| |  | 
| |  | 













Consolidated Financial Statements



December 31, 2013 and
2012



(Expressed in thousands
of U.S. dollars)















Management’s Responsibility for Financial
Reporting



The management of Eldorado Gold Corporation
is responsible for the integrity and fair presentation of the financial information contained in this annual report. Where appropriate,
the financial information, including financial statements, reflects amounts based on management’s best estimates and judgments.
The financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board. Financial information presented elsewhere in the annual report is consistent with that disclosed in
the financial statements.



Management is responsible for establishing
and maintaining adequate internal control over financial reporting. Management has established and maintains a system of internal
accounting control designed to provide reasonable assurance that assets are safeguarded from loss or unauthorized use, financial
information is reliable and accurate and transactions are properly recorded and executed in accordance with management’s
authorization. This system includes established policies and procedures, the selection and training of qualified personnel and
an organization providing for appropriate delegation of authority and segregation of responsibilities. Any system of internal control
over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial statement preparation and presentation.



Management has a process in place
to evaluate internal control over financial reporting based on the criteria established by the Committee of Sponsoring Organizations
of the Treadway Commission (1992) in Internal Control – Integrated Framework. Based on this assessment, management has concluded
that as at December 31, 2013, the Company’s internal control over financial reporting was effective.



The Board of Directors oversees management’s
responsibility for financial reporting and internal control systems through an Audit Committee, which is composed entirely of independent
directors. The Audit Committee meets periodically with management, the Company’s outside advisors and the independent auditors
to review the scope and results of the annual audit and to review the financial statements and related financial reporting and
internal control matters before the financial statements are approved by the Board of Directors and submitted to the Company’s
shareholders.



KPMG, an independent registered public
accounting firm, appointed by the shareholders, has audited the Company’s financial statements in accordance with Canadian
generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States) and has
expressed its opinion in the auditors’ report. The effectiveness of the Company’s internal control over financial reporting
as at December 31, 2013 has also been audited by KPMG, and their opinion is included in their report.







|Paul N. Wright          | Fabiana Chubbs         
|----------------------- | -----------------------
|Chief Executive Officer | Chief Financial Officer







February 20, 2014

Vancouver,
British Columbia, Canada











| |                                                                                                         |                                                                                 
| | ------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------
| | KPMG
        LLP

Chartered
Accountants

PO
Box 10426 777 Dunsmuir Street

Vancouver
BC V7Y 1K3

Canada | Telephone (604) 691-3000
        Fax (604) 691-3031
        Internet	www.kpmg.ca









INDEPENDENT
AUDITORS’ REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of
Directors of Eldorado Gold Corporation



We have audited the accompanying
consolidated financial statements of Eldorado Gold Corporation, which comprise the consolidated balance sheets as at December 31,
2013 and December 31, 2012, the consolidated income statements, statements of comprehensive income, changes in equity and cash
flows for each of the years in the two-year period ended December 31, 2013, and notes, comprising a summary of significant accounting
policies and other explanatory information.

Management's Responsibility for
the Consolidated Financial Statements

Management is responsible for the
preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due
to fraud or error.

Auditors’ Responsibility

Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian
generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend
on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and
fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances.
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 consolidated financial statements.

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





KPMG LLP is a Canadian limited liability
partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
KPMG Canada provides services to KPMG LLP.













Opinion

In our opinion, the consolidated
financial statements present fairly, in all material respects, the consolidated financial position of Eldorado Gold Corporation
as at December 31, 2013 and December 31, 2012, and its consolidated financial performance and its consolidated cash flows for each
of the years in the two-year period ended December 31, 2013, in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.

Other Matter

We also have audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United States), Eldorado Gold Corporation's internal control
over financial reporting as of December 31, 2013, based on the criteria established in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992), and our report dated February 20, 2014expressed an unmodified (unqualified) opinion on the effectiveness of Eldorado Gold Corporation’s internal control over
financial reporting.





Chartered Accountants

Vancouver, Canada

February 20, 2014







| |                                                                                                         |                                                                                 
| | ------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------
| | KPMG
        LLP

Chartered
Accountants

PO
Box 10426 777 Dunsmuir Street

Vancouver
BC V7Y 1K3

Canada | Telephone (604) 691-3000
        Fax (604) 691-3031
        Internet	www.kpmg.ca

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the Board of Directors and Shareholders
of Eldorado Gold Corporation

We have audited Eldorado Gold Corporation’s
(the Company) internal control over financial reporting as of December 31, 2013, based on criteria established in Internal
Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992). The
Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included in the accompanying report titled “Management’s
Responsibility for Financial Reporting”. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit.

We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

A company’s internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could
have a material effect on the financial statements.

Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.



KPMG
LLP is a Canadian limited liability partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
KPMG Canada provides services to KPMG LLP.













In our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established
in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(1992).

We also have audited, in accordance
with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of the Company as of December 31, 2013 and December 31, 2012 and the related consolidated
income statements, statements comprehensive income, changes in equity and cash flows for each of the years in the two-year period
ended December 31, 2013, and our report dated February 20, 2014 expressed an unmodified (unqualified) opinion on those consolidated
financial statements.







Chartered Accountants

Vancouver, Canada

February 20, 2014











Eldorado Gold Corporation

Consolidated
Balance Sheets

(Expressed in
thousands of U.S. dollars)



|                                                         |    |           |           | Note      | December 31, 2013 | December 31, 2012
|-------------------------------------------------------- | -- | --------- | --------- | --------- | ----------------- | -----------------
|                                                         |    |           |           |           |                   |                  
|                                                         |    |           |           |           | $                 | $                
|ASSETS                                                   |    |           |           |           |                  
|Current assets                                           |    |           |           |           |                  
|Cash and cash equivalents                                |    | 6         | 589,180   | 816,843  
|Term deposits                                            |    |           |           | 34,702    | -                
|Restricted cash                                          |    |           |           | 262       | 241              
|Marketable securities                                    |    |           | 4,387     | 1,988    
|Accounts receivable and other                            |    | 7         | 89,231    | 112,324  
|Inventories                                              |    |           | 8         | 244,042   | 220,766          
|                                                         |    |           |           |           | 961,804           | 1,152,162        
|Investments in associate                                 |    | 9         | 10,949    | 27,949   
|Deferred income tax assets                               |    | 17        | 997       | 3,149    
|Restricted assets and other                              |    | 10        | 37,330    | 31,846   
|Defined benefit pension plan                             |    | 16        | 13,484    | 4,571    
|Property, plant and equipment                            |    | 11        | 5,684,382 | 5,868,742
|Goodwill                                                 |    |           | 12        | 526,296   | 839,710          
|                                                         |    |           |           |           | 7,235,242         | 7,928,129        
|LIABILITIES & EQUITY                                     |    |           |           |          
|Current liabilities                                      |    |           |           |           |                  
|Accounts payable and accrued liabilities                 | 13 | 211,406   | 224,567  
|Current debt                                             |    |           | 14        | 16,402    | 10,341           
|                                                         |    |           |           |           | 227,808           | 234,908          
|Debt                                                     |    |           |           | 14        | 585,006           | 582,974          
|Asset retirement obligations                             |    | 15        | 85,259    | 79,971   
|Deferred income tax liabilities                          |    | 17        | 842,305   | 816,941  
|                                                         |    |           |           |           | 1,740,378         | 1,714,794        
|Equity                                                   |    |           |           |           |                  
|Share capital                                            |    |           | 18        | 5,314,589 | 5,300,957        
|Treasury stock                                           |    |           |           | (10,953)  | (7,445)          
|Contributed surplus                                      |    |           | 78,557    | 65,382   
|Accumulated other comprehensive loss                     |    | (17,056)  | (24,535) 
|Retained earnings (deficit)                              |    |           | (143,401) | 594,876  
|Total equity attributable to shareholders of the Company |    | 5,221,736 | 5,929,235
|Attributable to non-controlling interests                |    | 273,128   | 284,100  
|                                                         |    |           |           |           | 5,494,864         | 6,213,335        
|                                                         |    |           |           |           | 7,235,242         | 7,928,129        
|                                                         |    |           |           |           |                   |                  









|Approved on behalf of the Board of Directors |                                    | 
|-------------------------------------------- | ---------------------------------- | 
|                                             |                                    | 
|                                             |                                    | 
|                                             | (Signed) Robert R. GilmoreDirector | 
|                                             |                                    | 
|                                             |                                    | 
|Date of approval: February 20, 2014          |                                    | 















The accompanying notes are an integral
part of these consolidated financial statements.









Eldorado Gold Corporation

Consolidated
Income Statements

(Expressed in
thousands of U.S. dollars except per share amounts)







|                                                                |        |           |           |  |         |        
|--------------------------------------------------------------- | ------ | --------- | --------- |  | ------- | -------
|For the year ended December 31                                  | Note   | 2013      | 2012     
|                                                                |        |           |           |  | $       | $      
|Revenue                                                         |        |           |          
|Metal sales                                                     |        | 1,123,992 | 1,147,541
|                                                                |        |           |           |  |         |        
|Cost of sales                                                   |        |           |          
|Production costs                                                | 26     | 481,892   | 427,946  
|Depreciation and amortization                                   |        | 149,068   | 113,529  
|                                                                |        | 630,960   | 541,475  
|Gross profit                                                    |        | 493,032   | 606,066  
|                                                                |        |           |           |  |         |        
|Exploration expenses                                            |        | 34,686    | 39,521   
|General and administrative expenses                             |        | 68,291    | 70,135   
|Defined benefit pension plan expense                            | 16     | 2,478     | 1,900    
|Share based payments                                            | 19     | 19,492    | 21,794   
|Acquisition costs                                               | 5      | -         | 21,247   
|Impairment loss on property, plant and equipment and goodwill   | 11, 12 | 808,414   | -        
|Foreign exchange loss (gain)                                    |        | 6,799     | (2,780)  
|Operating profit (loss)                                         |        | (447,128) | 454,249  
|                                                                |        |           |          
|Loss on disposal of assets                                      |        | 830       | 509      
|Loss (gain) on marketable securities and other investments      |        | 2,421     | (176)    
|Loss on investments in associates                               |        | 1,285     | 5,627    
|Impairment loss on investment in associates                     | 9      | 14,051    | -        
|Other income                                                    |        | (6,201)   | (6,870)  
|Asset retirement obligation accretion                           | 15     | 1,337     | 1,842    
|Interest and financing costs                                    | 27     | 40,412    | 6,983    
|Writedown of assets                                             |        | 3,990     | -        
|                                                                |        |           |          
|Profit (loss) before income tax                                 |        | (505,253) | 446,334  
|Income tax expense                                              | 17     | 144,362   | 128,276  
|Profit (loss) for the year                                      |        | (649,615) | 318,058  
|                                                                |        |           |           |  |         |        
|Attributable to:                                                |        |           |          
|Shareholders of the Company                                     |        | (653,329) | 305,302  
|Non-controlling interests                                       |        | 3,714     | 12,756   
|Profit (loss) for the year                                      |        | (649,615) | 318,058  
|                                                                |        |           |           |  |         |        
|Weighted average number of shares outstanding (thousands)       | 28     |           |          
|Basic                                                           |        |           |           |  | 715,181 | 689,007
|Diluted                                                         |        |           |           |  | 715,181 | 690,669
|                                                                |        |           |           |  |         |        
|Earnings per share attributable to shareholders of the Company: |        |          
|Basic earnings (deficit) per share                              |        | (0.91)    | 0.44     
|Diluted earnings (deficit) per share                            |        | (0.91)    | 0.44     
|                                                                |        |           |           |  |         |        







The accompanying notes are an integral
part of these consolidated financial statements.









Eldorado Gold Corporation

Consolidated
Statements of Comprehensive Income

(Expressed in
thousands of U.S. dollars)







|For the year ended December 31                                    |      | Note | 2013      | 2012    
|----------------------------------------------------------------- | ---- | ---- | --------- | --------
|                                                                  |      |      | $         | $       
|                                                                  |      |      |           |         
|Profit (deficit) for the year                                     |      |      | (649,615) | 318,058 
|Other comprehensive gain (loss):                                  |      |      |           |         
|Change in fair value of available-for-sale financial assets       |      |      | (1,258)   | -       
|Realized gains on disposal of available-for-sale financial assets | (17) | (56)
|Actuarial gains (losses) on defined benefit pension plans         |      | 16   | 8,754     | (12,981)
|Total other comprehensive gain (loss) for the year                |      |      | 7,479     | (13,037)
|Total comprehensive income (deficit) for the year                 |      |      | (642,136) | 305,021 
|                                                                  |      |      |           |         
|Attributable to:                                                  |      |      |           |         
|Shareholders of the Company                                       |      |      | (645,850) | 292,265 
|Non-controlling interests                                         |      |      | 3,714     | 12,756  
|                                                                  |      |      | (642,136) | 305,021 
|                                                                  |      |      |           |         







The accompanying notes are an integral
part of these consolidated financial statements.









Eldorado Gold Corporation

Consolidated
Statements of Cash Flows

(Expressed in
thousands of U.S. dollars)







|                                                              |  |       |           |          
|------------------------------------------------------------- |  | ----- | --------- | ---------
|                                                              |  |       |           |          
|For the year ended December 31                                |  | Note  | 2013      | 2012     
|                                                              |  |       | $         | $        
|Cash flows generated from (used in):                          |  |       |           |          
|Operating activities                                          |  |       |           |          
|Profit for the year                                           |  |       | (649,615) | 318,058  
|Items not affecting cash                                      |  |       |           |          
|Asset retirement obligation accretion                         |  |       | 1,337     | 1,842    
|Depreciation and amortization                                 |  |       | 149,068   | 113,529  
|Unrealized foreign exchange loss (gain)                       |  |       | 775       | (1,072)  
|Deferred income tax expense (recovery)                        |  |       | 27,516    | (14,311) 
|Loss on disposal of assets                                    |  |       | 830       | 509      
|Loss on investment in associates                              |  |       | 1,285     | 5,627    
|Impairment loss on investment in associates                   |  |       | 14,051    | -        
|Writedown of assets                                           |  |       | 3,990     | -        
|Impairment loss on property, plant and equipment and goodwill |  |       | 808,414   | -        
|Loss (gain) on marketable securities and other investments    |  |       | 2,421     | (176)    
|Share based payments                                          |  |       | 19,492    | 21,794   
|Defined benefit pension plan expense                          |  |       | 2,478     | 1,900    
|                                                              |  |       | 382,042   | 447,700  
|                                                              |  |       |           |          
|Changes in non-cash working capital                           |  | 20    | (25,669)  | (152,472)
|                                                              |  |       | 356,373   | 295,228  
|Investing activities                                          |  |       |           |          
|Net cash received on acquisition of subsidiary                |  | 5     | -         | 18,789   
|Purchase of property, plant and equipment                     |  |       | (481,986) | (426,174)
|Proceeds from the sale of property, plant and equipment       |  | 2,086 | 859      
|Proceeds on pre-production sales                              |  |       | 24,877    | 54,705   
|Proceeds from the sale of marketable securities               |  |       | 2,025     | 1,270    
|Funding of non-registered supplemental retirement plan        |  |       |           |          
|investments, net                                              |  |       | -         | 14,486   
|Investments in associates                                     |  |       | (6,357)   | (14,768) 
|Increase on investment in term deposits                       |  |       | (34,702)  | -        
|Decrease (increase) in restricted cash                        |  |       | (12)      | 55,149   
|                                                              |  |       | (494,069) | (295,684)
|Financing activities                                          |  |       |           |          
|Issuance of common shares for cash                            |  |       | 7,003     | 22,145   
|Proceeds from contributions net of dispositions from          |  |       |           |          
|non-controlling interest                                      |  |       | 2,321     | -        
|Dividend paid to non-controlling interests                    |  |       | (13,281)  | (9,399)  
|Dividend paid to shareholders                                 |  |       | (84,948)  | (93,142) 
|Purchase of treasury stock                                    |  |       | (6,462)   | (6,830)  
|Long-term and bank debt proceeds                              |  |       | 15,977    | 650,000  
|Long-term and bank debt repayments                            |  |       | (10,354)  | (120,430)
|Loan financing costs                                          |  |       | (223)     | (18,808) 
|                                                              |  |       | (89,967)  | 423,536  
|Net increase (decrease) in cash and cash equivalents          |  |       | (227,663) | 423,080  
|Cash and cash equivalents - beginning of year                 |  |       | 816,843   | 393,763  
|                                                              |  |       |           |          
|Cash and cash equivalents - end of year                       |  |       | 589,180   | 816,843  





The accompanying notes are an integral
part of these consolidated financial statements.



















