Financial Overview

(in millions of won)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	Rate of change	Factors
Sales	2,112,649	2,194,080	(3.7%)	<FY2013 Sales by division and product (Ratio)> [Special steel business] -Special steel 1,987.1 billion won (94.1%) -Forged auto components (Crankshafts, axle shafts, CV joints, etc.) 19.9 billion won (0.9%) <Auto parts business> -Auto parts (Axle assemblies, etc.) 35.7 billion won (1.7%)
Operating income	143,852	171,773	(16.3%)	-
Net income	104,009	119,182	(12.7%)	-

Transfer of headquarters

-In 2012, the Company transferred its headquarters from Gunsan, Jeollabuk-do to Seoul Special City.

Business Plan

-The Company aims to achieve yearly sales of 4 trillion won in 2015.

R&D Structure

-Number of engineers at the technical center : 49 (as of Dec. 31, 2013)

<Special steel products division>
-In 1987, the Company established a technical center to conduct research on special steel. Research activities are carried out in three operating segments: the Research Management Division; Research and Development Division; and Production Engineering Division.

-In 2006, the Company set up a R&D center. This facility consists of a Testing and Analysis Center to analyze materials, and a Reliability Evaluation Center to assess the reliability of products.

<Auto parts division>
-The Company formed an automotive technology development team in 1986, when it launched production of car axles. This development team has two divisions; the R&D Division, and the Production Engineering Division.

-The Company announced in October 2012 that it has completed a new testing facility within the premises of its existing R&D center in Korea. The new building will be equipped with various advanced devices. It has a spectroanalysis room, a wet screening room, a testing room and an ultrasonic C-Scan system on the first floor, and a scanning electron microscopy (SEM) room and a heat treatment testing room with a Gleeble thermomechanical simulator on the second floor. (From a press release, December 1, 2012)

R&D Expenditure

(in millions of won)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011
Amount	20,523	23,498	15,492
% of Sales	1.0%	1.1%	0.6%

Recent Developments

Development projects	Development period
High-strength tempered steel for rack bars	36 months
Steel for crankshafts used in Nissan's vehicles	12 months
Non-tempered steel to manufacture high-strength crankshafts	12 months
Mass-production of high-performance, non-tempered steel for Hyundai Motor	6 months
SCR423PRH for high-temperature, vacuum carburizing	36 months
Steel (SCM420HB) for high-strength transmission shafts	24 months
Non-tempered steel (II) for crankshafts used in Nissan's vehicles	12 months
Steel (SDP20) for plastic molds	12 months
High-stress spring steel	6 months
Nickel- and molybdenum-free steel products	6 months
Carburized steel for small gears	10 months
High-strength steel for transmission shafts	9 months
Non-tempered steel for crankshafts (Used in the M1G engines made by Renault Samsung)	6 months
Steel for connecting rods (Used in GM Korea's engines compliant with the Euro 5 emissions standards)	11 months
Vacuum/high-temperature carburized steel (this technology is used on Hyundai hybrid vehicles)	11 months
Low-temperature vacuum carburized steel (SCR422HLVC) for Hyundai Motor	12 months
Steel materials (SCR420H) for transmissions for Jatco and Honda	12 months