AR09

T
A
I
H
A
N
2
0
0
9

A
n
n
u
a
l

R
e
p
o
r
t
Insong Building, 194-15, Hoehyeon-dong 1-ga, Jung-gu, Seoul, Korea
http://www.taihan.com
This report was printed with soy-based ink one eco-friendly paper.
TAIHAN 2009 Annual Report
the way to
a global leader
Introduction
Performance Highlights
CEO Message
Domestic Affiliates
Global Affiliates
Corporate History
Review of Operations
Power Cable
Telecommunication
Copper Rod & Wire
R&D
Growth & Innovation
Sustainability Management
Transparent Management
People
Social Contribution
Health and Safety
Enviromnetal Management
Financial Section
Independent Auditors Report
Balance Sheets
Statements of Income
Statements of Disposition of Deficit
Statements of Changes in Shareholders Equity
Statements of Cash Flows
TAIHAN around the world
Office & Plants
Contents
04
06
08
10
12
14
17
18
19
20
21
24
26
28
30
32
40
41
43
44
45
46
48
49
01. Head Office
TEL : +82-2-316-9114 FAX : +82-2-754-5257
02. Anyang Plant
785, Gwanyang-dong, Dongan-gu, Anyang-si, Gyeonggi-do, Korea
TEL : +82-31-420-9114 FAX : +82-31-423-2685
03. R&D Laboratory
TEL : +82-31-420-9530 FAX : +82-31-420-9350
04. Dangjin Plant
2-1 Seulhang-ri, Gadae-myeon, Dangjin-gun, Chungcheongnam-do, Korea
TEL : +82-41-359-9114 FAX : +82-41-359-9116
01 03 02 04
Office & Plants
Web site : www.taihan.com
Annual report, presentation materials and newsletters are available in PDF at the
companys web site
With its core capacity developed
through more than 50 years in the
cable business, TAIHAN is gearing up
for a new future. TAIHAN, a leading
company in Korea in the power,
telecommunication, and material, is
now competing head to head with
leading companies around the world.
Based on its corporate values of
harmony, trust, and following the
virtuous path, we will grow together
with all of the stakeholders including
the customers, investors, employees,
and the local communities.
We will be opening doors to a happier
world and a more prosperous future.
This report outlines the financial conditions, results of operations, prospects, and business strategies of Taihan Electric Wire Co., Ltd. These statements
are based on the most objective facts available. However, matters that are subject to prognostication-including the companys plans, estimates, and
forecasts that have been suggested at current points of time-can and may change in the future.
the way to
a global leader
Annual Report 2009
4
Corporate Introduction
TAIHAN has led the domestic cable business since its establishment in 1955 and is now becoming a globally competitive
company in the power, communication, and material industries. In order to take the next step up and become a global
leading company that can compete with leading companies around the world, we need to not only remain committed to
our core competences that have been accumulated from previous business experience but we also need to focus on the
development of technology, invest in facilities, and strengthen our organization capabilities and constantly look for new
businesses that will be the growth engines in future. We have always tried to provide the best products and best services for
our customers and will continue contribute to value creation of our customers and will become a company that grows with
its customers on the basis of the right management strategies complementing our fundamental beliefs and principles.
Company Profile (as of December 2009) >>
Company Taihan Electric Wire Co., Ltd.
Business Type Cables & Wires
Major Items Produced Power Cables, Communication Cables, Optical Cables, and Wholesale/Electricity Construction
CEO Kang, Hee-Jeon
Address Insong Building, 194-15, Hoehyeon-dong1-ga, Jung-gu, Seoul, Korea
Established Feb. 21, 1955
Date of IPO Dec. 27, 1968
Employees 837
Fiscal Year December
Face Value 2,500 KRW
Number of Issued Stocks 57,090,428 Shares (Common Stocks: 49,068,719 Shares / Preferred Stocks : 8,021,709 Shares)
External Auditing Agency Deloitte Anjin LLC
Auditors Opinion Suitable
Credit Class BBB+(BOND), A3+(CP)
Closing Month December
Main Bank Hana Bank
Financial Highligts >>
For the years ended
Sales
Gross Profits
Operating Income
EBITDA
Ordinary Income
Net Income
As of the years ended
Current Assets
Property, Plant and Equipments
Total Assets
Interest-bearing Debts
Net Debts
Total Liabilities
Capital Stock
Capital Surplus
Retained Earnings
Capital Adjustment
Total Shareholders' Equity
(In millions of KRW)
2009 2007 2008
2,444,536
142,054
82,241
91,869
112,144
70,770
1,203,797
195,975
3,394,483
2,105,030
2,035,381
2,516,068
122,650
508,631
477,414
(70,511)
878,416
2,078,618
119,656
67,473
75,976
119,994
77,556
1,315,139
402,490
2,981,927
1,362,754
1,013,201
1,909,600
122,650
625,119
430,832
(23,489)
1,072,327
2,260,088
140,239
70,468
80,083
(316,280)
(277,113)
1,442,320
256,470
3,382,234
2,225,097
2,203,095
2,629,185
122,672
788,654
176,615
(229,012)
753,049
Introduction the way to a global leader
5
Organizational Chart >>
CEO
Cable Business Division
Marketing & Sales
Division
Energy Cable Domestic
Sales Group
Energy Cable Overseas
Sales Group
ICT Sales & Marketing
Group
Base Metal
Sales Group
EHV. Construction &
Engineering Group
Global Operation
Group
Power Cable
Manufacturing Plant
Corporate Strategy
Group
EHV. Power Cable
Accessory Plant
Portfolio Management
Group
Communication
Cable Plant
Base Metal
Plant
Finance Group
Business Support
Group
Human Resources
Group
Legal Department
Technology Innovation
Division
Research &
Development LAB
Cable Business Support
Group(GOP)
Smart Grid
Business Department
Production &
Engineering Division
Procurement
Group
Plant Construction
TF Group
Corporate Strategy
Division
Business Planning
Department
Business Management
Division
2009 Performance Highlights
Expanding Overseas Orders by Increasing the Global Sales
The position of global TAIHAN was enhanced a great deal in 2009. In addition to our major markets in the Middle East and Asia, new markets such
as the USA, Oceania, Central and South America emerged quite well. The 69 to 345kV extra high voltage turnkey project, budgeted at 100 million USD,
was obtained in New York and San Diego. Successfully obtaining large orders in the USA and performing large electricity projects will help turn the corner
on the recent economic crisis and will help to steadily expand orders in the markets of advanced countries. TAIHAN was selected as the supplier of the
400kV extra high voltage power network project (valued at 140 million USD) that was ordered by the Ministry of Electricity & Water (MEW) of Kuwait in
April. It also won the 220kV under-ground transmission network project (valued at 13 million USD and the companys first major project in South America)
that was commissioned by the Ministry of Electricity & Wire of Argentina in May. In September, the company was selected as the supplier of the 220kV
extra high voltage turnkey project (valued at 94.3 billion KRW) in New Zealand so that the export exceeded 70% of the total sales.
Enlisted in the DJSI Korea 2009 Index
In the Dow Jones Sustainability Index (DJSI) Korea 2009 assessment announced on October 20, TAIHAN was certified as a good company in the
electric components & equipment area and was listed in the DJSI Korea Index. DJSI Korea 2009 is collaboratively managed by Dow Jones, Korea
Productivity Center (KPC), and SAM (the agency of assessing sustainable management and making global investments). Therefore, it is an index that
presents objective information to investors and persons concerned about assessing the sustainability of companies. As it is enlisted in the DJSI Korea, a
positive evaluation from investors is expected from the activation of the socially responsible investment (SRI) market. It will be a chance to build a
sustainable management system in the future.
Actively Propelling the Smart Grid Business
TAIHAN organized the smart grid business organization in May 2009 for systematic propulsion to enhance the smart grid business as one of the
new growth engine businesses. It participated in the Technology Development Subcommittee of the Smart Grid Roadmap Committee within the Ministry
of Knowledge and Economy and prepared the roadmap for the cable section. It is trying to build an advanced grid on the basis of our core competences
in the energy and communication sectors as the major member of the Korea Smart Grid Association. In order locate and cultivate more specific business
items, a smart grid consultative group among subsidiaries led by TAIHAN was organized. Key smart grid solutions including the AMI (Advanced Metering
Infrastructure) system and the smart meter will be commercialized on the basis of the already developed TMS (Total Monitoring System), enamelled
copper wire cable, and optical fiber composite cable.
Building the Low Carbon Green Management System
TAIHAN is doing its best to introduce eco-friendly management practices by reducing the emission of greenhouse gases that are mainly
responsible for causing climate change. The newly forming Climate Change Committee (March 2009) has collated the carbon inventories from all
operation sites and a plan to reduce greenhouse gas by 25% (about 20,000 tons) compared to 2008 by 2012 has been established and is being
implemented. The Dangjin factory that is under construction will be built as a green factory that is equipped with an eco-friendly production system and
will be able not only to use energy very efficiently but to recycle energy. Establishing a new recyclable energy system that will include solar street lights
and solar power generators, using LNG, the eco-friendly clean fuel, highly efficient manufacturing facilities, and introduce a system of collecting and
decomposing SF6, which mainly generates greenhouse gas, will make it possible to establish an eco-friendly production system for our newly built
factory.
Annual Report 2009
6
Established a Joint Venture for Cable Production in Saudi Arabia
TAIHAN established STCC (Saudi Taihan Cable Company Ltd.) in Saudi Arabia last September for building up local production bases to the Middle
East market. It concluded a joint venture contract with SSEM, the largest electricity construction company in Saudi, and is building a factory that will
produce medium and low voltage power cables from 2011. It will pursue a strategy of expanding sales to the Middle East market up to annual revenues
of 300 million USD by preparing a production site in Saudi, where the largest power cable market in the Middle East is developing. The production range
of STCC will be expanded from 2012 to include such highly value-added products as extra high voltage power cables in order to make our site the
largest cable production center in the Middle East.
Developed the 400kV Enamelled Copper Wire Cable
TAIHAN succeeded in developing the 400kV enamelled copper wire cable that enhances transmission capacity by 20% or more compared to
existing products. The enamelled copper wire cable, commercialized for the first time in Korea, has a lighter weight and shorter depth compared to
existing products so that the cost for cable manufacturing and power network establishment can be greatly reduced, and the transmission efficiency can
be highly enhanced. Furthermore, by greatly reducing the quantity of the materials needed for cable manufacturing and the amount of fuel needed for
power generation, it achieves a very high techno-economical value and has been actively accepted as an eco-friendly product that reduces the quantity
of carbon generation.
Developed the Composite Bushing for the first time in Korea
TAIHAN developed composite bushing, one of the key parts for power transmission grid, for the first time in Korea. The composite bushing is used
for the end box of the 220kV to 300kV extra high voltage cable. As the composite bushing uses silicon materials, it is highly resistant against external
impacts compared to the existing porcelain bushing type and has good transmission characteristics so that it is being used very widely. Moreover, the
light weight, convenient installation, and extremely low maintenance cost has made it very popular recently. TAIHAN succeeded in localizing the
composite bushing to achieve a better price and shorter delivery period so that our competitiveness in winning domestic and overseas new projects has
been enhanced. In particular, product performance was verified through the electricity presence test of the San Diego Gas & Electric, USA and so was
used as the major accessory material of the San Diego 230kV extra high voltage power network project that was won last February. We will expand the
product range to the class between 345kV and 500kV.
Concluded the HVDC Technology Development MOU
TAIHAN concluded an MOU with KEPCO for collaborative research on developing a High Voltage Direct Current (HVDC) transmission system. The
MOU is concerned with localizing HVDC technology, which is believed to be the future technology that will secure the blue ocean in the power industry.
HVDC is an eco-friendly and highly efficient transmission and distribution technology converting AC power produced in the power plant into DC power for
transmission and reconverting it into AC power for power supply. It has a great ripple effect on semiconductors, power electronics, controls,
communications, and engineering fields and it is recognized as a key strategic technology in power projects in Korea. Through collaborative research, we
will develop processing and transmission technology. If domestic power companies collaboratively start HVDC overseas business, it is expected to lead
