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2011 ANNUAL REpORTDOOSAN HEAVY INDUSTRIES& CONSTRUCTION

1962~201250 YEARS OF EXCELLENCEDOOSAN HEAVY INDUSTRIES& CONSTRUCTION


Celebrating 50 Years of exCellenCe

At Doosan Heavy Industries & Construction, the past five decades have

brought tremendous challenges and opportunities. From our early years

as a trading company and light manufacturer, to our steady, disciplined rise

as emerging global leader in power and water, we have consistently worked

to bring more value to the world. As we mark our 50th anniversary in 2012,

we rededicate ourselves to that mission as we continue to collaborate

and innovate to deliver the clean power and water the world needs to grow

and thrive in the decades to come.

historY highlights

1960s~1970sEARlY BEgINNINgS

Korea’s first machinery industrial complex is established in Changwon

to support the nation’s emerging heavy manufacturing sector.

1980s~1990sSOlID FOUNDATIONS

A new name and opening ofthe world’s largest integrated

manufacturing plant lay a solid foundation for growth.

2000s~glOBAl ExpANSION

Balancing stability and expansion, we fortify our solid foundation

and accelerate our global march for growth.

1962 • Founded as Hyundai International, a trading company

1973 • Korean government announces heavy manufacturing sector promotion plan

• Changwon designated as site for Korea’s first heavy industrial complex

1976 • Construction of Changwon plant started • Received first power equipment order

from GE1977 • Produced large-capacity power plant

boilers1978 • Entered desalination business • Acquired first six ASME stamps

1980 • Renamed Korea Heavy Industries & Construction or “Hanjung”

1982 • Changwon plant is completed, the world’s largest integrated manufacturing plant at the time

• Korea’s first 13,000-ton press began operations

1985 • Won first turnkey desalination order for Assir Phase 1 project in Saudi Arabia

1991 • Ulchin Nuclear Power Plant in Korea named “Power Plant of the Year” by Power magazine

1993 • Awarded “Grand Prize for Quality Management” by Korean Standards Association

• Acquired ISO 9001 certification1996 • Taean Thermal Power Plant in Korea

named “Power Plant of the Year” by Power Engineering magazine

1997 • Adopted Six Sigma quality management program

• Acquired ISO 14001 certification1999 • Acquired power equipment businesses

of Hyundai Heavy Industries and Samsung Heavy Industries through Korean power equipment sector restructuring

2000 • Listed on Korean Stock Exchange • Awarded “Grand Prize for Quality

Management” by Korean Standards Association

2001 • Completed privatization and renamed Doosan Heavy Industries & Construction

• Thermal desalination plants designated a “World-Class Product of Korea” with a No. 1 global market share

2002 • Delivered nuclear plant equipment for Sequoyah (USA) and Qinshan (China) projects

• Dangjin Thermal Power Plant named “Power Plant of the Year” by Power Engineering magazine

2003 • Crankshafts designated a “World-Class Product of Korea”

2004 • HRSGs designated a “World-Class Product of Korea” with a No. 1 global market share

• Mold and tool steel and cold press work rolls designated “World-Class Products of Korea”

2005 • Obtained KOLAS/OHSAS18001 health and safety management system certification

• Won Shuaibah project in Saudi Arabia, the world’s largest desalination project at the time

• Acquired American Engineering Services’ reverse osmosis water treatment business and founded Doosan Hydro Technology

2006 • Acquired Romanian casting and forging specialist Kvaerner IMGB, now Doosan IMGB

• Acquired British energy services specialist Mitsui Babcock, now Doosan Babcock

• Established water R&D centers in Dubai, UAE and Tampa, Florida, USA

2007 • Started construction of Doosan Heavy Industries Vietnam (Doosan Vina) plant

• Hydro-turbine runner and stern and rudder castings designated “World-Class Products of Korea”

• Won Mundra project in India, the world’s largest coal-fired project to date

• Surpassed orders of KRW 7 trillion for the first time

2008 • Named “Korea’s Most Admired Company” by Korea Management Association Consulting

• Won Shuwaikh RO desalination project in Kuwait

• Won Gheco-One project, Thailand’s first supercritical coal-fired power plant

• Won Yeongweol combined-cycle power project in Korea

2009 • Acquired Czech-based turbine maker Skoda Power

• Completed Doosan Vina plant in Vietnam • Shipped Asia’s first 3 MW onshore/offshore

wind turbines and Korea’s first gas turbines • Ranked No. 4 on BusinessWeek World’s

Best Companies list • Ranked No. 2 on Boston Consulting Group’s

2009 Value Creators list2010 • Participated as APR1400® main equipment

supplier in winning consortium bid for the Braka nuclear plant project in the UAE

• Won Rabigh 2 project in Saudi Arabia, the world’s largest oil-fired power plant to date

• Won Ras Al Khair Phase 1 project in Saudi Arabia, the world’s largest desalination plant to date

• Surpassed orders of KRW 13 trillion for the first time

• Low-pressure turbine rotor shafts designated a “World-Class Product of Korea”

2011 • Acquired Indian boilermaker AE&E Chennai Works, now Doosan Chennai Works

• Won Yanbu Phase II project in Saudi Arabia, the world’s largest single-unit MED plant

• WinDS3000™ offshore wind turbine won international type certification from DEWI-OCC

• Won “2010 HSE Best Contractor Award” for the Jebel Ali M Project in the UAE

• Signed CSR agreement with city of Changwon

• Nuclear reactors, oil-fired boilers, and turbine-generator rotor shafts designated “World-Class Products of Korea”

• Doosan Power Systems acquired German engineering and energy company AE&E Lentjes, now Doosan Lentjes

1960s~1970s 2000s~

1980s~1990s


We completed Samcheonpo Units1~2, handling all project aspects from major equipment manufacturing to construction and installation for the two 560 MWe unit facility, Korea’s largest coal-fired thermal plant at the time.

1984COmplETED FIRST TURNkEY THERmAl plANT pROjECT

We delivered two 40 MWe gas turbines for the Laem Chabang combined-cycle power project in Thailand, completing our first overseas gas turbine order.

2001COmplETED FIRST OVERSEAS gAS TURBINE ORDER

We won this turnkey USD 370 million project, the world’s largest thermal power plant at the time with four units totaling 2,000 MWe.

2004WON 2,000 mWe SIpAT STAgE-I pROjECT IN INDIA

We were ranked the world’s top supplier of heat-recovery steam generators by McCoy Power Reports after delivering a total of 62 units in 2003. We have maintained a top-tier market share in this field each year since.

2003RANkED WORlD’S NO. 1 HRSg SUpplIER

We established Han-Viet Heavy Industry & Construction Corporation or “Hanvico”, a USD 25.7 million 70:30 joint venture with state-run heavy manufacturer DMF. The company was renamed Doosan Vina Haiphong in 2010.

1995ESTABlISHED mANUFACTURINg plANT IN VIETNAm

We completed Yeongheung Units 1~2, Korea’s first 800 MWe coal-fired thermal power plant.

2004COmplETED FIRST 800 mWe EqUIpmENT ORDER

560MWe

We were the prime contractor and main equipment supplier for Boryeong Units 3~6, Korea’s first 500 MWe coal-fired thermal plant project to adopt the standardized design used for all 500 MWe plants built since.

1994COmplETED FIRST STANDARD 500 mWe plANT pROjECT

We won this USD 50 million project to upgrade four boilers. Together with an earlier USD 70 million turbine upgrade order we received in 2007, this project will increase output by 13.5% from 660 MWe to 750 MWe for all four units and extend plant life by 25 years.

2009WON ERARINg BOIlER UpgRADE pROjECT IN AUSTRAlIA

We signed a framework agreement with the government of Vietnam to serve as the sole technical partner for a national project to localize equipment production for 600 MWe coal-fired thermal plants.

2010SIgNED VIETNAm lOCAlIzATION pARTNERSHIp

We acquired this India-based boilermaker for EUR 20.5 million, giving us a manufacturing presence in the world’s largest emerging market for coal-fired thermal power plants.

2011ACqUIRED AE&E CHENNAI WORkS

We acquired this Czech-based turbine manufacturer for EUR 451.6 million, completing our acquisition of core technologies in all three primary power generation equipment fields—boilers, turbines, and generators.

2009ACqUIRED SkODA pOWER

We won this USD 3.5 billion EPC order for four 700 MWe oil-fired thermal power units totaling 2,800 MWe, our first overseas oil-fired thermal plant order and the largest overseas power plant project win at the time for a Korean firm.

2010WON 2,800 mWe RABIgH 2 pROjECT IN SAUDI ARABIA

Subsidiary Doosan Power Systems acquired a 99.04% interest in this Germany-based boiler and air pollution control specialist for EUR 57 million, giving us access to eco-friendly technologies for circulating fluidized-bed boilers, flue-gas cleaning systems, and waste-to-energy plants.

2011ACqUIRED AE&E lENTjES

We won this USD 1.1 billion project for two 685 MWe coal-fired thermal units totaling 1,370 MWe.

2010WON 1,370 mWe RAIpUR pROjECT IN INDIA

We wrapped up a three-year development program for the WinDS3000™ 3 MW offshore wind turbine by winning international type certification from DEWI-OCC of Germany.

2011WON 3 mW WIND TURBINETYpE CERTIFICATION

Subsidiary Doosan Chennai Works won a USD 900 million order from NTPC for three 800 MWe boilers for the Kudgi project. We expect to win a USD 600 million order for two more units for the Lara project before year-end.

2012WON 4,000 mWe BUlk BOIlER ORDER IN INDIA

thermal Power milestones

UK-based subsidiary Doosan Babcock signed a GBP 550 million partnership agreement covering mechanical site services, boiler and ancillary plant, engineering and technical support, and non-destructive examination services for nine British Energy power stations, eight of which are nuclear.

2007WON 7-YEAR BRITISH ENERgY SERVICES CONTRACT

We acquired this UK-based boiler OEM and energy services company for JPY 20 billion, giving us access to the century of expertise of one of the world leaders in power plant boiler technology.

2006ACqUIRED mITSUI BABCOCk

We established this US-based firm in a strategic alliance with EPC and O&M specialist Burns and Roe to provide world-class engineering services for Doosan power projects worldwide.

2008ESTABlISHED DOOSAN ENgINEERINg & SERVICES

DOOSAN LENTJES (2011)

DOOSAN BABCOCK (2006)

SKODA pOwEr (2009)

DOOSAN CHENNAI wOrKS (2011)


We delivered the steam generators for the 1,000 MWe Yonggwang Unit 1 in Korea.

1983 1999DElIVERED FIRST mAjOR EqUIpmENT ORDER

WON FIRST US NUClEAR EqUIpmENT ORDER

We won this order for two 700 MWe steam generators for Qinshan Phase III in China, our first overseas nuclear equipment order.

1997WON FIRST OVERSEASNUClEAR EqUIpmENT ORDER

We won the major equipment order for Yonggwang Units 3~4, Korea’s first 1,000 MWe nuclear project to adopt the OPR1000 standard design.

1987WON FIRST OpR1000 plANT pROjECT

OPR1000

nuClear Power milestones2008

WON FIRST US Ap1000™EqUIpmENT ORDERS

We won three orders from Westinghouse for major equipment for six 1,150 MWe AP1000™ nuclear units for the V.C. Summer, Vogtle, and Levy County projects.

2009WON FIRST OVERSEAS ApR1400® ORDER

We were part of a consortium led by Korea Electric Power Corporation that won the USD 40 billion Braka 1~4 project in the UAE. We will supply major equipment for four 1,400 MWe APR1400® nuclear units for the project.

We won this order for four 1,200 MWe replacement steam generatorsfor Sequoyah 1 in Tennessee.

2006WON FIRST ApR1400® EqUIpmENT ORDER

We won the major equipment order for Shin-Kori 3~4, Korea’s first 1,400 MWe nuclear units to adopt the third-generation APR1400® design.

2007WON FIRST CHINA Ap1000™ EqUIpmENT ORDER

We won this USD 350 million order from Westinghouse for major equipment for two 1,150 MWe AP1000™ nuclear units for the Sanmen and Haiyang projects.

AP1000™

APR1400®

2010DEVElOpED mmIS AND RCp FOR NUClEAR plANTS

We completed development of a man-machine interface system (MMIS)—the “brain” of nuclear power plants—and a reactor cooling pump (RCP). These solutions will see their first use in the upcoming Shin-Ulchin 1~2project in Korea.

MSFWe won the 0.15 MIGD Farasan MSF project in Saudi Arabia, our first desalination project.

1978water milestones

WON FIRST DESAlINATION pROjECT

We set up R&D centers in Dubai, UAE and Tampa, Florida, USA to accelerate development of next-generation high-capacity desalination technologies.

2006ESTABlISHED OVERSEAS R&D CENTERS

We acquired the North American reverse osmosis water treatment business of American Engineering Services and established Doosan Hydro Technology. The company was named “Desalination Company of the Year” in 2008 by Global Water Intelligence.

2005ESTABlISHED DOOSAN HYDRO TECHNOlOgY

We won this USD 850 million IWPP EPC order featuring twelve 16 MIGD MSF evaporator units, making it the world’s largest desalination project at the time. The plant was named “Thermal Desalination Plant of the Year” in 2009 by Global Water Intelligence.

2006WON 194 mIgD SHUAIBAH pHASE 3 pROjECT IN SAUDI ARABIA

100MIGD

We won this USD 560 million EPC order featuring ten 10 MIGD MSF evaporator units, the world’s largest desalination project at the time.

1993WON 100 mIgD SHOAIBA pROjECT IN SAUDI ARABIA

We won this USD 350 million EPC order featuring five 12.5 MIGD MSF evaporator units and a 37.5 MIGD RO plant, the world’s first hybrid desalination project.

2001WON 100 mIgD FUjAIRAH pROjECT IN THE UAE

16.7MIGD/unit

We won this USD 800 million IWPP EPC project featuring six 16.7 MIGD MSF evaporator units, the largest-capacity units at the time.

2008WON 100 mIgD SHUWEIHAT S2 pROjECT IN THE UAE


Our desalination plants received the “World-Class Product of Korea” designation from the Korean government in 2001 for achieving a global top-5 market share. In the years since, we have won this recognition in a total of 11 product categories, including marine engine crankshafts (2003), heat-recovery steam generators, mold and tool steel, and cold press work rolls (2004), hydro-turbine runner and ship stern and rudder castings (2007), low-pressure turbine rotor shafts (2010), and nuclear reactors, oil-fired boilers, and turbine-generator rotor shafts (2011).