Eldorado Gold Corporation

Consolidated
Statements of Changes in Equity

(Expressed in
thousands of U.S. dollars)









|For the year ended December 31,                                  | Note | 2013      |   | 2012     
|---------------------------------------------------------------- | ---- | --------- | - | ---------
|                                                                 |      | $         | $
|Share capital                                                    |      |           |   |          
|Balance beginning of year                                        |      | 5,300,957 |   | 2,855,689
|Shares issued upon exercise of share options, for cash           |      | 7,003     |   | 22,145   
|Transfer of contributed surplus on exercise of options           |      | 2,934     |   | 23,221   
|Shares issued on acquisition of European Goldfields Ltd.         | 5    | -         |   | 2,380,140
|Transfer of contributed surplus on exercise of deferred phantom  |      |           |   |          
|units                                                            |      | 3,695     |   | 19,762   
|Balance end of year                                              |      | 5,314,589 |   | 5,300,957
|                                                                 |      |           |   |          
|Treasury stock                                                   |      |           |   |          
|Balance beginning of year                                        |      | (7,445)   |   | (4,018)  
|Purchase of treasury stock                                       |      | (6,462)   |   | (6,830)  
|Shares redeemed upon exercise of restricted share units          |      | 2,954     |   | 3,403    
|Balance end of year                                              |      | (10,953)  |   | (7,445)  
|                                                                 |      |           |   |          
|Contributed surplus                                              |      |           |   |          
|Balance beginning of year                                        |      | 65,382    |   | 30,441   
|Share based payments                                             |      | 19,847    |   | 21,092   
|Shares redeemed upon exercise of restricted share units          |      | (2,954)   |   | (3,403)  
|Options issued on acquisition of European Goldfields Ltd.        | 5    | -         |   | 31,130   
|Deferred phantom units granted on acquisition of European        |      |           |   |          
|Goldfields Ltd.                                                  | 5    | -         |   | 29,105   
|Partial reversal of non-controlling interest acquired on buy-out |      | 2,911     |   | -        
|Transfer to share capital on exercise of options and deferred    |      |           |   |          
|phantom units                                                    |      | (6,629)   |   | (42,983) 
|Balance end of year                                              |      | 78,557    |   | 65,382   
|                                                                 |      |           |   |          
|Accumulated other comprehensive loss                             |      |           |   |          
|Balance beginning of year                                        |      | (24,535)  |   | (10,069) 
|Other comprehensive loss for the year                            |      | 7,479     |   | (14,466) 
|Balance end of year                                              |      | (17,056)  |   | (24,535) 
|                                                                 |      |           |   |          
|Retained earnings                                                |      |           |   |          
|Balance beginning of year                                        |      | 594,876   |   | 382,716  
|Dividends paid                                                   |      | (84,948)  |   | (93,142) 
|Profit attributable to shareholders of the Company               |      | (653,329) |   | 305,302  
|Balance end of year                                              |      | (143,401) |   | 594,876  
|Total equity attributable to shareholders of the Company         |      | 5,221,736 |   | 5,929,235
|                                                                 |      |           |   |          
|Non-controlling interests                                        |      |           |   |          
|Balance beginning of year                                        |      | 284,100   |   | 56,487   
|Profit attributable to non-controlling interests                 |      | 3,714     |   | 12,756   
|Dividends declared to non-controlling interests                  |      | (14,096)  |   | (9,399)  
|Non-controlling interest acquired from European Goldfields Ltd.  | 5    | -         |   | 224,256  
|Contributions net of dispositions                                |      | (590)     |   | -        
|Balance end of year                                              |      | 273,128   |   | 284,100  
|                                                                 |      |           |   |          
|Total equity                                                     |      | 5,494,864 |   | 6,213,335











The accompanying notes are an integral
part of these consolidated financial statements.









Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)





|1. |  | General Information
|-- |  | -------------------

Eldorado
Gold Corporation (“Eldorado” or the “Company”) is a gold exploration, development and mining company.
The Company has operations and ongoing exploration and development projects in Turkey, China, Greece, Brazil and Romania. The
Company acquired control of European Goldfields Ltd. (“EGU”) in February 2012, including its producing mine, Stratoni,
and development projects, Olympias and Skouries in Greece and Certej in Romania.

Eldorado
is a public company which is listed on the Toronto Stock Exchange and New York Stock Exchange and is incorporated and domiciled
in Canada.



|2. |  | Basis of preparation
|-- |  | --------------------

These
consolidated financial statements, including comparatives, have been prepared using accounting policies in compliance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The
consolidated financial statements were authorized for issue by the Board of Directors on February 20, 2014.

Adoption
of new accounting standards and upcoming changes

The
following standards and amendments to existing standards have been adopted by the Company commencing January 1, 2013:

| | · | IAS
                                         19 ‘Employee Benefits’– In June 2011, the International Accounting
                                         Standards Board (“IASB”) published a revised version of IAS 19.  The
                                         revised IAS 19 (“IAS 19R”) represents IASB’s effort to improve the
                                         accounting for employee retirement benefits.  The revisions include:
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Requirement
                                         to recognize past service costs immediately in net income rather than using the corridor
                                         method.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-Requirement to recognize actuarial gains and losses immediately in other
comprehensive income (“OCI”). Previously, companies had the option of recognizing actuarial gains and losses through
OCI immediately or via use of the corridor method.

-Requirement that expected return on plan assets be calculated based on the
rate used to discount the defined benefit obligation which is based on high quality bond yields. Previously, equity returns were
incorporated into the expected return on plan assets.

| | - | Requirement
                                         for more disclosure relating to the characteristics and risks of the amounts in the financial
                                         statements regarding defined benefit plans, including the timing and uncertainty of the
                                         entity’s cash flows.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
adoption of this standard had a nominal impact on the Company’s audited consolidated financial statements. Therefore comparative
periods have not been restated. The required disclosures are included in note 16 of these audited consolidated financial statements.

| | · | IFRS
                                         10 ‘Consolidated Financial Statements’– This IFRS establishes
                                         control as the basis for an investor to consolidate its investee; it defines control
                                         as an investor’s power over the investee with exposure, or rights, to variable
                                         returns from the investee and the ability to affect the investor’s return through
                                         its power over the investee. There was no impact on the audited consolidated financial
                                         statements as a result of the adoption of this standard.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | IFRS
                                         11 ‘Joint Arrangements’ – This standard replaces the guidance
                                         in IAS 31 ‘Interests in Joint Ventures’.  Under IFRS 11, joint
                                         arrangements are classified as either joint operations or joint ventures.  Joint
                                         ventures entities are now accounted for using the equity method.  Upon application
                                         of IFRS 11, entities which had previously accounted for joint ventures using proportionate
                                         consolidation shall collapse the proportionately consolidated net asset value into a
                                         single investment balance at the beginning of the earliest period presented. The
                                         investment’s opening balance is tested for impairment in accordance with IAS 28
                                         ‘Investment in Associates and Joint Ventures’ and IAS 36 ‘Impairment
                                         of Assets’.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|2. |  | Basis of preparation (continued)
|-- |  | --------------------------------

Any
impairment losses are recognized as an adjustment to opening retained earnings at the beginning of the earliest period presented.
There was no impact on the audited consolidated financial statements as a result of the adoption of this standard.

| | · | IFRS
                                         12 ‘Disclosure of Interests in Other Entities’ – This IFRS is
                                         a new standard that applies to companies with an interest in subsidiaries, joint arrangements,
                                         associates or unconsolidated structured entities.  The application of this standard
                                         intends to enable users of the financial statements to evaluate the nature of and risks
                                         associated with its interests in other entities, and the effects of those interests on
                                         its financial position, financial performance and cash flows. Companies are now required
                                         to disclose information about significant judgments and assumptions made in determining
                                         the control of another entity, the joint control of an arrangement or significant influence
                                         over another entity and the type of joint arrangement when the arrangement has been structured
                                         through a separate vehicle. The Company has provided the additional disclosures
                                         required by this standard in note 9 of these audited consolidated financial statements.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | IFRS
                                         13 ‘Fair value measurement’ – This IFRS aims to improve consistency
                                         and reduce complexity by providing a precise definition of fair value and a single source
                                         of fair value measurement and disclosure requirements for use across IFRS. The requirements
                                         do not extend the use of fair value accounting but provide guidance on how it should
                                         be applied where its use is already required or permitted by other standards within IFRS.
                                         The required disclosures are included in notes 21 and 25 of these audited consolidated
                                         financial statements.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | IAS
                                         36 ‘Impairment of Assets’– In May 2013, the IASB published
                                         a revised version of this standard to reverse the unintended requirement in IFRS 13 ‘Fair
                                         Value Measurements’to disclose the recoverable amount of every cash-generating
                                         unit to which significant goodwill or indefinite-lived intangible assets have been allocated.
                                         Under the amendments, recoverable amount is required to be disclosed only when an impairment
                                         loss has been recognized or reversed.  The amendments apply retrospectively for
                                         annual periods beginning on or after January 1, 2014. The Company early adopted the amendments
                                         to this standard and has therefore disclosed the recoverable amount only for cash generating
                                         units where an impairment loss was recognized during 2013. These disclosures have been
                                         provided in note 11 of these audited consolidated financial statements.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | IFRIC
                                         20 ‘Stripping costs in the production phase of a surface mine’ –
                                         This interpretation applies to waste removal costs that are incurred in open pit mining
                                         activity during the production phase of the mine. Recognition of a stripping activity
                                         asset requires the asset to be related to an identifiable component of the ore body.
                                         Stripping costs that relate to inventory produced should be accounted for as a current
                                         production cost in accordance with IAS 2, ‘Inventories’. Stripping
                                         costs that generate a benefit of improved access and meet the definition of an asset
                                         should be accounted for as an addition to an existing asset. Existing stripping costs
                                         on the balance sheet at transition that do not relate to a specific ore body should be
                                         written off to opening retained earnings. The stripping activity asset shall be depreciated
                                         on a systematic basis, over the expected useful life of the identified component of the
                                         ore body that becomes more accessible as a result of the stripping activity. There was
                                         no impact on the audited consolidated financial statements as a result of the adoption
                                         of this standard.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
following standards and amendments to existing standards have been published and are mandatory for Eldorado’s annual accounting
periods beginning January 1, 2014, or later periods:

IFRS
9 ‘Financial Instruments: Classification and Measurement’– This is the first part of a new standard
on classification and measurement of financial assets that will replace IAS 39, ‘Financial Instruments: Recognition and
Measurement’. IFRS 9 has two measurement categories: amortized cost and fair value. All equity instruments are measured
at fair value. A debt instrument is recorded at amortized cost only if the entity is holding it to collect contractual cash flows
and the cash flows represent principal and interest. Otherwise it is measured at fair value with changes in fair value through
profit or loss. In addition, this new standard has been updated to include guidance on financial liabilities and derecognition
of financial instruments. This standard is effective for years beginning on or after January 1, 2015. The Company is currently
evaluating the extent of the impact of the adoption of this standard.

2





Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|2. |  | Basis of preparation (continued)
|-- |  | --------------------------------

| | · | IFRIC
                                         21 ‘Levies’ – This interpretation of IAS 37, ‘Provisions,
                                         Contingent Liabilities and Contingent Assets’,applies to the accounting for
                                         levies imposed by governments. IAS 37 sets out criteria for the recognition of a liability,
                                         one of which is the requirement for the entity to have a present obligation as a result
                                         of a past event (“obligating event”). IFRIC 21 clarifies that the obligating
                                         event that gives rise to a liability to pay a levy is the activity described in the relevant
                                         legislation that triggers the payment of the levy. IFRIC 21 is effective for annual periods
                                         commencing on or after January 1, 2014. The Company is currently evaluating the extent
                                         of the impact of adoption of this standard.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | There
                                         are no other IFRS or IFRIC interpretations that are not yet effective that could be expected
                                         to have a material impact on the Company.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Significant accounting policies
|-- |  | -------------------------------

The
principal accounting policies set out below have been applied consistently to all years presented in these consolidated financial
statements, and have been applied consistently by all Eldorado entities.

3.1	Basis
of presentation and principles of consolidation

(i)  	Subsidiaries
and business combinations

Subsidiaries
are entities controlled by Eldorado. Control exists when Eldorado is exposed to, or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. In assessing control, potential
voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are included in
the consolidated financial statements from the date that control commences until the date that control ceases.

The
acquisition method of accounting is used to account for business acquisitions. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are generally measured initially
at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest.

The
excess of the cost of acquisition over the fair value of Eldorado’s share of the identifiable net assets acquired is recorded
as goodwill. If the cost of acquisition is less than the fair value of the net assets acquired, the difference, or gain is recognised
directly in the income statement.

Transaction
costs, other than those associated with the issue of debt or equity securities, which the Company incurs in connection with a
business combination, are expensed as incurred.

The
most significant wholly-owned and partially-owned subsidiaries of Eldorado, are presented below:

|Subsidiary                                                  | Location | Ownership
    interest | Status       | Operations
    and development projects owned                                          
|----------------------------------------------------------- | -------- | ---------------------- | ------------ | ---------------------------------------------------------------------------------------
|Tüprag
    Metal Madencilik Sanayi ve Ticaret AS (“Tüprag”) | Turkey   | 100%                   | Consolidated | Kişladağ
        Mine
        Efemçukuru
        Mine                                  
|Unamgen
    Mineração e Metalurgia S/A                      | Brazil   | 100%                   | Consolidated | Vila
    Nova Iron Ore Mine                                                            
|Qinghai
    Dachaidan Mining Ltd (“QDML”)                   | China    | 90%                    | Consolidated | TJS
    Mine                                                                           
|Thracean
    Gold Mining SA                                 | Greece   | 100%                   | Consolidated | Perama
    Hill Project                                                                
|Sino
    Guizhou Jinfeng Mining Limited (“Jinfeng”)         | China    | 82%                    | Consolidated | Jinfeng
    Mine                                                                       
|Sino
    Gold Jilin BMZ Mining Limited                      | China    | 95%                    | Consolidated | White
    Mountain Mine                                                                
|Heihe
    Rockmining Limited (“Eastern Dragon”)             | China    | 95%                    | Consolidated | Eastern
    Dragon Project                                                             
|Brazauro
    Resources Corporation (“Brazauro”)             | Brazil   | 100%                   | Consolidated | Tocantinzinho
    Project                                                              
|Hellas
    Gold SA (“Hellas”)                               | Greece   | 95%                    | Consolidated | Stratoni
        Mine
        Olympias
        Project
        Skouries
        Project
|Deva
    Gold SA (“Deva”)                                   | Romania  | 81%                    | Consolidated | Certej
    Project                                                                     



3







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

(ii) 	Investments
in associates (equity accounted for investees)

Associates
are those entities where Eldorado has the ability to exercise significant influence, but not control, over the financial and operating
policies. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another
entity.

| |  | Associates
                                         are accounted for using the equity method (equity accounted investees) and are recognized
                                         initially at cost. The consolidated financial statements include Eldorado’s share
                                         of the income and expenses and equity movements of equity accounted investees, after
                                         adjustments to align the accounting policies with those of Eldorado, from the date that
                                         significant influence commences until the date that significant influence ceases.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | When the Company’s
                                         share of losses exceeds its interest in an equity accounted investee, the carrying amount
                                         of that interest (including any long-term investments) is reduced to nil and the recognition
                                         of further losses is discontinued except to the extent that the Company has an obligation
                                         to make, or has made, payments on behalf of the investee.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | At each balance
                                         sheet date, each investment in associates is assessed for indicators of impairment.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------

(iii)
Transactions with non-controlling interests

For
purchases from non-controlling interests, the difference between any consideration paid and the relevant share of the carrying
value of net assets of the subsidiary acquired is recorded in equity. Gains or losses on disposals to non-controlling interests
are also recorded in equity.

Eldorado
treats transactions in the ordinary course of business with non-controlling interests as transactions with third parties.

(iv)	Transactions
eliminated on consolidation

Intra-company
and intercompany balances and transactions, and any unrealized income and expenses arising from all such transactions, are eliminated
in preparing the consolidated financial statements.

3.2	Foreign
currency translation

(i)
 	Functional and presentation currency

Items
included in the financial statements of each of Eldorado’s entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). The consolidated financial statements are presented in U.S.
dollars, which is the Company’s functional and presentation currency, as well as the functional currency of all significant
subsidiaries.

(ii)
	Transactions and balances

Foreign
currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency
at the exchange rate at that date. Foreign exchange gains and losses resulting from the settlement of such transactions, and from
the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement.

3.3	Property,
plant and equipment

(i)	Cost
and valuation

| |  | Property, plant and equipment are carried
                                         at cost less accumulated depreciation and any impairment in value. When an asset is disposed
                                         of, it is derecognized and the difference between its carrying value and net sales proceeds
                                         is recognized as a gain or loss in the income statement.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





4







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

(ii)	Property,
plant and equipment

Property,
plant and equipment include expenditures incurred on properties under development, significant payments related to the acquisition
of land and mineral rights and property, plant and equipment which are recorded at cost on initial acquisition. Cost includes
the purchase price and the directly attributable costs of acquisition or construction required to bring an asset to the location
and condition necessary for the asset to be capable of operating in the manner intended by management.

(iii)	
Depreciation

Mine
development costs, property, plant and equipment and other mining assets whose estimated useful life is the same as the remaining
life of the mine are depreciated, depleted and amortized over a mine’s estimated life using the units-of-production method
calculated based on proven and probable reserves.