to both the creation of high values and a great ripple effect on related fields.
the way to a global leader
7
We will develop the global
competitiveness of our main
business and actively promote
new business growth engines in
order to realize our dream of
becoming a leading company.
This will also be achieved by
amassing the collective power of
the TAIHAN peoples and by being
creative in our efforts to adapt
and thrive in a rapidly changing
corporate business environment.
Annual Report 2009
8
CEO Message
CE0 message
Dear Customers and Shareholders,
I would like to begin this message by delivering the deepest appreciation to all of our stakeholders for their unwavering support.
The global economic crisis that began in the 2nd half of 2008 created financial problems for us. In 2009, the situation in the
global financial and raw materials markets continued to be unstable. Our company tried to strengthen the competitiveness of
cable business and made an effort to improve the financial structure of the company by expanding the shareholders equity and
by selling some assets. Accordingly, we developed new overseas markets in the USA, Oceania, and South America in the cable
sector resulting in an outstanding Performance in cable business. And we also build up overseas production bases in South
Africa, Vietnam, and Saudi Arabia to enhance our supply capability in these markets. Furthermore, we resolved to prepare for the
situation after the crisis by developing new products such as enamelled copper wire cable and micro-structured optical fiber,
which have been successfully commercialized for the first time here at home and by actively developing the smart grid, which
has been hailed as the next generation eco-friendly power system.
A lot of change is expected in 2010 from a managerial point of view. In order to actively respond to the global market
environment, our organization was restructured with the emphasis being placed on functions such as sales, production, and
technology in order to operate the organization in the most efficient and cohesive manner. We will make every effort to secure
financial stability within the year and will restructure our business structure by putting the emphasis on the cable business sector
where the mid- and long-term situation is expected to be stable and which will consolidate the foundation of our future growth.
TAIHAN broke ground for a new plant in October 2008 in Dangjin, Chungcheongnam-do, an emerging strategic logistics center
in Korea and future industrial base. Our new plant will serve as the next-generation cable Mecca. All the major tasks involved in
the operation and movement of the existing factory are being executed competently and without any hitches. We will make
intensive efforts to strengthen productivity through cost reduction and efficiency improvement and to enhance our competence in
the areas of technology, facilities, and manpower that will be the basis future competitiveness.
TAIHAN has been in the wire and cable business since its establishment in 1955. During these past 55 years the company has
demonstrated its staying power and ability to achieve sustainable growth by overcoming many crises by adeptly turning problems
into opportunities. When everyone talks about a crisis, we make an effort to use it as an opportunity to accomplish greater
development with a defiant and bold attitude. If we combine our talents and skills together to achieve a common goal in a spirit of
camaraderie, we can realize our dream of becoming a global leading company.
On the basis of a corporate spirit of right management, TAIHAN has made incessant efforts to be both a responsible social partner
and responsible corporate citizen. We will overcome any crisis that might arise and secure sustainable growth with our passion
and determination. All members of TAIHAN will do their best to enhance the values of customers and shareholders by developing
the company further. We promise to become a company that responds to the expectations of all people that care for us.
We respectfully and cordially ask for your everlasting encouragement and support.
Thank you so much.
9
April 29, 2010
Kang, Hee-Jeon,
CEO & President
Annual Report 2009
10
Domestic Affiliates
TAIHAN, which has grown for 55 years in the cables and industrial materials business, is
steadily pursuing the advancement of its business structure to be competitive and
adaptable to changes in the business environment. It is developing construction business
as the axis of its future growth through Namkwang E&C and TEC Construction and is
steadily searching for and cultivating new growth engines in this era when information
communication and eco-friendly energy technology will be paramount in business.
OPTOMAGIC
Optomagic, equipped with advanced facilities, technical capabilities, and large production facilities in the optical fiber field, is leading to the establishment
of the next generation information communication network. Optomagic succeeded in developing the optical fiber for natural lighting which makes it
possible to collect sunlight from inside and the optical fiber with the micro structure which is the next generation optical fiber that reduces bend loss and
maximizes production efficiency. It is positioned as one of the worlds best optical fiber company with outstanding production and technical capabilities.
Due to the expansion and spread of IPTVs and the increase in the large data transmission rate mainly in the USA and Europe, the demand for high quality
optical fiber used for establishing FTTH is steadily increasing. Optomagic will largely expand its domestic and overseas sales through more active
marketing campaign. Meanwhile, it has developed as a biotech company specializing in doing research and developing new medicines and forming
partnerships through the acquisition and merger with Chemizon.
MUJU RESORT
Muju Resort, which is a representative resort located in the Deogyusan National Park, is an all year round comprehensive leisure facility oriented toward
harmony between nature and human, the arts, and health. Muju Resort is equipped with various leisure facilities such as large ski slopes, golf facilities,
and luxury hotels and condominiums. Muju Music Festival has been held since 2007. Saturdays Andante has been held since 2008. It has established
itself as a prestigious resort that features beautiful scenery and delightful music. It will be developed as the most comprehensive resort in Korea through
steady investments in facilities such as the renovation of accommodation and leisure facilities.
TAIHAN MARINE CABLE (TMC)
TMC, the company specializing in wire and cable for ships and in optical cables for inside buildings, was awarded a prize for its exports in 2007, which
exceeded 70 million USD. It also won a prize for exports in 2008, which exceeded 100 million USD. It is now positioned as the top supplier of cables for
ship building in Korea. TMC succeeded in developing the first optical cables for ships in Korea in 2009 by constantly innovating technology and by
improving the quality of its products and has acquired certification from major classification organizations such as the American Bureau of Shipping (ABS)
and Det Norske Veritas (DNV). It has the world best technical capability and is recognized for this. It is now actively cultivating domestic and overseas
markets including China, Japan, and Europe.
TEC & CO
TEC & CO is developing and supplying state-of-the-art home network systems and is creating a life culture that is exquisitely convenient. It is becoming
the best home network specialty company thanks to the optical fiber based FTTH technology of TAIHAN. It is trying to become a comprehensive IT
company in the global era by starting U-city and smart grid businesses with its eco-friendly leading edge business model.
www.optomagic.co.kr
www.tecnco.kr
www.mujuresort.com
www.tmc-cable.com
Domestic Affiliaties the way to a global leader
11
TAIHAN TECHREN
Based on its fine technical capability in the electricity and optics areas, Taihan Techren is the new recyclable energy specialty company applying for a
domestic patent on its condensation device, developing a tracking system, and manufacturing and supplying various types of solar power generation
systems. Its technical capability was demonstrated by its completion of the largest thin film system solar power plant in the nation in Yeongju, Gyeongbuk
in 2008. The development of overseas market was accelerated with equity investment from Sojitz Group, a Japanese general trading company in May
2009. Taihan Techren will do its best to become the company leading future eco-friendly energy businesses on the basis of its exclusive technical
capability.
ONSE TELECOM
Onse Telecom, established in 1997, is a backbone communication carrier providing comprehensive communication services such as international calls, long
distance calls, the wireless Internet, and the IDC business. Onse Telecom is steadily providing new services suitable to customers needs in the ubiquitous
era. It released the open mobile Internet So1 as a response to the open wireless network. Many customers are fond of its various additional services such as
Sayphone, national representative number 1688, and collect call 1677. In order to respond to the rapidly changing communication market, it is actively
participating in future growth businesses such as VoIP and MVNO and is growing as a company leading the future communications culture.
TEC CONSTRUCTION
TEC Construction became affiliated with TAIHAN at the end of 2007. It is a comprehensive construction company that is specialized in architecture, civil
engineering, and development projects and has won various large projects on the basis of is construction capability and technological expertise that has
been accumulated in the construction area for 50 years. It is building TAIHANs new cable factory at Dangjin and is participating in the four river turnkey
project ordered by Busan Office of Land. It is also winning road and apartment projects ordered by Korea Land Corporation, and so it is recording
outstanding results in the public sector. Its competitiveness will be strengthened by steadily developing new overseas markets.
NAMKWANG ENGINEERING & CONSTRUCTION
Namkwang E&C, established in 1947, has led Koreas construction industry on the basis of its abundant construction experience and outstanding
technical capability. It is demonstrating its capability as a comprehensive construction company in various areas from large social infrastructure
construction projects to Haustory, the apartment brand leading the creation of a new residence culture. It is actively developing overseas markets
including Saudi Arabia, Iraq, the Philippines, Vietnam, and Angola. It is showing steady growth by obtaining orders of more than 1.26 trillion KRW during a
period of overall recession in the construction industry.
DAEKYUNG MACHINERY & ENGINEERING
Daekyung Machinery & Engineering, established in 1981, is a company manufacturing and supplying heat exchangers and boilers used for petrochemical
plants and energy related industrial facilities and has factories in Ulsan and Yeosu. Building energy related infrastructure in the Middle East and in
advanced countries such as USA is being actively pursued. Sales recorded in 2009 were 243.8 billion KRW, an increase of 10% or more compared to
that of the previous year. It is expected that growth will continue through the expansion of sales channels in overseas markets and through the steady
development of technology.
www.techren.co.kr
www.onsetel.co.kr
www.tecconst.com
www.namkwang.co.kr
www.dkme.com
Annual Report 2009
12
Global Affiliates
TAIHAN is promoting future growth strategies through the expansion of overseas
projects. In its main business, wire & cable, it has strengthened by building our
production bases in emerging markets such as South Africa, Vietnam, Cambodia, and
Saudi Arabia. Since advancing into the Mongolian mobile communications operating
business in 1999, it has embarked on forging a communications network operating
business. In 2006, its communications operating business took another leap forward with
the acquisition of the largest communications operator in the D.R. Congo. The company
is expanding its business to growth potential areas such as the leisure industry on the
basis of our core competences in the existing business sectors. TAIHANs global
investment business has expanded to the USA, Canada, the Philippines, and Hong Kong
in order to set up its global business network.
TAIHAN GLOBAL HOLDINGS
Taihan Global Holdings (TGH) was established in Hong Kong in 2006 to achieve the efficient integrated management of TAIHANs overseas affiliates,
which are spread all over the world. TGH plays the hub role in the overseas investment business as the front base for the global business of TAIHAN. It
will steadily focus on finding out and investing in new, profitable projects.
TAIHAN USA
TAIHAN USA was established in 2001 as a platform to advance into the American market. It has consolidated the basis for the development of the local
market by expanding the orders of power cable products in the USA since 2003 and has expanded the sales of power and new information
communication products in America since the large extra high voltage power turnkey project was won in 2007. In February 2009, it concluded with the
National Grid, the energy authority covering the east of USA, the contract for supplying the extra high voltage power network with 69kV to 345kV (valued
