of Land, Transport, and Maritime Affairs through the evaluation on factors affecting the environment such as energy and resource savings, reduction of pollutant emission, convenience, harmony with surroundings at all processes covering materials, design, construction, maintenance and disposal.

[Environment-friendly Building Certifications]

Classification Name of Building

Environment-friendly Building Certifications (Main

certification)

Baekhyun Village Humansia e-Pyunhan Sesang Complex 8, Baekhyun Village Humansia e-Pyunhan Sesang Complex 9, Musil e-Pyunhan Sesang, Wondong e-Pyunhan Sesang Complex 1, Wondong e-Pyunhan Sesang Complex 2, Jaesu Nohyung Wondong e-Pyunhan Sesang

Environment-friendly Building Certifications

(Preliminary certification

Seoul I.T Complex, Seocheo KIM'S TOWER (B), Osan Sema e-Pyunhan Sesang, Seoul Woods e-Pyunhan Sesang

_ Seoul I.T Complex: This building with six basement floors and 21 ground floors on a total floor area of 73,340.10m2 which is under construction in Sangam-dong, Mapo-gu, Seoul, acquired the top-level preliminary environment-friendly building certification in December 2009.15.6% of cooling and heating of the building will be generated from geothermal heat system. Rainwater tanks and heavy water tanks will be installed under the ground, of which rainwater will be used for landscaping and heavy water will be used for toilets.

_ Baekhyun Village Humansia e-Pyunhan Sesang Complex 9: This apartment complex with 15 residential buildings and 348 households located in Seongnam, Gyeonggi-do, was completed the construction in October 2009 and acquired the environment-friendly building main certification. Nine kinds of materials with the environment-friendly certification including recycled glass-wool insulator, plaster board and clay brick went into the construction to improve the environment and interior air quality. In addition, we installed the waste transfer system and food waste driers, which is expected to contribute to the reduction of food wastes, improvement of residential lives, recycling of food wastes and solution of landfill space problems.

Daelim has tried to accumulate environment-friendly technologies for years. By applying these technologies to various projects, we are leading the construction of environment-friendly and sustainable buildings. We will continue to focus on developing new technologies for load reduction of buildings and applying more renewable energies to provide more environment-friendly and low energy consumption buildings. Jungrung 2nd e-Pyunhan Sesang

Our Jungrung 2nd e-Pyunhan Sesang completed in June 2009 became Seoul’s first apartment complex in which solar power generation system was applied. It boasts low energy consumption and environment-friendly facilities built by green construction design and technologies.

_ Solar power generation system: Daelim adopted the solar power generation system to meet recent customer needs for low energy consumption and environment-friendly buildings. Electricity generated by the solar power generation system is supplied to common-use spaces, which contributes to the reduction of electricity charges. Solar absorber plates installed at main gates, side walls of each building and rooftops generate monthly average of 550kwh electricity. And the electricity is used for the power of basement lights and street lamps through being changed to alternating current by converters after letting generated electricity flow as the direct current to transmission.

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Application of Environment-friendly

Technologies

Creation of Environment-friendly

Living Spaces


[Installation of Solar Absorber Plates][Flow of Solar Power Generation System]

AC (Alternating Current)

<4 Inverters>

<Common UseParking Lot Lamps>

DC (Direct Current)

<44 200W Module Plates>

<4 DC Connector Bands>

<Electricity Control Panel>

46 47

_ e-Energy playground: The e-Energy playground generates electricity by using the kinetic energy of running children, and the electricity operates each theme of play equipments. This process stimulates the curiosity and interest of children.Children are able to learn the production principle of electricity generated from kinetic energy from early childhood and the value of electricity through the e-Energy playground, which is highly praised by residents.

[Devices of the e-Energy playground]

Devices Content

Bicycle pinwheel Work a pedal and the pinwheel rotates

Music rotation stage Turn the stage and music comes from it

Bicycle light Work a pedal and colorful lights are on

Music generator Rotate generators and music comes from it

Wind direction dragonfly Check the direction of the wind

Exciting slide Slide down the slide and potential energy takes place

The Ministry of Environment announces the disposal results of environment-related penalties collected by the violation

of environmental regulations of construction companies twice a year (March and September). As for Daelim, there has

been no accident or violation of environmental regulations for the last 10 years. Therefore, there was no deduction

point on trust in the environment sector. Daelim will strive to prevent environmental affairs, thereby to be the leader in

environment-friendly construction in the future.

Most countries are tightening regulations of greenhouse gas emissions. To actively respond to these regulations, Daelim

conducts the research on actual carbon dioxide emission.

We established the carbon emissions management system in 2009 and are aggregating the amount of carbon

emissions at the sites in the nation and the headquarter office in real time. We will make every effort to reduce carbon

emission based on systematic target management.

[Results of Carbon Emission (Daelim and Business Partners)]

Year Unit Equipment Electricity Vehicle Gas Others Total

2009CO2 tons 200,349 25,459 16,247 6,203 2,168 250,426

% 80.0% 10.2% 6.5% 2.5% 0.8% 100%

2008CO2 tons 207,994 31,727 10,194 8,276 - 258,191

% 80.6% 12.3% 3.9% 3.2% - 100%

2007CO2 tons 172,328 18,929 8,911 7,205 - 207,373

% 83.1% 9.1% 4.3% 3.5% - 100%

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Reduction of Greenhouse Gas Emission

Research and Analysis on Carbon Emission

Environmental Accident or Violation

of Environmental Regulations


e-Energy playground

0%

20%

40%

60%

80%

100%

20082007 2009

Others

Gas

Vehicle

Electricity

Equipment

Breakdown of Carbon EmissionCarbon Emission (CO2 tons)

2008

258,191

2007

207,373

250,426

2009

Daelim is implementing the Green Habit campaign which is a low carbon practice movement aimed at the reduction of carbon emission in all lifestyles since 2009. Through this campaign, all of our executives and staffs are changing their habits in life and workplace into low carbon ones. Target for Green Habit and Result

Target Home and Private Life Workplace

Action Items

- Electricity and gas savings

- Public transportation in daily life

- Effectiveness of water and food consumption

- Minimization of wastes

- Recycling of resources, etc.

- Improvement of building management

- Energy saving through upgrading equipments

for lighting, heating and cooling

- Minimization of wastes

- Recycling of resources, etc.

Reinforcing perception of all employees about the necessity of green business through cyber

education for 4 weeks- 99.7% of all employees completed the education.

Monitoring activities throughself-evaluation by team and individual

level once a month

Setting up green mindset by utilizing

the Green Habit PR posters and images

Delivering the willingness of the CEO through officially proclaiming the campaign

Giving sense of obligation to all employees by signing the oath

Enhancing the awareness by sharing the practical tasks through internal broadcasting

Cyber Education for Green

Management

Proclamation of Green Habit Campaign

Green Habit Oath

Sharing Practical Tasks

Self-evaluation on Green

Public Relations on Green Habit

Result of Green Habit

Provision of Transportation to Employees

Daelim is operating commute buses for employees upon their arrival and departure, and implementing the 10th-day-no-driving system to reduce greenhouse gas emissions.