2001RECOgNIzED FOR glOBAl TOp-5 mARkET SHARE

Following our listing on the Korean Stock Exchange in 2000, we completed our privatization in 2001 and took on our current name as a core member of the Doosan Group, accelerating our emergence as a global leader in power and water.

2001OpENED A NEW ERA

We joined forces with a local partner to win this USD 300 million high-capacity reverse osmosis EPC order, the region’s largest RO project at the time.

2010WON 228 mIgD RAS Al kHAIR pHASE 1 pROjECT IN SAUDI ARABIA

We won this USD 1.76 billion EPC project featuring eight 20 MIGD MSF evaporator units and a 67.5 MIGD RO plant, the largest-capacity units to date for both technologies. The hybrid project will be the world’s largest to date when completed in 2014.

We won this USD 124 million EPC project featuring the industry’s largest multi-effect distillation unit to date, nearly twice the size of largest unit currently in operation.

2011WON 15 mIgD YANBU pHASE II mED pROjECT IN SAUDI ARABIA

68,000tons/day

2009WON 52.8 mIgD jEDDAH RO pROjECT IN SAUDI ARABIA

800,000people

other milestones

We opened the Future Business Technology Development Center in Daedeok Science Town in Daejeon to focus on emerging energy technologies such as wind power, fuel cells, and integrated-gasification combined-cycle generation.

2005OpENED NEW R&D CENTERIN kOREA

We acquired a 99.76% interest in this Romania-based casting and forging manufacturer for USD 15.2 million, giving us a strategic manufacturing presence in the European market.

2006ACqUIRED kVAERNER ImgB

We opened this USD 300 million manufacturing plant composed of five factories and dedicated port facilities on a 110-hectare site in Vietnam’s Dung Quat Economic Zone. Staffed by nearly 1,700 employees, the plant’s productivity reached parity with our Changwon plant in 2011.

2009ESTABlISHED DOOSAN VINA

We were ranked No. 4 out of 40 of the world’s best companies by this influential business weekly, the top ranking by a Korean company. During the 2004~2008 evaluation period, we generated a compound annual growth rate of 34% in revenues and 26% in enterprise value, ranking sixth and third, respectively.

2009RANkED NO. 4 ON BuSIneSSWeek WORlD’S BEST COmpANIES lIST

We were ranked No. 1 in machinery and construction and No. 2 overall out of 694 firms on the annual Value Creators list based on a total shareholder return of 58.5% during the 2004~2008 period.

2009RANkED NO. 2 ON BOSTON CONSUlTINg gROUp VAlUE CREATORS lIST

58.5TOTAl ShARehOlDeR ReTuRn

%

Subsidiary Doosan Babcock opened a 40 MWt oxyfuel combustion test facility in the UK to demonstrate its OxyCoal™ technology for efficient carbon capture.

2009OpENED OxYFUEl TEST FACIlITY IN Uk

We won this USD 453 million project to build a 300 MWe coal syngas-fired integrated-gasification combined-cycle power plant, Korea’s first demonstration plant to utilize this cleaner combustion technology to reduce emissions and simplify carbon capture.

2011WON 300 mWe TAEAN IgCC plANT ORDER

We donated a USD 1 million seawater reverse osmosis desalination plant to An Bihn Island, resolving a chronic water shortage issue for the island of about 500 approximately 40 km off the coast of Vietnam.

2011DONATED 100-TON/DAY RO DESAlINATION plANT

We won this USD 46 million order for 42 rubber-tired gantry cranes from PSA International. We have shipped over 210 cranes to this customer to date.

2004WON CRANE ORDER FROm pORT OF SINgApORE

DIMENSIONS

At Doosan Heavy Industries & Construction, we are exploring the future of power and water. Backed by nearly five decades of experience as a partner for growth and progress around the globe, we are now hard at work developing the world-class power and water technologies that will add sustainable new dimensions to life.

EXpLORINGNEW

ElEVATINg VAlUES

12 Building Capabilities

14 Creating Synergy

16 Renewing Tomorrow

18 growing people

20 Financial Highlights

22 CEO message

26 management Team

28 2011 at a glance

30 global presence

ExplORINg NEW DImENSIONS

02 New Horizons

04 New Ideas

06 New Solutions

CONTENTS

34 EpC Business group

38 power Business group

44 Nuclear power plant Business group

48 Water Business group

52 Casting & Forging Business groupDElIVERINg SOlUTIONS

56 Environmental Responsibility

58 Social Responsibility

60 partner ResponsibilityTRANSFORmINg RESpONSIBIlITY

64 management’s Discussion & Analysis

68 Independent Auditors’ Report

70 Financial Statements

78 Doosan group

80 global Network

ENHANCINg VAlUE

Today, we are looking ahead to the future. The insights we gain each day are guiding us as we strategically invest in the advanced technologies that will enable us to generate power and watermore cleanly and efficiently than ever before.

newhorizons

2 3

new Ideas

4 5

We believe that ideas are the fuel that drives innovation. Our ideas come from some of the brightest minds in power and water across our global network as we collaborate around the clock to turn those ideas into reality.

newSolutionsWhat we ultimately deliver is solutions. These solutions are the culmination of technical innovation and teamwork across multiple disciplines, subsidiaries, and continents to deliver more powerand water for the world.

6 7

And those dimensions are why we are an emerging global leader in power and water.

This is how our focus on power and water is adding new dimensions to life for millions around the globe.

8 9

RENEWINg TOmORROW

BUIlDINg CApABIlITIES

CREATINg SYNERgYAt Doosan, our values have made us a global player in power and water over the past five decades. Today, we’re elevating every aspect of our operations and organization to the next level as we set our sights on becoming a global leader.

gROWINg pEOplEVALUES

ELEVATI NG

EpCVALUE ChAIN

pROjECT plANNINgmarketing

plant engineering

construction

SERVICE

EqUIpmENT DESIgN

& mANUFACTURINg

building CaPabilities

At Doosan, we are not just good at building equipment for power and water plants. we are good at engineering

and building those plants from the ground up. Over the decades, we have grown from being

a world-class equipment manufacturer to a world-class EpC contractor, a unique, synergistic combination

that sets us apart from the competition.

12 13

Creating sYnergYAt Doosan, we have strategically built a global network of manufacturing, engineering, and marketing subsidiaries over the past decade. Anchored by strategic acquisitions, this global network is now creating synergy that is opening new market opportunities for us worldwide, enabling us to develop and deliver power and water solutions optimized for each local market.

mANUFACTURINg BASES

Doosan IMGB

+

Doosan Vina

+

Doosan Chennai works

TECHNOlOgY BASES

Doosan Babcock

+

Skoda power

+

Doosan Lentjes

+

Doosan Hydro Technology

+

Doosan Engineering & Services

ˇ

GLObAL

SUbSIDIARIES

14 15

renewing tomorrow

At Doosan, we are prepared for dramatic growth in some of tomorrow’s most promising renewable

energy fields. Our strong foundation in the fundamental technologies for wind turbines,

integrated-gasification combined-cycle plants, and carbon capture and storage solutions is

now opening new market opportunities for us around the globe.

16 17

74 GW

RENEwAbLE ENERGYOUTLOOk

Krw

2020Global CCS market 140 trillion

400 GW

2030Global IGCC Market

2020Global Offshore wind

Generation Capacity

SMART OFFICE

INITIATIVE

CApABIlITY DEVElOpmENTvirtu

ous circle

of growth

work-life balance

WORkFORCE mANAgEmENT

& SYSTEm ImpROVEmENT

INEFFICIENCY ElImINATION

growingPeoPle

At Doosan, we believe in corporate growth through personal growth. Under the motto of “personal and

corporate growth through work-life balance”, we are now taking this “2G” philosophy to

the next level through our Smart Office initiative as we aim to create a virtuous circle of growth

through capability development, inefficiency elimination, and workforce management and system improvement.

18 19

Amid financial and political turbulence around the globe, we continuedto deliver solid results backed by substantial multi-year order backlogsin most of our businesses. Although orders declined 28% in 2011after a record-setting 2010 performance that was fueled by orders delayedfrom 2009, overall growth was solid for the year, with revenues rising 7.1%and operating income rising 10.5%, indicating that our focus onprofitable growth is delivering results.

FINANCIAL HIGHLIGHTS

TOTAl ASSETS 13,589 11,725 16,977 15,158

TOTAl SHAREHOlDERS’ EqUITY 4,797 4,139 5,176 4,621

REVENUES Nuclear Power Plants 1,257 1,135 1,226 1,061

EPC 2,919 2,634 2,723 2,355

Power 2,464 2,224 2,233 1,932

Water 854 771 449 388

Castings & Forgings 798 720 793 686

Other Subsidiaries 203 183 505 437

TOTAl REVENUES 8,495 7,667 7,929 6,859

OpERATINg INCOmE 570 514 516 446

NET INCOmE 262 237 1,363 1,179

EARNINgS pER SHARE IN kRW AND USD 8,382 7,565 977 845

DIVIDENDS pER SHARE IN kRW AND USD 750 677 750 649

in KRW billions in KRW billionsin USD millions in USD millions

2011 2010

Doosan Engineering & Construction was included in the scope of consolidation in 2010 and excluded in 2011.*

Revenues, operating income, net income, earnings per share, and dividends per share are converted into US dollars

at the average exchange rate of USD 1 = KRW 1,108.02 in 2011 and KRW 1,156.05 in 2010.

Total assets and total shareholders’ equity are converted into US dollars

at the December 31 closing exchange rate of USD 1 = KRW 1,159.00 in 2011 and KRW 1,120.00 in 2010.

*

*

Growth rate +7.1%

rEVENUES in KRW billions

Growth rate -27.9%

OrDErS in KRW billions

Growth rate +10.5%

OpErATING INCOME in KRW billions

8,495

7,929

570

516

10,10213,867

finanCial highlights

20 21

On behalf of the entire Doosan Heavy Industries & Construction family,I am pleased to report that we surpassed Krw 10 trillion in orders fora second straight year despite a challenging global business environment.Our focus for 2012 will be on achieving organic growth as we diversifyour business portfolio in order to secure new growth engines and ensure thatour existing businesses remain competitive in their respective sectors.

we continued to enjoy solid results in key regional markets in 2011. Order highlights

for the year included a boiler bulk order worth Krw 1.5 trillion in India, a strategic

market for us and the world’s largest emerging market for coal-fired thermal power

plants. In the water sector, we successfully entered the multi-effect distillation

desalination market by winning two major orders in Saudi Arabia, the world’s largest

seawater desalination market. we also signed the major equipment contract for

units 3 and 4 of the Braka Apr1400® nuclear plant project in the UAE.

we made a number of strategic internal changes of note during the year.

The reorganization of our EpC and power Business Groups in May 2011 has

positioned us to enhance our competitiveness in the EpC power plant field and

expand our power equipment business, laying the foundation for greater synergy and

profitable growth. we also completed a major overhaul of our human resources system

to benefit our technical workforce and take our competitiveness to the next level.

CEO MESSAGE

Ceomessage

22 23

Our global business capabilities took a major step forward in 2011. productivity at

our Doosan Vina manufacturing plant in Vietnam achieved par with our Changwon

plant in Korea. we acquired boilermaker Doosan Chennai works in India and

boiler and air pollution technology specialist Doosan Lentjes in Germany.

we made significant headway in the renewable energy field as our winDS3000™

3 Mw offshore wind turbine system won international certification. we also

won the Taean IGCC project, Korea’s first commercial coal syngas-fired

integrated-gasification combined-cycle plant.

As we look ahead over the horizon, global power and water markets are projected to

steadily grow over the long term. As global markets emerge from the current economic

slowdown, we aim to achieve organic growth by diversifying our business portfolio to

secure new growth engines as well as maintaining the competitiveness of our existing

businesses in their respective sectors. Toward this end, we have identified four key

tasks that we will focus on in 2012.

First, we will continue to push forward with key corporate-wide long-term initiatives to

generate new growth momentum by steadily diversifying our business portfolio.

Second, we will continue to secure global top-tier competitiveness in products and

technologies in power, water, and other core businesses.

Third, we will strive to maximize synergy with our overseas subsidiaries by optimizing

our global operations.

Fourth, we will continue to expand our Smart Office initiative and systematic

personnel training programs as we pursue our “2G Strategy”—our conviction that our

businesses can only grow through the growth of our people.

The year 2012 is a very meaningful year to us because it also marks our 50th

anniversary. Over the past five decades, we have overcome countless challenges to

achieve the remarkable success we enjoy today. And we believe that even greater

success lies ahead.

Thank you again for your continued interest and support. we invite you to join us as

we continue our quest to become a global leader in power and water.

CEO MESSAGE24 25

Geewon Park Chairman & Chief Executive OfficerDoosan Heavy Industries & Construction

DONGSOO SUhExecutive Vice presidentpower Business Group

“We aim to move a step closer to being a global top-4 power partner in 2012 by sharpening our competitiveness and growing our businesses. We will focus on securing top-tier technology, expanding our product lineup, growing our service business, ramping up our new IGCC business, sharpening the cost competitiveness of our wind turbine business, optimizing our global manufacturing operations, and upgrading our quality control system and organization.”

hUNTAk kIMExecutive Vice presidentEpC Business Group

“In 2012, we will be relying on our extensive experience and innovation know-how as we strive to maximize the synergy between our core engineering and construction capabilities and take the next step toward becoming a premier global EPC partner. We will also be expanding our engineering capabilities to achieve our long-term goal of being able to concurrently handle 10 projects at any given time.”

kEYSUN hANpresident & COO

“We aim to surpass revenues of KRW 10 trillion for the first time in 2012 as we raise our competitiveness to a global top-tier level to drive organic growth. We will focus on profitability and sharpen our project risk management capabilities. We will promote work-life balance. We will invest in quality control and a technology. We will also emphasize the Doosan Way, the unique way of doing business that has sustained Doosan for over a century.”

SEOkhEE kOhExecutive Vice president Casting & Forging Business Group

“With orders slowing in key fields such as shipbuilding and nuclear plant equipment, we are now in the process of upgrading and diversifying our operations as we take the next step toward becoming a global leader in casting and forging. In 2012, we will be focusing on improving cost competitiveness and workplace safety, identifying new products and businesses that will spur growth, and securing leadership through top-tier technical competitiveness.”