at 100 million USD) for 5 years to the New York and New England. It was selected as the company to exclusive supply the 230kV extra high voltage
power network to be built in the San Diego by San Diego Gas & Electric, which is the largest energy authority in the west of the USA. It will be become
the major power network provider in the USA market by securing new buyers and by strengthening its sales network.
MALESELA TAIHAN ELECTRIC CABLE
MALESELA TAIHAN ELECTRIC CABLE (M-TEC) is the front base for our advancement into Africa and was established as a joint venture in South Africa in
2000. It is a comprehensive cable company producing various optical communication cables and power cables and has become the best cable
company in Africa with an annual production of 200 million USD. The South Africa government has initiated a plan to invest about 46 billion USD in power
generation, transmission, and distribution by 2012 to stabilize the demand on power so that the Africa power market will continue to grow. M-TEC will also
expand its sales in the African market by diversifying its production items and by expanding its sales network.
TAIHAN SACOM CABLE COMPANY
TAIHAN SACOM CABLE COMPANY (TSC) is a comprehensive wire and cable company that was established near Ho Chi Minh through joint investment
with SACOM, the best communication cable company in Vietnam, in 2005. TSC produces various power and communication cables and supplies them
to the local market. It started to operate a communications factory in 2006, completed a power factory in July 2007, and is expanding its sales network to
Southeast Asia, the Middle East, and Australia.
www.m-tec.co.za
www.tsc.vn
Global Affiliaties the way to a global leader
13
SKYTEL
Skytel was founded in a joint partnership with SK Telecom for mobile phone services in Mongolia in 1999. Since its establishment, the company has
expanded services to the whole of Mongolia with steady investment in facilities and with technology development and has led the development of the
local IT industry. In the midst of the economic crisis in 2009 and fierce competition with late starters, the number of our subscribers has increased sharply
and has reached more than 330 thousand persons that are 10% or more compared to the number the previous year. The wireless communication
service, including the 3G network service will be strengthened and will continue to grow with various additional services such as VOD and data roaming
service.
SKY RESORT
Sky Resort is the first comprehensive leisure resort in Mongolia, which was established near Ulaanbaatar, through joint investment with MCS, the largest
company in Mongolia, in 2008. The international ski slopes that two thousand or more people can use at the same time were opened in November 2009,
and the golf country club is being constructed with a completion date set for 2011. With the increased interest of the Mongolian people in leisure, Sky
Resort will focus on inviting local and overseas tourists with excellent leisure facility and services.
STANDARD TELECOM
Launched in 2006 as a joint venture with the local government through the acquisition of major shareholdings by CKT, Standard Telecom is the major
telecom service operator in the D.R. Congo. It builds the optical backbone network in Kinshasa, the capital, to provide high quality communication
services such as the Internet and VoIP and is expanding its services to neighboring cities such as Matadi and Boma. The national communication network
will be built step by step to expand services. It developed the market for EVDO (Evaluation-Data Only), the ultra high speed Internet service, in 2009 and
has attracted more than five thousand new subscribers so that the possibility of growing as a comprehensive communication company has been
enhanced. It will diversify its services through various additional services such as Biz-Phone and leased lines and through new investment.
TAIHAN GLOBAL CANADA INVESTMENT
Taihan Global Canada Investment, the tourism leisure specialty investment company, is operating Hilton Canada, which is the international brand hotel in
Vancouver, Canada, that TAIHAN acquired in March 2007. Hilton Canada is a hotel that specializes in seminars and conferences with corporate
customers as its main targets. The number of users will increase a lot thanks to 2010 Vancouver Winter Olympics.
www.st.cd
www.hiltonvancouver.com
www.skytel.mn
www.skyresort.mn
14
Annual Report 2009
Corporate History
Founded TAIHAN Electric Wire Co., Ltd.
Produced plastic insulated power cable
Produced PVC jacket cable
Installed the copper smelting and rolling mill first time in Korea
Produced the lead sheathed communication cable
Acquired KS mark for wire and cable
Started export of cable to Vietnam and Taiwan
Produced 1.2/4.4mm fine conductor coaxial cable
Started production of ACSR first time in Korea
Listed the company stock on the Korean Stock Exchange
Started production of stalpeth cable
Produced 33kV XLPE insulated power cable first time in Korea
Started production of the watt hour meter
Produced 345kV ACSR first time in Korea aluminum rod
Produced communication cables & by Properzi method
Produced aluminum compressed conductor power cable
Acquired UL and CSA Certificate first time in Korea
Completed the construction of Anyang cable plant
Produced standard coaxial cable and 154kV OF cable
Developed optical fiber cable
Marked the production record of 1 Million watt hour meters
Won the grand prize of First Securities Award
Completed extra high voltage OF power cable plant
Contracted for US$ 30 Million communication cable to Saudi Arabia
Installed the optical cable network in Seoul
Developed and produced screen cable
Completed underground power transmission line in Korea
Completed Anyang SCR (Southwire Continuous Rod) Plant
Started production of Flame Retardant Plastic Cable for nuclear power
plant
Completed 154kV POF power line replacement first time in the world
Completed the VCV extra high voltage power cable plant in Anyang
Produced foam skin communication cable first time in Korea
Exported OF power cable turnkey project (Malaysia)
Completed optical fiber cable plant in Anyang
Produced multiple and single mode optical fiber cable
Developed and produced 154kV XLPE power cable
Developed 345kV OF power cable
Supplied the optical fiber cable for Seoul Olympic communication
networks
Developed the 154kV single core lead sheathed OF cable
Exported 132kV XLPE power cable first time in Korea
Acquired the KS Mark for vinyl insulated cable, high frequency coaxial
cable
Won the Prime Minister Award meritorious service in National
backbone Communication Network
Manufactured Optical Fiber Ground Wire (OPGW)
Developed high foamed coaxial cable for CATV
Succeeded in localization of extra high voltage OF cable accessories
Developed submarine optical fiber cable and leakage coaxial cable
Developed Kraft insulated 345kV OF cable first time in Korea
Developed optical fiber cable for emergency and 154kV OF cable
accessories Developed PPLP insulated 345kV OF cable first time in
Korea
Expanded SCR production facilities, the largest capacity in Korea
Supplied 565Mb/s Optical Transmission System to KT
Established a joint venture in Qingdao, China
Commercialized 345kV OF cable
Succeeded localization of Class 1E power cable for the unclear power
1955
1957
1958
1959
1961
1964
1965
1966
1968
1969
1970
1972
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1991
1992
1950s >>
1960s >>
1980s >>
1990s >>
1970s >>
Corporate History
Acquired ISO 9001 Certificate on cable and Watt Hour Meter
Developed Electronic Watt Hour Meter
Launched stainless steel business
Developed 345kV OPGW
Developed 345kV and 765kV AWS for overhead ground wire
Developed 765kV ACSR/AW 480SQMM (Cardinal)
Developed STACIR
Acquired ISO 9002 certificate on stainless steel
Completed new VCV TOWER and extra high voltage power cable plant
Developed optical distribution board, optical terminal box, mechanical
connector Developed high intensity TACSR/AW and 765kV OPGW
Acquired ISO 9001 Certificate on power cable accessories
Awarded the Presidential Prize for achieving US$ 500 Million export
Developed ribbon type optical fiber cable
Developed Aerial Bundle Cable with Waterproof (ABC-W)
Commercialized the multiple mechanical optical connector
Recorded 2 Million tons of copper rod
Developed Non-Zero Dispersion Shifted optical fiber
Established Skytel in Mongolia
Separated the aluminum business (founded Novelis Korea)
Developed epoxy bushing for high voltage transmission line terminal
Acquired JIS certificate on stainless steel coil and sheet
Established Malesela Taihan Electric Cable Pty., Ltd. in South Africa
Acquired ISO 9001 certifi cate on extra high voltage underground
power cable and OPGW
Acquired ISO 14001 certificate for environmental management system
Developed 345kV XLPE power cable Developed polymer insulator
Developed and commercialized 345kV XLPE cable accessories
Optomagic completed optical fiber plant
Acquired Muju Resort Co., Ltd.
Completed 345kV XLPE underground power transmission line
Developed 400kV XLPE cable and accessories (KEMA certificate)
Developed FTTH total solution
Participated in BcN (Broadband convergence Network) business
(Ubinet consortium construction of FTTH)
Acquired Ssangbangwool (SBW) Co., Ltd. (now, TryBrands)
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2002
2003
2004
15
2000s >>
Celebrated the 50 anniversary
Established Skynetworks in Mongolia
Established Taihan-Wizhome for Home network business (now, TEC & CO)
Selected as a model project for the Muju Tourism & Leisure corporate
Issued Overseas Convertible Bonds amounting to US$ 160,000,000
Established a joint venture TSC Co., Ltd. in Vietnam
Awarded the Presidential Prize for achieving US$ 700 Million export
Established TMC for shipbuilding cable and wire
Established Taihan-Techren Co.,Ltd. for solar power generation
Achieved KRW 2 trillion in sales
Acquired D.R. Congo Korea Telecom (CKT)and set up Standard Telecom
Established TAIHAN Global Holdings LTD. (in Hong Kong)
Built the third VCV extra high voltage power cable
Standard Telecom Launched telecom operation service in D.R. Congo
Received an order worth US$ 400 Million by M-TEC (Pty) Ltd.
Acquired Hilton Hotel in Vancouver, Canada
Completed construction of the Dangjin power devices plant
Acquired Myungji Construction Co., Ltd. (now, TEC Construction)
Awarded the Presidential Prize for achieving US$ 1 Billion export
Won the $100 million power turnkey project in Qatar
Acquired Namkwang Engineering & Construction
Won the $175 million power turnkey project in Russia
Ground-breaking for New Cable Plant in Dangjin
Won the $175 million power turnkey project in Kuwait
Developed the 400kV Enamelled Copper Wire Cable
Established a joint venture for cable production in Saudi Arabia (STCC)
Listed in DJSI (Dow Jones Sustainability Index) Korea 2009
2005
2006
2007
2008
2009
Review of
Operations
01
A global economic crisis started in 2008 and continued in 2009.
Major countries collaboratively tried to escape from the
recession, but the world economy couldnt avoid a general and
sharp downturn. Accordingly, TAIHAN tried to secure technical
competitiveness and to respond to the economic environment
by maintaining a stable profit structure through market
diversification. It focused on the development of its smart grid
business and on the development of eco-friendly cables and is
steadily investing in facilities and technology development in
response to the new demand for smart phones, FTTH, and IPTV.
17_ Power Cable 18_ Telecommunication 19_ Copper Rod & Wire 20_ R&D 21_ Growth & Innovation
Review of Operations the way to a global leader
17
The world economic recession also affected the cable industry. The
decrease in investment by major countries and regions including the
Middle East caused a slowdown in exports and downturn in profits. It was
a time when environmental change resulted in a strengthening of our
technical capability and diversification in the market so that an opportunity
could be sought in the crisis.
The sales revenue of the companys power cable business in 2009
decreased from 900.9 billion KRW in 2008 to 814.4 billion KRW, a
reduction of 10.6% due to a fall in the price of the copper, the main raw
material of cables, by 25%. However, the actual sales profits increased
from 74.8 billion KRW to 93.1 billion KRW due to an increase in the sales
of high value-added products and a reduction in production costs thanks
to the companys incessant efforts for reducing cost and improving
efficiency.
It was the year when the effort to develop overseas markets bore fruit. For
example, the company won the order in February 2009 from the USA
National Grid for the extra high voltage turnkey project in New York and
New England (valued at 100 million USD) even through there was fierce
competition from global leading companies. TAIHAN won the 220kV extra
high voltage cable project in Buenos Aires, Argentina (valued at 52 million
USD) and established a bridgehead for developing the South American
market. Also won the Saudi Arabia 380kV extra high voltage turnkey
project (valued at 39 million USD), the Kuwait 400kV turnkey project
(valued at 140 million USD). It also received a 220kV XLPE cable supply
contract from Transpower New Zealand Ltd. These results together are
proof of our remarkable performance in overseas markets in difficult times
and indicate meaningful progress in market diversification.
In 2009, green business came to fore as a new paradigm in the energy
industry. In the context of global warming, smart grids and eco-friendly