_ Amount of oil used by Daelim and Business Partners in the Second Half of 2009

(Unit: ℓ)

Vehicles for Commuting Vehicles for Business

Gasoline Diesel Gasoline Diesel

1,029,460 460,000 192,525 967,064

48 49

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Green Habit


2008

5.5

5.1

2009 2008

26.1

24.6

2009 2008

189.8

169.8

2009

2008

628

587

2009 2008

340.8

322

2009 2008

30.8

37.4

2009

Energy Saving through Green Habit in the Head Office

Classification 2008 2009 Change

Consumption

Electricity (kwh) 5,523,527 5,080,259 ▼ 8.03%

Water supply (tons) 26,058 24,624 ▼ 5.50%

Gas (m3) 189,818 169,846 ▼ 10.52%

District heating (Gcal) 628 587 ▼ 6.53%

Oil (ℓ)Gasoline 340,871 322,045 ▼ 5.52%

Diesel 30,829 37,375 △ 21.23%

Total 6,189,517 5,691,142 ▼ 8.05%

Electricity (Gwh) Water Supply (thousand tons) Gas (thousand m3)

District Heating (Gcal) Oil – Gasoline (㎘) Oil – Diesel (㎘)

52 Balance of Life and Works 61 Customer Satistaction 67 Win-Win Cooperation 70 Social contribution activities

Caring for each other makes tomorrow warmer and happier.As a responsible corporate citizen that respects the individual and cares about the community, Daelim will make every effort to sustainably create social value and walking together with the community through various social contribution activities and human-oriented management.

SOCIAL PERFORMANCE

52 53

The number of employees of Daelim was 3,278 as of the end of 2009 and the total annual wages were KRW199.4 billion. The annual average wage was KRW61 million per employee.

ClassificationNo. of Employees Average Length of

Services

Wage

Office/Management Technical Post Total Yearly Total (billion) Per Employee (million)

Male 675 2,487 3,162 11 years and 9 months KRW194.0 KRW61

Female 60 56 116 9 years and 8 months KRW5.4 KRW46

Total 735 2,543 3,278 11 years and 8 months KRW199.4 KRW61

Total amount of KRW40.4 billion has been accumulated for the defined benefit type retirement pension as of the end of 2009, which accounted for 83.9% of the total allowances for severance and retirement benefits of KRW48.1 billion. The employees’ vesting rights for retirement benefits are entirely guaranteed by this accumulated amount.

Monthly wage standard for new employees was applied to all of Daelim’s business places including the head office, branches and construction sites. It was about 3.4 times of the statutory minimum wage decided and notified by the Minimum Wage Committee.

Classification 2007 2008 2009

vs. statutory minimum wage 370% 360% 340%

* as of 209 hours a month

As of the end of 2009, the number of employees of Daelim was 3,278, of which 2,995 employees belonged to the head office and the domestic sites and 283 employees worked in overseas sites.

ClassificationDomestic Overseas

TotalHead Office Branch Site Sub Total Branch Site Sub Total

Ordinary Worker 1,429 50 1,050 2,529 14 182 196 2,725

Specialized Worker 159 10 297 466 2 85 87 553

Total 1,588 60 1,347 2,995 16 267 283 3,278

In 2009, the number of the unemployed was 23, which accounted for 0.8% of total 2,790 ordinary workers as of the end of the previous year. Daelim keeps lower turnover rate through continuous cultivation of talented people and improvement of welfare system.

Classification 2006 2007 2008 2009

No. of the unemployed 22 46 33 23

Total employees as of the end of the previous year 2,487 2,548 2,663 2,790

Turnover rate 0.9% 1.8% 1.2% 0.8%

SOCIAL PERFORMANCE

Balance of Life and Works

Wages of Employees

Number of Employees

Defined Benefit Type Retirement Pension

New Employee’s Wage over Statutory

Minimum Wage

Job Changes

2009

553

3,278

2,725

2008

544

3,256

2,712

2007

3,071

2,651

420

2006

2,853

2,537

316Ordinary Worker

Total

Specialized Worker

0.5

0.0

1.0

1.5

2.0

2009200820072006

(Unit: %)Turnover rate

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(Unit: persons)

54 55

The company is operating various welfare systems such as subscription of group term insurances, supports for student aid, general health checkup, supports for medical expenses, and provision of resort for the employees to improve their quality of lives and continuously grow. Especially, we have been operating the selective welfare system that any employee can chose the kind of welfare items according to their preferences since 2008.

Contents Contents Contents Contents

Group term insurance

Support for unexpected death, injury, and disease

Student aidSupport for actual student aid to reduce the burden of education

Selective welfare system

Cafeteria type welfare system Provision of resortSupport major condos in the country once a year (3 nights)

General health checkup

General health checkup through 60 major medical examination centers in the country every year

Support for medical expenses

Support for medical expenses paid for the employee and its family up to KRW3 million a year

In-company community

Support for operation expenses of in-company communities to reinforce the relationship among employees

Operation of in-site dining halls

Provision of lunch/dinner in the head office and breakfast/lunch/dinner in sites

Operation of commuter bus

More than 10 lines for convenient commutation of employees

In-company loansSupport for loans at low interest rate by the in-company labor welfare fund

Support for Moving expense

Support for long distance moving expenses caused by transfer orders

Maternity bonusKRW3 million per birth for the employees having 3 children or more

Daelim is operating a medical office in the company for the health management of employees, in which resident nurses analyze the health checkup results of employees, monitors and supports the potential patients of major diseases periodically. Additionally, the families of employees are able to use the same health checkup program, and the company supports medical expenses for the prevention and treatment of diseases. We are also providing employees with the body composition analysis and consultation services and operating the no-smoking clinic by cooperating with local public health centers in order to continuously drive preemptive health management activities.

Health Checkup Program for Employees

and Families

Periodic Performance Evaluation and Career

Development of Employees

Employee Figures

SOCIAL PERFORMANCE

Daelim evaluates the performances and competencies of employees fairly every year according to the regulations, and the results are applied to overall personnel management including incentive payment, promotion, phone layout, education & training, reward & penalties. This process intends to uplift the employee’s satisfaction level and finally to improve the companywide performances.

We hired a total of 3,278 employees as of end of 2009, of which the thirties and forties accounted for 72.2%. This result becomes the foundation for sustainable growth of the company. The rate of the fifties and over reaches 15.1%, and most of them demonstrate high quality craftsmanship. Meanwhile, the rate of female workers is relatively low due to the characteristics of construction business which has more limitation on the maternity protection than other businesses.

ClassificationOrdinary Work Specialized Work Total

Male Female Sub Total Male Female Sub Total Male Female Sub Total Rate

Twenties 351 19 370 41 5 46 392 24 416 12.7%

Thirties 866 48 914 233 25 258 1,099 73 1,172 35.8%

Forties 1,053 16 1,069 123 2 125 1,176 18 1,194 36.4%

Fifties 371 1 372 114 0 114 485 1 486 14.8%

Sixties 0 0 0 10 0 10 10 0 10 0.3%

Total2,641 84 2,725 521 32 553 3,162 116 3,278

96.9% 3.1% 94.2% 5.8% 96.5% 3.5%

The company pays wages according to the skill level, duties, workplace, and individual factors of each employee. There is no gender discrimination in the compensation policy, therefore, the same wage is paid to the employees who are performing the same duty with similar work skills with each other. We pursue the performance-focused corporate culture. There is no gender discrimination in the incentive system as well, except for the difference for the performances of each unit organization. This system motivates employees to boost performances and be fruitful, and helps the company enhance its competitiveness.