SEOkwON YUNExecutive Vice presidentwater Business Group

“Backed by a portfolio that features all three major desalination technologies, we will expand our operations and maintenance business in 2012 as we pursue opportunities in the build-operate-transfer and water treatment fields. We will also focus on reducing overall project lifetime cost and boosting our presence in the Middle East. Combined, these efforts will help reduce revenue fluctuations and create a more profitable, diversified business portfolio.”

hAbANG kIMExecutive Vice presidentNuclear power plant Business Group

“We expect the nuclear power industry to face continued delays for new project tenders in 2012 in the wake of Japan’s Fukushima accident. We will be teaming up Korea Electric Power and Korea Hydro & Nuclear Power to market the third-generation APR1400® nuclear plant globally. We will also be bolstering our plant service capabilities as we optimize our manufacturing system to sharpen our competitiveness.”

MYUNGwOO kIMExecutive Vice presidentManagement Division

“We continue to actively invest in our EHS system to ensure that we are good stewards of the environment and our worksites are safe and accident-free. Labor relations is another crucial area that we focus on, building on a mutually beneficial win-win relationship that is the foundation of our competitiveness.We are also expanding engagement with local communities at home and abroad as we strive to be a good neighbor as well as a good employer.”

SEUNGjOO ChOEExecutive Vice president CTO

“In 2011, we significantly upgraded our R&D organization by establishing the Basic Technology R&D Center and IP Team at our Corporate R&D Institute. In 2012, we will step up development of new products and technologies, bolster competitiveness in existing and new businesses, and empower our people through our Smart Office initiative as we pursue our mission of creating value in power and water technologies.”

MYEONGhO jANGSenior Vice presidentCFO

“We completed the transition to Korean International Financial Reporting Standards in 2011 as part of our commitment to upgrading our financial management system to meet the standards and requirements of the global business environment. Given the continued and increasing volatility in global markets, our top priority in 2012 will continue to be on enhancing financial stability as we actively support business growth around the globe.”

At Doosan, our world-class people, industry-leading technology, andunique manufacturing capabilities enable us to deliver innovative, best-in-classsolutions in each of our businesses. The synergy we are creating today ensuresthat our reputation as one of the world’s leading power and water solutionproviders will continue to grow tomorrow.management

team

MANAGEMENT TEAM26 27

DOOSAN LENTJES

DOOSAN CHENNAI wOrKS

STRATEgIC OVERSEAS ACqUISITIONS

We made two major overseas acquisitions in 2011. In January, we acquired boilermaker AE&E Chennai Works in India to establish a local manufacturing base that will enable us to compete in India’s booming market for coal-fired thermal plants. In November, we acquired boiler and air pollution control specialist AE&E Lentjes in Germany, strengthening our technol-ogy portfolio in the fields of circulating fluidized-bed boiler combustion and flue gas treatment.

ORDER pERFORmANCEAfter setting a new record of KRW 13.8 trillion in 2010, orders reached KRW 10.1 trillion in 2011, surpassing the KRW 10 trillion mark for a second straight year. Major wins for the year included two desalination plant orders from Saudi Arabia, a nuclear power plant order from the UAE, and multiple power equipment orders from India and Korea.

10 trillionkRW

BUSINESS gROUp REORgANIzATIONIn May, we merged the former Power Plant and Construction Business Groups and then reorganized those operations into the new EPC and Power Business Groups. The new organization positions us for more profitable growth in the global power plant market, enabling both business groups to operate together for synergy as well as alone to maximize business opportunities.

new ePC andPower Business Groups

World-Class Products of korea

pUBlIC RECOgNITIONWe were recognized in various ways through the year. We topped the Korea Great Work Place Index survey sponsored by Korea Management Association Consulting in the renewable energy category. Our global market leadership was also recognized as three more of our products—nuclear reactors, oil-fired boilers, and turbine-generator rotary shafts—were designated as World-Class Products of Korea in recognition of their global top-5 market share, bringing our total to 11 to date.

11

COmmUNITY ENgAgEmENT

pERSONNEl SYSTEm OVERHAUl

In October, we became the first major Korean com-pany to bring titles for production personnel in line with administrative personnel, eliminating that traditional distinction between white-collar and blue-collar posi-tions. At the same time, we introduced a three-track promotion system for technical personnel that allows them to choose both managerial and non-managerial career paths.

We stepped up our commitment to the Changwon community in 2011 by signing an agreement to support the city’s community priorities, including education, vocational training, employment, and support for the underprivileged. We also expanded our community commitment in Vietnam, donating a 100-ton/day reverse osmosis desalination facility for An Bihn Island.

RENEWABlE ENERgY mIlESTONES

Our WinDS3000™ wind turbine became Korea’s first 3 MW offshore system to win international type certi-fication in 2011. The certification marks the successful conclusion of a three-year development project and paves the way for overseas sales. We also won the Taean IGCC project, Korea’s first commercial coal syngas-fired integrated-gasification combined-cycle plant project.

DESAlINATION mARkET BREAkTHROUgHWe are the world leader in multi-stage flash (MSF) desalination. In 2011, we extended our competitive-ness into the multi-effect distillation (MED) desalina-tion field by winning two major orders in Saudi Arabia. In February, we booked the Yanbu Phase II project, the industry’s largest single-unit MED project to date with a capacity of 15 MIGD. We also booked the 12 MIGD Marafiq Yanbu project in September.

SmART OFFICE INITIATIVEWe launched our Smart Office initiative under the motto of “Personal and company growth through work-life balance.” The initiative aims to promote work efficiency to create the free time our people need to invest in leisure and self-improvement. Initiative pro-grams like core working hours and two-week summer and Christmas vacations have been well received.

glOBAl ExpOSURE

We continued to elevate our global profile through the sponsorship of a number of international sporting events in 2011. We were a patron of the famed British Open golf tournament for a second straight year. We also were the title sponsor of the first Asian Dream Cup football clinic and charity match organized by Korean football star Ji-sung Park’s JS Foundation in Ho Chi Minh City, Vietnam.

2011 AT A GLANCE

2011 at a glanCe

28 29

DOOSAN ENgINEERINg& SERVICES

Doosan Engineering & Services provides engineer-ing services for Doosan power projects around the globe. Established in September 2008, this US-based firm is a strategic alliance with Burns and Roe, a world-class EPC and O&M specialist in power and energy projects.

globalPresenCe

At Doosan, our global network of sales, engineering, and manufacturingsubsidiaries is building the future of power and water. Our presence in keymarkets worldwide enables us to deliver world-class turnkey power and watersolutions to customers virtually anywhere on the planet.

Doosan Power Systems provides cleaner, greener power technology, products, and services to customers worldwide. Established in 2010, this UK-based firm integrates three of the most respected names in power—Doosan Babcock, Doosan Lentjes, and Skoda Power.

www.doosanpowersystems.com

ˇ

DOOSAN pOWER SYSTEmS

Skoda Power designs and manufactures modern turbine and generator solutions for the energy and industrial sectors. A Doosan company since 2009, this Czech-based firm also offers end-to-end solu-tions from design to full lifecycle care.

www.doosan.com/skodapower

ˇ

SkODA pOWERˇDOOSAN BABCOCk

Doosan Babcock designs and delivers advanced steam generation solutions to the global power indus-try. A Doosan company since 2006, this UK-based firm is also a leading energy services business, serving the power, oil and gas, and petrochemical industries.

www.doosanbabcock.com

Doosan Hydro Technology is a total water solu-tion provider with unrivaled expertise in reverse osmosis and membrane technologies. A Doosan company since 2005, this US-based firm was named “Desalination Company of the Year” in 2008 by Global Water Intelligence.

www.doosanhydro.com

DOOSAN HYDRO TECHNOlOgY

DOOS AN lENTjES

Doosan Lentjes provides process and plant engi-neering, boiler and environmental technologies, and components for thermal power and energy-from-waste biomass plants. A Doosan company since 2011, this Germany-based firm is now part of Doosan Power Systems.

Doosan Chennai Works is a fast-growing manu-facturer of boilers for coal-fired power plants. A Doosan company since 2011, this India-based firm is currently undertaking a major capacity expansion project to scale manufacturing up to meet growing local demand.

DOOSAN CHENNAI WORkS

Doosan Power Systems India spearheads our operations in this emerging market. Established in 2011 through the merger of three subsidiar-ies, this Chennai-based firm has the engineering, manufacturing, and marketing capabilities to deliver power plant solutions specifically designed for the local market.

DOOSAN pOWER SYSTEmS INDIA

Doosan IMGB produces a full range of castings and forgings for the power generation, industrial machin-ery, mold and tool making, and other industries. A Doosan company since 2006, this Romania-based firm gives us a strategic presence in the European market.

www.doosanimgb.com

DOOSAN ImgB

Doosan Vina manufactures a full range of power and water equipment. Opened in 2009, this Vietnam-based firm is the country’s largest heavy manufactur-ing plant to date and a key asset in our strategy to extend our global business.

www.doosan-vina.com

DOOSAN VINA

Doosan Vina Haiphong specializes in oversized and overweight steel structures, boilers, pressure vessels, storage tanks, steel fabrication work, and piping work. Established in 1995, this joint venture Vietnam-based firm is a local pioneer in obtaining ISO 9001 certification and ASME stamps.

www.doosanvinahaiphong.com

DOOSAN VINA HAIpHONg

DOOSAN ENGINEERING & SERVICES

DOOSAN VINADOOSAN VINA HAIpHONG

DOOSAN CHENNAI WORKS

DOOSAN pOWER SyStEmS INDIA

DOOSAN pOWER SyStEmSDOOSAN BABCOCK

DOOSAN LENtJES

DOOSAN ImGB

DOOSAN HyDRO tECHNOLOGySKODA pOWERˇ

30 GLOBAL prESENCE

NUClEAR pOWER SOlUTIONSWATER SOlUTIONS

EpC SOlUTIONS

SOLUTIONSAt Doosan, we are building a reputation as a global leader in power and water by delivering world-class solutions. Our unique ability to engineer, manufacture, construct, operate, and service the plants and equipment we sell adds up to a compelling value proposition.

CASTINg & FORgINg SOlUTIONS

pOWER EqUIpmENT SOlUTIONS

DELIVERIN G

2011 REVIEW / Although global financial and

political turmoil impacted certain segments of the

independent power project market, the primary

challenge in the global EPC power market was the

intensification of competition as Korean, Chinese,

and Japanese construction firms aggressively

entered the market. We responded by pursuing a

selective tender strategy focused on profitability and

strengthening our internal capabilities, a strategy

made possible by a solid 2010 order performance

that boosted our backlog to historic levels. While

orders declined to KRW 1,786 billion in 2011, rev-

enues grew over 7% to reach a new high of KRW

2,919 billion for the year.

The strategic reorganization we undertook in May

2011 was part of our strategy to strengthen our

internal capabilities. Formed through the merger of

our former Power Plant and Construction Business

Groups, our new EPC Business Group is now rein-

forcing our competitiveness and core capabilities,

paving the way for profitable growth going forward.

2012 OUTlOOk / We expect 2012 to be a chal-

lenging year for global EPC contractors as existing

competitors pursue more aggressive strategies and

new players enter the market. In this difficult environ-

ment, we will seek to leverage our extensive project

management experience and innovation know-how

to generate new synergies between our core engi-

neering and construction capabilities as we take

the next step toward becoming a premier global

EPC partner.

To achieve this goal, we will put the highest priority

on meeting the needs of our clients in a timely and

responsible manner. As an experienced EPC con-

tractor, we will professionally manage all engineer-

ing, procurement, and construction aspects of our

power plant projects. Backed by our unique organi-

zational culture, we will continue to strengthen

collaboration between each of these disciplines,

constantly working to improve our operational effi-

ciency. We will also seize every market opportunity

and partner with Doosan Power Systems India to

execute EPC projects around the world as we

upgrade that subsidiary’s capabilities in the pursuit

of a more profitable EPC business model.

At Doosan, we are one ofthe world’s fastest-growingengineering, procurement,and construction (EpC)contractors. Over the decades,our advanced plant engineeringcapabilities have enabled usto manage power plant projectsof all types around the globe.Today, we are aiming to bea premier global EpC partner,delivering innovative powersolutions and services that willkeep the world growing.

THE global premierpartner in EpC

+7%

2011 rEVENUES

OUr VISION

RABIgH 2 THERmAl pOWER plANTWork on this 2,800 MWe (700 MWe x 4) project—the largest thermal plant tender won by a Korean EPC contractor to date—is now well underway.

ePCbusinessgrouPOrders dropped to Krw 1,786 billion in 2011 as project tenders underway in the Middle East and India faced delays. revenues continued to grow incrementally, reaching Krw 2,919 billion as projects won in 2011 got underway in earnest. Although backlog decreased to Krw 6,941 billion in the face of falling orders, we con-tinued to maintain a comfortable multi-year order book.

Production Capacity

2800 mWe

Total Generating Capacity

20 gWe

34 35

1,786

OrDErSin Krw billions

6,078

6,941

BACKLOGin Krw billions

7,931

2,919rEVENUESin Krw billions

2,723

jEbEL ALI M CCpp pROjECTConsisting of three 670 Mwe combined-cycle power units, the Jebel Ali M project is the largest power plant ordered to date in the UAE.

pROjECT pORTFOlIO

• Sipat TPP, India: 660 MWe x 3• Glow CFB, Thailand: 115 MWe x 1• Amman East CCPP, Jordan: 370 MWe x 1• Taweelah A10, UAE: 216 MWe• Barka Phase 2 IWPP, Oman: 685 MWe + 26.4 MIGD• Jebel Ali M CCPP, UAE: 670 MWe x 3• Mundra TPP, India: 800 MWe x 5• Qatalum CCPP, Qatar: 625 MWe x 2• Daharki CCPP, Pakistan: 175 MWe x 1• Cebu CFB, Philippines: 100 MWe x 2• Cirebon TPP, Indonesia: 700 MWe x 1• Gheco-One TPP, Thailand: 700 MWe x 1• Qurayyah Add-on, Saudi Arabia: 1,238 MWe• Raipur TPP, India: 685 MWe x 2• Rabigh 2 TPP, Saudi Arabia: 700 MWe x 4• Mong Duong II TPP, Vietnam: 600 MWe x 2

37

2011 REVIEW / We once again had a strong year

in 2011 as orders rose over 20% to KRW 5,226

billion. Key overseas project wins included the

NTPC bulk order (800 MWe x 5) in India, Yanbu II

TPP (267 MWe x 3) in Saudi Arabia, Mong Duong II

TPP (540 MWe x 2) in Vietnam, and a performance

upgrade project for the Sabarmati TPP (121 MWe

x 2) in India as our overseas power plant service

business continued to gain momentum. We also

won a steady stream of orders in Korea, including

Taean IGCC (300 MWe x 1)—our first integrated-

gas combined-cycle project—Pocheon CCPP (780

MWe x 2), Yangju CHP (550 MWe x 1), and Tamna

offshore wind farm (3 MW x 10) projects. Revenues

also posted solid growth of over 10% to KRW

2,464 billion as we made progress on our booming

equipment order backlog and delivered equipment

for Yeosu TPP Unit 2 (340 MWe x 1) in Korea,

Angamos TPP (240 MWe x 2) in Chile, and Cebu

TPP (103 MWe x 2) in the Philippines.

