the way to a global leading company05. intro taken by imm pe, announced visions to reach ... the...

The Way toa Global Leading Company

2015 ANNUAL REPORT

CONTENTS

0406080910

1316171819

2122242628

3335373839

INTROPerformance HighlightsCEO MessageHistoryOrganizational ChartGlobal Network

REVIEW OF OPERATIONSPower CableE&CCommunication CableBase MetalR&D

SUSTAINABLE MANAGEMENTTransparent ManagementPeopleSocial Responsibility Safety and Health ManagementEnvironmental Management

FINANCIAL SECTIONIndependent Auditors’ ReportSeparate Statements of Financial PositionSeparate Statements of Comprehensive IncomeSeparate Statements of Changes in Shareholders’ equitySeparate Statements of Cash Flows

Company Name TAIHAN Electric Wire Co., Ltd. Business Areas Power Cables, Communication Cables, Base Metal, etc.Products and Services Design, Manufacturing and Installation in Electric and Communication Cable SystemCEO Jin-yong ChoiAddress Taihan Smart Tower, 317 Simindae-ro, Anyang-si, Gyeonggi-do, KoreaEstablishment 1955. 02. 21IPO date 1968. 12. 27Employees 890Fiscal Year End DecemberFace Value 500 KRWNo. of shares 839,089,231 SharesExternal auditor Nexia SamdukAuditor’s opinion In reviewMain bank Hana Bank

For the years ended

SalesGross Profits Operating Income EBITDAIncome Before TaxNet Income

As of the years ended

Current AssetsProperty, Plant and EquipmentsTotal AssetsInterest bearing DebtsNet DebtsTotal LiablitiesCapital StockCapital SurplusRetained EarningCapital AdjustmentTotal Shareholder's Equity

20131,910,024

79,663

2013499,309531,725

1,491,580724,101692,718

1,219,049491,586481,192

3,533272,531

20141,617,496

123,62726,64450,364

2014467,595 504,840

1,285,004 761,436 730,618

1,249,189 519,642

4,11435,815

20151,360,383

118,92936,88360,553

2015514,637 485,252

1,194,839 578,433 536,457 852,800 419,545

4,206342,039

Company Profile

Financial Highlights

2015 ANNUAL REPORT

Korean Won (In Millions)

Korean Won (In Millions)

(196,511)(173,850)(642,018)(706,654)

(186,759)(257,802)

(58,334)(429,607)(703,780)

(53,029)(57,211)

(404,803)(486,515)

05

INTRO

Taken by IMM PE, announced visions to reach

the top 3 among global cable companies

TAIHAN has laid the foundation for a rebound by receiving IMM PE as their major shareholder. TAIHAN has terminated joint management with the creditor bank autonomous council and is now off to a fresh start. With stronger financials, TAIHAN expects to pioneer a new 100-year frontier to become a global cable company. Furthermore, TAIHAN announced vision and mid/long-term strategies to reach the top 3 among global cable companies. It plans to strengthen global competitiveness to its main business, extra high voltage cables, and to expand investments in new growth engines such as subsea cables, HVDC cables, and HTLS(High Temperature Low Sag) conductor. TAIHAN will install subsea cables, distribution cable system equipment in Dangjin factory and seek orders, and further subsea cables, extra high voltage cable research to establish a new growth engine framework. The company expects to add momentum to European markets, as it plans to install production equipment for smooth al sheath (smooth al sheath: thin metal layer inserted inside a cable to strengthen cable’s electric power) cables, a popular type of cable in Europe.

Signing MOU With National Grid Of Saudi Arabia

TAIHAN signed a MOU with National Grid of Saudi Arabia, the Middle East’s largest electricity market, to solidify its power sector partnership. With the MOU, TAIHAN will expand informational exchanges and technical support on diverse cable and cable systems including power cables, and personnel exchanges through managing education programs. Furthermore, it will standardize power cable designs and equipment to strengthen its competitiveness in the Saudi Arabian market. Thus, TAIHAN has secured order competitiveness by building solid partnerships that simply go beyond merely being a supplier and grow together in the Saudi Arabian market. The company has secured the no.1 market share in Saudi Arabia for it extra high voltage cables.

All-out remodeling for better profitability

TAIHAN’s current top priority is profitability. The company has strategically reduced its materials business that possesses low profitability, and has reinforced its order portfolio with high-margin products such as extra high voltage cables and HTLS(High Temperature Low Sag) conductor. In addition, TAIHAN has continuously revamped its businesses to enhance the company’s profitability, by using TOP (Total Operational Performance) activities that reduce costs and improve productivity. Separately, TAIHAN is seeking ways to improve profitability by utilizing overseas manufacture points in Vietnam and South Africa. By adding equipment and transferring technology, TAIHAN supply Southeast Asian and African orders from these nearby factories, which will enhance profitability by reducing logistics and labor costs.

Stronger financial conditions

TAIHAN has used various strategies to eliminate financial risks. New funds have been injected as IMM PE took its stake, and reduced most of its contingent liabilities by divesting its large real-estate related nonoperating assets. In 2015 alone, TAIHAN relieved KRW 250 billion of its contingent liabilities by divesting Nambu Terminal land and Shinhan Investment Bank building. TAIHAN will devote its fullest endeavors to eliminate remaining contingent liabilities to realize complete financial stability. The fact that the company reflected value depreciation for its investment assets in the 2015 accounting audit will positively influence TAIHAN’s long-term financial improvement.

Full efforts to influence overseas orders

Overseas orders started growing as TAIHAN’s financial conditionsstabilized. TAIHAN expanded its order competency by not only procuring USD 27 million and USD 7 million orders from the US and Australia, two of the developed power markets, but also proceeding with high-end 500kV and 380kV extra high voltage cable projects. Furthermore to this, byprogressing OETC(Oman Electricity Transmission Company)’s 400kV pre-qualification registration, TAIHAN is aggressively striving to enter Oman’s 400kV underground cable project. The company, through its new market expanding endeavors, is attempting to enter North African regions such as Egypt and Algery, with 5~15% growth in power demand.

The Way to a Global Leading Company 2015 Annual report

Performance Highlights

Efforts to enhance product quality

TAIHAN has strived to improve its failure rate and product quality. The company sees quality as a promise and trust given to customers. TAIHAN set up a board in the factory that monitors quality-related issues for all processes and helps to diagnose problems in real time. Additionally, the company plans to utilize a ‘suggestion system’ to entice employees to actively brainstorm new ideas. In particular, its quality assurance organization has been promoted to ‘division’ from ‘team’, to give more attention to minimizing quality-related problems.

