PSG033-1107

www.poongsan.co.kr

POONGSAN | ANNUAL REPORT 201060-1, 3-GA, CHUNGMURO, CHUNG-GU, SEOUL, KOREA TEL: 82-2-3406-5114 FAX: 82-2-3406-5400

2010 ANNUAL REPORT

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ChallengePoongsan overcomes allobstacles tosuccess.

CreatePoongsan generates value ineach of our operations.

ChangePoongsan constantly seeksways to improveour company, our industry, our world.

ConfirmPoongsan consistently checksto ensure total quality in our work.

CommunicatePoongsan communicates openly with our customers, employees, partners, and shareholders.

Poongsan Corporation can and will contribute to human progress through our

superior products, employment opportunities, and uncompromising service.MISSION

Poongsan will set the global standard for excellence in everything we do.VISION

03 POONGSAN WAY

04 CHAIRMAN’S MESSAGE

06 PRODUCT INFORMATION

38 COMPANY & FINANCIAL INFORMATION

54 ORGANIZATION & BOARD OF DIRECTORS

TABLE OF CONTENTS

CORE VALUES

The confidence our investors so generously extended to Poongsan encouraged us to

work that much harder and resulted in an impressive rise in the price of Poongsan’s

share. Share price rose steadily throughout the year, making Poonsgan’s stocks one

of the best performers on the Korean Stock Exchange in 2010. Similarly, Poongsan

Holdings also recorded an impressive rate of growth in market value.

All of these achievements were made possible by the unwavering dedication and dili-

gence of our employees. Focus on quality, efficiency, customer service and research

and development made Poongsan products a standout amongst our competitors and

the product of choice by customers. Our global market reach - already strong and

growing stronger - continues to reach more and more businesses around the world.

Looking ahead to 2011, we hope to build on the strong results of this year. Poongsan

will continue to focus on product quality, production efficiency, customer service and

research and development as we meet the challenges and opportunities of existing

and emerging markets. 2011 promises to be an exciting year of growth and develop-

ment not only for Poongsan but also for the entire global economy as the world con-

tinues its steady economic recovery.

Yet, in the end, the true measure of Poongsan’s success is the satisfaction of our

shareholders and customers. As we strive to continually elevate our global position

both as a business and as a responsible global citizen, we always have your expecta-

tions and satisfaction as our first and foremost objective. In closing, I thank you,

once again, for your steadfast support and guidance.

Yours truly,

Jin Roy RyuChairman and Chief Executive OfficerPoongsan Corporation

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To Our Valued Customers, Partners and Shareholders,

Following the turbulent global market of 2009, I am pleased to report that

2010 witnessed a year of strong performance by Poongsan. Both sales and

profits were robust as our products reached new markets and consolidat-

ed their position in others. Supported by increasing demand from the

defense, automotive and IT industries and coupled with an overall strong

economic performance across Asia, Poongsan is committed to maintain

and build on the strong results of 2010.

In an effort to further focus our effort on our core copper and defense

businesses, Poongsan examined its structure and related subsidiaries.

This resulted in the sale of Poongsan Microtech and the creation of a joint

venture with LIG Nexone. LIG Poongsan Protech will focus on developing

new rocket propellant.

Poongsan Group as a whole in 2010 set record-breaking levels in sales vol-

umes for both the copper and defense business sectors. The Group

recorded KRW 3.4 trillion, or US$ 3.1 billion, in sales. 2010 profits for the

Group set a record high of KRW 215 billion before tax.

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Jin Roy RyuChairman & Chief Executive OfficerPoongsan Corporation

CHAIRMAN’S MESSAGE

COIN BLANKS

FABRICATED NON-FERROUS METAL PRODUCTS

Sheets & Strips

Leadframe Alloys

Pipes, Tubes & Fittings

Rods, Bars & Wires

Alloy Tubes

Titanium & Stainless Steel Tubes

Stainless Steel Strips

Precision Forgings

DEFENSE PRODUCTSMilitary Ammunition

Components of Ammunition

COMMERCIAL AMMUNITION

MACHINERY

RESEARCH & DEVELOPMENT

PRODUCTINFORMATION

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Over the past forty-three years, Poongsan has earned a reputation as a trusted supplier

of coin blanks to the global market. The company was designated as the Republic of

Korea's sole coin blank manufacturer by the Korea Minting and Security Printing

Corporation in 1970. Poongsan first exported coin blanks to Taiwan in 1973, and since

then has supplied its coin blanks to over 60 countries on 6 continents. As a recognized

participant in the production of Euro coins, Poongsan not only continues to supply coin

blanks to the EU market but also has, in collaboration with major European Mints,

expanded to include Slovenian Euro coin blanks in 2006 and Cyprus Euro coin blanks in

2007. Additionally, Poongsan continued its global market expansion with sales to

Denmark, Norway, Chile and Peru. Today, 38 years after its first export, Poongsan is the

world's largest coin blank manufacturer, accounting for more than half of the world's

coin blank trade volume.

Poongsan casts over 50 different types of coin blank materials - from brass, nickel sil-

ver, cupronickel, and aluminum bronze to other special copper alloys. In recent years,

Poongsan has concentrated on meeting the global demand for bi-metal, clad metal and

nordic coin blanks. Poongsan has also expanded its coin blank production to include

stainless steel coin blanks.

Poongsan also operates special facilities dedicated to the production of precious metal

coin blanks for commemorative coins and medallions.

With its expertise of forty-three years, Poongsan is a leader in the global market for pre-

cious metal blanks. Poongsan has supplied precious metal blanks for a variety of domestic

and international events which include the 1988 Olympic Games, the 2002 FIFA World

Soccer Game and the Asia-Pacific Economic Cooperation (APEC) in 2005. 3.

Coin Blanks“One Stop Service”from melting old coin scraps toproducing new coin blanks enables Poongsan to be anundisputed world leader in the coin blank industry.

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A large part of Poongsan’s success in supplying its customers with superior products

in a timely manner lies in its integrated production system. A sophisticated automatic

gauge control system precisely manages the thickness of strips used to produce coin

blanks while simultaneously managing the weight and surface of coin blanks to meet

the particular specifications of each of Poongsan's customers. Similar automated pro-

duction systems are used for each process of melting & casting, rolling, blanking,

testing and packing. Poongsan performs quality tests at every stage to ensure that

every product exceeds the expectations of its customer. Poongsan’s commitment to

quality and service is reflected in the latest technological advances, state-of-the-art

facilities, and the most effective processes that are used in its plants worldwide.

To further enhance Poongsan's efficiency and effectiveness of production and delivery,

Poongsan works closely with a global production network that spans the Americas

and Asia. With a production capacity of 20,000 tons of copper alloy products, Siam

Poongsan, established in October 2000, is strategically located in Thailand to improve

Poongsan's ability to supply coin blanks to countries in Southeast Asia. PMX,

Poongsan's affiliate in the United States, manufactures materials used for minting

coins in various countries, including coin blank strips for the dollar coins in the United

States. With an annual production capacity of 120,000 tons of copper and copper alloy

strips, PMX has emerged both as a trusted supplier of coinage strips and as an impor-

tant supplier of industrial-based material.

With sophisticated technology and uncompromising dedication to excellence,

Poongsan prides itself on consistent and timely delivery of its products at competitive

prices. Uncompromising focus on superior products, reliable performance and cus-

tomer satisfaction has cultivated strong and loyal relationships between Poongsan

and its customers. The ability to network globally combined with an effective “one stop

service” approach to production strategically positions Poongsan to further strength-

en its global presence expanding into new markets and safeguarding its place as the

world’s premier manufacturer of coins.

