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Dear Shareholders

CEO Jaeho Ko
Dear shareholders,

The year 2013 was a difficult one in and out of the company. But despite this situation, we at DSME established a grand vision to become the ‘World Leader in Ocean Technology.’ Concerted efforts were made to improve financial soundness, cultivate technical professionals, and upgrade our management system. As the result, our sales and operating income stood at KRW 14.08 trillion and KRW 424.2 billion on a non-consolidated basis in 2013, respectively. New orders were USD 13.6 billion. We are proud to say we are the only one in the industry to achieve over USD 10 billion in new orders for 4 consecutive years.

Business conditions for 2014 are by no means favorable. Despite expectations on a slight recovery in commercial ship market and the status quo in offshore market, the competition will be further intensified due to the prolonged low growth trend around the globe. Also, the recent stronger Korean currency will weaken our competitiveness in exports.

However, the Company has set higher management goals for 2014 - more than KRW 15 trillion in sales and USD 14.5 billion in new orders - to outplay competitors and secure sustainable growth and stable profit sources. We are fully prepared to realize these goals and gain greater trust from the market.

The year 2014 will be a very important period for our Company. To achieve actual progress in evolving into the world’s best EPCIC player in the fields of shipbuilding and offshore plants, we will devote ourselves to securing higher engineering capabilities and developing new markets in the world.

With those in mind, DSME will promote the following tasks for the year.

First, we will strictly implement ethical management.
To raise our status as a global leader to a higher level, we are committed to arranging strict ethical standards and exterminating corruption and unethical practices through a zero-tolerance principle. We will also ensure our company is clean not only on ethics but also in safety and environment by thoroughly complying with principles and regulations.

Second, we will continue to lead in technology and enhance our core capabilities. The progress we made in 2013 has provided the foundation for our progression to becoming an EPCIC player in the fields of shipbuilding and offshore plant. The challenge before us this year is to unleash the full potential of the Company to deliver on our promises. We will enhance our product competitiveness through technological superiority and lead our company in its growth for many years to come.

Third, we will focus on creative innovation and cost competitiveness improvement. Our company has remained competitive and has won new orders thanks in large part to our solid relationships with our major clients, despite difficult financial times. All employees at DSME will make a concerted effort to continuously improve the ways we work and think, and stimulate creative thinking and innovation to minimize cost and maximize profit.

Last, we will put an emphasis on creating sustainable value for stakeholders. When everyone wants to join our company, employees want to work together until retirement, shareholders are satisfied with the company’s value, and suppliers and local communities enjoy shared success, we can take pride in where we work. In this regard, we are committed to building an advanced corporate culture in which all employees can communicate and respect each other, and consequently, deliver hope and happiness to all stakeholders. Harmony between labor and management and shared growth with suppliers must be promoted.

Our company will continue to concentrate on leading technological innovation and reinforcing our core capabilities in the long-term just beyond generating short-term results, through which we will increase our corporate value and deliver returns to shareholders.

In 2014, we will steer DSME with an emphasis on evolving into the ‘World Leader in Ocean Technology’

In closing, let me sincerely thank you again for your support. I hope you and your families enjoy good fortune and health in the days ahead.

Thank you.

March 28, 2014
President & CEO JaehoKo