Capitalized
development costs related to a multi-pit operation are amortized on a pit-by-pit basis over the pit’s estimated life using
the units-of-production method calculated based on proven and probable reserves related to each pit.

Property,
plant and equipment and other assets whose estimated useful lives are less than the remaining life of the mine are depreciated
on a straight-line basis over the estimated useful life of the assets.

Where
components of an asset have a different useful life and cost that is significant to the total cost of the asset, depreciation
is calculated on each separate component.

Depreciation
methods, useful lives and residual values are reviewed at the end of each year and adjusted if appropriate.

(iv)
Subsequent costs

Expenditure on major
maintenance or repairs includes the cost of replacement parts of assets and overhaul costs. Where an asset or part of an asset
is replaced and it is probable that further future economic benefit will flow to the Company, the expenditure is capitalized.
Similarly, overhaul costs associated with major maintenance are capitalized when it is probable that future economic benefit will
flow to the Company and any remaining costs of previous overhauls relating to the same asset are derecognized. All other expenditures
are expensed as incurred.

(v)
 Deferred stripping costs

Stripping costs
incurred during the production phase of a mine are considered production costs and included in the cost of inventory produced
during the period in which the stripping costs are incurred, unless the stripping activity can be shown to be a betterment of
the mineral property, in which case the stripping costs are capitalized. Betterment occurs when stripping activity increases future
output of the mine by providing access to additional reserves. Stripping costs incurred to prepare the ore body for extraction
are capitalized as mine development costs (pre-stripping). Capitalized stripping costs are amor-tized on a unit-of-production
basis over the economically recoverable proven and probable reserves to which they relate.

(vi)
Borrowing costs

Borrowing costs
are expensed as incurred except where they are directly attributable to the financing of construction or development of qualifying
assets requiring a substantial period of time to prepare for their intended future use. Interest is capitalized up to the date
when substantially all the activities necessary to prepare the asset for its intended use are complete.

Investment income
arising on the temporary investment of proceeds from borrowings is offset against borrowing costs being capitalized.







5







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

(vii)	
Mine standby and restructuring costs

Mine standby costs
and costs related to restructuring a mining operation are charged directly to expense in the period incurred. Mine standby costs
include labour, maintenance and mine support costs during temporary shutdowns of a mine.

3.4	Exploration,
evaluation and development expenditures

(i)  
Exploration

Exploration expenditures
reflect the costs related to the initial search for mineral deposits with economic potential or obtaining more information about
existing mineral deposits. Exploration expenditures typically include costs associated with the acquisition of mineral licenses,
prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. All expenditures relating to exploration
activities are expensed as incurred except for the costs associated with the acquisition of mineral licenses which are capitalized.

(ii) 
Evaluation

Evaluation expenditures
reflect costs incurred at projects related to establishing the technical and commercial viability of mineral deposits identified
through exploration or acquired through a business combination or asset acquisition.

Evaluation
expenditures include the cost of:

| | a) | establishing
                                         the volume and grade of deposits through drilling of core samples, trenching and sampling
                                         activities in an ore body that is classified as either a mineral resource or a proven
                                         and probable reserve;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | determining
                                         the optimal methods of extraction and metallurgical and treatment processes;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------

| | c) | studies
                                         related to surveying, transportation and infrastructure requirements;
| | -- | ----------------------------------------------------------------------------------------------------------------------

| | d) | permitting
                                         activities; and
| | -- | -------------------------------------------------------------------

| | e) | economic
                                         evaluations to determine whether development of the mineralized material is commercially
                                         justified, including scoping, prefeasibility and final feasibility studies.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Evaluation expenditures
are capitalized if management determines that there is evidence to support probability of generating positive economic returns
in the future. A mineral resource is considered to have economic potential when it is expected the technical feasibility and commercial
viability of extraction of the mineral resource is demonstrable considering long-term metal prices. Therefore, prior to capitalizing
such costs, management determines that the following conditions have been met:

§There is a probable future benefit that will contribute to future cash inflows;

§The Company can obtain the benefit and control access to it; and

§The transaction or event giving rise to the benefit has already occurred.

The evaluation phase
is complete once technical feasibility of the extraction of the mineral deposit has been determined through preparation of a reserve
and resource statement, including a mining plan as well as receipt of required permits and approval of the Board of Directors
to proceed with development of the mine.

(iii)
Development

Development expenditures
are those that are incurred during the phase of preparing a mineral deposit for extraction and processing. These include pre-stripping
costs and underground development costs to gain access to the ore that is suitable for sustaining commercial mining, preparing
land, construction of plant, equipment and buildings and costs of commissioning the mine and mill.

Expenditures incurred
on development projects continue to be capitalized until the mine and mill commences commercial production. Alternatively, if
the factors that impact the technical feasibility and commercial viability of a project change and no longer support the probability
of generating positive economic returns in the future, expenditures will no longer be capitalized.

6







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

3.5	Goodwill

Goodwill represents
the excess of the cost of an acquisition over the fair value of Eldorado's share of the net assets of the acquired business at
the date of acquisition. When the excess is negative (negative goodwill), it is recognized immediately in income. Goodwill on
acquisition of subsidiaries and businesses is shown separately as goodwill in the financial statements. Goodwill on acquisition
of associates is included in investments in significantly influenced companies and tested for impairment as part of the overall
investment.

Goodwill is carried
at cost less accumulated impairment losses and tested annually for impairment. Impairment losses on goodwill are not reversed.
The impairment testing is performed annually or more frequently if events or changes in circumstances indicate that it may be
impaired.

Goodwill is allocated
to cash-generating units for the purpose of impairment testing. The allocation is made to those cash generating units or groups
of cash generating units (“CGU”s) that are expected to benefit from the business combination in which the goodwill
arose. If the composition of one or more cash generating units to which goodwill has been allocated changes due to a re-organization,
the goodwill is re-allocated to the units affected.

The
gain or loss on disposal of an entity includes the carrying amount of goodwill relating to the entity sold.

3.6	Impairment
of non-financial assets

Other long-lived
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment test is performed when the impairment indicators demonstrate that the carrying amount may not be recoverable and
it is reviewed at least annually.

An impairment loss
is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less cost to sell and value in use. For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are separately identifiable cash flows or CGUs.

Value in use is
determined as the present value of the future cash flows expected to be derived from an asset or CGU based on the detailed mine
and/or production plans. The estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.

Fair value less
cost to sell is the amount obtainable from the sale of an asset or CGU in an arm’s length transaction between knowledgeable,
willing parties, less the costs of disposal. For mining assets, fair value less cost to sell is often estimated using a discounted
cash flow approach because a fair value is not readily available from an active market or binding sale agreement. Estimated future
cash flows are calculated using estimated future prices, mineral reserves and resources, operating and capital costs. All assumptions
used are those that an independent market participant would consider appropriate. Non-financial assets other than goodwill impaired
in prior periods are reviewed for possible reversal of the impairment when events or changes in circumstances indicate that an
item is no longer impaired.

3.7	Financial
assets

(i)  
Classification

The Company classifies
its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available-for-sale.
The classification depends on the purpose for which the financial assets were acquired. Management determines the classification
of its financial assets at initial recognition.

(a)
Financial assets at fair value through profit or loss

Financial assets
at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if
acquired principally for the purpose of selling in the short-term. Derivatives are also categorised as held for trading unless
they are designated as hedges.

7







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

(b)
Loans and receivables

Loans
and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They are included in current assets, except for those with maturities of greater than 12 months after the end of the reporting
period, which are classified as non-current assets. Eldorado’s loans and receivables comprise cash and cash equivalents,
restricted cash, accounts receivable and other, and restricted assets and other in the balance sheet.

(c)
Available-for-sale financial assets

Available-for-sale
financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it
within 12 months of the end of the reporting period. Eldorado’s available-for-sale financial assets comprise marketable
securities not held for the purpose of trading.

(ii)
Recognition and measurement

Financial
assets are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through
profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction
costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments
have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

Available-for-sale
financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables
are subsequently carried at amortised cost using the effective interest method.

Gains
or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category
are presented in the income statement within ‘Gain or loss on marketable securities’ in the period in which they arise.
Dividend income from ‘financial assets at fair value through profit or loss’ is recognised in the income statement
as part of other income when Eldorado’s right to receive payments is established.

Gains
or losses arising from changes in the fair value of available-for-sale financial assets are recognized in other comprehensive
income and presented within equity. When marketable securities classified as available-for-sale are sold or impaired, the accumulated
fair value adjustments recognised in other comprehensive income are included in the income statement as ‘Gain or loss on
marketable securities’.

(iii)	Impairment
of financial assets

The
Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial
assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there
is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset
(a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial
asset or group of financial assets that can be reliably estimated.

| |  | An impairment loss
                                         in respect of a financial asset measured at amortized cost is calculated as the difference
                                         between its carrying amount, and the present value of the estimated future cash flows
                                         discounted at the original effective interest rate. An impairment loss in respect of
                                         an available-for-sale financial asset is calculated by reference to its fair value. In
                                         the case of equity instruments classified as available-for-sale, a significant or prolonged
                                         decline in the fair value of the security below its cost is also evidence that the assets
                                         are impaired. If any such evidence exists for available-for-sale financial assets, the
                                         cumulative loss – measured as the difference between the acquisition cost and the
                                         current fair value, less any impairment loss on that financial asset that was previously
                                         recognized in profit or loss – is removed from equity and recognized in the income
                                         statement.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





8







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

All
impairment losses are recognized in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset recognized
previously in equity is transferred to profit or loss. An impairment loss is reversed if the reversal can be related objectively
to an event occurring after the impairment loss was recognized. Impairment losses recognized for equity securities are not reversed.

3.8
Derivative financial instruments

| |  | Derivatives are recognized initially
                                         at fair value on the date a derivative contract is entered into. Subsequent to initial
                                         recognition, derivatives are measured at fair value, and changes in fair value thereafter
                                         are recognized in profit and loss. Fair values for derivative instruments are determined
                                         using valuation techniques, using assumptions based on market conditions existing at
                                         the balance sheet date. Derivatives are not accounted for using hedge accounting.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.9	
Inventories

| |  | Inventories are valued at the lower
                                         of cost and net realizable value. Costs incurred in bringing each product to its present
                                         location and condition are accounted for as follows:
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i) | Product
                                         inventory consists of stockpiled ore, ore on leach pads, crushed ore, in-circuit material
                                         at properties with milling or processing operations, gold concentrate, other metal concentrate,
                                         iron ore stockpile awaiting shipment, doré awaiting refinement and unsold bullion.
                                         Product inventory costs consist of direct production costs including mining, crushing
                                         and processing; site administration costs; and allocated indirect costs, including depreciation
                                         and amortization of property, plant and equipment.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Inventory costs
are charged to production costs on the basis of quantity of metal sold. The Company regularly evaluates and refines estimates
used in determining the costs charged to production costs and costs absorbed into inventory carrying values based upon actual
gold recoveries and operating plans.

Net realizable
value is the estimated selling price, less the estimated costs of completion and selling expenses.

| | ii) | Materials
                                         and supplies inventory consists of consumables used in operations, such as fuel, chemicals,
                                         reagents and spare parts, which are valued at the lower of average cost and net realisable
                                         value and, where appropriate, less a provision for obsolescence. Costs include acquisition,
                                         freight and other directly attributable costs.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.10
Trade receivables

| |  | Trade receivables are amounts due from
                                         customers for bullion, doré, gold concentrate, other metal concentrates and iron
                                         ore sold in the ordinary course of business.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Trade receivables are recognised initially
                                         at fair value and subsequently measured at amortised cost using the effective interest
                                         method, less a provision for impairment where neccesary.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.11
Cash and cash equivalents

| |  | Cash and cash equivalents include cash
                                         on hand, deposits held at call with banks, other short-term highly liquid investments
                                         with maturities at the date of acquisition of three months or less, and bank overdrafts.
                                         Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.12
Share capital

| |  | Common shares
                                         are classified as equity. Incremental costs directly attributable to the issue of common
                                         shares and share options are recognized as a deduction from equity, net of any tax effects.
                                         Common shares held by the Company are classified as treasury stock and recorded as a
                                         reduction of shareholders’ equity.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.13
Trade payables

| |  | Trade payables are obligations to pay
                                         for goods or services that have been acquired in the ordinary course of business from
                                         suppliers. Accounts payable are classified as current liabilities if payment is due within
                                         one year or less (or in the normal operating cycle of the business if longer). If not,
                                         they are presented as non-current liabilities.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9





Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



| |  | 
| |  | 

|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

Trade
payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

3.14
Debt and borrowings

| |  | Borrowings are recognised initially
                                         at fair value, net of transaction costs incurred. Borrowings are subsequently carried
                                         at amortised cost, calculated using the effective interest rate method. Any difference
                                         between the proceeds (net of transaction costs) and the redemption value is recognised
                                         in the income statement over the period of the borrowings using the effective interest
                                         method.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Fees paid on the establishment of loan
                                         facilities and other borrowings are recognised as transaction costs of the loan to the
                                         extent that it is probable that some or all of the facility and other borrowings will
                                         be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent
                                         there is no evidence that it is probable that some or all of the facility and borrowings
                                         will be drawn down, the fee is capitalised as a pre-payment for liquidity services and
                                         amortised over the period of the loan to which it relates.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.15	
Current and deferred income tax

| |  | Income tax expense comprises current
                                         and deferred tax. Income tax expense is recognized in the income statement except to
                                         the extent that it relates to items recognized either in other comprehensive income or
                                         directly in equity, in which case it is recognized in other comprehensive income or in
                                         equity, respectively.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Current tax is the expected tax payable
                                         on the taxable income for the year, using tax rates enacted or substantively enacted
                                         at the reporting date, and any adjustment to tax payable in respect of previous years.
                                         Taxes on income in the interim periods are accrued using the tax rate that would be applicable
                                         to expected total annual earnings. The tax rate used is the rate that is substantively
                                         enacted.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Deferred income
tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However, deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled.

A
deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which
the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be realized.

3.16	
Employee benefits

(i)
	Defined benefit plans

Certain employees
have entitlements under Company pension plans which are defined benefit pension plans. For defined benefit plans, the level of
benefit provided is based on the length of service and earnings of the person entitled.

The cost of the
defined benefit plan is determined using the projected unit credit method. The related pension liability recognized in the consolidated
balance sheet is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets.

The Company obtains
actuarial valuations for defined benefit plans for each balance sheet date. Actuarial assumptions used in the determination of
defined benefit pension plan liabilities are based on best estimates, including rate of salary escalation and expected retirement
dates of employees. The discount rate is based on high quality bond yields, as per IAS 19. The assumption used to determine the
interest income on plan assets is equal to the discount rate, as per IAS 19.



10







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

Actuarial gains
and losses are recognized in full in the period in which they occur in other comprehensive income without recycling to the statement
of income in subsequent periods. Current service cost, the vested element of any past service cost, the interest income on plan
assets and the interest arising on the pension liability are included in the same line items in the statement of income as the
related compensation cost.

Past service costs
are recognized immediately to the extent the benefits are vested, and otherwise are amortized on a straight-line basis over the
average period until the benefits become vested.

(ii)
Termination benefits

| |  | Eldorado recognizes termination benefits
                                         when it is demonstrably committed to either terminating the employment of current employees
                                         according to a detailed formal plan without possibility of withdrawal, or providing benefits
                                         as a result of an offer made to encourage voluntary termination. Benefits falling due
                                         more than twelve months after the end of the reporting period are discounted to their
                                         present value.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(iii)
	Short-term benefits

| |  | Short-term employee benefit obligations
                                         are measured on an undiscounted basis and are expensed as the related service is provided.
                                         A liability is recognized for the amount expected to be paid under short-term cash bonus
                                         or profit-sharing plans if Eldorado has a present legal or constructive obligation to
                                         pay this amount as a result of past service provided by the employee and the obligation
                                         can be estimated reliably.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.17
Share-based payment transactions

The
Company applies the fair value method of accounting for all stock option awards and equity settled restricted share units. Under
this method the Company recognizes a compensation expense for all stock options awarded to employees, based on the fair value
of the options on the date of grant which is determined by using the Black-Scholes option pricing model. For equity settled restricted
share units, compensation expense is recognized based on the quoted market value of the shares.

The
fair value of the options and restricted share units are expensed over the vesting period of the awards with a corresponding increase
in equity. No expense is recognized for awards that do not ultimately vest. Deferred share units are liability awards recorded
at the quoted market price at the grant date. The corresponding liability is marked to market at each reporting date.