Welfare Benefits for Regular Employees

Performance-focused Culture

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Daelim’s industrial accident rate is the beginning of 0.1% level and shows very much stabilized status, which is far less than average disaster rate in the industry. It is the result that all the employees have driven the preemptive prevention activities against the disaster such as the risk assessment (SORA) and pointing out activity as well as the systematic operation of the safety & health management system (OHSAS 18001) based on the management principle for human respect.

56 57

Status of Industrial Disaster

SOCIAL PERFORMANCE

Local Hiring and Proportion of Senior Management Hired

from the Local Community

Human Rights Policy

Measures to Eliminate Child Labor

The respect for human rights of each executive and staff is the basic principle of our management activities. To this end, a variety of programs are executed. For example, we are running a grievance counseling office at guarantees the confidentiality and a breast-feeding facility for the protection of maternity. We are also operating the sexual harassment prevention classes against all employees every year in order to preserve the work environment for female workers and to foster sound organization culture.

Daelim prohibits child labor and forced labor entirely in accordance with the relative regulations enforced by the government. Therefore, we do not hire new employees who are under the minimum age for employment that has been provided in the regulations of each country in entire domestic and overseas business sites inclusively.

Local hiring procedure

As we are carrying out a variety of overseas construction projects in Saudi Arabia, Kuwait, Iran, the Philippines, China, etc., hiring local people is a priority for us according to the localization strategy. For hiring local people, we perform vacancy notifications and recruit activities under the cooperation between local business owner, labor organizations, and manpower agencies. And various opportunities to develop their own capabilities and to be paid sufficient compensations are provided to the local employees according to the local Labor Act of each country.

Proportion of Senior Management Hired from the Local Community

We have not been able to hire senior management from the local communities as yet, because the local manpower pool has not been diversified. However, we have hired medium position managers locally for supervisor or underneath.

[Local Hiring Results]

Country Saudi Arabia Kuwait Iran China Singapore Total

No. of Employees 25 1 18 27 3 74

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[Industrial Disaster Rate Trend]

Average in the industry Daelim(Unit: %)

0

0.1

0.2

0.3

0.4

0.5

0.6

200920082007200620052004

0.51

0.26 0.4

0.19

0.45

0.11

0.44

0.12

0.43

0.11

0.50

0.12

58 59

Duty Education and Lifelong Study Program

SOCIAL PERFORMANCE

Our education performances in 2009 are as follows:

[Average Annual Education Hours per Employee]

Classification Ordinary WorkerSpecialized

WorkerTotal

No. of Completed Courses

Completed HoursNo. of Completed

Courses per Employee

Training Hours per Employee

Executive 69 69 105 1,776 2 26

General Manager 731 121 852 2,877 63,453 3 74

Deputy General Manager 692 91 783 3,987 95,269 5 122

Manager 503 135 638 3,524 84,497 6 132

Assistant Manager 376 131 507 3,566 89,118 7 176

Staff 423 75 498 4,745 130,499 10 262

Total 2,794 553 3,347 18,804 464,610 6 139

The executives and staff have completed 6 education courses and invested an average 139 hours with an average per person in 2009.

Tailored education to strengthen the job quality

Daelim provides various educational programs targeting the reinforcement of company’s competitiveness through strengthening the employees’ duty performing competency. In particular, we support the enhancement of individual professionalism as well as the company’s competitiveness by providing tailored educations according to each individual’s duty.

Average Annual Education Hours per

Cultivation of global talents embodied with Hansoop Spirit

With the target of cultivation global talents embodied with Hansoop spirit, Daelim is providing employees with various

systematic education programs for their capability improvement. Daelim’s talent cultivation system is divided into 4

courses – core value (Hansoop personalization) course to share the company’s core values, leadership course for the

cultivation of future managers, duty competency course to improve professionalism, and global course.

Executives and staffs are provided with selective on-/offline educations for their competency improvement according

to each individual’s duty and competency level. We support the individual’s competency development through external

education, acquisition of licenses, and language support when each individual needs the self-development.

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[Companywide Education System]

Cultivation of global talents embodied with Hansoop Spirit

Hansoop Personalization Leadership Competency Professional Competency Grobal

Basic LevelLearning Organization

Self-studying Culture (Self-Development): External Education, Language Support, Qualifications about Statutory Duties, etc.

Leadership Training

for Newly Appointed

as Executives

Reading Management Academy

Construction Management Academy3 [1 A2-5]

Construction Management Academy2 [1C2-3]

Construction Management Academy1[20b4-5]

Follow-Up Course for New Employees

Basic Course for Executives (Top Course

in Construction)

Training for Assigned Employees

After Completion Management for Completed Employees

Professional Course for Executives (Marketing/

CFO, etc)

ProfessionalLevel(Executives)

AdvancedLevel

IntermediateLevel

FundamentalLevel

Introduction Course for New Employees

Basic Duty Course for New Employees

Vision

Basic Co

urse (Exp

ected)

Trainin

g fo

r Experien

ced Em

plo

yees (ON

)

Job

Master C

ou

rse/Strategic D

uty

Co

mm

on

Co

urse in

Each Jo

b/Th

eme C

ou

rse

Trainin

g fo

r Develo

pin

g Lan

gu

age A

bilities

Co

mm

on

Trainin

g fo

r Dep

artmen

t/Head

qu

arters

Du

ty Ch

ang

e Co

urse

GLO

BAL BIZ

After Completion Management for Completed Employees

Job profiles

· Prognosis of knowledge and skills for the job by using job profile(Self-check Superior’s check)

Diagnosis of Competency

· Deduction of weak knowledge and skills

Deduction of Education Needs

· Establishment of training plans for making up for weak knowledge and skills

- Cyber book reading - Specialized external training,

etc

Execution/Evaluation

· Implementation of training programs

· Monitoring of training practice�→ Control by indices Coached by team leaders

[Planning and execution process of team leader oriented duty competency development]

(Unit: hours)

NCSI (National Customer Satisfaction Index)

We are taking the national customer satisfaction index rating under the fair screening every year that is jointly organized by Korea Productivity Center, Chosun Daily, and Michigan University. The institutes monitored the customer satisfaction of residents in our e-Pyunhan Sesang apartment complex, at which our efforts acquired excellent evaluation. As a result, we have achieved the 1st rank in the NCSI (national customer satisfaction index) in 2009.

KARSI (Korea Apartment Residents Satisfaction Index)

KARSI is the customer satisfaction rating surveyed by the Ministry of Land, Transportation and Maritime Affairs based on the morality, objectivity, and fairness, which pursues the quality improvement of houses and people’s lives. Our e-Pyunhan Sesang apartment complex has been recognized by the government for supplying quality housing through its selection of superior company by KARSI in 2009, and received the favor to add up 2% of basic type construction costs to the sale prices.

60 61

Volunteer Activities for Customers Health &

Safety

SOCIAL PERFORMANCE

Provision of lifelong study programs through the cyber training center

Our cyber training center makes it possible for all employees to easily search lifelong study programs and to take the courses. These programs include work duty, language, IT and general management areas, which are provided to all employees through cyber training and mailing contents without limitation. (320 cyber courses and 119 mailing courses were operated in 2009)

We also provide a variety of language study contents such as daily English learning materials, construction English, and global cultures through the global zone in the cyber training center. Executives and staffs can continuously plan and practice the self development in the lifelong study conception by acquiring the up-to-date knowledge contents for management, economics, creativity, and so on.