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Poongsan’s rolled products vary in size ranging from 630mm to9.2mm in width and from 2.4mm to 0.05mm in thickness.

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Poongsan takes pride in its efficiently and effectively integrated production system that

includes the world's largest shaft furnace, hot mill, cold rolling mill and slitting pro-

cessing station. Housed in Poongsan's Ulsan plant, this production system allows for

the manufacture of high quality, competitive products, each of which undergoes rigor-

ous quality inspection using the latest equipments available to ensure accuracy in size

and superior quality both in physical and surface properties. Such detailed attention

from production to quality control results in Poongsan's ability to consistently meet the

specific, individual needs of Poongsan's customers.

Poongsan produces a diverse range of copper and copper alloy sheets and strips for use

across many industries. This includes use in interior and exterior application for both

commercial and residential real estate, as well as use in construction, machinery, auto-

mobile, electrical and electronics, semiconductor, and telecommunication. These rolled

products are available in copper, brass, cupro-nickel, phosphorous deoxidized copper,

phosphor bronze, nickel silver, aluminum bronze, and other high performance alloys.

In addition to copper and copper alloy products, Poongsan also produces tin-plated

strips, multigauge strips and stainless steel strips. As with rolled products, these strips

are manufactured using state-of-the-art methods to ensure the highest quality prod-

ucts for customers. Poongsan's tin-plated, multigauge, and stainless steel strips boast

uniform plating thickness, superior surface brightness, excellent welding and corro-

sion-resistant property factors and a long-lasting plating layer that resists deteriora-

tion. As a result, they are widely used in switches, connectors, terminals, and various

other electronic parts.

Sheets & Strips

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Using its forty years of experience in fabricated copper, Poongsannow offers new high-tech materials for use in semiconductor leadframes and connectors.

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Having already developed various copper alloys, Poongsan is now offering new copper

alloys - PMC 102 and PMC 102M - that contain nickel, silicon and phosphorus. These alloys

contain the ideal properties required in semiconductor leadframes - superior electrical

and thermal conductivity as well as high strength and thermal resistance at high tempera-

tures. Poongsan maintains patents for these alloys in the U.S., Japan and the United

Kingdom.

In addition to PMC 102, Poongsan supplies other copper alloys such as C194, PMC 90,

PMC 90 (multi-gauge), C1100 and C1220. The properties of these versatile materials are

ideally suited for use in leadframes, transistors, power-transistors and heat sink compo-

nents.

In order to ensure the production of high quality leadframe alloys, Poongsan maintains

dedicated production lines equipped with casting furnace, rolling mill, tension leveler,

tension annealer and slitting at its Ulsan plant.

Leadframe Alloys

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With the largest facility in the country, Poongsan is Korea’s leadingcopper tube manufacturer.

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Poongsan produces and supplies to both domestic and international customers various

copper tubes for different purposes ranging from plumbing and housing applications to

ACR tubes for use in air conditioners and refrigerators. Poongsan also produces wrought

copper pressure fittings for plumbing, heating and related mechanical applications.

Poongsan produces copper pipes, tubes and fittings in various sizes to meet the quality

and precision specified by its customers. Every precaution is taken to deliver products

that exceed the customer's expectations. Such features as a high-performance Tube

Reducer and STD line ensure dimensional accuracy, outstanding physical properties and

excellent surface conditions. At each step of production, technicians conduct a series of

tests that include electromagnetic and pneumatic assessments to guarantee high-quali-

ty products.

Copper tubes display several characteristics ideally suited for their multifaceted use.

First, the non-corrosive property of copper tubes increases the durability of buildings.

Second, the flexibility of copper tubes better withstands movements of buildings in gen-

eral and, in particular during earthquakes. Third, high thermal conductivity of copper

tubes makes them attractive for water-heating, heating, gas and drainage pipes. Fourth,

unlike most metals, copper does not break easily in low temperatures, making them

ideal for use in temperature-related products such as air conditioners and refrigerators.

Finally, the inner-grooved form of certain copper products maximizes energy efficiency,

making them all the more attractive for use in temperature sensitive products.

Poongsan possesses KS, ISO 9001, ANSI/NSF 61, AS 3688 and JIS H3401 certifications

and is committed to manufacturing quality products in accordance with international

standard specifications. At every step, Poongsan emphasizes continuous improvement in

quality and efficiency to satisfy each of its customer's requirements and deliver the best

products on the market.

Pipes, Tubes & Fittings

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Using a 4,000 ton extruding press, rod blocks and a combined drawing machine, Poongsan produces bars, rods and wires withdiameters that range from 2.0mm to 105mm.

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Poongsan produces a full range of high-quality copper and copper alloy rods, bars, and

wires. In 2006, Poongsan developed and obtained a patent for the production of lead free

brass bars and wires. Bars are widely used in bolts and nuts, valves, various machinery,

electrical parts and accessory components for automobiles and industrial equipments.

Poongsan's free cutting brass bars boast superior welding and cutting capabilities and

are popular for use in nuts and bolts, connectors, and electrical and electronic parts.

Additionally, Poongsan brass wires are used in specialty products such as EDM wires.

Presently, Poongsan is expanding its presence in the high-purity oxygen-free copper

rods market.

Poongsan prides itself in the high quality products that it delivers to its customers. Its

automated production line by product type ensures that the exact specifications

requested by each of its customers are always achieved. Through strict quality control

procedures from casting to chamfering to inspection, Poongsan focuses on quality from

start to finish.

Rods, Bars & Wires

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Poongsan produces a variety of copper alloy tubes well suited for use by both domestic

and international customers in their large-scale industrial facilities. Over the years,

Poongsan has gained international recognition for its technical ability and product quali-

ty. In 1993, Poongsan received ISO 9001 certification for copper alloys in recognition for

its superior product quality and customer service.

Poongsan supplies copper alloy tubes to large-scale desalination projects around the

world. As a global leader in copper alloy tubes, Poongsan continues to make significant

contributions by supplying superior products to various industries ranging from thermal

and nuclear power stations to seawater desalination, oil refining and shipbuilding.

Alloy Tubes

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Poongsan was a major supplier of copper alloy tubes in Saudi Arabia’s Al-Shoaiba project, the world’s largest desalination plant.

Partnering with Valtimet S.A.S of France, Poongsan supplies defect-free welded titanium and stainless steel tubes to meet the everchanging needs of the most demanding customers throughout the world.

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Poongsan Valinox, a joint venture established in 2004 with Valtimet S.A.S (France), oper-

ates a tube mill dedicated exclusively to the production of titanium and stainless steel

tubes. Since its inception, Poongsan Valinox has supplied high-quality welded titanium

and stainless steel tubes to domestic and international customers. With state-of-the-art

technology and quality, Poongsan Valinox is an emerging player in the production and

supply of titanium and stainless steel tubes to the global market.

Poongsan Valinox's titanium tubes are lightweight with superior strength and strong

resistance to heat and corrosion. As a result, they are used in a wide range of plants such

as nuclear power, desalination, chemical and petrochemical refining and shipbuilding.

These titanium and stainless steel tubes are subject to a comprehensive quality assur-

ance system that has been refined through several decades of experience in the manu-

facturing of these products. This system is thorough and extensive, overseeing each pro-

duction stage from cold roll forming, tungsten inert gas welding, annealing, non-destruc-

tive testing to product shipping. To further guarantee the specific mechanical and chemi-

cal properties and dimension specifications requested by its customers, all of Poongsan

Valinox's welded titanium and stainless steel tubes undergo rigorous testing.