04


TAIHAN has announced its vision

to become one of the top 3 among

global cable companies through

providing the best value to

customers. Focusing on its main

cable business, the company has

combined core capabilities to

strategize quality management,

profitability management, future

growth engines, and spirit

management to become a global

cable company.

CEOMESSAGE

Dear customers, shareholders, and all other stakeholders of TAIHAN, Thank you for your continued attention and support.

Last year was a groundbreaking year for TAIHAN. By accepting IMM, one of the prestigious private equity funds in Korea, led to new majority ownership, allowing us to completely eliminate financial risk that continued for many years. With this, we have announced a vision to reach ‘One of the top 3 among global cable companies.’ Going one step further, we have also aggressively invested in equipment and research.

We not only developed new products such as subsea cables and HVDC cables, but also established specific production facility plans in order to lay the foundation to continue business going forward. As such, it was a year to establish a solid basis for a renewed beginning. TAIHAN’s situation has drastically improved, but unstable economic conditions lingered due to uncertain global economic factors and dismal domestic markets. Specifically, downstream industries such as construction were still sluggish, while Middle Eastern investment sharply declined due to low oil prices. However, TAIHAN was able to increase operating income 40% year on year, with our company-wide effort to enhance productivity and reduce costs.

TAIHAN will make our best efforts to increase our company value by aggressively investing in new growth engines and by focusing on high value-add products. We will make this year as the first year towards ranking among the top 3 cable companies in the world.

For the last 61 years, we have overcome our limits in the most unstable moments and used them as opportunities to make new rebounds. As a result, we established ourselves as a global leader in energy, telecommunications, and industrial materials. TAIHAN looks forward to serving our customers as a competitive global company. All of our teams will march forward with this ideology engraved into our hearts.

Through continuous product development and capital investments, profitability maximization, and human resource development, we will write of becoming a new ‘centennial company’ on top of our 60-year history.

A transparent, trustworthy company for its customers and shareholders! A rewarding company that spreads a positive tone!A company that everyone wants to work for! We ask for you look forward to TAIHAN’s glorious future.

Thank you.

May 11, 2016

Choi, Jin-young CEO of TAIHAN

Management Policy

QulityManagement

Profit-BasedManagement

Preparation For Future Growth

Renovation of Organizational

Culture

· Minimizing defect rates· Technology improvement

· Reinforcement of R&D· Discovering new business areas· Fostering human resources

· Strengthening sales capacity· Securing cost competitiveness

· Encouraging management -Harmonizing management -Compensating management -Achieving management

0706

Vision Target 2020

Global TOP3in the cable industry

· Sales of 2 trillion· Business profits of 100 billion· EBITDA of 120 billion

(Unit: Korean Won)

INTRO

TAIHAN, the first wire & cable company in Korea, has grown into a world-

class cable company who is very competitive in power, communication and

base metal business sector for over the 60 years since its establishment.

1950s

2000s

1960s

1970s

FROM 2010

1980s

1990s

The Way to a Global Leading Company

History

2015 Annual report

ORGANIZATIONAL CHART

History begins

Localization of the products /Establishment of business basis

Modernized production basis /Leading the technology in cable

Full-scale growth of the wire &cable business

Enhancement of cable &cable accessory

Establishment of the global production station

Completion of the Dangjin Plant /Leaped to the status of a global

leading company

1955 Establishment of the company1958 Production of PVC covered conductor

1964 Acquisition of the KS Mark for the first time in Korea Exportation to Southeast Asia for the first time in Korea1969 Development of 33kV XLPE cable for the first time in Korea

1976 Production of 154kV Oil Filled cable for the first time in Korea1977 Development of fiber-optic cable for the first time in Korea

1984 Completion of the optical communication cable plant Production of 154kV XLPE cables1987 Production of OPGW Development of 345kV OF cable & cable accessory

1995 Development of 765kV ACSR1996 ISO 9001 certification in electric power equipment field1997 Expansion of the overseas market Award with the trophy for 5,000 million dollar export

2000 Merging the cable corporate <M-TEC> in South Africa2005 Establishment of the cable corporate <TSC> in Vietnam 2007 Completion of Dangjin Cable Accessory Plant Award with the trophy for a billion dollar export2008 Expansion to the extra-high voltage turn-key market in Australia / USA / Russia2009 Development of 400kV Enamel Coated Conductor Cable and Composite Bushing for extra-high voltage

2010 Development of polymer insulation tube for extra-high voltage for the first time in Korea2011 Construction of the Dangjin Plant & its completion2012 Development of 400km/h high-speed railway wire for the first time in Korea Pass the PQ test for 500kV high voltage cable for the first time in Korea2013 Development of signal transmission cable for train operation control, for the first time in Korea2014 Production of ACCC-type high temperature low sag conductor2015 Supply of 500kV extra-high voltage cable in the United States, for the first time in North America Taken over by IMM PE Proclamation of vision for becoming the global TOP3 wire & cable company

Business Center

Overseas Sales Dept.1

Overseas Sales Dept.2

Domestic Sales Dept.

Base Metal Business Dept.

EHV Engineering & Construction

Dept.

Middle East Sales Team

Overseas Network Team

Overseas Sales Team 1

Overseas Sales Team 2

Domestic Sales Team 1



Base Metal Sales Team

Base Metal Production Team

System Duct Sales Team

Bus Duct Production Team

Sales Management Team

Profit Create TFT

EHV Construction Management Team

EHV Construction Team

EHV Engineering Team

Quality Management

Unit

Cable Production & Development

Dept.

EHV Accessory Business Dept.

Procurement & Material Unit

Research & Development

Lab

Quality Center

Quality Management Team

Process Innovation Team

Cable Technical Team

EHV Cable Production Team

Industrial Cable Production Team

EHV Accessory Sales Team

EHV AccessoryTechnical Team

EHV Accessory Production Team

Production Support Team

Production Planning Team

Plant Engineering Team

Procurement Team

Trading Support Team

Business Management Center

Finance & Strategic

Planning Unit

Human Resources & General Affairs Unit

Affiliate Support Unit

Legal Unit

Internal Audit Unit

Finance Team

Accounting Team

Strategy & Management Team

CEO

The Board of Directors

The Board of DirectorsSecretariat

Senior Executive Vice President

0908

INTRO

TAIHAN, with the world’s largest

cable factory in Dangjin, has

established 11 overseas branch

offices in 10 countries, as well as

production facilities in South Africa

and Vietnam, in order to

strengthen its global

competitiveness in its main cable

production business.