cable businesses are starting to receive a lot of attention in the cable
industry. According to market demand, smart grid business department
was organized to promote the advancement of the cable industry.
Regarding new recyclable energy, eco-friendly cables such as solar
cables and cables for wind power generation were developed to diversify
our portfolio.
The company actively participated in developing HVDC (High Voltage
Direct Current) technology, which has been spotlighted as the next
generation transmission technology to contribute to the development of
transmission technology. As part of our effort to develop technology, it
concluded a HVDC development MOU with KEPCO to manufacture
cables and evaluate their performance in 2010.
TAIHAN will continue to face challenges in 2010. It will make every effort
to steadily develop technology by developing the 500kV extra high
voltage cable technology and the smooth sheath cable and will contribute
to enhancing human society by promoting the smart grid and new
recyclable energy businesses. Moreover, it will secure stable, profitable
markets by developing the new India and South America markets and will
improve the global competitiveness of the company as a comprehensive
cable company by activating an overseas production corporation.
Power Cable
814,408
SALES(Millions of Korean Won)
Annual Report 2009
18
Last year, the communication industry also had a hard time due to the
recessi on i n the constructi on market and the shri nki ng of pri vate
investment caused by the worldwide financial crisis. However, the
communication industry of 2009 cannot be characterized by only crisis
and stagnation. As for the communication industry of 2009, a new
paradigm appeared during the crisis as growth in quality was achieved
despite the stagnation in quantitative growth. The number of wired
phones continued to decrease, but the number of subscribers for the
Internet phone service (VoIP), the new voice service, and the number of
subscribers for the IPTV service, the new Internet-based TV service,
increased. In reaction to these developments, it was necessary to build
wireless Internet infra and optical cable infra.
The recession in the global market and the reduction of private investment
produced fierce competition in the optical cable market. However,
demand clearly increased from the 2nd half of 2009, and the prospect for
2010 appears bright. The growth of the optical cable market will be
maintained in the domestic market due to the activation of FTTH, VoIP,
and IPTV. An increase in worldwide demand is expected due to the
increase in demand in developing countries, China, and India. TAIHAN will
expand its production capacity to promote market development through
long-term cable supply contract and distribution network markets in
America and Europe.
OPGW market went through a general recessionary period with delays in
projects, but market demand has now stabilized. The domestic market is
saturated but overseas markets have expanded extremely fast for several
years. TAIHAN will respond to market expansion mainly in South America,
North Afri ca, and I ndi a through partnershi ps wi th gl obal l eadi ng
construction companies.
The domestic market for copper communication cables has shrunk, but
overseas markets for them has expanded. The demand for data cables
will increase by 10% or more due to the increase in the Internet spread
rate that is happening mainly in developing countries. The company will
actively undertake sales initiatives through the localization of the entire
business process from production to consumption as we make the base
for each region the production base and secure the distribution channels
of the base for each continent.
Telecommunications
117,292
19
Copper sales revenue in the material business area was 152,062M/T in
2009, an increase of 19.7% compared to 2008. However, sales revenue
was 1.2063 trillion KRW, a bit of dip compared to that of the previous
year (1.2268 trillion KRW). The main reason is that the price of copper
decreased due to the recession in the global market in the 2
nd
half of
2008.
Overseas sal es of Copper Rod, i ncl udi ng Chi na has dramati cal l y
increased. The shortage of electrolytic cathode copper in China caused
by pump priming caused an increase in the SHFE price, and the price
difference between LME and SHFE caused arbitrage transactions
resulting in an increase in copper sales revenues. Exports to the Middle
East, Southeast Asia, and Southwest Asia decreased due to a decrease
in demand and the low prices offered by new starters. Private investment
in the domestic copper rod market shrunk but showed the same level of
results compared to 2008 due to an increase in demand caused by
government policy on SOC investment. Magnet wire sales revenues fell
by 22% due to a decrease in demand for compressors caused by the
decrease in demand for home appliances in the 1st half of 2009.
However, an increase in orders caused by the inventory procurement of
home appliance companies in the 2nd half of 2009 and the increase in
demand for vehicle motors caused by an increase in the sales revenues
of the domestic vehicle manufacturers will contribute to an increase in
indirect exports.
As for the materials market in 2010, the demand for high quality SCR will
increased due to the recovery in the global market. However, the
entrance of new starters from India and China into the market will make
the competition fiercer. Moreover, the prospects for profitability are not
promising due to the increase of price of copper, the increase in
premiums, and the unfavorable foreign exchange rate. Accordingly,
TAIHAN will diversify its market activities by securing stability in copper
sales quantity through an increase in volume based on the long-term
contracts with good customers, by strengthening sales activities to win
spot orders, and by developing the new Southwest Asia market that
includes Bhutan and Nepal.
Copper Rod & Wire
1,206,356
Annual Report 2009
20
Energy Sector >>
TAIHAN developed the enamelled copper wire cable after Nexans and Prysmian, the third occasion in the
world and the first time in Korea. The enamelled copper wire cable uses insulated wire with the copper
coated with enamel to maintain an electrically insulated state and so the resistance that occurs in existing
cables is reduced, which results in an increase in the transmission capacity by 20% or more. The external
diameter and weight of the cable is small and light - at levels of 95% and 90% superior to existing cables.
Beginning with the winning of the Kuwait 400kV extra high voltage turnkey project (valued at 140 million
USD) using the enamelled copper wire cable, TAIHAN has obtained an advantageous position in the global
market.
Info-Communication Sector >>
In the info-communication sector, Optomagic, the optical fiber specialty manufacturing affiliate, developed
the micro-structured optical fiber. The micro-structured optical fiber creates a fine foam layer around the
core to innovatively improve the bend loss. The bend limit radius of the existing optical fiber is 30mm, but
that of the micro-structured optical fiber is 5mm so that it is equipped with the optimal performance in the
FTTH environment. It can be used in the installation business where serious bends occur in buildings,
apartments, and regular homes so that demand will increase due to the expansion of the IPTV and FTTH
markets.
Material Sector >>
As for the material sector, an eco-friendly highly heat-resistant compound for solar power generation has
been developed. A cable prototype was manufactured, and an evaluation on its characteristics was
completed. Taihan Techren, the photovoltaic system affiliate, performed this feat. Moreover, the
certification sample has been manufactured for TUV and VDE certification in Germany. With the
development of the solar cable compound beginning, TAIHAN is actively responding to the increasing
demand for eco-friendly cables by developing the materials for environment-friendly cables. Moreover, a
non-halogen retardant jacket extra high voltage cable prototype was manufactured, and the evaluation on
its characteristics was completed.
Developing New Strategic Items for the Smart Grid >>
TAIHAN newly formed smart grid business departmnet to cultivate the smart grid as one of its future growth
engines. smart grid business departmnet participated in the KEPCO consortium to perform the
development and verification of various business models in the Jeju test bed, which is the worlds largest
smart grid new technology testing complex. 38 domestic companies participated in the KEPCO
consortium organized so that Korea can develop into a smart grid leading country by early commercializing
smart grid technology and by preparing the basis for the export industry. As for the smart place sector,
TAIHAN is actively participating in the development of the electronic watt hour meter, LED streetlight
system, and home and building Energy Managment System (EMS).
The company is trying to improve the original technology mainly through its technology research institute
and enhance its business performance through the technical innovation of each business division.
Recognizing the importance of intellectual property rights produced by R&D, it is improving its patent
acquisition and utilization of the system and is strategically responding to competitors patents.
Furthermore, it is building the model for an effective R&D to get good results through technical cooperation
with leading global specialty research agencies. TAIHANs differentiated technical competence is the
reason for our competitiveness so that its effort in this sector will greatly contribute to the company
becoming a leading international company in the future.
R&D
The company has been steadily
improving its R&D capability
since our R&D laboratory was
established in 2006. Moreover, it
newly organized its smart grid
business department to develop
various business models in the
smart grid areas that have been
spotlighted as future growth
engines.
21
Building MES >>
It is focusing on risk management for external factors so that business performance in market situations -
rapidly changing foreign exchange rate and raw material prices - is does negatively affected. Reflecting this
initiative, the company introduced the Manufacturing Execution System (MES) that applies RFID (electronic
tag) in 2008. It collected production information in real time, computerized the production plan and
schedule, secured the data for statistical quality control, managed the operation of production facilities in
real time, and built a paperless system for various data. As a result, the production status on orders can be
controlled in real time, and the maintenance of a suitable inventory for semi-products is possible so that
costs can be reduced far more than ever before. Work loss on site was reduced through semi-product
location management. Quality defects due to the incorrect usage of materials can be prevented, and the
facility operation rate and efficiency were improved so that productivity was improved by 0.5%, resulting in
an improvement in profitability.
Building IFRS >>
As the capital market is integrated globally, accounting standards are also being standardized. The
company plans to build a financial statement preparation system based on IFRS (International Financial
Reporting Standards) by the beginning of 2011 and has been promoting the project to introduce IFRS and
build the connective system. In case IFRS is successfully introduced, the financial and accounting
information of all subsidiaries will be collected in one place so that the opportunity for newly enhancing the
integrated management of a corporation and the evaluation of corporate values, and the detailed plan on
restructuring the corporate governance from the group aspect is efficiently prepared and so will enhance
the transparency and reliability of accounting information.
Operating the Technology Training Center >>
TAIHAN opened the technology training center last April. 10 groups with more than 60 staff members
completed the training courses as of December. The technology training center is providing education on
quality and safety to improve the technical capability of workers on site and will greatly contribute to
propagating technical capability and improving product quality through the systematic and specialized
education process.
Enjoyable Change and Internal Proposal Activities >>
The company is operating an internal proposal system so that all staff can be creative and active in their
work. If ideas and proposals are selected after having been assessed as good suggestions, person and
department are awarded prize money to encourage the voluntary participation of staff members. The
proposal system asks for feedback on how to improve the work improvement, enhance cost saving,
productivity enhancement, quality improvement, and safety accident prevention and establishes an active
corporate atmosphere through the implementation of the suggestions made by staff. In 2009, there were
5,157 proposals, an increase of 15% compared to the previous year. The number of participants was 502
persons, an increase of 9%. The participation rate was 88.8%, an increase of 10%. Therefore, it is
becoming a major innovation activity. Through perfect follow-up, internal proposal activities will substantially
contribute to the development of personal capabilities and to the prosperity of the company.
6 Sigma Activities >>