In 2007 & 2008 Poongsan Valinox acquired ISO 9001 and ISO 14001 certifications respec-

tively. These two certifications were awarded in recognition of Poongsan Valinox's com-

mitment to environmental protection and excellence in the production of titanium and

stainless steel tubes. Poongsan Valinox is committed to meeting the changing needs of

the most demanding customers of titanium and stainless steel tubes the world over.

Titanium &Stainless Steel Tubes

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A long history in metal rolling technology combined with newcapabilities enables Poongsan Special Metal Corporation to produce superior stainless steel strips.

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Poongsan Special Metal's precision slitters, tension leveler, tension annealing furnace

and computer control systems such as Automatic Gauge Controls and Automatic

Flatness Control System all contribute to ensure superior processing of stainless steel

strips a wide range of industrial purposes.

As with all of its other products, Poongsan Special Metal takes pride in its commitment

and ability to meet the specific needs of its customers. The thin-gauge, narrow-width

stainless steel strips that Poongsan Special Metal produces can be made as thin as

0.05mm and as narrow as 6mm. Poongsan Special Metal's superior rolling and heat-

treatment technologies yield a range of desired properties and consistent quality. These

Poongsan Special Metal products satisfy standard specifications set by KS, JIS, and AISI.

Poongsan Special Metal's stainless steel strips for spring products are particularly popu-

lar and widely used in lightweight, high-strength components such as switches, relays

and ITs that require strong spring capability.

Stainless Steel Strips

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Through aggressive investment in equipment and technology,Poongsan continues to expand and supply its line of large-scale andprecision-forging products to many different industries rangingfrom shipbuilding and automobiles to high tech, space and aviation.

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With the completion of the Angang plant in the early 1970's, Poongsan began operating its

own forging facility. Soon thereafter, the Korean government designated Poongsan as a

national precision technology plant and calibration center. Additionally, Poongsan's

Angang plant is recognized globally as an international certification test center.

Over the past four decades, Poongsan has demonstrated that it is a dedicated and dependable

supplier of parts to its customers in various industries. It has diligently and tirelessly invested

in the acquisition and development of technology in the field of precision forging. Poongsan

acquired certification in ISO/TS 16949 and SQ Mark, enabling it to supply parts to the automo-

bile industry. It has also received similar approval to produce and supply parts to the ship-

building industry. Additionally, Poongsan has supplied small scale body parts for military

weapons to the defense industry. Since the incorporation of two impressive hydraulic presses

- 12,000 tons and 6,000 tons, respectively - into its production line in 2004, Angang plant has

had the capacity to produce larger scale products such as aluminum wheels for tanks, and

body and metal parts for warheads, guided missiles and torpedoes. In addition, Poongsan

produces turbine blades, a component used by manufacturers of aircrafts.

The Angang plant is fully equipped with a complete quality assurance system required by

domestic and global automobile and shipbuilding manufacturers. To that end, the Angang

plant is organized to maintain independent production systems for different forging product

categories. The plant is equipped with sophisticated and comprehensive test centers to fur-

ther ensure the superior quality of its products. Furthermore, the DEFORM (Design

Environment for Forming) system and Material Data Base Software for forging process

design has enabled Poongsan to provide superior forging products at reduced costs and

shorter delivery times to its customers.

Poongsan is committed to ensuring a continued supply of quality as well as competitive

products to its customers. Poongsan's R&D is currently focused on enhancing cold and

hot precision forging and various other processing technologies in an effort to develop

and mass produce essential parts for the transportation industry.

Precision Forgings

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With forty years of experience and expertise in utilizing copper andcopper alloy production technologies in the manufacture of defenseproducts, Poongsan is a leader in the production and supply of high-tech precision ammunition to the military worldwide.

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Poongsan operates two defense product plants, one at Busan and the other at Angang.

These two plants develop and supply a wide range of small to large caliber ammunition,

ranging from 5.56mm cartridges to eight inch projectiles for howitzers. Poongsan's

defense products include ammunition used in anti-aircraft guns, mortars, howitzers,

tank guns, recoilless guns and naval guns.

The Busan and Angang plants employ a vertically integrated production system that

ensures reliable management of the production process from raw material to finished

product and secures superior quality defense ammunition and components.

Furthermore, Poongsan's defense products undergo ISO9000-2000 certified perform-

ance tests and inspections.

Military Ammunition

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In response to the growing market, ammunition components andsemi-finished defense products have become some of Poongsan’sprincipal export items.

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Poongsan manufactures semi-finished products and components used in the production

of ammunition. They include primers, fuses, bullet jacket cups, case cups, discs, cones,

rotating bands, links, tungsten penetrators and shell bodies. Poongsan FNS produces

and supplies fuses for use in naval ammunition, mortar shells and multiple launch rocket

systems. In addition to these components, Poongsan produces chemicals, such as nitro-

cellulose and nitroglycerine, contained in propellants. Today, Poongsan produces and

supplies both domestic and international customers with single-, double- and multiple-

base propellants.

Components ofAmmunition

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Poongsan develops and exports over 40 different types of sporting ammunition.

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Poongsan's commercial ammunition, PMC (Precision Made Cartridges), is widely used

throughout the world for recreational hunting and shooting and has earned a reputation

for excellence in quality.

Poongsan is committed to providing high performance, competitively priced commercial

ammunition to its customers. Poongsan's commercial ammunition plant has a vertically

integrated manufacturing system that allows for strict and precise management of the

production process from raw material to finished cartridges. To further ensure cus-

tomer satisfaction, commercial ammunition undergoes stringent quality inspections

and tests equivalent to those that Poongsan's military ammunition is subjected to.

In addition to providing high quality products at competitive prices, Poongsan is dedicated

to developing environmentally friendly ammunition using frangible projectiles and non-

toxic primers.

Commercial Ammunition

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Poongsan builds metal processing machineries and other customizedequipments for the steel, automobile and defense industries.

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In the early 1970's Poongsan's Machinery Business Unit (BU) began as a maintenance

shop for Poongsan Corporation. Over the years, Machinery BU has transformed into a

supplier of machinery and customized equipments. In addition, Machinery BU specializes

in rolling related products - such as annealing, pickling, degreasing, buffing, tin plating,

slitting machineries, scalping lines and rolling oil coolant systems. Machinery BU is also

renowned throughout the industry as the best provider of quality tools, multi-gauge

strips, copper molds, gauges and fixtures.

Machinery BU maintains strong relationships with prominent companies such as Posco

Engineering & Construction, Union Steel, Jindal Stainless, Borgwarner Transmission

Systems, and Samsung Techwin.

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Dedicated to meet customer needs, Poongsan remains committed toresearch and development.

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From its inception, Poongsan has aggressively pursued initiatives to enhance technology,

and develop and improve new and existing products. Today, Poongsan continues to

emphasize and invest in research and development of fabricated copper and copper alloy

products used in both the commercial and defense industries. Currently, Poongsan

employs over 150 professionals, 20% of whom hold doctorate degrees, as part of a multi-

disciplinary research staff.

Through its tireless dedication to research and development over the past forty years,

Poongsan takes pride in its ever expanding intellectual property portfolio. To date,

Poongsan has registered more than 80 patents worldwide that include patents for high

performance alloys such as PMC102M, PMC26 and lead & bismuth free brass. Poongsan

invests and strategically allocates resources to develop value-added products, to opti-

mize manufacturing processes and to invest in products with future growth. To this end,

Poongsan actively recruits and trains core talent, integrates existing technologies with

new ones, and selects and manages projects that meet market and customer demands.