M-TEC, located in the Republic of South Africa, is an advanced base for expansion to the African mainland, and was established in 2000 as a joint corporate. It is an integrated cable company that produces optical communication cables and power cables, and is on the way to becoming the best cable company in Africa.

www.m-tec.co.za

M-TEC

TAIHAN USA was established in 2000 to expand the sales in North America. After 2003, the company has established foundations for expanding the local market by supplying extra-high voltage middle and low voltage products to the electricity boards of the eastern and western part of the USA, and will continue to expand the sales of electricity and IT products in the USA.

TAIHAN USA

Dangjin plant was established in 2012. Dangjin plant possesses the world’s largest wire & cable manufacturing facility, which can maximize productivity through assembling various manufacturing facilities. It is the highest level facility equipped with the latest system of integrated control, danger detection and optimized energy effectiveness.

Dangjin Plant

TCV is a cable factory located in Ho Chi Minh, Vietnam, producing various range of communication and electric power cables. We play a leading part in the cable manufacturing industry in the Southeast Asian Market as there has been a considerable increase in the demand for electric power along with the significant economic growth in Vietnam.

www.tsc.vn

TCV

Accessory plant was established in 2007. The plant manufactures various terminations and splices for XLPE cables up to 500kv and OF cable up to 400kV. In addition, this plant manufactures diverse Link Box and Composite Hollow Bushing and GIS Epoxy insulator for customer.

Dangjin Cable Accessory Plant

Global Network

Russia

USA NY

Overseas Branch Office

Overseas Subsidiary

Vietnam

Kuwait

Qatar

Dubai

Singapore

South Africa

Australia

Kuala Lumpur

USA L.A

New Zealand

Riyadh

Jeddah

1110

The Middle East is a major demand source, which takes up 60% of the company’s exports. TAIHAN secured no.1 in 2015 market share, focusing on Saudi’s 380kV extra high voltage cable project. Despite difficulties from multiple delays due to aggravated financial conditions from low oil prices, the company secured competitiveness by stronger customer relationships. Specifically, TAIHAN prepared for risks by expanding business areas, acquiring ARAMCO PQ, SEC EPC PQ, and signing MOUs. Based on these efforts, we expect to solidify our market position in 2016.

After the company procured a 220kV 2500SQ turn-key construction order in 2013, we have continuously endeavored to establish a market presence in Qatar, a market dominated by Japanese and European high-end competitors. In September 2015, we have procured a 400kV 2500SQ turn-Key construction and submitted a bid to Qatar Electricity Company. Further to this, in UAE, we have procured multiple new projects in Dubai; we also are progressing to enter the 400kV extra high voltage cable market in Dubai and Abu Dhabi, based on our excellent performance in 132kV-level cables.

As Iran opened up its markets, we are laying the foundation to receive orders in the country through aggressive sales, such as regular technical presentations according to Iran government’s industrial development plans. Also, we are looking for local investments to strengthen our price competitiveness.

TAIHAN not only plans to strengthen Middle Eastern market domination, but is also striving to enter North African markets such as Egypt and Algeria. Entry barriers from duties, logistics costs, and local preferences exist, but we plan to enter the market with high-tech products such as 400kV and 500kV extra high voltage cables.

The Middle East/Africa

REVIEW OF OPERATION Power Cable

In 2015, the world economy continued to be sluggish. China’s economic growth recorded a 25-year low of 6.9%, and low oil prices resulted in financial contraction and lower commodities investment in Middle Eastern countries. World economic growth slowed to 3.1%, emerging markets to 4.0%, showing the lowest levels since the financial crisis. Korea’s economic growth slowed to 2.6%, due to default of the Greek economy, the weak Japanese Yen, and MERS.TAIHAN’s revenue slightly decreased due to lower commodities prices, order cancellations and delays from Middle East. However, there is a steady revenue growth in the Americas, and Europe has served as a substitute to the Middle East. In addition, IMM PE investment completely eliminated financial risks. With stable financials, business conditions improved greatly. Combined cost-reduction activities (TOP) and VALUE UP project for enhanced operation capabilities help establish new business models and secure competitiveness.

review ofoperations

132015 Annual report

EuropeAmericaOceaniaAsia

TAIHAN seeks to aggressively enter the European market, representing 20% of worldwide cable demand. We have laid the foundation by dispatching a sales representative in the UK, and by building a new sales network. We have achieved incremental sales by exporting OF cables to UK Power Networks. We are seeking to expand our operations to the UK, southern Europe, and Scandinavia.

We expect to see a gradual increase in demand until 2018 in North America, due to economic recovery, increased power demand, extra high&high voltage cable replacements, and an increase in new and renewable energy. TAIHAN, through stronger business relationships with its clients, expanded original contracts. In particular, as we have a track record of executing the SCE Chino-Hills Tehachapi Renewable Transmission Project, North America’s first 500kV project, we expect additional orders from successful sales of high-margin products such as HTLS(High Temperature Low Sag) conductor.

Central/South America’s priority was to establish a sales network. TAIHAN has uncovered a local sales agent in Peru, Argentina, and Chile, to build up market entry.

The Oceanic regions has received favorable evaluations through grid projects such as TransGrid, PowerCor, ElectraNet, SAPN, on top of a 132kV project from Ausgrid, Australia’s biggest power company. From 2013, 5-year long-term supply PJT with Ausgrid and Endeavour Energy, is in progress. The region is undertaking business expansions with EPC and national electricity board.

TAIHAN has consistently endeavored to strengthen operations in India with all of its high potential. Since the 2011s, 220kV and 400kV extra high voltage underground cable project opened up the Indian market, where we have been expanding operations to Indian governmental power companies, such as APTRANSCO, NHPC, and HPPCL.

Governmental market

In 2015, revenues from governmental power and insulated cables increased over 2014. Continuous power equipment investment from low power supply, and overhead conductor and underground installation business became reasons for governmental revenue increase.

The company has recorded KRW 6 billion worth of distinguished product revenues, which offers developmental direction to improve the medium&low voltage cables profit structures. In particular, the significance lies in that it offered points of improvement in lower power equipment investments and power industry recession due to the economic recession. The company plans to increase the revenue of distinguished products through continuous investment and R&D.

Civilian market

Domestic civilian market revenue for power cables decreased compared to 2014. Although new domestic apartment demand has increased, lower plant expansion demand and higher competition resulted in underperformance. However, demand for factory automation cables with better profitability has increased, and the company is reviewing capacity increase for these products.

In 2016, although we expect a reduction in market size from lower demand from conglomerates, we plan to respond to market conditions by adjusting product portfolios focusing on factory automation cables.