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Customer Satisfaction

[Daelim’s Cyber Training Center]

Awarding of Excellent CS Certificate

Excellent CS Certificate

Awarding of the Top-ranking Certificate of NCSI in 2009

Top-ranking Certificate of NCSI in 2009

[Scores and Ranking at NCSI for 3 years]

2007 2008 2009

Score 80 81 81

Ranking 2 2 1

Operation of Integrated Contact Center (ICC) and VOC System

Daelim has been running the ICC, established in September 2009 for the first time in the industry, in order to expand customer satisfaction activities. A lot of work processes and database which had been dispersed into several divisions such as sale counseling with customers, warranty reception and treatment were unified into the ICC, and we are now managing them at a single contact point through the ICC. Also, the automatic call connection matching system was first introduced in May 2009 through continuous system supplement and improvement. It automatically connects to the initial counselor when a customer calls second time or more, which provides customers with reduction of inquiry time and comfortable counseling environment.In April 2008, the VOC (Voice of Customers) system was renewed to respond to customers’ inquiry, counseling, and complaints swiftly and systematically through the homepage.We are also going to initiate a counseling system by SMS in May 2010 for the first time in the industry. This is an advanced system that our counselors reply by messages when customers send the message to #7114, which is expected to enhance customers’ convenience in accordance with the change of their life patterns by the distribution of smart phones. Customers are able to receive the counseling promptly and conveniently by this system.

Apartment maintenance reservation system

The company is providing after service promptly and accurately through the maintenance reservation system based on BASS (Before & After Service System) and mobile devices (PDA, mobile phone).

62 63

Quality Satisfaction Activities to Improve

Customer Value

SOCIAL PERFORMANCE

Operation of orange manager

We are running the ‘Orange Manager’ system to efficiently support the maintenance and after service for residents. The Orange Manager also plays a role as the one-to-one helper at the ‘Pre-residents Invitation Event for Prior Inspection’ which enhances the customer satisfaction.

Housewives advisory panel (orange creasumer) system

Daelim has been operating the ‘Orange Creasumer (creative consumer)’ (5th session, presently) system’ first time in the industry since 2005. Housewives in our e-Pyunhan Sesang apartment complex who had been working in the construction design or interior fields are preferentially selected as the creasumers. This system was introduced to listen to the voices of them who are the actual users of apartments and to develop customer value-centered products and services through the FGI, model house valuation meeting, quality checkup, and orange service inspection. It also contributes to the improvement of work processes for customer satisfaction.

Quality checkup events for residents

There are quality checkup events that housewife customer valuation group (named as Like Orange Manager) who are living in e-Pyunhan Sesang inspects the apartment houses before the pre-residents invitation events. It is a brand value enhancement campaign in order to evaluate the complete houses in the standpoint of newly in-moving customers, check the defects, minimize customers’ complaints at the pre-residents invitation events, and lift up the quality completeness.

Pre-residents invitation event

In addition to various quality checkups, we implement the pre-residents invitation event for customers to visit their own homes and inspect inconveniences a month before moving in. Through this event, we improve and treat the insufficient affairs which were checked by customers.

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Contents Classification and Team Assignment

Solution of Problems

Answer DeliveryCustomer Reviews

(Satisfaction, Recommendation

Index)

Feedback(Marketing, Products,

Sales Skills, Apartment Sales, etc)

[VOC System Flow Chart]

Clean Space Service Checkup

Housewives Advisory Panel Appointment Ceremony

[Counseling Flow Chart by SMS]

Searching for Answering Information

Preparing and Sending Reply

SMS to CustomerMessage Inquiry from Customers

[A/S Reservation System Process]

Temporary Registrationfor A/S

ConfirmationTime Management

Contents Identification and Change to Ordinary

Registration

Ordinary RegistrationConversion Rate

Management

Notification ofScheduled date for

Maintenance Service

Schedule Management

Materials Management

A/S Line-up

Integration with Mobile Phone and

PDA

Happy Call

Satisfaction Management

Promise-keeping Management

64 65

Cultural activities for customer satisfaction

SOCIAL PERFORMANCE

Orange Culture Day

We provide a variety of cultural events such as the world’s renowned 4 grand musicals, music concerts, and cinema previews for the contractors and pre-residents of e-Pyunhan Sesang for the relaxation of customers along with the culture and arts.

Orange Experience Day

To meet housewives’ needs for cultural experiences, Daelim offers a var iety of programs such as the visit to the construction environment research centers, experimental education of botanic gardens, the first anniversary festival for residents, regional music concerts and VIP invitation events.

Social contribution activities

We are participating in social contribution activities together with our e-Pyunhan Sesang customers. These activities include ‘Sharing Love and Sharing Kimchi Event’, ‘Voluntary Works in the Aged Nursing Home’ and ‘Beautiful World by Sharing Love’ donation campaign connected with a non-profit citizen body ‘Beautiful Shop’, and ‘Delivering Silver ID Necklace’ campaign. Through these activities, we and our customers are recognizing the importance of social contribution and practicing social responsibility, which helps to form the consensus for the company’s management philosophy, products, and brand value.

Orange Checklist

We present the apartment evaluation standard table, ‘Orange Checklist’, that has made out by the specialists in construction and design when executing the residents’ prior inspection. It is listed with about 90 specific items that must be checked and inspected before the home owners move in. Inconvenient items are perfectly treated and repaired in advance.

Orange Letter and cultural webzine for scheduled residents

The Orange Letter is sent to pre-residents in order to approach them and culture & art news related to the construction business are also provided by webzine on the homepage. The Orange Letter is issued every quarter from a year before the moving-in, which includes various specialized contents such as ‘Our Home Visiting in Advance’ informing the construction progress, ‘Letters from the Field Directors’, and ‘Looking around Our Neighborhood (guide to local information)’ introducing the living environments or cultural spaces nearby the apartment.

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Sharing Love and Sharing Kimchi Event Voluntary Works in the Aged Nursing Home

Orange check list

Orange Art-school Housewives’ Ideas Competition

Orange Happy Day

It's ComplicatedThe Tale of Despereaux Phantom of the Opera Brother was Brave Nanta

Culture & Art Webzine on HomepageOrange letter

Customer service brand ‘Orange Service’

Daelim introduced the ‘Orange Service’ for the first time in the industry in 2003 in order to enhance customer value through providing differentiated services. The Orange Service includes cleaning of inside houses (kitchen, bathroom, lampshade, bed, etc.), silicon recoating of bathrooms, cleaning of external windows, and free management of landscape architecture of public areas in the complex.In April 2008, the ‘LOHAS Service’ was launched to meet customers’ needs for health. New residents are able to use the community facilities such as health club, in-door golf, GX room for free during the first six months through the ‘LOHAS Service’.

_ Customer information collected through various channels is saved and coded in the database and safely managed by the firewall.

_ We have set up systematic and efficient internal control system abided by regulations and guidelines for the management of customer information.

_ Safety of customer information is being enhanced through continuous educations on the responsible staff and companywide safety consciousness cultivation.