Looking to the future, Poongsan is ever more committed to research and development.

Poongsan has built a results-driven R&D organization that benefits from global network-

ing and collaboration among the various research laboratories at Ulsan, Poongsan

Special Metal, PMX and Siam Poongsan. Poongsan is also currently in the process of

building a corporate global research center based in the city of Daejeon. In the same vein,

Poongsan is presently working to develop the next-generation of high tech materials

such as battery terminal products for hybrid electric vehicles and leadframe materials

for LED & semiconductors. Poongsan's commitment to R & D focusing on environmental-

ly friendly products is evidenced by its dedication to developing environmentally friendly

processes for the manufacture of these products.

Research & Development

R &

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COMPANY&FINANCIALINFORMATION

COMPANY INFORMATION

Plants

Domestic Affiliates

Overseas Affiliates

Company History

FINANCIAL INFORMATION

ORGANIZATION & BOARD OF DIRECTORS

LOCATION : Ulju-gun, Ulsan

PRODUCTS : Copper and copper alloy sheets,

strips, tubes, rods, wires,

raw materials for leadframes,

tin-plated strips and coin blanks

LOCATION : Angang-eup, Gyeongju

PRODUCTS : A complete line of ammunition

for small arms, medium- to

large-caliber arms and sporting

arms

LOCATION : Haeundae-gu, Busan

PRODUCTS : Small arms and sporting

ammunition

⊙ ULSAN PLANT

Poongsan's Ulsan Plant began operations in 1980. Since then, Ulsan has continually

increased its production output. At present, the plant boasts the world's largest produc-

tion capacity and is unrivaled in product quality. Ulsan continues to be dedicated to effi-

cient production and superior products. To help maximize operational efficiency, the plant

has implemented Poongsan's ERP system. It has also completed the installation of a new

state-of-the-art shaft furnace to further enhance competitiveness and meet the rising

demand for high-value alloy products. In addition, the plant's casting capacity for semi-

conductor leadframe and automobile connector materials has been improved to allow for

increased downstream production capacity and improved product quality. Furthermore, a

new breakdown mill, bell furnace and precision CNC slitter have been installed. In order

to meet the specific demands of its customers with regard to product quality and service,

Ulsan actively enforces the Six-Sigma Initiative.

⊙ ANGANG PLANT

Established in 1973, Poongsan's Angang Plant was Korea's very first facility exclusively

dedicated to the manufacture of ammunition and is regarded as the birthplace of Korea's

domestic defense industry. Today, Angang produces an array of military and sporting

ammunition, defense components and precision forging products ranging from 5.56mm

small arms to 227mm MLRS rocket warheads. Since its establishment, Angang has success-

fully contributed to the strength of the Korean armed forces and self-reliance of our

national defense. Angang's manufacturing process is vertically integrated beginning with

raw materials to complete rounds of ammunition. Angang's defense and commercial prod-

ucts are superior in quality and competitive in price in the global market.

Recently, Angang released new conceptual munitions for the next generation weapon plat-

forms. Currently, the plant is focusing on the production of smart ammunitions with selec-

tive precision attack capability designed for digitalized future battlefields.

⊙ BUSAN PLANT

Poongsan's 344-acre Busan Plant is located in the heart of an urban area that is one of the

most popular tourist sites in the summer. For that reason, Poongsan, in cooperation with

the local government, manages the plant in a very environmentally conscientious and

responsible manner.

Traditionally, the Busan Plant has produced a variety of small-caliber, sporting and hunting

ammunition and tracer products. Today, the plant is concentrating on developing intelli-

gent high-tech ammunition. Busan has received its ISO9001, ISO14001 and OHSAS18001

certifications.

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PLANTS

⊙ POONGSAN VALINOX CORPORATION

Poongsan Valinox Corporation was established in May 2004 as a joint venture between

Poongsan and Valtimet to produce titanium and stainless steel tubes. In response to the

steeply rising demand for titanium tubes, Poongsan Valinox invested in production facili-

ties to dramatically increase productivity. In addition, product diversification was

achieved through the completion of production facilities for stainless steel tubes. By join-

ing its tube-manufacturing technology to Valtimet's material procurement and world-

wide marketing, Poongsan created new synergies and economies of scale. Such vision

has helped meet the rising demand for titanium and stainless steel tubes, projected from

the worldwide construction of new desalination plants, replacement of aging facilities,

as well as new power plant construction and upgrading of industrial materials.

⊙ POONGSAN METAL SERVICE CORPORATION

Poongsan Metal Service Corporation was founded in February 2007 to meet the various

requirements of our customers. With its modern slitting equipment, Poongsan Metal Service

supplies a diverse range of copper and copper alloy sheets and strips in a prompt manner. It

also manages warehousing of copper and copper alloy tubes, rods and wires.

⊙ POONGSAN FNS CORPORATION

Poongsan FNS Corporation was established in 1973 to produce precision machinery prod-

ucts. In particular, it specialized in fuse products and sensors for the defense sector, while

producing nuclear fuel assembly (WH-type top and bottom nozzle) parts and specialty

tools for the nuclear power plant sector. Poongsan acquired Poongsan FNS Corp. in

February of 2004 to connect its traditional ammunition production expertise to Poongsan

FNS's precision fuse manufacturing and develop state-of-the-art ammunition.

Additionally, Poongsan FNS entered the aerospace industry by forming industry-educa-

tion cooperation agreements with the Agency for Defense Development and the Korea

Institute of Science & Technology, enabling research, development and production of pre-

cision machinery parts.

⊙ PNT CORPORATION

PNT Corporation is a joint venture established in June 2001 with Nippon Mining & Metal

Corporation, one of the largest non-ferrous metal companies in Japan. To cope with the

rising demand from the various industries such as electric, electronics and information

technology, PNT specializes in tin-plated copper alloy strips.

LOCATION : Pyeongtaek, Gyeonggi

PRODUCTS : Copper & copper alloy sheets,

strips

LOCATION : Gyeyang-gu, Incheon

PRODUCTS : Titanium tubes and stainless steel

tubes

LOCATION : Nonsan, Chungnam

PRODUCTS : Fuse products, accelerometers

for inertia navigational systems,

and core products for top and

bottom nozzle assembly

LOCATION : Ulju-gun, Ulsan

PRODUCTS : Tin-plated copper alloy strips

42 43

DOMESTIC AFFILIATES

⊙ POONGSAN HOLDINGS CORPORATION

Poongsan Holdings Corporation is the parent company of the Poongsan Group and

includes manufacturing units: the Changwon Plant produces a wide range of high-quality

and high-tech products such as fittings, ammunition parts and multi-gauge strips for

leadframes. The Busan Plant builds metal processing facilities for the steel, automobile

and defense industries - and both designs and produces high-grade copper molds.

⊙ POONGSAN SPECIAL METAL CORPORATION

Drawing on our 40 years of experience and world-class facilities, Poongsan Special Metal

Corporation specializes in stainless steel strips, nickel alloy strips and precious metal coin

blanks. We take particular pride in our automated production system and superior rolling and

heat treatment technologies that enable us to meet the specific needs of our valued cus-

tomers. Recently, Poongsan Special Metal strengthened its competitiveness in the market by

developing core materials, including nickel and nickel alloy products for high-tech electronics

products.