Domestic

The Way to a Global Leading Company 2015 Annual report 1514

REVIEW OF OPERATIONREVIEW OF OPERATION

Revenue and operating profit from the TAIHAN'S E&C division has increased year on year. The higher performance was due to government/private demand from cable replacements, and pioneering new markets such as Indonesia, Venezuela, Kazakhstan, and Algeria.

In recent years, the cable industry has been sluggish due to heated price competition and delayed orders in Middle Eastern countries due to low oil prices. However, TAIHAN’s E&C division has stable revenue from developed countries including Australia and Singapore, and based on our precise construction capabilities, has expanded its operations to the US, Russia, Middle East, India, Southeast Asia, and South/Central American regions, which have active power equipment replacement projects and new investments. Recently, we have procured mega extra high voltage cable projects in Saudi Arabia and the US. We particularly anticipate additional orders from the US, as market entry there has progressed.

Extra high voltage cables exhibited the highest operating margins among the cable products, as the product is technically complex entering. New markets with fre-quent power equipment replacements such as the US, Canada, and Europe, and the MENA region with new expected cable orders, we believe will see a steady revenue and operating profit in 2016.

Moreover, amid intense competition in the global market, the company is focusing on 300kV~500kV level or higher products with high added value. In particular, we have been recognized for our advanced technology with successful extra high voltage turn-key projects in Australia, New Zealand, Singapore, Qatar, and Kuwait. Considering the fact that this area was dominated by European and Japanese cable companies, this performance carries significant meaning.

In 2016, we plan to continue not only extra high voltage cable construction, but also technical upgrades on subsea cables and overhead cables, based on OF Cable replacement work in Korea, European and North American cable replacements, power infrastructure and urban development projects in the Middle East, and infrastructure investments in developing countries, in order to increase revenues and operating profit.

Engineering & Construction

TAIHAN is engaged in the communication cable production/distribution business, as well as telecommunication construction business.

In particular, the company holds Korea’s largest production facilities of communication cables, and holds the top vendor market share in data cables(UTP, FTP, STP), RF cables, F/S cables, and railway signaling cables.

The company recorded KRW 53.8 billion in revenue in 2015, 26.3% lower than 2014’s KRW 73 billion, due to the global economic recession, an increase in uncertainty, dismal domestic markets, and profitability management. However, 2015 operating profits increased approximately KRW 1.7 billion, a KRW 800 million increase from 2014’s KRW 900 million.

The company has secured a stable revenue stream based on more than 100 of domestic and overseas clients including domestic telecommunications companies, mid/mega distribution companies, global top-tier telecommunications companies, and SCS(structured cabling system) companies. Recently, the company has strengthened order competitiveness, diversified sales networks, secured new growth engines, and overcame original business limitations, through integrated wiring materials market entry, turn-key orders through cooperation with telecommunications and construction businesses.

TAIHAN plans to accelerate is communications cable business and secure price competitiveness through R&D and cost reduction, focusing on high-margin products based on enhanced operations.

Communication Cable


REVIEW OF OPERATIONREVIEW OF OPERATION

TAIHAN achieved an 8% increase in base metal sales in 2015 campared to 2014, tataling in 85,000MT. This is a significant performance that has been proven in dismal domestic markets and Southeast Asian markets, one of the major export markets, despite lower copper prices, reduced investment in governmental businesses from the global recession affecting Europe, and the tanking manufacturing index.

Domestic sales showed a slight increase compared to last year. In overseas markets, the ratio of Southeast Asian and Indian market orders increased comparably. In 2015, the domestic and overseas sales ratio in materials business was 65% and 35% respectively. Overseas demand included the Philippines, Australia, India, Indonesia, and Bangladesh.

Magnet wire showed a decrease in sales value and copper amount. This is mainly due to reduced production in heavy electric equipment and refrigerant compressor. The automobile

TAIHAN has moved its Ansan technology lab to Dangjin in August 2015. This decision was based on synergies of R&D and production, to improve communications with research and production departments. In effect, prototype production for R&D became more flexible, and immediate analysis/diagnosis of production failures became possible.

Last year, a diverse portfolio of R&D projects for cable product development and enhanced technical capacity contributed to increased revenue and cost reduction. In addition, through mid/long-term national projects, TAIHAN built upon its technological trust, and upgraded its development capacities with diverse programs for enhanced R&D manpower.

Specifically, TAIHAN is now capable of producing long-distance versions of extra high voltage cables. The company also developed aluminum, eco-friendly smooth aluminum sheath cables, and acquired KERI certification so as to lay the foundation for tapping European into markets.

Moreover, with KEPCO’s ‘next-generation HTLS(High Temperature Low Sag) conductor development’, TAIHAN installed production equipment for high-strength steel ACSS and ACCC type of HTLS conductors. We now have a strong portfolio that can meet the diverse market demands.

In 2012, TAIHAN became the first domestic cable company to develop a polymer composite bushing with enhanced shockproof, stability, and lightness. TAIHAN has now completed its 145~500kV high voltage products that satisfies diverse conditions required from the global market, and has been focusing on increasing our products’ stability and reliability. In addition, our company succeeded in developing volt-type cable junction boxes with increased worker convenience.

TAIHAN plans to continue its research toward diverse HVDC cable and accessories, and product development, utilizing advanced materials technologies.

Base Metal R&D

market slightly grew with model changes and new model releases. In particular, we expect growth in middle line usage in 2016 as well as 2015.

The base metal business has been highly affected by world economic trends. The manufacturing industry entered its recovery phase in China, emerging markets such as India and Vietnam, and the manufacturing sector in Europe, which we expect to exert a positive influence in base metal business.

The company plans to seek export clients by securing stable revenue streams through long-term contracts with secure customers and targeting niche markets in FTA-signed countries. In particular, we plan to enhance our competitiveness and customer satisfaction by producing and exporting copper rod in different sizes, as overseas demand of copper rod is consistently growing.


TAIHAN, Based on sophisticated corporate governance such as a professional management structure and independent board of directors, TAIHAN has achieved a transparent management that enhances value and protects shareholder rights.

TAIHAN has issued 839,089,231 ordinary shares, and is publicly traded on the KRX. As of December 31 2015, the majority shareholder of TAIHAN is Nike Co., Ltd with a 71.5% stake, which contributed KRW 300 billion in cash. TAIHAN, TAIHAN reports its management status to shareholders in shareholder meetings through our CEO. Any issues requiring decisions are resolved by reflecting shareholder opinions. Ideas collected through the IR department are reviewed by the management and the board to be reflected in corporate policies and operations.