In recent years, we have significantly enhanced

our competitiveness by expanding our engineering,

technical, and manufacturing capabilities through

overseas expansion and strategic acquisitions.

Doosan Vina in Vietnam has become a key overseas

manufacturing base since ramping up operations

in 2009. Our ongoing R&D and collaboration with

subsidiaries worldwide has also been instrumental

in our successful development of core technologies

in the boiler, turbine, and generator fields.

2012 OUTlOOk / Global demand for combined-

cycle and thermal power plants is projected to

steadily grow in 2012. National power develop-

ment policies are expected to continue to focus on

renewable energy fields such as wind power and

integrated-gasification combined-cycle (IGCC)

power generation as well as increasing efficiency

and scale.

We are now in the process of expanding the facilities

and production capacity of Doosan Chennai Works

in India to improve our competitiveness in the world’s

largest emerging market for coal-fired thermal power

plants. By winning additional bulk order and service

projects in India, we aim to reinforce our existing

equipment business as well as gain a competitive

edge in the service field going forward. Our acquisi-

tion of AE&E Lentjes of Germany through subsidiary

Doosan Power Systems gives us core technologies

in the fields of circulating fluidized bed boilers and

flue gas cleaning that will expand our opportunities

in these more profitable segments of the thermal

plant market.

At Doosan, we are a world-class supplier of thermalpower generation equipmentwith more than 119 Gwof generating capacity delivered to utilities around the worldover the past three decades.Today, we are expandingbeyond fossil-fuel generationas we aim to lead the way inthe low-carbon green energytechnologies that will powerthe future.

We won our first integrated-gas combined-cycle project in 2011.

Total Turbine and Generator Capacity Delivered worldwide to Date

119 gW

660/800 mWepre-Engineered Steam Turbine Generators Launched

PowerbusinessgrouPOrders rose to Krw 5,226 billion as we booked major projects in India, Saudi Arabia, Vietnam, and Korea. revenues also rose, reaching Krw 2,464 billion on the strength of our strong order performance in 2011. Our second straight year of strong order growth also pushed backlog to a record-high of Krw 8,518 billion.

300 mWe x 1

TAEAN IgCC We marked our fifth year at the top of the Middle

East oil-fired thermal plant market in 2011.

54.6%

OIL-FIrED THErMAL pLANTMArKET SHArE

38 39

rEVENUESin Krw billions

2,233

2,464

OrDErSin Krw billions5,226

4,349

BACKLOGin Krw billions8,518

5,680

BOIlERS / We are a world-class supplier of the

industry’s cleanest, most efficient solutions for

conventional thermal power generation.

In 2011, we booked the Yanbu II (267 MWe x 3) TPP

in Saudi Arabia, marking our fifth year at the top of

the Middle East oil-fired thermal plant market. This

performance helped our oil-fired boilers earn the

prestigious “World-Class Product of Korea” designa-

tion from Korea’s Ministry of Knowledge Economy

during the year in recognition of our top-five market

share. We also completed boiler deliveries for the

Angamos TPP (240 MWe x 2) in Chile, Cebu CFB

TPP (103 MWe x 2) in the Philippines, and Yeosu

CFB TPP Unit 2 (340 MWe x 1) in Korea, strength-

ening our reputation as a global industry player with

core technologies in every boiler category.

HRSgS / Our high-efficiency D-Top™ modu-

lar heat-recovery steam generators are used in

combined-cycle and cogeneration plants around

the globe. Since entering this business in the latter

part of the 1990s, we have delivered more than 422

units for 138 projects in 36 countries.

In 2011, we delivered 14 units, capping a five-year

period as the world’s No. 1 HRSG supplier with an

average 14.7% market share between 2007 and

2011 according to McCoy Power Reports. Major

orders for the year included Sejong CHP Units 1~2

(185 MWe x 2) in Korea, OML 58 CCPP (165 MWe x

2) in Nigeria, Erzin CCPP (250 MWe x 2) in Turkey,

IEC add-on CCPP (260 MWe x 3) in Israel, and

New Haripur CCPP (260 MWe x 1) in Bangladesh.

TURBINES & gENERATORS / We are a globally

competitive supplier of high-performance turbine

gensets with more than two decades of experience

in delivering solutions that set the standard for reli-

ability, efficiency, and maintainability.

In 2011, we booked genset orders for the Pocheon

TPP (780 MWe x 2) and Yangju CHP (550 MWe x 1)

in Korea and Mong Duong II TPP (540 MWe x 2) in

Vietnam. We also successfully completed testing of

the genset for the Gheco-One TPP (700 MWe x 1) in

Thailand, our first genset engineered and manufac-

tured entirely with in-house technology, paving the

way for us to expand sales worldwide.

mATERIAl HANDlINg EqUIpmENT / We are

Korea’s leading maker of material handling equip-

ment for the global container and bulk handling

industries, delivering turnkey solutions that are

widely recognized for their performance and quality

to major ports and plants worldwide. Since 1979, we

have supplied cranes to major ports in the United

States, Singapore, and around the world. We have

also delivered continuous ship unloaders to Korean

thermal power and steel plants.

WIND TURBINES / We tapped our more than

three decades of experience and expertise in the

power generation equipment business in 2006 to

launch development of a 3 MW onshore/offshore

wind turbine. We completed development of the

high wind class WinDS3000™ turbine in 2010 and

earned international type certification in March

2011, paving the way for our entry into the global

wind power market.

The first onshore/offshore wind turbine from a

Korean maker, the WinDS3000™ is designed

for optimal reliability and durability in challenging

offshore environments as well as best-in-class

operational efficiency and maintainability. After

booking our first multi-unit order for the Shinan

project (3 MW x 3) in Korea in 2010, we booked

orders for the Yeongheung (3 MW x 1) and Tamna

(3 MW x 10) projects in 2011. We also installed

Korea’s first offshore turbine in 2011 and began

performance testing in early 2012, paving the way

for full-scale construction work to get underway on

the 30 MW Tamna offshore wind farm later in the

year. We are currently in the process of expanding

the WinDS3000™ lineup of 3 MW onshore/offshore

turbine models and establishing local sales and

service centers in key international markets as we

take aim at becoming a major global supplier in the

wind industry by 2015.

OUr NEw AFFILIATES TUrBINE MANUFACTUrING CApACITy

BOILEr MANUFACTUrING CApACITy

8,500mWe

5,500 mWe

GENErATOr MANUFACTUrING CApACITy

8,500mWe

KOrEA’S FIrST OFFSHOrE wIND TUrBINE

WinDS3000™

DOOSAN CHENNAI wOrKS

DOOSAN LENTJES

BOIlER & HRSg SOlUTIONS

• Circulating fluidized-bed boilers• Subcritical drum boilers• Supercritical once-through boilers• Drum-type HRSGs• Once-through HRSGs• Balance-of-plant equipment

pROjECT pORTFOlIO

• Yeongheung TPP Units 1~2*, Korea: 800 MWe x 2• Yeongheung TPP Units 3~4*, Korea: 870 MWe x 2• Yeongheung TPP Units 5~6, Korea: 870MWe x 2• Boryeong TPP*, Korea: 500 MWe x 8• Hadong TPP*, Korea: 500 MWe x 8• Dangjin TPP*, Korea: 500 MWe x 8• Taean TPP*, Korea: 500 MWe x 8• Donghae TPP*, Korea: 200 MWe x 2• Sipat STPP Stage-I*, India: 660 MWe x 3• Raipur-Chhattisgarh TPP, India: 685 MWe x 2• Mundra TPP*, India: 800 MWe x 4• Gheco-One TPP, Thailand: 700 MWe x 1• Eraring TPP, Australia: 750 MWe x 4 (Retrofit)• Rabigh 2 TPP, Saudi Arabia: 700 MWe x 4• Ain Sokhna TPP, Egypt: 650 MWe x 2• Marafiq TPP 5~6, Saudi Arabia: 275 MWe x 2• Yanbu II TPP, Saudi Arabia: 267 MWe x 3• Kudgi TPP Stage-I, India: 800 MWe x 3• Essar CCPP*, India: 660 MWe HRSG x 3• Kondapalli CCPP*, India: 110 MWe HRSG x 2• Rehab CCPP*, Jordan: 120 MWe HRSG x 2• Mapna CCPP, Iran: 160 MWe HRSG x 44• Ironwood CCPP*, USA: 250 MWe HRSG x 2• Cuaiba CCPP*, Brazil: 175 MWe HSRG x 2• Peterhead CCPP, UK: 255 MWe HRSG x 3• Castejon CCPP*, Spain: 250 MWe HRSG x 1• Gibraltar CCPP*, Spain: 250 MWe HRSG x 2• Phu My 3 CCPP*, Vietnam: 235 MWe HRSG x 2• Panglima CCPP*, Malaysia: 250 MWe HRSG x 2* Projects supplied utilizing technology under license from Alstom Power, Inc.

TURBINE & gENERATOR SOlUTIONS

• Steam turbines (200 MWe~1,450 MWe)• Gas turbines (144 MWe~270 MWe)• Hydro turbines (30 MWe~350 MWe)• Generators (150 MVA~1,700 MVA)• Moisture separator reheaters

pROjECT pORTFOlIO

• Mong Duong II TPP, Vietnam: 540 MWe x 2• Pocheon TPP, Korea: 780 MWe x 2• Yangju CHP, Korea: 550 MWe x 1• Braka NPP 1~4, UAE: 1,400 MWe x 4• Marafiq TPP 5~6, Saudi Arabia: 275 MWe x 2• Cirebon TPP, Indonesia: 700 MWe x 1• Gheco-One TPP, Thailand: 700 MWe x 1• Eraring TPP, Australia: 750 MWe x 4 (Retrofit)• Yeongweol CCPP, Korea: 180 MWe x 3• Yeongheung TPP, Korea: 800 MWe x 2• Hadong TPP, Korea: 500 MWe x 8• Dangjin TPP, Korea: 500 MWe x 8• Taean TPP, Korea: 500 MWe x 8• Donghae TPP, Korea: 200 MWe x 2• Shin-Kori NPP Units 1~2, Korea: 1,000 MWe x 2• Shin-Kori NPP Units 3~4, Korea: 1,400 MWe x 2• Shin-Ulchin NPP Units 1~2, Korea: 1,000 MWe x 2• Shin-Wolsong NPP Units 1~2, Korea: 1,000 MWe x 2• Yonggwang NPP, Korea: 1,000 MWe x 4• Ulchin NPP, Korea: 1,000 MWe x 4• Wolsong NPP Units 2~4, Korea: 700 MWe x 3• Yangyang PSPP, Korea: 250 MWe x 4• Yecheon PSPP, Korea: 400 MWe x 2• Sancheong PSPP, Korea: 350 MWe x 2

40 41

mATERIAl HANDlINg SOlUTIONS

• Container handling cranes• Bulk material handling systems• Electric overhead traveling cranes• General cargo handling equipment• Equipment parts and service

pROjECT pORTFOlIO

• Kuwait Port, Kuwait: STSGC x 6, RTGC x 6• Military Ocean Terminal Sunny Point, USA: STSGC x 2• Port of Samarinda, Indonesia: STSGC x 2, RTGC x 5• Balboa Port, Panama: STSGC x 4• Port of Busan, Korea: STSGC x 5, RTGC x 49• Posco, Korea: 3,000-ton/hr CSU x 4• Posco, Korea: 400-ton teeming ladle crane x 2• Various NPP, Korea: Polar cranes x 8• Various TPP, Korea: Coal handling systems• Jaxport, USA: 1,510-ton/hr CSU and conveyor system• Jaxport, USA: STSGC x 4• Port of Jakarta, Indonesia: STSGC x 4• Port of Tanjung Pelepas, Malaysia: RTGC x 36• Jurong Port, Singapore: STSGC x 5• PSA International, Singapore: STSGC x 9, RTGC x 203• Jawaharlal Nehru Port, India: STSGC x 7, RTGC x 30• Port of Colombo, Sri Lanka: RTGC x 28

WIND pOWER SOlUTIONS

• Onshore/offshore wind turbines

pROjECT pORTFOlIO

• Shinan, Korea: 3 MW x 3• Yeongheung, Korea: 3 MW x 1• Tamna, Korea: 3 MW x 10

M501F GAS TURbINEwe delivered three of these 180 Mwe turbines for the yeongweol combined-cycle project in Korea, our first gas turbine order.

43

2011 REVIEW / Following the Fukushima nuclear

plant accident in Japan in 2011, Japan, Germany,

and a few other countries either canceled new

plant projects or put them on hold pending review,

leading to a decline in nuclear plant and equip-

ment orders during the year. While order growth

was down just over 14% to KRW 1,946 billion, we

surpassed our 2011 target as we booked orders for

the major equipment for Braka 3~4 (1,400 MWe x

2) in the United Arab Emirates. Revenues grew a

modest 2.5% to KRW 1,257 billion as we delivered

the reactor and steam generators for Shin-Kori 4

(1,400 MWe) and a replacement steam generator

for Ulchin 2 (950 MWe) in Korea as well as reactors

for Sanmen 1 (1,150 MWe) and Haiyang 1 (1,150

MWe) in China.

2012 OUTlOOk / While the Fukushima accident

has clearly dampened enthusiasm, nuclear power

remains a realistic and practical solution to reducing

the greenhouse gas emissions that are playing a

role in climate change. Although we expect orders

for new plants to be delayed in the short term while

nations review and strengthen nuclear safety, we

expect countries that have committed themselves

to adopting nuclear power will maintain their policy

direction, resulting in new plant construction over

the long term.

In 2012, Shin-Kori 5~6, Korea’s third project to

adopt the advanced Generation III APR1400® design

will be initiated, of which we expect to win orders

in near future. We expect revenues to hold steady

at around KRW 1,200 billion as we deliver steam

generators for Sanmen 1 and Haiyang 1 in China,

reactors for Vogtle 1 and V.C. Summer 1 in the

United States, and a replacement steam generator

for Ulchin 1 in Korea.

In addition to reactor, steam generator, and other

major equipment orders, we also manufacture fuel-

handling systems, casks for storing and transporting

spent fuel, and other auxiliary equipment. Backed

by our own advanced alloy-making and large-scale

casting technology and facilities, our integrated

production system is capable of handling every

manufacturing process from materials to finished

products under one roof. We plan to increase our

manufacturing capacity from 3.5 reactors in 2011

to 5 reactors in 2012 as we prepare for future growth

opportunities around the globe.