LOCATION : Gyeyang-gu, Incheon

PRODUCTS : Stainless steel strips, nickel alloy

strips and precious metal coin

blanks

LOCATION : Changwon, Gyeongnam

Haeundae, Busan

PRODUCTS : Multi-gauge strips, fittings,

ammunition parts, machinery

and equipment and copper molds

⊙ POONGSAN (H.K.) LTD.

Recognizing the importance of a distribution base for the Chinese and Southeast Asian

markets, Poongsan established an affiliate company in Hong Kong in 1991 followed by a

slitting center in Dongguan. In 2010, Poongsan Hong Kong closed its Dongguan slitting

center and opened a newer and larger scale slitting center in Songgang (Shenzen, China).

This new facility will enable Poongsan to expand and increase sales of high value-added

products both in Southern China and in other Southeast Asian markets.

⊙ POONGSAN (SHENZHEN) CO., LTD.

Poongsan Shenzhen opened for business in March 2010. The slitting center supplies cop-

per alloy strips including leadframe materials as well as stainless steel strips to cus-

tomers in China and southeast Asia. This facility is strategically located to be able to pro-

vide on-time delivery and better service to our customers in this region.

⊙ POONGSAN (SHANGHAI) CO., LTD.

Poongsan established an office inside the Shanghai Free Trade Zone in order to gain

access to the Chinese copper market in 2002. Since its inception, Poongsan Shanghai has

steadily grown its sales of high value fabricated copper products to the high-tech and

automotive industries. Poongsan Shanghai also operates its own slitting center to process

rolled products locally. It supplies copper ACR tubes, brass rods and stainless steel strips

to local customers throughout China as well as to U.S. and Japanese companies with

operations in China.

⊙ SIAM POONGSAN METAL CO., LTD.

Established in October 2000, Siam Poongsan Metal is the only manufacturer of rolled cop-

per and copper alloy products in Southeast Asia. Products manufactured at Siam Poongsan

range from sheets and strips and coin blanks to other copper and copper alloy products.

Siam Poongsan is a major supplier of coin blanks to the Thai government. With its com-

pletely integrated copper and copper alloy production facilities - from melting and casting

to slitting - Siam Poongsan has contributed significantly to the development of the

Southeast Asian region by providing alternative sources of fabricated materials for key

industries. As a result, it has become a recognized and reliable supplier of copper and copper

LOCATION : Tsimsatsui, Kowloon, Hong Kong

PRODUCTS : Copper and copper alloy sheets

and strips, copper tubes, brass

rods, and stainless steel strips

LOCATION : Yanchuanshequ, Songgang,

Shenzhen, China

PRODUCTS : Copper and copper alloy sheets

and strips, stainless steel strips

LOCATION : Waigaoqiao Free Trade Zone,

Shanghai, China

PRODUCTS : Copper and copper alloy sheets

and strips, copper tubes, brass

rods, and stainless steel strips

LOCATION : Laemchabang, Chonburi, Thailand

PRODUCTS : Copper and copper alloy sheets

and strips, coin blanks

44 45

⊙ PMX INDUSTRIES, INC.

Incorporated in 1989, PMX Industries is a fabricated rolled-copper alloy plant with an

annual production capacity of 120,000 tons of copper and copper alloy strip. PMX has

earned a strong reputation as an important and reliable supplier of commercial coinage,

high performance alloys, automotive and electronic materials, and more recently, ammu-

nition strip. PMX is currently investing in stamping equipment to further support ammu-

nition products and other value- added business.

Meanwhile, PMX continues to focus on high-value materials for electrical and electronic

applications as well as their new EPA-approved MicroGuard materials designed for touch

surfaces in hospitals, schools, public and residential buildings.

To support its groundbreaking MicroGuard program, PMX has patents pending on five

new alloys-including C66910 that looks like stainless steel, but is in fact a copper alloy

that kills bacteria within two hours. The PMX Sales, Marketing and Production Teams are

working closely together to develop and promote such cutting edge products that meet

the changing needs of our clients.

OVERSEAS AFFILIATES

LOCATION : Cedar Rapids, Iowa, USA

PRODUCTS : Copper and copper alloy strips,

and strips for coins

alloy products, not only to Thailand but also to the other nations in the region. Siam

Poongsan is aggressively working to expand its facilities in order to meet the anticipated

increase in demand for fabricated copper products in Southeast Asia.

⊙ POONGSAN JAPAN CORPORATION

In April 2002 Poongsan Japan Corporation was established in Kawaguchi City, Japan to

address the demanding product specifications and service required by the Japanese mar-

ket. Poongsan Japan processes and sells phosphor bronze, copper, brass and tin-plated

strips and high-value copper rolling products. Through prompt delivery, consistent and

reliable quality assurance, and effective customer service, Poongsan Japan continues to

grow its domestic market share of not only copper rolling products but also copper tubes

and stainless steel strips.

⊙ POONGSAN (M) SDN BHD

Poongsan (M) SDN BHD, which also operates its own slitting center, was established in

November 2001 to promote Poongsan products throughout Malaysia, Singapore and

other ASEAN countries. It sells copper and copper alloy sheets and strips as well as stain-

less steel strips, offering its customers reliable quality, on-time delivery and customer

service.

⊙ POONGSAN AMERICA CORPORATION

Incorporated in 2002, Poongsan America plays a critical role in supplying Poongsan

Corporation with copper and copper alloy scraps, machinery and spare parts, and chemi-

cals and other sub-materials. Poongsan America also promotes Poongsan products to

overseas customers, especially in the Americas’ and developing countries’ markets.

46

LOCATION : (Head Office) Tokyo, Japan

(Kawaguchi Office) Kawaguchi,

Saitama, Japan

PRODUCTS : Copper and copper alloy sheets

and strips, copper tubes, brass

rods, and stainless steel strips

LOCATION : Kota Kemuning, Shah Alam,

Selangor, Malaysia

PRODUCTS : Copper and copper alloy sheets

and strips, copper tubes, brass

rods, and stainless steel strips

LOCATION : Los Angeles, California, USA

COMPANY HISTORY

Oct. 1968 Poongsan Metal Corp. founded

Dec. 1969 Bupyung Plant completed

Apr. 1970 Poongsan designated as coin blank producer for the Mint of Korea

Mar. 1973 Angang Ammunition Plant completed

Jul. 1980 Onsan Plant Phase One completed

Jan. 1982 Dongrae Plant completed

Jan. 1983 Precision Dies Manufacturing Shop at Dongrae Plant completed

Aug. 1985 Leadframe Manufacturing Shop at Dongrae Plant completed

Oct. 1988 Onsan Plant Phase Two completed

Mar. 1989 Poongsan Metal Corp. renamed Poongsan Corporation

Apr. 1992 PMX Industries, Inc. in Cedar Rapids, Iowa, U.S.A. established

Dec. 1993 Quality Standard Certificate ISO 9002 for copper and copper alloy products awarded

Dec. 1996 Quality Standard Certificate ISO 9002 for titanium tubes and stainless steel strips awarded

Oct. 1997 Poongsan Metal Plant in Dongguan, China completed

Nov. 1999 Quality Standard Certificate ISO 9001 and ISO 9002 for defense industry products awarded

Oct. 2000 Siam Poongsan Metal Co., Ltd. established in Thailand

Jun. 2001 PNT Corporation JV established in Ulsan

Nov. 2001 Poongsan (M) SDN BHD established in Johor, Malaysia

Jan. 2002 Poongsan (Shanghai) Co., Ltd. established in China

Apr. 2002 Poongsan Japan Corp. established in Saitama, Japan

Jul. 2002 Poongsan America Corp. established in Los Angeles, California, U.S.A.