TAIHAN introduced to the whole organization the 6 sigma system, whose excellent results were verified in
outstanding domestic and overseas companies who successfully performed innovation activities. The year
2009 is the preparatory stage to consolidate the foundation for promoting the 6 sigma activities. All staff
has cultivated the fundamental capability to successfully promote the 6 sigma project through two basic
online education sessions. The 6 sigma project will be consolidated in the whole organization through
steady education and project performance, and internal capability will be improved through it to create
substantial results.
Growth &
Innovation
The corporate management
environment in the 21
st
century
changes every day. TAIHAN will
pursue sustainable growth in the
overall management environment
by developing technology,
innovating work processes, and
enhancing our organizational
culture.
Sustainability
Management
02
24_ Transparent Management 26_ People 28_ Social Contribution 30_ Health and Safety 32_ Environmental Management
As the recent business environment rapidly changes, trust among persons
and the need for transparent management are being recognized as being very
important for future sustainable growth. TAIHAN is trying to improve its
business structure and take its responsibilities as a corporate citizen
seriously. It is strengthening its corporate competitiveness by developing
technology, cultivating talent, and establishing a transparent management
system and is leading the way in environmental preservation for the next
generation so that life may be enjoyed in a cleaner environment. Furthermore,
it is promoting various activities that make a social contribution and help the
local community to grow. The company is making the future better by
adopting solid values and by strengthening our corporate structures and will
do its best to become a global leading company trusted by people.
Sustainability Management the way to a global leader
25
Audit Committee >>
Pursuant to Article 25, Provision 2 of articles of incorporation, the audit
committee is formed to do the accounting and auditing work and evaluate
the internal control system so that the fairness and transparency of
company operation are maintained. The audit committee members are all
outside directors (3 persons) to ensure independence. Through the four
meetings and their regular work in 2009, the committee was able to
monitor the work performance of directors, appoint an outside auditor,
exercise legal authority, and carry out tasks designated by the board of
directors.
A CEO-Led Responsible Management System >>
TAIHAN has operated a management specialist system after chairman
Sull Won-Ryang passed away in 2004. A responsible management
system is being enacted by the CEO. Under the CEOs authority and
responsibility, the organization consists of such major sections as the
Cable Business Division, the Corporate Strategy Division, and the
Business Management Division and is trying to establish and secure
global capabilities. Our senior managers, including the CEO, are regularly
evaluated on management results compared to work targets and are
awarded sui tabl e compensati on after a comprehensi ve check of
achievement and work capabilities.
Disclosure Policy >>
The company regularly holds Investors Relations (IR) sessions to advertise
sales results, affiliates, and future strategy to domestic and overseas
analysts, fund managers, the press, and individual and institutional
investors. The IR activities for domestic institutional investors and analysts
have been carried out actively. Our companys major management
activities and overall information can be always checked through the
homepage ( www. t ai han. com) and t hr ough t he onl i ne publ i c
announcement syst em of t he Fi nanci al Super vi sor y Ser vi ce
(dart.fss.or.kr). It is also implementing an internal open communication
policy. The understanding of members and the creation of a bond of trust
and sympathy are very important and so information is frequently shared
by using the internal bulletin board (EP), company newsletter, and
homepage. Accordingly, the company vision, the CEOs management
policy, business status and results, and corporate culture are shared. The
culture of trust and shared success is established through smooth
information sharing between labor and management.
Internal Control system >>
TAIHAN is maximizing productivity by integrating management resources
such as production, sales, HR, accounting, financing, accounting, and
fixed assets into one system through the ERP (Enterprise Resource
Pl anni ng) system. I t i s enl argi ng customer servi ces and promptl y
responding to internal and external environmental change. Moreover, the
internal accounting management system, which adheres to the strictest
standards (Internal Control), operates to ensure the reliability of public
announcements in relation accounting information. The company is
operating an internal accounting management system with advanced
information systems. It is evaluating the status of operations twice a year
and receiving an audit from Deloitte Anjin LLC, which is the external
auditor.
Annual Report 2009
26
TAIHAN is cultivating the talents, self development and welfare of its employees through the various types of
human resources management such as education, compensation, and welfare systems and is enhancing its
corporate competitiveness through these measures.
People
Cultivating talent with global competitiveness >>
In order to create the best value and to become a leading global
company in the rapidly changing business environment, the competence
of human resources equipped with the global competitiveness is vital. In
order to respond to the internal and external business environment and
cultivate the talent to make innovative changes, various education and
training programs are provided and an internal career development
system is operated to continue our investment and support in staff so
that they can develop their capabilities.
Selecting and cultivating key global talent >>
Key persons who have a great influence on contributing to the creation of
organizational performance, who are likely to become role model for
members, and will likely perform an important key role for future business
success are being identified early at each level in each division and they
are being cultivated to hold key positions. For such people differentiated
education opportunities such as mentoring, action learning, intensive
english conversation education and other various incentives including
programs supporting overseas dispatch and degree acquisition are
provided in order to help them become global players.
Strengthening work capability of individuals and their
corresponding departments >>
Various types of education systems are being operated to provide
opportunities to strengthen the members work capabilities. Work
capabilities for individuals are developed through credit taking education
programs requiring individuals to take the necessary credits annually, and
work capabilities for corresponding department are strengthened through
the i n-house i nstructor system that sel ects and uti l i zes i n-house
specialists. Work capabilities are being improved through various
educati on programs such as e-l earni ng, i nsi de and outsi de work
education, and education for each level.
Bui l di ng and i mpl ementi ng the necessary capabi l i ty
development system for each growth stage >>
Our systematic program effectively initiates measures and supports
employees, from interns to mangers, in their career development. New
starters learn how to do their work and easily adapt to the organizational
culture through systematic introductory education and through advanced
OJT(mentoring). Juniors are provided with e-learning, work education
managed by the correspondi ng departments, i nsi de and outsi de
education, and language education. Seniors (Assistant Manager to
Manager) go through the TEC MBA education program. Managers
(Deputy General Manager to General Manager) are provided with
opportunities to grow to become next generation leaders through various
education courses such as the leadership development course and team
leader capability strengthening program.
Activating the in-house job market >>
Opportunities for performing new work is provided to staff that have done
the same work for 5 or more years. Anyone can do work he/she desires
or be transferred to another department through job posting if there is a
vacancy. Furthermore, the desired industry, company, department, and
work can be selected through our internal job market that includes all of
our affiliates to promote a self-led career path.
Sharing business results by introducing the Employee Stock
Ownership Plan (ESOP) >>
Differently from the ESOPs of other companies, TAIHAN introduces a
ESOP system in which the company contributes to the total amount of
stock acquisition expenses to award stocks to staffs and officers free of
charge in order to provide substantial economic benefits to staff and
managers. It contributed an amount corresponding to 50% of individual
annual salary of all staff and managers in May 2005 to the employee
stock ownership association so that all the members of the company
became employees and shareholders. Staff can understand the overall
management policies from the companys viewpoint through ESOP, and
i t i s i ndi r ect l y assi st i ng t he st af f i n cr eat i ng t hei r asset s. The
developmental win-win relationship between employee and the company
will be consolidated through the supplementation of the long-term
incentives for sustainable management.
Stabilizing employment and improving competitiveness by
introducing the peak wage system >>
During the foreign exchange crisis in 1997, the domestic wire and cable
market was faced with growth stagnation, and personnel expenses
steadily increased due to a seniority-type salary system. To deal with this
situation, the peak wage system was introduced at the end of 2003 to
stabi l i ze the empl oyment of empl oyees and enhance the com-
petitiveness of the company. The introduction of the peak wage system
enhanced competitiveness by considerably easing the burden of
personnel expenses and created a more stable work environment. It
reduced personnel expenses, upgraded the corporate image, and
consolidated a win-win labor and management culture by implementing
the peak wage system af ter an agreement between l abor and
management was arrived instead of artificially restructuring manpower.
Extending the retirement age >>
The specialty and work proficiency of production staff greatly affects
productivity and quality control as well. Therefore, securing many skilled
workers is very important to improving corporate competitiveness. The
company is implementing an extension of the retirement age as the
domestic and world labor populations rapidly aged. The retirement age
was extended from 55 years of age to 61 years of age through an
agreement between labor and management and with mutual trust. Due
to the extension of the retirement age, as of the end of December 2009,
the average service period of skilled workers of TAIHAN is over 12 years,
and staff members that have served the company for 10 or more years
make up 57% out of the total skilled workers. Concern over employment
stability has been removed and the company has secured the skills of
workers and enhanced productivity in a win-win management strategy.
Retirement pension >>
The company subscribes to and is operating a retirement pension (the
fixed payment type) introduced in May 2006 to stably secure the pension
of staff.Accordingly, it is actively responding to the socio-economic
envi ronmental change by ensuri ng the soundness of reti rement
allowances management within the company and by pursuing the stable
reinvestment of retirement allowances.
Vacation system to allow staff to recharge their knowledge >>
With the goal of cultivating creative talent, a knowledge recharge
opportunity of 6 months to 1 year is being provided for persons having
served the company for 5 years to 10 years. Accordingly, a long-term
vacation system for developing individual capabilities such as overseas
language training and certificate acquisition is being operated that allows
members to be away from daily work.
27
Annual Report 2009
28
TAIHAN is participating in social contribution activities and all staff and managers join in these programs under the
slogan: working together to create a happier world. To accomplish these purposes, with the catchphrase
One Person, One Time Volunteer Work, every member is encouraged to participate in volunteer activity to help less
fortunate neighbors more than once a year during holidays. More than 80% of all staff practices the joy of sharing.
Furthermore, social activities that deliver happiness to every corner of society including welfare, education,
and culture are carried out through public benefit foundations such as the Insong Culture Foundation and the
Sull Won-Ryang Culture Foundation together with other groups.
Social Contribution
Social contribution in 2009 >>
Employee volunteer activities
Lets ART (4 times), visits to welfare facilities (16 times), Habitat (once),
bl ood donati on (frequent), del i very of bri quettes to l ow i ncome
households (once), and Muju IT education (twice)
Donation activities
Donation activities such as 2009 Hope Campaign
Working Together to
Create a Happier
World
Welfare
Art &
Culture
Education
A Company that Coexists with Society