TAIHAN has improved its management transparency by running an independent board of directors. There are 6 directors on the board, with two (33%) external directors. The directors of the company actively support creative management activities through extensive experience and expert knowledge, and contribute in raising corporate values. The board meeting is held once a month to realize transparent management under our CEO.

Following our Articles of Incorporation’s clause 1 of Chapter 25, TAIHAN has an audit committee to perform audits, evaluate internal control systems, and secure fairness and transparency of corporate management. The audit committee is run by 2/3 of the external directors to ensure independence. The committee performs monitoring of director activities, exercising legal authorities to assign external auditors, and executing mandates from the board.

TAIHAN periodically discloses operating performance and other aspects of corporate status to domestic/foreign shareholders, debtholders and the media. These promotion efforts of TAIHAN are a part of our corporate information disclosures to domestic/foreign stakeholders. TAIHAN major corporate events, and supporting information can be found on our corporate website (www.taihan.com), and FSS electronic disclosure system. Corporate financial information and IR data on the website enhances shareholder understanding of the company.

Shareholders

Independent Operation of the Board of Directors

Audit Committee

Public Disclosure Policy

Transparent ManagementSUSTAINABLE MANAGEMENT

sustainable management

2015 Annual report 21

SUSTAINABLE MANAGEMENT

To achieve TAIHAN's vision and management goals, we continuously secure the right people who share our corporate values and our passion for excellence. In addition, to hire the right people with the right fit with TAIHAN, we do our best in each step of the recruiting process. Through in-depth recruiting process including interviews with the eventual co-workers, executives, and the top management, we one able to recruit the righest quality of perssonel for our company.

We organize team-level learning organizations to enhance individual job performance and organizational growth. Individuals create self-development blueprints; we subsequently run an in-house seminar through team discussions, by selecting topics for individual and team improvements that are necessary or need improvement. Further, we add depth in knowledge through external seminars or inviting experts outside our company.

With the belief “No corporate without the people”, TAIHAN recognizes securing and fostering creative personnel as the main root of corporate development. We realize the ideal future and current organizational behaviors through talent, to achieve the company’s vision and goals. TAIHAN looks for global people who drives innovations of individuals and organizations, and creates values for the clients and the company. Through our talent culture, we share role models to not only create common goals for growth and motivations, but also convey the company’s management beliefs and core values.

Secure New Talents Through Strategic Recruiting

Individual And Organizational Growth Through COP (Community of Practice)

Growing together, win-win corporate culture

TAIHAN is a global company that creates more than 60% of the total revenues outside of Korea. To enhance responsiveness of increasing overseas orders and jump to a “global leading” company with aggressive overseas expansion, we focuses on fostering personnel with global competitiveness. Through Global biz skill and English PT programs, we continuously strive to enhance our people’s understanding of other cultures, business manners, communication skills, nego-tiation skills, and PT skills, to foster employees with global mind, and capabilities to promote TAIHAN’s technology and products.

TAIHAN’s labor and management, based on mutual trust, have overcome and united against big and small external and internal problems through win-win labor-management corporate culture. This corporate culture leads to a win-win management, enhancing productivity and improving product quality. With a healthy labor-management relationship, our company has been successfully competing in the global markets without any labor-management disputes for the last 30 years.

Training Personnel With Global Competence

Labor-Management Win-Win Corporate Culture

People

HarmonizingManagement

CompensatingManagement

AchievingManagement

EncouragingManagement

Harmonizing Management Building an organization with one accord through the vitalization of internal communication

Compensating Management

Pursuing pride and fruitful endeavors through compensation and encouragement for each task

Achieving Management

Promoting the spirit of taking ownership and responsibility by delegating authority needed for the achievement of goals



Employee volunteer activities

Elderly care service (2), childcare service (2), Living environment improvements (2), Vegetable TAIHAN (4), junior electric classes (12)

Since the 1970s, TAIHAN has been consistently sharing with the underprivileged, under the slogan ‘creating a happy world together’. The company has managed a ‘1 person-1 volunteer activities’ system where all employees must participate in volunteer activities at least once a year. Not only the employees, but also the families of the employees get together to operate social contributions to maximize the value of sharing.

Going forward, TAIHAN will never forget that this company exists thanks to all the endeavors of the stakeholders, including clients, partners, the community, and employees. We will prioritize the company’s social responsibilities and do our best to fulfill them.

Social Contributions In 2015

Blood Drive of Love

To fulfill our duties to society, TAIHAN have conducted the ‘Blood Drive of Love’ twice in 2015. This event was held in Anyang and Dangjin, where our factories are located. This event helps provide extra blood through employees’ blood donations. Collected donation certificates were donated to the Red Cross, to help the underprivileged that are incapable of receiving medical benefits. TAIHAN will continue to operate blood donation campaigns.

Local environment cleaning

To socially contribute in the Dangjin area where our factory is located, we have conducted local environment cleaning activities, 4 times in 2015. Environmental cleaning activities for

Support for the underprivileged

In cooperation with the community’s welfare facilities, TAIHAN regularly runs social contribution activities once a month. We visit families with living environmental and hygiene problems because of disabilities, in order to improve their living conditions; and we also provide diverse experiences for children in low-income families. In addition, we participate in eldenly care services and kimchi making services for the community’s elders. In the future, we will continue to improve the quality of life of the underprivileged around us, and realize the true meaning of sharing.

Volunteer Activities of Executives And Employees

Social Responsiblity

Dangjin’s coastline and labor-management joint neighborhood cleaning projects were held to create a clean environment. TAIHAN has always given deep consideration as to where the helping hand is most needed in the local neighborhood, and has continuously endeavored to improve and protect the local environment.

Junior electric classes

TAIHAN hosted ‘Junior electric courses’ 12 times throughout 2015. This event teaches elementary school students in Dangjin about the concepts of electricity. Employees in TAIHAN become teachers for a day to teach stimulate curiosity and promote interest in science in students of Dangjin area, who have less access to scientific experiences.

Working Together To Create

A Happier World

Support for fostering talent Support for advancing science & technology

Education

A company coexisting with society- Volunteer Activity of Employees

- Corporate Donations

Welfare

Art & Culture

Developing art and cultureExpanding the art and

culture communityWorking together to make

a happier world

1 Contribution per person

Motto Mission


Industrial health and safety commission

TAIHAN has hosted an industrial health and safety commission each quarter, to enhance workers’ health and safety awareness, create an optimal working environment, and adhere to industrial health and safety regulations. Decisions made in the committee are applied to collective agreements and industry safety regulations, to be adhered to by the laborers and employees.