Dec. 2003 Environmental Standard Certificate ISO14001 awarded to Poongsan for its copper and copper alloy products

Feb. 2004 Acquisition of fuse and precision machinery parts maker Hyopchin Industrial Co., Ltd.

May 2004 Poongsan Valinox Corporation JV established in Bupyung

Jun. 2004 Angang plant acquires international accreditation as certification and inspection body

Nov. 2004 Poongsan honored with Productivity Innovation Award at National Quality Management Convention

Apr. 2005 Hyopchin Industrial Co., Ltd. renamed Poongsan FNS Co., Ltd.

Oct. 2005 Onsan plant obtains KOSHA18001 (Occupational Safety and Health Management System)

Apr. 2006 Poongsan designated as the first environmentally friendly company among national nonferrous metals industries

Oct. 2006 Poongsan obtains patent for its Lead Free Brass Bars

Feb. 2007 Poongsan Metal Service Corporation established

May 2007 Poongsan honored with Korean System Management Grand Prix Award at International System Certification

Convention

Nov. 2007 Poongsan received Bronze Tower Order of Industrial Service Merit at National Quality Management Competition

Nov. 2007 "$700 Million Export Tower” awarded on the 44th Annual Trade Day

Jul. 2008 Establishment of Poongsan Holdings Corporation

Dec. 2008 Poongsan honored with Korean Ministry of National Defense Award in recognition of its defense product exports

Dec. 2009 Poongsan honored with Defense Quality Management Grand Prix Award

Dec. 2010 Poongsan Microtec Corp. was sold to a local IT company Hidis.

47

Capital Expenditure

In 2010, the company recorded 205,612 million KRW in capital expenditures, a 222% increase from

2009.

2nd half Total

20081st half

Operating & Net Income (for 5 years) Unit: Million KRW

Operating Income

Net Income(Loss)

2007

73,598

(9,900)

68,384

51,125

83,744

(183,840)

152,128

(132,715)

2nd half Total

20081st half

23,309

23,963

21,095

21,211

44,404

45,174

2006

128,395

144,092

2009

150,417

147,489

2010

178,564

148,870

Capital Expenditure & Depreciation Expense (for 5 years) Unit: Million KRW

Capital Expenditure

Depreciation Expense

2007

46,970

48,039

2009

63,735

40,454

2010

205,612

34,723

2006

56,171

53,140

▣ Financial Position

Assets

The company's total assets as of December 31, 2010 were 1,947,790 million KRW, an increase of 15%

from the previous year. Current assets in 2010 were 1,004,828 million KRW, an increase of 4% from

2009. Non-current assets also increased 29.9% over 2009.

Liabilities

Total liabilities as of December 31, 2010 stood at 978,825 million KRW, up 15% or 130,074 million KRW

from the previous year. Current liabilities were 662,659 million KRW, an increase of 5.0%. Non-cur-

rent liabilities, meanwhile, were up at 316,166 million KRW, an increase of 45.4% from 2009.

Short-term borrowings for 2010 comprised 59.8% of total current liabilities for an amount of 396,112

million KRW. This represented an increase of 48,845 million KRW from the previous year. Long-term

borrowings of non-current liabilities also increased in 2010 to 139,094 million KRW. The balance from

bond issues increased by 29,954 million KRW to close at 119,592 million KRW.

The debt to equity ratio was 101%, an increase of 0.4 percentage points from the previous year.

Loans & Interest Rates Unit: Million KRW

Loans

Interest Rates(%)

2008

551,603

5.89

2007

466,864

5.27

2006

451,562

4.95

2009

579,457

5.13

2010

718,142

4.17

Loans & Interest Rates(Unit: Million KRW)

Interest Rates

Loans

2006 2007 2008 2009 2010

5.27%

5.89%

5.13%4.17%

451,5

62

466,8

64

551,6

03 7

18,1

42

579,4

57

4.95%

Operating & Net Income(Unit: Million KRW)

128,3

95

144,0

92

-9,9

00

-132,7

15

73,5

98

152,1

28

148,8

701

78,5

64

Operating Income

Net Income

147,4

89

150,4

17

▣ Results of Operations

Production and Sales

The global economy's recovery gained momentum in 2010, stimulating demand across many sectors.

The economic recovery across Asia boosted demand for Poongsan's products resulting in extremely

strong sales growth for 2010. Poongsan products performed well across the board, penetrating new

markets and consolidating and improving their position in existing ones. New record levels for sales

were set in both the defense and copper business sectors.

The company's sales for 2010 came in at 2.2 trillion KRW, a 25% increase from 2009. Sales of prod-

ucts from the Nonferrous Metal Division comprised 76.9% of total sales while the Defense Products

Division accounted for the remaining 23.1%. In 2010, Poongsan recorded the largest operating profit

since its foundation on the strength of its high value-added products and defense product exports.

* Numbers prior to June 30, 2008, are based on the business performance of Poongsan Corporation before the establish-

ment of Poongsan Holdings Corporation.

Operating Income

In 2010, the company's operating income was 178,564 million KRW, up by almost 19% on 2009. While

the ratio of operating profit to revenue was 8.2%, down 0.4 percentage points from 8.6% over the pre-

vious year. Poongsan continued to increase profitability through increased sales of high value-added

products and sustained cost-cutting measures.

Net Income

Net income for 2010 increased to 148,870 million KRW, the largest net income since the company’s

foundation. The company paid 39,370 million KRW in corporate taxes, an increase of 6,155 million

KRW from the previous year. Net profit ratio decreased from 8.4% in 2009 to 6.8% in 2010 due to the

decrease of non-operating income and a larger tax charge.

48 49

Yearly Sales (Poongsan Corporation) Unit: Million KRW

2nd half Total

20082007 20062009

1st half

378,447

518,976

897,423

78,533

29,391

107,924

1,005,347

Domestic

Export

Sub-Total

Domestic

Export

Sub-Total

239,185

440,976

680,161

189,675

137,997

327,672

1,007,833

617,632

959,952

1,577,584

268,208

167,388

435,596

2,013,180

584,930

966,683

1,551,613

258,997

87,384

346,381

1,897,994

561,326

877,486

1,438,812

257,002

54,671

311,673

1,750,485

477,401

801,031

1,278,432

297,223

170,217

467,440

1,745,872

2010

675,120

1,007,473

1,682,593

333,996

170,572

504,568

2,187,161

Nonferrous Metal

Defense Products

Total

2006 2007 2008 2009 2010

FINANCIAL INFORMATION

Balance Sheet

Exchange Rate :￦1,138.90=US$1(End of 2010)

Exchange Rate :￦1,167.60=US$1(End of 2009)

Current Assets

Cash and cash equivalents

Trade accounts receivable, net

Inventories

Other current assets

Total Current Assets

Non-Current Assets

Investments

Tangible and intangible assets

Land

Buildings

Structures

Machinery

Others

Others non-current assets

Total Non-Current Assets

Total Assets

Current Liabilities

Trade payables

Short-term borrowings

Other payables

Current portion of long-term liabilities

Other current liabilities

Total Current Liabilities

Long-Term Liabilities

Bonds payable

Long-term borrowings

Provision for retirement and severance benefits

Total Long-Term Liabilities

Total Liabilities

Shareholders' Equity

Capital stock

Capital surplus

Capital adjustments

Accumulated other comprehensive income

Retained earnings(Accumulated Deficit)