- Employee Volunteer Activities
- Corporate Donations
Insong Culture Foundation
- Support for Gifted Students
- Scholarship Program
Sull Won-Ryang Culture Foundation
- Cultivating the Arts and Culture
- Expanding the Arts and Culture Community
29
Volunteer activities by Executives and Employees >>
Lets ART
Lets ART has the meaning of Enjoy Culture! and provides the opportunity
of experiencing culture for children from low income families through the
sponsorship of the Sull Won-Ryang Culture Foundation. Members of
TAIHAN join the outdoor activities as volunteers. This program has been
supported with such events as Culture Hiking. In 2009, in linkage with the
Seoul Regional Children Center Study Room Association, staff members
attended various culture events such as plays, musicals, and exhibitions
with children from four regions a total of four times.
Habitat for Humanity
This charity has been supporting the building of houses for low income
families since 2001. In the summer of 2009, with the monetary support of
the company, managers and staff members did voluntary construction
work for 2 days at the Daejeon branch site. The activity is positioned as a
regular volunteer program of our company and is expanding the real
meaning of volunteer activities to the inside of the company.
Delivering Briquettes with Love
Last December, Briquettes with Love were delivered to single old people
and low income households of Guryong Village in Gaepo-dong Gangnam-
gu. Briquettes were moved in a relay manner in the narrow alley so that
the aged can stay warm in the winter. It was very cold, but the warm
scene of delivering briquettes with one mind was very beautiful.
Additionally, each business site of TAIHAN is regularly doing volunteer
activities for welfare facilities monthly. They have been supporting
Eunpyeong Angel House (the main office) for about 40 years. They have
been visiting the Vedesda handicapped welfare facility (Anyang) and
Gyangmyeong Silver House (Dangjin) to help in the cleaning and laundry
and taking the handicapped for walks. Our staff members are trying to
give substantial assistance to help people so that they can play a full role
in society.
TAIHAN Groups Culture Foundations >>
Insong Culture Foundation
Insong Culture Foundation is the scholarship foundation of Sull Gyeong-
Dong, the founder of TAIHAN, which was establishment in 1970. It has
been providing scholarships and research funds for middle and high
school students, universities and specialty research agencies for more
than 40 years. It is expanding its activities from scholarship activities for
isolated people so that their dreams of learning and self-development
come true in difficult situations, to global scholarship programs such as
the overseas scholarship program for cultivating Mongolian IT talent and
the SKY-TAIHAN scholarship. (www.insong.or.kr)
Sull Won-Ryang Culture Foundation
In order to pay a tribute to and succeed the entrepreneurial spirit of the
late Chairman Sull Won-Ryang, who passed away in 2004, the Sull Won-
Ryang Culture Foundation was established in December 2005. The
foundation was established to contribute to the development of national
culture and arts by expanding the basis of the culture and arts of the
society and by finding and cultivating outstanding young talent in culture
and arts. The Saturdays Andante concert has been held in the Muju
Resort every Saturday since 2008. In the summer, it prepares the festival
in which the people in the local community can enjoy quality music at the
Muj u Musi c Festi val i n whi ch Geum Nan-Sae, the worl d famous
conductor, participated. Furthermore, it is doing various activities to share
beautiful culture through the Lets ART program that includes culture hiking
with disadvantaged children. (www.sullwonryang.or.kr)
Annual Report 2009
30
On the basis of our management ideology of respect for human beings, the workers' health and safety are the top
priorities in the management and all relevant measures are applied to every aspects of production and development
to achieve the goal of creating an accident free work place and improving the health of the work force. Moreover,
our company fully complies with the regulations of International Labor Organization (ILO).
Health and Safety
The Health and Safety Goal of TAIHAN
Promoting activities that enhance safe
product development and production
Setting and operating quantified goals
The Disaster Rate
Complying with the relevant laws and
other requirements
Promoting steady improvement and
pollution prevention activities
Recycling and reducing the use of
resources
Action Plan
Introducing and operating the safety and health management
system (OHSAS 18001)
Activities that locate, identify and improve internal and external risk
factors, and checking on how these activities are being implemented, are
being undertaken through the introduction and operation of OHSAS
18001, the global safety and health management system, in Anyang and
Dangjin plant. OHSAS 18001 is the safety and health management
system collaboratively designed by world famous certification and standard
agencies and is the management system designed to prevent industrial
disasters occurring in each operation site of a company and for creating
and maintaining the optimal work environment to systematically manage
the workers' safety. TAIHAN has established an advanced management
system fully corresponding to international standards with regard to quality,
the environment, safety, and health by acquiring ISO 14001 and OHSAS
18001 certification in 2001. As a result, as of 2009, there have been no
disasters or serious accidents at our business site.
1
2
3
4
5
Goal Promoting activities to ensure safety and health and a
comfortable life
Vision Providing zero defect products and services that
customers can use comfortably
Pursuing eco-friendly and corporate
philosophy of respect for human dignity
0.62
0.77 0.77
1.18 1.18
1.10
1.15
1.12
0.72
0.71 0.70
0.29
0.51
0.49
0.00
The Disaster Rate The Nation TAIHAN
2005 2006 2007 2008 2009
31
Promoting the health and safety activities of labor and
management
1) Holding the industrial safety and health committee meetings
Labor and management of TAIHAN is making a collaborative effort
to achieve the safety and health in our operation sites. The industrial safety
and health committee, which consists of an equal number of persons from
labor and management, holds regular meetings to improve the safety and
health of workers and to observe measures outlined in the Industrial Safety
and Health Law. The matters reviewed, voted on, or decided on by the
committee comply with industrial safety laws, collective agreements, and
industrial safety regulations. The major talking points at meetings are: site
i mpr ovement s, medi cal exami nat i ons, and wor k envi r onment
measurements. Labor and management are steadily performing safety
and health activities such as identifying factors that can improve health
and safety factors and establishing and implementing these measures.
2) Carrying out the campaign to ensure no disasters
The campaign to ensure no disasters is being conducted once
every six months by five environmental safety and quality management
committee members of the labor union to enhance awareness among
workers about safety. Major items include urging workers to wear
protective clothing, airing campaign slogans, posting safety rules, and
providing safety trinkets and refreshments. Awareness of safety issues is
steadily being improved through the participation of all staff members. A
comprehensive medical examination is provided for all staff members to
promote health and well being. Information on health, including how staff
can respond to diseases and accidents, is frequently delivered through
the corporate bulletin board and through business e-mails.
3) Performing joint environment safety checks
TAIHAN regularly and jointly check the environmental safety of the
site with five environmental safety and quality management committee
members from the labor union to identify risk factors and to improve the
work environment and so achieve our goal of creating business sites that
are accident and disaster free. The company doing its best to prevent
accidents and create a safe and clean environment where workers can
concentrate on their work. This is accomplished by quickly acting on
matters brought to our attention and checking on the implementation of
safety and health activities in the business site.
4) Performing regular health and safety education activities
The company provides regular health and safety education (2 hours
or longer each month and 16 hours or longer for supervisors annually) in
order to stimulate and focus the attention of staff on health and safety
issues. Moreover, if an accident occurs, the nature and circumstances of
t he acci dent and t he measur es bei ng car r i ed out t o pr event a
reoccurrence are promptly announced to all business sites through an
advanced disaster management system so that the health and safety of
staff are ensured.
The environment is very important to the life of human beings and to the sustainable management of a company.
This systematic and strict environment system will be established so that the next generation can enjoy a happier and
more valuable life. TAIHAN is leading the way in trying to preserve the environment by actively practicing the energy
saving, contamination prevention, and resource recycling and reduction through the development and process
improvement of eco-friendly products.
Environmental Management
Realization of the
Carbon Energy
Management System
The Mid- and Long-Term Goal of Carbon Management
Reduction by 25% compared to 2008 by 2012 and by 34% compared to BAU
Reducing greenhouse gases such as CO2 by 30,000 ton (accumulated quantity)
The Organization to Respond to Climate Change
The company has been organizing and operating the Response to Climate Change TFT to actively
respond to climate change issues and create new opportunities since March 2009
The TFT establishes the carbon reduction goal and the action plan to achieve it for each stage and will
make steady efforts to conduct the various plans related to climate change by utilizing eco-friendly
products and the smart grid.
Annual Report 2009
32
Response to Climate
Product
Developing new
growth items
Developing the new
recyclable energy
Production
Establishing the low
carbon energy system
Realizing the green
factory
Response to Climate
Vision and Strategy on Climate Change: ECO-2012
Performance and Plan for Each Strategy
1) ECO-FACTORY
Establishing CEMS
It checks in real time the quantity of greenhouse gas generated and the energy used for each facility
and for each process at all the operation sites. It establishes and implements the reduction and
improvement plan, and introduces CEMS (Carbon Energy Management System) to steadily reduce
greenhouse gases. It is estimated that it will reduce greenhouse gases by 25% compared to 2008 by
2012 according to the ECO-2012 plan and 45,900 tons of greenhouse gas by 2102 by establishing a
goal for each year.
Carbon integration and carbon efficiency are the criteria that readily show the relationship between the
economic added value and the greenhouse emission quantity and make it possible to quantitatively
manage the greenhouse emission reduction result for each year.
33
Goal Reducing the greenhouse gas by 25% compared to 2008 by 2012
Vision The global ECO system through the dynamics and the fertility of soil
Strategy
ECO-FACTORY
Establishing the CEMS
(Carbon Energy
Management System)
Establishing the IBS
(Intelligent Building System)
ECO-PRODUCT
Realizing the carbon-
labeling
Enamelled Copper
Wire Cable
ECO-IR
Opening the carbon
information
Inviting the investment in
the SRI sector
Expanding the green culture
The Greenhouse Gas Emission
Quantity and Plan
72.0
78.4
72.5
69.5 67.1
75.2
89.3
74.8
2005
* BAU: Business As Usual (The CO2 emission
quantity that can be achieved with the current
technology and policy
2008 2009 2010 2011 2012
58.4
BAU*
Stage 1 Improving the energy efficiency 160 9.8
Stage 2 Improving the productivity 4,392 6.7
Stage 3 Introducing Green-Factory 1,160 4.5
Stage 4 Collecting SF6 and introducing the dec 150 24.9
TOTAL 5,862 45.9
The Plan for Reducing Greenhouse Gases for Each Stage
Carbon Intensity (CI) & Carbon Efficiency (CE)
Stage Plan
Investment Amount Reduction Quantity
Remark
(Thousand KRW) (Thousand ton)
Sales 11,034 16,228 20,786 24,455 22,604
GHG 72,091 60,064 68,851 78,415 72,495
Operating Profit 291 459 675 822 705
CI 6.53 3.70 3.31 3.21 3.21
CE 0.40 0.76 0.98 1.05 0.97
Category 2005 2006 2007 2008 2009 Remark
* Excluding the
STS sector
of 2005 and
2006
Annual Report 2009
34
TAIHAN is steadily reducing the CO2 emission quantity compared to the unit production quantity through
the improvement of energy efficiency
The carbon efficiency, the CO2 emission quantity based on the economic output, is being steadily
enhanced.
3.21 3.21
3.31
3.70
6.53
2005 2006 2007 2008 2009
8.00
6.00
4.00
2.00
-
1.05
0.97
0.78
0.98
0.40
2005 2006 2007 2008 2009
1.20
1.00
0.80
0.60
0.40
0.20
-
* Carbon Efficiency (The economic output compared to the CO2 emission quantity)
Establishing CEMS
IBS (Intelligent Building System) is the intelligent building system reducing energy costs and
administration expenses, enhancing the value of a ubiquitous building, and providing a comfortable work
and business environment. It is under way with the goal of completing the operation in 2012.
2) ECO-PRODUCT
Carbon-labeling