3.18	
Provisions

| |  | A provision is recognized if, as a
                                         result of a past event, the Company has a present legal or constructive obligation that
                                         can be estimated reliably, and it is probable that an outflow of economic benefits will
                                         be required to settle the obligation. They are determined by discounting the expected
                                         future cash flows at a pre-tax rate that reflects current market assessments of the time
                                         value of money and the risks specific to the liability.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(i)
	Rehabilitation and restoration

| |  | Provision is made for mine rehabilitation
                                         and restoration when an obligation is incurred. The provision is recognised as a liability
                                         with a corresponding asset recognised in relation to the mine site. At each reporting
                                         date the rehabilitation liability is re-measured in line with changes in discount rates,
                                         and timing or amount of the costs to be incurred. The rehabilitation liability is classified
                                         as an ‘Asset retirement obligation’ on the balance sheet.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The provision recognised represents
                                         management’s best estimate of the present value of the future costs required. Significant
                                         estimates and assumptions are made in determining the amount of restoration and rehabilitation
                                         provisions. Those estimates and assumptions deal with uncertainties such as: requirements
                                         of the relevant legal and regulatory frameworks, the magnitude of necessary remediation
                                         activities and the timing, extent and costs of required restoration and rehabilitation
                                         activity.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11





Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|3. |  | Significant accounting policies (continued)
|-- |  | -------------------------------------------

| |  | These uncertainties may result in future
                                         actual expenditure differing from the amounts currently provided. The provision recognised
                                         is periodically reviewed and updated based on the facts and circumstances available at
                                         the time. Changes to the estimated future costs for operating sites are recognised in
                                         the balance sheet by adjusting both the restoration and rehabilitation asset and provision.
                                         Such changes give rise to a change in future depreciation and financial charges.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.19	
Revenue recognition

Revenue from the
sale of bullion, doré, gold concentrate, other metal concentrates and iron ore is recognized when persuasive evidence of
an arrangement exists, the bullion, doré, metal concentrates and iron ore has been shipped, title has passed to the purchaser,
the price is fixed or determinable, and collection is reasonably assured. Revenues realized from sales of pre-commercial production
are recorded as a reduction of property plant and equipment.

Our metal concentrates
are sold under pricing arrangements where final metal prices are determined by market prices subsequent to the date of shipment.
Provisional revenue is recorded at date of shipment based on metal prices at that time. Adjustments are made to the provisional
revenue in subsequent periods based on fluctuations in the market prices until date of final metal pricing. Consequently, at each
reporting period the receivable balances relating to sales of concentrates changes with the fluctuations in market prices.

3.20	
Finance income and expenses

| |  | Finance income comprises interest income
                                         on funds invested (including available-for-sale financial assets), gains on the disposal
                                         of available-for-sale financial assets and changes in the fair value of financial assets
                                         at fair value through profit or loss. Interest income is recognized as it accrues in
                                         profit or loss, using the effective interest method.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Finance expenses comprise interest expense
                                         on borrowings, unwinding of the discount on provisions, changes in the fair value of
                                         financial assets at fair value through profit or loss and impairment losses recognized
                                         on financial assets. All borrowing costs are recognized in profit or loss using the effective
                                         interest method, except for those amounts capitalized as part of the cost of qualifying
                                         property, plant and equipment.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.21
Earnings (loss) per share

| |  | Eldorado presents
                                         basic and diluted earnings per share (“EPS”) data for its common shares.
                                         Basic EPS is calculated by dividing the profit or loss attributable to common shareholders
                                         of the Company by the weighted average number of common shares outstanding during the
                                         period. Diluted EPS is determined by adjusting the profit or loss attributable to common
                                         shareholders and the weighted average number of common shares outstanding for the effects
                                         of all dilutive potential common shares, which comprise warrants and share options granted
                                         to employees.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | Critical accounting estimates and judgements
|-- |  | --------------------------------------------

The
preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.

| |  | Estimates and underlying assumptions
                                         are reviewed at each period end. Revisions to accounting estimates are recognized in
                                         the period in which the estimates are revised and in any future periods affected.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Significant areas requiring the use
                                         of management estimates include assumptions and estimates relating to determining defined
                                         proven and probable reserves, value beyond proven and probable reserves, fair values
                                         for purposes of purchase price allocations for business acquisitions, asset impairment
                                         analyses, asset retirement obligations, share-based payments and warrants, pension benefits,
                                         valuation allowances for deferred income tax assets, the provision for income tax liabilities,
                                         deferred income taxes and assessing and evaluating contingencies.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|4. |  | Critical accounting estimates and judgements (continued)
|-- |  | --------------------------------------------------------

| |  | Actual results could differ from these
                                         estimates. Outlined below are some of the areas which require management to make significant
                                         estimates and assumptions in determining carrying values.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Purchase price
allocation

| |  | Business combinations require estimates
                                         to be made at the date of acquisition in relation to determining asset and liability
                                         fair values and the allocation of the purchase consideration over the fair value of the
                                         assets and liabilities.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | In respect of mining company acquisitions,
                                         such as the acquisition of EGU in February 2012, purchase consideration is typically
                                         allocated to the mineral reserves and resources being acquired. The estimate of reserves
                                         and resources is subject to assumptions relating to life of the mine and may change when
                                         new information becomes available. Changes in reserves and resources as a result of factors
                                         such as production costs, recovery rates, grade or reserves or commodity prices could
                                         impact depreciation rates, asset carrying values and environmental and restoration provisions.
                                         Changes in assumptions over long-term commodity prices, market demand and supply, and
                                         economic and regulatory climates could also impact the carrying value of assets, including
                                         goodwill.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Estimated recoverable
reserves and resources

| |  | Mineral reserve and resource estimates
                                         are based on various assumptions relating to operating matters, including, with respect
                                         to production costs, mining and processing recoveries, cut-off grades, as well as assumptions
                                         relating to long-term commodity prices and, in some cases, exchange rates, inflation
                                         rates and capital costs. Cost estimates are based on feasibility study estimates or operating
                                         history. Estimates are prepared by appropriately qualified persons, but will be impacted
                                         by forecasted commodity prices, inflation rates, exchange rates, capital and production
                                         costs and recoveries amongst other factors. Estimated recoverable reserves and resources
                                         are used to determine the depreciation of property, plant and equipment at operating
                                         mine sites, in accounting for deferred stripping costs, in performing impairment testing
                                         and for forecasting the timing of the payment of decommissioning and restoration costs.
                                         Therefore, changes in the assumptions used could impact the carrying value of assets,
                                         depreciation and impairment charges recorded in the income statement and the carrying
                                         value of the decommissioning and restoration provision.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Current and deferred
taxes

| |  | The Company calculates current and deferred
                                         tax provisions for each of the jurisdictions in which it operates. Actual amounts of
                                         income tax expense are not final until tax returns are filed and accepted by the relevant
                                         authorities. This occurs subsequent to the issuance of financial statements. Therefore,
                                         profit in subsequent periods will be affected by the amount that estimates differ from
                                         the final tax return.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Estimates
of recoverability are required in assessing whether deferred tax assets and certain deferred tax liabilities are recognized on
the balance sheet. The Company also evaluates the recoverability of deferred tax assets based on an assessment of the ability
to use the underlying future tax deductions before they expire against future taxable income. Deferred tax liabilities arising
from temporary differences on investments in subsidiaries, joint ventures and associates are recognized unless the reversal of
the temporary differences is not expected to occur in the foreseeable future and can be controlled.

Assumptions
about the generation of future taxable profits and repatriation of retained earnings depend on management’s estimates of
future production and sales volumes, commodity prices, reserves, operating costs, decommissioning and restoration costs, capital
expenditures, dividends and other capital management transactions.

Judgement
is also required in the application of income tax legislation. These estimates and judgments are subject to risk and uncertainty
and could result in an adjustment to current and deferred tax provisions and a corresponding credit or debit to profit.







13







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|4. |  | Critical accounting estimates and judgements (continued)
|-- |  | --------------------------------------------------------

Impairment of non-current
assets and goodwill

Non-current assets
are tested for impairment when events or changes in circumstances suggest that the carrying amount may not be fully recoverable.
We conduct an annual test for impairment of goodwill in the fourth quarter of each fiscal year and at any other time of the year
if an indicator of impairment is identified.

Calculating the
estimated fair values of CGUs for non-current asset impairment tests and CGUs or groups of CGUs for goodwill impairment tests
requires management to make estimates and assumptions with respect to future production levels, operating and capital costs in
our life-of-mine (“LOM”) plans, long-term metal prices, foreign exchange rates and discount rates. Changes in any
of the assumptions or estimates used in determining the fair values could impact the impairment analysis.

Management is also
required to make judgments with respect to the level at which goodwill is tested for impairment. Judgments include an assessment
of whether CGUs should be grouped together for goodwill testing purposes at a level not larger than an operating segment or tested
at the individual CGU level.



|5. |  | Acquisition of European Goldfields Ltd.
|-- |  | ---------------------------------------

On February 24,
2012 the Company acquired 100% of the issued and outstanding shares of EGU. Under the terms of the Arrangement former EGU shareholders
received 0.85 of an Eldorado common share and C$0.0001 in cash for each EGU share. Eldorado issued 157,959,316 common shares pursuant
to the Arrangement. EGU holds a 95% stake in the Kassandra Mines district in Greece, which is comprised of the Stratoni Mine,
and the Olympias and Skouries development projects, and an 80% stake in the Certej development project in Romania.

The Company acquired
EGU to increase its presence in the Aegean region and leverage local operating knowledge and expertise.

The goodwill of
$473,782 resulting from the acquisition arises mainly on the recognition of deferred income tax liabilities and non-controlling
interests and represents, among other things, the exploration potential within the assets acquired and future variability in the
price of minerals. None of the goodwill is deductible for tax purposes.

In April 2007, Hellas
Gold (“Hellas”), a subsidiary of EGU, agreed to sell to Silver Wheaton (Caymans) Ltd. (“Silver Wheaton”)
all of the silver metal to be produced from ore extracted during the mine-life within an area of approximately seven square kilometres
around the Stratoni mine up to 15 million ounces, or 20 million ounces if additional silver is processed through the Stratoni
mill from areas other than the current producing mine. The sale was made in consideration of a prepayment to Hellas of $57.5 million
in cash, plus a payment per ounce of payable silver equal to the lesser of $3.90 and the prevailing market price per ounce calculated,
due and payable at the time of delivery. The expected cash flows associated with the sale of the silver to Silver Wheaton at a
price lower than market price have been reflected in the fair value of the mining interest recorded upon acquisition of EGU. The
Company has presented the value of any expected future cash flows from the sale of any future silver production to Silver Wheaton
as part of the mining interest, as the Company did not receive any of the original upfront payment. Further, the Company does
not believe that the agreement to sell to Silver Wheaton meets the definition of an onerous contract or other liability as the
obligation only arises upon production of the silver.











14







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



| | 5. | Acquisition of European Goldfields
                                         Ltd. (continued)
| | -- | --------------------------------------------------------------------------------------------

The allocation of
the purchase price is as follows:



|Purchase price:                                                  |           | $           
|---------------------------------------------------------------- | --------- | ------------
|                                                                 |           |             
|157,959,316 common shares of shares of Eldorado at C$15.05/share | 2,380,140
|4,713,248 replacement options                                    | 31,130   
|1,931,542 equity settled deferred phantom units                  | 29,105   
|Cash consideration                                               |           | 19          
|Total Consideration                                              |           | 2,440,394.00
|                                                                 |           |             
|Net assets acquired:                                             |           |             
|                                                                 |           |             
|Cash                                                             |           |             
|Accounts receivable                                              |           | 20,844      
|Inventory                                                        |           |             
|Other assets                                                     |           |             
|Mining interests                                                 |           | 2,745,440   
|Goodwill                                                         |           |             
|Accounts payable                                                 |           | (71,944)    
|Other liabilities                                                |           | (45,457)    
|Deferred income taxes                                            |           | (495,744)   
|Non-controlling interest                                         |           | (224,256)   
|                                                                 |           |             





The
purchase price allocation was finalized as at March 31, 2013. There were no changes from what was reported in the Company’s
annual financial statements for the year ended December 31, 2012.

The fair value of
the common shares and replacement options issued and the equity settled deferred phantom units (“DPUs”) as part of
the consideration paid for EGU was based on the closing share price on February 24, 2012 on the Toronto Stock Exchange. The value
of the replacement options was calculated using the Black-Scholes model. The following inputs were used to value the replacement
options:

|Risk-free
    interest rate      |  | 1.28%               | 
|-------------------------------- |  | ------------------- | 
|Expected
    volatility (range)  |  | 39%
    – 44%       | 
|Expected
    life (range)        |  | 0.7
    – 1.7 years | 
|Expected
    dividends per share |  | Cdn
    $0.09       | 
|Forfeiture
    rate              |  | 0%                  | 



Acquisition related
costs of $21,247 have been charged to transaction costs in the consolidated income statement for the year ended December 31, 2012.

These consolidated
financial statements include EGU’s results from February 24, 2012. The revenue included in the 2012 consolidated income
statement since February 24, 2012 contributed by EGU was $48,701. This was from the sales of zinc, lead and silver concentrates
produced at the Stratoni Mine in Greece. The net loss before tax was $26,348.

Had EGU been consolidated
from January 1, 2012, the 2012 pro-forma consolidated income statement would include additional revenue of $56,479 and a net loss
before tax of $49,392 from EGU.

Eldorado received
net cash of $18,789 as a result of the EGU transaction. This net increase of cash was a result of an acquired cash balance of
$18,808 less cash consideration of $19.







15







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|6. |  | Cash and cash equivalents
|-- |  | -------------------------

|                             | December
        31, 2013
        $ | December
        31, 2012
        $
|---------------------------- | ----------------------------------- | -----------------------------------
|Cash
    at bank and on hand | 508,611                             | 559,267                            
|Short-term
    bank deposits | 80,569                              | 257,576                            
|                             | 589,180                             | 816,843                            



|7. |  | Accounts receivable and other
|-- |  | -----------------------------

|                                            | December
        31, 2013
        $ | December
        31, 2012
        $
|------------------------------------------- | ----------------------------------- | -----------------------------------
|Trade
    receivables                       | 21,510                              | 53,147                             
|Value
    added and other taxes recoverable | 10,984                              | 6,724                              
|Other
    receivables and advances          | 16,704                              | 27,173                             
|Prepaid
    expenses and deposits           | 40,033                              | 25,280                             
|                                            | 89,231                              | 112,324                            



|8. |  | Inventories
|-- |  | -----------

|                                            | December
        31, 2013
        $ | December
        31, 2012
        $
|------------------------------------------- | ----------------------------------- | -----------------------------------
|                                            |                                     |                                    
|Ore
    stockpiles                          | 59,152                              | 46,826                             
|In-process
    inventory and finished goods | 73,510                              | 83,639                             
|Materials
    and supplies                  | 111,380                             | 90,301                             
|                                            | 244,042                             | 220,766                            

The cost of materials
and supplies consumed during the year and included in production costs amounted to $195,936 (2012 – $181,013).



|9. |  | Interests in other entities
|-- |  | ---------------------------

9.1
Investments in associates

|                                 | December
        31, 2013
        $ | December
        31, 2012
        $
|-------------------------------- | ----------------------------------- | -----------------------------------
|                                 |                                     |                                    
|Serabi
    Mining Plc (“Serabi”) | -                                   | 2,145                              
|Kopy
    Goldfields (“Kopy”)     | -                                   | 4,929                              
|Glory
    Resources (“Glory”)    | 10,046                              | 10,675                             
|Kenai
    Resources (“Kenai”)    | -                                   | 1,150                              
|Nordic
    Mines (“Nordic”)      | 903                                 | 9,050                              
|                                 | 10,949                              | 27,949                             

(a)
Serabi

In
January 2013, Serabi issued 270,000,000 new shares; the Company did not participate in the issue reducing its interest to 5.9%.
As a result, the Company recorded equity losses at December 31, 2012 to reduce the carrying value of the investment to the fair
market value of the Serabi shares. During 2013, the Company accounted for this investment as an available-for-sale marketable
security.

16







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|9. |  | Interests in other entities (continued)
|-- |  | ---------------------------------------

(b)
Kopy

During
the fourth quarter of 2013 the Company sold 3,895,851 shares of Kopy reducing its interest to 9%. As a result, the Company recorded
equity losses at the time of sale to reduce the carrying value of the investment to fair market value and started accounting for
this investment as an available-for-sale marketable security. The amount of equity loss for the year before reclassification was
$373.



(c)
Glory

There
were no share issuances by Glory during 2013. The Company maintains its representation of 19.9% interest in Glory and the ability
to appoint one board member.

The
investment in Glory is being accounted for under the equity method and the continuity of its investment is as follows:

|                                            | 2013   | 2012  
|------------------------------------------- | ------ | ------
|                                            | $      | $     
|Balance
    at January 1,                   | 10,675 | 11,203
|Equity
    loss catch up from previous year | (127)  | -     
|Equity
    loss for the year                | (502)  | (528) 
|Balance
    at December 31,                 | 10,046 | 10,675

Based
on quoted market prices, the fair value of the Company’s investment in Glory at December 31, 2013 was $6,768.

Glory
currently holds mineral interests in the Sapes gold project in Thrace, Greece.

On
October 30, 2013, Eldorado announced that it will acquire, through one of its subsidiaries and by way of a friendly cash takeover,
all of the outstanding shares of Glory that are not already owned or controlled by the Company for total consideration of approximately
A$30.5 million. Eldorado also proposed to acquire all the issued options of Glory for total consideration of approximately A$1.8
million and to settle Glory's deferred obligations in the Sapes Gold Project to Cape Lambert Resources Limited for A$6.5 million.