Total Shareholders' Equity

Total Liabilities and Shareholders' Equity

2009

52,247

336,396

550,140

27,105

965,888

68,744

633,891

323,603

130,100

26,432

95,540

58,216

23,543

726,178

1,692,066

88,209

347,267

24,056

73,596

98,220

631,348

89,638

68,955

58,809

217,403

848,751

140,121

543,971

(152)

27,772

131,604

843,315

1,692,066

2010

23,949

310,762

632,378

37,739

1,004,828

119,395

801,447

422,016

125,866

23,611

83,185

146,769

22,119

942,962

1,947,790

77,801

396,112

16,957

63,280

108,510

662,659

119,592

139,094

57,479

316,166

978,825

140,121

543,971

(152)

26,961

258,064

968,965

1,947,790

2008

150,175

232,202

457,590

35,694

875,661

47,293

613,564

319,930

134,120

24,583

88,320

46,611

27,307

688,164

1,563,825

97,999

315,390

24,130

83,494

121,013

642,024

89,682

63,038

53,348

206,069

848,093

140,121

727,739

(81)

31,792

(183,840)

715,732

1,563,825

2009

44,747

288,109

471,172

23,214

827,242

58,876

542,901

277,152

111,425

22,638

81,826

49,860

20,164

621,941

1,449,183

75,547

297,420

20,603

63,032

84,121

540,723

76,771

59,057

50,368

186,196

726,919

120,008

465,887

(130)

23,786

112,713

722,264

1,449,183

2010

21,028

272,862

555,253

33,136

882,279

104,834

703,702

370,547

110,515

20,731

73,040

128,869

19,421

827,957

1,710,236

68,312

347,802

14,889

55,562

95,276

581,841

105,007

122,130

50,469

277,606

859,447

123,030

477,628

(133)

23,673

226,591

850,789

1,710,236

2008

119,423

184,654

363,889

28,385

696,351

37,608

487,923

254,418

106,656

19,549

70,235

37,065

21,716

547,247

1,243,598

77,932

250,807

19,189

66,396

96,232

510,556

71,318

50,130

42,423

163,871

674,427

111,429

578,719

(64)

25,282

(146,195)

569,171

1,243,598

Conversion into Thousands of United States Dollars

Millions of Korean Won

▣ Non-consolidated Balance Sheet

(Note) These financial statements are made and reported based on Korean GAAP which was revised in 2010.

Shareholders' Equity

The ratio of stockholders' equity to total assets was 49.7% by end of year 2010, a decline of 0.1 per-

centage points from 2009. Total stockholders' equity was posted at 968,965 million KRW, an increase

of 125,650 million KRW from the previous year.

50 51

Key Performance Indicators

Stability

Profitability

Activity

Growth

Productivity

Debt Ratio(%)

Net Profit to Sales(%)

Receivables Turnover(%)

Increase in Recurring Profit Over Last Year(%)

Value-Added per Person (Million KRW)

2009

100.6

8.4

6.1

254.9

148

2010

101.0

6.8

6.8

4.2

150

2008

118.5

(6.6)

8.6

(4,925.4)

54

2007

69.1

(0.5)

8.1

(101.2)

114

2006

68.3

8.2

8.4

138.9

133

Stock Value Analysis

EPS (Earnings per Share)

EBITDA

Net Assets per Share

2007

(358)

121.6

30,188

2009

5,265

190.1

30,092

2010

5,314

212.4

34,576

Unit

KRW

Billion KRW

KRW

2006

5,152

181.5

31,148

1,865

92.3

30,765

(6,562)

104.0

25,540

2nd half1st half

2008

2006 2007 2008 2009 2010

Debt Ratio

Net Profit to Sales

Receivables Turnover

2006 2007 2008 2009 2010

2006 2007 2008 2009 2010

-0.5

%

-6.6

%

6.8

%

8.4

%

8.2

%

8.1

% 8.6

%

6.8

%

6.1

%8.4

%

69.1

%

118.5

%

101.0

%

100.6

%

68.3

%

2006 2007 2008 2009 2010

Value-Added per Person (Million KRW)

114

54

150

148

133

Key Performance Indicators

Stock Price PerformanceWon Share

Statement of Cash FlowsExchange Rate :￦1,138.90=US$1(End of 2010)Exchange Rate :￦1,167.60=US$1(End of 2009)

I. Cash Flows from Operating Activities

1.Net income(loss)

2.Addition of expenses of non-cash transactions

3.Deduction of revenues non-cash transactions

4.Changes in assets and liabilities from

operating activities

II. Cash Flows from Investing Activities

1.Cash inflows from investing activities

2.Cash outflows for investing activities

III. Cash Flows from Financing Activities

1.Cash inflows from financing activities

2.Cash outflows for financing activities

IV. Increase(decrease) in Cash equivalents( I+II+III )

V. Cash and Cash equivalents at Beginning

VI. Cash and Cash equivalents at End

2009

(37,252)

147,489

93,753

(46,711)

(231,783)

(89,340)

3,265

(92,605)

28,664

1,122,737

(1,094,074)

(97,928)

150,175

52,247

2010

86,551

148,870

87,819

(44,239)

(105,899)

(230,663)

5,585

(236,248)

115,814

1,502,750

(1,386,936)

(28,298)

52,247

23,949

2008

215,395

(183,840)

225,668

(24,981)

198,549

(27,753)

132

(27,886)

(54,885)

915,117

(970,003)

132,756

17,419

150,175

2009

(31,905)

126,318

80,295

(40,006)

(198,512)

(76,516)

2,796

(79,312)

24,550

961,577

(937,027)

(83,871)

128,618

44,747

2010

75,995

130,714

77,109

(38,844)

(92,984)

(202,531)

4,904

(207,435)

101,689

1,319,475

(1,217,786)

(24,847)

45,875

21,028

2008

171,288

(146,195)

179,457

(19,866)

157,892

(22,069)

105

(22,174)

(43,647)

727,727

(771,374)

105,571

13,852

119,423

Conversion into Thousandsof United States Dollars

Millions of Korean Won

▣ Non-consolidated Statement of Cash Flows

(Note) These financial statements are made and reported based on Korean GAAP which was revised in 2010.

52 53

Income Statement

Sales

Cost of Goods sold

Gross Profit

Selling and Administrative Expenses

Operating Income

Non-Operating Revenues

Interest income

Gains on foreign currency transaction & translation

Gains on valuations of equity method securities

Gains on derivative transactions

Gains on valuations of derivatives

Others

Non-Operating Expenses

Interest expenses

Losses on foreign currency transaction & translation

Losses on valuation of equity method securities

Losses on derivative transactions

Losses on valuation of derivatives

Others

Income(Loss) Before Income Tax Expenses

Income Tax Expenses

Net Income(Loss)

2009

1,745,872

1,531,885

213,987

63,570

150,417

170,166

6,888

48,907

29,546

60,270

13,928

10,627

139,880

30,166

54,333

15,335

28,645

6,076

5,325

180,704

33,215

147,489

2008

2,013,180

1,791,643

221,538

69,409

152,128

196,242

4,911

90,216

23,054

49,424

17,357

11,280

465,060

32,592

116,194

140,391

88,197

78,542

9,144

(116,690)

16,025

(132,715)

2010

2,187,161

1,933,288

253,873

75,309

178,564

121,150

4,478

39,958

25,278

21,377

17,113

12,946

111,474

28,268

40,596

110

12,423

25,346

4,731

188,240

39,370

148,870

2009

1,495,266

1,311,995

183,271

54,445

128,826

145,741

5,899

41,887

25,305

51,619

11,929

9,102

119,802

25,836

46,534

13,134

24,533

5,204

4,561

154,765

28,447

126,318

2008

1,600,939

1,424,765

176,174

55,197

120,977

156,057

3,905

71,743

18,333

39,303

13,802

8,971

369,829

25,917

92,401

111,643

70,136

62,459

7,273

(92,795)

12,744

(105,539)

2010

1,920,415

1,697,505

222,910

66,124

156,786

106,375

3,932

35,085

22,195

18,770

15,026

11,367

97,879

24,820

35,645

97

10,908

22,255

4,154

165,282

34,568

130,714

Conversion into Thousandsof United States Dollars

Millions of Korean Won

▣ Non-consolidated Income Statement

(Note1) These financial statements are made and reported based on Korean GAAP which was revised in 2010.