Carbon-labeling and carbon-footprint disclose the information on the quantity of greenhouse gas
emitted from all the product processes of cable manufacturing, production, usage, and disposal of
TAIHAN. The company will promote carbon-labeling on representative cables such as the 154kV extra
high voltage cable by 2012.
> Providing eco-friendly air conditioning, sanitation, electricity, and
lighting services
> Building energy-saving green IT infra
> Completing the eco-friendly building
Environmental Aspect
> Establishing the risk management basis with the integrated
monitoring control through the control center
> Improving the effective response capability through the integrated
operation for each facility
> I mprovi ng the l ong-term operati on expenses through the
economical efficiency index control
Operational and Economic Aspects
* Carbon Intensity (The CO2 emission quantity compared to the unit production quantity sales revenue)
35
Enamelled Copper Wire Cable
Global warming rapidly increases the demand on electric power. Accordingly, the demand on power
cables is being increased by 10%. Moreover, as the demand on the cables with the low transmission loss
and with the large transmission capacity is increased, TAIHAN succeeded in developing the 400kV
enamelled copper wire cable with the transmission loss lower by 20% than that of a regular cable and with
the transmission capacity larger by 10% than that of a regular cable and won the large project from
Ministry of Electricity & Water of Kuwait so that the profit will be increased in the future.
3) ECO-IR
Carbon Disclosure Project (CDP)
According to the 'CDP 2009' assessment announced by Korea CDP (Carbon Disclosure Project)
Committee last October 28, TAIHAN was ranked 13th out of 100 companies surveyed. The assessment
that 475 financial investment agencies from the world performed with Korea CDP Committee to find out
how each company responded to climate change was performed for the highest-ranking 100 companies
based on total domestic market value in 2008. They were assessed on the basis of the information on the
strategy to respond to climate change and on the status of carbon emission. The company received a
good result from the assessment and had an opportunity to enhance its position as an eco-friendly
company. In order to actively respond to climate change, it will expand eco-friendly new growth engines
by developing new recyclable energy practices such as greenhouse gas reduction and smart grids further.
Expanding the Green Culture
TAIHAN is building and operating the company intranet so that all managers and staff can check the
quantity of greenhouse gas generated from their daily activities and company work. 'The Carbon Diary' is
organized to show the quantity of the greenhouse gas generated from vehicle movement, computer
usage, water usage, and cigarette smoking. Moreover, each individual is informed on how greenhouse
gas can be reduced and how to save energy by themselves.
Cable Weight 73kg/m 66kg/m
Transmission Capacity 915 MVA 1000 MVA
Transmission Loss 135 kW/m 110 kW/m
Comparison of the Transmission Loss and Capacity of the Enamelled Copper Wire Cable
Category
Regular Conductor
(3000sqmm)
Wire Insulated Conductor
(2500sqmm)
Remark
Water Toxicity 100% 91%
Occurrence of
Photochemical Ozone
100% 92%
Air Toxicity 100% 90%
Energy Consumption 100% 93%
Raw Materials Consumption 100% 88%
Effects of the Enamelled Copper Wire Cable on the Manufacturing Environment
Category
Regular Conductor
(3000sqmm)
Wire Insulated Conductor
(2500sqmm)
Remark
0 20 40 60 80 100
IT
Utility
Communication
Raw Materials
Necessary Consumables
Industrial Goods
Select Consumables
Financial
Pharmaceutic als and Health
Energy
62.6
59.2
55.9
45.0
44.7
35.3
32.3
24.5
9.5
0
Average of
Initial Response
Company : 33.0
Overall
Average :41.3
TAIHAN
Point :66.4(13)
TAIHAN Green Growth Project
Annual Report 2009
36
Saving Energy and
Resources
Energy Saving
The company has actively improved facilities, work processes, and productivity to save the energy
needed for factory operations. The B/C oil was reduced by 20% compared to 2006 through steady
energy saving and productivity improvements. Our company is minimizing energy usage by performing
energy management for each process line of the factory.
When the cables manufactured by TAIHAN are disposed after usage, 99% of the total weight can be
recycled. Accordingly, it voluntarily concluded an agreement with the Korean government (Ministry of
Environment) on cable recycling and is monitoring the whole process from the disposal and collection of a
product to the processing of raw materials.
Moreover, TAIHAN minimizes waste generated by implementing strict waste preventative measures. In
particular, maximizing the recyclability ratio of generated waste is minimizing the environmental pollution
caused by the waste. The company recycled 3,718 tons out of the total 4,572 tons of waste generated
from its business activities in 2007 and has steadily maintained a 80% or higher recyclability ratio since
2005.
Energy Usage
B/C Oil KL 2,609 2,363 2,230 2,098
LNG 1,000 M3 6,237 6,901 6,589 7,231
Electricity MHW 54,639 59,741 59,607 60,751
Water ton 429,547 449,701 442,745 468,378
Category Unit 2006 2007 2008 2009 Remark
Recyclable Raw and Supplementary Materials RaRati
Recycling tons/year 3,588 4,055 3,718
Burying tons/year 15 1 1
Burning tons/year 696 777 853
Total tons/year 4,298 4,833 4,572
Recycling Ratio % 83 84 81
Category Unit 2007 2008 2009 Remark
Recyclable Raw and Supplementary Materials Rati
154kVA 1200SQMM CV Cable 99.20%
154kVA 2000SQMM CV Cable 99.30%
Category Recyclability Ratio Remark
Energy Usage Compared to Production
B/C Oil KL/ton 7.78 6.49 6.34 6.91
LNG 1,000 M3/ton 3.51 3.47 3.41 3.41
2006 2007 2008 2009
8.00
6.00
4.00
2.00
-
B/C Oil LNG
37
Protecting the Air and
Water Ecological
System
The company is managing the emission of contaminated materials generated by the operation of
production facilities with a self-determined standard far stricter than the environmental law. Accordingly,
dust and sulfur oxides (SOX) are being managed 20% below the emission permission standard, and
nitrogen oxides (NOX) are being managed 40% below the emission permission standard.
The fuel being used for production facilities is being replaced with the eco-friendly low sulfur fuel and
clean fuel, and it will be reborn as the green company by installing solar street lights and by introducing the
solar power generation facilities and IBS system.
Emission of Air Polluting Materials:
Dust kg/year 7,153 4,865 4,445 4,311
SOX kg/year 11,192 10,137 9,566 9,000
As for water polluting materials such as COD (Chemical Oxygen Demand) and SS are concerned ,
water is released 5% below the legally permitted standard thanks to our optimal water treatment system
that comprehensively manages water resources. A system that will not release waste water is to be
installed and operated in the Dangjin factory so that water polluting materials will not be released from the
operation site.
Water Polluting Materials Emission Level:
COD ppm 130.0 5.7 5.0 5.9 5.7
SS ppm 120.0 2.4 4.9 4.2 5.6
Category Unit Standard 2006 2007 2008 2009
2006 2007 2008 2009
12,000
10,000
8,000
6,000
4,000
2,000
0
SOX Dust
2006 2007 2008 2009
10.0
8.0
6.0
4.0
2.0
0
SS COD
Financial
Section
03
40_ Independent Auditors Report 41_ Balance Sheets 43_ Statements of Income 44_ Statements of Disposition of Defict
45_ Statements of Changes in Shareholders Equity 46_ Statements of Cash Flows
Annual Report 2009
40
English Translation of a Report Originally Issued in Korean
We have audited the accompanying non-consolidated statements of financial position of Taihan Electric Wire Co., Ltd. (the Company) as of December
31, 2009 and 2008, and the related non-consolidated statements of income, dispositions of deficit, changes in shareholders' equity and cash flows for
the years then ended, all expressed in Korean Won. These financial statements are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our 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 financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the non-consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as
of December 31, 2009 and 2008, and the results of its operations, the changes in its retained earnings and shareholders' equity, and its cash flows for
the years then ended, in conformity with accounting principles generally accepted in the Republic of Korea.
Without qualifying our opinion, we draw attention to the following:
As explained in Notes 26 to the non-consolidated financial statements, the Company continues to reorganize its structure for the purpose of making it
more profitable and to organize for its present needs in accordance with many newly established regulations to face the global financial crisis and the local
economic downturn. The Company contracted a agreement to improve financial structure with Hana bank on May 28, 2009 and must comply with terms
and conditions regarding disposition of real estate, paid-in capital increase, release the guarantee of obligation and others. Financial statements of the
Company reflects the possible effects of economic uncertainty and the decision of the management regarding the execution of such terms above which
however may be significantly difference from the actual results.
Accounting principles and auditing standards and their application in practice vary among countries. The accompanying financial statements are not
intended to present the financial position, results of operations, changes in shareholders equity and cash flows in accordance with accounting principles
and practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea
to audit such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying
financial statements are for use by those knowledgeable about Korean accounting procedures and auditing standards and their application in practice.
To the Shareholders and Board of Directors of
Taihan Electric Wire Co., Ltd.
Notice to Readers
This report is effective as of March 10, 2010, the auditors report date. Certain subsequent events or circumstances may have occurred between the auditors report date
and the time the auditors report is read. Such events or circumstances could significantly affect the accompanying financial statements and may result in modifications to
the auditors report.
March 10, 2010
Financial Section the way to a global leader
41
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 11)
Short-term financial instruments (Notes 3 and 11)
Available-for-sale securities (Note 4)
Held-to-maturity securities (Note 4)
Trade accounts and notes receivable, net of allowance
for doubtful accounts of 5,086 million in 2009 and
4,956 million in 2008 (Note 11)
Short-term loans, net of allowance for doubtful
accounts of 126,052 million in 2009 and 42,079
million in 2008 (Notes 11 and 19)
Other accounts receivable
Accrued income
Advance payments
Prepaid expenses
Guarantee deposits
Prepaid value added tax
Financial derivative assets
Income tax receivable (Note 10)
Current portion of deferred tax assets (Note 10)
Inventories (Note 6)
Total current assets
NON-CURRENT ASSETS:
Available-for-sale securities (Notes 4 and 11)
Held-to-maturity securities (Note 4)
Equity method investments (Note 5)
Long-term loans, net of allowance for doubtful
accounts of 56,968 million in 2009 and 33,585
million in 2008 (Note 11)
Property, plant and equipment, net (Notes 6, 7, 20 and 21)
Intangible assets, net
Guarantee deposits (Note 3)
Deferred tax assets (Note 10)
Other non-current assets
Total non-current assets
Total assets
22,001
80,429
22,500
3,269
388,480
452,803
32,476
46,526
58,537
11,171
10,685
15,454
13,298
12,982
58,131
213,578
1,442,320
152,603
14,000
1,242,743
81,917
256,470
365
479
169,054
22,283
1,939,914
3,382,234
69,648
60,982
22,500
-
381,555
247,785
84,900
42,839
20,433
5,525
6,814
7,950
56,733
-
14,584
181,549
1,203,797
109,456
53,914
1,508,623
191,007
195,975
512
559
125,180
5,460
2,190,686
3,394,483
2008 2009
Balance Sheets
As of December 31, 2009 and 2008
Continued
Annual Report 2009
42
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES:
Trade accounts and notes payable (Note 11)
Short-term borrowings (Notes 7 and 11)
Other accounts payable
Advances received
Deposits received
Financial derivative liabilities
Accrued expenses
Income tax payable
Current maturities of long-term borrowings, net (Note 8)
Current maturities of finance lease liabilities (Note 8)
Other current liabilities
Total current liabilities
NON-CURRENT ASSETS:
Long-term borrowings, net of current maturities (Notes 8 and 11)
Debentures, net (Note 8)
Bonds with stock warrants, net (Notes 8 and 11)
Convertible bonds, net (Note 8)
Exchangeable bonds, net (Note 8)
Finance lease liabilities (Notes 8 and 11)
Financial derivative liabilities
Accrued severance benefits, net (Note 9)
Other long-term liabilities
Total long-term liabilities
Total liabilities
COMMITMENTS AND CONTINGENCIES (Note 24)
SHAREHOLDERS EQUITY (Note 12):
Capital of common stock
Capital of preferred stock
Capital surplus
Capital adjustments
Accumulated other comprehensive loss (Note 18)
Retained earnings
Total shareholders' equity
Total liabilities and shareholders equity
229,277
865,067
38,694
36,325
115
12,433
15,396
-
765,320
4,473
14,263
1,981,364
111,083
483,627
26,555
23,119
-
1,161
-
245
2,030
647,821
2,629,185
122,672
20,054
788,654
(229,012)
(125,934)
176,615
753,049
3,382,234
2008 2009
See accompanying notes to non-consolidated financial statements.
104,906
1,087,696
36,030
94,886
113
19,023
18,748
72,755
514,383
4,537
2,737