Service Quality

Improvement of Customer Information

Regulations and Guidelines

Customer Information

on Password/ Firewall Publicity and

Education about Information

Security

Contract Customer Information

Membership Information on the Homepage(A/S, Orange Service, Interests Customer, etc)

Other Personal Information

66 67

Financial Support

Support for Technology Development

SOCIAL PERFORMANCE

Full cash payment of contracted amount

The terms and conditions of outsourcing contract payments for partnership companies are as follows. Daelim pays all the field costs by cash including outsourcing expenses for partnership companies. However, costs for in-house construction and outsourcing of private contracts are paid by B2B Plus method with 60-day maturity (cash and cash equivalent payments, loan against e-Credit that has no claim rights to the partnership companies).

Reduction or exemption of performance bond

• We reduce the amount of performance bond according to the domestic subcontractor management regulation, clause 4.7 (performance bond) for the registered companies of Daelim.

• Daelim selects superior partnership companies and grants privileges every year by the domestic construction subcontractor management regulation, clause 5.0 (evaluation & reward of partnership companies)

• Special favors to superior partnership companies (2009. 3. 27 ~ 2010. 3.31)

_ Exemption of performance bond_ Preferential treatment of payment against earned value_ Endow with priority right for the invitation to bid

Daelim supports the development & transfer of technologies, facilities, and joint research to the partnership companies in view of win-win cooperation, and the followings are our performances.

Free support for patent and technology and expansion of joint technology development

• Conclusion of an agreement on the joint research & developmentDaelim, Geosys Co., Ltd., and Chemicon Co., Ltd. signed an agreement on the joint R&D to shorten concrete structure processing construction period by using crude steel type binding materials

• Conclusion of an agreement on the joint research & developmentDaelim, Ssangyong Cement Ind. Co., Ltd., and Econex Co., Ltd. signed an agreement on the joint R&D for crude steel concrete mixing technology to shorten the construction period of apartment houses

• Conclusion of an agreement on the joint acquisition of intellection property rightsDaelim and Pavingstone Co., Ltd. signed an agreement on the joint development of the subject technology: Road pavement method by stone materials

• Conclusion of an agreement on the imputation of intellectual property and royalty payment for jointly developed technology

Daelim and Sunghyun Chemical Co., Ltd. signed an agreement on the development and acquisition of joint intellectual property rights for subject technology: Patent application # 0138450 (composition of high strength concrete cement high density fire-resistant covering material with finish effects), Patent application # 0138458 (high strength concrete method by using the high strength concrete cement type high density fire-resistance spray coating material) _ Above data is for the technology agreements signed up in 2009.

Protection of Customer Information

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Win-Win Cooperation

Clean Spaces Green Garden

The LOHASClean Sky

68 69

Support for Management Activities

SOCIAL PERFORMANCE

Operation of financial consulting and activation of management diagnosis program for partnership companies

• Daelim executed the management diagnosis program for partnership companies who had high transaction weight with us as a part of polices of support for superior partnership companies and support for win-win cooperation.1) Contents: Financial consulting for major partnership companies (11 companies)2) Organization: Person-in-charge of Daelim, CPA of Korea Business Appraisal & Valuation Corp.3) Schedule: (1) Submission of documents – Jul 6~10, 2009

(2) Dispatch of questionnaire for analysis result – Jul 11, 2009 (3) Visit and meeting with management: Jul 13~23, 2009

• Expected effects1) Sympathy for the improvement direction of financial status and deliberation of support plan for each company2) Step by step measures for the improvement of credit rating of registered companies 3) Understanding of the management status of target companies for raising credit rating

Daelim grants various privileges such as stable supply in order to cultivate superior partnership companies.

• Privileges for superior partnership companies1) Exemption of performance bond2) Preferential payment of earned value (100% cash)3) Endow priority for the invitation to bid.

• Expansion of D&P (Design and Procurement) contracts (as of end of December 2009)1) Materials: 41 items / 38 companies2) Outsourcing: 16 work units / 16 companies

• Expansion of annual price agreement (as of end of Dec, 2009)1) Materials: 36 items / 46 companies2) Outsourcing: 5 work units / 9 companies

Daelim strives to protect the human rights of executives and staff of partnership companies by the statement of following descriptions as special terms and conditions for contract when signing up the subcontracting agreement with them.

• Safety of workers in partnership companies (Article 2)Guidelines for the safety of mentality and health of workers

• Subscription of employment insurance and retirement mutual aid installment (Articles 4, 5)Subscription of employment insurance and retirement mutual aid installment for the stable employment of workers and basic life

• First payment of labor wages out of the payment for earned value and subrogation (Article 7)First payment of labor wages with priority and subrogation when payment of labor wages is delayed as of accidents or so in the partnership companies

Education program

Financial Support

The 3D object-based costs-schedule tier technology and 3D object-based information management technology applied with BIM in Korea are still in its beginning stage of development. In order to develop 3D-based efficient construction management program with the domestic technologies, Daelim provided financial supports to Sensorway Co., Ltd. with technological competitiveness to develop construction technology for suspension bridges and to H&K Engineering to develop construction equipments.

Daelim is supporting and executing the educations for management innovation, cost reduction, labor, quality, safety, and environment to strengthen the competency of executives and staff of partnership companies.

Extensive execution of quality & safety education for executives and staff of partnership companies

• 1st cyber education of quality for executives and staff of partnership companies1) Education period: Apr 27~ May 26, 2009 (1 month)2) Attendance: 240 persons / 166 partnership companies3) Graduation: 225 attendance / 159 partnership companies

• 2nd cyber education of quality for executives and staff of partnership companies1) Education period: Sep 24~ Oct 20, 2009 (1 month)2) Attendance: 209 persons / 118 partnership companies3) Graduation: 184 attendance / 108 partnership companies

• Cyber education of safety for executives and staff of partnership companies1) Education period: Nov 9 ~ Dec 15, 2009 (1 month)2) Attendance: 77 persons / 47 partnership companies3) Graduation: 75 attendance / 47 partnership companies

• Safety environment education (for partnership companies) for managers/supervisors of 2009 winter season1) Education period: Jan 14 ~ Mar 4, 20092) Education Venues: Major construction sites as for 9 sectors3) Education Contents: Intensive management principle, risk management, environment management4) Education frequency and performance: 65 times, 250 partnership companies, 1,174 employees

• Execution of win-win cooperation seminar1) Conference of D&P companies: 6 times per year (3 presidential meetings and 3 staff-in-charge meetings)2) Playmate Conference: 2 times a year (Mar, Sep in 2009)3) Playmate breakfast seminar: 2 times a year (Apr, Oct in 2009)

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Human Rights of Major Venders and

Subcontractors

Support for Contract Activities

Daelim is committed to supporting underprivileged people and sharing love with local communities. To this end, we are implementing 5 kinds of social contribution activities: sharing happiness, sharing love, sharing clearness, sharing culture and sharing hope.

Daelim has been constructing houses for the homeless people since 2005, in which our executives and staff proactively participate. We also repaired 30 childcare community centers and 20 low-income homes needed for repairs and supports in Seoul and the suburbs of Seoul in May 2009.Daelim will continue to expand the lovely home repairing project that can make the most use of characteristics of construction business.

New employees of Daelim should complete the Sharing Love activity class as a compulsory education course when entering the company. Any employee in the main office can participate in the Kimchi service, facility cleaning, outdoor cultural service activities, etc. through volunteer application. Meanwhile, employees at each site are performing the services for the alienated neighbors in the community. There are 10 in-house community clubs and they voluntarily visit their sister-welfare facilities to deliver donations or presents and join the cleaning and cultural activities.