(Note2) Numbers prior to June 30, 2008 are based on the business performance of Poongsan Corporation before the establishment of Poongsan Holdings Corporation.

Exchange Rate :￦1,138.90=US$1(End of 2010)Exchange Rate :￦1,167.60=US$1(End of 2009)

54

POONGSAN CORPORATION

HEAD OFFICE

60-1, 3-ga, Chungmuro, Chung-gu, SeoulPhone : 82-2-3406-5114Fax : 82-2-3406-5400http://www.poongsan.co.kr

DOMESTIC PLANTS

Ulsan Plant611, Daejung-ri, Onsan-eup, Ulju-gun, UlsanPhone : 82-52-231-9114Fax : 82-52-231-9400

Angang Plant2222-2, Sandae-ri, Angang-eup,Gyeongju,GyeongbukPhone : 82-54-760-6114Fax : 82-54-760-6400

Busan Plant52, Banyeo 1-dong, Haeundae-gu, BusanPhone : 82-51-520-8114Fax : 82-51-520-8400

OVERSEAS OFFICE

Taiwan officeRM708, 21Century Bldg., No.207 Tun HwaNorth Road, Taipei, TaiwanPhone : 886-2-2545-5311/2Fax : 886-2-2546-0081

PMC Poongsan office950 Echo Lane Suite 352 Houston, Texas77024, U.S.A.Phone : 1-281-389-4331Fax : 1-281-727-0280

Poongsan (Pakistan) officePoongsan Corp. Islamabad OfficePOF Hotel, Quaid Avenue, Wah Cantt,PakistanPhone : 92-51-453-9588Fax : 92-51-453-9599

California office3350 Scotte Blvd Building #6, Santa Clara, CA 95054, U.S.A.Phone : 1-408-982-9162FAX : 1-408-982-0769

DOMESTIC AFFILIATES

Poongsan FNS Corporation57-2, Toyang-ri, Eunjin-myeon, Nonsan,ChungnamPhone : 82-41-740-5500Fax : 82-41-741-7780

PNT Corporation611, Daejung-ri, Onsan-eup, Ulju-gun, UlsanPhone : 82-52-231-9981Fax : 82-52-239-9940

OVERSEAS AFFILIATES

PMX Industries, Inc.5300, Willow Creek Drive S.W., CedarRapids, Iowa 52404, U.S.APhone : 1-319-368-7700Fax : 1-319-368-7701

Poongsan (H.K.) Ltd.Suite 1120, Ocean Center 5, Canton Road,Tsimsatsui, Kowloon, Hong KongPhone : 852-2-735-6330Fax : 852-2-730-7396

Poongsan (Shenzhen) Co., Ltd.8 Dahualu, Yanchuanshequ, Songgang,Baoan, Shenzhen, ChinaPhone : 86-755-3323-8916FAX : 86-755-3323-8912

Poongsan (Shanghai) Co., Ltd.Jiatai Road No.105, Pudong WaigaoqiaoFree Trade Zone, Shanghai, ChinaPhone : 86-21-5868-0881Fax : 86-21-5868-0882

Siam Poongsan Metal Co., Ltd.38/14 Moo 5, Laemchabang Industrial Estate,T. Tungsukhla, A. Sriracha, Chonburi 20230,ThailandPhone : 66-38-400-056Fax : 66-38-490-328

Poongsan Japan CorporationRune Yotsuya Building 3rd floor2-4-1, Yotsuya, Shinjuku-ku, Tokyo, 160-0004, JapanPhone : 81-3-5269-6570Fax : 81-3-5269-6571(Kawaguchi Office)Angyo-Kitaya 628, Kawaguchi, Saitama334-0054, JapanPhone : 81-48-297-6931Fax : 81-48-297-6933

Poongsan (M) SDN BHDNo. 16, Jalan Anggerik Mokara, 31/59, KotaKemuning, Seksyen 31, 40460 Shah Alam,Selangor, MalaysiaPhone : 60-3-5122-0001Fax : 60-3-5122-0002

Poongsan America Corporation601 South Figueroa St. Suite No.4600, Los Angeles, CA 90017, U.S.APhone : 1-213-236-0300Fax : 1-213-236-0308

POONGSAN HOLDINGS CORPORATION

HEAD OFFICE

60-1, 3-ga, Chungmuro, Chung-gu, SeoulPhone : 82-2-2278-6700Fax : 82-2-2278-6790

DOMESTIC PLANTS

Changwon Plant57, Sungju-dong, Changwon, GyeongnamPhone : 82-55-239-0700Fax : 82-55-267-0701

Busan Plant52, Banyeo 1-dong, Haeundae-gu, BusanPhone : 82-51-520-8900Fax : 82-51-522-0117

DOMESTIC AFFILIATES

Poongsan Special Metal Corporation324-6, Hyosung-dong, Gyeyang-gu, IncheonPhone : 82-32-540-7114Fax : 82-32-540-7400

Poongsan Valinox Corporation324-6, Hyosung-dong, Gyeyang-gu, IncheonPhone : 82-32-556-4424Fax : 82-32-556-4429

Poongsan Metal Service Corporation680-1, Naegi-ri, Poseung- eup, Pyeongtaek,GyeonggiPhone : 82-31-650-7500Fax : 82-31-650-7511

OVERSEAS & DOMESTIC NETWORKORGANIZATION & BOARD OF DIRECTORS

Ryu, JinChairman & Chief Executive Officer

Park, Woo DongVice President

Yu, Byung DukAuditor

Lee, Bong SooOutside Director Dean, ProfessorGraduate School of Journalism,Semyung University

Park, Chul SoonOutside DirectorCertified PublicAccountant,Sehyun AccountingCorporation

Ryu, Mok KiVice Chairman

Choi, Han MyungPresident & Chief Executive Officer

AUDIT DIV.

AUDITOR

ENTERPRISE RISK MAN-AGEMENT SUPPORT DIV.

CHIEF OFFICER OF MANAGEMENT

MANAGEMENT DIV.

FINANCE DIV.

INTEGRATED PROCUREMENT DIV.

ULSAN PLANT

NON-FERROUS METALPRODUCTS SALES DIV.

ANGANG PLANT

BUSAN PLANT

DEFENSE PRODUCTS SALES DIV.

CHIEF OFFICER OF FABRICATEDNON-FERROUS METAL BUSINESS

CHIEF OFFICER OF DEFENSE PRODUCTS BUSINESS

GLOBAL RESEARCH CENTER

GENERAL SHAREHOLDERS’ MEETING

BOARD OF DIRECTORS

CHAIRMAN & CEO

VICE CHAIRMAN

PLANNING & MANAGEMENT DIV.