At Doosan, we have a proventhree-decade track record asthe prime major equipmentcontractor for Korea’s nuclearpower program, one of thesafest and most efficientin the world. Today, we arewell positioned to play a keyrole in the industry’s globalrenaissance as the transitionto a low-carbon economygains momentum aroundthe world.

Generation III Design

ApR1400®

ApR1400®

rEACTOr MODELBRAkANUClEARpOWER plANT

60 YEARSOperational Life

This 5,600 MWe (1,400 MWe x 4) project in the UAE is our first international sale of the advanced third-generation APR1400® nuclear plant.

GENErATING CApACITy

Braka Units 1~4

5600 mWe

1,400mWe

nuClearPower PlantbusinessgrouPOrders were down to Krw 1,946 billion in 2011 as we booked the major equipment order for Braka 3~4 in the UAE. revenues rose slightly to Krw 1,257 billion as global deliveries for projects in China and the US stayed on schedule. Our backlog also continued to remain strong at a record Krw 5,472 billion.

44 45

5,472

4,372


1,9462,275


1,226

rEVENUESin Krw billions1,257

ShIN-kORI Npp 3~4 pROjECTA new generation of nuclear plants is now being built in Korea. Shin-Kori 3~4 will be equipped with Apr1400® reactors, a Generation III design that boasts 40% higher output than the current mainstay Opr1000 reactor as well as a 60-year design life for major equipment. Developed over a 10-year period between 1992 and 2002, the Apr1400® design also dramatically enhances operational efficiency and safety, particularly in the area of earthquake engineering. we will supply the entire nuclear steam supply system (NSSS) for this project.

NUClEAR pOWER plANT SOlUTIONS

• PWR nuclear steam supply systems• CANDU nuclear steam supply systems • Fuel storage equipment • Man-machine interface systems• Balance of plant• Replacement, repair, and refurbishment services• Supplementary machinery

pROjECT pORTFOlIO

pWR SYSTEmS• Ulchin, Korea: 1,000 MWe x 4• Shin-Ulchin, Korea: 1,400 MWe x 2• Yonggwang, Korea: 1,000 MWe x 6• Shin-Kori, Korea: 1,000 MWe x 2• Shin-Kori, Korea: 1,400 MWe x 2• Shin-Wolsong, Korea: 1,000 MWe x 2• Sanmen, China: 1,150 MWe x 1• Haiyang, China: 1,150 MWe x 1• Vogtle, USA: 1,150 MWe x 2• V.C. Summer, USA: 1,150 MWe x 2• Levy County, USA: 1,150 MWe x 2• Braka, UAE: 1,400 MWe x 4

CANDU SYSTEmS• Wolsong, Korea: 700 MWe x 3• Qinshan Phase III, China: 700 MWe x 2

mAjOR EqUIpmENT• Sequoyah 1~2, USA: 1,200 MWe RSG x 8• Watts Bar 1, USA: 1,200 MWe RSG x 4• ANO 2, USA: 900 MWe RPZ, RRVH x 1• Waterford 3, USA: 1,150 MWe RRVH x 1• Indian Point 2~3, USA: 1,000 MWe RRVH, CRDM x 2• Palo Verde 1~3, USA: 1,300 MWe RRVH, CEDM x 3• Qinshan Phase II 3: 650 MWe RV x 1

46 47

We won the Yanbu Phase IIMED project (15 MIGD) featuring the largest single-unit MED distiller to date.

2011 REVIEW / Despite a global slowdown in

2011 brought on by the Eurozone financial crisis,

we continued to maintain our leadership of the ther-

mal desalination industry by winning the industry’s

largest capacity single-unit multi-effect distillation

(MED) project to date as well as booking an order

from a new client, Marafiq. Together with US-based

subsidiary Doosan Hydro Technology, we booked

consolidated orders of KRW 239 billion and con-

solidated revenues of KRW 854 billion.

Given the challenging industry environment, we

achieved remarkable results in the Middle East

market during 2011, winning two major MED projects

in Saudi Arabia. In February, we won the Yanbu

Phase II MED project (15 MIGD) featuring the

largest single-unit MED distiller to date with nearly

twice the capacity of the current largest MED unit

on the market, followed in September by the Marafiq

Yanbu MED project (12 MIGD). Notably, 2011 was

the first year we simultaneously had projects under-

way in all three types of desalination—MSF, MED,

and RO. We also completed commissioning of the

Shuweihat S2 project (100 MIGD) in the United

Arab Emirates—the industry’s largest plant com-

missioning of the year—as well as the Shuwaikh RO

project (30 MIGD) in Kuwait. We are now providing

operation and maintenance services for Shuwaikh

RO, paving the way for a full-scale advance in the

O&M business in the coming years. We were also

honored during the year as the runner-up for the

prestigious “Desalination Company of the Year”

award at the 2011 Global Water Awards presented

by Global Water Intelligence.

2012 OUTlOOk / The ongoing Eurozone financial

crisis is expected to make project financing a con-

tinued challenge in 2012, resulting in delays for major

seawater desalination projects. Although the entry of

new players will further intensify competition in the

marketplace, we believe our ability to deliver optimized

solutions utilizing the three major desalination tech-

nologies—MSF, MED, and RO—will enable us to win

at least one major project during the year. Our O&M

experience with the Shuwaikh RO project will also

help expand our share in the water value chain.

Looking forward, we believe that we are less than

two years away from closing the scale gap between

MED and MSF unit capacities, the primary obstacle

that has kept more-efficient MED technology from

dominating the industry. As we continue to expand

and develop the advanced technologies that have

made us a global desalination leader, we will also

continue to strategically pursue growth opportunities

in the water treatment and O&M businesses around

the globe.

At Doosan, we are the worldleader in seawater desalinationsolutions. Our proven portfolioof MSF, MED, and rOtechnologies enables us todeliver dependable, cost-effective turnkey solutionswith the shortest lead times inthe industry. we continue toprogressively expand into thebroader water and wastewatertreatment markets as we pursue our vision of becominga global leader in water.

mSF + mED + RO + HYBRID

100 mIgDSHUwEIHAT S2 prOJECT COMpLETION

MAJOr TECHNOLOGIES

WORlD’SlARgEST mED UNIT

Meeting the daily water needs of 230,000 people

15 mIgD

Ordered Desalination Capacity(1998~2011)

1,286 mIgDwaterbusinessgrouPConsolidated orders declined to Krw 239 billion in 2011 as global financial challenges led to delays in major project tenders. Consolidated revenues continued to climb, reaching Krw 854 billion as work continued on the ras Al Khair project (228 MIGD) in Saudi Arabia, the industry’s largest desalination plant project to date.

48 49

854

449


239

1,769

OrDErSin Krw billions1,577


2,054

ShUwEIhAT S2 IwppThe largest seawater desalination plant commissioned in 2011, Shuweihat S2 in the UAEis also the most energy-efficient MSF installation to date. Launched in December 2008, the project became fully operational in October 2011. Located 250 km southwest of the capital city of Abu Dhabi, the plant is now supplying the water needs of approximately 1.5 million people.

DESAlINATION SOlUTIONS

• Multi-stage flash (MSF)• Multi-effect distillation (MED)• Reverse osmosis (RO)• Hybrid systems

WATER TREATmENT SOlUTIONS

• Advanced water treatment Advanced water treatment solutions based on membrane separation

• Municipal wastewater treatment and reclamation Advanced treatment and reclamation solutions, including membrane filtration

Biological nutrient removal (BNR) process

Membrane bioreactor (MBR) process

• Industrial water and wastewater treatment Pre-treatment and wastewater treatment systems for RO desalination plants

Water supply and wastewater treatment systems for power plants

Water treatment solutions for the oil and gas industry

Zero liquid discharge (ZLD) systems

pROjECT pORTFOlIO

• Marafiq Yanbu MED, Saudi Arabia: 12 MIGD, MED• Yanbu Phase II Expansion MED, Saudi Arabia: 15 MIGD, MED• Ras Al Khair Phase 1, Saudi Arabia: 228 MIGD, MSF+RO (Hybrid)• Rabigh Power No. 2 MSF Unit, Saudi Arabia: 2.16 MIGD, MSF (Captive)• Jeddah Phase 3 RO, Saudi Arabia: 52.8 MIGD, RO• Qurayyah Add-on CCPP MSF Unit, Saudi Arabia: 1.32 MIGD, MSF (Captive)• Shuweihat S2 IWPP, UAE: 100 MIGD, MSF• Shuwaikh RO, Kuwait: 30 MIGD, RO• Shuaibah Phase 3 Expansion RO, Saudi Arabia: 33 MIGD, RO• Shuaibah Phase 3 IWPP, Saudi Arabia: 194 MIGD, MSF• Sabiya Stage 3, Kuwait: 50 MIGD, MSF• Zawia MED, Libya: 1.1 MIGD, MED (Captive)• Ras Laffan ‘B’, Qatar: 60 MIGD, MSF• Shuaiba South Rehabilitation, Kuwait: 36 MIGD (20% increase), MSF• Sohar IWPP, Oman: 33 MIGD, MSF• Benghazi North MED, Libya: 1.1 MIGD, MED (Captive)• Sabiya Stages 1 & 2, Kuwait: 50 MIGD, MSF• Fujairah Hybrid, UAE: 100 MIGD, MSF+RO (Hybrid)• Shuaibah Pumping Station ‘C’, Saudi Arabia: 43.5 MIGD (Pumping station)• Umm Al Nar Station ‘B’, UAE: 62.5 MIGD, MSF• Az Zour South Phase 2, Kuwait: 28.8 MIGD, MSF• Al Taweelah A2 IWPP, UAE: 50 MIGD, MSF• Shuaibah Phase 2, Saudi Arabia: 100 MIGD, MSF• Jebel Ali Station ‘E’, UAE: 24 MIGD, MSF• Assir Phase 1, Saudi Arabia: 21 MIGD, MSF• Yanbu Desalination Plant, Saudi Arabia: 6 MIGD, MSF (Equipment)• Farasan Desalination Plant, Saudi Arabia: 0.5 MIGD, MSF (Equipment)

pROjECTS UNDERWAY

• Qurayyah Add-on CCPP MSF Unit, Saudi Arabia: 1.32 MIGD, MSF (Captive)• Jeddah Phase 3 RO, Saudi Arabia: 52.8 MIGD, RO• Rabigh Power No. 2 MSF Unit, Saudi Arabia: 2.16 MIGD, MSF (Captive)• Ras Al Khair Phase 1, Saudi Arabia: 228 MIGD, MSF+RO (Hybrid)• Yanbu Phase II Expansion MED, Saudi Arabia: 15 MIGD, MED• Marafiq Yanbu MED, Saudi Arabia: 12 MIGD, MED

50 51

2011 REVIEW / Despite growing demand for mold

and tool steel from the auto and steel industries,

a continuing slump in the shipbuilding and power

generation industries kept orders and revenues flat

in 2011. Overall, orders edged down 0.6% to KRW

831 billion, while revenues edged up 0.6% to KRW

798 billion.

During the year, we continued to expand both our

casting and forging shops to increase our reac-

tor shell forging capacity in response to growing

demand for ultra-large castings and forgings from

the nuclear and thermal power plant industries.

While installation of a new electroslag remelting

furnace to produce ultra-supercritical (USC) rotors

and superior mirror-like mold steel continued, we

completed new plate backup-roll machining facilities.

We continued to actively work to reduce our carbon

footprint following the conversion of our furnaces

and heat-treatment facilities to LNG in recent years.

We also continued to invest in the development of

manufacturing technologies for integrated forged

nuclear reactor components, low-temperature

impact-resistant steel castings, and other new

products that will create new market opportunities

and boost profitability.

2012 OUTlOOk / Although the delay in global

economic recovery is expected to cause a slight

decline in revenues, we are targeting revenues of

KRW 580 billion as we launch new products such

as steel castings for the offshore plant industry. As

we strategically expand our production capabilities

to meet rising demand for USC rotors, we are also

diversifying into new value-added fields and global

markets as we set the stage for continued order and

revenue growth in the coming years. We also plan

to expand investment in both technology and prod-

uct development to address gaps in our product

portfolio. On the business side, we are aggressively

pursuing new business opportunities in Europe,

Russia, and Africa through our Romanian subsidiary,

Doosan IMGB. By 2016, we aim to expand melting

capacity to 350,000 tons and forging capacity to

230,000 tons.

230,000

350,0002016 TArGET MELTING CApACITy

2016 TArGET FOrGING CApACITy

WORlD-lEADINg pRODUCTS

From marine engine crankshafts in 2003 to turbine-generator rotor shafts in 2011, we have achieved a top-five global market share in seven product categories to date.

At Doosan, we are avertically-integrated supplierof components for the nuclearand thermal power plantindustries as well as materialsfor the steel, auto, and othermanufacturing industries.we deliver superior qualitycastings and forgings backedby world-class technicalexpertise and productionfacilities in Korea and romania.

Casting & forgingbusinessgrouPOrders and revenues were virtually unchanged at Krw 831 billion and Krw 798 billion respectively in 2011 as the global shipbuilding and power generation industries remained stagnant. Backlog was off just over 10% to Krw 507 billion as excess industry capacity and tough competition pushed prices downward.

INDUSTRIES SERVED

• Shipbuilding• Power generation• Iron and steel making• Mold and tool making• Mining• Cement• Petrochemical

INDUSTRY-lEADINg pRODUCTS

• Hydro turbine castings: #1• Stern and rudder castings: #2• Marine engine crankshafts: #3• Plastic mold and tool steel: #4• Cold press work rolls: #4• Low-pressure turbine rotor shafts: #4• Turbine-generator rotor shafts: #4

tons

tons

52 53

798

793


831836


507566


At Doosan, we believe we have a responsibility to make the world a better place. Our commitment to sustainable, shared growth is making a difference in local communities everywhere we do business as we strive to create greater value for our stakeholders.