Accident-free campaign

TAIHAN runs an accident-free campaign every 6 months to enhance workers’ safety awareness. Through activities such as safety slogan chants, rule posts, and promotions, we encourage all employees to be involved in accident-free activities and enhance safety awareness levels.

Joint labor-management environment safety inspections

To discover risk factors and enhance working environment, the company regularly runs joint labor-management environment safety inspections and creates an accident-free working business environment. By inspecting safety activity measures and improving substandard safety measures, we our doing our best to prevent accidents and create a safe working environment.

In-house safety index management

Taihan is making every effort to ensure the safety of each employee and create work places free of hazards and diseases

Health And Safety Measures


Employee health promotion

To continuously manage employee health, our company carries out regular checkups and hazard inspections. For employees with any symptoms, we conduct regular surveys and treatments to prevent aggravation of the illness. Furthermore, we realize employee health values through health management, health promotion, and industrial hygiene management.

Stronger emergency response capabilities

To prevent emergency from disasters, fire, and explosions, eliminate emergency causes, and minimize environmental safety health influences, we conduct regular training and health & safe-ty activities to ensure workplace safety.

TAIHAN reflects safety and health issues in all of its management process, including training, safety inspections, and emergency responses. For continuous improvements and management, our company not only utilizes PSM(Process Safety Management) but also ESH systems such as ISO-14001 & OHSAS-18001.

Health And Safety Management System

Accident-free campaign Emergency response trainingJoint labor-management environment safety inspection Health checkup for employees

Safety And Health Management

Based on a corporate philosophy of humanism management instruction, TAIHAN has managed a health and safety management system. Individual employees actively perform safety and health activities to realize a workplace that is accident-free.

Number of Industrial Disaster

Risk Reduction Activity

(Corporate safety indicators(%) = number of industrial accidents/number of workers *100)

Ratio of industrial disaster in the same businessOur Company's ratio of industrial disaster

Standard

Elimination and improvement ofdanger factors

Goals

200

2015 Results

222

Achievement (%)

111%

Notes

Elimination and improvement ofsafety accident factors from unsafe actions/conditions

3

2013 2014 2015

0.41%

0.39%

0.40%

0.14%

0.32%

0.13%

1 1

ESH INTEGRATED MANAGEMENT SYSTEM


Vision

Goal

Strategy

Vision And Goal

1. Improvement measures to produce and develop safe products2. Quantified goals and management3. Adherence to related laws and other requirements4. Continuous improvements and anti-pollution activities5. Resource recycle and reduction

Safety and health activities for a better life

Realize customer satisfaction by providing safe products and services, and pursuing healthy, eco-friendly, and humane corporate activities through resource management.

Risk Controland Prevention

PartnersManagement

Plan

ning

Practice

Improvement

Risk Evaluationand ControlRegulation

Control

CapabiltyManagement

Infomation andCommunication

ProcessManagement

Follow-upManagement

Evaluatiom and Improvement

AchievementManagement

Evaluation

We have planted environmental remediation species by securing a buffer space(14m wider) to workplace parameters. Regarding pollutants created during production processes, we minimize their environmental consequences to nearby residential areas by treating the pollutants with higher standards than the legal requirement.

Disposal sludge

Oil waste

Solid waste oil

Lead ash

Other waste

Dust

Paint waste


We currently manage 5 initial water treatment facilities and 2 water retention areas. The southwest retention area is established underground to utilize the surface space as greenery.

The southeast area is formed as an ecological wetland. Waste water is physically/chemically treated and recycled. Sewage is initially treated in a sewage disposal plant, released to ecological wetlands (detention pond) to reduce pollutants for final release.

In 2015, 80% of 2,789 tons of waste was recycled or reused as resources. Other waste is burnt or filled and safely treated.

We have contributed to the realization of a resource circulation society by reducing wastes and increasing the amount of recycled materials.

Air

Waste

WaterEnvironmental Management

The environment is very important to the life of human beings and to the sustainable management of a company. TAIHAN is leading the way in preserving the environment through the energetic practice of the developing of eco-friendly products, energy saving through process improvement, contamination prevention, resource recycling and reduction, etc. TAIHAN implemented this strict environmental system so that the next generation can enjoy a happier and more valuable life.

Category

Allowed Cischarge

Aimed Concentration

Discharged Level

Discharge To Reference Level

Dust

40mg/m

5.8mg/m³

10mg/m³

14.5%

NOX

200ppm

5.7ppm

10ppm

2.9%

SOX

400ppm

5.9 ppm

10ppm

1.5%

HCL

6ppm

0.2ppm

0.6ppm

3.3%

Pb

10mg/m³

0.06ppm

1mg/m³

1.0%

2010

4.1 3.20.7

22.2

1.3

12.8

6.6

1.60.9 0.9 1.6

2.5

0.8 1.4 2.01.7 2.5

30.8

2012 20142011 2013 2015

Dust Sulfur oxides Nitrogenous compound

Discharged Air Pollutants

(Unit : Ton)2010 2011 2012 2013 2014 2015

139

194

118

105

83

97

Synthetic resin waste

Timber waste

Ceramics waste

Waste water process sludge

Adsorbent waste

General Waste Treatment

2010 2011 2012 2013 2014 2015

500,000

375,000

250,000

125,000

Water Usage

117

164

100

22

29

18

0.03 0.61 0.21

84

63

75

2119 21

00.57 0.77

Recycled Total by-product levelReclamation Incineration level

(Unit : KWON)


Designated Waste Treatment

(Unit : Ton)

83%

15%1% 1%

14%

6%5%

2% 1%

14%

58%

Greenhouse gas inventory construction

TAIHAN has strived to establish and manage greenhouse gas emissions. We have established greenhouse gas inventory since 2005, and managed them with 3rd party certifications since 2007. Specifically, we have developed a methane gas emission factor of indirect emissions during extra high voltage cable isolation process, and received a 3rd party verification. We not only established greenhouse gas inventory of TAIHAN’s Dangjin factory, but also with all other factories of TAIHAN. Through diverse reduction activities, the company has established and met reduction goals each year.

* Control year: Average discharged green house gases between 2012~2014

Green House Gas And Energy Control

2012

73,9

0636

,693

2014

50,1

40

42,2

80

44,3

06

2011

50,1

4036

,993

2013

38,7

10

37,5

29

2015

Allotment Emission quantity

Discharging Greenhouse gases

Mid/long-term green gas and energy

management goals

25% (BAU) greenhouse gas emission reduction until 2020, compared to the 2012~2014 average

Climate change response team

To actively respond and create new opportunities to offset climate change, the company has organized and managed a climate change response TFT since March 2009.