70 71

Sharing Happiness


Sharing Love

SOCIAL PERFORMANCE

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Sharing Clearness

Sharing Culture

The ‘Clearness Sharing Volunteers’ comprised of the employees of main office and construction sites in the country implements ‘Caring One Mountain, One River and One Street’ campaign jointly with local governments in major 10 regions. Starting from caring Mt. Nam by the civil division in early June, executives, staff and their families of construction/plant/management support divisions have participated in regular cleaning activities through the year. Meanwhile, workers at each construction site in the nation conduct the ‘Caring One Street’ activity that makes up flower roads and cleans up the roads in the neighborhood of the construction sites once for every month.

Daelim has joined the Korea Mecenat Council as a member since 1994, and continued the support for culture and arts to the children in the nursery schools in Seoul and Gyeonggi-do areas for 15 years. The company processed the ‘Daelim Dream Tree Arts Travel’ program for the children and teenagers in the welfare facilities at the Daelim Art Gallery together with Korea Mecenat Council in 2009, in which more than 500 children in the nursery schools and childcare centers in Seoul and Gyeonggi-do areas had good chances to experience valuable culture/arts exhibitions for a day.

We have continuously donated second-hand PCs to alienated people and the developing countries jointly with the self-help promotion agencies since 2004. This campaign also helps the company create jobs in the process of collecting and treating the PCs. In addition, we contributed electric wheelchairs and information terminals to the disabled.

Sharing Hope

72 73

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APPENdIx

73 GRI Index

77 GRI Guideline Application Level

78 Accolades and Participation in Association

79 Financial Data

80 History

GRI Index

Profile Disclosure Description Page Remark

Strategy and Analysis

1.1 CEO Message 4

1.2 Opportunities and Challenges 12,30~31

Organizational Profile

2.1 Name of the Company 8

2.2 Primary Brands, Products, and/or Services 10~112.3 Operational structure 82.4 Location of Company's Headquarters 8

2.5Names of Countries with Either Major Operations or That are Specifically Relevant to the Sustainability Issues overed in the Report

8

2.6 Ownership and Legal Form 82.7 Markets Served 82.8 Scale of the reporting 8,24~262.9 Significant Changes During the Reporting Period Regarding Company Size, Structure, or Ownership - N/A

2.10 Awards Received 78

Report Parameters

3.1 Reporting Period 2

3.2 Date of Most Recent Previous Report 23.3 Reporting Cycle 23.4 Contact Point for Questions Regarding the Report or Its Contents 23.5 Process for Defining Report Content 18~203.6 Boundary of the Report 23.7 State Any Specific Limitations on the Scope or Boundary of the Report 23.8 Basis for Reporting on Joint Ventures, Subsidiaries That Can Significantly Affect 23.9 Report Information, Data Measurement, Evaluation Method 2

3.10 Re-statements of Information Provided in Earlier Reports - N/A

3.11"Significant Changes from Previous Reporting Periods in the Scope, Boundary, or Measurement Methods applied in the report"

- N/A

3.12 GRI Contents Index 73~76

3.13 Policy and Current Practice with Regard to Seeking External Assurance for the Report 2

Governance, Commitments,

and Engagement

4.1 Governance Structure of the Organization 13~14

4.2 Indicate Whether the Chair of the Highest Governance Body is Also an Executive Officer 13~144.3 Board of Directors 13~144.4 Mechanisms for Shareholders and Employees to Provide Opinions to the Highest Governance Body 13~14

4.5"Linkage between Compensation for Members of the Highest Governance Body, Senior managers, and Executives (Including Departure Arrangements), and the Organization's Performance (Including Social and Environmental Performance)"

13~14

4.6 Processes in Place for the Highest Governance Body to Ensure Conflicts of Interest are Avoided 13~14

4.7Process for Determining the Qualifications and Expertise of the Members of the Highest Governance Body for Guiding the Organization's Strategy on Economic, Environmental, and Social Topics스

13~14

4.8 Management Principles 9,12,15~17

4.9Procedures of the Highest Governance Body for Overseeing the Organization's Management of Economic, Environmental, and Social Performance and Principles

13~14

4.10Processes for Evaluating the Highest Governance Body's Own Performance, Particularly with Respect to Economic, Environmental, and Social Performance

13~14

4.11 Explanation of Whether and How the Precautionary Approach or Principle is Addressed by the Organization 9

4.12Externally Developed Economic, Environmental, and Social Charters, Principles, or Other Initiatives to Which the Organization Subscribes or Endorses

32

4.13Memberships in Associations (Such as Industry Associations) and/or National/International Advocacy Organizations in Which the Organizations

78

4.14 List of Stakeholder Groups Engaged by the Organization 18~214.15 Basis for Identification and Selection of Stakeholders with Whom to Engage 18~214.16 Approaches to Stakeholder Engagement 18~21

4.17Key Topics and Concerns That Have Been Raised Through Stakeholder Engagement and How the Organization has Responded

18~21

74 75

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Economic Performance

Indicator

EC1 Direct Economic Value Generated and Distributed 24~26,52EC2 Financial Implications and Other Risks and Opportunities for the Organization’s Activities Due to Climate Change 30~31EC3 Coverage of the Organization’s Defined Benefit Plan Obligations 52EC4 Significant Financial Assistance Received from Government 26

EC5Range of Ratios of Standard Entry Level Wage Compared to Local Minimum Wage at Significant Locations of Operation

52

EC6 Policy, Practices, and Proportion of Spending on Locally-Based Suppliers at Significant Locations of Operation -

EC7Procedures for Local Hiring and Proportion of Senior Management Hired from the Local Community at Locations of Significant Operation

56

EC8Development and Impact of Infrastructure Investments and Services Provided Primarily for Public Benefit through Commercial, Inkind, or Pro Bono Engagement

-

EC9 Understanding and Describing Significant Indirect Economic Impacts 26

Environmental Performance

Indicator

EN1 Materials Used by Weight or Volume 36EN2 Percentage of Materials Used That are Recycled Input Materials 36EN3 Direct Energy Consumption by Primary Energy Source 36,47EN4 Indirect Energy Consumption by Primary Source 36,47EN5 Energy Saved due to Conservation and Efficiency Improvements 48~49

EN6Initiatives to Provide Energy-efficient or Renewable Energy Based Products and Services, and Reductions in Energy Requirements as a Result of These Initiatives

38~42,44~46

EN7 Initiatives to reduce indirect energy consumption and reductions achieved 48~49EN8 Total water withdrawal by source -EN9 Water sources significantly affected by withdrawal of water -

EN10 Percentage and total volume of water recycled and reused 36

EN11Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of High Biodiversity Value Outside Protected Areas

38~40

EN12Description of Significant Impacts of Activities, Products, and Services on Biodiversity in Protected Areas and Areas of High Biodiversity Value Outside Protected Areas

38~40

EN13 Habitats protected or restored 38~40EN14 Strategies, Current Actions, and Future Plans for Managing Impacts on Biodiversity 38~40

EN15Number of IUCN Red List Species and National Conservation List Species with Habitats in Areas Affected by Operations, by Level of Extinction Risk

- N/A

EN16 Total direct and Indirect Greenhouse Gas Emissions by Weight 47EN17 Other Relevant Indirect Greenhouse Gas Emissions by Weight 47EN18 Initiatives to Reduce Greenhouse Gas Emissions and Reductions Achieved 47EN19 Emissions of Ozone-depleting Substances by Weight - N/A