EnvirOnmEntAl rEspOnsibility

Transfo rming

sOciAl rEspOnsibility

pArtnEr rEspOnsibility

rE sPonsi BiLiTY

08

EHs CommiTmEnT / Since acquiring ISO 14001

certification in 1997 and OHSAS 18001 certification

in 2004, we have made comprehensive EHS excel-

lence top priority at our manufacturing facilities and

project sites around the globe. Having EHS manuals

in place for each global project site enabled us to

safely evacuate personnel from Libya when that

country’s civil war escalated in March 2011. Another

major achievement came on January 1, 2012 when

we passed 10 million hours of accident-free opera-

tions at the Rabigh 2 thermal plant site in Saudi

Arabia, an accomplishment supported by daily real-

time data collection of EHS issues at project sites

worldwide and monthly audits as part of our ongoing

efforts to resolve and mitigate issues. As our global

business scope has expanded, we have also imple-

mented a comprehensive health care program that

includes on-site medical staff to improve the health

and welfare of our frontline employees.

EnvironmEnTaL LEadErsHiP / We strong-

ly believe that putting the environment first is smart

business sense. As part of our efforts to prevent the

release of environmentally harmful substances, we

have put in place a monitoring system for sewage

and wastewater collection tanks at our plant sites

that includes sensors to detect both water level and

electrical ground faults in submerged pumps.

Our commitment to environmental leadership also

extends to our carbon footprint. Each year, we invest

over KRW 3 billion to reduce our energy consumption

and greenhouse gas emissions. In December 2011,

we completed implementation of a green energy

management system (GEMS) to aid us in effec-

tively responding to the Korean government’s energy

and emissions reduction target-setting program as

well as efficiently pursue cost reduction initiatives.

Connected to a network of over 3,000 sensors that

gather real-time data on carbon dioxide emissions at

our Changwon plant, GEMS analyzes this data and

integrates with our ERP system, laying the foundation

for sound decision-making based on instant access

to objective data as well as a projected KRW 3.2

billion savings in our annual energy costs. As a major

player in the heavy manufacturing sector, we are

committed to being an opinion leader by participating

in the Korean government’s pilot emissions target-

setting program and cap-and-trade program as well

as the industry’s monitoring, reporting, and verification

standard-setting initiative.

Marking 10 million hours of accident-free operations on the Rabigh 2 thermal plant project in Saudi Arabia

Helping keep Masan Bay clean in Korea

At Doosan, our EHS

philosophy is simple.

We aim to be an industry

leader in environmental,

health, and safety

management as we develop

the environmentally-friendly

power and water technologies

and products that will make

tomorrow a healthier, more

sustainable place to live.

EnvironmEnTaL

LEadErsHiP

EHs

CommiTmEnT

EnvironmEnTaL

rEsPonsiBiLiTY

56 57

CommuniTY sErviCE / Over 6,300 employ-

ees at our Changwon plant representing 95% of

our family volunteer to make the greater Changwon

region a better place to live for our disadvantaged

neighbors and children. In May 2011, we signed an

agreement with the city of Changwon to support

community priorities, help educate and train a high-

quality workforce, and support centers serving

underprivileged children and teens. At the same

time, we have also reached out to our neighbors

through a variety of programs such as our adopt-a-

village initiative that now serves six regional villages

as well as environmental clean-up drives to make

our community a cleaner, more beautiful place to live.

Our spirit of sharing is also making a difference in

overseas communities. In Vietnam’s Quang Ngai

region—home to Doosan Vina—we have teamed up

with Korea’s Chung-Ang University Medical Center

to provide a variety of free medical services and

donations, including cleft lip and palate surgeries

for children, medical check-ups and treatment for

the general public, and medical equipment and

pharmaceuticals for clinics and hospitals. We have

also installed desalination facilities and completed

numerous community improvement projects to

enhance the quality of life for our neighbors.

CuLTuraL sPonsorsHiPs / Another way

we give back to our local communities is through

the sponsorship of popular pastimes such as con-

certs and sports events. In May 2011, we hosted the

fourth Doosan Match Play Championship, the Korea

LPGA’s sole golf match-play event. The KRW 100

million championship was won by Su-jin Yang, her

first victory of the year. We continued our interna-

tional golf sponsorship for a second straight year

as a patron of the famed British Open, the oldest

and most prestigious of the world’s four major golf

tournaments. We were also the title sponsor of the

first Asian Dream Cup held in Vietnam’s Ho Chi

Minh City in June 2011. Organized by Korean foot-

ball star Ji-sung Park’s JS Foundation, the cup

included a football clinic for youth and a charity

match between Park’s team of international foot-

ballers and NaviBank Saigon, with the proceeds

going to promote the development of local football.

Donating a 100-ton/day reverse osmosis desalination facility for An Bihn Island in Vietnam

Sponsoring free medical and dental check-ups in Vietnam

At Doosan, engaging

communities for good is

an integral part of our DNA.

From community service to

cultural sponsorships, we are

united in our commitment to

making our world a better,

brighter place to live.

CommuniTY

sErviCE

soCiaL

rEsPonsiBiLiTY

CuLTuraLsPonsorsHiPs

58 59

GLObAL NETwORk / With 13 overseas sub-

sidiaries and 37 branch offices worldwide, we have

an increasingly global face. Over the past six years,

we have welcomed US water solution provider

Doosan Hydro Technology, Romanian casting and

forging specialist Doosan IMGB, UK boiler OEM

Doosan Babcock, Czech turbine OEM Skoda Power,

Indian boilermaker Doosan Chennai Works, and

German boiler and air pollution control specialist

Doosan Lentjes into our family through strategic

acquisitions. We have also set up Doosan Engineering

& Services in the US to expand our architect-engi-

neering capabilities, Doosan Vina in Vietnam to

expand our manufacturing capabilities, and Doosan

Power Systems in the UK to provide complete plant

solutions and energy services to power utilities in

Europe and the Americas. This synergistic network

is now bringing together some of the world’s best

minds and technologies to deliver innovative solu-

tions to tomorrow’s power and water challenges.

SUCCESSFUL pARTNERShIpS / Partner-

ships play a crucial role in our global success. In

Korea alone, we depend on well over 1,000 suppli-

ers to help us deliver world-class power and water

solutions to customers around the world. Our voca-

tional training program established back in 2009 in

partnership with the Human Resources Development

Service of Korea trained over 4,000 on- and off-site

partner workers in 2011, offering some 23 courses

in 9 core areas such as engineering, quality control,

and welding. We also established a 72-member team

of inside and outside experts tasked with funda-

mentally upgrading supplier competitiveness in 2011.

The team is now collaborating with over 140 key

suppliers to develop master plans that will enhance

partner competitiveness in six broad areas, including

quality improvement, quality assurance, production

technology, engineering optimization, productivity

improvement, and environment, health, and safety.

GLObAL RECOGNITION / Beyond our reputa-

tion as a well-known and respected name in the

global power and water industries, our consistent

growth in recent years has also earned us a place

on some of the world’s most prestigious corporate

rankings. In 2009, BusinessWeek ranked us fourth

out of 40 companies on its annual World’s Best

Companies list. The Boston Consulting Group named

us fourth in machinery and construction on its 2010

Value Creators rankings based on an analysis of

total shareholder return during the 2005 to 2009

period. We were also honored to make our second

appearance on the Fortune Global 500 in 2011 as

the Doosan Group ranked No. 489 based on total

2010 group sales of USD 19.94 billion.

Signing an agreement to establish the win-win Growth Fund for partners

Hosting the first annual Doosan partner Conference

At Doosan, we believe

it takes a global perspective

to be a truly world-class

company. Through strategic

acquisitions, expansion, and

partnerships, we are

committed to generating

synergy that creates

greater value for all our

stakeholders.

GLObAL

NETwORk

pARTNER

RESpONSIbILITY

GLObALRECOGNITION

SUCCESSFULpARTNERShIpS

ˇ

60 61

At Doosan, we believe greater shareholder value begins with greater customer value. Our focus on strategically expanding our markets, technologies, synergies, and efficiencies is laying the foundation for more profitable growth in the years ahead. VALUE

NEW mARkETS

NEW SYNERgIESNEW VAlUE

NEW EFFICIENCIES

NEW TECHNOlOgIES

ENhANCI NG

mARkET STRATEgY OVERVIEW

In 2011, we continued to strengthen our position as a global leader in power and water by winning orders

in key markets such as India, Saudi Arabia, and Vietnam.

Our acquisition of boilermaker Doosan Chennai Works (formerly AE&E Chennai Works) in January was a

strategic move that has enhanced our competitiveness in India, a market that is rapidly emerging as the

world’s largest market for coal-fired thermal power plants. This local presence was instrumental in our win

of a bulk order for two major projects in the Indian state of Karnataka worth KRW 1,500 billion.

In addition to strengthening our EPC power plant business, we also beefed up our power generation equip-

ment business, securing boiler, turbine, and other equipment orders for projects in Saudi Arabia, Vietnam,

Korea, and other markets as we set our sights on being a global top-tier maker.

In the field of water, we continued to consolidate our leadership in the seawater desalination segment by

making inroads into the multi-effect distillation (MED) market. We also became the first in the global water

industry to secure a project and technology portfolio spanning all three major desalination technologies

available today—MED, multi-stage flash distillation (MSF), and reverse osmosis filtration (RO).

TECHNICAl STRATEgY OVERVIEW

We continue to improve our technical competitiveness in the power and water industries by securing core

technologies through strategic acquisitions and ongoing research and development.

In November 2011, we acquired a majority stake in Doosan Lentjes (formerly AE&E Lentjes) through European

subsidiary Doosan Power Systems. This acquisition gives us access to proprietary technologies in the boiler

and air pollution control fields, including circulating fluidized-bed boilers and flue-gas desulfurization.

Our ongoing R&D in the field of integrated-gasification combined-cycle power generation was instrumental

in our winning the Taean IGCC project in 2011, Korea’s first coal syngas-fired IGCC plant. This high-profile

project gives us the opportunity to take the lead in the development of the standard IGCC plant design for

our home market as we focus on meeting demand for cleaner energy at home and abroad.

In the field of renewable energy, our wind turbine business continued to pick up speed. Since wrapping up

development of our WinDS3000™ 3 MW wind turbine system, we have won a steady stream of domestic orders.

Today, we are developing technologies to support higher-output turbines with capacities of 5 MW and up.

ORgANIzATIONAl STRATEgY OVERVIEW

In 2011, we carried out a major reorganization of our operations. We merged our former Power Plant and

Construction Business Groups and then reorganized them into the new EPC and Power Business Groups.

We expect this new organization to generate greater synergy between our EPC power plant and equipment

businesses, laying the foundation for profitable growth in the power plant sector in the years ahead.

One of our major focuses at our overseas manufacturing subsidiaries has been on productivity. In the three

years that have passed since we opened our Doosan Vina subsidiary in Vietnam in 2009, we have made huge

gains in productivity. Today, Doosan Vina rivals our main Changwon plant in this crucial performance metric.

FINANCIAl REVIEW

In 2011, we surpassed consolidated orders of KRW 10 trillion for a second straight year by winning the

follow-on order for units 3~4 of the Braka nuclear plant project in the UAE as well as a boiler bulk order

in India. Our backlog continued to increase, reaching KRW 23 trillion, equivalent to 2.7 times our revenues

for the year.

As work got underway in earnest on projects won in 2010 such as the Braka nuclear plant in the UAE and

Rabigh 2 thermal plant in Saudi Arabia, our consolidated revenues and operating income continued to rise,

reaching KRW 8.5 trillion and KRW 569.6 billion, respectively. Non-operating profit from equity-method

investees rose KRW 116.6 billion in 2011 due to improved performances by Doosan Infracore and other

investee companies. Our financial soundness improved as our debt-to-equity ratio declined 44 percentage

points to 183.3%, improving financial soundness. Our project financing exposure also declined 35% to

KRW 1,372 billion.

Going forward, we plan to steadily strengthen our financial soundness and global competitiveness to build

a more solid foundation for profitable growth in the years ahead.

Management’s

Discussion & Analysis

64 65

WATER BUSINESS gROUp in KRW billionsin KRW billionsEpC BUSINESS gROUp

Consolidated orders fell sharply to just under KRW 1.8 trillion due to delayed project tenders in the Middle

East and India. Our win of the Mong Duong II TPP EPC order in Vietnam was the one bright spot in a very

challenging year. Consolidated revenues rose KRW 196 billion to just over KRW 2.9 trillion as projects

won in 2010 got underway in earnest. Although falling nearly KRW 1 trillion, backlog remained strong at

KRW 6.9 trillion.

in KRW billionspOWER BUSINESS gROUp

Consolidated orders rose strongly to over KRW 5.2 trillion as we continued to diversify our business portfolio

by winning a bulk order from India and major orders in Korea—including our first 1,000 MWe ultra-supercritical

and integrated-gasification combined-cycle plants—as well as performance upgrade and operations and

maintenance contracts at home and abroad. While consolidated revenues rose slightly to nearly KRW 2.5

trillion, backlog rose nearly KRW 2.9 trillion, ensuring steady revenue growth in the near term.

NUClEAR pOWER plANT BUSINESS gROUp in KRW billions

Consolidated orders nearly reached KRW 2 trillion in 2011 as we followed up our win of major equipment

for the Braka 1~2 NPP project in the UAE in 2010 with the major equipment order for Braka 3~4. While

consolidated revenues remained virtually unchanged at just over KRW 1.2 trillion, backlog rose to nearly

KRW 5.5 trillion on the strength of the Braka 3~4 order.

Consolidated orders dropped sharply to KRW 239 billion due to the delay of a major project tender. While

consolidated revenues rose sharply to KRW 854 billion due to strong orders from the previous year, backlog

declined to just under KRW 1.6 trillion.

CASTINg & FORgINg BUSINESS gROUp in KRW billions

Consolidated orders remained virtually unchanged at KRW 831 billion as growing demand for mold and

tool steel from the auto and steel industries offset oversupply and slumping demand in the shipbuilding

and power generation industries. Consolidated revenues were also virtually identical at KRW 798 billion.

Backlog declined to KRW 507 billion as growing competition pushed down prices.

66 67

11

10

Revenues Orders Backlog

1,257 1,946 5,472

1,226 2,275 4,372

11

10


2,464 5,226 8,518

2,233 4,349 5,680

11

10


2,919 1,786 6,941

2,723 6,078 7,931

11

10


798 831 507

793 836 566

11

10


854 239 1,577

449 1,769 2,054

THE BOARD OF DIRECTORS AND SHAREHOlDERSDOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO., lTD.:

We have audited the accompanying consolidated statements of financial position of Doosan Heavy Industries

& Construction Co., Ltd. and its subsidiaries (the “Group”) as of December 31, 2011 and the related consoli-

dated statements of income, comprehensive income, changes in equity and cash flows for the year then

ended. Management is responsible for the preparation and fair presentation of these consolidated financial

statements in accordance with Korean International Financial Reporting Standards. Our responsibility is to

express an opinion on these consolidated financial statements based on our audit.