As
at February 19, 2014, 174,571,102 shares were acquired under the takeover bringing Eldorado’s investment in Glory to 219,167,022
shares or 97.8%.

The
financial statements used for the calculation of equity method for Glory were dated June 30, 2013 since Glory’s financial
statements as of December 31, 2013 will not be ready for release until after the Company’s year-end release date. The Company
accounts for the difference in the first quarter of the following year and this difference is not expected to be material for
the first quarter of 2014. Glory is a company based in Australia and as such is only required to file financial statements for
the half-year and at year-end.







17







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|9. |  | Interests in other entities (continued)
|-- |  | ---------------------------------------

Summarized
financial information for Glory on a 100% basis and reflecting adjustments made by the Company for differences in accounting policies,
is as follows:

|                                                          | December 31, 2013 | December 31, 2012
|--------------------------------------------------------- | ----------------- | -----------------
|                                                          | $                 | $                
|Current assets                                            | 4,001             | 9,656            
|Non-current assets                                        | 37,331            | 40,704           
|                                                          | 41,332            | 50,360           
|                                                          |                   |                  
|Current liabilities                                       | 186               | 260              
|Non-current liabilities                                   | 79                | 91               
|                                                          | 265               | 351              
|                                                          |                   |                  
|Profit (loss) of associates for the year                  | (2,532)           | (2,647)          
|Other comprehensive income                                | 8                 | (2)              
|Total comprehensive income                                | (2,524)           | (2,649)          
|The Company's equity share of profit (loss) of associates | (502)             | (528)            





(d)
Kenai

On
July 8, 2013, Kenai was acquired by Serabi. As a result the Company reduced the carrying value of the investment to the fair market
value of the Serabi shares at the end of June 30, 2013. The amount of equity loss for the year before the acquisition by Serabi
was $180.

(e)
Nordic

In
January 2013, the Company subscribed to 36,855,167 shares of Nordic and in November 2013 sold 14,000,000 shares. The Company’s
interest in Nordic at the end of 2013 was 10.1%. The Company continues to have the ability to appoint one board member in Nordic.

The
investment in Nordic is being accounted for under the equity method and the continuity of its investment is as follows:

|                              | 2013     | 2012   
|----------------------------- | -------- | -------
|                              | $        | $      
|Balance
    at January 1,     | 9,050    | -      
|Purchases
    during the year | 6,357    | 10,416 
|Sales
    during the year     | (350)    | -      
|Equity
    loss for the year  | (103)    | (1,366)
|Impairment
    loss           | (14,051) | -      
|Balance
    at December 31,   | 903      | 9,050  

Based
on quoted market prices, the fair value of the Company’s investment in Nordic at December 31, 2013 was $903. Due to decline
in fair value of the investment the Company has recorded an impairment loss on its investment in Nordic in the amount of $14,051.

Nordic
is a gold mining and exploration company focusing on the Nordic region of Europe.

The
financial statements used for the calculation of equity method for Nordic were dated September 30, 2013 since Nordic’s financial
statements as of December 31, 2013 will not be ready for release until after the Company’s year-end release date. Nordic
is considered an immaterial investment for the Company and its financial information does not have a significant impact on the
Company’s financial position, financial performance and cash flows.



18







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|9. |  | Interests in other entities (continued)
|-- |  | ---------------------------------------

9.2
Investment in subsidiaries

The
following table summarized the information relating to each of the Company’s subsidiaries that has non-controlling interests
(“NCI”) with material impact on net profit. The amounts disclosed for each subsidiary are based on those included
in the consolidated financial statements before inter-company eliminations. Disclosures related to Hellas and Deva have not been
provided as these subsidiaries currently have no material impact on net profit.



|                                                     | December 31, 2013 | December 31, 2012
|---------------------------------------------------- | ----------------- | -----------------
|                                                     | QDML              | Jinfeng          
|                                                     | $                 | $                
|NCI percentage                                       | 10%               | 18%              
|                                                     |                   |                  
|Current assets                                       | 222,216           | 57,417           
|Non-current assets                                   | 107,219           | 647,064          
|Current liabilities                                  | (82,179)          | (503,695)        
|Non-current liabilities                              | (7,983)           | (22,823)         
|Net assets                                           | 239,273           | 177,963          
|Carrying amount of NCI                               | 22,112            | 19,734           
|Revenue                                              | 144,057           | 171,104          
|Net profit                                           | 45,506            | 20,308           
|Total comprehensive income                           | 45,506            | 20,308           
|Profit allocated to NCI                              | 4,228             | 490              
|Dividends paid to NCI                                | 4,066             | 7,584            
|Cash flows from operating activities                 | (104)             | 83,179           
|Cash flows from investing activities                 | (11,333)          | (53,284)         
|Cash flows from financing activities                 | (40,664)          | (26,156)         
|Net increase (decrease) in cash and cash equivalents | (52,101)          | 3,739            





Significant
restrictions



The
Company cannot increase the drawdown limit of the entrusted loan described in note 14(h) without the consent of QDML’s non-controlling
interest.



|10. |  | Restricted assets and other
|--- |  | ---------------------------

|                                                      | December
        31, 2013
        $ | December
        31, 2012
        $
|----------------------------------------------------- | ----------------------------------- | -----------------------------------
|                                                      |                                     |                                    
|Restricted
    credit card deposits                   | 658                                 | 673                                
|Non-current
    accounts receivable                   | 898                                 | 1,288                              
|Prepaid
    loan costs (note 14(c))                   | 2,528                               | 3,918                              
|Environmental
    guarantee deposits                  | 13,285                              | 12,468                             
|Deposit
    on land acquisition at Jinfeng            | 2,918                               | 654                                
|Long-term
    value added and other taxes recoverable | 17,043                              | 12,845                             
|                                                      | 37,330                              | 31,846                             





19







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|11. |  | Property, plant and equipment
|--- |  | -----------------------------





|                                 |                    |                     |                           |                               |                        |          
|-------------------------------- | ------------------ | ------------------- | ------------------------- | ----------------------------- | ---------------------- | ---------
|                                 | Land and buildings | Plant and equipment | Capital works in progress | Mineral properties and leases | Capitalized Evaluation | Total    
|                                 | $                  | $                   | $                         | $                             | $                      | $        
|Cost                             |                    |                     |                           |                               |                        |          
|Balance at January 1, 2012       | 264,213            | 981,154             | 61,164                    | 1,900,502                     | 33,052                 | 3,240,085
|Additions/transfers              | 64,272             | 197,379             | 77,263                    | 87,613                        | 22,826                 | 449,353  
|Acquistion of EGU                | 62,327             | 201,188             | 5,070                     | 2,476,855                     | -                      | 2,745,440
|Proceeds on pre-production sales | -                  | (54,705)            | -                         | -                             | -                      | (54,705) 
|Other movements                  | -                  | 3,309               | -                         | -                             | (1,682)                | 1,627    
|Disposals                        | -                  | (3,621)             | -                         | -                             | -                      | (3,621)  
|Balance at December 31, 2012     | 390,812            | 1,324,704           | 143,497                   | 4,464,970                     | 54,196                 | 6,378,179
|                                 |                    |                     |                           |                               |                        |          
|Balance at January 1, 2013       | 390,812            | 1,324,704           | 143,497                   | 4,464,970                     | 54,196                 | 6,378,179
|Additions/transfers              | 85,803             | 183,237             | 10,806                    | 198,352                       | 18,303                 | 496,501  
|Proceeds on pre-production sales | -                  | -                   | -                         | (24,877)                      | -                      | (24,877) 
|Other movements                  | (2,287)            | (3,954)             | (812)                     | (742)                         | 239                    | (7,556)  
|Disposals/impairment losses      | (21,122)           | (53,602)            | -                         | (429,909)                     | -                      | (504,633)
|Balance at December 31, 2013     | 453,206            | 1,450,385           | 153,491                   | 4,207,794                     | 72,738                 | 6,337,614
|                                 |                    |                     |                           |                               |                        |          
|Depreciation                     |                    |                     |                           |                               |                        |          
|Balance at January 1, 2012       | (57,176)           | (268,648)           | -                         | (66,351)                      | -                      | (392,175)
|Depreciation for the year        | (25,696)           | (61,083)            | -                         | (28,513)                      | -                      | (115,292)
|Other movements                  | -                  | (4,304)             | -                         | 192                           | -                      | (4,112)  
|Disposals                        | -                  | 2,142               | -                         | -                             | -                      | 2,142    
|Balance at December 31, 2012     | (82,872)           | (331,893)           | -                         | (94,672)                      | -                      | (509,437)
|                                 |                    |                     |                           |                               |                        |          
|Balance at January 1, 2013       | (82,872)           | (331,893)           | -                         | (94,672)                      | -                      | (509,437)
|Depreciation for the year        | (35,679)           | (79,137)            | 2,280                     | (35,102)                      | -                      | (147,638)
|Other movements                  | (335)              | 570                 | -                         | 906                           | -                      | 1,141    
|Disposals                        | 601                | 2,046               | -                         | 55                            | -                      | 2,702    
|Balance at December 31, 2013     | (118,285)          | (408,414)           | 2,280                     | (128,813)                     | -                      | (653,232)
|                                 |                    |                     |                           |                               |                        |          
|Carrying amounts                 |                    |                     |                           |                               |                        |          
|At January 1, 2012               | 207,037            | 712,506             | 61,164                    | 1,834,151                     | 33,052                 | 2,847,910
|At December 31, 2012             | 307,940            | 992,811             | 143,497                   | 4,370,298                     | 54,196                 | 5,868,742
|Balance at December 31, 2013     | 334,921            | 1,041,971           | 155,771                   | 4,078,981                     | 72,738                 | 5,684,382



*
Prior period balances have been reclassified to conform with current period presentation.



The
amount of capitalized interest during the year ended December 31, 2013 included in property, plant and equipment was $3,705 ($2012
– $3,382).

As at December 31,
2013 the carrying value of goodwill at our Jinfeng mine and Eastern Dragon project was impaired by the entire allocated amounts
of $138,529 and $174,885, respectively (note 12). As a result, the Company assessed the recoverable amounts of property, plant
and equipment for each of these locations.



20







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|11. |  | Property, plant and equipment (continued)
|--- |  | -----------------------------------------

The recoverable
amount of an asset is the higher of its value-in-use and fair value less costs to sell. An impairment loss is recognized for any
excess of the carrying amount of an asset over its recoverable amount. The recoverable amount of the Company’s assets is
calculated using fair value less costs to sell. In addition to using the same fair value less costs to sell approach, the key
assumptions utilized are the same as those used for our annual goodwill impairment testing as described in note 12.

As at December 31,
2013, we recorded impairment charges of $495,000 ($371,250 net of deferred income tax recovery) on the property, plant and equipment
in China. Impairment charges included $350,000 impairment ($262,500 net of deferred income tax recovery) at our Eastern Dragon
project and $145,000 ($108,750 net of deferred income tax recovery) at our Jinfeng mine. These impairment charges were applied
to the property, plant and equipment based on the relative carrying amounts of the assets as at December 31, 2013 that were subject
to impairment charges. The carrying amount of our Eastern Dragon project and our Jinfeng mine after impairment charges is $444,830
and $630,512 respectively.



|12. |  | Goodwill
|--- |  | --------



|                         | 2013      | 2012   
|------------------------ | --------- | -------
|                         | $         | $      
|Cost                     |           |        
|Balance at January 1,    | 839,710   | 365,928
|Acquired during the year | -         | 473,782
|Impaired during the year | (313,414) | -      
|Balance at December 31,  | 526,296   | 839,710



Impairment tests
for goodwill

Goodwill is tested
for impairment annually and when circumstances indicate that the carrying value may not be recoverable. Impairment is determined
for goodwill by assessing the recoverable amount of each cash generating unit or group of CGUs to which the goodwill relates.
Where the recoverable amount of the CGU is less than its carrying amount including goodwill, an impairment loss is recognised.
Impairment losses relating to goodwill cannot be reversed in future periods.

Goodwill is allocated
to Eldorado’s individual CGUs in China and to a group of CGUs in Greece.

The recoverable
amount of a CGU or group of CGUs is determined based on the higher of fair value less costs to sell and value-in-use. These calculations
use projections based on financial budgets approved by management. Cash flows beyond the five-year period are extrapolated using
the estimated growth rates stated below. The estimates of future cash flows were derived from the most recent LOM plans with mine
lives ranging from 7 to 42 years.

Key assumptions
used for fair value less costs to sell calculations are as follows:

|                                                                                                                                                                               | 2013                                                                                    | 2012                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------- | ----------------------------------------------------------------------
|Gold
    price ($/oz)                                                                                                                                                          | $1,200
    - $1,300                                                                     | $1,350
    - $1,700                                                   
|Silver
        price ($/oz)
        Copper
        ($/lb)
        Lead
        ($/lb)
        Zinc
        ($/lb)
        Inflation
        Rate
        Discount
        rate | $22
        $3.04-$3.36
        $1.00
        $0.86
        2%
        7%
        - 12% | $30
        -
        -
        -
        2.5%
        7%
        - 9%





21







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|12. |  | Goodwill (continued)
|--- |  | --------------------

Based on the goodwill
impairment tests performed, the Company concluded that the goodwill was recoverable in all of the assessed areas with the exception
of the Jinfeng mine and the Eastern Dragon development project. The fair value less costs to sell discounted cash flow model yielded
impairments of the full carrying value of goodwill of the Jinfeng mine ($138,529) and Eastern Dragon project ($174,885).

The above assumptions
have been used for the analysis of the recoverability of goodwill. The use of copper, lead and zinc in our pricing assumption
reflects the revenue stream of our Greece group of CGUs, which was not subject to impairment testing in the prior year as the
allocation of the purchase price was not finalized until the first quarter of 2013.

The year over
year decrease in the gold price assumptions reflects the decline in observed market prices in late 2013. This has significantly
affected the projected cash flows of the Jinfeng mine and Eastern Dragon project.

Furthermore, a
Chinese permitting risk premium has been applied to the Eastern Dragon project to reflect the permitting delays that the development
project has experienced. The discount rates used reflect specific risks relating to this project.

As at December
31, 2013, goodwill is allocated to the White Mountain mine, TJS mine and Greece group of CGUs in the amounts of $50,276, $2,238
and $473,782, respectively.

In order for the
White Mountain mine, TJS mine and Greece group of CGUs recoverable amount to be equal to their carrying amount, the following
long term gold price assumptions would have to be used:

|                      | White
    Mountain Mine | TJS
    Mine | Greece
|--------------------- | ----------------------- | ------------ | ------
|Gold
    price ($/oz) | $1,175                  | $1,275       | $1,065



The Company believes
that a long term decline in the gold price environment would result in changes in operating cost inputs that may offset the impact
of a lower gold price environment.

The values assigned
to the key assumptions represent management’s assessment of future trends in the gold mining industry and in the global
economic environment. The assumptions used are management’s best estimates and are based on both current and historical
information from external and internal sources.



|13. |  | Accounts payable and accrued liabilities
|--- |  | ----------------------------------------



|                        | December
        31, 2013
        $ | December
        31, 2012
        $
|----------------------- | ----------------------------------- | -----------------------------------
|Trade
    payables      | 106,098                             | 101,505                            
|HST
    and other taxes | 6,442                               | 19,607                             
|Accrued
    expenses    | 98,866                              | 103,455                            
|                        | 211,406                             | 224,567                            











22







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|14. |  | Debt
|--- |  | ----

|                                                                 | December
        31, 2013
        $ | December
        31, 2012
        $
|---------------------------------------------------------------- | ----------------------------------- | -----------------------------------
|Current:                                                         |                                     |                                    
|Jinfeng
    China Mechant Bank (“CMB”) working capital loan  (a) | 16,402                              | -                                  
|Eastern
    Dragon HSBC revolving loan facility (b)              | -                                   | 10,341                             
|                                                                 | 16,402                              | 10,341                             
|Non-current:                                                     |                                     |                                    
|Senior
    notes  (d)                                            | 585,006                             | 582,974                            
|Total
    debt                                                   | 601,408                             | 593,315                            



(a)
Jinfeng CMB working capital loan

On January 16, 2013,
Jinfeng entered into a RMB 100.0 million ($16,402) working capital loan with CMB. Each drawdown bears fixed interest at the prevailing
lending rate stipulated by the People’s Bank of China on the date of drawdown. The Facility had a term of up to one year,
from January 16, 2013 to January 14, 2014. Subsequent to year-end, the term of the facility was extended to January 28, 2015.
This facility is unsecured.

As at December 31,
2013, Jinfeng has drawn down the full amount of RMB 100.0 million ($16,402) under this facility, in three tranches, and has used
the proceeds to fund working capital obligations. All tranches of the loan have a term of six months and a fixed interest rate
of 5.6%.

Subsequent to December
31, 2013, Jinfeng repaid RMB 63.0 million ($10,333) on this facility and subsequently drew down the same amount.