The TFT executes carbon reduction goals and execution plans. The team will exert continuous efforts to create real values by implementing diverse climate change responses such as eco-friendly products and utilization of smart grids.

In 2016, the company seeks to replace all of its lighting to LED, in order to reduce power usage and respond to greenhouse gas emissions trading.

The Way to a Global Leading Company30 2015 Annual report 31

Climate changecoundterpart TFT

Climate changecounterpart office

Productionsubcommittee

Technologicaldevelopment

subcommitteeNewly growing item

developmentRenewable energy

development

Low-carbonenergysystem construction

Green factoryrealization opment

Participation in the emission trading sheme

TAIHAN has engaged in emissions trading as it has been selected as an emissions trading company since 2015.We endeavor to go beyond basic energy and greenhouse gas emission reduction activities; the entire company produces energy reduction plans and synchronizes with each team’s KPI to meet reduction goals.

Energy-saving activities

Central electricity control system using IFS emission reduction

- IFS(Intelligent Factory System) is a system, which we have established in 2012. It provides optimal business environment, re duces energy and greenhouse gas, and improves ubiquitous building values. - Through IFS, we have minimized heating/electricity usage by utilizing efficient energy systems through automatic equipment and remote power monitoring inspections.- Automatic office lights-out: 12:00 ~13:00, 18:00 ~ 19:00- Central cooling/heating control: Summer - 26℃, Winter - 20℃

Replacement to clean energy

We have replaced our original B/C boiler (efficiency : 87%) with a smoke tube LNG boiler (efficiency : 92%) to minimize greenhouse gas and air pollutant emissions.

Highly efficient facilities

Compressors of each factory (850HP x 3) are replaced reciprocatingturbo type & screw type

Central electricity control system Replace to clean engery High efficient facilities

Financial Section

We have audited the accompanying separate financial statements of Taihan Electric Wire Co, Ltd. (the "Company"), which comprise separate Matemems of financial position m of December 31, 2015. separate statements of comprehensive income, separate statements of changes hi shareholders' equity and separate statements of cash flows for year then ended. and a summary of significant accounting policies and other explanatory information.

Management Responsibility for the Separate Financial StatementsManagement is responsible for the preparation and fair presentation of these separate financial statements in accordance with International Financial Reporting Standards adopted by the Republic of Korea (“K-IFRS”) and for such internal control as management determines is necessary to enable the preparation of separate financial statemema.nt are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility Our responsibility is to issue a report on these separate financial statements based on our audits. conducted our audits in accordance with Korean Standards on Auditing. more standards that we comply with ethical requirements and plan and perform the audit to obtain he assurance about whether the separate financial statements are free from material

An audit involves performing procedures to obtain audit evidences about the amounts and disclosures in the separate financial statements. The procedures selected de-pend on the auditor’s, judgment, including the assessment of the risk of material misstatement of the separate financial statement, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant to the entity's preparation and fair preparation of the separate financial statements in order to design audit procedures that arc appropriate in the circumstances, but not the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the separate financialbstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

To the Shareholders and Board of Directors of Taihan Electric Wire Co., Ltd.

Emphasis of Matter

Other Matter

Without modifying our opinion, we draw attention to the following: As described in Note 22, for the year ended December 31, 2015, the Company reduced its capital of KRW 503 billion without consideration, increased its paid-in capital of KRW 385.2 billion and converted KRW 17.7 billion of preferred stock into common stock.

As described in Note 17 and Note 36, the business restructuring agreement with creditors made in 2012 has terminated during 2015. According to debt adjustment followed by the termination of agreement, borrowing of KRW 80 billion was converted into common stocks and remaining debt of KRW 612 billion was changed its borrowing term(repayment delay until December 31. 2020 and application of annual 2.5% interest rate).Gain on debt adjustment of KRW 111.3 billion was accounted as a result.

As described in Note I, NIKE INC. became a major shareholder (71.51%) of the Company through investing of KRW 300 billion in cash by way of issuance of new shares.

As described in Note 10, net impairment loss of KRW 138.8 billion on investment in subsidiaries was accounted in 2015.

As described In Note 35, net receivables from related party transactions as of December , 2015 is KRW 54.9 billion (receivables of KRW 806.8 billion and allowance for doubtful accounts of KRW 751.9 billion) and net receivables from related party transactions as of December 31, 2014 is KRW 49.7 billion (receivables of KRW 834.8 billion end allowance for doubtful accounts of KRW 785.1 billion).

As described in Note 40, the Company made a decision of merger with its subsidi-ary, TEC&Co Co.. Ltd., in accordance with a resolution of the board of directors on laceary 22, 2016. The date of merger is May 2, 2016.

The separate statements of financial position as of December 31, 2014 and the related separate statements of comprehensive income, changes in shareholders’ equity and cosh flows for the year than ended were audited by Deloide Anjin LLC; and in their report dated March 20, 2015, they expressedunmodified opinion on these financial statements.

INDEPENDENT AUDITORS’ REPORT

March 17, 2016

Based on a Report Originally Issued in Korean

Notice to Readers This report is effective as of March 17, 2016, 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.


Separate Statements ofFinancial Position

As of December 31, 2015 and 2014

KOREAN WON (In thousands) KOREAN WON (In thousands)

FINANCIAL SECTION


ASSETS 2015 2014

Current assets : Cash and cast equivalents 41,976,648 30,817,919 Short-term financial instruments 100,876,641 4,267,457 Current available-for-sale financial assets 3,268,627 3,268,627 Accounts receivable 172,694,901 222,538,991 Short-term loans 36,996,119 20,014,937 Other current financial assets 21,373,094 23,312,380 Inventories 116,253,024 127,060,516 Income tax receivable 403,605 571,043 Other current assets 20,794,797 35,742,770 Non-current assets held for sale - -

Total current assets 514,637,456 467,594,640

LIABILITIES AND SHAREHOLDERS’ EQUITY 2015 2014

Current liabilities : Accounts payable 113,732,333 270,766,274 Short-term borrowings 118,233,126 151,123,839 Current-portion of long-term borrowings 47,686,926 361,825,203 Other current financial liabilities 77,403,251 91,157,711 Current provision 18,165,457 55,014,197 Other current liabilities 43,827,785 51,420,125

Total current liabilities 419,048,878 981,307,349

Non-current assets :

Available-for-sale financial assets 51,871,899 51,666,998 Long-term loans 4,000 26,134 Investment in subsidiaries, associates and joint ventures 40,510,559 171,930,179 Other financial assets 24,955,269 5,620,614 Property, plant and equipment 485,252,850 504,840,319 Intangible assets 17,817,382 19,353,512 Investment property 655,878 661,459 Deferred tax assets 59,133,464 63,310,252