We did not audit the financial statements of Doosan Power Systems Holdings Ltd. and two subsidiaries

whose financial statements reflect 17.40% of total assets before eliminating intra-group transactions as

of December 31, 2011 and 18.00% of total revenue before eliminating intra-group transactions for the

year then ended. Further, we did not audit the financial statements of Doosan Infracore Co., Ltd. and one

equity-accounted investee, whose share of equity reflects 20.96% of total assets as of December 31, 2011

and 35.93% of profit of equity-accounted investees. Those financial statements were audited by other

auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the accounts

included for those subsidiaries and equity-accounted investees, is based solely on the reports of other

auditors. We have audited the consolidated statement of financial position as of December 31, 2010 and

the related consolidated statements of income, comprehensive income, changes in equity and cash flows

for the year then ended that are not accompanying this report and were prepared in accordance with the

previous Generally Accepted Accounting Principles in the Republic of Korea (“Previous K-GAAP”). Our audit

report thereon dated March 30, 2011 expressed an unqualified opinion. The accompanying consolidated

financial statements as of December 31, 2010 and January 1, 2010 and for the year ended December 31,

2010, are presented for comparative purpose and are not within our scope of audit.

We conducted our audit in accordance with auditing standards generally accepted in the Republic of Korea.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the consolidated financial statements are free of material misstatement. An audit includes examining, on a

test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An

audit also includes assessing the accounting principles used and significant estimates made by manage-

ment, as well as evaluating the overall financial statement presentation. We believe that the audit evidence

we have obtained is sufficient and appropriate to provide a basis for our opinion.

In our opinion, based on our audit and the reports of other auditors, the consolidated financial statements

referred to above present fairly, in all material respects, the financial position of the Group as of December

31, 2011 and its financial performance and its cash flows for the year then ended in accordance with Korean

International Financial Reporting Standards.

Without qualifying our opinion, we draw attention to the following:

The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements

may differ from those generally accepted and applied in other countries. Accordingly, this report and the

accompanying consolidated financial statements are for use by those knowledgeable about Korean auditing

standards and their application in practice.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 20, 2012

This report is effective as of March 20, 2012, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

Independent

Auditors’ Report

Based on a report originally issued in Korean

68 69

ASSETS Cash and cash equivalents ￦ 783,253,494 ￦ 1,517,605,693 ￦ 2,069,968,730

Short-term investment instruments 75,743,900 266,055,873 349,478,048

Trade receivables 1,026,094,699 2,236,045,679 3,118,445,477

Due from customers for contract work 1,607,582,781 1,962,833,559 2,180,092,442

Other receivables 202,868,939 268,220,130 296,175,922

Prepayments 709,070,063 796,458,881 780,450,436

Advanced expenses 39,248,720 99,137,515 90,484,640

Derivative instrument assets including firm commitment assets

252,010,371 214,505,984 1,101,779,282

Inventories 457,467,194 591,862,858 2,247,847,165

Non-current assets held for sale - 13,226,442 15,166,202

Other current assets 110,311,202 673,237,572 502,324,074

Current assets 5,263,651,363 8,639,190,186 12,752,212,418

Long-term financial instruments 58,726,407 41,001,406 38,504,585

Long-term investments in securities 96,539,013 301,233,951 335,033,894

Investments in equity-accounted investees 3,825,562,505 2,871,334,538 349,461,715

Long-term loans 102,496,654 64,065,252 75,128,450

Property, plant and equipment 2,689,591,471 3,521,807,490 5,800,415,224

Intangible assets 1,157,876,792 1,070,352,496 7,186,216,944

Investment property 10,051,988 127,420,390 194,300,067

Derivative instrument assets including firm commitment assets

261,312,351 225,275,015 772,523,053

Guarantee deposits 69,889,675 99,468,666 127,500,685

Deferred tax assets 19,763,080 11,843,197 13,041,056

Other non-current assets 33,707,295 4,149,162 58,710,477

Non-current assets 8,325,517,231 8,337,951,563 14,950,836,150

TOTAl ASSETS ￦ 13,589,168,594 ￦ 16,977,141,749 ￦ 27,703,048,568

In thousands of won

(Unaudited) (Unaudited)

December 31, 2010

January 1, 2010

December 31, 2011

In thousands of won

(Unaudited) (Unaudited)

December 31, 2010

January 1, 2010

December 31, 2011

lIABIlITIES Trade payables ￦ 668,027,022 ￦ 1,303,546,207 ￦ 2,427,874,138

Short-term borrowings 1,699,679,954 2,206,456,503 3,076,237,046

Other payables 414,523,778 376,051,995 885,378,104

Advanced receipts 113,602,351 1,115,201,668 2,065,356,181

Due to customers for contract work 2,067,922,516 1,846,655,929 1,249,992,993

Withholdings 9,650,522 106,562,816 76,618,528

Accrued expenses 339,826,153 295,699,509 788,168,414

Current tax liabilities 60,288,358 96,976,985 105,759,586

Current portion of long-term debt 385,654,664 973,680,088 2,003,022,990

Derivative instrument liabilities including firm commitment liabilities

259,363,285 230,887,487 754,480,550

Provisions 29,885,912 142,367,802 247,263,304

Non-current liabilities held for sale - - 5,588,744

Other current liabilities 27,707,018 60,018,828 142,334,851

Current liabilities 6,076,131,533 8,754,105,817 13,828,075,429

Debentures 958,586,239 1,335,385,141 2,182,896,059

Long-term borrowings 528,467,353 477,937,023 5,453,843,838

Long-term other payables 42,592,489 47,296,056 55,917,651

Employee benefits 256,818,065 204,319,039 724,383,725

Deposits received 170,942,648 178,862,633 148,851,913

Derivative instrument liabilities including firm commitment liabilities

310,362,357 281,898,040 386,541,688

Deferred tax liabilities 210,640,948 232,993,562 133,676,533

Provisions 140,998,312 256,638,308 288,726,905

Other non-current liabilities 96,700,631 31,501,915 82,634,011

Non-current liabilities 2,716,109,042 3,046,831,717 9,457,472,323

TOTAl lIABIlITIES ￦ 8,792,240,575 ￦ 11,800,937,534 ￦ 23,285,547,752

Consolidated

Statements of

Financial position Consolidated

Statements of

Financial position

EqUITY Share capital ￦ 529,217,335 ￦ 529,082,335 ￦ 528,698,835

Capital surplus 883,636,599 956,958,238 938,454,765

Other capital adjustments (197,869,706) (134,427,447) (197,015,894)

Accumulated other comprehensive income 2,321,194 (26,988,153) (247,563,925)

Retained earnings 3,553,289,725 3,471,525,934 2,280,573,547

Equity attributable to owners of the Controlling Company

4,770,595,147 4,796,150,907 3,303,147,328

Non-controlling interests 26,332,872 380,053,308 1,114,353,488

TOTAl EqUITY 4,796,928,019 5,176,204,215 4,417,500,816

TOTAl EqUITY AND lIABIlITIES ￦ 13,589,168,594 ￦ 16,977,141,749 ￦ 27,703,048,568

Doosan Heavy Industries & Construction Co., Ltd. and Subsidiaries

As of December 31, 2011, 2010 and January 1, 2010


As of December 31, 2011, 2010 and January 1, 2010

(Continued)

70 71

Consolidated

Statements of

Income

CONTINUINg OpERATIONS Revenue ￦ 8,495,506,109 ￦ 7,928,868,331

Cost of sales 7,250,464,580 6,582,510,454

gross profit 1,245,041,529 1,346,357,877

Selling and administrative expenses 742,584,437 794,552,635

Other income 102,881,898 41,017,273

Other expenses 35,706,677 77,056,083

Results from operating activities 569,632,313 515,766,432

Finance income 442,471,363 423,376,818

Finance costs 656,558,048 640,347,974

Net finance costs (214,086,685) (216,971,156)

Share of profit (loss) of equity accounted investees 504,914,453 (91,197,788)

profit before income tax 860,460,081 207,597,488

Income tax expense 119,276,381 125,665,141

profit from continuing operations 741,183,700 81,932,347

Discontinued operations

Profit (loss) from discontinued operations (net of tax) (479,488,358) 1,280,567,252

profit for the year 261,695,342 1,362,499,599

profit attributable to:

Owners of the Controlling Company 274,781,302 1,251,584,079

Non-controlling interests (13,085,960) 110,915,520

profit for the year ￦ 261,695,342 ￦ 1,362,499,599

EARNINgS pER SHARE Basic earnings per share (won) ￦ 3,063 ￦ 13,937

Diluted earnings per share (won) ￦ 3,062 ￦ 13,929

EARNINgS pER SHARE - CONTINUINg OpERATIONS Basic earnings per share (won) ￦ 8,382 ￦ 977

Diluted earnings per share (won) ￦ 8,381 ￦ 976

(Unaudited)

In thousands of won, except per share information

20102011

Consolidated

Statements of

Comprehensive Income

pROFIT FOR THE YEAR ￦ 261,695,342 ￦ 1,362,499,599

OTHER COmpREHENSIVE INCOmE Net change in fair value of available-for-sale financial assets

34,883,416 17,630,350

Effective portion of changes in fair value of cash flow hedges

18,823,489 38,542,206

Defined benefit plan actuarial losses (141,931,183) (17,379,007)

Changes in unrealized gain on valuation of equity-method investments

114,042,298 7,096,770

Foreign currency translation differences for foreign operations

(57,605,836) (37,656,244)

Changes in the scope of consolidation (94,964,691) 434,432,417

Income tax on other comprehensive income 3,007,065 (12,847,943)

Other comprehensive income (loss) for the year, net of income tax

(123,745,442) 429,818,549

TOTAl COmpREHENSIVE INCOmE FOR THE YEAR ￦ 137,949,900 ￦ 1,792,318,148

TOTAl COmpREHENSIVE INCOmE ATTRIBUTABlE TO: Owners of the Controlling Company 178,449,004 1,456,407,053

Non-controlling interests (40,499,104) 335,911,095

TOTAl COmpREHENSIVE INCOmE FOR THE YEAR ￦ 137,949,900 ￦ 1,792,318,148

(Unaudited)

In thousands of won

20102011


For the years endedDecember 31, 2011 and 2010


For the years endedDecember 31, 2011 and 2010

72 73

Balance at january 1, 2010 (Unaudited)

￦ 528,698,835 ￦ 938,454,765 ￦ (197,015,894) ￦ (247,563,925) ￦ 2,280,573,547 ￦ 1,114,353,488 ￦ 4,417,500,816

Annual dividend - - - - (44,878,894) (4,636,537) (49,515,431)

Profit for the year - - - - 1,251,584,079 110,915,520 1,362,499,599

Defined benefit plan actuarial losses

- - - - (15,752,798) (1,626,209) (17,379,007)

Share-based compensation 383,500 4,934,044 529,307 - - - 5,846,851

Net change in fair value of available-for-sale financial assets

- - - 9,462,526 - 3,799,166 13,261,692


- - - 7,013,486 - 83,284 7,096,770


- - - 25,885,827 - 4,177,093 30,062,920


- - - (37,685,748) - 29,504 (37,656,244)

Change in interests of subsidiaries - 13,569,429 30,752,214 - - (62,689,751) (18,368,108)

Changes in the scope of consolidation - - 31,306,926 215,899,681 - (784,352,250) (537,145,643)

Balance at December 31, 2010 (Unaudited)

￦ 529,082,335 ￦ 956,958,238 ￦ (134,427,447) ￦ (26,988,153) ￦ 3,471,525,934 ￦ 380,053,308 ￦ 5,176,204,215

In thousands of won

Share capital

Capital surplus

Retained earnings

Total equity

Othercapital

adjustment

Non- controlling

interests

Accumulatedother

comprehensiveincome

Consolidated

Statements of

Changes in Equity Consolidated

Statements of

Changes in Equity

In thousands of won

Share capital

Capital surplus

Retained earnings

Total equity

Othercapital

adjustment

Non- controlling

interests

Accumulatedother

comprehensiveincome

Balance at january 1, 2011 (Unaudited)

￦ 529,082,335 ￦ 956,958,238 ￦ (134,427,447) ￦ (26,988,153) ￦ 3,471,525,934 ￦ 380,053,308 ￦ 5,176,204,215

Annual dividend - - - - (67,375,866) - (67,375,866)

Profit for the year - - - - 274,781,302 (13,085,960) 261,695,342

Defined benefit plan actuarial losses

- - - - (50,740,197) - (50,740,197)

Share-based compensation 135,000 1,688,584 2,222,147 - - - 4,045,731

Acquisition of treasury stock - - (49,999,638) - - - (49,999,638)

Changes in retained earnings arising from equity-method investments

- - - - (74,901,448) - (74,901,448)

Net change in fair value of available-for-sale financial assets

- - - 26,156,227 - - 26,156,227


- - - 114,042,298 - - 114,042,298


- - - 14,268,205 - - 14,268,205


- - - (56,067,428) - (1,538,408) (57,605,836)

Changes in the scope of consolidation - (76,707,781) (15,694,339) (69,089,955) - (339,096,068) (500,588,143)

Others - 1,697,558 29,571 - - - 1,727,129

Balance at December 31, 2011

￦ 529,217,335 ￦ 883,636,599 ￦ (197,869,706) ￦ 2,321,194 ￦ 3,553,289,725 ￦ 26,332,872 ￦ 4,796,928,019


For the year ended December 31, 2010


For the year ended December 31, 2011

(Continued)

74 75

Consolidated

Statements of

Cash Flows

CASH FlOWS FROm OpERATINg ACTIVITIES Cash generated from operating activities ￦ 229,262,260 ￦ 1,008,519,866

Interest received 25,112,441 30,958,937

Interest paid (161,106,213) (322,002,180)

Dividends received 12,165,760 6,425,897

Income taxes paid (91,907,746) (71,679,505)

Net cash from operating activities 13,526,502 652,223,015

CASH FlOWS FROm INVESTINg ACTIVITIES Net decrease (increase) in short-term investment instruments 50,760,148 (26,666,745)

Collection of loans 9,897,713 139,691,448

Increase in loans (108,322,665) (410,618,737)

Decrease in guarantee deposits 49,198,065 34,860,812

Increase in guarantee deposits (38,299,635) (32,685,255)

Acquisition of long-term financial instruments (16,910,000) (20,575,437)

Proceeds from sale of long-term investment in securities 22,400,259 -

Acquisition of long-term investment in securities (3,119,224) (16,678,638)

Proceeds from sale of investments in equity-accounted investees 1,897,489 3,971,206

Acquisition of investments in equity-accounted investees (218,849,925) (277,459,888)