(b)
Eastern Dragon HSBC revolving loan facility

In May 2010, Eastern
Dragon entered into a RMB 80.0 million ($13,121) revolving facility (“the Facility”) with HSBC Bank (China). The Facility
could be drawn down in minimum tranches of RMB 1.0 million ($164) or its multiples. Each drawdown bore interest fixed at the prevailing
lending rate stipulated by the People’s Bank of China on the date of drawdown. The Facility had a term of up to one year.
In February 2012, the Facility was reviewed by the bank and was extended to March 11, 2013. In March 2013, Eastern Dragon re-paid
the full amount of this loan.

(c)
HSBC revolving credit facility

The Company has
a $375.0 million revolving credit facility with HSBC (“the credit facility” or “ARCA”) and a syndicate
of other banks. The ARCA matures on November 23, 2016. The ARCA is secured by the shares of SG Resources and Tuprag, wholly owned
subsidiaries of the Company.

The ARCA contains
covenants that restrict, among other things, the ability of the Company to incur an aggregate unsecured indebtedness exceeding
$850.0 million, incur secured indebtedness up to $200.0 million, make distributions in certain circumstances, sell material assets
and carry on a business other than one related to the mining business. Significant financial covenants include a maximum debt
to Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of 3.5:1 and a minimum EBITDA to interest
of 3:1. The Company is in compliance with these covenants at December 31, 2013.

Loan interest is
variable dependent on a leverage ratio pricing grid. The Company’s current leverage ratio is approximately 1.2:1. At this
ratio, interest charges and fees are as follows: LIBOR plus margin of 2.00% and undrawn standby fee of 0.50%. Fees of $4,728 were
paid in relation of the credit facility. This amount has been deferred as pre-payments for liquidity services and will be amortized
over the term of the credit facility. As at December 31, 2013, the prepaid loan cost on the balance sheet was $2,528 (note 10).

No amounts were
drawn down under the ARCA as at December 31, 2013.

23







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|14. |  | Debt (continued)
|--- |  | ----------------

(d) Senior
notes

On December 10,
2012, the Company completed an offering of $600.0 million senior notes (“the notes”) at par value, with a coupon rate
of 6.125% due December 15, 2020. The notes pay interest semi-annually on June 15 and December 15. The Company received proceeds
of $589.5 million from the offering, which is net of the commission payment. The notes are redeemable by the Company in whole
or in part, for cash:

| | i) | At
                                         any time prior to December 15, 2016 at a redemption price equal to 100% of the aggregate
                                         principal amount of the notes at the treasury yield plus 50 basis points, and any accrued
                                         and unpaid interest;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii) | On
                                         and after the dates provided below, at the redemption prices, expressed as a percentage
                                         of principal amount of the notes to be redeemed, set forth below, plus accrued and unpaid
                                         interest on the notes:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

December 15, 2016	103.063%
December 15, 2017	101.531%
2018 and thereafter	100.000%

The early prepayment
prices are to reimburse the lender for lost interest for the remaining term. The fair market value of the notes as at December
31, 2013 is $577.1 million.

Net deferred financing
costs of $14,994 have been included as an offset in the balance of the notes in the financial statements and are being amortized
over the term of the notes.

(h)
Entrusted loan

In November 2010,
Eastern Dragon, HSBC Bank (China) and QDML, our 90% owned subsidiary, entered into a RMB 12.0 million ($1,968) entrusted loan
agreement, which has been increased to RMB 720.0 million ($118,093) through a series of amendments.

Under the terms
of the entrusted loan, QDML with its own funds entrusts HSBC Bank (China) to provide a loan facility in the name of QDML to Eastern
Dragon. The loan can be drawn down in tranches. Each drawdown bears interest fixed at the prevailing lending rate stipulated by
the People’s Bank of China on the date of drawdown. Each draw down has a term of three months and can be rolled forward
at the discretion of QDML. The interest rate on this loan as at December 31, 2013 was 4.59%.

As at December 31,
2013, RMB 634.1 million ($104,004) had been drawn under the entrusted loan.

Subsequent to December
31, 2013, RMB 3.0 million ($492) was drawn under this loan.

The entrusted loan
has been recorded on a net settlement basis.



| | 15. | Asset
                                         retirement obligations
| | --- | ---------------------------------------------------------------------



|                                    | Greece  | Brazil | China  | Turkey | Romania | Total  
|----------------------------------- | ------- | ------ | ------ | ------ | ------- | -------
|                                    | $       | $      | $      | $      | $       | $      
|At January 1, 2013                  | 33,649  | 3,406  | 25,603 | 17,313 | -       | 79,971 
|Acquired during the year            | -       | -      | -      | -      | -       | -      
|Accretion during the year           | 413     | 54     | 391    | 479    | -       | 1,337  
|Revisions to estimate of obligation | (1,420) | (621)  | (696)  | 5,772  | 916     | 3,951  
|At December 31, 2013                | 32,642  | 2,839  | 25,298 | 23,564 | 916     | 85,259 
|Estimated undiscounted amount       | 50,822  | 3,829  | 31,233 | 74,371 | 2,945   | 163,200







24







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|15. |  | Asset retirement obligations (continued)
|--- |  | ----------------------------------------

The
Company’s asset retirement obligations relate to the restoration and rehabilitation of the Company’s mining operations
and projects under development. The expected timing of the cash flows in respect of the provision is based on the estimated life
of the various mining operations.

The
provision is calculated as the present value of estimated future net cash outflows based on the following key assumptions:



|                     | Greece     | Brazil | China      | Turkey     | Romania
|-------------------- | ---------- | ------ | ---------- | ---------- | -------
|                     | %          | %      | %          | %          | %      
|At December 31, 2012 |            |        |            |            |        
|Inflation rate       | 2.5        | 2.5    | 2.5        | 2.5        | -      
|Discount rate        | 0.7 to 2.7 | 1.6    | 0.7 to 1.8 | 1.9 to 3.0 | -      
|                     |            |        |            |            |        
|At December 31, 2013 |            |        |            |            |        
|Inflation rate       | 2.0        | 2.0    | 2.0        | 2.0        | 2.0    
|Discount rate        | 0.4 to 4.0 | 3.0    | 1.3 to 3.0 | 3.1 to 4.0 | 4.0    
|                     |            |        |            |            |        



The
discount rate is a risk-free rate determined based on U.S. Treasury bond rates. U.S. Treasury bond rates have been used for all
of the mine sites as the liabilities are denominated in U.S. dollars and the majority of the expenditures are expected to be incurred
in U.S. dollars. The inflation rates used in determining the present value of the future net cash outflows are based on worldwide
inflation rates.

Environmental
guarantee deposits exist with respect to the environmental rehabilitation of the mines in China (note 10).

Additionally,
the Company has provided the following:

| | a) | a
                                         €50.0 million Letter of Guarantee to the Ministry of Environment of Greece as security
                                         for the due and proper performance of rehabilitation works in relation to the mining
                                         and metallurgical facilities of the Kassandra Mines and the removal, cleaning and rehabilitation
                                         of the old Olympias tailings.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | a
                                         $30.0 million Letter of Guarantee to the Ministry of Environment, Energy and Climate
                                         change of Turkey as security for the due and proper performance of rehabilitation works
                                         committed in connection with the environmental impact assessment approved for Kişladağ
                                         and Efemçukuru. This Letter of Guarantee is renewed annually, expires on September
                                         19, 2014 and has an annual fee of 27 basis points.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|16. |  | Defined benefit plans
|--- |  | ---------------------





|                                       |  | December 31, 2013 | December 31, 2012
|-------------------------------------- |  | ----------------- | -----------------
|                                       |  | $                 | $                
|Balance sheet obligations (asset) for: |  |                   |                  
|Pension Plan                           |  | 477               | 616              
|Supplementary pension plan             |  | (13,961)          | (5,187)          
|                                       |  | (13,484)          | (4,571)          









25







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|16. |  | Defined benefit plans (continued)
|--- |  | ---------------------------------





|                                                                 |  | December 31, 2013 | December 31, 2012
|---------------------------------------------------------------- |  | ----------------- | -----------------
|                                                                 |  | $                 | $                
|Income statement charge for:                                     |  |                   |                  
|Pension plan                                                     |  | 215               | 146              
|Non-registered supplementary pension plan                        |  | 2,263             | 1,754            
|                                                                 |  | 2,478             | 1,900            
|                                                                 |  |                   |                  
|                                                                 |  |                   |                  
|Actuarial losses (gains) recognised in the statement of other    |  |                   |                  
|comprehensive income in the period (before tax)                  |  | (8,754)           | 12,981           
|Cumulative actuarial losses recognised in the statement of other |  |                   |                  
|comprehensive income (before tax)                                |  | 13,523            | 22,277           







The Company operates
defined benefit pension plans in Canada with two components: a registered pension plan (“the Pension Plan”) and a
supplementary pension plan (“the SERP”). During the second quarter of 2012, the SERP was converted into a Retirement
Compensation Arrangement (“RCA”), a trust account. As it is a trust account, the assets in the account are protected
from the Company’s creditors.  The RCA requires the Company to remit 50% of any contributions and any realized investment
gains to the Receiver General of Canada as refundable tax.

These plans, which
are only available to certain qualifying employees, provide benefits based on an employee’s years of service and final average
earnings at retirement. Annual contributions related to these plans are actuarially determined and made at or in excess of minimum
requirements prescribed by legislation.

Eldorado’s
plans have actuarial valuations performed for funding purposes. The Pension Plan last had an actuarial valuation performed as
of January 1, 2011 for funding purposes with the next required valuation as of January 1, 2014. The SERP’s last valuation
was on January 1, 2013 for funding purposes and the next valuation will be prepared in accordance with the terms on the pension
plan. The measurement date to determine the pension obligation and assets for accounting purposes was December 31, 2013.

The SERP is designed
to provide supplementary pension benefits to qualifying employees affected by the maximum pension limits under the Income Tax
Actpursuant to the registered Pension Plan.Further, the Company is not required to pre-fund any benefit obligation
under the SERP.

Total cash payments

The amount contributed
to the Pension Plan and the SERP was $2,958 (2012 – $39,601). Cash payments totalling $167 were made directly to beneficiaries
during the year (2012 – $172). The Company expects to contribute $209 to the Pension Plan and $2,835 to the SERP in 2014.

The estimated future
pension payments for the next five years and five years thereafter are as follows:

|                                      | 2014 | 2015 | 2016  | 2018
    and later
|------------------------------------- | ---- | ---- | ----- | ------------------
|                                      | $    | $    | $     | $                 
|Estimated
    future pension payments | 172  | 267  | 2,533 | 15,197            











26







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|16. |  | Defined benefit plans (continued)
|--- |  | ---------------------------------

The amounts recognised
in the balance sheet are determined as follows:



|                                   | December 31, 2013 |          | December 31, 2012 |             
|---------------------------------- | ----------------- | -------- | ----------------- | ------------
|                                   | Pension Plan      | SERP     | Total             | Pension Plan
|                                   | $                 | $        | $                 | $           
|                                   |                   |          |                   |             
|Present value of obligations       | 2,407             | 31,529   | 33,936            | 2,585       
|Fair value of plan assets          | (1,930)           | (45,490) | (47,420)          | (1,969)     
|Liability (asset) on balance sheet | 477               | (13,961) | (13,484)          | 616         





The movement
in the defined benefit obligation over the year is as follows:



|                        | 2013         | 2012   
|----------------------- | ------------ | -------
|                        | Pension Plan | SERP   
|                        | $            | $      
|Balance at January 1,   | 2,585        | 35,903 
|Current service cost    | 190          | 2,466  
|Interest cost           | 101          | 1,397  
|Actuarial loss (gain)   | (302)        | (5,781)
|Benefit payments        | -            | (167)  
|Exchange loss (gain)    | (167)        | (2,289)
|Balance at December 31, | 2,407        | 31,529 







The movement in
the fair value of plan assets of the year is as follows:



|                               | 2013         | 2012   
|------------------------------ | ------------ | -------
|                               | Pension Plan | SERP   
|                               | $            | $      
|At January 1,                  | 1,969        | 41,090 
|Interest income on plan assets | 77           | 1,600  
|Actuarial gain (loss)          | (113)        | 2,784  
|Contributions by employer      | 123          | 2,835  
|Exchange gain (loss)           | (126)        | (2,819)
|At December 31,                | 1,930        | 45,490 







The amounts recognised
in the income statement are as follows:





|                               | 2013         | 2012   
|------------------------------ | ------------ | -------
|                               | Pension Plan | SERP   
|                               | $            | $      
|                               |              |        
|Current service cost           | 190          | 2,466  
|Interest cost                  | 101          | 1,397  
|Expected return on plan assets | (76)         | (1,600)
|Defined benefit plans expense  | 215          | 2,263  





27







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|16. |  | Defined benefit plans (continued)
|--- |  | ---------------------------------

The actual return
on plan assets was $4,582 (2012 – $1,520).

The principal
actuarial assumptions used were as follows:





|                                                                                  | 2013         | 2012     
|--------------------------------------------------------------------------------- | ------------ | ---------
|                                                                                  | Pension Plan | SERP     
|                                                                                  | %            | %        
|                                                                                  |              |          
|Expected return on plan assets                                                    | 4.8          | 4.8      
|Discount rate - beginning of year                                                 | 3.9          | 3.9      
|Discount rate - end of year                                                       | 4.8          | 4.8      
|Rate of salary escalation                                                         | -            | -        
|Average remaining service period of active employees expected to receive benefits | 7.6 years    | 7.6 years





The assumption
used to determine the interest income on plan assets is equal to the discount rate, as per IAS 19.



Plan
Assets

The
assets of the Pension Plan and the amounts deposited in the SERP account are managed by a major investment management company
and are invested only in conformity with the investment requirements of applicable pension laws.



The
following table summarizes the defined benefit plans’ weighted average asset allocation percentages by asset category:



|                                                                        |     | December 31, 2013 | December 31, 2012
|----------------------------------------------------------------------- | --- | ----------------- | -----------------
|                                                                        |     | Pension Plan      | SERP             
|Investment funds                                                        |     |                   |                  
|Money market                                                            |     | 1%                | 7%               
|Canadian fixed income                                                   | 99% | 4%                | 99%              
|Canadian equities                                                       |     | -                 | 20%              
|U.S. equities                                                           |     | -                 | 17%              
|International equities                                                  |     | -                 | 7%               
|Other (1)                                                               |     | -                 | 45%              
|Total                                                                   |     | 100%              | 100%             
|                                                                        |     |                   |                  
|1Assets held by the Canada Revenue Agency in the refundable tax account |     |                  



The sensitivity
of the overall pension liability to changes in the weighted principal assumptions is:

|                           | Change
    in assumption      | Impact
    on overall liability
|-------------------------- | ----------------------------- | -------------------------------
|Discount
    rate          | Increase
    by 0.5%          | Decrease
    by 6.7%           
|                           | Decrease
    by 0.5%          | Increase
    by 6.1%           
|Salary
    escalation rate | Increase/decrease
    by 0.5% | Increase/decrease
    by 0.1%  















28







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|17. |  | Income tax expense and deferred taxes
|--- |  | -------------------------------------

Total income
tax expense consists of:



|                                |  |        |          | December 31, 2013 | December 31, 2012
|------------------------------- |  | ------ | -------- | ----------------- | -----------------
|                                |  |        |          | $                 | $                
|Current tax expense             |  |        | 116,846  | 142,587          
|Deferred tax expense (recovery) |  | 27,516 | (14,311)
|                                |  |        |          | 144,362           | 128,276          





Total income
tax expense attributable to geographical jurisdiction is as follows:





|                    |  |  |     | 2013     | 2012   
|------------------- |  |  | --- | -------- | -------
|                    |  |  |     | $        | $      
|Turkey              |  |  |     | 109,195  | 74,052 
|China               |  |  |     | (90,177) | 52,794 
|Greece              |  |  |     | 122,657  | 847    
|Brazil              |  |  |     | 3,202    | 1,110  
|Canada              |  |  |     | 51       | -      
|Romania             |  |  |     | (889)    | (540)  
|Other jurisdictions |  |  | 323 | 13      
|                    |  |  |     | 144,362  | 128,276







Factors affecting
income tax expense for the year:





|                                                                 |           |           |          | 2013     | 2012
|---------------------------------------------------------------- | --------- | --------- | -------- | -------- | ----
|                                                                 |           |           |          | $        | $   
|Profit before income tax                                         |           | (505,253) | 446,334 
|Canadian statutory tax rate                                      |           | 26.00%    | 25.00%  
|Tax on profit at Canadian statutory tax rate                     | (131,366) | 111,584  
|                                                                 |           |           |          |          |     
|Items that cause an increase (decrease) in income tax expense:   |           |          
|                                                                 |           |           |          |          |     
|Foreign income subject to different income tax rates than Canada | (9,074)   | (18,256) 
|Increase in Greek tax rates                                      |           | 125,102   | -       
|Non-tax effected operating losses and capital gains              | 20,434    | 19,149   
|Non-deductible expenses and other items                          | 14,636    | 12,445   
|Non-deductible goodwill impairment                               | 78,354    |          
|Foreign exchange and other translation adjustments               | 23,807    | (6,325)  
|Amounts under (over) provided in prior years                     | 762       | (50)     
|Investment tax credits                                           |           |           | (12,381) | (15,846)
|Withholding tax on foreign income                                |           | 34,088    | 25,575  
|Income tax expense                                               |           |           | 144,362  | 128,276 







The
Canadian income tax rate increased during the year due to changes in the law that increased corporate income tax rates in Canada.