Total other non-current assets 680,201,301 817,409,467

Total assets 1,194,838,757 1,285,004,107

Non-current liabilities:

Long-term borrowings 412,513,155 248,487,342 Defined benefit obligations 15,736,860 12,571,579 Non-current provision 2,854,082 5,028,719 Other financial liabilities 2,647,054 1,794,153 Total non-current liabilities 433,751,151 267,881,793

Total liabilities 852,800,029 1,249,189,142

Shareholders’ equity :

Capital stock 419,544,615 519,641,713 Other contributed capital 404,802,904 (58,334,488) Other components of equity 4,206,232 4,114,428 Accmulated deficit (486,515,023) (429,606,688) Total shareholders' equity 342,038,728 35,814,965

Total liabilities and shareholders' equity 1,194,838,757 1,285,004,107

FINANCIAL SECTIONFINANCIAL SECTION

KOREAN WON (In thousands)KOREAN WON (In thousands except per share amounts)

Separate Statements ofComprehensive Income

Separate Statements of ChangesIn Shareholders’ Equity

For the Years Ended December 31, 2015 and 2014 For the Years Ended December 31, 2015 and 2014


2015 2014

Sales 1,360,382,694 1,617,496,059Cost of sales (1,241,453,883) (1,493,869,493)Gross profit 118,928,811 123,626,566

Selling and administrative expenses (82,045,803) (96,982,204)Operating income 36,883,008 26,644,362

Capital stockOther

contributedcapital

Other components

of equityAccmulated

deficit Total

Balance at January 1, 2014 491,586,002 481,192,372 3,533,338 (703,780,270) 272,531,442

Net loss - - - (257,802,031) (257,802,031)

Gain (loss) on valuation of AFS - - 581,091 - 581,091

Acturial gain (loss) - - - (3,148,450) (3,148,450)

Increase of paid-in-capital 28,055,710 (4,402,797) - - 23,652,913

Disposition of deficit - (535,124,063) - 535,124,063 -

Balance at December 31, 2014 519,641,712 (58,334,488) 4,114,429 (429,606,688) 35,814,965

Capital stockOther

contributedcapital

Other components

of equityAccmulated

deficit Total

Balance at January 1, 2015 519,641,712 (58,334,488) 4,114,429 (429,606,688) 35,814,965

Net income - - - (57,211,099) (57,211,099)

Gain (loss) on valuation of AFS - - 91,803-

91,803

Acturial gain (loss) - - - 302,764 302,764

Reduction in capital without consideration (502,979,832) 502,969,899 - - (9,933)

Increase of paid-in-capital 385,154,735 (22,702,404) - - 362,452,331

Debt-for-equity swap 17,728,000 (17,728,000) - - -

Stock option - 597,897 - - 597,897

Balance at December 31, 2015 419,544,615 404,802,904 4,206,232 (486,515,023) 342,038,728

Non-operating income and expenses :

Financial income 56,507,382 20,566,377 Financial expense (245,044,598) (212,302,933) Other non-operating income 173,543,982 43,789,144 Other non-operating expenses (74,918,845) (65,455,653)

(89,912,079) (213,403,065)

Net income (loss) before income tax (53,029,071) (186,758,703)

Income tax expense 4,182,028 71,043,328

Net income (loss) (57,211,099) (257,802,031)

Other comprehensive income (loss): Items not to be reclassified subsequently to profit or loss: Acturial gain (loss) on defined benefit obligations 302,764 (3,148,450) Items to be reclassified subsequently to profit or loss: Gain on valuation of AFS financial assets 91,803 581,091

Comprehensive income (loss) (56,816,532) (260,369,390)

KOREAN WON

Earnings (loss) per share : Basic earnings per share (299) (8,022)

KOREAN WON (In thousands)

FINANCIAL SECTION Separate Statements ofCash Flows

As of December 31, 2015 and 2014

KOREAN WON (In thousands)


2015 2014

Cash Flows from operating activities : Net income (loss) (57,211,099) (257,802,031) Non-cash flows adjustment 75,129,933 299,429,725 Changes in operating assets and liabilities (115,210,484) (77,043,605) Net cash flows from operations (97,291,650) (35,415,911) Interest received 1,963,572 1,998,382 Interest paid (28,790,984) (32,980,137) Dividends received 465,763 189,806 Income taxes refund (paid) 50,909 (673,294) Net cash provided by (used in) operating activities (123,602,390) (66,881,154)

2015 2014

Cash Flows from Financing Activities : Increase of short-term borrowings 594,776,275 592,927,891 Increase of long-term borrowings 18,000,563 33,388,000 Increase of paid-in-capital 300,000,000 - Repayment of short-term borrowings (484,937,407) (482,589,257) Repayment of current portion of long-term borrowings (136,720,475) (66,679,187) Decrease of leasehold deposits received (461,100) - Common stock issuance costs (3,548,549) (138,329) Net cash provided by (used in) financing activities 287,109,307 76,909,118

Cash Flows from Investing Activities :

Decrease of short-term financial instruments 17,838,162 36,535,574 Disposition of current AFS financial assets - 60,000 Disposition of non-current AFS financial assets 4,792,795 - Disposition of AFS financial assets - 27,596 Decrease of short-term loans 1,436,968 2,793,000 Decrease of long-term loans 5,589,923 5,465 Disposition of investments in subsidiaries 1,270 2,121,500 Decrease of other financial assets 2,403,460 938,239 Disposition of property, plant and equipment 355,725 1,405,189 Increase of short-term financial instruments (129,777,874) (26,392,059)

Acquisition of current AFS financial assets - (60,000)

Acquisition of AFS financial assets (5,248,737) (955) Increase of short-term loans (35,799,460) (18,040,098) Increase of long-term loans (4,000) (31,361) Increase of other financial assets (1,632,516) (1,138,865) Acquisition of property, plant and equipment (2,993,180) (4,866,568) Acquisition of intangible assets - (1,590,380) Acquisition of assets held for sales (2,782,383) - Acquisition of investments in subsidiaries (7,414,224) (3,056,806) Net cash provided by (used in) investing activities (153,234,071) (11,290,529)

Increase (decrease) in cash and cash equivalents 10,272,846 (1,262,565)

Cash and cash equivalents at beginning of the year 30,817,919 31,382,620Effect of exchange rate on cash and cash equivalents 885,883 697,864Cash and cash equivalents at end of the year 41,976,648 30,817,919

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