EN20 KNOx, SOx, and Other Significant Air Emissions by Type and Weight 41~43EN21 Total Water Discharge by Quality and Destination 41~43EN22 Total Weight of Waste by Ttype and Disposal Method 41~43EN23 Total Number and Volume of Significant Spills 46

EN24Weight 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

EN25Identity, Size, Protected Status, and Biodiversity Value of Water Bodies and Related Habitats Significantly Affected by the Reporting Organization’s Discharges of Water and Runoff

38~40

EN26 Initiatives to Mitigate Environmental Impacts of Products and Services, and Extent of Impact Mitigation 38~42, 44~46

EN27 Percentage of Products Sold and Their Packaging Materials That are Reclaimed by Category - N/A

EN28Monetary Value of Significant Fines and Total Number of Non-monetary Sanctions for Noncompliance with Environmental Laws and Regulations

46

EN29Significant Environmental Impacts of Transporting Products and Other Goods and Materials Used for the Organization’s Operations, and Transporting Members of the Workforce

47

EN30 Total Environmental Protection Expenditures and Investments by Type 37


Social Performance

Indicator: Labor Practices and Decent Work

LA1 Total workforce by employment type, employment contract, and region 52LA2 Total Number and Rate of Employee Turnover 53

LA3Benefits Provided to Full-time Employees That are Not Provided to Temporary or Part-time Employees, by Major Operations

54

LA4 Percentage of Employees Covered by Collective Bargaining Agreements 52LA5 Minimum Notice Period(s) Regarding Operational Changes -LA6 Percentage of Total Workforce Represented in Formal Joint Management Worker Health and Safety Committees -

LA7Rates of Injury, Occupational Diseases, Lost Days, and Absenteeism, and Number of Workrelated Fatalities by Region

57

LA8Education, Training, Counseling, Prevention, and Risk-control Programs in Place to Assist Workforce Members, Their Families, or Community Members Regarding Serious Disease

54

LA9 Health and Safety Topics Covered in Formal Agreements with Trade Unions 54,56LA10 Average Hours of Training per Year per Employee by Employee Category 58~59LA11 Programs for Skills Management and Lifelong Learning and Assist Them in Managing Career Endings 58~60LA12 Percentage of Employees Receiving Regular Performance and Career Development Reviews 55

LA13Composition of Governance Bodies and Breakdown of Employees per Category According to Gender, Age Group, Minority Group Membership, and Other Indicators of Diversity

14,53~55

LA14 Ratio of Basic Salary of Men to Women by Employee Category 55

Human Rights Performance

Indicator

HR1Percentage and Total Number of Significant Investment Agreements That Include Human Rights Clauses or That Have Undergone Human Rights Screening

56

HR2Percentage of Significant Suppliers and Contractors That have Undergone Screening on Human Rights and Actions Taken

69

HR3 Total Member of Employee Training on Policies and Procedures Concerning Aspects of Human Rights 56HR4 Total Number of Incidents of Discrimination and Actions Taken 55~56

HR5Operations Identified in Which the Rright to Exercise Freedom of Association and Collective Bargaining may be at Significant Risk, and Actions Taken to Support These Rights

56

HR6Operations Identified as Having Significant risk for Incidents of Child labor, and Measures Taken to Contribute to the Elimination of Child Labor

56

HR7Operations Identified as Having Significant Risk for Incidents of Forced or Compulsory Labor, and Measures to Contribute to the Elimination of Forced or Compulsory Labor

56

HR8Percentage of Security Personnel Trained in the Organization’s Policies or Procedures Concerning Aspects of Human Rights

-

HR9 Total number of Incidents of Violations Involving Rights of Indigenous People and Actions Taken -

Society Performance

Indicator

SO1Nature, Scope, and Effectiveness of Any Programs and Practices That Assess and Manage the Impacts of Operations on Communities

38~40

SO2 Percentage and Total Number of Business Units Analyzed for Risks Related to Corruption 15~17SO3 Percentage of Employees Trained in Organization’s Anti-corruption Policies and Procedures 15~17SO4 Actions Taken in Response to Incidents of Corruption 16~17SO5 Public Policy Positions and Participation in Public Policy Development and Lobbying -

SO6Total Value of Financial and In-kind Contributions to Political Parties, Politicians, and Related Institutions by Country

26

SO7Total Number of Legal Actions for Anticompetitive Behavior, Anti-trust, and Monopoly Practices and Their Outcomes

16~17

SO8Monetary Value of Significant Fines and Total Number of Non-monetary Sanctions for Noncompliance with Laws and Regulations

16~17

76 77

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GRI G3 Application Level


Responsibility Performance

Indicator

PR1Life 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

41,44

PR2Total Number of Incidents of Non-compliance with Regulations and Voluntary Codes Concerning Health and Safety Impacts of Products and Services During Their Life Cycle

62

PR3Type of Product and Service Information Required by Procedures, and Percentage of Significant Products and Services Subject to such Information Requirements

63~64

PR4Total Number of Incidents of Non-compliance with Regulations and Voluntary Codes Concerning Product and Service Information and Labeling

62

PR5 Practices Related to Customer Satisfaction, Including Results of Surveys Measuring Customer Satisfaction 61~65PR6 Programs for Adherence to Laws, Standards, and Voluntary Codes Related to Marketing Communications -

PR7Total Number of Incidents of Non-compliance with Regulations and Voluntary Codes Concerning Marketing Communications, Including Advertising, Promotion, and Sponsorship

-

PR8Total Number of Substantiated Complaints Regarding Breaches of Customer Privacy and Losses of Customer Data

66

PR9Monetary Value of Significant Fines for Noncompliance with Laws and Regulations Concerning the Provision and Use of Products and Services

-

Daelim’s 2009 Corporate Social Responsibility Report was prepared based on the GRI G3 guidelines.

In addition, This report fully satisfies the quality and quantitative requirements of level “B” in the GRI G3 Application Level Table.

[GRI Application Level Table]

G3 Profile

G3 Management Approach

G3 Performance Indicators & Sector Supplement Performance Indicators

Report Application Level

Report on :

1.1, 2.1-2.10, 3.1-3.8,3.10-3.12, 4.1-4.4, 4.14-4.15

Not Required

Report on a minimum of 10 Performance Indicators, Including at least one from each of: social, economic, and environment

Report on :

including all of ‘C’ items

1.2, 3.9, 3.13, 4.5-4.13,4.16-4.17

Management Approach Disclosures for each Indicator Category

Report on a minimum of 20 Performance Indicators, Including at least one from each of: economic, environment, human rights, labor, society, product responsibility

Report on :

Same as requirement for

Level B

Management Approach Disclosures for each Indicator Category

Respond on each core G3 and Sector Supplement* indicator with due regard to the materiality Principle by eithera) reporting on the indicatoror b) explaining the reason for its omission.