29







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|17. |  | Income tax expense and deferred taxes (continued)
|--- |  | -------------------------------------------------

The change for
the year in the Company's net deferred tax position was as follows:





|                                                               |  |          |        |   |           |           | 2013      | 2012
|-------------------------------------------------------------- |  | -------- | ------ | - | --------- | --------- | --------- | ----
|Net deferred tax asset (liability)                             |  |          |        |   | $         | $        
|Balance at January 1,                                          |  |          |        |   |           | (813,792) | (332,320)
|Deferred income tax (expense) recovery in the income statement |  | (27,516) | 14,311
|Adjustments related to acquisitions                            |  |          |        | - | (495,744)
|Other                                                          |  |          |        |   |           |           | -         | (39)
|Net balance at December 31,                                    |  |          |        |   | (841,308) | (813,792)



The
composition of the Company’s net deferred income tax asset and liability and deferred tax expense (recovery) is as follows:





|                              |                     |                          |                         |         |        |          | Expense (recovery)
|----------------------------- | ------------------- | ------------------------ | ----------------------- | ------- | ------ | -------- | ------------------
|Type of temporary difference  | Deferred tax assets | Deferred tax liabilities | on the income statement
|                              |                     |                          | 2013                    | 2012    | 2013   | 2012     | 2013              
|                              |                     |                          | $                       | $       | $      | $        | $                 
|Property, plant and equipment | 4,687               | 2,428                    | 878,725                 | 852,556 | 23,910 | 7,506   
|Loss carryforwards            |                     | 12,059                   | 11,246                  | -       | -      | (813)    | 329               
|Liabilities                   |                     |                          | 18,226                  | 15,955  | 2,784  | 5,510    | (4,997)           
|Investment tax credits        |                     | 7,795                    | 11,050                  | -       | -      | 3,255    | (11,050)          
|Other items                   |                     | 4,054                    | 4,549                   | 6,620   | 954    | 6,161    | (5,724)           
|Balance at December 31,       | 46,821              | 45,228                   | 888,129                 | 859,020 | 27,516 | (14,311)







|Unrecognized deferred tax assets       | 2013    | 2012  
|-------------------------------------- | ------- | ------
|                                       |         |       
|Tax losses                             |         |       
|Other deductible temporary differences | 1,800   | 4,471 
|Total unrecognized deferred tax assets | 109,925 | 97,037









Unrecognized
tax losses



At
December 31, 2013 the Company had losses with a tax benefit of $108,125 (2012 – $92,566) which are not recognized as deferred
tax assets. The Company recognizes the benefit of tax losses only to the extent of anticipated future taxable income that can
be reduced by the tax losses. The gross amount of the tax losses for which a tax benefit has not been recorded expire as follows:







30







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|17. |  | Income tax expense and deferred taxes (continued)
|--- |  | -------------------------------------------------



|Expiry date                               | Canada  | Brazil  | Greece | Australia | Total  
|----------------------------------------- | ------- | ------- | ------ | --------- | -------
|                                          |         | $       | $      | $         | $      
|2014                                      |         | -       | -      | 1,503     | -      
|2015                                      |         | 6,030   | -      | 9,719     | -      
|2016                                      |         | -       | -      | 627       | -      
|2017                                      |         | -       | -      | 2,152     | -      
|2018                                      |         | -       | -      | 216       | -      
|2025                                      |         | 7,922   | -      | -         | -      
|2026                                      |         | 14,858  | -      | -         | -      
|2027                                      |         | 10,717  | -      | -         | -      
|2028                                      |         | 25,895  | -      | -         | -      
|2029                                      |         | 23,451  | -      | -         | -      
|2030                                      |         | 7,411   | -      | -         | -      
|2031                                      |         | 45,364  | -      | -         | -      
|2032                                      |         | 75,412  | -      | -         | -      
|2033                                      |         | 66,137  | -      | -         | -      
|No Expiry                                 |         | -       | 5,130  | -         | 35,906 
|                                          |         | 283,197 | 5,130  | 14,217    | 35,906 
|                                          |         |         |        |           |        
|Capital losses with no expiry             | 140,620 | -       | -      | -         | 140,620
|                                          |         |         |        |           |        
|Tax effect of total losses not recognized | 91,913  | 1,744   | 3,696  | 10,772    | 108,125





Deductible
temporary differences



At December 31,
2013 the Company had deductible temporary differences for which deferred tax assets of $1,800 (2012 – $4,471) have not been
recognized because it is not probable that future taxable profits will be available against which the Company can utilize the
benefits. The vast majority of these temporary benefits have no expiry date.



Temporary differences
associated with investments in subsidiaries



The Company has
not recognized deferred tax liabilities in respect of historical unremitted earnings of foreign subsidiaries for which we are
able to control the timing of the remittance and are considered reinvested for the foreseeable future.  At December
31, 2013, these earnings amount to $1,463,262 (2012 - $1,397,881).  Substantially all of these earnings would be subject
to withholding taxes if they were remitted by the foreign subsidiaries.



Tax Credits



The Company has
$2,450 (2012 – $3,900) of tax credits that have not been recognized.



Other factors
affecting taxation



During the year
the Turkish Lira has weakened, causing a deferred income tax expense during the year of $20,645 due to the decrease in the value
of the future tax deductions associated with the Turkish operations.  The Company expects that in the future significant
foreign exchange movements in the Turkish Lira, Euro or Chinese Renminbi in relation to the U.S. dollar will cause significant
volatility in the deferred income tax expense or recovery.



31







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|17. |  | Income tax expense and deferred taxes (continued)
|--- |  | -------------------------------------------------

During the year
the Company’s income tax expense was reduced by $12,381 due to the benefit of investment tax credits associated with the
Kişladağ mine in Turkey. In the current year, $4,586 of the investment tax credit was used while $7,795 is expected
to be realized in future periods.

On January 11, 2013
the government of Greece enacted legislation increasing the corporate income tax rate from 20% to 26%, effective January 1, 2013.
As required by IAS 12, “Income Taxes”, when an income tax rate has changed the deferred tax liability must be adjusted
to reflect the change in the income tax rate. This non-cash adjustment is required to be charged to deferred income tax expense.
The Company recorded the adjustment during the quarter ended March 31, 2013 increasing its deferred tax liability and deferred
tax expense by $125.1 million.



|18. |  | Share capital
|--- |  | -------------

Eldorado’s
authorized share capital consists of an unlimited number of voting common shares without par value and an unlimited number of
non-voting common shares without par value. At December 31, 2013 there were no non-voting common shares outstanding (December
31, 2012– none).

|Voting
    common shares                                   | Number
        of
        Shares | Total
        $
|---------------------------------------------------------- | -------------------------------- | ---------------
|                                                           |                                  |                
|At
    January 1, 2012                                     | 551,682,917                      | 2,855,689      
|Shares
    issued upon exercise of share options, for cash | 3,271,683                        | 22,145         
|Estimated
    fair value of share options exercised        | -                                | 23,221         
|Shares
    issued for acquisition of subsidiary            | 157,959,316                      | 2,380,140      
|Common
    shares issued for deferred phantom units        | 1,430,560                        | 19,762         
|At
    December 31, 2012                                   | 714,344,476                      | 5,300,957      
|Shares
    issued upon exercise of share options, for cash | 1,403,152                        | 7,003          
|Estimated
    fair value of share options exercised        | -                                | 2,934          
|Common
    shares issued for deferred phantom units        | 469,062                          | 3,695          
|At
    December 31, 2013                                   | 716,216,690                      | 5,314,589      



|19. |  | Share-based payments
|--- |  | --------------------

(a)
Share option plans

The
Company has two share option plans (“Plans”) approved by the shareholders under which share purchase options (“Options”)
can be granted to directors, officers, employees and consultants.

The
Company’s Employee Plan (“Employee Plan”) consists of Employee Plan Options subject to a 10-year maximum but
generally have a five-year term. Employee Plan Options vest at the discretion of the Board of Directors at the time an option
is granted, typically in three separate tranches over two years. As at December 31, 2013, a total of 3,622,780 options (2012 –
6,269,117) were available to grant to employees, consultants or advisors under the Employee Plan.

The
Company’s Directors and Officers Plan (“D&O Plan”) consists of D&O Plan Options subject to a 10-year
maximum but generally have a five-year term. D&O Plan Options vest at the discretion of the Board of Directors at the time
an option is granted, typically in three separate tranches over two years. As at December 31, 2013, a total of 6,086,250 Options
(2012 – 8,112,250) were available to grant to directors and officers under the D&O Plan.





32







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|19. |  | Share-based payments (continued)
|--- |  | --------------------------------

Movements in the
number of share options outstanding and their related weighted average exercise prices are as follows:

|                                                                                   | 2013                                     | 2012                             
|---------------------------------------------------------------------------------- | ---------------------------------------- | ---------------------------------
|                                                                                   | Weighted
    average exercise price Cdn$ | Number
        of
        options
|At
    January 1,                                                                  | 13.68                                    | 15,074,444                       
|Regular
    options granted                                                        | 10.28                                    | 5,792,130                        
|Replacement
    options granted on acquisition of European Goldfields Ltd (note 5) | -                                        | -                                
|Exercised                                                                          | 5.14                                     | (1,403,152)                      
|Forfeited                                                                          | 13.81                                    | (2,710,001)                      
|At
    December 31,                                                                | 13.20                                    | 16,753,421                       

At December 31,
2013, 11,278,478 share purchase options (December 31, 2012 – 10,293,934) with a weighted average exercise price of Cdn$13.93
(December 31, 2012 – Cdn$12.99) had vested and were exercisable. Options outstanding are as follows:

|                                                             |  | December
    31, 2013        
|------------------------------------------------------------ |  | -----------------------------
|                                                             |  | Total
    options outstanding
|Range
        of
        exercise
        price
        Cdn$ |  | Shares                       
|                                                             |  |                              
|$7.00
    to $7.99                                           |  | 397,945                      
|$8.00
    to $8.99                                           |  | 157,360                      
|$9.00
    to $9.99                                           |  | 286,900                      
|$10.00
    to $10.99                                         |  | 5,487,312                    
|$11.00
    to $11.99                                         |  | 10,000                       
|$12.00
    to $12.99                                         |  | 617,115                      
|$13.00
    to $13.99                                         |  | 2,087,745                    
|$14.00
    to $14.99                                         |  | 212,289                      
|$15.00 to $15.99                                             |  | 4,608,431                    
|$16.00
    to $16.99                                         |  | 2,864,324                    
|$18.00
    to $18.99                                         |  | 24,000                       
|                                                             |  |                              
|                                                             |  | 16,753,421                   

Share based payments
expense related to share options for the year ended December 31, 2013 was $13,269 (2012 – $15,933)

The assumptions
used to estimate the fair value of options granted during the years ended December 31, 2013 and 2012 were:

|                                    |  | 2013            |  | 2012              
|----------------------------------- |  | --------------- |  | ------------------
|                                    |  |                 |  |                   
|Risk-free
    interest rate (range) |  | 1.08%           |  | 1.08% – 1.23%     
|Expected volatility (range)         |  | 47% – 57%       |  | 39% – 46%         
|Expected life (range)               |  | 0.8 – 2.8 years |  | 0.7 – 2.7 years   
|Expected dividends                  |  | Cdn $0.15       |  | Cdn $0.10 to $0.12
|Forfeiture rate                     |  | 6%              |  | 6%                

33







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|19. |  | Share-based payments (continued)
|--- |  | --------------------------------

The weighted average
fair value per stock option was Cdn$2.00 (2012 – Cdn$2.80). Volatility was determined based on the historical volatility
over the estimated lives of the options.

(b)
Restricted share unit plan

The Company has
a Restricted Share Unit (‘‘RSU’’) plan whereby restricted share units may be granted to senior management
of the Company. Once vested, an RSU is exercisable into one common share entitling the holder to receive the common share for
no additional consideration. A portion of the RSUs granted have a vesting schedule where half vest immediately and the remaining
half vest on the first anniversary of the grant. The remaining portion of the RSUs granted vest over two years with one third
of the RSUs vesting immediately. The current maximum number of common shares authorized for issue under the RSU plan is 5,000,000.

A total of 657,151
RSUs (2012 – 470,070) at a grant-date fair value of Cdn$10.43 per unit were granted during the year ended December 31, 2013
(2012 – Cdn$14.65 ) under the Company’s RSU plan and 219,051 were exercisable at December 31, 2013 (2012 – 156,691).

The fair value
of each RSU issued is determined as the closing share price at grant date.

A summary of
the status of the RSU plan and changes during the year is as follows:



|                    | 2013      | 2012     
|------------------- | --------- | ---------
|At
    January 1,   | 465,832   | 253,587  
|Granted             | 657,151   | 470,070  
|Redeemed            | (348,138) | (257,825)
|Forfeited           | -         | -        
|At
    December 31, | 774,845   | 465,832  



As at December
31, 2013, 774,845 common shares purchased by the Company remain held in trust in connection with this plan (2012 – 465,832).
At the end of the period, 179,807 RSUs are fully vested and exercisable (2012 – 80,011). These shares purchased and held
in trust have been included in treasury stock in the balance sheet.

Restricted share
units expense for the year ended December 31, 2013 was $6,578 (2012 – $5,159).

(c)
Deferred share units plan

The Company has
an Independent Directors Deferred Share Unit (“DSU”) Plan under which DSU’s are be granted by the Board from
time to time to independent directors (“participants”). The performance period of each DSU commences on the Grant
Date and expires on the Termination Date of the participant. The Termination Date is when the participant ceases to be a Director
of the Company. On redemption each unit entitles the participant to receive a cash payment equal to the market value of the Company’s
shares on the date of redemption. At December 31, 2013, 216,073 DSUs were outstanding (2012 – 126,406 DSUs) with a value
of $1,322 (2012 – $1,626), which is included in accounts payable and accrued liabilities.

Reversal of compensation
expense related to the DSUs was $355 for the year ended December 31, 2013 (2012 – expense of $702).



(d)
Deferred phantom units

In accordance with
the acquisition agreement of EGU (note 5), the EGU DPUs will be converted on redemption to Eldorado shares using the 85% share
exchange ratio as indicated within the plan of Arrangement. The DPU plan was amended to allow for share settlement only. Each
DPU is exercisable into one common share entitling the holder to receive the common share for no additional consideration. During
the year, 469,062 DPUs were exercised. The remaining 31,920 DPUs are expected to be exercised during 2014.



34







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|20. |  | Supplementary cash flow information
|--- |  | -----------------------------------

|                                                                                | December
        31, 2013
        $ | December
        31, 2012
        $
|------------------------------------------------------------------------------- | ----------------------------------- | -----------------------------------
|                                                                                |                                     |                                    
|Changes
    in non-cash working capital                                         |                                     |                                    
|Accounts
    receivable and other                                               | 17,705                              | (47,729)                           
|Inventories                                                                     | (24,705)                            | (18,346)                           
|Accounts
    payable and accrued liabilities                                    | (18,669)                            | (86,397)                           
|Total                                                                           | (25,669)                            | (152,472)                          
|                                                                                |                                     |                                    
|Supplementary
    cash flow information                                         |                                     |                                    
|Income
    taxes paid                                                           | 101,058                             | 105,364                            
|Interest
    paid                                                               | 34,686                              | 4,013                              
|                                                                                |                                     |                                    
|Non-cash
    investing and financing activities                                 |                                     |                                    
|Shares,
    options and DPUs  issued on acquisition of European Goldfields Ltd. | -                                   | 2,440,375                          





|21. |  | Financial risk management
|--- |  | -------------------------

21.1
Financial risk factors

Eldorado’s
activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk and
price risk), credit risk and liquidity risk. Eldorado’s overall risk management program focuses on the unpredictability
of financial markets and seeks to minimize potential adverse effects on Eldorado’s financial performance.

| | (a) | Market risk
| | --- | -----------

(i)
Foreign exchange risk

The
Company operates principally in Canada, Turkey, China, Brazil, Greece and Romania, and is therefore exposed to foreign exchange
risk arising from transactions denominated in foreign currencies. Foreign exchange risk arises when future commercial transactions
or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

Eldorado’s
cash and cash equivalents, accounts receivable, marketable securities, accounts payable and accrued liabilities and debt are denominated
in several currencies, and are therefore subject to fluctuation against the U.S. dollar.