1,955,814
103,773
399,178
-
-
43,306
6,067
6,109
-
1,820
560,253
2,516,067
122,650
-
632,912
(194,791)
(159,769)
477,415
878,416
3,394,483
43
Sales (Notes 22, 23 and 25)
Cost of sales (Notes 16, 22 and 25)
Gross profit
Selling and administrative expenses (Note 17)
Operating income
Non-operating income
Interest income (Note 22)
Dividend income (Note 22)
Gain on disposal of available-for-sale securities
Gain on valuation of equity method investments (Note 7)
Gain on disposal of equity method investments (Note 7)
Gain on foreign currency transactions
Gain on foreign currency translation
Gain on disposal of property, plant and equipment (Note 8)
Gain on futures transactions
Gain on valuation of financial derivatives (Note 24)
Gain on disposal of financial derivatives
Gain on recovery of bad debts
Gain on disposal of investment
Others
Non-operating expenses
Interest expenses
Other bad debt expenses
Loss on disposal of available-for-sale securities (Note 6)
Loss on valuation of available-for-sale securities
Impairment losses of available-for-sale securities (Note 6)
Loss on valuation of equity method investments (Note 7)
Loss on disposal of equity method investments
Impairment losses of equity method investments
Loss on foreign currency transactions
Loss on foreign currency translation
Loss on disposal of property, plant and equipment
Loss on futures transactions
Loss on redemption of bonds
Loss on disposal of investments
Impairment losses of other investments
Loss on valuation of financial derivatives (Note 24)
Loss on disposal of financial derivatives (Note 24)
Others
Income before income tax
Income tax expense (Note 13)
Net income
Basic earnings per share (Note 19)
Diluted earnings per share (Note 19)
2008 2009
For The Years Ended December 31, 2009 and 2008
2,444,536
2,302,482
142,054
59,813
82,241
59,409
1,566
4,481
45,120
2,841
117,073
25,588
381,846
72,415
43,328
58,962
7,045
-
7,561
827,235
121,112
73,934
305
1,860
-
290,894
-
-
68,291
104,620
2,200
94,906
5,289
-
-
1,477
22,366
10,078
797,332
112,144
41,374
70,770
1,490
1,483
2,260,088
2,119,849
140,239
69,770
70,468
83,838
1,788
1,401
35,939
123,326
59,683
15,380
101,778
41,151
18,960
892
12
13,507
6,639
504,294
163,092
110,950
7,432
-
9,613
268,509
9,858
4,601
173,755
8,771
-
86,536
25,120
29,856
26,266
488
989
10,208
936,043
(361,280)
(84,167)
(277,113)
(5,917)
(5,917)
Annual Report 2009
44
2008 2009
RETAINED EARNINGS BEFORE APPROPRIATIONS:
Unappropriated retained earnings carried over from prior year
Cumulative effects of restatements
Net income
APPROPRIATIONS:
Legal reserve
Other reserves
Cash dividends (Note 20)(dividend ratio of 0% in 2009 and 20% in 2008)
DISPOSITON:
Other reserves
UNAPPROPRIATED RETAINED EARNINGS TO BE
CARRIED FORWARD TO SUBSEQUENT YEAR:
658
-
(277,113)
276,455
-
-
-
-
276,455
276,455
-
624
(180)
70,770
71,214
2,369
44,500
23,687
70,556
-
-
658
45
(In millions of KRW except per share amounts)
Balance as of January 1, 2009
Cumulative effects of change in accounting principles
Restated beginning balance
Payment of dividends
Balance after appropriations
Net loss
Increase in capital
Exercise of warrants
Additional acquisition of the subsidiary shares
Changes in capital surplus and adjustments from
equity method investments in subsidiaries
Issuance of stock of warrants
Disposal of treasury stock from exercise of stock option
Gain on valuation of available-for-sale securities
Loss on valuation of available-for-sale securities
Gain on valuation of equity method investments
Loss on valuation of equity method investments
Gain on revaluation of property, plant and equipment
Loss on valuation of financial derivatives
Balance as of December 31, 2009
878,416
-
878,416
(23,687)
854,729
(277,113)
167,283
191
(35,783)
6,401
3,367
139
-
-
-
-
-
-
753,049
477,415
-
477,415
(23,687)
453,728
(277,113)
-
-
-
-
-
-
-
-
-
-
-
-
176,615
Retained
earnings
(159,769)
-
(159,769)
-
(159,769)
-
-
-
-
-
-
-
(197)
24,940
7,700
(24,933)
2,482
23,842
(125,934)
Accumulated
other
comprehensive
income
(70,510)
(124,281)
(194,791)
-
(194,791)
-
-
-
(39,021)
4,561
240
-
-
-
-
-
-
(229,012)
Capital
adjustments
508,631
124,281
632,912
-
632,912
-
147,229
169
3,238
1,840
3,367
(101)
-
-
-
-
-
-
788,654
Capital
surplus
122,650
-
122,650
-
122,650
-
20,054
22
-
-
-
-
-
-
-
-
-
-
142,726
Common
stock
Total
Annual Report 2009
46
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation
Amortization of intangible assets
Bad debts expenses
Other bad debt expenses
Provision for severance benefits
Amortization of discount on debentures
Amortization of stock warrants adjustment
Amortization of exchangeable rights adjustment
Amortization of conversion rights adjustment
Loss (gain) on valuation of available-for-sale securities, net
Loss (gain) on disposal of available-for-sale securities, net
Impairment losses of available-for-sale securities
Loss on valuation of equity method investments, net
Gain on disposal of equity method investments, net
Gain on disposal of property, plant and equipment, net
Loss (gain) on foreign currency translation, net
Loss on foreign currency transaction
Loss (gain) on valuation of financial derivatives, net
Depreciation
Others, net
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Increase in trade accounts and notes receivable
Increase in other accounts receivable
Increase in accrued income
Decrease (increase) in advanced payments
Increase in prepaid expenses
Increase in inventories
Cash dividends from equity method investments
Increase in deferred tax assets
Decrease (increase) in other current assets
Increase (decrease) in trade accounts and notes payable
Increase in other accounts payable
Increase in accrued expenses
Increase in income tax payable
Decrease in other current liabilities
Payment of severance benefits
Decrease in deposits to National Pension Fund
Increase in pension plan assets
Decrease in the deferred tax liabilities
Net cash provided by (used in) operating activities
(277,113)
9,615
147
634
110,950
3,140
3,424
19,471
4,345
9,687
-
7,432
9,613
232,570
(113,468)
(101,778)
(8,313)
62,453
(18,472)
9,615
37,333
268,783
(26,990)
52,897
(13,998)
(38,104)
(5,646)
(34,437)
11,148
(27,189)
(32,082)
127,828
2,664
(3,352)
(72,755)
21,497
(1,463)
3
(1,470)
-
(41,449)
(49,779)
2008 2009
Continued
70,770
9,628
143
2,720
73,934
3,047
2,381
6,904
2,738
16,138
1,860
(4,176)
-
245,775
(2,841)
(379,646)
110,794
-
(41,850)
9,628
10,631
58,180
(22,088)
(52,866)
(33,122)
(17,194)
(2,815)
(8,231)
5,354
(35,251)
(22,739)
70,156
16,695
10,930
28,914
(9,759)
(1,175)
1
(1,328)
(6,499)
(81,017)
47,931
47
CASH FLOWS FROM INVESTING ACTIVITIES:
Withdrawal of long-term financial instruments
Collection of short-term loans
Proceeds from disposal of available-for-sale securities
Proceeds from disposal of held-to-maturity securities
Proceeds from disposal of equity method investments
Collection of long-term loans
Proceeds from disposal of property, plant and equipment
Withdrawal (acquisition) of short-term financial instruments,
Extension of short-term loans
Acquisition of available-for-sale securities
Acquisition of held-to-maturity security
Acquisition of equity method investments
Extension of long-term loans
Acquisition of property, plant and equipment
Acquisition of intangible assets
Increase in government subsidy
Others, net
Net cash used in operating activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings
Proceeds from long-term borrowings
Issuance of debentures
Issuance of bonds with stock warrants
Issuance of exchangeable bonds
Issuance of convertible bonds
Exercise of stock warrants
Exercise of stock options
Paid-in capital increase
Proceeds from disposal of treasury stock
Repayment of short-term borrowings
Repayment of current maturities of long-term borrowings
Repayment of long-term borrowings
Repayment of debentures
Repayment of finance lease liabilities
Repayment of bonds with stock warrants
Repayment of convertible bonds
Purchase of treasury stock
Payment of dividends
Repayment of current maturities of finance lease liabilities
Net cash provided by financing activities
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS,
END OF YEAR
50,333
30,435
7,000
199,748
19,719
2,470
(19,447)
(193,827)
(52,032)
(13,500)
(64,768)
(21,400)
(130,814)
-
-
82
(186,001)
-
121,079
402,586
341,302
-
-
37
138
167,283
-
(191,056)
(172,733)
(10,000)
(34,900)
-
(155,036)
(252,343)
-
(23,687)
(4,537)
188,133
(47,647)
69,648
22,001
2008 2009
180,545
44,952
1,964
56,012
3,881
661,235
104,704
(292,016)
(64,300)
(49,464)
(1,115,884)
(51,043)
(58,899)
(237)
-
(36)
(578,587)
163,725
100,000
199,469
-
50,963
-
-
-
-
-
-
(147,083)
-
-
(2,438)
(14,103)
(28,655)
(43,117)
(24,187)
(3,825)
250,752
(279,905)
349,553
69,648
Kuwait
TAIHAN around the World
Overseas Branch Office
Dubai Representative Office
Flat No.705, Al Safa Tower, Sheikh Zayed Road, P.O.Box 117561, Dubai, UAE
TEL : +971-4-331-7233 FAX : +971-4-331-7322
E-mail : hkjoo@taihan.com, taitian@emirates.net.ae
Riyadh Branch Office
Office No.613, Al Rossais Commercial Center
Olaya Road, P.O.Box 300201, Riyadh 11372, Kingdom of Saudi Arabia
TEL : +966-1-419-0227 FAX : +966-1-419-0262
E-mail : jmcho@taihan.com
Kuwait Branch Office
Sabah al Salem, block No.4, Street No.31 House No.7, State of Kuwait
TEL : +965-2552-8642 FAX : +965-2552-1498
E-mail : janghee5@taihan.com
Kuala Lumpur Branch Office
Suite 15.03 15th Floor, Kenanga International, JL. Sultan Ismail,
50250 Kuala Lumpur, Malaysia
TEL : +60-3-2161-8017/8027 FAX : +60-3-2161-3628
E-mail : iamsj@taihan.com
Singapore Branch Office
150 Kampong Ampat #07-04 KA Centre Singapore 368324, Republic of Singapore
TEL : +65-6842-5069 FAX : +65-6842-5076
E-mail : iamsj@taihan.com
Australia Branch Office
Suite 704, Level 7, 90 Mount Street, North Sydney, NSW 2060, Australia
TEL : +61-2-9460-3600 FAX : +61-4-9954-4354
E-mail : cwlee@taihan.com
Argentina Branch Office
Bartolome Mitre 1541(1037), Buenos Aires, Argentina
E-mail: sikim@taihan.com
Venezuela Branch Office
Avenida Principal Los Chorros de mila Centro Epresarial Villa Los Chorros Piso4
Oficina 404 Merida, Venezuela
TEL : +58-274-414-1627
E-mail: jintai@taihan.com, luis.juarez@taihanla.com
Overseas Subsidiaries
South Africa M-TEC (Malesela Taihan Electric Cable Pty., Ltd.)
Steel Road Peacehaven Vereeniging 1930 Gauteng, South Africa
TEL : +27-16-450-8200 FAX : +27-16-450-8202
E-mail : junehah@m-tec.co.za Website : www.m-tec.co.za
D.R. Congo Standard Telecom
158, Avenue de la Democratie(Ex- Huilerie) Commune de la Gombe, Kinshasa, D.R.Congo
TEL : +243-1511-0007 FAX : +243-1511-1100
E-mail : colee@stelecom.cd Website : www.www.st.cd
Vietnam TSC (Taihan Sacom Cable Co., Ltd)
7th Floor, 71-73 Dien Bien Phu, phuong 15, Binh Thanh District, Vietnam
TEL : +84-8-518-0786 FAX : +84-8-518-0785
E-mail : kimjh@tscable.com.vn Website : www.tsc.vn
Cambodia KTC Cable co., Ltd.
Phlove Tomnupkopsrove, Phum Tropaingo Sangkat Korkrokar, Khan Dankor, Phnom Pen,
Camobodia
TEL : +855-12-211-068 FAX : +855-23-357-116
E-mail : ktc@ktc.com.kh Website : www.ktccable.com
Hong Kong TGH (Taihan Global Holdings, Ltd.))
No.1808, 18F, Tower 2, Admiralty Center, 18 Harcourt Road, Admiralty, Hong Kong
E-mail : yjinnie@taihan.com
Mongolia Skytel
3rd FL, Skytel Plaza Bldg, Chinggis khaan Avenue-9, Ulaanbaatar-13, Mongolia
TEL : +976-11-318488 FAX : +976-11-318487
E-mail : skytel@mtcone.net Website : www.skytel.mn
Mongolia Sky Resort LLC
16th floor, Central Tower, 2 Sukhbaatar Square, Ulaanbaatar, 210620a, Mongolia
TEL : +976-11-320345 FAX : +976-11-320341
E-mail : info@skyresort.mn Website : www.skyresort.mn
USA Taihan USA (Taihan Electric USA., Ltd.)
LandMark Building, 99 Tulip Avenue, Suite#106, Floral Park, NY 11001, USA
TEL : +1-516-355-5600 FAX : +1-516-355-5601
E-mail : sw1012@taihan.com
Canada Taihan Global Canada Investment., Ltd.
Unit 610-4538 Kingsway, Burnaby, BC, Canada V5H 4T9
TEL : +604-438-7070 FAX : +604-438-7072
E-mail : taihanglobal@gmail.com Website : www.hiltonvancouver.com
Cambodia
Hongkong
Malaysia
Singapore
Australia
Argentina
Vietnam
USA
Canada
Mongolia
D.R.Congo
South Africa
Saudi Arabia
UAE
Subsidiary Company / Branch office
Venezuela
Introduction
CEO Message
Domestic Affiliates
Global Affiliates
Corporate History
Review of Operations
Power Cable
Telecommunication
Copper Rod & Wire
R&D
Growth & Innovation
Sustainability Management
Transparent Management
People
Social Contribution
Health and Safety
Enviromnetal Management
Financial Section
Balance Sheets
TAIHAN around the world
Office & Plants
Contents
04
06
08
10
12
14
17
18
19
20
21
24
26
28
30
32
40
41
43
44
45
46
48
49
01. Head Office
TEL : +82-2-316-9114 FAX : +82-2-754-5257
02. Anyang Plant
TEL : +82-31-420-9114 FAX : +82-31-423-2685
03. R&D Laboratory
TEL : +82-31-420-9530 FAX : +82-31-420-9350
04. Dangjin Plant
2-1 Seulhang-ri, Gadae-myeon, Dangjin-gun, Chungcheongnam-do, Korea
TEL : +82-41-359-9114 FAX : +82-41-359-9116
01 03 02 04
Office & Plants
Web site : www.taihan.com
Annual report, presentation materials and newsletters are available in PDF at the
companys web site
T
A
I
H
A
N
2
0
0
9

A
n
n
u
a
l

R
e
p
o
r
t
http://www.taihan.com
This report was printed with soy-based ink one eco-friendly paper.
TAIHAN 2009 Annual Report
the way to
a global leader

AR09

Cargado por

Información del documento

Descripción original:

Derechos de autor

Formatos disponibles

Compartir este documento

Compartir o incrustar documentos

Opciones para compartir

¿Le pareció útil este documento?

¿Este contenido es inapropiado?

Copyright:

Formatos disponibles

AR09

Cargado por

Copyright:

Formatos disponibles

T

También podría gustarte