C C+ B B+ A A+

Report

Externally

Assured

Report

Externally

Assured

Report

Externally

AssuredDisclosures

Stan

dard

Dis

clos

ures

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Accolades and Participation in Association Financial Data

Participation in Association- Federation of Korean Industries

- Korea Chamber of Commerce and Industry

- Korea Institute of Construction Technology

- Korea Construction Engineers Association

- Korea Atomic Industrial Forum

Accolades Balance Sheet

As of December 31, 2009 and 2008(KRW in billions)

Classification 2009.12 2008.12

Assets

Current assets 4,987.9 4,282.9

(Cash) 1,042.3 494.0

Non-current assets 3,354.8 2,854.0

Total assets 8,342.7 7,136.9

Liabilities

Current liabilities 2,834.5 2,330.0

Non-current liabilities 1,714.1 1,616.3

(Borrowings) (1,873.2) (1,637.9)

Total liabilities 4,548.6 3,946.3

Shareholders' equity

(Capital stock) (218.5) (218.5)

Total shareholders' equity 3,794.1 3,190.6

Income Statement

Years ended December 31 2008 and 2009 (KRW in billions)

Classification4Q 2008 4Q 2009 Change

E&C Petrochemical TOTAL E&C Petrochemical TOTAL E&C Petrochemical TOTAL

Sales 4,948.9 943.3 5,892.2 5,418.9 855.9 6,274.8 470.0 (87.4) 382.6 6.5%

Cost of sales 675.7 79.4 755.1 620.9 154.1 775.0 (54.8) 74.7 19.9 2.6%

Selling & administrative expenses 311.9 53.9 365.8 296.1 48.3 344.4 (15.8) (5.6) (21.4) -5.9%

Operating income 363.8 25.5 389.3 324.8 105.8 430.6 (39.0) 80.3 41.3 10.6%

Non-operating profit and loss (163.8) (84.0) (247.8) (146.8) 153.4 6.6 17.0 237.4 254.4 102.7%

Income before income tax 200.0 (58.5) 141.5 178.0 259.2 437.2 (22.0) 317.7 295.7 208.9%

Net income 101.5 343.2 241.7

- Number one in the Apartment Category in National Customer Satisfaction Competency Index(NCSI) (Korea Productivity Center)_01

- Awarded the Best Winner in Construction Industry Category on "Dow Jones Sustainability Index(DJSI)" (Korea Productivity Center)_02

- Awarded the Grand Prize on "Green Construction Awards" (Joongang Newspaper)_03

- Awarded the Greand Prize on "Green Housing Awards" (Hankook Ilbo)_04

- Awarded the Grand Prize on "Hankyung Housing Culture Awards"_0501

04

05

02

03

01_ No. 1 in apartment sector of the 2009 NCSI held by Korea Productivity Center

02_ The Best Company in the construction sector of DJSI Korea held by Korea Productivity Center

03_ Grand Prize in the Green Construction Competition held by Jungang Daily

04_ Grand Prize in the Green Housing Awards held by Hankook Daily

05_ Grand Prize in the Hankyung Residential Culture Awards held by Hankook Economic Daily

80 81

Establishment of Daelim 1939~195870-year History of Korean Construction Started.

A small construction materials store with the name of

Burim Corporation started the business in front of the

Bupyeong Station on October 10, 1939, and had grown

into the nation’s leading woods materials supplier by

expanding its businesses into forest development, log

production, and lumbering in just 6 years. The company

changed the name to “Daelim Industrial” and paved the

way for a comprehensive construction company by

leading the rebuilding of the postwar economy.

Era of Development and Growth 1962~1970Leading the Economic Development and Advancing into Seoul

Daelim evolved into the leader of Korea’s construction

industry by seizing opportunities of the 5-Year National

Economic Development Plan launched in 1962. The

company ranked the top in terms of the construction

project volume in 1966. And it started a new business era

by moving the head office to Seoul. The construction of

Gyeongbu Expressway and Gyeongin Expressway, the

main artery of the nation’s economy also started in this

period.

Business Expansion and Takeoff 1972~1981Improving the Quality of Construction Technologies

The construction POSCO Plants was the monumental

project for the government that vigorously pushed

forward with sophistication of the industrial structure in

the course of economic development in the 1970s. Daelim

carried out this project, which helped the company

leapfrog into a leader in the construction of heavy

chemical and plant facilities. Also, Daelim Engineering

Company was established in 1974 to enter the turn-key

base construction projects.

Rapid Growth and Blooming 1982~1996Shaping a Future with the Strengths of 50-year History

Daelim had successfully completed a number of major

construction projects both in Korea and abroad in the

1980s in the midst of the Economic Development Plan.

The company’s accomplishments have been awarded

with the Gold Tower of Industrial Accomplishments

and the US$5 Billion Overseas Construction Medal. The

Olympic Main Stadium, Independence Hall and Seoul

Court House Complex are some of the outstanding

architectural structures built by Daelim during this period.

Envisioning a New Millennium 1997~Present

Opening a New Chapter

Backed by the recognition of contributions to the nation’s

economic and social development, Daelim received the

Grand Prize at the Korea Construction Award in 2001.

Today, the housing culture is requiring more comfortable

spaces beyond just living spaces. To meet this trend,

Daelim is striving to improve the quality of customers’ lives

by adopting environment-friendly and ergonomic devices

and innovative design to the construction of apartment

complexes.

Monuments in Overseas Markets 1965~Present

Leapfrogging into a Global Leader

With the piling projects for the construction of sea berth

in Rach Gia, Vietnam, in 1966, Daelim entered the overseas

construction markets. The company extended its reach

to Southeast Asia in the early 1970s and the Middle East

in 1974. Since then, Daelim was able to enter over 10

countries in the Middle East in just 5 years, which has

become the foundation for the myth of construction

boom in the Middle East.

Bupyeong Police Headquarter Building

1947

Filing and covering up Cheonggyecheon

1958

Namsan Children’s Hall

1970

Sejong Performing Arts Center

1978

Establishment of Daelim

1939

Daelim’s Headquarter Building in Dongja-dong

1954Chuncheon Dam

1965

Gyeongbu Expressway and Gyeongin Expressway

1969

The Ministry of National Defense Building

1970POSCO’s Steel Plants

1973

National Assembly HouseYeongdong Expressway Section 1

1975

Jamsil Olympic Main Stadium

1984

Diplomatic Center

1996

Daelim Acrovill in Dogok-dong

1999The Independence Hall of Korea

1987

Petro FCC Plants in the Philippines

2008Gangneung Multi-purpose Dam

1991

Seoul Court House Complex

2001

Seohae Grand Bridge

2000

Korea Chamber of Commerce BuildingCheonggyecheon Restoration Project

2005

Landfill of Incheon LNG Terminal District 4Samcheonpo Grand Bridge

2003

Gwanhwamun Square

2009

King Fahd International Airport in Saudi ArabiaKing Abdulaziz International Airport in Saudi Arabia

1992

LNG Plants in MalaysiaBintulu Port in Malaysia

1983

Karun Dam in Iran

2000Shanghai IIP Plants in China

2006

Saudi-Bahrain Cement Plants

1981

Doha West Power Station in Kuwait

1984South Pars Gas Refinery Plant in Iran

2003

Corporate History

Copyright © 2009 by Daelim

Industrial Co., Ltd. Produced by IR-Plus

Daelim Industrial Co., Ltd.

ENGINEERING & CONSTRUCTION GROUP www.daelim.co.kr146-12. Susong-dong, Jongno-gu, Seoul, Korea Tel : 82-2-2011-7114 Fax : 82-2-2011-8000

Documents

Daelim Corporate Sustainability Report 2009Daelim has worked together with the economic development of Korea in its history of past 70 years. With endless creativity and challenging