The
table below summarizes Eldorado’s exposure to the various currencies denominated in the foreign currency, as listed below:



|                                         | Canadian dollar | Australian dollar | Euro        | Swedish krona | Romanian lei | Great Brithish pound | Turkish        lira | Chinese renminbi | Brazilian real
|---------------------------------------- | --------------- | ----------------- | ----------- | ------------- | ------------ | -------------------- | ------------------- | ---------------- | --------------
|
|                                         |                 |                   |             |               |              |                      |                     |                  |               
|Cash and cash equivalents                | 76,137          | 1,096             | 7,615       | 11,086        | 11,359       | 81                   | 10,097              | 540,873          | 32,929        
|Marketable securities                    | 3,933           | -                 | -           | 4,432         | -            | -                    | -                   | -                | -             
|Accounts receivable and other            | 1,695           | -                 | 2,581       | -             | 7,025        | -                    | 19,780              | 215,806          | 33,701        
|Accounts payable and accrued liabilities | (12,516)        | -                 | (27,624)    | -             | (4,066)      | (15)                 | (24,939)            | (640,418)        | (8,827)       
|Debt                                     | -               | -                 | -           | -             | -            | -                    | -                   | (100,000)        | -             
|Net balance                              | 69,249          | 1,096             | (17,428)    | 15,518        | 14,318       | 66                   | 4,938               | 16,261           | 57,803        
|                                         |                 |                   |             |               |              |                      |                     |                  |               
|Equivalent in U.S. dollars               | $    65,111     | $          960    | $  (24,002) | $    2,415    | $      4,399 | $        109         | $      2,314        | $         2,661  | $   24,675    









35









|21. |  | Financial risk management (continued)
|--- |  | -------------------------------------

Based
on the balances as at December 31, 2013, a 1% increase/decrease in the U.S. dollar exchange rate against all of the other currencies
on that date would have resulted in a decrease/increase of approximately $786 in profit (loss) before taxes. There would be no
effect in other comprehensive income.

Cash
flows from operations are exposed to foreign exchange risk, as commodity sales are set in U.S. dollars and a certain amount of
operating expenses are in the currency of the country in which mining operations take place.

(ii)
Metal price risk and other price risk

Eldorado is subject
to price risk for fluctuations in the market price of gold and other metals. Gold and other metals prices are affected by numerous
factors beyond the Company’s control, including central bank sales, producer hedging activities, the relative exchange rate
of the U.S. dollar with other major currencies, global and regional demand and political and economic conditions.

Worldwide
gold and other metals production levels also affect their prices, and the price of these metals is occasionally subject to rapid
short-term changes due to speculative activities. The Company has elected not to actively manage its exposure to metal price risk
at this time. From time to time, Eldorado may use commodity price contracts to manage its exposure to fluctuations in the price
of gold and other metals.

Other
price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices.

Eldorado’s
other price risk includes equity price risk, whereby the Company’s investments in marketable securities are subject to market
price fluctuation.

| |  | (iii) Interest rate risk
| |  | ------------------------

Interest rate risk
is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest
rates. Current financial assets and financial liabilities are generally not exposed to interest rate risk because of their short-term
nature. The majority of the Company’s debt is in the form of notes with a fixed interest rate of 6.13%. As at December 31,
2013 the average interest rate in Eldorado’s debt was 6.11% (2012 – 6.09%). A 10% increase or decrease in the interest
rate on floating rate debt held at December 31, 2013 would result in a $92 decrease or increase (2012 – $64) in the Company’s
profit before tax.

(b)
Credit risk

Credit risk is the
risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial
loss. Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, restricted
cash and accounts receivable. Eldorado deposits its cash and cash equivalents, including restricted cash, with high credit quality
financial institutions as determined by rating agencies. As at December 31, 2013, approximately 53% (2012 – 71%) of Eldorado’s
cash and cash equivalents, including restricted cash, are held with one financial institution. The Company considers this to be
its only significant credit risk exposure.

Payment for metal
sales is normally in advance or within fifteen days of shipment depending on the buyer. The historical level of customer defaults
is negligible which reduces the credit risk associated with trade receivables at December 31, 2013.

(c) Liquidity
risk

Liquidity risk
is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments.
The Company manages liquidity by maintaining adequate cash and cash equivalent balances and by using its lines of credit as required.
Management monitors and reviews both actual and forecasted cash flows, and also matches the maturity profile of financial assets
and liabilities. Contractual maturities relating to debt are included in note 14.



36







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|21. |  | Financial risk management (continued)
|--- |  | -------------------------------------

21.2
Capital risk management

Eldorado’s
policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development
of our mining projects. Capital consists of all of the components of equity; share capital from ordinary shares, contributed surplus,
accumulated other comprehensive income, retained earnings and non-controlling interests.

Consistent with
others in the industry, Eldorado monitors capital on the basis of the debt to capital ratio and debt to EBITDA. The debt to capital
ratio is calculated as debt, including current and non-current debt, divided by capital. The debt to EBITDA ratio is calculated
as debt, including current and non-current debt, divided by earnings before interest costs, taxes and depreciation. This policy
includes a target debt to capital ratio of less than 30% and a debt to EBITDA target ratio below 3.5.

As at December
31, 2013, our debt to capital ratio was 10.9% (2012 – 9.6%) and our debt to EBITDA ratio was 1.2:1 (2012 – 1.01).

These policy targets
are managed through the repayments and issuances of debt as well as the continuing management of operations and capital expenditures.

21.3
Fair value estimation

Fair values are
determined directly by reference to published price quotations in an active market, when available, or by using a valuation technique
that uses inputs observed from relevant markets.

The three levels
of the fair value hierarchy are described below:

| | · | Level
                                         1 – Unadjusted quoted prices in active markets that are accessible at the measurement
                                         date for identical, unrestricted assets or liabilities.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level
                                         2 – Inputs that are observable, either directly or indirectly, but do not qualify
                                         as Level 1 inputs (i.e.,quoted prices for similar assets or liabilities).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level
                                         3 – Prices or valuation techniques that require inputs that are both significant
                                         to the fair value measurement and unobservable (i.e., supported by little or no market
                                         activity).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Assets and liabilities
measured at fair value on a recurring basis as at December 31, 2013 include:





|                                                   | Balance at December 31, 2013 |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable inputs
|-------------------------------------------------- | ---------------------------- |  | ---------------------------------------------------- |  | ----------------------------------- |  | -------------------------------
|                                                   | $                            |  | $                                                    |  | $                                   |  | $                              
|                                                   |                              |  | (Level 1)                                            |  | (Level 2)                           |  | (Level 3)                      
|Assets                                             |                              |  |                                                      |  |                                     |  |                                
|                                                   |                              |  |                                                      |  |                                     |  |                                
|Available-for-sale financial assets                |                              |  |                                                      |  |                                     |  |                                
|Marketable securities                              | 4,387                        |  | 4,387                                                |  | -                                   |  | -                              
|                                                   |                              |  |                                                      |  |                                     |  |                                
|                                                   |                              |  |                                                      |  |                                     |  |                                
|Non-current assets                                 |                              |  |                                                      |  |                                     |  |                                
|Investments in associates - Nordic Mines (note 10) | 903                          |  | 903                                                  |  | -                                   |  | -                              
|Total assets                                       | 5,290                        |  | 5,290                                                |  | -                                   |  | -                              







37







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|21. |  | Financial risk management (continued)
|--- |  | -------------------------------------

No liabilities
are measured at fair value on a recurring basis as at December 31, 2013.

The fair value of
financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded
as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service,
or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis.
The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in
Level 1. Instruments included in Level 1 comprise primarily publicly-traded equity investments classified as held-for-trading
securities or available-for-sale securities.



|22. |  | Commitments
|--- |  | -----------

The
Company’s contractual obligations, not recorded on the balance sheet, at December 31, 2013, include:



|                                              |  | 2014
        $ |  | 2015
        $ |  | 2016
        $ |  | 2017
        and later
        $
|--------------------------------------------- |  | -------------- |  | -------------- |  | -------------- |  | --------------------------------
|                                              |  |                |  |                |  |                |  |                                 
|Operating leases and capital
    expenditures |  | 8,459          |  | 9,179          |  | 8,189          |  | 20,804                          
|Purchase obligations                          |  | 85,029         |  | 16,733         |  | 14,393         |  | 29,004                          
|                                              |  |                |  |                |  |                |  |                                 
|Totals                                        |  | 93,488         |  | 25,912         |  | 22,582         |  | 49,808                          

Purchase obligations
in 2014 relate primarily to mine expansion projects at Kişladağ, mine development projects at Tocantinzinho and Eastern
Dragon as well as operating and maintenance supply contracts at our operating mines.



|23. |  | Contingencies
|--- |  | -------------

The Company is
involved in legal proceedings from time to time, arising in the ordinary course of its business. As at December 31, 2013, the
amount of ultimate liability with respect to these actions will not, in the opinion of management, materially affect Eldorado’s
financial position, results of operations or cash flows.



|24. |  | Related party transactions
|--- |  | --------------------------

Key management
includes directors (executive and non-executive), officers and senior management. The compensation paid or payable to key management
for employee services, including amortization of share based payments, is shown below:



|                                                |  | 2013   | 2012  
|----------------------------------------------- |  | ------ | ------
|                                                |  | $      | $     
|Salaries and other short-term employee benefits |  | 11,660 | 12,206
|Defined benefit pension plan                    |  | 2,478  | 1,900 
|Share based payments                            |  | 11,766 | 11,959
|                                                |  | 25,904 | 26,065



In November,
2012, our wholly owned subsidiary, Eldorado Gold Cooperatief U.A. (“the Coop”), entered into a bridge loan agreement
with Nordic for SEK 38,775,000 ($5,967).  The loan was to be settled by way of Nordic units at the time of Nordic’s
new rights subscription. The loan was to be repaid in full, plus accrued interest at a rate of 15% per annum.  On January
22, 2013, the Nordic rights issue was fully subscribed and the Coop was issued 35,250,000 shares in Nordic at SEK 1.10 per share
and was paid SEK 545,732 ($84) in accrued interest.





38







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|25. |  | Financial instruments by category
|--- |  | ---------------------------------

Fair
value

The
following table provides the carrying value and the fair value of financial instruments at December 31, 2013 and December 31,
2012:



|                                         | December 31, 2013 |            | December 31, 2012
|---------------------------------------- | ----------------- | ---------- | -----------------
|                                         | Carrying amount   | Fair value |                  
|                                         | $                 | $          |                  
|Financial Assets                         |                   |            |                  
|                                         |                   |            |                  
|Available-for-sale                       |                   |            |                  
|Marketable securities                    | 4,387             | 4,387      |                  
|                                         |                   |            |                  
|Loans and receivables                    |                   |            |                  
|Cash and cash equivalents                | 589,180           | 589,180    |                  
|Term deposit                             | 34,702            | 34,702     |                  
|Restricted cash                          | 262               | 262        |                  
|Accounts receivable and other            | 78,247            | 78,247     |                  
|Restricted assets and other              | 20,287            | 20,287     |                  
|                                         |                   |            |                  
|Financial Liabilities                    |                   |            |                  
|Accounts payable and accrued liabilities | 211,406           | 211,406    |                  
|Debt                                     | 601,408           | 593,530    |                  







|26. |  | Production costs
|--- |  | ----------------





|                                                 | 2013    | 2012    
|------------------------------------------------ | ------- | --------
|                                                 | $       | $       
|                                                 |         |         
|Labor                                            | 110,048 | 90,709  
|Fuel                                             | 42,038  | 36,641  
|Reagents                                         | 48,983  | 44,156  
|Electricity                                      | 40,694  | 38,612  
|Mining contractors                               | 63,532  | 58,628  
|Operating and maintenance supplies and services  | 104,915 | 100,216 
|Site general and administrative costs            | 31,518  | 26,082  
|Inventory change                                 | (3,737) | (12,448)
|Royalties, production taxes and selling expenses | 43,901  | 45,350  
|Total production costs                           | 481,892 | 427,946 







|27. |  | Interest and financing costs
|--- |  | ----------------------------





|                                   |  | 2013   | 2012 
|---------------------------------- |  | ------ | -----
|                                   |  | $      | $    
|                                   |  |        |      
|Interest expense                   |  | 34,101 | 4,203
|Financing fees                     |  | 6,311  | 2,780
|Total interest and financing costs |  | 40,412 | 6,983







39







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|28. |  | Earnings per share
|--- |  | ------------------

The
weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the weighted average number
of ordinary shares used in the calculation of basic earnings per share as follows:





|                                                                   | December 31, 2013 | December 31, 2012
|------------------------------------------------------------------ | ----------------- | -----------------
|                                                                   | (in thousands)    | (in thousands)   
|                                                                   |                   |                  
|Weighted average number of ordinary shares used in the calculation |                   |                  
|of basic earnings per share                                        | 715,181           | 689,007          
|Diluted impact of stock options                                    | -                 | 1,662            
|                                                                   |                   |                  
|Weighted average number of ordinary shares used in the calculation |                   |                  
|of diluted earnings per share                                      | 715,181           | 690,669          







The
loss used to calculate basic and diluted earnings per share for the year ended December 31, 2013 was $653,329 (2012 – earnings
of $305,302).



|29. |  | Segment information
|--- |  | -------------------

Identification
of reportable segments

The
Company has identified its operating segments based on the internal reports that are reviewed and used by the chief executive
officer and the executive management (the chief operating decision makers or CODM) in assessing performance and in determining
the allocation of resources.

The
CODM considers the business from both a geographic and product perspective and assesses the performance of the operating segments
based on measures of profit and loss as well as assets and liabilities. These measures include operating profit, expenditures
on exploration, property, plant and equipment and non-current assets, as well as total debt. As at December 31, 2013, Eldorado
had six reportable segments based on the geographical location of mining and exploration and development activities.

29.1	
Geographical segments

Geographically,
the operating segments are identified by country and by operating mine or mine under construction. The Brazil reporting segment
includes the Vila Nova mine, development activities of Tocantinzinho and exploration activities in Brazil. The Turkey reporting
segment includes the Kişladağ and the Efemçukuru mines and exploration activities in Turkey. The China reporting
segment includes the TJS mine, Jinfeng and White Mountain mines, the Eastern Dragon development project and exploration activities
in China.

The
Greece reporting segment includes the Stratoni mine and the Olympias, Skouries and Perama Hill development projects and exploration
activities in Greece. The Romania reporting segment includes the Certej development project. Other reporting segment includes
operations of Eldorado’s corporate office and exploration activities in other countries. Financial information about each
of these operating segments is reported to the CODM on at least a monthly basis.











40







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



|29. |  | Segment information (continued)
|--- |  | -------------------------------





|                                                                     | 2013   
|-------------------------------------------------------------------- | -------
|                                                                     | Turkey 
|                                                                     | $      
|Information about profit and loss                                    |        
|Metal sales to external customers                                    | 608,117
|Production costs                                                     | 188,800
|Depreciation                                                         | 42,373 
|Gross profit (loss)                                                  | 376,944
|                                                                     |        
|Other material items of income and 
expense                          |        
|Impairment loss on property, plant and
   and equipment and goodwill | -      
|Exploration expenses                                                 | 13,377 
|Income tax expense (recovery)                                        | 109,256
|                                                                     |        
|Additions to property, plant and
   equipment during the year        | 196,332
|                                                                     |        
|Information about assets and liabilities                             |        
|Property, plant and equipment (*)                                    | 854,893
|Goodwill                                                             | -      
|                                                                     | 854,893
|                                                                     |        
|Debt                                                                 | -      













|                                                            | 2012   
|----------------------------------------------------------- | -------
|                                                            | Turkey 
|                                                            | $      
|Information about profit and loss                           |        
|Metal sales to external customers                           | 550,781
|Production costs                                            | 132,390
|Depreciation                                                | 19,023 
|Gross profit (loss)                                         | 399,368
|                                                            |        
|Other material items of income and 
expense                 |        
|Exploration expenses                                        | 8,504  
|Income tax expense                                          | 74,052 
|                                                            |        
|Additions to property, plant and
 equipment during the year | 191,659
|                                                            |        
|Information about assets and liabilities                    |        
|Property, plant and equipment (*)                           | 699,182
|Goodwill                                                    | -      
|                                                            | 699,182
|Debt                                                        | -      









*
Net of revenues from sale of pre-commercial production

41







Eldorado Gold Corporation

Notes to the
Consolidated financial statements

(Expressed
in thousands of U.S. dollars, unless otherwise stated)



29.	Segment
information (continued)

The
Turkey and China segments derive their revenues from sales of gold. The Brazil segment derives its revenue from sales of iron
ore. The Greece segment derives its revenue from sales of zinc, lead and silver concentrates.

The
measure of total debt represents the current and long-term portions of debt.

29.2	
Economic dependence

| |  | At December 31, 2013, each of our Chinese
                                         mines had one major customer, to whom each sells its entire production, as follows:
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

TJS
Mine	Henan Zhongyuan Gold Smelter Factory Co. Ltd.of Zhongjin Gold Holding Co. Ltd.

Jinfeng
Mine	China National Gold Group

White
Mountain Mine	Refinery of Shandong Humon Smelting Co. Ltd.

| |  | 29.3 Seasonality/cyclicality of operations
| |  | ------------------------------------------

| |  | Management does not consider operations
                                         to be of a significant seasonal or cyclical nature.
| |  | ------------------------------------------------------------------------------------------------------------------------------------