Proceeds from sale of investments in subsidiaries (610,333,037) (252,778,277)

Business combination, net of cash acquired (51,353,584) (109,175,320)

Acquisition of property, plant and equipment (261,173,916) (270,755,404)

Acquisition of investment property - (10,053,942)

Proceeds from sale of property, plant and equipment 3,624,940 2,588,634

Proceeds from sale of investment property 12,407,712 3,347,458

Proceeds from sale of intangible assets 1,600,455 12,615,901

Acquisition of intangible assets (82,926,371) (97,990,845)

Others - (85,000)

Net cash used in investing activities ￦ (1,239,501,576) ￦ (1,328,448,029)

(Unaudited)

In thousands of won

20102011

Consolidated

Statements of

Cash Flows

CASH FlOWS FROm FINANCINg ACTIVITIES Net increase in short-term borrowings ￦ 281,613,608 ￦ 284,603,451

Repayment of current portion of long-term debt (510,000,000) (954,249,525)

Proceeds from asset-backed liabilities - 360,000,000

Repayment of asset-backed liabilities - (50,000,000)

Proceeds from issuance of debentures 653,940,293 677,048,396

Repayment of debentures - (15,591,556)

Proceeds from long-term borrowings 228,321,470 113,187,499

Repayment of long-term borrowings (26,067,538) (192,613,279)

Stock options exercised 1,265,300 3,682,040

Dividends paid (67,375,866) (49,515,431)

Acquisition of treasury stock (49,999,638) -

Others (34,244) 63

Net cash from financing activities 511,663,385 176,551,658

Effect of exchange rate fluctuations on cash held (20,040,510) (52,689,681)

Net decrease in cash and cash equivalents (734,352,199) (552,363,037)

Cash and cash equivalents at 1 January 1,517,605,693 2,069,968,730

Cash and cash equivalents at 31 December ￦ 783,253,494 ￦ 1,517,605,693

(Unaudited)

In thousands of won

20102011


For the years ended December 31, 2011 and 2010


For the years ended December 31, 2011 and 2010

(Continued)

76 77

DOOSAN CORpORATIONwww.doosan.com

DOOSAN CORpORATION – FASHIONPolo Ralph Lauren and Esprit distribution

DOOSAN CORpORATION– ELECTrO-MATErIALSwww.dse.co.krCopper-clad laminate manufacturing

DOOSAN CORpORATION – GLONETGlobal logistics, food and chemical imports,pharmaceuticals, nutraceuticals, andcosmeceuticals manufacturing

DOOSAN CORpORATION– INFOrMATION & COMMUNICATIONSolution services, data center services, ASP services, ERP solutions

DOOSAN HEAVY INDUSTRIES &CONSTRUCTION CO., lTD.www.doosanheavy.comPower plant facilities, seawater desalinationand water treatment plant facilities, castings andforgings, construction

DOOSAN INFRACORE CO., lTD.www.doosaninfracore.comConstruction equipment, industrial vehicles, machine tools and automation systems, diesel and CNG engines, defense products

DOOSAN ENgINEERINg & CONSTRUCTION CO., lTD.www.doosanenc.comInfrastructure, commercial, residential, and industrial construction, chemical process equipment,factory automation, industrial plant facilities, food andbeverage plant equipment, OLED panels

DOOSAN ENgINE CO., lTD.www.doosanengine.comMarine engines and diesel power plants

DOOSAN CApITAl CO., lTD.www.doosancapital.co.krIntegrated credit financing services

DOOSAN DONgAwww.doosandonga.comTextbooks and educational materials, printed andelectronic dictionaries, encyclopedia CDs, online learning, commercial printing

SRS kOREA CO., lTD.www.srs-korea.comKFC Korea, Burger King, food courts

ORICOm INC.www.oricom.comIntegrated marketing communications

DOOSAN BEARS INC.www.doosanbears.comProfessional baseball team

DOOSAN mOTORS CORpORATIONwww.hondacarsdoosan.co.krHonda automobile sales and service

NEOplUx CO., lTD.www.neoplux.comVenture capital, corporate restructuring andconsulting

DOOSAN CUVEx CO., lTD.www.ladenaresort.comLadena Resort operation

DOOSAN TOWER CORpORATIONwww.doota.comProperty management and fashion mall operation

DOOSAN FEED & lIVESTOCk CORpORATIONwww.doosanfeed.co.krAnimal feed manufacturer

CORpORATE gROWTH THROUgH pERSONAl gROWTH

At Doosan, our growth strategy is built on the simple but powerful idea that global excellence begins with the synergistic growth of both our people and businesses.

The Doosan story started back in 1896 when

founder Park Seung-jik opened a small fabric shop

in downtown Seoul. More than a century later, we are

a USD 20 billion group of companies with more than

42,000 employees at 25 domestic and 115 overseas

subsidiaries in 34 countries that generated 55% of

total sales outside Korea in 2010, ranking No. 489

on the 2011 Fortune Global 500.

During the 20th century, we had a significant impact

on the development of Korea’s consumer goods,

industrial manufacturing, trade, and construction

sectors. In the 21st, we are making an even more

significant one on the world’s industrial infrastruc-

ture, construction, machinery, and equipment sectors.

Led by a trio of businesses that are globally involved

in building tomorrow’s infrastructure—Doosan Heavy

Industries & Construction, Doosan Engineering &

Construction, and Doosan Infracore—we are today

an emerging global partner in improving the quality

of life for tens of millions around the world.

Visit us soon at doosan.com to find out more about

how Korea’s oldest business group is bringing new

innovation and value to customers around the globe.

ABOUT THE DOOSAN gROUp THE DOOSAN WAY gROUp AFFIlIATES

DOOSAN GrOUp

doosan grouP

THE VAlUES AND pHIlOSOpHYTHAT DRIVE OUR gROWTH

The Doosan way is our unique way of doing business that has sustained Doosan for more than a century and given us a competitive edge for the future. As a values-based management system, it guides us as we set goals, make strategic decisions, and work to reach our aspirations and fulfill our vision.

The Doosan Way links our values to the dynamic management systems that guide our daily activities. We

continually work to strengthen the connection between the Doosan Credo and our business operations.

And because we value innovative solutions, we constantly upgrade the business system as we develop

new technologies, devise better processes, and adapt to the evolving needs of our people.

Our values light the way as we take the next exciting steps forward to become an integrated, world-class

leader and innovator in our key industries. By developing breakthrough products and services that can be

used by people all over the world, we seek to improve the quality of life for the entire global community.

78 79

Taipei OfficeNo. 51 Keelung RoadSection 2, Suite 704Taipei, Taiwan, ROCTel +886-2-2739-2255Fax +886-2-2739-2266

Bangkok OfficeM-Thai Tower, 10th FloorAll Seasons Place87 Wireless RoadPhatumwanBangkok 10330, ThailandTel +66-2-654-0690Fax +66-2-654-0693

Hanoi OfficeDaeha Business CenterSuite 1101360 Kim Ma StreetBa Dinh DistrictHanoi, VietnamTel +84-4-6273-0545Fax +84-4-6273-0550

jakarta OfficeMandiri Tower, 20th FloorPlaza BapindoJl. Jend. Sudirman Kav 54-55Jakarta, IndonesiaTel +62-21-2995-0105Fax +62-21-2995-0108

Hanjung powerP.O. Box 2803Boroko, NCDPapua New GuineaTel +675-320-0529Fax +675-321-2984

Doosan power SystemsDoosan HouseCrawley Business QuarterManor Royal, CrawleyWest Sussex, RH10 9AD, UKTel +44-1293-61-2888Fax +44-1293-58-4321

Skoda powerTylova 1/57, 301 28Plzen, Czech RepublicTel +420-378-185-939Fax +420-378-185-910

Doosan lentjesDaniel-Goldbach-Strasse 19Ratingen 40880, GermanyTel +49-(201)-747-99-100 Fax +49-(201)-365-88-647

Doosan BabcockPorterfield RoadRenfrew, PA4 8DJ, UKTel +44-141-886-4141Fax +44-141-885-3338

Doosanpower Systems (Europe)Daniel-Goldbach-Strasse 19Ratingen 40880, GermanyTel +49-(201)-747-99-100 Fax +49-(201)-365-88-647

Frankfurt OfficeArabella Center, 9th FloorLyoner Strasse 44-48Frankfurt am Main 60528GermanyTel +49-69-69-5004-11Fax +49-69-69-5004-10

Doosan ImgB104 Berceni RoadBucharest 4, RomaniaTel +40-21-301-2500Fax +40-21-301-2701

Abu Dhabi OfficeAl Ghaith Tower, Suite 508Hamdan StreetP.O. Box 27767Abu Dhabi, UAETel +971-2-627-6273Fax +971-2-627-6274

DoosanWater R&D CenterMonarch Office Tower29th FloorSheikh Zayed RoadP.O. Box 11859, Dubai, UAETel +971-4-327-5545Fax +971-4-327-5596

Dubai OfficeThe H DubaiOffice Tower, 30th FloorOne Sheikh Zayed RoadP.O. Box 11859Dubai, UAETel +971-4-327-5545Fax +971-4-327-5529

kuwait OfficeLaila Commercial TowerSuite 7B, Block 49Salem Al-Mubarak StreetSalmiya, KuwaitTel +965-6001-3075Fax +965-2575-2001

middle East Operations CenterThe H DubaiOffice Tower, 30th FloorOne Sheikh Zayed RoadP.O. Box 11859Dubai, UAETel +971-4-327-5545Fax +971-4-327-5592

Riyadh OfficeThe Plaza, Suites 205~207(Al Akaria 4), Olaya StreetP.O. Box 9656Riyadh 11423, Saudi ArabiaTel +966-1-419-1696Fax +966-1-419-1995

North Africa OfficeLand Mark Building, 2nd Floor67 El Teseen St., 5th SettlementNew Cairo, Helwan, EgyptTel +202-2613-1038Fax +202-2613-1039

Doosan Engineering & Services5 Paragon DriveMontvale, NJ 07645, USATel +1-201-746-8200Fax +1-201-746-8210

Doosan HF Controls1624 West Crosby RoadSuite 124Carrolton, TX 75006, USATel +1-469-568-6526Fax +1-469-568-6589

Doosan Hydro Technology1865 Massaro BoulevardTampa, FL 33619, USATel +1-813-620-4281Fax +1-813-623-6092

Doosan Heavy Industries AmericaParker Plaza, 10th Floor400 Kelby StreetFort Lee, NJ 07024, USATel +1-201-944-4554 31, 24Fax +1-201-944-5022

Newington Office178 Shattuck WayNewington, NH 03801, USATel +1-603-433-5507Fax +1-603-433-1060

pittsburgh OfficeC/O Westinghouse Electric Company, Suite 115C600 Cranberry Woods DriveCranberry TownshipPA 16066, USATel +1-412-374-6071Fax +1-724-720-0903

Schenectady OfficeGeneral Electric Building 33Room 202AOne River RoadSchenectady, NY 12345, USATel +1-518-385-5218Fax +1-518-385-4984

Tampa Office912 Chad LaneTampa, FL 33619, USATel +1-813-805-8800Fax +1-813-623-6666

Tampa Water R&D Center912 Chad LaneTampa, FL 33619, USATel +1-813-805-8800Fax +1-813-623-6666

Santiago OfficeNueva Tajamar 481Oficina 1103, Las CondesSantiago, ChileTel +56-2-657-3333Fax +56-2-657-3343

Doosan power Systems (North America)1050 Crown Pointe ParkwaySuite 1200Atlanta GA 30338, USATel +1-770-551-5750 Fax +1-770-551-5753

Doosan power Systems(latin America)Alameda Santos 787, 7th FloorSao Paulo 01419-001, BrazilTel +55-11-2348-0100Fax +55-11-2348-0119

Doosan VinaDung Quat Economic ZoneBinh Thuan CommuneBinh Son DistrictQuangngai Province, Vietnam Tel +84-55-3618-900Fax +84-55-3618-950

Doosan Vina HaiphongKm 92, National Highway 5So Dau WardHong Bang DistrictHaiphong City, VietnamTel +84-31-371-2710Fax +84-31-371-2714

Doosan power Systems IndiaDLF Square, 16th FloorJacaranda MargDLF City Phase IIGurgaon, Haryana 122 002IndiaTel +91-124-439-8200Fax +91-124-414-7006

DoosanChennai Works 18/2A Seneerkuppam Bypass Road, PoonamalleeChennai, Tamil Nadu 600 056 IndiaTel +91-44-664-55-555Fax +91-44-664-55-501

New Delhi OfficeTime Tower, Suite 515M.G. Road, Sector 28Gurgaon, Haryana 122 002IndiaTel +91-124-665-3300Fax +91-124-665-3345

mumbai OfficeCNB Square, Suite 501Sangam Complex127 Andheri Kurla RoadChakala, Andheri EastMumbai, Maharashtra400 059, IndiaTel +91-22-6177-0501Fax +91-22-6177-0599

Doosan Heavy Industries japan Mita Kokusai Bldg., Suite 24131-4-28, Mita, Minato-kuTokyo 108-0073, JapanTel +81-3-3452-5451~3Fax +81-3-3452-5624

Beijing OfficeGateway Plaza, Tower B19th Floor, No. 18 XiaguangliNorth Road, East Third RingChaoyang DistrictBeijing 100027, ChinaTel +86-10-8454-7122, 7136Fax +86-10-8484-7139

Shanghai OfficeFar East International PlazaBuilding A, Suite 809No. 319 Xian Xia RoadChangning DistrictShanghai 200051, ChinaTel +86-21-5877-8696Fax +86-21-5877-5938

GLOBAL NETwOrK

AmERICAS ASIA & OCEANIA EUROpE mIDDlE EAST & AFRICA

global network

80 81

Our vision of being a global leader in power and water isn’t just about market share. What drives our global team is a shared commitment to fundamentally improving the quality of life for people everywhere on the planet by delivering the world’s best power and water solutions. We invite you to join us as we take the next step in adding sustainable new dimensions to life through power and water.

DOOSANHEAVY.COm

HEAD OFFICE & CHANGwON pLANT22 DoosanVolvo-ro, Seongsan-gu

Changwon, Gyeongnam 642-792, Korea

Tel +82-55-278-6114, 7114

Fax +82-55-264-5551, 5552

SEOUL OFFICE

465 Gangnam-daero, Seocho-gu

Seoul 137-920, Korea

C.p.O. Box 1826, Seoul Korea

Tel +82-2-513-6114

Fax +82-2-513-6200

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doosan heavy · pdf fileat doosan heavy industries & construction, ... 1973 • korean...

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